DECATUR — City leaders are weighing options to handle skyrocketing costs for public safety pensions, an ongoing problem for municipalities across Illinois.
Solutions discussed by the Decatur City Council on Tuesday including shifting the clerical duties of sworn officers to civilian public safety staff who would instead qualify for pensions through the Illinois Municipal Retirement Fund, a less expensive option.
Mayor Julie Moore Wolfe said there are no current plans to cut police officers.
“We want to keep our highly trained police officers on the streets doing officer work,” Moore Wolfe said, “and maybe we can shift some of the paperwork tasks to non-sworn officers."
The council spent more than two and a half hours Tuesday discussing various financial issues, including pensions, the city’s property tax levy and the process by which the city appropriates funding each year. No action is taken during study sessions which are held for council members to discuss information and ideas.
More study sessions are planned as City Manager Scot Wrighton prepares to unveil a 2020 budget proposal, his first as city manager.
The city of Decatur’s required funding for police pensions went from $2.9 million in 2009 to $4.7 million in 2018. According to a city document, required funding for fire pensions increased by 90 percent from $2.9 million in 2009 to $5.6 million in 2018.
Wrighton said Decatur has always made its full recommended contribution its year but remains underfunded — and the city is not alone in that situation. Decatur’s police and fire pension funds represent two of more than 650 public safety funds in Illinois. Most have more liabilities than assets, even as municipalities struggle to meet their contributions.
“Most of the levers to make the change are controlled by the state legislature which failed again this year to produce any kind of tangible solution,” he said.
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Wilshire Associates, an investment advisory firm, estimates the nationwide total of unfunded state and local government pension obligations is $1.26 trillion. Illinois’ unfunded state and local government pension obligations is about $200 billion of the national total and roughly $150 billion is owed to state pensioners. The remaining $50 billion in unfunded liabilities are owed to Illinois’ local pensioners.
Wrighton said city leaders could fund the total pension contribution through property taxes, but city leaders have chosen to offset some of those costs with other revenue to ease the burden on taxpayers. The total police pension costs for 2019-2020 is roughly $4.7 million, of which $4 million would come from the property tax levy. The total fire pension costs for the same fiscal year is roughly $5.6 million, of which $5.1 million would be charged to the property tax levy. The city would fund the remaining amount, more than $1.2 million between both pensions, through other means.
The pension costs are consuming a greater portion of the city budget every year, forcing the city to spend less on things like neighborhood revitalization projects, Councilman David Horn said.
As public safety pensions take up more and more of the annual property tax levy, there are fewer property tax revenues available for paving streets, special project debt service and all of the other functions of local government, according to Wrighton.
“If the state doesn’t make any changes, we are helpless,” Councilman Chuck Kuhle said.
“So we as a city need to make a change,” Moore Wolfe said.
The council also discussed property taxes during the study session. The city’s property taxes are between 15 and 17 percent of the total tax levy for most residents, who also pay property taxes for schools, the Decatur Park District, the Sanitary District of Decatur, Macon County, townships and other entities.
Council members have three tax levy strategies to consider: one based on a flat dollar amount; another projected to create a level rate for the individual taxpayer, taking into account changes in property values and the addition of more property to the city through annexation; and a final strategy that incorporates a modest increase in the overall rate.
Some council members seemed to lean toward the second option with reservations.
“I believe we should wait and disclose to the public our thought process and let them decide,” Councilman Bill Faber said.
The council plans to continue the discussion of tax levy, budget processes and several other topics mentioned during the study session.
Contact Analisa Trofimuk at (217) 421-7985. Follow her on Twitter: @AnalisaTro