STERLING – To meet the demands of soaring pension costs of city workers, residents must be asked to pay a little more in property taxes, City Manager Scott Shumard told the council Monday night.
Shumard is suggesting the pension rate, which is paid through a separate property tax levy, be upped 6 cents per $100 of a home’s equalized assessed value. The pension levy must be adopted next month, he said.
Last year, the city’s contribution to the Police Department pension fund was $497,884; this year, the actuaries are recommending a contribution of $605,834, which is a 21.7 percent increase, he said.
The city’s Fire Department contribution last year was $415,260. This year, that number will be $502,889, an increase of 21.1 percent, he said.
“The state’s not really enacted any pension reform at any level,” Shumard said. “Police and fire pension funds, there haven’t been a lot of changes.”
Shumard said continuing to allow people to retire at 50 is “a big challenge,” especially at current benefit levels.
People are living longer since the retirement rules were put in place, and that has created an “unreasonable burden” on cities.
“The city of Sterling has in the past always contributed what the recommended levels were, and we’re still falling this far behind,” Shumard said. “It tells you that something’s wrong with the system.” It’s not a matter of the city’s underfunded them ... It’s an unsustainable system.”
Also Monday night, City Council members agreed to extend the contract of Rock Falls’ deputy chief until April 30.
Rock Falls Deputy Chief Gary Cook has been serving as Sterling’s interim fire chief for 2 years. Sterling will continue to pay Rock Falls $3,811 a month for Cook’s service.
The Rock Falls City Council also voted on Nov. 6 to extend its contract with Cook until April 30.