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City preparing for pension reforms in Rock Falls

Amendment to state code goes after unfunded liability

Published: Wednesday, Feb. 5, 2014 1:15 a.m. CST

ROCK FALLS – It has been 4 years since the Illinois legislature passed Public Act 96-1495, but municipalities would be wise to not forget about it.

Starting in 2016, the amendment to the state's pension code will allow unfunded pension liability to be taken from a municipality's Local Government Distributive Fund, which is its share of the state income tax.

City Administrator Robbin Blackert presented some information regarding possible ramifications of the amendment at Tuesday's City Council meeting. The information applies mainly to the city's police and fire department funds.

In 2016, the state can go after one-third of a municipality's LGDF money. In 2017, it goes up to two-thirds, and in 2018, it can be as much as 100 percent.

Blackert told the council that Rock Falls is in a better situation than most cities in Illinois. At a meeting she recently attended on the act, she discovered that 56 percent funding was considered well-funded by most.

Rock Falls' fire pension fund is now funded at 93.3 percent, while the police fund is 68 percent funded.

"My problem with this legislation is that municipalities like Rock Falls, who are diligently funding their pensions, are paying for others who couldn't or wouldn't pay for their police and fire funds," Blackert said.

For fiscal year 2015, the actuary recommended the city fund the police fund at $267,066, and the city set the levy for $298,034. The recommendation for the fire fund was $95,127, and the city's levy was for $100,794.

The city must resist the temptation to take money away from a well-funded fire fund and put it somewhere else, Mayor Bill Wescott said.

"The pensions are a combination of contributions we make, the employees make, and investments," Wescott said, "Returns on investments did well last year, but in 2008, the IMRF took a multimillion dollar nosedive."

"It's important to pay extra when you can, so you're better positioned for an economic downturn," Blackert said. "It wasn't raining when Noah built the ark."

Wescott also reported that the city has received projections for health and dental insurance rates for the coming plan year, which is this July through June 2015. The Finance Committee is recommending that the city accept a plan that would reflect a 4 percent decrease for health insurance and a 3 percent increase for dental for city employees in all tiers.

"We are very fortunate to be in this group," Wescott said. "Our subpool has over $1.2 million in reserve. The due diligence put in with studying rates – we're seeing the fruits of those labors."

Also, a new Hennepin Canal Trails Committee has been formed, with Alderman Jim Schuneman appointed chairman. It will basically combine the Recreational Trail and Hennepin Canal committees, in an effort to better coordinate the efforts of both.

The Sauk Valley Landlord's Association has been invited to a meeting to talk about the city's proposed rental inspection program. The meeting will be at 6:30 p.m. Feb. 26 at the Rock Falls Chamber of Commerce building, 601 W. 10th St.

Next meeting

The Rock Falls City Council next meets at 6:30 p.m. Feb. 18, at City Hall, 603 W. 10th St. 

The agendas will be posted at www.rockfalls61071.com and at City Hall. Call 815-622-1100 for more information.

The City Council meeting also can be viewed live on Channel 5.

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