By Todd Wineburner
Pensions dominated the discussion at last night’s Pontiac City Council meeting. The firefighters' pension fund returned 5-point-7 percent for the fiscal year ending March 31st, while the police fund posted a return of 4-point-7 percent. City Administrator Bob Karls says the biggest issue with both funds is unfunded liability. The police pension fund is currently 71 percent funded, while the firefighters are reporting 56 percent. Karls says the shortfall occurs because of weak investment markets combined with the state’s formula, which assumes a 7 percent annual return. That 7 percent level has been extremely elusive over the last several fiscal years, and Karls says that means declining funding levels.
The state requires that both funds reach a 90 percent funding level by 2033, and Karls says the city will continue to adjust tax levies to keep the funds on track. He says he's satisfied with the performance of the local pension boards, whose members take the pension issues very seriously and are always working to maximize returns. Karls says pension problems have been complicated further because of investment restrictions written into the state statute, and because the state was sluggish in updating their mortality tables for computing pensions. Until recently, Illinois was using life expectancy figures from the 1970s.
In other business, the council approved a facade grant for properties at 317 and 319 North Mill street, and retained Crawford, Murphy, and Tilly of Springfield as the consultants for the Pontiac airport.