Police pension fund short $286,121
City asked to make up difference
Tuesday, September 20, 2005
MONMOUTH - The Monmouth Police Pension Board said the city of Monmouth owes the pension fund $286,121 next year to meet the city's financial obligation.Sgt. Dean Blust told council members Monday that is the amount the state said Monmouth is required to pay the fund.
Corporate Counsel Marcum Spears said each year the Department of Insurance calculates the retirement based on new hires and employer and employee contributions to the fund.
"The city has funded this every year but it has not funded it enough," Spears said.
City Administrator Shannon Thompson said last year the Pension Board asked for $250,000 but the city only levied $131,000, creating a shortfall of $129,000. The city must adopt its upcoming tax levy by the fourth week of December, giving the council some time to discuss the Pension Board's funding request. Spears said the city is obligated to make sure the pension checks are good. If the city does not fully fund the pension fund, it will continue to create financial problems in the future.
The city's general fund cannot withstand an impact like this request, Thompson said. The city currently levies $900,000 for the general fund and if the city took the shortfall out of that fund it would have an impact on the entire city budget. But, she added, this is a significant shortfall and is something that needs to be addressed by the council.
Alderman Dan Heatherly, Ward 4 said part of the problem with the pension fund is the investments it has made with the money, the buy-outs of officers based on the union contract.
Monmouth, Thompson said, has three options. The city could no nothing, which she suggested is not the thing to do. The city could take the money out of the general fund, something that would put the budget in jeopardy, or see what taxpayers have to say about increasing the pension fund more than 5 percent to cover the request. If that were to happen, the city would have to hold a Truth and Taxation hearing before the adoption of the levy.
Mayor Rod Davies said the city could conduct its own study to see what the city's actual financial obligations are to the fund.
Blust assured the council that the Police Pension Fund is "quite solvent, but this is an issue that needs to be addressed."
In the end, Davies said he would talk to the city auditor about the city's option. He also asked the council to think about the options including the merits of conducting its own study.
In other business, the council approved spending $19,850 for an engineering study of the main wastewater treatment plant.
Andy Jackson, public works manager for Environmental Management Corp., the St. Louis-based firm that operates the city's Public Works Department, said the city was notified six months ago it would receive a $485,000 State and Tribal Assistance Grant. But, before the city can get the money, it must dedicate the funding to a project. Jackson said the study will be totally reimbursed through the grant. Donahue and Associates, Champaign, will do the study. The city recently completed a study of the north wastewater treatment plant.
