Excerpts from the ChicagoTribune.com:
The Lake Forest City Council is looking for ways to handle the increasing costs of running a fire department, particularly pension costs. The fire pension levy in 2005 was $466,229, according to a presentation at the Oct. 3 city council meeting. This year it’s $1.2 million. By 2027, city officials project that it will increase to $2.6 million.
Adding the police pension fund, total public safety costs are projected to hit $6.7 million in 2027.
Firefighters contribute 9.45 percent of their pay to the pension fund while police employees contribute 9.91 percent of their pay. Each entity has a pension fund managed by a five-person pension board and advised by professional investment advisers.
There is about $60 million total in the two pension funds, said Elizabeth Holleb, director of finance for the city.
“Like many of the pension plans, in late 2015 and early 2016, the market was not doing well,” Holleb said. “We closed the books on April 15. We had very low returns. We assume a return of seven percent.”
The actual return on firefighter pension investments was .28 percent while police pension investments lost 1.64 percent, according to city documents. The city of Lake Forest is responsible for making up the difference.
The fiscal 2017 budget for the fire department is $6.25 million with 98 percent of the cost being personnel. The department has 35 full-time employees. The city of Lake Forest has always met or exceeded the state-mandated pension contributions, Holleb said.
In past years, the city has reduced staff by attrition.
“The problem is that we are so lean . . .its difficult to make those sort of reductions,” Holleb said.
“The math doesn’t work long term,” said City Manager Robert Kiely during the Oct. 3 meeting, adding that the cost of fire service is rising faster than the city’s ability to raise revenue.
“Unaltered, the growth of public safety pension obligations alone will require massive tax and fee increases as well as severe cuts in other governmental services in order to merely fund the annual increase,” Ald. Stanford Tack read from a prepared letter. “The committee determined that there were no significant opportunities for revenue enhancement or fiscal efficiencies in the fire department that could clearly contribute the mitigation of these clearly unsustainable financial trends.”
In the short term, the city council instructed city staff to research a fee of $10 per quarter, or $40 per year, on residents. That would offer the city government one to two years in which to research and implement changes.
The city also plans to reach out to neighboring communities to discuss sharing of fire services, although what that could look like has yet to be determined.
“We will not compromise public safety,” Mayor Don Schoenheider said.
