LA GRANGE – A new actuary is recommending the village contribute roughly $345,000 more to its police and fire pension funds than budgeted for next fiscal year, but a surplus from last year is expected to offset the increase.
During Monday's Village Board meeting, Todd Schroeder, of the accounting firm Lauterbach & Amen, said that a number of adjusted factors, including the mortality rate of police and firefighters, influenced his recommendation.
“We are seeing that police officers and firefighters are living longer than has generally been assumed for police officers and firefighters in Illinois in the past," Schroeder said.
If the Village Board votes in December to increase pension contributions based on Schroeder's recommendation, the cost will primarily be offset by revenue from income and sales tax, building permits and a planned 1 percent increase in the village's utility tax, Finance Director Lou Cipparrone said.
The utility tax will increase from 3 to 4 percent for fiscal year 2014-15, still less than the 5 percent maximum most municipalities use, Cipparrone said.
Before hiring Schroeder, the village worked with an actuary who used mortality tables from several decades ago, causing the village to contribute less to the police and fire pension funds than it might have with recommendations based on updated rates.
“It’s going to be a problem that’s got to be chipped away at slowly over time," Schroeder said.
Trustee Jim Palermo and former Trustee Michael Horvath had in the past urged fellow board members to consider larger contributions to the pension funds, but were unsuccessful.
“They personally took some heat for being so aggressive," Trustee Mark Kuchler said Monday. "But I think what we’ve seen by bringing in a fresh look, they were right.”
Palermo, who still questioned Schroeder's decision to use death rates lower than recommended by the state, said the village is now in better hands.
“My comfort level is far higher than it was a couple years [ago]," he said. “It’s going to result in tighter belts, but it was an [adjustment] that had to be made, and we’ll be a stronger financial community for it.”