In recent reports from the Chicago Tribune, the Lake Forest City Council is grappling with the escalating expenses tied to maintaining its fire department, especially concerning the rising pension costs. Back in 2005, the fire pension levy stood at $466,229. Fast forward to this year, and that figure has skyrocketed to $1.2 million. By 2027, city officials anticipate that this number will balloon to an overwhelming $2.6 million.
When factoring in the police pension fund, the total expenditure earmarked for public safety is projected to reach a staggering $6.7 million by 2027. Firefighters currently contribute 9.45% of their earnings toward the pension fund, while police employees chip in 9.91%. Both departments operate separate pension funds, each overseen by a five-member pension board and guided by professional investment advisors.
Elizabeth Holleb, the city's director of finance, disclosed that the combined value of these two pension funds totals approximately $60 million. She noted that similar to numerous pension schemes, the funds faced challenging times between late 2015 and early 2016 when the markets performed poorly. Holleb mentioned that despite closing their books on April 15, they recorded significantly low returns. The city assumes an average return rate of 7%.
However, the reality tells a different story. For the fiscal year 2017, the actual return on firefighter pension investments amounted to a mere 0.28%, whereas the police pension investments incurred a loss of 1.64%. As a result, the city of Lake Forest shoulders the responsibility of bridging this gap.
The current fiscal 2017 budget for the fire department amounts to $6.25 million, with 98% of this budget allocated to personnel costs. The department employs 35 full-time workers. Holleb assured that the city has consistently met or surpassed the state-mandated pension contributions.
Over the years, the city has attempted to cut costs by reducing staff through natural attrition. However, Holleb emphasized the challenges posed by already lean staffing levels, making further reductions increasingly difficult.
City Manager Robert Kiely expressed concerns during the October 3rd council meeting, stating that the rising cost of fire services outpaces the city’s capacity to generate additional revenue. Alderman Stanford Tack echoed similar sentiments, citing a prepared statement that highlighted the lack of viable opportunities for enhancing revenue or achieving fiscal efficiencies within the fire department to counteract these unsustainable financial trends.
In the immediate future, the city council directed staff to explore the possibility of implementing a $10 quarterly fee, equating to $40 annually, on residents. This initiative aims to provide the city with one to two years to investigate and introduce necessary changes.
Additionally, Lake Forest is considering reaching out to neighboring communities to discuss potential collaboration on fire services, though the specifics remain undefined.
Mayor Don Schoenheider reassured residents that public safety will remain uncompromised. "We will not compromise public safety," he stated firmly.
This situation underscores the complexities of balancing municipal budgets amidst rising operational costs and the need for sustainable solutions.
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