Evanston Police and Fire pension officials laid out a powerful argument Tuesday, Nov. 1, in support of the city raising its pension contributions to 100% toward the state’s target goal of full funding by 2040.

Council Member Clare Kelly, 1st Ward, hosted the meeting where Tim Schoolmaster, longtime president of the Board of Trustees of the Evanston Police Pension Fund, led the presentation at the virtual meeting.

Using graphs and charts, Schoolmaster traced the city’s failure to fund the recommended level of employee pensions and allowed unfunded interest payments to skyrocket.

Pension funds support retirement, death and disability benefits for retired police officers and firefighters. The contributions, made by both employee and employer, pay for public safety services already rendered, officials pointed out.

Police Officer Otha Brooks joins about 50 other Evanston officers and staff at a “celebration of service” ceremony in front of the Police Department in May Brooks has been an officer for 18 years. Credit: Richard Cahan

The city’s required payment for police and fire pension funds in 2022 is $22,039,820, Schoolmaster said.

The normal cost is $7,103,539, or 32% of the payment. Interest payments on money owed is $14,936,280 or 68%.

Evanston’s unfunded accrued liability in the police fund grew from $4 million to a high of $132.2 million in 2020, as the city made minimum payments, Schoolmaster said.

How did this happen, some asked. “People that are in public office, they may be there five, seven years and they don’t like to pay taxes, so they may say, ‘we’ll let somebody in the future pay for it,’ ” Schoolmaster said.

Or, suggested Kelly, “You might want to rather spend that money on other shinier objects.”

Firefighter Angela Jones with Evanston Fire Department’s Engine 22 hosed off the 1100 block of Elmwood at the annual block party in July 2021. Credit: Evan Girard / Evanston RoundTable

Jack Mortell, retired firefighter and a member of the Firefighter’s Pension Board, pointed out that initially the pension funds were supposed to be fully funded in 2010.

“So they [local officials] kept kicking it down the road,” he said, “and it’s actually time to reverse this because it’s becoming untenable.”

Kelly has called on the city to step up its contributions in the 2023 city budget from 90% level to 100% toward reaching the state’s target by 2040.

At 90%, $106 million of the city’s contribution will be amortized, said Schoolmaster. The $26 million difference, though, will continue to grow at a 6.25% compound interest rate since it was ignored in the funding.

Funding at 100% percent will cost roughly $4.4 million a year more, estimated Jason Franken, the actuarial consultant for the Police and Fire Pensions, who added, “it’s a tough pill to swallow today but over the long term it will save taxpayers a lot more money.”

Kelly, who said she followed the issue long before her election to the council in 2021, maintained, “It’s something that we as a city can do. I mean when you scrutinize a proposed budget of over $400 million, that money can be found within the budget, like for example expenditures that aren’t necessary,” she argued.

City officials are in the homestretch of their 2023 budget, setting Monday, Nov. 21, as their target date for adoption.

Bob Seidenberg is an award-winning reporter covering issues in Evanston for more than 30 years. He is a graduate of the Northwestern University Medill School of Journalism.

One reply on “Pay now or pay later: Officials urge city to fully fund pensions”

  1. Great Article, it has been a budget problem for over 30 years- and the taxpayers are going to suffer financially if this council does not address this, it is not going away.

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