Several members of the city’s Finance & Budget Committee took its chairman to task at their meeting Tuesday, Dec. 13, for sending a letter to the mayor and council members at a crucial point in the budget process stating his opposition to the solution the committee was pursuing on funding public safety pension.
At the meeting, members were critical of chair David Livingston’s actions, and one speaker, during citizen comment, suggested Livingston consider stepping down.
The committee had played a forward role in the historic provision approved Dec. 12 committing the city to a 100% pension funding track after decades of underfunding public safety pensions and incurring millions in unfunded liabilities.
At the end of 2021, police pensions were funded at about 64%. The state requires all municipalities to fund public safety pensions at 90% or more by 2040.
During this budget process, Evanston council members made it clear they would like to move to a path of 100% funding much faster. They also made it clear they wanted to avoid a property tax. Yet, to move the pension funding on a path to 100% funding (rather than the proposed 90%) will require increasing annual pension contributions by an additional $4.5 million.
Livingston had joined committee colleagues in approving the 100% funding recommendation over the 90% funding level.
However, in a discussion at the Nov. 21 City Council meeting where the 100% effort passed as part of the 2023 budget, Mayor Daniel Biss referred to receiving an email that day from Livingston.
The email, Biss said, reiterated Livingston’s opposition to using the full $4.5 million without a property tax increase. The mayor then added, “I’m interested in hearing more options myself.”
‘A better approach’
In his email to Biss and council members, Livingston, writing in the first person, argued he did not believe the proposal to contribute an additional $4.5 million in 2023 was “the right path to take.”
Livingston suggested, instead, that a “better approach’” would be for officials to consider an additional $2 million to $2.5 million in 2023, drawing on either available funding in the city’s General Fund or use of available excess reserves.
He then suggested officials work with pension actuaries on alternative funding paths for both the city’s 90% path and 100% goal, starting in early 2023. In the email, Livingston specified that he had not discussed those points with Finance and Budget Committee members.
“They are my own views. I wanted to get you these thoughts before the meeting tonight,” he wrote, identifying himself as Finance and Budget Committee chair in the email sign off.
In an interview with the RoundTable, on the eve of passage of the budget, Livingston joined city’s chief finance officer, Hitesh Desai, maintaining that “using excess reserves is not a sustainable approach,” and that the city needed a more robust study to develop its glide path to 100% pension funding by 2040.
The public back and forth
In discussion at the Tuesday Finance & Budget Committee meeting, Council Member Devon Reid, 8th Ward, spoke in support of Livingston’s right to express his view, noting he had read the email “and you clearly stated that you’re speaking in your personal capacity. And I don’t think that you give up your rights as a citizen to share your personal opinion.”
But committee member Leslie McMillan expressed concern about the handling of committee communications moving forward.
Kelly said, “I agree with member McMillan that we should agree on how [the information] is going to be relayed, make sure that it is really consistent every time.
“Our public safety pensions should not be made a political football,” Kelly added. “This needs to become a regular line item and we can decide how we do that that, whether it’s from continuing to fund 90% through the levy and we [use] the PPRT [Personal Property Replacement Tax] to bridge that. I think it’s time to bring an end to politicizing the funding of something we have a contractual obligation to.”
Livingston did not explicitly respond to the criticism, choosing to clarify why he took his position.
“If I could just say one thing, and I think I reached out to several of you consistent with the comments from prior meetings. I very much support getting to 100% funding,” he said. “My only concern with respect to this was at least in the first year – and we do have excess reserves to do this in the first year – but it was not backed by any revenue sources.
“That’s your prerogative,” he said to committee members. “I will say it’s going to create additional work for us as we roll forward and we will continue to do that.”