Evanston aldermen tonight will try again to agree on what assumptions the city should use in setting aside money for public safety pension.

At their last meeting, several aldermen, prompted by complaints from the local pension boards that the assumptions provided by the city’s actuarial firm were too rosy, asked staff to survey what numbers other municipalities are using.

Evanston aldermen tonight will try again to agree on what assumptions the city should use in setting aside money for public safety pension.

At their last meeting, several aldermen, prompted by complaints from the local pension boards that the assumptions provided by the city’s actuarial firm were too rosy, asked staff to survey what numbers other municipalities are using.

After looking at 11 other metro-area communities, the staff report to be presented tonight concludes that Evanston’s key assumption of projected investment return is more conservative than average.

The other towns are assuming investment yields averaging 7.61 percent with a range from 7 percent in Oak Lawn and Tinley Park to a high of 8.25 percent in Skokie.

Evanston currently assumes a 7.25 percent return, but staff is proposing to cut that to 7 percent.

The pension board representatives have proposed a further reduction to 6.75 percent.

The new staff report looks at several additional changes to more conservative assumptions suggested by the pension boards — including using mortality tables that assume retirees will live longer and higher estimates for rates of salary increases and wage inflation.

If all the more conservative assumptions were adopted, the city would have to increase its public safety pension contributions by nearly 23 percent next year — instead of the 13 percent increase called for by the staff report.

Assuming there were no compensating cuts in city expenditures, that would mean an increase of 8.1 percent in the city’s property tax levy next year, compared to a 4.6 percent increase under the plan recommended by staff.

Bill Smith is the editor and publisher of Evanston Now.

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4 Comments

  1. Round Two [or is it 100] of False Reform

    Again the city [i.e. tax payers] face the consequences of very bad pension/benefit promises over the years—and they will probably make again.

     Remember Barney Frank and Chris Dodd [Congressmen] wanted to ‘roll the dice’ with Fannie and Freddie and thus give the lowest possible downpayment to home buyers.  This led to the housing and then economic crisis.   The  city has been on this path [social engineering and promises we can’t keep] for years and—well you can see where we are.

  2. Oh boy, oh joy – more taxes

    So the pension board wants Evanston to go below the range of other communities.

    The way things are going in Evanston it would not surprise me if Aldermen capitulate and agree to the pension board, which would increase our city taxes.

    We’re going to be hit with a library tax now.

    Our property tax assessment just came in and while some people might pay less in the second installment others are unaware that the assessor’s are very conservative with their new 2010 assessment. In my research I have consistently found properties that have just sold hundreds of thousands of dollars below the assessor’s 2010 assessment. The same was true for last year because the assessor’s office is simply not accurately predicting the sharp drop in real estate values. Their assessments are way too conservative.

    Let’s not forget for the time the Assessor’s Office billed us 55 percent our 2010 property taxes in the first installment rather than the typical 50 percent.

    I strongly suspect that the large number of foreclosures in some areas is partly due to property taxes.

    So many property owners are probably paying more taxes than they should.

    To summarize this year –  higher city and county taxes, a new library tax and higher property taxes during a severe recession in it’s third year and state unemployment nearing 10 percent.

    And what will the City Council do about next year as the tax revenue continues it’s descent. Based on past behavior, I’d say the Council will simply … wait for it …  raise taxes!

    We are not being governed. We’re being robbed.

  3. Pension Deficits, TIF Diversions & A Bankrupt City Of Evanston

    Again, nothing happens in a vacumn ! However, poliiticians & some media writers love it when they can divide a community and obscure the "big picture" by keeping issues disconnected.

    Some ideas that have historical & factual perspective:

    The previous City Councils kicked this taxpayer liabilty so many times down the road each year that the amount now owed is insurmountable. It is interesting that our long time serving aldermen on the current Council, did not discover "alleged fiscal reform" until shortly before the last mayoral & aldermanic elections. The smarter politicians chose not to run, however one wonders if they have any regrets for the bankrupt fiscal condition that the COE was left in from their respective elected terms.

    I would hope that all of my fellow taxpaying citizens, our elected officials and City staff would read the Chicago Tribune editorial from last Friday (August 6, 2010) entitled "Raid the TIFs". As we have heard from some of our politicians before: "that Evanston is not like Chicago", I would only point out that both municipalities are "broke". That being said I think our own politicians should consider if any surpluses can be created in Evanston’s current TIF districts. Evanston had a TIF surplus with the Downtown II TIF which expired last year, however most of that surplus (800k or thereabouts0 went to redoing the Maple St. streetscape, which hadn’t been done that long ago and certainly must not have been done well (since it had to replaced). Of course one of the most irresponsible and shameful decisions by our elected officials of a bankrupt COE was spending 150k for a sculpture on the City Parking Garage. The sculpture still appears to be one of a Evanston taxpayer contemplating leaping, in my own view. ( As a valid comparison all Evanston citizens/voters should consider that the same City Council that said there was no money for the branch libraries voted for this wasteful, shameful and artstic eyesore @ 150k). Are you seeing a pattern here? Have I connected the dots to the big picture yet?

    A bankrupt COE! Who is responsible for this? Where did all the projected tax revenue go from the "greatest buliding boom" in my lifetime that the City of Evanston has ever seen? How did Evanston get to the point that our Library system could be decimated by those partially responsible for creating a bankrupt COE? Unfortunately, as the great cartoon character POGO once said: "We have met the enemy and he is US!" We are all ultimately responsible: the citizens that don’t keep an eye on government, the citizens that don’t vote, the politicians that see everything in only political terms, don’t think about long term fiscal health vs. short term political gain and the media/journalists that do not undertake objective reporting, investigative reporting or balanced reporting due to conflicts with advertising revenue received, editorializing under the cover of alleged journalism or just plainly wanting to be friendly etc. with some of those they write about (ie;objective journalistic distance). All things change & nature abhors a vacumn. We owe a great debt in Evanston to all those who are working for honest change, real transparency and to help our elected politicians see where priorities have been misplaced. 

     ,          

  4. Pensions

    Good for Evanston for asking the tough questions about actuarial assumptions.  If the investment returns, retirement age and mortality assumptions are all flawed, the city will not get an honest picture of its pension plight.  Investment projections which are too optimistic results in  employer contributions which are too small and growing funding deficits.  Likewise with retirement ages which are too old and life expectancy assumptions which are too low.   Add to the subject the GASBs proposed adjustment to liability discount rates, and the bad situation may be far worse.  Other communities should have Evanston’s courage.

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