Ald. Clare Kelly at virtual 1st Ward meeting on Thursday night.

“It’s only been a 40-year-plus battle.”

So said Timothy Schoolmaster, a retired Evanston police officer and head of the Police Pension Board.

That battle has been to stop underfunding the city’s public safety retirement funds, which, according to Schoolmaster, are $280 million below where they should be.

In a virtual 1st Ward meeting, Schoolmaster said, “Pensions are not sexy, not exciting,” but the money needs to be there for first responders who “put their lives on the line for you.”

On the firefighter side, Jack Mortell, retired fire captain and head of the Fire Pension Board, said, “The city failed to pay the full amount. It’s now come around and is biting all of us in the butt.”

Ald. Clare Kelly (1st), who made fixing the pension mess a cornerstone of her council campaign, said she hopes City Council will approve a “full funding” resolution on Monday that was recommended last week by the city’s Finance and Budget Committee.

The city’s pension actuary firm, Foster and Foster, has estimated that closing the pension funding gap, assuming a 6.5% return on investments, will require spending about $6 million more per year on public safety pension fund contributions than the $25 million the city is contributing this year.

But the projections show that once the funding gap is closed the required contributions would drop to a total of less than $5 million a year by 2042.

Kelly said there is no intent to raise property taxes as part of pension reform.

“We don’t need to raise taxes for this,” she claimed.

Both Mortell and Schoolmaster thanked Kelly for working on an often thankless issue.

In an unrelated matter, the proposed rebuild of Ryan Field was also discussed.

Kelly said the anticipated Aug. 9 date for the Land Use Commission hearing on Northwestern’s $800 million project has still not been finalized.

Kelly said she agrees with 200-some NU professors who signed a petition, calling for a pause in stadium planning until the hazing controversy is resolved.

“NU should address the horrible hazing issue,” Kelly said, “before putting all of its energy into building a new stadium with large special events [concerts].”

Jeff Hirsh joined the Evanston Now reporting team in 2020 after a 40-year award-winning career as a broadcast journalist in Cincinnati, Ohio.

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  1. The pension funding issue has gotten much better over the years. In 2007 the estimated unfunded liability was $100 million, but that assumed a 7.5% rate of return, which is fantasy-land, IMO. A new actuarial consultant was engaged that same year and lowered the interest rate assumption. I am not sure if they updated the life tables, but I think that was done at some point. When they recalculated the unfunded liability they came up with 140 million. At the time I still thought that was optimistic.

    There has been enough attention to this issue over the years that I think they are at or near a realistic measure of the cost.

    I don’t believe that this will be cost-free to homeowners. Homeowners have to do their part to fund the total costs of capital and operational expenditures in Evanston. Pension contributions are a part of that total. City council may be able to delay having to raise taxes for some period of time by increasing borrowing or deferring other capital expenditures (which is like borrowing with a high interest rate), but it’s hard to see how the cost won’t hit homeowner property tax bills at some point.

    1. Good thoughts and actuarially well brought up, but perhaps the most important issue is the old fashioned nature of a life long pension with cost of living increases. Very few businesses other than government (which includes public schools) can afford such pension benefits for their employees. Most private-sector businesses have gone to very modest fixed payout pensions and contributions to IRA/401K plans due to the real cost of the older style pension programs.

      While there may be exceptions, I don’t believe any other major city as looked into this approach. Evanston seems to want to be first in many issues. Perhaps our city council would want to address this very important issue with major impact on Evanston children and grandchildren.

      IMO, though, there is no chance whatever our council will put this item on an agenda filled with tenant rights, homeless shelters, reparation funding, mayoral campaign subsidies , environmental issues and other such.

      1. Hi Peter H.,
        1. The public safety pension programs are state-mandated. The city has no choice but to pay now, or pay more later.
        2. The state managed to modify the public safety pension programs several years back to reduce the cost (and benefits provided) for new hires. But more radical reform has been blocked by the state supreme court.
        3. The employees involved are exempt from social security — so they lack the core retirement benefit that private-sector workers can supplement with IRAs and 401(k)s.
        So, even if structural reform of pension programs fit the city’s progressive agenda, the city couldn’t implement it.
        — Bill

  2. Excellent work by Tim Schoolmaster, the pension board and Alderman Clare Kelly keeping pensions a priority. As the longest served Evanston Police Officer, I appreciate all the effort it took to get this done.

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