A loyal reader did the research at the State Comptroller’s Office to produce the following spreadsheet with 2014 data::
Comments
Township Statistics — 32 Comments
Maybe if we could see the municipalities and school districts side by side with the Twhs it would give us a better understanding.
I agree.
My other worry is if they consolidate a township with low debt with one with more what is the effect?
One person at the hearing said that debt will remain with the taxpayers now responsible for it.
A Modest Proposal
One of the impediments to the current proposal is that it tries to place some large population townships with some townships with much smaller populations. I think that the residents of those smaller population townships might have concerns about being out voted at the ballot box when electing the new officials for the new townships by people in the former larger population township, and therefore might be inclined to vote against the consolidation, thereby killing it.
Given these numbers, I have a modest suggestion to reconfigure the current proposal. It is as follows:
(1) Leave Algonquin Township as is. It is too big to be combined with either Grafton or Nunda without overwhelming the votes in those areas.
(2) Combine Nunda with McHenry, which have roughly equal populations and which would form a new township with a population similar to that of Algonquin.
(3) Combine Richmond and Burton, both with similar size populations.
(4) Combine Grafton with Dorr. However, Grafton still has twice the population of Dorr. Similarly, Greenwood, which could be combined with Hebron, has a significantly larger population than the latter. Most of that population is in the North end of Woodstock. If you reduced the size of Greenwood geographically by moving the township line with Dorr North to the current northern boundary of Woodstock, you would place Grafton/Dorr as well as Greenwood/Hebron more nearly equal in population plus you put all of Woodstock in the same township. You can use a line of latitude for the description of the location of the new township line.
The rest are combined as in the current proposal.
As a thought on why pensions are a bigger priority than townships, the top pension in Illinois is over $500,000, whereas
Alden Township expenditures for 2014 were $365K,
Hartland was $503K,
Hebron was $455K,
Riley was $504K,
Coral was $503K, &
Burton was $295K.
If they don’t spend a lot of money, how much money can the taxpayer save through consolidation?
Maybe some, probably not a whole lot.
No one is leaving Illinois because townships spend too much money.
That is not one of our biggest problems.
Maybe we can save some money through township consolidation but it is not a top priority.
Open The Books has Snapshot Spending Reports for the Townsihps.
Including pensions with per pupil spending as much is spent on one public education classroom as the smaller townships spend in one year.
And most school districts never say they have enough money as they always need more money to close the achievement gap or due to more low income kids or improve technology or whatever.
OK Mike, options and input are a good thingy, even from a get rid of them dude like you!
LOL
The County has its own problems why is it worrying itself with townships.
Here is some information about the McHenry County IMRF Pension Fund.
McHenry County participates in the IMRF Regular and Sheriff Law Enforcement Plan (SLEP) pension funds.
The following from the McHenry County website.
Meeting 6/24/2014 8:30 AM
June 24, 2014 8:30 AM
This item has been placed onto the agenda to remind the committee they still have this item to review/discuss at a future committee meeting.
Ms. Barnes stated that she would like to see a report on the percentages different organizations are required to pay into IMRF and she would like to know the difference.
She stated that the County is required to pay 23% of SLEP though the numbers are going down and not as many new employees are added into SLEP.
She stated at some point payments will be made directly to the retirees without any new employees paying into that program. She stated she is hopeful that the report will identify the issues.
Ms. Barnes noted that staff is not addressing the County Board members concerns regarding the unions and the true impacts their agreements have on the taxpayers of the County.
Committee members agreed that a meeting with an IMRF representative would be helpful to better understand the payment system and the liability reports.
Ms. Barnes stated she is also concerned that some committee items seem to be skipping this committee. She stated that the resolutions are those items that have the biggest impact to this County.
She reminded committee members that the resolution concerning an arbitrator’s decision did not flow to this committee.
She stated that if any resolution involves money that resolution should flow through this committee and she feels past practice is not being followed.
Ms. Kurtz left committee at 12:15PM.
Ms. McCann stated that she believe the committee needs to have further discussion on the Sikich study as well.
She noted that the report talks about the need to increase staff in Administration, but the report did not discuss the needs of other staff in this area.”
Here’s an older note about IMRF pension fund problems at the county.
June 24, 2014
“Because of new standards upcoming changes to be included in future audits include pension actuarial tables that look at the annual position of IMRF.
The full accrual statement will include the County’s unfunded pension liability and projections of what will be owed on the plans. The County Board members will start to hear pension “chatter”.
The IMRF Plan is in a much better position than many plans throughout the Country, though there are some plans that are 100% funded.
This should not affect the County’s bond rating.
Mr. Sarbaugh informed the committee members that the County budgets for IMRF based on the approved positions.
Problems occur when it takes three to four years to settle a union contract and that causes the County to pay a huge lump sum payment to IMRF.
These large payments are compounded because the payout’s are based on current earnings, not what was earned when the negotiations started three or four years prior.
Committee members voiced concern that IMRF shows the County is under-funded.
The committee members were reminded that this is data for the 2012 fiscal year.
Mr. Austin reminded the committee members that IMRF tells the county what we need to pay.
IMRF wants to be 100% funded, though the market has not performed so the rates have gone up.
IMRF does the calculations on what the County will be required to pay.
IMRF adjusts the rate each April, which is provided prior to the budget.
There is nothing the County can do to address the higher payment requirement from those individuals that earned less three years ago.
These payments are controlled by IMRF.
Committee members questioned in terms of transparency, how do you explain to the taxpayers the large payments being made to IMRF.
The committee was reminded that a discussion on how large payout’s to IMRF will be defined in the Financial statement will be held when Mr. Skala returns.
Ms. Acker stated it is a policy decision on how to best handled this issue.
She stated there is no right or wrong way to address this.
This would not become a compliance issue.
Ms. Kurtz voiced concern because when she reviews the numbers listed under the SLEP fund.
The committee members were reminded that IMRF tells us what our obligations are.
Retirement funds are very complex and the members need to be aware that pensions are now getting a lot of attention.
The committee members were informed that they need to be aware of what is going on so they can address opportunities for policy decisions.
Mr. Provenzano voiced concern as they have never been told that the SLEP fund is not 100% funded and that this fund is barely 50% funded while continuing to negotiate new contracts for those involved in SLEP.
Mr. Austin reminded the committee members that we do not determine the payments.
This is calculated by IMRF.
We can ‘blame’ IMRF but this fund is still under funded.
The current investments are causing a swing to some of the numbers, that was one reason the County was asked to pay more for this obligation in 2009.
The County elected to pay more in order to make this investment whole.
When the IMRF benchmark was looming, they came to us to let us know we had a problem.
This is not a threshold that we control.
The County only receives one annual statement per year so we don’t know if we are getting close to these thresholds.
Ms. Palmer stated that in March 2013 IMRF reported that the entire fund is 96.1% funded.
The report shows appreciable gains of 20% in 2013.
Ms. Barnes questioned if IMRF is based on the County’s total payroll or based on an employee’s payroll level.
Committee members were informed a resolution was reviewed at the Law and Justice Committee meeting regarding a requirement for the supervisory staff in the Sheriff’s department to be paid a certain percent more than the non-supervisory staff.
It was stated that this type of action will increase the total obligation to IMRF as well. Mr. Sarbaugh stated that he does not believe wages affect the monthly obligation.
Committee members were informed that IMRF considers future costs into the rate we pay.
Every government pay their costs based on their workforce.
It was stated that the market has a quicker impact to the numbers.
Ms. Kurtz noted that the committee has had a number of discussions regarding the jail contract though they continue to have gaps in understanding the expenses, the numbers included in the CAFR and the decline of revenue streams though there is nothing on the ‘costs’ listed.”
Why does the County not have a section of its website devoted to IMRF explaining all of these issues to taxpayers?
Why does the county not have a section of its website devoted to bonds explaining the upcoming principal and interest payment schedule?
Instead taxpayers have to spend time wading through documents finding the answers on their own, and most taxpayers don’t have the knowledge to do that, and their elected officials don’t bother to explain the situation to the taxpayers.
The same thing happens in all taxing districts.
Pensions and bonds are the biggest issues facing taxpayers.
Not small townships.
Most small townships don’t have much debt or unfunded liabilities.
The biggest problems in the state are debt and unfunded liabilities.
Thank you Mark!
You are right on the money!
Joe Gottemoller is directly responsible for the creation of the Schofield Township Task Force.
The Task Force was not created by the Board, just Joe.
He could simply disband the group because he is wasting taxpayer dollars in this effort to create LARGER units of government.
These larger units of government would have the power to set their own salaries.
The group pushing for consolidation claims it will reduce salaries for elected officials.
How can they promise that when the new Boards have the power to set their own salaries?
BTW The numbers you posted with the time mark of 07/17/2015 at 2:28 pm are total expenditures, including what the Road District spent.
The Highway commissioners who have total control over the expenditure of the majority of township tax dollars are not even represented on the so-called Task Force.
The county is concerning itself because a state statute provides that the county board may put such referenda on the ballot without requiring the citizens to circulate petitions and get thousands of signatures, and a group has formed, done some research, and has requested same.
The county’s options in that respect were
(1) ignore the group and make them go out and get signatures;
(2) have one of the regular committees, such as management services, which considered the direct election of the county board chair resolution, take it up;
(3) form a special task and include some township officials as well as proponents.
I have no quarrel with the task force, however, I do think it should include a Road Commissioner and Township Assessor in addition to someone representing Supervisors.
Also, it should be clear that the matter would go to the full County Board regardless of any recommendation, which hasn’t been spelled out.
What will be the impact on assessments?
Who will be the assessor for the merged or subsumed townships?
Susan: There would be a new assessor elected to represent the entire merged township.
You would have an election at the regular time but now it would cover the entire area of the formerly two separate townships.
In smaller townships where there are now part time assessors, that job could potentially become full time.
I sponsored a bill in the 1970’s to allow townships to agree by intergovernmental agreement to have a multi-township assessor.
Mike, Joe has increase the committee to include a Road dude, by I’ve not heard about a assessor.
The effected road commissioners voted to have Alg Twh’s road commissioner represent them on the committee.
Susan, everything is going to be effected, even assessment rates.
The pro side seems to want to rush this threw, vote on the concept, then figure out the costs after the fact.
sound good to you?
No me!
So that would mean that Bob Miller is on the task force?
Actually, that’s a good idea.
He might want to add the McHenry County Assessor, who is a Democrat, to give that party a voice, as this is going to appear on both the Rep and Dem primary ballots if approved.
$186,045,763 McHenry County expenditures FY 2014.
$026,559,700 All Township expenditures FY 2014.
The county believes it can better serve taxpayers by consolidating a $26.5M unit of government, rather than lobby legislators to change IMRF pension law or otherwise reduce costs in its $186M unit of government?
At the very least the county could better educate the public on IMRF pensions on its website.
Instead the public has to educate themselves by locating then deciphering the pertinent information.
The county could do more to educate the public on how further IMRF pension reform can save the taxpayers money.
But they are not.
So here is some more pension education.
First those in IMRF also contribute to and thus receive Social Security.
That is not true in most other public sector pension funds in Illinois, the other notable exceptions being state employees (SERS pension fund).
The County participates in 3 IMRF pension plans.
1. Regular.
2. Sheriff (SLEP)
2. District (Conservation District?)
Pension statistics can be found in the Comprehensive Annual Financial Report (CAFR) or another financial document if the taxing district does not have a CAFR or they can be obtained via submitting a FOIA request for documents to the taxing district or pension fund.
The 2014 McHenry County CAFR was just approved July 1st or so, can’t locate it on the website.
From the Fiscal Year (FY) 2013 CAFR (the McHenry County fiscal year is December 1 thru November 20th).
Plan member (employee) contribution rates:
4.5% Regular Plan
7.5% Sheriff Dept Plan
4.5% District Plan (Conservation District?).
Employer contribution rates are determined annually by IMRF and include the normal (i.e. current year) cost plus an added amount to reduce the unfunded liability.
Unfunded liability in layman’s terms is the amount the pension fund is short; it’s the amount that should be in the pension fund right now, but is not; the amount is calculated by an actuarial formula; the idea is that the pension fund needs a certain amount right now so that projected investment returns allow the projected payouts.
Employer contribution rates for 2012
10.55% Regular Plan
23.62% Sheriff Dept Plan
11.73% District Plan (Conservation District?).
But that doesn’t include, apparently, the County and District (Conservation District?) contribution for disability benefits, death benefits, and supplemental retirement benefits, all of which are pooled at the IMRF level.
Contribution rates for disability and death benefits and set by the IMRF Board of
Trustees, while the supplemental retirement benefits rate is set by statute.
So where are the contribution rates for disability benefits, death benefits, and supplemental retirement benefits?
Maybe we should be talking about before talking about consolidating townships.
Annual Pension Cost in Calendar Year 2012
$5,334,510 Regular Plan
$2,755,659 Sheriff Dept Plan
$507,761 District Plan
$8,597,820 Total
Is the annual pension cost the employer cost only or does it also include the employee cost.
Maybe we should be talking about that before talking about consolidating townships.
Next, Actuarial Assumptions.
The required contributions for calendar year 2012 were determined as part of the December 31, 2010 actuarial valuation using the entry age normal actuarial cost method.
The actuarial assumptions at December 31, 2010 included:
(a) 7.50% investment rate of return (net of administrative and direct investment expenses).
(b) projected salary increases of 4.00% a year, attributable to inflation,
(c) additional projected salary increases ranging from 0.4% to 10.0% per year depending on age and
service, attributable to seniority/merit
(d) post-retirement benefit increases of 3% annually.
The actuarial value of plan assets was determined using techniques that spread the effects of short-term volatility in the market value of investments over a five-year period with a 20% corridor between the actuarial and market value of assets.
Each plan’s unfunded actuarial accrued liability at December 31, 2010 is being amortized as a level percentage of projected payroll on an open 30 year basis.
Well there’s much more but that’s enough for now.
Anything the taxpayer does not understand in that should be part of a Pensions for Dummies FAQ on the county website.
But there is not Pensions for Dummies FAQ on the county website.
The county thinks its more important to consolidate townships, which are not even part of the county.
Mark of all your comments about IMRF you never mention it is 96% fully funded at the moment, and has seen some reform already, and isn’t part of the state pension problems.
I think it could use future reform as you suggested.
All the contributions should be part of a employees total comp, negotiating who pays what amount should be between the employer and employee.
Rauner has talked about taxing pensions, better to make a 5% cut in the pensions so the pension fund gets direct benefit and the money doesn’t get lost in the general fund and spent wastefully.
How many employers in the private sector contribute 10.55%, 23.62%, or 11.73% to their employees retirement fund, while the employee contributes 4.5%, 7.5%, or 4.5%?
So here we go again taxpayers subsidizing benefits more generous and less risky benefits than they themselves receive, benefits which have been hiked over the years.
Each government employer participating in IMRF has its own IMRF pension funding level.
So the more meaningful statistic to property taxpayers is the IMRF funding level of each taxing district (governmental unit) on their property tax bill, not the overall funding level of IMRF for all employers.
For instance McHenry County taxpayers don’t pay taxes to Rock Island County so they don’t care much about the funding status of Rock Island’s IMRF pension fund, which is incorporated into the 96% funding level statistic.
What is the source of the 96% funding level statistic…where is that found…in what document or URL.
That would tell us if the 96% funding is market value or actuarial.
See the difference in the 2014 IMRF CAFR, which seems to be the most current CAFR on their website.
87.3 percent funding actuarial utilizing 5 year smoothing.
93.1 percent funding market value.
Let’s look at McHenry County’s IMRF funding levels, continuing where I left off previously in the McHenry County 2013 CAFR (the most recently available on the county website).
Regular Plan
As of December 31, 2012, the most recent actuarial valuation date, the Regular Plan was 79.77% funded.
The actuarial accrued liability for benefits was $106,849,241 and the actuarial value of assets was $85,235,771, resulting in an underfunded actuarial accrued liability (UAAL) of $21,613,470.
The covered payroll for calendar year 2012 (annual payroll of active employees covered by the plan) was $50,564,074 and the ratio of the UAAL to the covered payroll was 42.74%.
SLEP Plan
As of December 31, 2012, the most recent actuarial valuation date, the SLEP Plan was 53.29% funded.
The actuarial accrued liability for benefits was $52,906,778 and the actuarial value of assets was $28,192,668, resulting in an underfunded actuarial accrued liability (UAAL) of $24,714,110.
The covered payroll for calendar year 2012 (annual payroll of active employees covered by the plan) was $11,666,635 and the ratio of the UAAL to the covered payroll was 211.84%.
District (Conservation District?) Plan
As of December 31, 2012, the most recent actuarial valuation date, the District Plan was 68.30% funded.
The actuarial accrued liability for benefits was $9,610,061 and the actuarial value of assets was $6,563,413, resulting in an underfunded actuarial accrued liability (UAAL) of $3,046,648.
The covered payroll for calendar year 2012 (annual payroll of active employees covered by the plan) was $4,328,735 and the ratio of the UAAL to the covered payroll was 70.38%.
Recap as of the end of December 31, 2012 (which is the date in the McHenry County 2013 CAFR which is the latest CAFR on the county website).
The county board should list the current figures on the website.
After all the county board is elected to represent the taxpayers.
IMRF is not a state problem, other than the state legislators and Governors set the benefits.
IMRF is a local funding problem, other than local gets a lot of funding from the state albeit not earmarked for pension funding.
It’s an interwoven web but one thing is for sure, the money comes from the taxpayer one way or another, and the benefits are more generous than those received by almost every taxpayer who is not in one of the public sector pension funds in Illinois.
Here is some more information about the County’s IMRF pension funds from the county website.
IMRF Cash Funding Needs
Meeting 2/25/2014 8:30 AM
February 25, 2014 8:30 AM
Chairman McCann invited Ms. Schuster, Mr. Chirikos and Chairwoman Hill to join the committee members at the table so they could be involved in the discussion regarding the IMRF (Illinois Municipal Retirement Fund) Cash Funding Needs.
Mr. Sarbaugh joined committee members for presentation of the IMRF Cash Funding Needs of the County.
Because of concerns, this presentation was put together so the committee could focus on the issues and concerns facing the IMRF fund and cost projections over the next several years.
Ms. Linda McMahon, Financial Analyst, and Ms. Cindy Kozlowski, Sr. Financial Analyst joined Mr. Sarbaugh for this presentation.
These individuals are responsible for making sure the County is IMRF compliant.
For those new to the County Board, this issue has not just “snuck up on us”.
In 2010 the County Board took action when the cash balance dropped faster than projected.
At that time the board stated that if 2010 should end with a surplus those funds could be utilized to fund IMRF.
This action occurred in early 2011.
Because of what was happening, they continued to review this fund.
This fund continued to move faster than projected.
Committee members continued with a review of the IMRF/SLEP history from 1997 to current.
The rates are based on the calendar year.
In April the County will receive a new rate.
Investments for IMRF are better this year, so it is hopeful that we will receive a rate decline.
In 2010 the County Board was notified that there was a hit to the markets making it necessary for the employers to make their funds healthy.
IMRF offered an opportunity to continue to pay at the FY09 rate and they would carry the difference at a rate of 7.5%.
Since the County had a 16 month reserve it was recommended that we go ahead and pay this at the current rate with the understanding that we did not know how long the economic issues would last.
The County was hopeful this would only last for a short period, which we all know did not happen.
The rates have grown every year, except for 2014.
Compounding the issue is that the County also pays for SLEP (Sheriff’s Law Enforcement Personnel) retirement plan, which includes the peace offices and deputies in the Sheriff’s Department.
The committee members were informed that this program is much more generous than IMRF.
The employee contribution for IMRF from 1997 – 2014 averaged 4.5%.
The average contribution for the SLEP employees for 1997 – 2006 was 6.5%.
This was increased in 2007 to 7.5%.
The employer portion for IMRF is currently 10.76% with contributions to SLEP being 25.17%.
The County is paying 15% more for the SLEP contributions.
If you review the IMRF Fund Tax Levy History it shows that the amount collected in 2014 will be less than what was collected in 2005.
Mr. Sarbaugh noted that he works with the County Board Chair, the Finance and Audit Chair, and the County Administrator to determine what level of funds will be needed to operate.
Committee members were reminded that there is no statutory tax rate cap so if the County should say that all the taxes are to go to IMRF, they can do so.
The only limits are to the overall tax cap.
Valley Hi, the Conservation District and the Mental Health Board have reached their maximum set tax rate cap.
IMRF, Social Security, the Tort Fund and the General Fund have no State set statutory tax rate cap.
Mr. Sarbaugh stated that he will not know how much has been collected for 2013 for another 30 days.
He has requested an increase to the IMRF levy rate.
You can see the declining valuation, which artificially raises the rate.
In order to maintain the funding, something is needed in order to offset the fund.
Committee members were reminded that there is a County policy to maintain a 6 month reserve.
In the past the reserve rose to a high of 16.29 months in reserve, which was too high.
In 2010, this fund was in line with County policy.
The fund then dropped in 2011 and 2012.
The County does not budget for worst case scenarios.
Recent impacts to the cash balance due to retroactive pay, contract settlements, payouts of accumulated benefits and comp time, court settlements on personnel action and changes to IMRF policies have caused the cash balance to become seriously depleted.
Mr. Heisler left committee at 9:18 AM.
Committee members questioned the large 28% increase to the fund in 2009-2010.
They were informed that this occurred because of contract settlements.
Committee members were reminded that one of the contracts included a yearlong arbitration so back pay for two years was included as a part of their contract settlement.
The County also has three contracts with step increases which can change the amount of earnings in a given year.
The last few step movements is greater.
SLEP has much greater increases as well.
Once the officers have made all their steps they only receive the same increases as the regular employees for IMRF.
Mr. Heisler returned to committee at 9:25 AM.
Mr. Provenzano left committee at 9:26 AM.
It was noted there is some confusion between the “Budget” and “Cash”.
There was a request to enhance the cash balance two years ago.
At that time they budgeted for the true cost of the FOP contracts.
One cannot calculate for unknowns.
They are now able to actually budget for personnel, though they don’t budget for unknowns like sick leave buy-back, vacation buy-back, overtime or comp time.
They rely on the department heads to provide these costs.
Committee members were reminded that the budget is not the issue it is the costs that are hitting the cash fund.
Mr. Sarbaugh noted that one issue is that employees take comp time and then don’t use this time for years causing comp time to cost more at today’s rate than when it was originally granted.
The number of hours an employee can carry over has been negotiated down in many of the contracts though this is still an issue.
Military pay draws on the reserve as the County has to pick up the costs to IMRF in order to keep that employee whole.
The County is required to pick up the military contributions until the employee returns from duty.
Many of the contract settlements include back pay as well.
Ms. Kurtz left committee at 9:30 AM.
Committee members voiced concern that these pay outs are so burdensome to the County.
Committee members were informed that there is now a County Policy that does not allow more than six weeks of vacation time to remain on the books at one time.
Mr. Provenzano returned to committee at 9:35 AM.
Committee members were informed that the main focus at this time is there is only $263,000 left in the IMRF fund.
With the new eTime system, they are able to budget more confidently and efficiently.
Mr. Sarbaugh stated he also has been budgeting more closely.
Ms. Kurtz returned to committee at 9:37 AM.
Committee members continued with their review of the current and future demands to IMRF.
With the jail contract, they added 70 employees to corrections which has increased the cost of Step increases and IMRF Liability costs.
Other budget unknowns include the cost of ongoing contract union negotiations for FOP Unit III.
The contract for this unit expired in November 2012 with ongoing negotiations.
This contract will include retro pay for at least two years.
The Valley Hi Nurses have a new contract in negotiations so the contract may include retro payments as well.
The McHenry County Recorder’s department has staff that may be going union as well.
Staff for this department were not awarded increases for FY2014 that still need to be accounted for.
FOP Unit’s I and II begin negotiations this fall, which will affect the budget as well.
Additional concerns include possible use of the CPI and changes to IMRF.
Committee members continued with their review of the cash needs analysis as of February 24, 2014.
All special funds are cross charged for any related expenses.
The next page takes into account all property taxes collected.
The County cannot pay its February liability so this fund will need to be fixed until the tax cycle kicks in.
Mr. Sarbaugh noted that he has brought forward some short term recommendations, though he stated he is not sure what would be the best way to handle this issue.
He stated that this information is being brought forward to allow for a discussion by the committee.
After a lengthy discussion, Mr. Provenzano questioned what the consequences would be to forgive the loan to the General Fund.
M s. Kurtz reminded committee members that the previous resolution identified these funds as being a loan so this is an outstanding liability that must be addressed.
Mr. Provenzano stated that this is an obligation and this issue is an exception to the rules and it is up to this committee to determine the best way to handle an adjustment to this fund.
Mr. Hammerand voiced concern and stated that this issue was the ramification of providing raises and retro pay to staff.
Mr. Austin noted that this issue was created by union arbitrator awards that included retro pay for a couple of years.
It was stated that the question now is whether to loan funds from the General Fund to address the IMRF Fund needs with payments being made in increments or to lower the cash reserves in order to cancel this issue.
Committee members questioned with the decline of the reserves, would the County then be able to sustain this growth?
They stated they don’t want to find the County needing to issue tax anticipation warrants in the future because of this action.
They stated that they do not want to find the County with a cash reserve problem.
Mr. Sarbaugh reminded committee members that he was asked last March if this budget is sustainable.
He stated that he believes it is though he can’t control some things that affect this organization from the outside.
The County does not have total control over everything that affects the budget.
The County has no control over retroactive costs to bring union contracts current after a negotiated settlement.
The current resolution, as it stands, allows for the borrowing of up to $2.2 million dollars while forgiving the previous loan made in 2013.
This also creates a new loan for the $2.2 million dollars.
Committee members questioned if the committee could just authorize the creation of a new loan to the IMRF Fund from the General Fund and then come back to the committee to discuss how to address the loans.
Committee members stated they do not feel comfortable with forgiving one loan while creating a new loan.
Committee members stated that one of the issues that needs to be discussed by the committee in the future is the ongoing cycle that the Finance Committee finds themselves in by being put in a position of approving arbitrator awards without any thought of how the County is to pay for these costs.
These costs are compounded when during the negotiations they approve two years of retro pay.
There is not enough emphasis being put on this issue.
The County needs to find a way to address this issue, if not, this issue will stay the same.
It was stated that we “budget” appropriately but that does not address the cash flow issues that continue to face the County.
To continue to have to take a loan from the General Fund to address this issue is not the answer.
Wow, I said it needed more adjustment agreeing with you.
You want more I guess?
And that’s not including the County’s OPEB (Other Post Employement Benefit) plans.
This also from the McHenry County 2013 CAFR (Comprehensive Annual Financial Report).
County Plan
As of August 1, 2011, the most recent actuarial valuation date, the plan was 0% funded.
The actuarial accrued liability for benefits was $15,797,805 and the actuarial value of assets was $0, resulting in an unfunded actuarial accrued liability (UAAL) of $15,797,805.
The covered payroll (annual payroll of active employees covered by the plan) was $65,612,697, and the ratio of the UAAL to the covered payroll was 24.08%.
District Plan (Conservation District?)
As of March 31, 2012, the most recent actuarial valuation date, the plan was 0% funded.
The actuarial accrued liability for benefits was $145,721 and the actuarial value of assets was $0, resulting in an unfunded actuarial accrued liability (UAAL) of $145,721.
The covered payroll (annual payroll of active employees covered by the plan) was $4,160,902, and the ratio of the UAAL to the covered payroll was 3.50%.
The exact name of the report is:
County of McHenry, Illinois
Comprehensive Annual Financial Report
For the Fiscal Year Ended November 30, 2013
It’s 237 pages.
So where is the Pension and OPEB easy to read, easy to understand, in plain English, document on the County website, describing all this to taxpayers funding the pensions and OPEB.
And then there’s the IMRF 13th payment perk taxpayers fund via employer contributions to IMRF.
Pensioners receive a bonus check every July.
The Daily Herald and others have written about it.
“The bonuses are funded by charging the nearly 3,000 government agencies throughout the state with IMRF-eligible employees 0.62 percent of those employees’ annual salaries.
That money is pooled together in a special bonus fund and paid out every July to the retirement system’s beneficiaries, IMRF officials said.”
Read the article, McHenry County in effect subsidized DuPage County with the 13th payment perk.
There are plenty of problems and lack of transparency at the County level that should be getting a lot of attention to be sure it’s on a sustainable cost effective transparent footing before they go around consolidating townships.
By the way the IMRF 13th payment is billed as a hedge against inflation, a type of cost of living allowance for retirees, akin to a cost of living allowance received by Social Security or a COLA by the other public sector pension funds.
The net effect is it’s just another taxpayer funded benefit for public sector workers, with an employer contribution and and no employee contribution.
IMRF employees also contribute to and thus receive Social Security and thus a Social Security cost of living allowance.
There’s no 13th payment or COLA in a 401K.
It’s not a level playing field.
What if anything does all this ongoing discussion about IMRF have to do with consolidating Townships?
Every public employee represents a shadow debt owed by Illinois taxpayers.
If the township does not participate in IMRF,and many don’t ,how does that add to the debt load?
Since McHenry County has taken the “initiative” on “streamlining” local government, will they also be looking at consolidating McHenry County’s TWENTY-NINE villages and cities? Does it make sense to have THAT many in one County? And does anyone have the totals on their budgets, employees, and union contracts..?
Am I missing something, or is the voter’s decision made by simply looking at the comparative tax rates of townships at issue?
It seems to me that the lower tax rate township citizens will immediately begin subsidizing the higher tax rate township.
If savings accrue through consolidation, the lower tax rate township will have to see the combined township tax rate lower than their current tax rate in order to benefit.
Using the data from the table above, I ran comparisons of 4 proposed township marriages.
( even if data from table is incomplete or inaccurate, the procedure of comparison is easy: divide revenues ( extension) by eav.
Doing that separately for each township then using totals ( total revenues divided by total eav):
( Algonquin taxpayer win, Grafton taxpayers lose)
( savings from consolidation would need to get total rate down to,or below Graftons original tax rate of .001953461)
So in every case of consolidation, there is one township jumping in tax rate while the other township drops in tax rate.
Why would any of the lower tax rate township voters want to vote for this?
Here is information about the county, McHenry County, from the Comptroller website.
For Fiscal Year 2014
Chief Executive Officer – Peter Austin
Chief Financial Officer – Pam Palmer
Population – 307,283
Equalized Assessed Valuation – 7,189,697,681
Total Employees 1,218
Total Expenditures – $186,045,763
Total Revenues – $186,970,364
Total Indebtedness $55,283,516
There is lots more information about the county and other taxing districts on the state comptroller website.
The population and EAV does not match up exactly with the overall total numbers of the townships, likely because the data is self reported by the taxing districts.
Once again, just pick a taxing district or pension fund or retiree healthcare or state agency or Federal agency or some aspect of government and start reading documents and asking questions about their financials and operations.
Chances are no one else is doing that.
Although here we have some people looking into townships, which is ok, why they chose townships and not some of the bigger problems like pensions remains a mystery.
Maybe they don’t feel like they can make a very big impact on pensions right now.
Maybe they want a small victory and then move onto something bigger.
Maybe there are political reasons.
Most likely different people in the townships consolidation effort have different agendas, as is often the case with any group effort which involves a decision.
Maybe if we could see the municipalities and school districts side by side with the Twhs it would give us a better understanding.
I agree.
My other worry is if they consolidate a township with low debt with one with more what is the effect?
One person at the hearing said that debt will remain with the taxpayers now responsible for it.
A Modest Proposal
One of the impediments to the current proposal is that it tries to place some large population townships with some townships with much smaller populations. I think that the residents of those smaller population townships might have concerns about being out voted at the ballot box when electing the new officials for the new townships by people in the former larger population township, and therefore might be inclined to vote against the consolidation, thereby killing it.
Given these numbers, I have a modest suggestion to reconfigure the current proposal. It is as follows:
(1) Leave Algonquin Township as is. It is too big to be combined with either Grafton or Nunda without overwhelming the votes in those areas.
(2) Combine Nunda with McHenry, which have roughly equal populations and which would form a new township with a population similar to that of Algonquin.
(3) Combine Richmond and Burton, both with similar size populations.
(4) Combine Grafton with Dorr. However, Grafton still has twice the population of Dorr. Similarly, Greenwood, which could be combined with Hebron, has a significantly larger population than the latter. Most of that population is in the North end of Woodstock. If you reduced the size of Greenwood geographically by moving the township line with Dorr North to the current northern boundary of Woodstock, you would place Grafton/Dorr as well as Greenwood/Hebron more nearly equal in population plus you put all of Woodstock in the same township. You can use a line of latitude for the description of the location of the new township line.
The rest are combined as in the current proposal.
As a thought on why pensions are a bigger priority than townships, the top pension in Illinois is over $500,000, whereas
Alden Township expenditures for 2014 were $365K,
Hartland was $503K,
Hebron was $455K,
Riley was $504K,
Coral was $503K, &
Burton was $295K.
If they don’t spend a lot of money, how much money can the taxpayer save through consolidation?
Maybe some, probably not a whole lot.
No one is leaving Illinois because townships spend too much money.
That is not one of our biggest problems.
Maybe we can save some money through township consolidation but it is not a top priority.
Open The Books has Snapshot Spending Reports for the Townsihps.
http://www.openthebooks.com/search/documents/?PensionCode=1841
Path to the above link:
http://www.OpenTheBooks.com > Illinois > Reports > SNAPShot Reports > Village, Township, County, Park, Library, Local SNAPShot Reports.
Scroll down to the bottom of the link and select 500 items per page.
Register on the site first or risk losing your place on the website if you do too many queries.
Here are the McHenry County Townships for which Open the Books Snapshot Spending Reports are available.
Reports Available
Algonquin Township
Burton Township
Chemung Township
Dorr Township
Greenwood Township
Grafton Township
Marengo Township
McHenry Township
Nunda Township
Richmond Township
Riley Township
Seneca Township
No reports are available for the following townships.
Alden Township
Coral Township
Dunham Township
Hartland Township
Hebron Township
With the exception of Burton Township, the lack of an IMRF pension fund coincides with no available Snapshot Spending Report.
Mike W, what you propose sounds like something that should be shared with the commission.
Cal made a suggestion about creating a CL/Lakewood Twh, he should make up his map and present it also.
Much to be considered, so I’m not liking the pro side trying to force a fast vote on it, then after the fact work out the details.
Very N.P. of them, and do we need another mess like ACA?
Frankly, IMO, we should of been able to vote on that monster also.
Any major changes to our gov, taxes, and etc should not be left up to our elected.
History is on my side on that comment!
Ya Man!
We are in times of coffee without caffeine, Milk without lactose, and cigarettes without nicotine.
When are we going to have politicians without corruption?
Sarcasm 330
Nob: I had previously shared that information with the Chair of the commission and one of the members.
Just thought I would throw it out here as well since I saw that Cal had published the numbers.
It is going to be Option 4, I believe.
Alden Township – Zero full time employees, 2 full time, $107,683 total salary to all employees.
Burton Township – Zero full time employees, 13 part time employees, $105,172 total salary to all employees.
Coral Township – 2 full time employees, 6 part time employees, $158,582 total salary to all employees.
Dunham Township – 4 full time employees, 10 part time employees, $209,505 total salary to all employees.
Hartland Township – 1 full time employee, 9 part time employees, $182,380 total salary to all employees.
Hebron Township – 1 full time employee, 4 part time employees, $148,235 total salary to all employees.
Richmond Township – 3 full time employees, 20 part time employees, $364,135 total salary to all employees.
Riley Township – No full time employees, 5 part time employees, $133,564 total salary to all employees.
Seneca Township – 2 full time employees, 10 part time employees, $162,980 total salary to all employees.
etc.
Illinois State Comptroller Data Warehouse.
http://warehouse.illinoiscomptroller.com > [type first name leaving out the word township] > Go > Show Me the Data > Population, EAV, and Employees
Including pensions with per pupil spending as much is spent on one public education classroom as the smaller townships spend in one year.
And most school districts never say they have enough money as they always need more money to close the achievement gap or due to more low income kids or improve technology or whatever.
OK Mike, options and input are a good thingy, even from a get rid of them dude like you!
LOL
The County has its own problems why is it worrying itself with townships.
Here is some information about the McHenry County IMRF Pension Fund.
McHenry County participates in the IMRF Regular and Sheriff Law Enforcement Plan (SLEP) pension funds.
The following from the McHenry County website.
Meeting 6/24/2014 8:30 AM
June 24, 2014 8:30 AM
This item has been placed onto the agenda to remind the committee they still have this item to review/discuss at a future committee meeting.
Ms. Barnes stated that she would like to see a report on the percentages different organizations are required to pay into IMRF and she would like to know the difference.
She stated that the County is required to pay 23% of SLEP though the numbers are going down and not as many new employees are added into SLEP.
She stated at some point payments will be made directly to the retirees without any new employees paying into that program. She stated she is hopeful that the report will identify the issues.
Ms. Barnes noted that staff is not addressing the County Board members concerns regarding the unions and the true impacts their agreements have on the taxpayers of the County.
Committee members agreed that a meeting with an IMRF representative would be helpful to better understand the payment system and the liability reports.
Ms. Barnes stated she is also concerned that some committee items seem to be skipping this committee. She stated that the resolutions are those items that have the biggest impact to this County.
She reminded committee members that the resolution concerning an arbitrator’s decision did not flow to this committee.
She stated that if any resolution involves money that resolution should flow through this committee and she feels past practice is not being followed.
Ms. Kurtz left committee at 12:15PM.
Ms. McCann stated that she believe the committee needs to have further discussion on the Sikich study as well.
She noted that the report talks about the need to increase staff in Administration, but the report did not discuss the needs of other staff in this area.”
http://mchenrycountyil.iqm2.com/Citizens/Detail_Motion.aspx?Frame=&MeetingID=2547&MinutesID=2231&MediaPosition=&ID=23975&Type=50&CssClass=%20style=
Here’s an older note about IMRF pension fund problems at the county.
June 24, 2014
“Because of new standards upcoming changes to be included in future audits include pension actuarial tables that look at the annual position of IMRF.
The full accrual statement will include the County’s unfunded pension liability and projections of what will be owed on the plans. The County Board members will start to hear pension “chatter”.
The IMRF Plan is in a much better position than many plans throughout the Country, though there are some plans that are 100% funded.
This should not affect the County’s bond rating.
Mr. Sarbaugh informed the committee members that the County budgets for IMRF based on the approved positions.
Problems occur when it takes three to four years to settle a union contract and that causes the County to pay a huge lump sum payment to IMRF.
These large payments are compounded because the payout’s are based on current earnings, not what was earned when the negotiations started three or four years prior.
Committee members voiced concern that IMRF shows the County is under-funded.
The committee members were reminded that this is data for the 2012 fiscal year.
Mr. Austin reminded the committee members that IMRF tells the county what we need to pay.
IMRF wants to be 100% funded, though the market has not performed so the rates have gone up.
IMRF does the calculations on what the County will be required to pay.
IMRF adjusts the rate each April, which is provided prior to the budget.
There is nothing the County can do to address the higher payment requirement from those individuals that earned less three years ago.
These payments are controlled by IMRF.
Committee members questioned in terms of transparency, how do you explain to the taxpayers the large payments being made to IMRF.
The committee was reminded that a discussion on how large payout’s to IMRF will be defined in the Financial statement will be held when Mr. Skala returns.
Ms. Acker stated it is a policy decision on how to best handled this issue.
She stated there is no right or wrong way to address this.
This would not become a compliance issue.
Ms. Kurtz voiced concern because when she reviews the numbers listed under the SLEP fund.
The committee members were reminded that IMRF tells us what our obligations are.
Retirement funds are very complex and the members need to be aware that pensions are now getting a lot of attention.
The committee members were informed that they need to be aware of what is going on so they can address opportunities for policy decisions.
Mr. Provenzano voiced concern as they have never been told that the SLEP fund is not 100% funded and that this fund is barely 50% funded while continuing to negotiate new contracts for those involved in SLEP.
Mr. Austin reminded the committee members that we do not determine the payments.
This is calculated by IMRF.
We can ‘blame’ IMRF but this fund is still under funded.
The current investments are causing a swing to some of the numbers, that was one reason the County was asked to pay more for this obligation in 2009.
The County elected to pay more in order to make this investment whole.
When the IMRF benchmark was looming, they came to us to let us know we had a problem.
This is not a threshold that we control.
The County only receives one annual statement per year so we don’t know if we are getting close to these thresholds.
Ms. Palmer stated that in March 2013 IMRF reported that the entire fund is 96.1% funded.
The report shows appreciable gains of 20% in 2013.
Ms. Barnes questioned if IMRF is based on the County’s total payroll or based on an employee’s payroll level.
Committee members were informed a resolution was reviewed at the Law and Justice Committee meeting regarding a requirement for the supervisory staff in the Sheriff’s department to be paid a certain percent more than the non-supervisory staff.
It was stated that this type of action will increase the total obligation to IMRF as well. Mr. Sarbaugh stated that he does not believe wages affect the monthly obligation.
Committee members were informed that IMRF considers future costs into the rate we pay.
Every government pay their costs based on their workforce.
It was stated that the market has a quicker impact to the numbers.
Ms. Kurtz noted that the committee has had a number of discussions regarding the jail contract though they continue to have gaps in understanding the expenses, the numbers included in the CAFR and the decline of revenue streams though there is nothing on the ‘costs’ listed.”
http://mchenrycountyil.iqm2.com/Citizens/Detail_Motion.aspx?Frame=&MeetingID=2547&MinutesID=2231&MediaPosition=&ID=23955&Type=50&CssClass=%20style=
We could go on and on about IMRF.
Why does the County not have a section of its website devoted to IMRF explaining all of these issues to taxpayers?
Why does the county not have a section of its website devoted to bonds explaining the upcoming principal and interest payment schedule?
Instead taxpayers have to spend time wading through documents finding the answers on their own, and most taxpayers don’t have the knowledge to do that, and their elected officials don’t bother to explain the situation to the taxpayers.
The same thing happens in all taxing districts.
Pensions and bonds are the biggest issues facing taxpayers.
Not small townships.
Most small townships don’t have much debt or unfunded liabilities.
The biggest problems in the state are debt and unfunded liabilities.
Thank you Mark!
You are right on the money!
Joe Gottemoller is directly responsible for the creation of the Schofield Township Task Force.
The Task Force was not created by the Board, just Joe.
He could simply disband the group because he is wasting taxpayer dollars in this effort to create LARGER units of government.
These larger units of government would have the power to set their own salaries.
The group pushing for consolidation claims it will reduce salaries for elected officials.
How can they promise that when the new Boards have the power to set their own salaries?
BTW The numbers you posted with the time mark of 07/17/2015 at 2:28 pm are total expenditures, including what the Road District spent.
The Highway commissioners who have total control over the expenditure of the majority of township tax dollars are not even represented on the so-called Task Force.
The county is concerning itself because a state statute provides that the county board may put such referenda on the ballot without requiring the citizens to circulate petitions and get thousands of signatures, and a group has formed, done some research, and has requested same.
The county’s options in that respect were
(1) ignore the group and make them go out and get signatures;
(2) have one of the regular committees, such as management services, which considered the direct election of the county board chair resolution, take it up;
(3) form a special task and include some township officials as well as proponents.
I have no quarrel with the task force, however, I do think it should include a Road Commissioner and Township Assessor in addition to someone representing Supervisors.
Also, it should be clear that the matter would go to the full County Board regardless of any recommendation, which hasn’t been spelled out.
What will be the impact on assessments?
Who will be the assessor for the merged or subsumed townships?
Susan: There would be a new assessor elected to represent the entire merged township.
You would have an election at the regular time but now it would cover the entire area of the formerly two separate townships.
In smaller townships where there are now part time assessors, that job could potentially become full time.
I sponsored a bill in the 1970’s to allow townships to agree by intergovernmental agreement to have a multi-township assessor.
Mike, Joe has increase the committee to include a Road dude, by I’ve not heard about a assessor.
The effected road commissioners voted to have Alg Twh’s road commissioner represent them on the committee.
Susan, everything is going to be effected, even assessment rates.
The pro side seems to want to rush this threw, vote on the concept, then figure out the costs after the fact.
sound good to you?
No me!
So that would mean that Bob Miller is on the task force?
Actually, that’s a good idea.
He might want to add the McHenry County Assessor, who is a Democrat, to give that party a voice, as this is going to appear on both the Rep and Dem primary ballots if approved.
$186,045,763 McHenry County expenditures FY 2014.
$026,559,700 All Township expenditures FY 2014.
The county believes it can better serve taxpayers by consolidating a $26.5M unit of government, rather than lobby legislators to change IMRF pension law or otherwise reduce costs in its $186M unit of government?
At the very least the county could better educate the public on IMRF pensions on its website.
Instead the public has to educate themselves by locating then deciphering the pertinent information.
The county could do more to educate the public on how further IMRF pension reform can save the taxpayers money.
But they are not.
So here is some more pension education.
First those in IMRF also contribute to and thus receive Social Security.
That is not true in most other public sector pension funds in Illinois, the other notable exceptions being state employees (SERS pension fund).
The County participates in 3 IMRF pension plans.
1. Regular.
2. Sheriff (SLEP)
2. District (Conservation District?)
Pension statistics can be found in the Comprehensive Annual Financial Report (CAFR) or another financial document if the taxing district does not have a CAFR or they can be obtained via submitting a FOIA request for documents to the taxing district or pension fund.
The 2014 McHenry County CAFR was just approved July 1st or so, can’t locate it on the website.
From the Fiscal Year (FY) 2013 CAFR (the McHenry County fiscal year is December 1 thru November 20th).
Plan member (employee) contribution rates:
4.5% Regular Plan
7.5% Sheriff Dept Plan
4.5% District Plan (Conservation District?).
Employer contribution rates are determined annually by IMRF and include the normal (i.e. current year) cost plus an added amount to reduce the unfunded liability.
Unfunded liability in layman’s terms is the amount the pension fund is short; it’s the amount that should be in the pension fund right now, but is not; the amount is calculated by an actuarial formula; the idea is that the pension fund needs a certain amount right now so that projected investment returns allow the projected payouts.
Employer contribution rates for 2012
10.55% Regular Plan
23.62% Sheriff Dept Plan
11.73% District Plan (Conservation District?).
But that doesn’t include, apparently, the County and District (Conservation District?) contribution for disability benefits, death benefits, and supplemental retirement benefits, all of which are pooled at the IMRF level.
Contribution rates for disability and death benefits and set by the IMRF Board of
Trustees, while the supplemental retirement benefits rate is set by statute.
So where are the contribution rates for disability benefits, death benefits, and supplemental retirement benefits?
Maybe we should be talking about before talking about consolidating townships.
Annual Pension Cost in Calendar Year 2012
$5,334,510 Regular Plan
$2,755,659 Sheriff Dept Plan
$507,761 District Plan
$8,597,820 Total
Is the annual pension cost the employer cost only or does it also include the employee cost.
Maybe we should be talking about that before talking about consolidating townships.
Next, Actuarial Assumptions.
The required contributions for calendar year 2012 were determined as part of the December 31, 2010 actuarial valuation using the entry age normal actuarial cost method.
The actuarial assumptions at December 31, 2010 included:
(a) 7.50% investment rate of return (net of administrative and direct investment expenses).
(b) projected salary increases of 4.00% a year, attributable to inflation,
(c) additional projected salary increases ranging from 0.4% to 10.0% per year depending on age and
service, attributable to seniority/merit
(d) post-retirement benefit increases of 3% annually.
The actuarial value of plan assets was determined using techniques that spread the effects of short-term volatility in the market value of investments over a five-year period with a 20% corridor between the actuarial and market value of assets.
Each plan’s unfunded actuarial accrued liability at December 31, 2010 is being amortized as a level percentage of projected payroll on an open 30 year basis.
Well there’s much more but that’s enough for now.
Anything the taxpayer does not understand in that should be part of a Pensions for Dummies FAQ on the county website.
But there is not Pensions for Dummies FAQ on the county website.
The county thinks its more important to consolidate townships, which are not even part of the county.
Mark of all your comments about IMRF you never mention it is 96% fully funded at the moment, and has seen some reform already, and isn’t part of the state pension problems.
I think it could use future reform as you suggested.
All the contributions should be part of a employees total comp, negotiating who pays what amount should be between the employer and employee.
Rauner has talked about taxing pensions, better to make a 5% cut in the pensions so the pension fund gets direct benefit and the money doesn’t get lost in the general fund and spent wastefully.
How many employers in the private sector contribute 10.55%, 23.62%, or 11.73% to their employees retirement fund, while the employee contributes 4.5%, 7.5%, or 4.5%?
So here we go again taxpayers subsidizing benefits more generous and less risky benefits than they themselves receive, benefits which have been hiked over the years.
Each government employer participating in IMRF has its own IMRF pension funding level.
So the more meaningful statistic to property taxpayers is the IMRF funding level of each taxing district (governmental unit) on their property tax bill, not the overall funding level of IMRF for all employers.
For instance McHenry County taxpayers don’t pay taxes to Rock Island County so they don’t care much about the funding status of Rock Island’s IMRF pension fund, which is incorporated into the 96% funding level statistic.
What is the source of the 96% funding level statistic…where is that found…in what document or URL.
That would tell us if the 96% funding is market value or actuarial.
See the difference in the 2014 IMRF CAFR, which seems to be the most current CAFR on their website.
87.3 percent funding actuarial utilizing 5 year smoothing.
93.1 percent funding market value.
Let’s look at McHenry County’s IMRF funding levels, continuing where I left off previously in the McHenry County 2013 CAFR (the most recently available on the county website).
Regular Plan
As of December 31, 2012, the most recent actuarial valuation date, the Regular Plan was 79.77% funded.
The actuarial accrued liability for benefits was $106,849,241 and the actuarial value of assets was $85,235,771, resulting in an underfunded actuarial accrued liability (UAAL) of $21,613,470.
The covered payroll for calendar year 2012 (annual payroll of active employees covered by the plan) was $50,564,074 and the ratio of the UAAL to the covered payroll was 42.74%.
SLEP Plan
As of December 31, 2012, the most recent actuarial valuation date, the SLEP Plan was 53.29% funded.
The actuarial accrued liability for benefits was $52,906,778 and the actuarial value of assets was $28,192,668, resulting in an underfunded actuarial accrued liability (UAAL) of $24,714,110.
The covered payroll for calendar year 2012 (annual payroll of active employees covered by the plan) was $11,666,635 and the ratio of the UAAL to the covered payroll was 211.84%.
District (Conservation District?) Plan
As of December 31, 2012, the most recent actuarial valuation date, the District Plan was 68.30% funded.
The actuarial accrued liability for benefits was $9,610,061 and the actuarial value of assets was $6,563,413, resulting in an underfunded actuarial accrued liability (UAAL) of $3,046,648.
The covered payroll for calendar year 2012 (annual payroll of active employees covered by the plan) was $4,328,735 and the ratio of the UAAL to the covered payroll was 70.38%.
Recap as of the end of December 31, 2012 (which is the date in the McHenry County 2013 CAFR which is the latest CAFR on the county website).
79.77% funded Regular
53.29% funded SLEP (County Sheriff’s department)
68.30% funded District (Conservation District).
Those numbers have since improved but not to 96%.
The county board should list the current figures on the website.
After all the county board is elected to represent the taxpayers.
IMRF is not a state problem, other than the state legislators and Governors set the benefits.
IMRF is a local funding problem, other than local gets a lot of funding from the state albeit not earmarked for pension funding.
It’s an interwoven web but one thing is for sure, the money comes from the taxpayer one way or another, and the benefits are more generous than those received by almost every taxpayer who is not in one of the public sector pension funds in Illinois.
Here is some more information about the County’s IMRF pension funds from the county website.
IMRF Cash Funding Needs
Meeting 2/25/2014 8:30 AM
February 25, 2014 8:30 AM
Chairman McCann invited Ms. Schuster, Mr. Chirikos and Chairwoman Hill to join the committee members at the table so they could be involved in the discussion regarding the IMRF (Illinois Municipal Retirement Fund) Cash Funding Needs.
Mr. Sarbaugh joined committee members for presentation of the IMRF Cash Funding Needs of the County.
Because of concerns, this presentation was put together so the committee could focus on the issues and concerns facing the IMRF fund and cost projections over the next several years.
Ms. Linda McMahon, Financial Analyst, and Ms. Cindy Kozlowski, Sr. Financial Analyst joined Mr. Sarbaugh for this presentation.
These individuals are responsible for making sure the County is IMRF compliant.
For those new to the County Board, this issue has not just “snuck up on us”.
In 2010 the County Board took action when the cash balance dropped faster than projected.
At that time the board stated that if 2010 should end with a surplus those funds could be utilized to fund IMRF.
This action occurred in early 2011.
Because of what was happening, they continued to review this fund.
This fund continued to move faster than projected.
Committee members continued with a review of the IMRF/SLEP history from 1997 to current.
The rates are based on the calendar year.
In April the County will receive a new rate.
Investments for IMRF are better this year, so it is hopeful that we will receive a rate decline.
In 2010 the County Board was notified that there was a hit to the markets making it necessary for the employers to make their funds healthy.
IMRF offered an opportunity to continue to pay at the FY09 rate and they would carry the difference at a rate of 7.5%.
Since the County had a 16 month reserve it was recommended that we go ahead and pay this at the current rate with the understanding that we did not know how long the economic issues would last.
The County was hopeful this would only last for a short period, which we all know did not happen.
The rates have grown every year, except for 2014.
Compounding the issue is that the County also pays for SLEP (Sheriff’s Law Enforcement Personnel) retirement plan, which includes the peace offices and deputies in the Sheriff’s Department.
The committee members were informed that this program is much more generous than IMRF.
The employee contribution for IMRF from 1997 – 2014 averaged 4.5%.
The average contribution for the SLEP employees for 1997 – 2006 was 6.5%.
This was increased in 2007 to 7.5%.
The employer portion for IMRF is currently 10.76% with contributions to SLEP being 25.17%.
The County is paying 15% more for the SLEP contributions.
If you review the IMRF Fund Tax Levy History it shows that the amount collected in 2014 will be less than what was collected in 2005.
Mr. Sarbaugh noted that he works with the County Board Chair, the Finance and Audit Chair, and the County Administrator to determine what level of funds will be needed to operate.
Committee members were reminded that there is no statutory tax rate cap so if the County should say that all the taxes are to go to IMRF, they can do so.
The only limits are to the overall tax cap.
Valley Hi, the Conservation District and the Mental Health Board have reached their maximum set tax rate cap.
IMRF, Social Security, the Tort Fund and the General Fund have no State set statutory tax rate cap.
Mr. Sarbaugh stated that he will not know how much has been collected for 2013 for another 30 days.
He has requested an increase to the IMRF levy rate.
You can see the declining valuation, which artificially raises the rate.
In order to maintain the funding, something is needed in order to offset the fund.
Committee members were reminded that there is a County policy to maintain a 6 month reserve.
In the past the reserve rose to a high of 16.29 months in reserve, which was too high.
In 2010, this fund was in line with County policy.
The fund then dropped in 2011 and 2012.
The County does not budget for worst case scenarios.
Recent impacts to the cash balance due to retroactive pay, contract settlements, payouts of accumulated benefits and comp time, court settlements on personnel action and changes to IMRF policies have caused the cash balance to become seriously depleted.
Mr. Heisler left committee at 9:18 AM.
Committee members questioned the large 28% increase to the fund in 2009-2010.
They were informed that this occurred because of contract settlements.
Committee members were reminded that one of the contracts included a yearlong arbitration so back pay for two years was included as a part of their contract settlement.
The County also has three contracts with step increases which can change the amount of earnings in a given year.
The last few step movements is greater.
SLEP has much greater increases as well.
Once the officers have made all their steps they only receive the same increases as the regular employees for IMRF.
Mr. Heisler returned to committee at 9:25 AM.
Mr. Provenzano left committee at 9:26 AM.
It was noted there is some confusion between the “Budget” and “Cash”.
There was a request to enhance the cash balance two years ago.
At that time they budgeted for the true cost of the FOP contracts.
One cannot calculate for unknowns.
They are now able to actually budget for personnel, though they don’t budget for unknowns like sick leave buy-back, vacation buy-back, overtime or comp time.
They rely on the department heads to provide these costs.
Committee members were reminded that the budget is not the issue it is the costs that are hitting the cash fund.
Mr. Sarbaugh noted that one issue is that employees take comp time and then don’t use this time for years causing comp time to cost more at today’s rate than when it was originally granted.
The number of hours an employee can carry over has been negotiated down in many of the contracts though this is still an issue.
Military pay draws on the reserve as the County has to pick up the costs to IMRF in order to keep that employee whole.
The County is required to pick up the military contributions until the employee returns from duty.
Many of the contract settlements include back pay as well.
Ms. Kurtz left committee at 9:30 AM.
Committee members voiced concern that these pay outs are so burdensome to the County.
Committee members were informed that there is now a County Policy that does not allow more than six weeks of vacation time to remain on the books at one time.
Mr. Provenzano returned to committee at 9:35 AM.
Committee members were informed that the main focus at this time is there is only $263,000 left in the IMRF fund.
With the new eTime system, they are able to budget more confidently and efficiently.
Mr. Sarbaugh stated he also has been budgeting more closely.
Ms. Kurtz returned to committee at 9:37 AM.
Committee members continued with their review of the current and future demands to IMRF.
With the jail contract, they added 70 employees to corrections which has increased the cost of Step increases and IMRF Liability costs.
Other budget unknowns include the cost of ongoing contract union negotiations for FOP Unit III.
The contract for this unit expired in November 2012 with ongoing negotiations.
This contract will include retro pay for at least two years.
The Valley Hi Nurses have a new contract in negotiations so the contract may include retro payments as well.
The McHenry County Recorder’s department has staff that may be going union as well.
Staff for this department were not awarded increases for FY2014 that still need to be accounted for.
FOP Unit’s I and II begin negotiations this fall, which will affect the budget as well.
Additional concerns include possible use of the CPI and changes to IMRF.
Committee members continued with their review of the cash needs analysis as of February 24, 2014.
All special funds are cross charged for any related expenses.
The next page takes into account all property taxes collected.
The County cannot pay its February liability so this fund will need to be fixed until the tax cycle kicks in.
Mr. Sarbaugh noted that he has brought forward some short term recommendations, though he stated he is not sure what would be the best way to handle this issue.
He stated that this information is being brought forward to allow for a discussion by the committee.
After a lengthy discussion, Mr. Provenzano questioned what the consequences would be to forgive the loan to the General Fund.
M s. Kurtz reminded committee members that the previous resolution identified these funds as being a loan so this is an outstanding liability that must be addressed.
Mr. Provenzano stated that this is an obligation and this issue is an exception to the rules and it is up to this committee to determine the best way to handle an adjustment to this fund.
Mr. Hammerand voiced concern and stated that this issue was the ramification of providing raises and retro pay to staff.
Mr. Austin noted that this issue was created by union arbitrator awards that included retro pay for a couple of years.
It was stated that the question now is whether to loan funds from the General Fund to address the IMRF Fund needs with payments being made in increments or to lower the cash reserves in order to cancel this issue.
Committee members questioned with the decline of the reserves, would the County then be able to sustain this growth?
They stated they don’t want to find the County needing to issue tax anticipation warrants in the future because of this action.
They stated that they do not want to find the County with a cash reserve problem.
Mr. Sarbaugh reminded committee members that he was asked last March if this budget is sustainable.
He stated that he believes it is though he can’t control some things that affect this organization from the outside.
The County does not have total control over everything that affects the budget.
The County has no control over retroactive costs to bring union contracts current after a negotiated settlement.
The current resolution, as it stands, allows for the borrowing of up to $2.2 million dollars while forgiving the previous loan made in 2013.
This also creates a new loan for the $2.2 million dollars.
Committee members questioned if the committee could just authorize the creation of a new loan to the IMRF Fund from the General Fund and then come back to the committee to discuss how to address the loans.
Committee members stated they do not feel comfortable with forgiving one loan while creating a new loan.
Committee members stated that one of the issues that needs to be discussed by the committee in the future is the ongoing cycle that the Finance Committee finds themselves in by being put in a position of approving arbitrator awards without any thought of how the County is to pay for these costs.
These costs are compounded when during the negotiations they approve two years of retro pay.
There is not enough emphasis being put on this issue.
The County needs to find a way to address this issue, if not, this issue will stay the same.
It was stated that we “budget” appropriately but that does not address the cash flow issues that continue to face the County.
To continue to have to take a loan from the General Fund to address this issue is not the answer.
http://mchenrycountyil.iqm2.com/Citizens/Detail_Motion.aspx?Frame=&MeetingID=2539&MinutesID=2081&MediaPosition=&ID=20789&Type=50&CssClass=%20style=
Wow, I said it needed more adjustment agreeing with you.
You want more I guess?
And that’s not including the County’s OPEB (Other Post Employement Benefit) plans.
This also from the McHenry County 2013 CAFR (Comprehensive Annual Financial Report).
County Plan
As of August 1, 2011, the most recent actuarial valuation date, the plan was 0% funded.
The actuarial accrued liability for benefits was $15,797,805 and the actuarial value of assets was $0, resulting in an unfunded actuarial accrued liability (UAAL) of $15,797,805.
The covered payroll (annual payroll of active employees covered by the plan) was $65,612,697, and the ratio of the UAAL to the covered payroll was 24.08%.
District Plan (Conservation District?)
As of March 31, 2012, the most recent actuarial valuation date, the plan was 0% funded.
The actuarial accrued liability for benefits was $145,721 and the actuarial value of assets was $0, resulting in an unfunded actuarial accrued liability (UAAL) of $145,721.
The covered payroll (annual payroll of active employees covered by the plan) was $4,160,902, and the ratio of the UAAL to the covered payroll was 3.50%.
The exact name of the report is:
County of McHenry, Illinois
Comprehensive Annual Financial Report
For the Fiscal Year Ended November 30, 2013
It’s 237 pages.
So where is the Pension and OPEB easy to read, easy to understand, in plain English, document on the County website, describing all this to taxpayers funding the pensions and OPEB.
And then there’s the IMRF 13th payment perk taxpayers fund via employer contributions to IMRF.
Pensioners receive a bonus check every July.
The Daily Herald and others have written about it.
“The bonuses are funded by charging the nearly 3,000 government agencies throughout the state with IMRF-eligible employees 0.62 percent of those employees’ annual salaries.
That money is pooled together in a special bonus fund and paid out every July to the retirement system’s beneficiaries, IMRF officials said.”
http://www.dailyherald.com/article/20140205/news/702059943
Read the article, McHenry County in effect subsidized DuPage County with the 13th payment perk.
There are plenty of problems and lack of transparency at the County level that should be getting a lot of attention to be sure it’s on a sustainable cost effective transparent footing before they go around consolidating townships.
By the way the IMRF 13th payment is billed as a hedge against inflation, a type of cost of living allowance for retirees, akin to a cost of living allowance received by Social Security or a COLA by the other public sector pension funds.
The net effect is it’s just another taxpayer funded benefit for public sector workers, with an employer contribution and and no employee contribution.
IMRF employees also contribute to and thus receive Social Security and thus a Social Security cost of living allowance.
There’s no 13th payment or COLA in a 401K.
It’s not a level playing field.
What if anything does all this ongoing discussion about IMRF have to do with consolidating Townships?
Every public employee represents a shadow debt owed by Illinois taxpayers.
If the township does not participate in IMRF,and many don’t ,how does that add to the debt load?
Since McHenry County has taken the “initiative” on “streamlining” local government, will they also be looking at consolidating McHenry County’s TWENTY-NINE villages and cities? Does it make sense to have THAT many in one County? And does anyone have the totals on their budgets, employees, and union contracts..?
Am I missing something, or is the voter’s decision made by simply looking at the comparative tax rates of townships at issue?
It seems to me that the lower tax rate township citizens will immediately begin subsidizing the higher tax rate township.
If savings accrue through consolidation, the lower tax rate township will have to see the combined township tax rate lower than their current tax rate in order to benefit.
Using the data from the table above, I ran comparisons of 4 proposed township marriages.
( even if data from table is incomplete or inaccurate, the procedure of comparison is easy: divide revenues ( extension) by eav.
Doing that separately for each township then using totals ( total revenues divided by total eav):
1. Algonquin/Grafton.
Algonquin rate: .002408172
Grafton rate: .001953461
Combined rate ( total revenues /total Eav) : .002242668
( Algonquin taxpayer win, Grafton taxpayers lose)
( savings from consolidation would need to get total rate down to,or below Graftons original tax rate of .001953461)
2. McHenry/Nunda
McHenry rate: .00557327
Nunda rate: .004699327
Total rate: .005130769
3. Dorr/Greenwood
Dorr rate: .003796336
Greenwood rate: .006401209
Total rate: .004643521
4. Chemung/Dunham
Chemung rate: .007246997
Dunham rate: .009981699
Total rate: .008281001
So in every case of consolidation, there is one township jumping in tax rate while the other township drops in tax rate.
Why would any of the lower tax rate township voters want to vote for this?
Here is information about the county, McHenry County, from the Comptroller website.
For Fiscal Year 2014
Chief Executive Officer – Peter Austin
Chief Financial Officer – Pam Palmer
Population – 307,283
Equalized Assessed Valuation – 7,189,697,681
Total Employees 1,218
Total Expenditures – $186,045,763
Total Revenues – $186,970,364
Total Indebtedness $55,283,516
There is lots more information about the county and other taxing districts on the state comptroller website.
http://warehouse.illinoiscomptroller.com
The population and EAV does not match up exactly with the overall total numbers of the townships, likely because the data is self reported by the taxing districts.
Once again, just pick a taxing district or pension fund or retiree healthcare or state agency or Federal agency or some aspect of government and start reading documents and asking questions about their financials and operations.
Chances are no one else is doing that.
Although here we have some people looking into townships, which is ok, why they chose townships and not some of the bigger problems like pensions remains a mystery.
Maybe they don’t feel like they can make a very big impact on pensions right now.
Maybe they want a small victory and then move onto something bigger.
Maybe there are political reasons.
Most likely different people in the townships consolidation effort have different agendas, as is often the case with any group effort which involves a decision.