At a time of serpentine pension reform debate in Illinois, St. Charles officials learned Monday night that two of their pension funds have no system of checks and balances in place.
Both the police and the fire pension funds have custodians who also serve as the investment broker. Outside auditor Fred Lantz described that setup as “the fox guarding the hen house.”
Police pension obligations are funded at about 60 percent, according to the audit, and firefighter pension obligations are funded at about 80 percent. Both are levels the outside auditor classified as hitting or surpassing the funding benchmarks he would like to see for a municipality the size of St. Charles.
Both pension funds are overseen by boards, and two of the five appointments to those boards are made by the city. The remaining members are current or retired police officers or firefighters.
City Administrator Brian Townsend said if there is blame to assign for lack of proper checks and balances over the funds, it sits with the pension boards.
“It’s fair to say that while the city has some influence through our appointed members, we do not have the final say,” Townsend said.
The city’s other major pension account is the Illinois Municipal Retirement Fund. It covers the pensions owed to rest of the city’s pension-eligible employees. The outside audit showed those pension obligations are about 69 percent funded. Lantz said that is a good number for the city right now.
Lantz added that the overall report is a “very, very good story” for the city to be showing organizations with which it wants to do business, particularly given the tight economy.
“From a long-term perspective, you operated the city on about a break-even standpoint in 2012,” Lantz said. “In these economic times, it’s a very good year for the city to end up in that financial position.”
Preceding the news about the firefighter pension fund, city officials honored Fire Chief Patrick Mullen. Mullen will retire at the end of November.
He came to St. Charles from Naperville five years ago to be the chief. Mullen spent 19 years in Naperville, where he achieved the rank of assistant fire chief, and has 35 years in the fire profession. City officials listed his oversight of the construction of a new fire headquarters downtown, the purchase of a new ladder truck, enhanced emergency planning and his pursuit of a pending accreditation for the fire department among Mullen’s most admirable accomplishments.
“I thank all of you for the opportunity to serve the citizens of St. Charles,” Mullen said. “I think we’ve accomplished some pretty neat things together.”
Mullen and his wife live in St. Charles and plan to remain in the city during his retirement.Copyright © 2014 Paddock Publications, Inc. All rights reserved.