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updated: 2/28/2014 7:17 AM

Island Lake board OKs fund transfer for pensions

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Island Lake trustees on Thursday agreed to transfer $50,000 from a dormant village fund set up to help reduce the town's debt to its police pension account.

The money will come from an impact-fee fund built up with money from developers. The fund contains about $214,000, but it's been sitting unused, Village Treasurer Ed McGinty said.

The transfer will make a big dent in the pension fund's $389,000 shortfall, which was discovered after an audit last year.

The funding hole developed from 2010 to 2013. In those years, only 27 percent of the money that was supposed to go into the retirement fund actually made it there.

The balance was used to cover other debts, particularly the town's widely criticized legal bills.

The biggest discrepancy occurred in the 2011 fiscal year. Of the $178,005 in taxes the village collected for the pension fund that year, none made it into the account, according to the audit.

Earlier this month, the village board voted to fire longtime Finance Director John Little, who was in charge of the town's checkbook during the time the account was mismanaged. McGinty now oversees the town's finances.

No criminal charges or civil complaints have been filed in connection with the issue.

State law says money earmarked for a town's police pension fund must go into that account, officials said. Impact-fee funds don't have such legal requirements, said David McArdle, the village's attorney.

"We're not under the gun to pay (that) back," McArdle said.

Trustees pledged to reimburse the money to the impact-fee fund, however. Future village budgets will include reimbursements for the fund, Mayor Charles Amrich said.

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