Round Lake Park wants more cash for police pensions
Round Lake Park residents next month will be asked to pay more toward village government to beef up the ailing police pension fund.
Under the proposal, Round Lake Park would borrow $5.4 million by issuing bonds to investors that would be used to strengthen the fund. If voters approve the Nov. 8 ballot question seeking permission to borrow the money, it would cost about $100 more annually for an owner of a house valued at $125,200, officials said.
It's the second time in three years village officials have asked voters to help stabilize the pension fund, which is severely underfunded. In April 2013, voters rejected a request for a property tax rate hike to raise money. That ballot measure was defeated by a 449 to 195 margin.
Trustee Scott Murar said a defeat of the Nov. 8 ballot question could have consequences for the village. If the request is rejected, three officers from the 11-member department could be laid off in an effort to save money needed for the annual pension fund payments, he said.
"It would be a big compromise in our safety, I would think," Murar said of the potential police cuts.
Round Lake Park's police pension fund is at 23 percent to 24 percent, believed to be one of the lowest in Illinois. Murar said the problem is a state tax cap limits how much the village can collect from property owners, thus thwarting any effort to boost the police pension fund.
Deputy Police Chief Dan Burch, who serves as pension board president, said the fund covers 13 active members, four retired officers and one surviving spouse. Pension boards are allowed to sue towns with lagging funds, but Burch said it would not make sense to do so and force the village to incur legal expenses.
"The village has been, from the beginning, trying to work with us," Burch said.
Murar said while the village is meeting minimum contribution requirements, it is about half what should go into the police pension pool annually. Officials said the village has been falling about $240,000 short each year.
Round Lake Park officials said the state could take action if the pension fund remains low. Documents show the Illinois Department of Insurance has sent a notice of noncompliance to the village.
Under Illinois law, the state could start diverting to the police fund one third of the money it earmarks to Round Lake Park, if the annual contributions are not increased this year. The law requires municipalities to be on track to have police and firefighter pension funds at 90 percent by 2040.
Village records show in the last financial year, which ended April 30, the state sent about $1.7 million to Round Lake Park as its share of taxes including motor fuel, income and video gambling.
Murar said losing any of the state revenue to the pension fund would hurt daily operations.
"We're a small community, a small budget, small operating (expenses)," he said. "It would be very detrimental to the village and those services we provide to the citizens."
No opponents to the ballot question have publicly surfaced. Murar said supporters soon will start knocking on doors as part of a public information campaign.