Kane County can fund pension increases, for now

Posted11/8/2012 5:30 AM

Kane County's pension liability payment will increase by about $729,000 in 2013, and all of that will have to be paid with new, non-property tax money since county board members recently voted to keep the county's overall tax levy flat. That includes the levy that funds the county's Illinois Municipal Retirement Fund and Sheriff's Law Enforcement Personnel retirement plan obligations.

Kane County has a track record of funding its IMRF obligations at or near 100 percent. But the county, like many other public bodies, had to make up a major loss of IMRF funding when the pension fund's investments tanked starting in 2008. When that happened, IMRF gave each participating employer, such as the county, an option to slowly increase its funding contribution over three years rather than getting stuck with a huge bill at once.

Sheila McCraven, the county's human resources director, told a county board committee Wednesday that the three-year time limit for underfunding its IMRF contribution is now over. In 2013, the county will have to pay the full rate it owes. That change represents an 11.5 percent increase in the amount the county must pay into IMRF in 2013.

Since the county board decided to keep its IMRF property tax levy flat for 2013, that $729,000 of increased cost must be paid by some other method.

Human Services Committee Chairman Phil Lewis said the good news is the county has the money, at least for 2013.

Lewis said a reduction in the amount of money the county has budgeted for insurance liability will fund a major chunk of the $729,000. The insurance liability fund is the account the county uses to pay for outside legal counsel and the defense of lawsuits. The county board trimmed that budget back by $452,000 next year. That leaves about $277,000 of IMRF obligations to cover. Lewis said increased income the county will receive from housing federal inmates in the county jail, and servicing DuPage County's juvenile offenders at the Juvenile Justice Center will cover much of the remaining cost. Various other fee increases will make up the difference, Lewis said. However, he indicated that may be only a short-term fix. The county's IMRF obligations will continue to increase in the coming years, Lewis said. Those costs may eventually clash with the desire of new county board members and the new chairman, Chris Lauzen, to keep the county's tax levy flat.

"This year the increase wasn't funded by property taxes," Lewis said."But if you read the IMRF report, it could get a lot worse in future years."

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