The City of Northlake, like all communities in Illinois, funds a Police Pension Fund. The terms of the pension are set by the State Legislature in Springfield, but finding the money to pay for the pension fund is left to each local community. As of December 31, 2013, the Police Pension Fund had total cash and investments of $15,414,405, up from $13,532,952 in the previous year. The fund had a good year in 2013. The City contributed $1,012,148.00, and the fund earned an additional $1,079,000, or 13.19%.

Despite growing by over $2 million in 2013, the Police Pension Fund is still funded at 60.07% for 2013, up from 59.28% in 2012. You can see the financial strain placed on municipalities to properly maintain adequate funding levels, when growth of over $2,000,000 in one year barely increases the percentage of funding. Some communities are in even worse condition. For example, the City of Chicago’s Police Pension Fund is funded at less than 30%.

While relief from Springfield would be welcome, and I am hopeful that something will happen soon, we must operate under the current conditions.

Video gaming was touted by several politicos as a bonanza for both the State and local governments. The City Council approved video gaming for Northlake with the stipulation that all proceeds be paid to the Police Pension Fund. As of October 20, 2014, video gaming has generated $29,020.32 for the City of Northlake. Of that amount $17,000 is from licensing fees, while $12,020.32 represents the 5% municipal tax. All of the revenue was paid to the Police Pension Fund.

While the additional revenue is certainly welcome, you can see that in the bigger picture, video gaming revenue pales in comparison to the amount required to fund the Police Pension Fund.

The Fund’s actuaries are recommending that the City contribute the same amount as the previous year, $1,012,148.00. If there is any good news, it’s that the amount did not increase.

The State Legislature has mandated that all Police and Fire Pensions be 90% funded by 2040, and that if the required annual contributions are not made, the amount will be withheld from revenues going to municipalities from the State such as sales tax, income tax and other state funding programs.

This is the reality of Pension Funding. The City of Northlake will meet the funding obligations dictated by the State legislature. So far we have been fortunate in that City services and programs have been able to continue. However, our infrastructure program, such as street repaving, water and sewer replacement and maintenance of City facilities has slowed somewhat, but we have been able to maintain our assets in relatively good condition.

As we move forward, we will meet all of these various obligations while trying not to place an undue financial burden on our residents.

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