Galesburg City Council is nearing the end of its budgeting process this year. One of the biggest concerns to the city and municipalities across the state is that they continue to grapple with how much to fund police and fire pensions when rate returns are strikingly low compared to years past.
Last night, City Manager Todd Thompson proposed spending around $4.3 million in FY17 on pensions. According to council documents, that number is roughly $753,000 less than the actuary recommended amount but $876,000 more than the state minimum.
If approved, Thompson tells WGIL this would be the first year the city would not fund at the recommended level, an issue he says he’s not too concerned about.
“The city for years has funded at the recommended contribution level and it’s perfectly acceptable to fund it at the state minimum, that’s what you have to do by law,” Thompson says. “We’ve always tried to do it at the higher level because the more money you can put into those pension funds, the more you’re better off because you get the interest on those funds.”
Thompson says the city has “taken a hit” from the bond rating agencies who determine the return on investment.
Mayor John Pritchard, Thompson and various aldermen have in past meetings advocated for a down state pension grouping system to get a better return rate. However, the issue is largely tied up at the state level which has yet to allow such a move.
