East St. Louis working with pension boards to avoid intercept, save police department
East St. Louis fire and police pension board members will give the city another chance to keep their pension funds current before deciding whether or not to pursue another revenue intercept by the Illinois Comptroller’s office.
That’s the step both of the boards took last September when audits revealed the city was behind nearly $4 million in mandated contributions to the funds that support retirement benefits for its first responders and their families.
Since then, the comptroller has seized all incoming revenues to the city and redistributed them to the pension funds to cover the back payments.
The revenue intercept caused interruptions to city services, delayed the budgeted hiring of at least five new police officers and threatened the jobs of firefighters and operation of one of the department’s engine houses.
Another one, City Manager Brooke Smith confirmed last week, would force the city to shut down its police department altogether.
That’s not what anybody wants, said Dennis Orsey, attorney for the pension boards. He says the pension boards are motivated to help the city meet its obligations without cutting back on those essential services.
“Both pension funds want to give (the city) one more opportunity,” Orsey said. “The pie has wedges. There’s a wedge for the city administration to keep the city operating. There’s a wedge for active duty police, active duty firefighters. There’s a wedge for police pension fund. There’s a wedge for the fire pension fund.
“We will fill in all of the holes with the numbers they provide. Everybody’s gotta share the pie equally.”
Abdon Pallasch, a spokesman for Illinois Comptroller Susana Mendoza, confirmed that the city’s shortfall was paid up as of December. The intercept may continue, however, if the city can’t prove its ability to make its pension contributions independently.
Members of both pension boards are working with city officials and pension board members on a monthly payment schedule that helps keep the funds current without interfering with the city’s ability to provide basic services to its residents. They held an initial discussion at East St. Louis City Hall last Tuesday.
City leaders agreed to present both funds detailed city financial information with a contribution proposal by Friday, Feb. 21. The firemen’s pension board will meet Feb. 25 and the police pension board will meet Feb. 27 to discus the city’s proposal and possible next steps.
Johnny Anthony, president of the fireman’s pension fund, said the city has offered a monthly contribution of $200,000. The fund spends about $312,000 each month on benefits, he said.
“We have to listen to the city and we have done that. We are waiting on them to come back with the numbers before we decide to take the deal they are offering,” Anthony said. “They still need to make us whole and put us back up to $12 million. If they do that, we will definitely work with them to definitely try to get things back right.”
The most immediate step the city must take, Orsey says, is continue regular audits in order to “get its financial house in order.”
The prior city administration committed to a $100,000 monthly payment, but those stopped as soon as the boards voted on petition the state for the intercept. The city has not made a direct contribution to the pension funds since June of 2019.
East St. Louis Mayor Robert Eastern III said both sides of the negotiations are working toward the same goal.
“The amount they intercepted is completely paid off. One hundred percent of our revenues were intercepted. We didn’t fight it,” Eastern said after last week’s meeting. “We are trying to keep our obligation. All under-served urban cities are struggling to maintain their finances.
“Going forward, we plan to make sure everybody is in the same room hearing the same thing. The dialogue today was good.”
