The Village of Chatham received an update on the status of their pensions this week. Overall, the funding percentage of the police pension has gone up 1.65 percent, which is good news. However, the pension is still only 59.26 percent funded.

Pensions are funded both by direct monetary contributions and by profits from investing those contributions. Last year, the investment income was more than enough to cover the payments to pensioners. That meant all of the new contributions went directly to closing the funding gap. But although the investment income was enough to cover the payments, it was lower than anticipated. Lost investment income has to be made up by additional contributions from the village. This, combined with normal salary increases, mean that the village’s expected contribution will be larger next year.

But even this cloud shows a silver lining. The markets giveth, and the markets taketh away. Even minor shifts in investment performance can dramatically change funding percentages. The fact that Chatham is still making progress towards its funding goals despite underperformance in its investments means the village leadership is doing what it should be doing to meet its pension obligations. And an annual increase in funding percentage of 1.65 percent still puts the village on track to reach the state’s 90 percent funding goal by 2040.

You can read the full report here, or watch the presentation here.

Raising pay for government workers is always a delicate subject. Springfield’s budget problems are well known, and the city has dramatically scaled back the size of its workforce already. And in an election year, raising pay for nonunion workers or for the city’s leadership makes for even more challenging optics.

But as long as there is inflation, there is justification for cost of living adjustments (COLA) for city workers. Any year without a COLA increase is functionally a cut in pay.  Mayor Langfelder brought a resolution calling for a 1.5 percent increase for non-union  employees. He said bringing the motion was important for transparency. However, the city council declined to take action this proposal.

Alderman Hanauer explained the council’s decision not to move on the motion. Pay increases are an executive function. Once the council has approved the budget, it is up to the mayor to assign raises as he sees fit and as money allows. Because the council had already approved money to cover these raises, implementing them was “100 percent an executive function.”

Aldermanic Pay

Alderman Theilen also brought forward two ordinances dealing with pay for the city council and the city’s executive officers. Like most units of government, the city council cannot raise its own pay. Any salary increases can only be approved for future councils. With the next municipal election coming up April 2nd, the time to implement an increase for the next cycle is now.

Alderman McMenamin said that these increases are important for making local office accessible to those of lesser means. Aldermen put in substantial numbers of hours for their wards. And city executives must leave the private sector. There has not been an increase for the last eight years, and if the increases are not approved, it will be another four before the matter can be brought up again. McMenamin said that personal finances should not be a reason someone should be unable to serve their community.

Other aldermen did not share this perspective. Alderwoman DiCenso said that people join the city council to serve their community, not to get rich. Passion, not profit, should be what motivates someone to run for office.

Both of Theilen’s ordinances passed out of committee and will be discussed at the next city council meeting.

Follow along live with the Chatham Village Board. They will be discussing the village’s finances and pension liability. Next year’s tax levy will also be planned.

Additionally, the Glenwood High School Boys Cross County team was recognized for winning their state contest.