The Murphysboro Police and Fire Department building is seen in 2015.

MURPHYSBORO — At a meeting in November, Murphysboro city aldermen were reviewing some of the city's financial statements when one questioned an item in the city fire department's budget.

Fire Chief Steve Swafford explained that proposed budgetary increase was for someone preparing to retire and, as such, planning to take advantage of a contractual agreement that allowed him to change his job title for a salary and, eventually, pension boost. He would assume the position of "chieftain," gaining a $10,000 salary increase in his final year or so of work and be positioned to bring home more money in his pension at retirement.

In recent years, this practice has cost Murphysboro tax payers about $700,000 a year in tax assessments.

This pension bump is apparently a long-running practice with fire and police pensions, but one that is eliciting more than raised eyebrows as municipalities try to harness resources and relieve tax burdens.

The money for that increase — until the person retires — comes from the city's budget, said Sandra Ripley, Murphysboro's human resources director. After retirement, the pension cost become part of the tax levy the city files against property owners, Ripley said.

It's what's wrong with this state, local and state representatives decry.

“No, I won’t go for that,” Alderman Gary McComb said this past Thursday. “That’s what wrong with Illinois pensions, and that’s why everyone is raising taxes to get money for fire and police pensions.”

Who's paying the bill?

Murphysboro is a city of 7,811 people, with a 2014 median household income of $28,915, significantly lower than the state average of $56,797, according to U.S. census data. That same year, more than one-fourth of the city's residents — 28.1 percent — lived below the poverty threshold, doubling the state average of 14.1 percent.

The city is hungry for new business, for economic and social reasons; economically, because it doesn't have a lot from which to draw. In 2004, one of the city's largest employers — the Curwood paper and packaging manufacturer — closed, eliminating more than 100 local jobs; city officials are still trying to attract a new tenant and revenue to that 10-acre space.

A little more than half — 57.7 percent of its 4,011 housing units are owned, and the city has spent the better part of this year trying to sell off abandoned properties and lots that it is losing money on to maintain. It had a list of 100-some properties and has sold about 10, for $2,500 and less.

The city's fiscal year 2015 budget was a combined $7.8 million. For 2014, the city's Equalized Assessed Valuation was $67 million, according to a report from the Illinois Comptroller's office.

In Murphysboro, according to a May 1, 2015, state insurance report, the city paid $772,210 for its fire and police pensions — $400,442 for the firefighters and $371,768 for the police. That does not include money paid toward other government retirees through the Illinois Municipal Retirement Fund.

Alderman Bill Pierson said the Illinois Department of Insurance computes the portion that each municipality owes toward its police and fire pensions; he noted that fire and police workers also contribute toward their own pensions. Police contribute 9.91 percent toward their pensions, while firefighters pay 9.45 percent, according to Ripley.

"It is not a budgeted item," Pierson said of the pension tax levy. "It is a mandated thing from the Illinois Department of Insurance. We fund it through a tax levy. We don't use it (those tax levies) for anything else."

In 2014, the city levied $1.25 million, half of it for the fire ($300,287) and police ($303,323) pensions — which was not received until 2015. Thus far into this year, Murphysboro has received 88 percent of those assessments — $266,667.48 toward the firefighters' pension and $269,361.23 for the police pension.

The county prepares the tax bill, of which Murphysboro receives 14.4 percent for what people pay on those assessments, Ripley said.

“I think that happens all across the whole entire state, it’s not just Murphysboro," Alderman Dan Bratton said. "It’s probably a problem for small-town America.”

Chieftains and training officers

Some attribute the load of the fire and police pensions to contractual language that allows them to increase their base salary so they can be leave for retirement earning a pension at a higher rate. Murphysboro city firefighters apply to become a "chieftain," while the city's police officers become a "training officer," according to contractual language.

Since 2010, three of Murphysboro's retiring firefighters have increased their salaries by a combined $35,208.14, according to a FOIA request. One retiree saw his salary 'bumped up' by $14,190.54 and another for $10,758.20; a firefighter retiring in February has a pending $10,259.40 salary bump-up. A fourth retiree was ineligible to receive the bumped-up salary.

Over that same time period, two retired police officers saw their salaries jump $9,565 in one instance and $10,386.20 in another, according to the FOIA documents.

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The starting salary for a patrol officer is $29,984 and for a firefighter, $30,612. The city just negotiated a new four-year contract with firefighters; it takes effect Jan. 1, 2016, and sees firefighters earning a 2 percent increase in 2016 and 2017 and a 1.5 percent increase in 2018 and 2019.

Contract negotiations with police are up for renewal April 30, 2016.

"I would love to get out of there (the contracts)," Bratton said, "but the problem … is that naturally they don’t want to turn loose of it ..."

"I think police and fire combined are 44 percent of our budget, and a lot of that has to do with the pension," Bratton said, "but by state law, they’re mandated certain things and then by contracts, there is something that would be in there that they get a 20 percent bump the year before they retired, which increases their pensions."

Pierson said that language has been in contracts for at least the past 11 years, as long as he's been on the board.

"I don't agree with that … but once it gets in the contract, it is virtually impossible to get out," Pierson said. "I don't know whether it's possible or not; it's just really hard."

According to the state's comptroller office document, Murphysboro's fire pensions for 2013 were funded at 52 percent and its police at 50 percent — far below the 80 percent the state considers safe.

What Murphysboro is experiencing is what many other cities throughout the state are experiencing, said Ted Dabrowski, spokesman and vice president of policy for the Illinois Policy Institute, a 501(c)3 organization.

"Murphysboro looks like the average, but that average is horrible — maybe I shouldn’t say horrible," Dabrowski said. "It’s extremely dangerous because the pension funds could go broke.”

"It’s very bad, across Illinois,” he said. “Illinois has one of the worst-funded pensions in the nation. If this was private-sector funding, it would have been shut down and (boarded) up a long time ago.”

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Pension padding?

Local government's pension liabilities (actuarial accrued liability)*


(*Data from The Warehouse, http://warehouse.illinoiscomptroller.com/)

Municipality Population (2013) Equalized Assessed Value (total) Illinois Municipal Retirement Fund (IMRF) Fire Police
BENTON 6,910 $699,869 3,060,575 4,243,702 5,686,675
- Funded ratio 83.1 81.3 36.8
CARBONDALE 26,324 $296,209,270 19,436,577 21,952,791 40,145,792
- Funded ratio 67.3 60.1 49.6
CARTERVILLE 5,496 $77,732,164 2,786,300 611,370 (2012) 1,250,150 (2014)
- Funded ratio 85.3 0.0 24.1
HERRIN 12,852 $132,501,622 6,934,854 12,534,634 11,154,519
- Funded ratio 66.1 46.7 (97.9 for 2014) 37.4
MARION 17,129 $286,807,293 12,682,720 11,875,528 15,036,581
- Funded ratio 79.9 71.7 59.4
MURPHYSBORO 7,894 $67,615,205 6,097,295 7,470,748 9,757,311
- Funded ratio 73.2 52.0 50.1
PINCKNEYVILLE 5,634 $29,789,925 4,794,104 0 3,483,597
- Funded ratio 73.8 0.0 14.4
(*Data from The Warehouse, http://warehouse.illinoiscomptroller.com/)


Stephanie Esters is a reporter covering Jackson and Union counties.

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