Council Overrides Mayoral Veto of Budget

By Mary Helt Gavin

In an evening filled with procedural twists and turns, at the March 10 City Council meeting, aldermen overrode Mayor Lorraine Morton's veto of the budget approved on Feb. 25. Citing the number of homes in foreclosure and at risk of foreclose, Mayor Morton said the 7-percent increase in the City's portion of the property tax was too great a burden for the taxpayers of Evanston to bear and not in the best interest of the community.

The Mayor had prepared information for Council members that she said suggested the Council could reduce City's contributions to the police and firefighters' pension funds, thereby reducing the overall tax burden to the citizens.

Aldermen unanimously rejected the Mayor's proposal and overrode the veto, suspending Council rules to be able to vote on the veto the same night they received it. Because the Mayor did not offer a line-item veto but instead vetoed the entire budget, the effect, had it survived, would have been to shut down all City operations, said First Assistant Corporation Counsel Herb Hill.

Council's approval of the budget came on Feb. 25, too late for the Mayor to return a veto during the previous fiscal year, which ended on Feb 29. Had Council not overridden the veto, the budget for the present fiscal year would have been invalidated, thus rendering all City contracts and expenditures null and void, Mr. Hill told the Council. "We cannot support the veto if it paralyzes the City," said Alderman Lionel Jean-Baptiste, 2nd Ward.

Alderman Delores Holmes, 5th Ward, said, "My first concern is the operation of the City."

Mayor Morton said she had not been able to ascertain a way to offer a line-item veto and chided the aldermen for not having enough respect for her efforts to wait the usual two weeks before voting on her veto. Several aldermen spoke of their admiration for the Mayor, assured her their vote was not personal and noted her tireless efforts to keep the City's property taxes a minimum.

"We all appreciate your concern for the taxpayers of Evanston. You have been a leader in protecting the taxpayer," said Alderman Elizabeth Tisdahl, 7th Ward.

Council members had to vote to suspend the Council rule mandating that consideration of the "return" [the veto] occur at the Council meeting after the return; then to amend Council rules to allow them to vote on the return that same night. Only then could they vote on the veto, which, in a rare show of unanimity on the Council, they rejected.

Council Bytes

At the Feb. 25 City Council meeting, Mayor Lorraine Morton read a proclamation in support of the Evanston Community Development Corporation (ECDC) and proclaimed March 1 as ECDC Outstanding Citizens Day. The organization, a not-for-profit that, Mayor Morton said, has worked to develop the west side with emphasis on minority enterprise, youth employment and affordable housing, honored Fifth Ward Alderman Delores Holmes and retired Police Chief William Logan its benefit on March 1.

City Council members also bade farewell to Public Works Director David Jennings, whose last official Council meeting was Feb. 25.

Last week's meetings were officially the final ones for Public Works Director David Jennings. Council members thanked him for his service to Evanston.

Local History for Black History Month

Dino Robinson, founder of Shorefront, gave a history of the Emerson Street YMCA on Feb. 18 to about 30 fourth- and fifth-graders participating in McGaw YMCA's "School's Out Program," an after-school program for those grades. Mr. Robinson held the students' rapt attention as he told how the Emerson Street YMCA opened in 1914 as a branch of the Evanston YMCA to serve the African-American community, and how it served as a major community center for the tightly knit black community in Evanston until it closed its doors in 1969. While the closing symbolized the end of segregation, there was a loss of the close sense of community that existed at the Emerson Y. Many elders in the African-American community could be picked out as children in the photos shown by Mr. Robinson. The program was presented by the McGaw YMCA as part of a Black History Month program.

Human Service Committee Recommends Broad Immigration Resolution

By Joe Linstroth

The City's Human Services Committee on Monday voted 4-1 in favor of the second of three proposed immigration resolutions. The approved resolution broadly calls for comprehensive immigration reform at the federal level but stops short of providing specific guidelines for City employees. The resolution now moves to the Council for action.

Before the committee were three separate proposals. The initial resolution, first introduced to the committee on Jan. 7, aimed to clarify the community's support for the local immigrant population. It offered specific guidelines for City employees to ensure that immigration status is not a barrier to receiving social services or unlawfully used in criminal complaints against non-citizens. Concerned that the first resolution would bring undo attention from federal immigration authorities to Evanston, Alderman Lionel Jean-Baptiste, 2nd Ward, drafted the broader resolution recommended by the committee. The third proposal was a combination of the two.

At last month's meeting, the committee postponed a vote on the resolutions to allow time for the City's law department to conduct a thorough review of the relevant federal immigration statutes. City staff attorney Lisa Woods told the committee on Monday there were two key federal laws at play regarding the third resolution: 8 USC 1634 and 8 USC 1373. Ms. Woods was particularly concerned about language in the first and third resolutions that would have prohibited City employees from disclosing a person's immigration status to federal authorities. According to federal law, Ms. Woods said, "the City cannot prohibit voluntary disclosure of immigration status."

Ald. Edmund Moran, 6th Ward, who co-authored both the first and third resolutions, inquired as to whether the phrase in the resolution, "... unless required to
do so by law ..." was sufficient to prevent any preemption of federal authority. "In my mind that [phrase] would remove the objection you perceive," he told Ms. Woods.

Ms. Woods's conclusion, however, was that "in the absence of a law requiring such disclosure, then the [City] employee would be left with voluntary disclosure, and that's what the proposal would prohibit."

Ms. Woods said the second resolution, limited to policy statements and calls to action, is "completely legal."

Ald. Moran suggested several motions for amendment of the third proposal's language. The other four committee members did not second them.

"[The third proposal] creates a perception that we can protect people, and I don't think we can," said Ald. Jean-Baptiste. "But for the lack of courage in Washington, we wouldn't be talking about this. ... Where we aim to shoot the arrow is at the national policy."

Ald. Moran, the committee's lone dissenter, agreed that comprehensive federal immigration reform was necessary, but said the second resolution fails to "signal to our residents that we are making a strong statement of support for our citizens."
"We should not say we lost if we do not pass the third option," said Ald. Jean-Baptiste. "In a sense, I think we do all the things the humane and just treatment [proposal] is calling for."

Council Approves Budget With 7 Percent Hike in City's Share of the Property Tax

By Mary Helt Gavin

Council members debated long and hard on Feb. 27 to hammer out a budget balanced with a 7.02 percent increase in the City's portion of the property tax.

City figures show the increase would be about 38¢ per day on a $10,000 property tax bill. The City's portion of the property tax is about 20 percent of the total; the two school districts' combined share is about 67 percent of the total tax bill.

The vote was 8-1, with Alderman Ann Rainey, 8th Ward, the sole "no" vote. She castigated her colleagues for their rejection of a 1 percent tax on prepared food and beverages that was projected to generate about $800,000 annually, with the revenue dedicated to the firefighters' and police pension funds.

In addition to the taxes and fees approved on Feb. 25, aldermen approved a registration fee for rental units - a flat $50 per building, regardless of the number of units. Two days before, at the Feb. 25 Council meeting, they had voted down an ordinance that would require licensing of all rental units at $40 per unit.

Aldermen also tacked on an additional $1.95-per-month refuse collection charge to the water bill. This will allow the City to recoup its full cost of refuse collection, said City Manager Julia Carroll.

They also increased the wheel tax to $75 per vehicle sticker, parking rates in downtown meters from 50¢ to 75¢ per hour, and the motor fuel tax by 1¢ per gallon of gasoline purchased in Evanston. John Burke of the City's transportation division said the cost to change the parking meters would be less than $1,000.

Aldermen agreed to fund the City's Mental Health Board at the same level as last year (about $844,000) rather than cut the funding by 10 percent, as had been proposed last week. They also agreed to allocate an additional $50,000 for programming for Mason Park. The two branch libraries and the elm-tree inoculation program, spared by an earlier Council decision, remained untouched.

By law, aldermen had to approve a balanced budget by March 1.

Pension Funding
Contributions to the firefighters' and police pension funds increased this year, as the City's unfunded liability to the two funds reached nearly $140 million as of last March. Aldermen voted several weeks ago to make the contribution to the funds as determined by the new actuary. (See separate story.)

Personnel
Reorganization at the Civic Center, said to be a three-year restructuring process, is creating vacancies - both through early retirement and consolidation of departments and services. By not filling many of these vacant positions, the City will garner ongoing savings, Ms. Carroll said, helping with future budgets.

Department-head vacancies will, for the most part, be filled. The position of assistant director of mental health services will not be filled when Harvey Saver retires later this year. Although Mr. Saver's title is "assistant director," there is no director; some of his duties will be subsumed into a different, lower-paid position later in the year, said Ms. Carroll. (See story in Health and Fitness.)

Council Discussion
In the little time they found for policy discussion, Ald. Rainey chided her colleagues for their rejection of the prepared food and beverages tax. "You're adding [a refuse collection fee] onto the water and sewer bill instead of having people pay a penny on the dollar when they go out to dinner." She said the refuse collection fee hike was "regressive."

Ald. Moran disagreed, saying the City should charge its full cost for refuse collection. "We get into trouble sometimes when we implement a program and don't charge the full amount for it," he said.

Ald. Wynne suggested that the City approach School District 65 about paying for its crossing guards. "The high school pays for its crossing guards," she said. "It's the District's responsibility, but it's really all our responsibility." Ms. Carroll said she would initiate talks with District 65 Superintendent Hardy Murphy in the next few months.

Mayor Lorraine Morton, who during the preceding weeks frequently asked the aldermen not to increase taxes, appeared resigned by the end of the evening.

"I've been around here a long time, and I think individual members of the Council have spent time scrutinizing the budget and doing what they could to resolve the issue," the Mayor said.

---

Some Hot-Ticket Budget Items

Taxed:
Property tax (City's portion) increased 7.02 percent
Business licenses (varying increases; new categories to be licensed)
Rental unit registration fee (new: $50/building)
Increase in charge for refuse collection ($1.95/month)
Parking meter rate increase to 75¢/hour downtown
Vehicle sticker price increase ("wheel tax" to $75)
Non-resident parking permits (increased to $150)

Saved:
Branch libraries
Elm tree inoculation program
Mason Park programming (additional $50,000)
Mental Health Board funding (same level as last year, $844,000)

Arboretum Plans Explained

Bob Zolomij, from Land Design Collaborative, presented an overview of the design plan for the Ladd Arboretum at a Seventh Ward meeting last week. Land Design Collaborative (LDC) is the City's consultant for the design of phase I.

The plan emphasizes the natural environment of the Arboretum and calls for additional plantings of native shrubs and perennials and prairie grasses. Several options were presented for stone entry features, including traditional river rock and limestone. Retaining walls, path edgings and individual or group seatings will be made of natural materials - limestone, for example, or sections of ash or elm.
Some changes to the environs of the Ecology Center are proposed, such as making the intersection at Bridge Street and McCormick Boulevard more pedestrian-oriented. LDC suggests creating public open space on all four corners there. The bridge design and the vehicular sight line, they said, create "unsafe conditions for pedestrians crossing to the Ecology Center and the parking lot."
Closer to the center, according to LDC, the driveway dominates the area, and vehicles block the view of the Ecology Center. The north side needs buffering from the road and the path needs new alignment.

The consultant also noted a "lack of organization" in the area used for organized activities and queueing day-campers.

Paul D'Agostino, superintendent of the City's Parks/Forestry division, said the City has allocated approximately $100,000 for this year. Work is scheduled to begin in the fall, he said.

Correction

In the Feb. 20 issue of the RoundTable, the name of John Szostek, winner of the Mayor's Award for the Arts, was misspelled.

Also, the statement that the present allowable height in downtown Evanston is 145 feet is incorrect. Under the City's zoning code, "the maximum building height in the D2 [downtown] district is forty two feet (42'). Building height (floors or stories) when seventy five percent (75%) or more of the gross floor area is devoted to accessory parking decks, up to a maximum of four (4) stories or forty feet (40'), whichever is less, shall be excluded from the calculation of building height. ... The maximum building height in the D3 [downtown] district is eighty five feet (85')." The zoning code also makes allowance in the height of the building for parking in the D3 area similar to those in the D2 area. The code also allows buildings higher than the maximum height allowed by the code to be deemed compliant. In addition, at present the City Council allows zoning relief as part of its planned-unit development (PUD) process, so City Council rather than the zoning code has the final word on height in the downtown area. Finally, Zoning Administrator Bill Dunkley told the RoundTable "there are other considerations" in determining allowable building height. The RoundTable regrets the errors.

Getting Ready for the Long Crawl

Ridge Avenue Repairs Begin This Month

By Mary Helt Gavin

If everything goes as planned, in about 10 months from now, Ridge Avenue will offer a smooth ride on four new lanes, steadily moving traffic monitored by in-road sensors and venerable post-top traffic lights, new curbs and a slight pitch to the surface to prevent storm water from collecting in the street.

Scheduled to begin March 17, construction will take place through late November, though, only one lane will be open on Ridge Avenue, requiring many of the nearly 20,000 vehicles per day that traverse the Evanston section of Ridge Avenue to use Asbury, Custer or Chicago avenues or McCormick Boulevard.

The plan is to close all but one lane of traffic on Ridge Avenue throughout the project. For the first two of the three stages, a northbound lane will be open; during the final stage there will be a lane for southbound traffic only. City transportation officials expect Asbury Avenue to absorb most of the detoured traffic.

"Traffic on Asbury is between 14,000-16,000 vehicles per day - fewer in the north and more in the south. ... The City repaired Asbury Avenue in 2007 in preparation for this extra traffic," Sat Nagar of the City's transportation division told the RoundTable.

Rajeev Dahal, also in the City's transportation division, said setting up the detours was one of the biggest challenges. He also said the City had considered whether to reconfigure Ridge Avenue into three lanes of traffic but decided to restore the four lanes.

Officials from the City and from Civiltech Engineering of Itasca, the company that will oversee the project, say they understand dust and disruption will be part of the process but have plans to address them.

The City held two open houses in late February to acquaint the public with the project, the detours and the expected interruptions to normal life along Ridge Avenue.

The project will be completed in three stages. Stage 1 involves installing nearly a mile of sewer pipes, said Steve Berecz of Gewalt Hamilton, the company that has already performed much sewer work in the City.

Ridge Avenue has a concrete bed overlaid with asphalt, said Project Engineer Reid Magner and Assistant Field Engineer Andy Garb. The street has been resurfaced several times, said Mr. Garb, building the street up to within inches of the curb top. "The road is also pitched wrong; there is [virtually] no slope," which allows storm water to collect on the road and in the gutters. "We'll correct the slope and add new and higher curbs so the water will drain [properly]," he added.

John Burke, the City's director of transportation, said "We'll grind off the asphalt and walk along the concrete to see where it needs to be repaired and make sure there is a strong bed."

Between the concrete bed at the asphalt surface the crews will lay an inch-thick polymerized leveling binder, said Mr. Manger. He said the polymer would minimize "reflective fractures" - tiny fissures in the substrate that, over winters of freezing and thawing, become potholes.

Mr. Burke said this binder "is recommended for use by the Illinois Department of Transportation District 1 for this application.... It provides elasticity in the pavement for the primary purpose of resisting rutting and the entrance of surface water into the underlying base ... and slows down the reflective cracking of the pavement."

Mr. Burke also said, "The [new] asphalt surface may last 15-20 years.... From a maintenance standpoint, [the strong concrete bed] makes for a quicker and less invasive repair project." More optimistic than Mr. Burke, Mr. Manger said the new surface should "last 25 years."

This same polymerized leveling binder was used on the McCormick Boulevard project, Mr. Burke said. Now in its third year, that pavement is "starting to get some fine transverse cracking in the surface reflecting up from the joints in the concrete base below. These fine reflective cracks ... do not adversely affect the pavement's ride performance or structural integrity." City crews monitor and seal them when they reach about 1/4" to protect the street, he said.

Robert Andres, principal of Civiltech Engineering, said his company has performed work for IDOT, the fed folks and many municipalities. Designing this project, he said, was the major challenge.

A state highway for decades, Ridge Avenue will soon become an Evanston street. A few years ago when the State of Illinois said it planned to repair Ridge Avenue, widen its nine-foot lanes and replace the small post-top stoplights with double mast-arm lights, many Evanstonians rebelled. Because much of the street targeted for repairs lies within the Ridge Historic District, and because the widening of the street was likely to kill or severely damage many of the parkway trees there, the City arranged to take over jurisdiction of the road, keep it at its current width and keep the post-top traffic lights. The City secured federal rather than state money for the repairs, but the City of Evanston will responsible for upkeep and further repairs.

Police Have No Motive, No Suspects in Shooting

As of last week police said they had neither motive nor suspect in the shooting that occured on Feb. 19 in a gated walkway between 1124 and 1126 Florence Ave.

Jevar Brooks, 31, of Chicago, was visiting friends at 1126 Florence Ave., said Eleanor Swopes, owner of the property. Police said Mr. Brooks has declined to say who shot him.

"When a victim refuses to cooperate, there is little chance of closing the case," Police Chief Richard Eddington told neighbors at a meeting held on Feb. 21 at Robert Crown Community Center in response to the shooting.

"We know he received several calls on his cell phone. We have recovered the cell phone and are looking to see who called him," Chief Eddington added.

The next meeting related to the shooting is scheduled for 7 p.m. on March 6 at the Robert Crown Center, 1701 Main St.

Police Seize Property Allegedly Stolen in Recent Burglaries

By Larry Gavin

Police seized five handguns, three shotguns and two rifles in a
raid on a house on Emerson Street. Photo by Allison Hagey

Evanston police, in partnership with members of the North Regional Major Crimes Task Force, seized a large quantity of property while executing search warrants at 1904 Emerson St. on Feb. 15. Police Commander James Elliot said police believe the property was stolen in residential burglaries committed in Evanston and nearby suburbs over the past six months.

Evanston police initially obtained a warrant to search the house for narcotics after receiving complaints from the community that drugs were being sold from a residence in the 1900 block of Emerson. In searching the house, Cmdr. Elliot said police found a substantial amount of narcotics, as well as five handguns, three shotguns and two rifles. Police also discovered what they believed was a large quantity of stolen property. A second search warrant was then obtained to seize the allegedly stolen property.

The second warrant was executed by members of the NORSTAF Burglary Task Force and the Evanston-Wilmette-Skokie task force. Cmdr. Elliot said investigators in the three communities have been working together for the last six months to gather intelligence and to solve residential burglaries, which showed a marked increase in all of the communities starting in August 2007.

The allegedly stolen property seized at the residence includes several flat screen televisions, digital cameras, high-value watches and jewelry, numerous DVD and video games, fur coats, flatware, lap top computers, cell phones, crystal pieces and coins. Police also seized $52,000 in cash.

"It was the largest seizure of stolen property in Evanston, at least in my 20 years." Cmdr. Elliot said. "At this time the estimated value is in excess of $100,000."

So far, the seized property has been linked to 20 robberies in the area, Cmdr. Elliot said at a press conference on Feb. 21.

Rengay Frazier, 36 years old, and Allan Boyland, 42 years old, both residents of 1904 Emerson St., were both charged with misdemeanor unlawful possession of cannabis and the unlawful use of a weapon by a felon. Rengay Frazier has also been charged with unlawful possession of a controlled substance with intent to deliver, with felony unlawful possession of cannabis, possession of stolen property, and other gun violations.

Cmdr. Elliot said Andre Frazier, the brother of Rengay Frazier, was charged with residential burglary.

Investigators are continuing to work on the case, and are continuing to attempt to link the property to reported burglary incidents. Cmdr. Elliot said Evanston police have worked closely with Wilmette and Skokie police in the past and what makes this case different is the formalization of their joint work. He said it is incumbent on police departments to form partnerships and to combine their resources to provide a high degree of services the public demands.

Recent Charges Involve D65 Custodian

By Larry Gavin

Rengay Frazier, who was charged with misdemeanor and felony offenses on Feb. 15 (see accompanying story) was employed by School District 65 as a custodian at Haven Middle School, according to a press release issued by the District.

Patricia Markham, communications director for District 65, told the RoundTable Mr. Frazier was employed by the District as a floater in 2004 and was employed on a full-time basis in 2005. Ms. Markham said the District did a criminal background check of Mr. Frazier before he was hired, and that he was hired in compliance with the School Code. Ms. Markham said she could not disclose the results of the criminal background check that were contained in Mr. Frazier's personnel file.

The School Code precludes school districts from knowingly hiring a person who has been convicted of committing or attempting to commit first degree murder or a Class X felony or certain specified offenses.

Cmdr. James M. Elliott of the Evanston Police Department told the RoundTable that Mr. Frazier had been convicted of a prior felony, but said he was not permitted to disclose the nature of the felony.

A prepared statement issued by District 65 states the police investigation did not turn up information to suggest that illegal activities occurred at the school, but that the District will conduct its own investigation. The District also states that Mr. Frazier will not be allowed to return to his position at the school pending the District's investigation; at the conclusion of the District's investigation, a final determination will be made about Mr. Frazier's status.

Discouraging Words at State of the City Address

For the first time in recent memory, Mayor Lorraine Morton's State of the City address was tinged with sadness and concern, as she took on three issues that are on the minds of many Evanstonians: the shortage of salt that left many streets icy and dangerous for days; the 49-story tower proposed at 708 Church St.; and the crisis in pension-funding which forced the City to increase real estate taxes and cut services.

Noting the long shifts put in by the snow emergency teams, Mayor Morton said, "I believe the City crews did the best they could in a difficult situation."

She said she had received several calls about the snow problems but added, "In my 15 years as Mayor, I have never received as many calls as I have about [the proposed 49-story tower at] 708 Church St." She added, "I know there is some middle ground."

Referring to the pension-funding crisis, she said, "You know that put me in the hospital." She said, as she has said several times before, she understands "everyone must get their pensions - and we want them to." The Mayor is in the process of appointing a blue-ribbon committee to look for long-term resolutions to the City's pension-funding problems.

Leadership Evanston Celebrates 15th Anniversary

Leadership Evanston celebrated its 15th anniversary on Feb. 21 at the John Evans House Alumni Center by honoring 15 "Venerable Contributors" who have regularly served as panelists or presenters at workshops sponsored by the organization.

Since its inception, more than 300 persons have participated in the signature program, which is a ten-month skills-based experience that trains people in community leadership skills, broadens their understanding of Evanston and the issues it faces, and creates opportunities for participants to build a network of community colleagues.

Those honored were Judy Aiello, Allan Alson, Paul Arntson, Delores Holmes, Frank Kaminski, Hon. Lorraine H. Morton, Dr. Hardy Murphy, Rev. Bob Oldershaw, Jonathan Perman, Dino Robinson, Bill Stafford, Jay Terry, Bob Teska and Mary Adams Trujillo. Pictured above are Mr. Terry, Ms. Aiello, and Mr. Teska.

Celebrating Evanston Women

The Evanston Women's History Project offers two opportunities to learn about and celebrate women who have made significant contributions to Evanston history. On March 13, from 7-9 p.m., there will be an update on the Project's research and discoveries at the Evanston History Center, 225 Greenwood St. Call 847-475-3410.
On March 16, 1-5 p.m., the project will host tours focusing on women and leadership at the Frances Willard House, 1730 Chicago Ave. Both events are free.

Annual Woman's Club Benefit Supports Ted Fund

The Woman's Club of Evanston will stage its 57th annual benefit, "LOL-GR8 FUN 4U," on March 7-9 and 13-15 at 1702 Chicago Ave. Rehearsing for "Sweet and Low," a number that parodies the choices and consequences of artificial sweeteners are (from left to right): Sharon Sullivan Walsh, Katherine Eiff, Kathy Rocklin, Kathy Joleuad and Renee Black. See www.wcofe.org or call 847-475-3800 for show times and ticket information.
Photo by Alicia O'Connor

City to Hire Economic Development Director

By a split vote, aldermen approved the hiring of a new economic development director to help entice businesses to Evanston. With the retirement of Assistant City Manager Judith Aiello, the City needs someone who will be "proactive" in fostering economic growth here, Ms. Carroll said.

Ald. Rainey opposed the addition of the economic development director position. She proposed using the money that will now fund the position to help ease the property tax increase. "I do not believe it's the time to hire a new person," she said, adding that City staff members in the planning and community development departments would be more than able to perform the functions of an economic development director. While not supporting the position for this year's budget, she said, "I will fully support this position in next year's budget."

Ms. Carroll said the economic development director would be the person to help the City break out of the condo-retail building model. "I don't see [that model] as sustaining us. ... We have a world-class university in our back yard. We have some of the [greatest] intellectual capital at Northwestern University. We need to be a player in the region, and we can't do that just by building buildings. Staff has not had time to take a proactive approach [to economic development], but it is very crucial to the financial success of this City," Ms. Carroll said.

Aldermen Melissa Wynne, 3rd Ward, and Edmund Moran, 6th Ward, agreed. "We've created a framework [for economic development] with the West Side and Central Street plans. The implementation phase is a story that is yet to be told."

Ald. Wynne opposed any delay in hiring the economic development director. "We're not a community that sells very easily in economic development. Especially now, with the economy, we have to be more proactive about our community."

Pension Mess Again: It Actuarially Is $140 Million

By Mary Helt Gavin

The City's present and former actuaries met with City Council members recently to explain the assumptions and methods they used in calculating the City's actuarially required contributions (ARCs) to the firefighters' and police pension funds. Ted Windsor, the City's former actuary, appeared before the Council on Feb. 27; Alex Rivera, a representative of Gabriel Roeder Smith (GRS), the City's present actuary, did so on Feb. 23.

The City's current unfunded liability to the pension funds was estimated at about $100 million by Mr. Windsor as of March 1, 2006, and at $141 million by GRS as of March 1, 2007. The pension funds must be fully funded by 2033 through annual contributions from the city.

City Manager Julia Carroll said she invited the actuaries to explain to the City Council members how each of them arrived at the unfunded liability and the ARC. Some Council members had questioned the validity of the $140 million estimate, particularly because making the ARC on that large a liability would cause an increase in the City's portion of the property tax.

After listening to both actuaries, Council members appeared to agree that the $140 million estimate was reasonable. City Council decided to fund the pensions at the level determined by GRS.

Key Assumptions
The actuaries used different assumptions in estimating the amount of the unfunded liability in the police and firefighters pension funds. For example:

· Mr. Windsor assumed that the funds contributed to the pension funds would earn 7.5 percent on their investments. GRS assumed a more conservative 7.25 percent.

· Mr. Windsor assumed that police and firemen would retire at the age of 56 years. GRS used a more conservative retirement age of 54 years, which increased the estimated pension liability.

· Mr. Windsor and GRS used different mortality tables. The mortality table used by GRS predicts that the retirees will live longer, which increases the estimated pension liability.

Mr. Windsor said the changes that GRS made in the retirement age and the longevity tables made the biggest difference in the cost estimates. He said, "The most significant move [GRS] made, the one I agree with most is the change in the pattern of retirement. Looking at the past, the pattern of retirements is earlier than the old assumption appears to be."

Overall, Mr. Rivera said Mr. Windsor used aggressive assumptions which resulted in a lower estimate of the unfunded pension liability at $100 million. He said, though, that Mr. Windsor's estimate of the unfunded liability was within an acceptable range.

Mr. Windsor defended his assumptions. He maintained that he used moderate assumptions and that GRS used conservative assumptions, which result in a higher estimate. When pressed by Ald. Bernstein as to whether GRS's $140 million estimate was unreasonable or within the realm of his reality, Mr. Windsor said, "I'd say that's within my realm of reality."

Mr. Windsor also said that he used a different payment method than the one used by GRS, and added that the change in method caused a bigger difference in the ARC than the change in assumptions. Under the method he used, he said "the payments start low and grow over time." In other words, he said, the increase in the unfunded liability was deliberate. "It follows a state model," he said. "Municipalities make lower payments at the start, and then their contributions become greater."

Under the payment method used by GRS, the City will pay more up front than under Mr. Windsor's method, but pay less than under his method as time goes on.

The Shortfall Grew Over Time

In this pension-funding problem, Evanston has a lot of company throughout the state. Since the 1980s, municipalities have been mandated to fund the police and firefighters' pensions; the municipalities are required to make annual contributions and to have the pensions fully funded by 2033. However, state legislation over the past 15 years has increased the requirements for municipalities by expanding pension benefits without giving the communities financial help to fund these requirements. First Ward Alderman Cheryl Wollin said, "There have been four [state] bills that changed benefits - all of them disastrous for cities, in my opinion."

In addition, it was not until the year 2000 that cities were required to put in an actuarially determined amount, the City's former finance director Bill Stafford told the RoundTable.

As actuary for the City, Mr. Windsor calculated annually the amount the City should contribute to each pension fund. According to "Schedules of Employer Contribution, Required Supplementary Information" which are part of the City's audited financial statements for the year ended Feb. 28, 2007, each year between 1996 and 2003 the City put in 99.5 percent or greater (108 percent in 2003) of the annual required contribution (ARC) to the firefighters' pension fund. In 2004, the latest year for which figures are reported, the City contributed only 82 percent of the ARC.

Similarly, the City's contributions to the police pension fund were 99 percent of the ARC or greater (110 percent in 2003) each year between 1996 and 2003. The City contributed only 75 percent of the ARC for 2004.

Even though the City contributed the amount of the ARC between 1996 and 2003 and fell short in only 2004, the unfunded liability to the pension funds grew dramatically in those years.

The City's financial statement for fiscal year ended Feb. 28, 2007, shows that between March 1, 1997, and March 1, 2006, the City's unfunded liability in the firefighters' pension fund grew from $17.8 million to $43.8 million; during the same 10-year period the unfunded liability in the police pension fund grew from $30.3 million to $54 million. The total unfunded liability grew from $48.3 million in 1997 to $97.8 million in 2006. See accompanying table.

Responsibility
Mr. Rivera said, "When actuarial assumptions fall short of actual return, there is a gap in funding rates. If this continues, then there is a faulty assumption." Yet Mr. Rivera also said Mr. Windsor had a "range of reasonable assumptions, and he was probably on the aggressive end. ... He did not update the assumptions. ... If you see a string of actuarial losses, what we should do is adjust the assumptions so you can dampen the losses," he said.

Mr. Windsor said he reassessed his assumptions "every three or so years," and he changed them once in the 15 or so years he served as the City's actuary.

Yet, Mr. Rivera said, the string of losses, "should have been a red flag." Later he said he felt Mr. Windsor's "entire assumption was on the aggressive end, plus he did not consider benefits. If only one [assumption] was aggressive, we could accept that model, but his assumptions were producing losses year after year. ... There was very little margin to absorb losses."

Mr. Windsor said the increased accrued liability was planned, so that municipalities would have to make greater contributions near the end of the funding period.

Some aldermen were concerned about the mounting liabilities.

"Who should have seen this?" asked Alderman Ann Rainey, 8th Ward.

"It is the responsibility of the pension boards and the City Council," said Mr. Rivera. "The actuary could only provide commentary. Ultimately it is up to the pension board, the City Manager and the City Council to set policy and assumptions."
A blue-ribbon panel appointed by Mayor Lorraine Morton is forming to look for long-term solutions to the City's pension problems.

Unfunded Liabilities in the Firefighters' and Police Pension Funds 1997-2006 (in $millions) as estimated by the former actuary

YEAR	FIREFIGHTERS	POLICE
1997	$17.8	$30.3
1998	$16.9	$29.4
1999	$18.2	$29.7
2000	$18.3	$33
2001	$21	$36.6
2002	$24.1	$40.2
2003	$29.3	$49.7
2004	$37.9	$47.3
2005	$40.4	$51.2
2006	$43.8	$54.0