City of Bloomington-Finances

by Diane Benjamin

From the Financial Statements – finally issued – 4/31/2012 Page 5:

The City is governed by a City Council elected on a non-partisan basis composed of nine Council members and a Mayor. The City Council is responsible to enact ordinances, resolutions, and regulations which govern the City, adopt the annual budget, as well as appoint members of various statutory and ordinance boards. The Council is elected to four-year staggered terms, while the Mayor is elected to a four-year term. The Mayor is elected at large, the Council members by ward. The City’s manager is responsible to carry out the policies and ordinances established by City Council, oversee the day-to-day operations of the City, and appoint the department heads of the City’s departments.

Ask the City Council members if they have any input, other than rubber-stamping whatever the City Manager brings to them.

On page 11, a Certificate of Achievement for Excellence in Financial Reporting was include for the year ending April 30, 2011.  Why is it in the April 30, 2012 financial statements?

Note from the Firemen’s pension fund:

The investment income for fiscal year 2012 decreased from 2011 investment income because the investment returns in 2012 were not as strong as in the prior year. Bear in mind, approximately 48.24 percent of the fire pension portfolio is invested within the equity market through variable annuities. The overall rate of return for the total portfolio performance of the Firemen’s Pension Fund in FY 2012 was 1.55 percent, while the composite index benchmark was 2.61 percent.  This return does not include the additional earnings embedded in the Pension Fund’s variable annuity and fixed annuity contractual death benefit & end of term values.

Note from the Police pension fund:

The investment income and change in fair market value of investments for the fiscal year 2012 was $1.141 million. This increase was substantially less than the increase reported in the prior year as there was nearly a 74% decrease in realized and unrealized gains in asset values and income from assets held during the fiscal year. The rate of return for the total portfolio of the Police Pension Fund as of April 30,
2012 was 2.36 percent while the rate of return as of April 30,2011 was 10.56 percent. Overall, net investment income was primarily due to income in the form of reinvested dividends as well as interest income. The custom blended benchmark index return was 5.20 percent in fiscal year 2012 and 10.53 percent in fiscal year 2011. The returns of the Police Pension Funds did not meet the index performance for 2012 as equity holdings’ underperformance depressed the portfolio return. For more details, see the investment section of the Police Pension Fund.

The same information is not available for the IMRF fund which covers all other City employees.  The report on this fund listed of the City of Bloomington website is from 12/31/11, even though the link is dated Fiscal Year 2012.  Page 120 of the Financial Statements (CAFR) does list funding percentages per year.  2007-2010 the City contributed 100%,  2011-88.19%, 2012-93.04%

As of 12/31/11 IMRF was funded 31.95%

As of 5/31/11 Police pension was funded 58.23%

As of 5/31/11 Firemen’s pension was funded 51.38%

The City pensions contributions have not been 100% of the required amount in all past years.

Citizens need to realize THEY must fund the shortfall in investment income.  Defined Benefit Programs mean participants are guaranteed a pension amount based on years of service, even if the fund’s investments do not materialize.  Most employers realized the risk and switched to 401K programs decades ago.  Governments negotiate union contracts without competition, the results are not in the best interests of the citizens.  It appears the City has been making a greater effort to fund the police and fireman pensions than it does for regular employees.

Post employment benefit funds show 0% funded.  Town of Normal also shows 0% funded.

The only alderman making pension funding an issue is Judy Stearns.  She publicly stated that her vote against last years budget was because pension funding was not a priority.  The other alderman, the mayor, and city manager don’t seem to care if Bloomington ends up like the state with massive unfunded pensions.  Of course, a city can file bankruptcy  while the state can’t.

From the City website about the 3 arrow city symbol:

Visually the symbol and the City’s identity represent a modern progressive style which is consistent with the City’s government.

What are they progressing to?

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