Response by Carl Woodward to a Springfield newspaper story: (Carl has previously written about Bloomington and Normal debt http://blnnews.com/2012/12/14/bloomington-normal-illinois-governmental-theft/)
I read your article. I know you wrote what was supplied to you, but you need to know the following so the readers are not mislead, not your fault.
The “real” city budget is only balanced because the city is not funding its pension and health care obligations. These obligations are being put on the “charge card” of the city, similar to a Ponzi issue. This is why the cash budget might be balanced, but only because the city’s “charge card” is going up each year. If you look at the attached from the most recent city audited financial statement, the unfunded future pension and health care obligations have increased approximately from $ 533 million in 2011 to $ 594 million in 2012, an increase over $60 million. In other words the “charge card” balance has gone up in twelve months approximately $ 60 million. Unless the cash balance of the city has gone up $60 million, the citizens are being misled about the “balanced budget”.
The unfunded pension amounts are required to be paid up to a 90 % level, ignoring health care obligations, by 2040. If you divide the total of the three main pension funds only, ignoring health underfunding of $ 292 million, the pension unfunded add to $ 300 million. Spread this over 28 years until 2040, legal requirement, the annual amount of the catch-up payment would approximate over $ 10 million. I did not see this in the article. Your article talks about spending half of the “surplus” of $2 million for pension catch-up, approximately $1 million, but it really needs to be at a minimum $10 million or more plus the health care catch-up.
You wrote about the unfunded police pension of $99.8 million, audit shows $ 92.8 million, and the firefighters unfunded of $116.7 million, but the attached audit shows $111.9. I might be misreading the audit. However, they did not give you the IMRF, Illinois Municipal Retirement Fund (other city employees) of $ 97 million and the unfunded health care amount of $292 million. The total of all of these exceeds $ 590 million.
If anyone disagrees with what I wrote have them contact me. I do not want to be wrong and unintentionally mislead anyone. This is serious and very little is really done about this. When the citizens read the city is “balancing its budget”, they are being misled.
Woodward & Associates, Inc.
1707 Clearwater Ave.
Bloomington, IL 61704
Work Phone: (309) 662-8797
Cell Phone: (309) 830-4747
Fax: (309) 662-9438
E-mail: [email protected]
One thought on “City of Springfield-as bad as Bloomington & Normal”
So city manager David Hales is not the miracle worker whiz kid that the rubber stamper council members are constantly slobbering over? Be nice they figure it out someday.