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Minutes - 06/17/2014 - Committee of the Whole MINUTES OF THE JUNE 17, 2014 SPECIAL MEETING OF THE COMMITTEE OF THE WHOLE OF THE VILLAGE OF OAK BROOK APPROVED AS WRITTEN ON JULY 8, 2014 1. CALL TO ORDER The Special Meeting of the Committee of the Whole of the Village of Oak Brook was called to order by President Gopal Lalmalani in the Samuel E. Dean Board Room of the Butler Government Center at 7:04 pm. The Pledge of Allegiance was given. 2. ROLL CALL Village Clerk Charlotte Pruss called the roll with the following persons PRESENT: President Gopal Lalmalani, Trustees Donald Adler, John Baar, Michael Manzo, Mark Moy, Gerald Wolin, and Asif Yusuf. ABSENT: None IN ATTENDANCE: Art Osten Jr., Interim Village Manager; Sharon Dangles, Finance Director; Barry Liss, Fire Chief; James Kruger, Police Chief; and Peter Friedman, Village Attorney. 3. FIRE AND POLICE PENSIONS President Lalmalani discussed the fire and police pensions and how they have become unsustainable due to legislation in Springfield. He stated that DuPage County ruled in favor of the Village in the pending Tom Sheahan pension case. Trustee Adler briefly discussed actuarial services conducted for both fire and police pensions. Trustee Manzo briefly discussed the pension problem and stated that the Board needs to make a decision on possible action and work with the Unions. He also stated that it is impossible to stay on the current track of funding because the Village will go bankrupt. He further stated that difficult decisions will have to be made. Finance Director Dangles gave a PowerPoint presentation that included the following: • Overview of Oak Brook Police and Fire Pensions • Benefit Levels for Tier I and Tier II Employees • Possible Village Actions • Potential Legislative Initiatives • Police and Fire Pension Funds Assets and Liabilities • Employee and Employer Contributions • Legislative Causes VILLAGE OF OAK BROOK MINUTES Page 1 of 3 COW MEETING OF JUNE 17, 2014 • Other Towns Funded Status for 2013 • Contributions for the Board to Consider for the July 8, 2014 Board Meeting • Actuarial Studies Conducted for Police and Fire Pension Funds • Funding Methods Used in Actuarial Studies • What Happened in 2014 • 2014 Contribution Options • Five Year Projection • Possible Village Actions 1. Freeze Hiring 2. Postpone Capital Projects 3. Utilize Reserves 4. Privatization and/or Consolidation 5. New Revenues • Potential Legislative Initiatives • Future Developments Discussion ensued regarding spousal benefits, legislative enhancements, increased pension contributions, the five year projection, cost of living and health benefits, legislative changes being challenged, funding levels, union negotiations and arbitration, cutting expenses and expenditures to fund the pensions, the actuarial evaluations conducted, and tier I and tier II benefits. Trustee Manzo stated that he supports the Illinois Department of Insurance’s recommendation for funding pensions. He also stated that the Village and employees must work together in solving the problem. Trustee Yusuf does not support using the Village reserves to fund pensions. He also is not in favor of imposing an additional tax. He stated that he supports the Illinois Department of Insurance’s recommendation for funding pensions. He also is not in favor of a paid on call fire department or outsourcing Village services. He is in favor of hiring part-time firefighters. Trustee Adler recommends making higher contributions to the pension funds this year. He discussed the 5 year period ending 2013. He also discussed the fire department contract and negotiating future union contracts for fire, police, and public works. He stated that the Village may have to take drastic measures to resolve the pension funding issue. Trustee Moy recommends making a contribution to the pension funds that is lower than what the actuaries recommend but higher than what the Illinois Department of Insurance recommends. Trustee Baar agrees with Trustee Moy about funding somewhere in the middle and recommends $800,000 for this year. He also stated that the Firefighters and Police VILLAGE OF OAK BROOK MINUTES Page 2 of 3 COW MEETING OF JUNE 17, 2014 Officers have tremendous loyalty to the Village and will negotiate to the limits of the law. He further stated that the Village must also get input and work with the business community. Trustee Wolin supports using the Illinois Department of Insurance’s recommendation for funding pensions. He also stated that the Village has a lot of options to evaluate. Interim Village Manager Osten suggested the Village fund the pensions somewhere in the middle. He stated that staff will be working on long term solutions to the pension funding crises and that one long term solution to consider is to push at the legislative level. He also stated that Oak Brook has hard working, talented, and loyal employees. President Lalmalani stated that the Village must keep all its options open, such as outsourcing and consolidation, to solve the pension funding issue but that adding additional taxes, such as a property tax is not an option. He thanked everyone for their comments and stated that the discussion will continue at the July 8th Board meeting. 4. RESIDENT/VISITOR COMMENTS Resident Bill Lindeman discussed legislation regarding pensions and stated imposing a pension tax should be considered. Rick Reamer, Attorney for the Police and Fire Pension Funds, stated that he was available to answer any questions. Resident Connie Xinos stated that the Village has no leverage with Unions and that the Village must find a way to stop what the Unions are doing. He also stated that the residents will not agree to a property tax levy. He suggested that the Village make the Sports Core and the Fire Department their own taxing districts. Resident George Klein suggested that the Village direct the Actuaries to change the 100% funded by 2040 to 90% funded. He also discussed spousal benefits, privatizing, and consolidation. 5. ADJOURNMENT Motion by Trustee Yusuf, seconded by Trustee Manzo to adjourn the Special Meeting of the Committee of the Whole at 9:29 pm. VOICE VOTE: Motion carried. ATTEST: /s/Charlotte K. Pruss Charlotte K. Pruss Village Clerk VILLAGE OF OAK BROOK MINUTES Page 3 of 3 COW MEETING OF JUNE 17, 2014