HERRIN, IL (WSIL) -- A Williamson County community is on its way to fully funding its fire and police pensions, after legislation aimed at reducing those debts, became state law last year.
City officials in Herrin said to reduce the community's "ever-increasing tax burden," they have entered into Pension Obligations Bonds.
Unfunded pension liabilities are one of the greatest fiscal concerns for Illinois� state and local governments. Legislation aimed at reducing fire and police pension debts became law last year, it requires cities to fund 90% of their pension obligations by the year 2040.
Herrin Mayor Steve Frattini says, their city is on track to be fully funded by April first.
"The only impact it may have on taxes is going to be a leveling off or perhaps a reduction," explains Frattini. "But that's going to take three to four years before we realize that, but future increases are going to be very, very minimal if any."
For Herrin to reach their goal, they have engaged into Pension Obligations Bonds, which will give the city a flat rate of repayment saving them more than $11 million over a 20 year period.
"It's going to create some stabilization to our property tax rate, which is how we fund the police and fire pensions," says Frattini. Â
Without the bonds, the city would have to find new funding, which Frattini says regularly falls on property taxes.
"There's always going to be an increase in costs of some kind but very, very minimal and perhaps at some point in time that increase in cost will totally go away," explains Frattini, adding that a fully funded pension will also provide assurance to the men and women in those departments.
Herrin Fire Chief Shawn Priddy agrees.
"It's one less thing that the employees and the city council (that) they don't have to worry about anymore," says Priddy, adding that it will help in recruitment as well.
"For somebody that would test and apply for us to know that the pension crisis is a problem, but for the City of Herrin it's not anymore."
