Caucus requests for actuarial accounting, explanation of anticipated rates of return go unanswered
CHICAGO (August 22, 2016)–The Chicago City Council Progressive Reform Caucus on Monday called on the Emanuel administration to show proof that its proposed water tax hike would actually generate the revenue needed to address the Municipal Employees’ Annuity and Benefit Fund (MEABF) of Chicago pension liability.
In a letter to City Budget Director Alexandra Holt sent last week, the 11-member Progressive Caucus requested the actuarial basis of the accounting used to come up with the proposal to fund the pension deficit by increasing Chicagoans’ water bills by 28 percent in the coming years.
“We requested this documentation as a matter of due diligence as we consider the proposed Water Use Fee,” said Progressive Caucus Chair Ald. Scott Waguespack (32). “As everyday Chicagoans have faced drastic property tax increases, we as elected representatives need to ensure that the proposed fee will in fact cover the payment schedule that has been laid out before we can even consider voting on this.”
In response, Holt indicated that the Emanuel administration does “not yet have the actuarial studies for the new MEABF and LABF [Laborers’ and Retirement Board Employees’ Annuity and Benefit Fund] proposals. She did not indicate when those actuarial studies would become available.
The aldermen also requested a breakdown of the rates of return used to calculate the amount that will have to be paid into the pension funds from the City’s corporate fund.
Holt did not include information responding to that question in her reply to the Caucus’ inquiry.
The aldermen also sent a letter to Council Office of Financial Analysis Director Ben Winick requesting an independent analysis of the administration’s proposal.
The Progressive Caucus said it hoped to hear back from Winick this week.
“We are deeply committed to fully funding our pension obligations and ensuring Chicago workers are paid what they were promised in their contracts,” said Ald. Leslie Hairston (5). “But we are concerned that this plan unduly burdens Chicago homeowners already struggling with other tax increases, and that this plan won’t actually raise the funds needed to address the liability.”
“We are troubled by the Emanuel administration’s request that we simply take their word for it that their accounting is accurate, when other analysts and experts have raised doubts,” said Ald. Susan Sadlowski Garza (10). “This matter is too important to ram through without proper analysis.”