Jared Labell, Executive Director of Taxpayers United of America, was quoted on the recent release of 10th annual Illinois State Pensions Report by Chicago Tribune.
As the Arlington Heights Park District’s executive director retires this week, about $85,000 worth of unused sick and vacation days he had accumulated since his hiring in 2008 have led to a significant salary spike during his final years of service, according to public records obtained from the park district by the Arlington Heights Post.
Retiring executive director Steve Scholten, 62, whose last day on the job is this week, was paid $182,533 in 2014, with his salary rising $32,516 – almost 18 percent – to $215,049 in 2015, officials said.
Scholten also received a six percent raise on Jan. 1, just months after he had alerted the park district’s board of commissioners that he would be retiring on June 30, but officials said most of the recent salary increase can be attributed to the park district paying out on Scholten’s unused sick and vacation days.
As of December 2015, Scholten was paid out half of his vacation and sick time, which was included in his $215,049 wages, said Donna L. Wilson, the park district’s director of finance and personnel.
“Once an employee announces they are retiring, we start paying out right away, so there’s not such a huge hit at the end,” Wilson said.
Since his hiring in 2008, Scholten had accumulated unused vacation days adding up to about $57,000, and unused sick days adding up to about $28,000, Wilson said.
While belt-tightening measures by the park board in 2012 eliminated the policy of allowing employees to be paid for unused sick days for those hired after 2007, Wilson said Scholten had an exception in his contract that allowed him to be exempt from the new provision.
Officials said that the park district’s new executive director, Rick Hanetho, who previously served as executive director of the Northbrook Park District, will have a base salary of $185,000, plus a $625 monthly car allowance, but has no payout provision in his contract for any unused sick days.
Prior to 2012, the park district paid half of an employee’s accumulated sick days up to 90 days, or a maximum of 45 days, Wilson said.
Scholten will have received all of his unused sick leave pay by Thursday, Wilson said.
Scholten’s monthly pension, which will be administered by the Illinois Municipal Retirement Fund, or IMRF, will be roughly 75 percent of the average of his highest annual salary earned over four consecutive years, IMRF spokesman John Krupa said.
In Scholten’s case, since he was employed by several local park districts during his 40 years in parks and recreation prior to being hired in Arlington Heights, including Elk Grove, Medinah, Glen Ellyn and Bloomingdale, Krupa said in addition to Scholten’s employee contributions, the remainder of his pension will be paid by each of the municipalities where he worked.
“It’s shared, and each park district’s liability is proportional to the amount of service credit earned,” Krupa said.
Krupa said it’s neither illegal nor unusual for public employees to “accrue a lot of sick and vacation days, and have a lump sum payment near the end of their employment.”
Indeed, Krupa said IMRF pensions are not contributing to the state’s budget crisis, adding, “IMRF is the best-funded pension system … it’s 87 percent funded.”
“These pensions are not funded by the state of Illinois, and most employers levy a tax for their employees’ IMRF-managed pensions,” said Krupa, adding that while IMRF does administer pensions for retiring executives like Scholten, most of the retirees were earning modest salaries.
“These are blue collar public servants who are not making executive salaries,” Krupa said.
Nonetheless, officials with the Chicago-based nonprofit Taxpayers United of America warned that when public service administrators reap sharp upticks in their wages shortly before retirement, local taxpayers end up picking up the tab for what the organization refers to as “pension spiking.”
“For many retirees in the private sector, they are looking at getting only a Social Security pension of about $15,000 a year,” TUA’s executive director Jared Labell said. “That pales in comparison to these public pensions, especially when you’re facing retirement on a fixed income, and you might not be able to stay in your home, because you can’t afford to pay your property taxes any longer.”
This week, the TUA released the results of its 10th annual Illinois State Pensions Report, which analyzed the IMRF, as well as several other retirement systems, including the Teachers’ Retirement System (TRS) and State Employees’ Retirement System (SERS).
According to the TUA report, the top 400 Illinois pensioners of 2016 will collectively receive $91.5 million in pension payouts this year alone.
“When you look at these huge public pensions, and you look at how much the employee has contributed, the system is lopsided, and it’s left to the local taxpayers to pay the bills,” Labell said.
Jim Tobin, President of Taxpayers United for America, was quoted by the Northwest Herald about his speech “Home Rule is Home Ruin” presented in Woodstock IL.
WOODSTOCK – With the possibility of Woodstock becoming home rule, local voter advocacy group Voters in Action is encouraging residents to be informed and know what the designation could mean for the city.
“The reason we think home rule is insidious is because it allows the city to raise property taxes without limit and without voter approval,” Tobin said, among other reasons.
In Illinois, when a municipality reaches a population of 25,000, it automatically becomes home rule, and Woodstock expects to reach that mark after a special census is conducted.
Advocates of home rule note the benefits, including giving more power to the people who know the community best, giving the city the ability to license landlords and create ordinances to require crime-free housing standards, and improving the city’s bond rating.
Woodstock resident and Voters in Action member Scott Gessert asked the Woodstock City Council to consider a policy that would limit the city’s home-rule power, and the council agreed to look at a policy in regards to notification, public hearings and limiting PTELL with an emergency provision – but not to consider an advisory referendum.
“[A referendum] is one of the most important controls voters have over their local government, and there is no good reason to give it up and hand the power to the bureaucrats,” Tobin said.
Woodstock City Council members and Mayor Brian Sager have said advisory referendums take time and money, and consideration of new taxes under home rule would be brought before the public at City Council meetings.
Joe Tirio, Voters in Action founder and Republican candidate for McHenry County recorder, asked for volunteers to help the group canvass newer neighborhoods in Woodstock that will be targeted by the special census. Volunteers will knock on doors May 21 and 22 to encourage residents not to participate in the special census, he said.
“Help us tell those people face to face that we aren’t going to sit and let them get the keys to almost unlimited taxing power,” Tirio said.
Anyone interested in volunteering can email firstname.lastname@example.org.
More information on home rule can be found on Voters in Action’s website at votersinaction.com, Taxpayers United of America’s website at taxpayersunitedofamerica.org and the city’s website at woodstockil.gov.