Police cost

The problem: 

An actuarial study done by EBS-RMSCO, Inc. shows that in 2010 the village had an unfunded actuarial accrued liability of $16,146,636.  Most of this is for post retirement health benefits to our police staff.  During that year the village paid about $426,241 to cover obligations already due now.  The report estimates that the village accrued an additional expense that would require $897,848 to be set aside to cover those costs when they come due.  The village has not put aside any of this money.

In effect, in 2010 we have spent $897K on credit, but we have not put aside any money to pay this bill. A quick calculation shows that to put this much money aside, the village would have to raise property taxes by 20%.

The $16M liability is a very large bill overall, one that we have, given our current level of police cost, obligated future village residents to pay.  To put the size of this bill in perspective, it is about triple our annual general fund budget.  And the size of this bill is growing rapidly.

To me, these numbers show that we are consuming police services at a faster rate than we are paying for them.  In my view, this is an irresponsible and unsustainable approach.

What can be done:

As best I can understand the problem, there are three basic courses of action.

1) Do nothing. Kick the can down the road, and let future village residents worry about the gigantic bill when it comes due.

2) Reduce the cost of police services.  Look at contractual obligations going forward.  Look at staffing levels.  Look at possible improvements in operating efficiencies.

3) Increase revenues.  Look at the fine structure.  Look at raising property taxes.  Look for ways that our big tax-exempt institutions, which consume a lot of police service, can contribute more to the cost.

I do not think the first approach is responsible or appropriate.  That is why I am urging action on this problem.  I believe the second and third approaches should be considered in tandem.  I have asked a Board subcommittee, composed of Trustee Warr and Trustee Hopke, to look at the possibilities raised in item 2.  I am working on a plans to look at the third approach.  I have already implemented a Board subcommittee on fines and fees, composed of Trustee Tischler and resident and former DSC member, Michele Arnold.  I am still working on a plan on how to approach our big institutions...but it will get done.

Summary:

I recognize how important police services are to our community.  They are a crucial.  I am proud of our police staff.  They are well trained, professional, and dedicated.  I recognize that they have difficult jobs, and I feel strongly they deserve to be well compensated.  Many folks, I am sure, share these feelings.  But, if you are a village resident, as you look at this issue I urge you to look at both sides of the equation:  service level and cost.  What do you think is the correct balance?

This problem will not go away by itself.  In fact, with the rapid increase in health insurance the problem is accelerating.  However, I do not think this is a fiscal crisis for the village.  Not yet.  It is a problem that has been a long time in the making, and it will be a problem that will take a long, sustained effort to solve.  I believe the time to start that effort is now.

I recognize this is somewhat discouraging news.  I do not enjoy reporting it.  It is indeed a daunting problem. But I am confident if we work together as a village we can solve it.

I welcome your questions and comments.