SALINE CO.—A high-tension debate that appeared to be a just-below-the-radar campaign push dominated the December meeting of the Saline County Board.
In the end, not many were as enlightened as perhaps the participants hoped they’d be, however, primarily because of the dry content and large amount of numbers and percentages thrown around. Still, it served to underscore two points: One, that years ago, retirement plans as offered by the Illinois Municipal Retirement Fund (IMRF) were entirely too generous and were what got the state of Illinois in the horrific mess it is in with pensions right now; and two, that a citizen who is upset with something his representatives in government are doing has the right, and indeed the duty, to run for office himself in an attempt to set things right.
Clarifying ‘mistruths’
Saline County Treasurer Danny Ragan and county board candidate on the upcoming Republican Primary ballot, Rod Wallace, had requested to be placed on the agenda in order to speak on differing sides of a single topic. Board Chairman Carey Harbison invited the two to decide between themselves who would speak first, with Wallace insisting Ragan initially take the floor.
Ragan addressed the Board, stating that he wished to clarify some “mistruths that had been brought against him” in regards to his pension plan. He advised that “a young lady who is campaigning against him, as well as her father who is campaigning for her, had spread the rumors,” and wanted it known that this was “not a campaigning speech, but an act of self-defense against the allegations of wrongdoing on his part.”
(Those present knew that he was specifically referring to Sara J. Wallace, who is the Republican candidate challenging Ragan on the ticket in the Primary March 18; her father is Rod Wallace.)
Plan available upon initial election
Ragan, who was elected in 2000 as the county treasurer, went on to explain that he was able to take the Elected County Official, or ECO, pension plan, available to him at the time of his initial term in office. The plan had been enacted before his election, (around 1996), and several other previous county officials had also used the same plan.
In 2004 the board discontinued the plan, even thought this meant higher rates because fewer people would be paying into it. The future employees of the county would not be offered the plan, but those who were already on it were grandfathered in, and therefore could keep it. Ragan is one of 15 people who are now on the plan, and pays 7.5 percent of his salary into his IMRF.
Of the 15 people on this plan, one member is active, seven are deferred, and seven are retired, Ragan said, stating that the rate is high for the plan for two reasons: One is that only one person is contributing to the plan, and the other is that the ECO portion of the IMRF pension plan is underfunded, and has been for several years.
A legal plan
Ragan was elected in under this plan, meaning his use of it is completely legal. For any change to be made to it, it would have to be an equally-legal change. At this juncture, Ragan brought up Wallace’s questioning of Ragan’s participation in the plan:
“What changes could Wallace want that are legal?” he asked.
He noted that the rate wouldn’t go down if Sara Wallace were elected into office; the plan had already been rescinded years ago; and he couldn’t ask the board to change his pension amount.
“If Rod Wallace was wanting to use this for his daughter’s candidacy, that could only happen if the Board allowed him to use this ‘Dead Horse’ in a public meeting,” Ragan said.
Stating that he isn’t a retirement specialist of any sort, Ragan said he does know what he will draw and his opponent was overstating how much the county is paying into his retirement.
“If it’s true that I could draw the $130,000 my accuser says I can draw, or even the $98,100 a year the county clerk says I could get,” Ragan posited, “I would immediately resign and thank my accuser for negotiating such a pretty pension for me. However, it looks rather suspicious, in my view, that these numbers are being provided by my Primary election opponent’s father.”
Documents, statistics provided
Ragan provided a collection of documents that serve as evidence that the allegations against him were being exaggerated. Amongst those were several documents that reflected Ragan’s projected income upon his retirement. One document from Kim Buchanan stated that if Ragan were to retire on December 30, 2014, at the age of 60 with 14 years of ECO service, his final rate of pay would be used, which is $60,000. He would receive $8,175 a month not including his stipend into his retirement fund. The document stated that Saline County pays Ragan $8,175 a month in salary, and $98,100 annually, not including stipend.
Additionally, a pension calculator sheet was provided showing the projected pension benefits from the retirement age of 59 through 77 for Ragan’s pension. The calculator showed that the maximum he would draw would be under the scenario that he retired at the age of 77, in which case he would earn $50,192 dollars yearly.
At this point, the meeting had been going on for just under 15 minutes, the majority of which time the board had sat and listened to Ragan’s comments apparently with due attention.
A ‘sure combination for disaster’
Next, Rod Wallace took the podium. He opened by reading his own letter. His first comments were that he had addressed the board in November of 2012 on the matter of increasing property taxes in Saline County. He stated in the letter that nothing had apparently been done, that the number of taxable properties was falling, and Saline County “is burning while the Saline County Board is fiddling.” He stated that this is a “sure combination for disaster.”
“The area is in a state of decline, and you must take measures to enact budget cuts in all of the taxing bodies to make property taxes affordable,” Wallace told the board. “This is because Saline County has seen a seven percent decline in residents, and Harrisburg has seen an 11 percent decrease. I believe competitive property tax rates would aid in slowing the decline in residents.”
Wallace stated he had conducted some research into the pension liability in Saline County, and found that the IMRF pension fund was 75 percent funded, but $2.7 million short of being fully funded. The Saline County Law Enforcement Pension plan is also underfunded by $500,000, according to Wallace. Those are the lesser concerns in Wallace’s view, compared to the ECO fund under which Ragan is in, which is $1.2 million underfunded according to his research.
Wallace gave a background overview of the plan, stating that it was enacted in 1997 by the Illinois Legislature and adopted by Saline County shortly thereafter, before it was rescinded. He stated that somehow, 18 people managed to select the ECO plan, or possibly slide their IMRF pension into the ECO plan. Board member Jim Fowler was singled out by Wallace as one of those who had done so when he served as the Saline County Clerk.
“The ECO plan is now on a path to a ‘death spiral’ for the property tax payers,” Wallace said, noting some discussion had been held in the area about exactly how much of Ragan’s pension was being paid out of property tax dollars.
Wallace’s numbers
Wallace ran through the same numbers showing that Ragan will have $512,000 paid into his pension from taxpayers by the end of 2014. This included the $8,175 per month, $98,000 annually from Saline County, and the $59,000 Ragan will pay himself. This would leave him earning $33,750 per year, which is unsustainable, according to Wallace. Wallace stated that he, Kerry Harbison, Danny Gibbs, and Kim Buchanan had held a conference call with an Illinois “Pension Guru” who told them that the amount that Ragan will earn is the amount that is set by normal life span assumptions, which is re-evaluated every five years. That equation is set to pay to Ragan a total of $778,500 on the low side through his life. In the event of his premature death, his surviving spouse would receive 67 percent of his pension for the remainder of her life.
At this point, with the meeting at just over 25 minutes, the attentive stares of the board had become dulled and cautious.
Brings up McKinnies
Wallace then pointed out that Mike McKinnies is also under the same plan. His plan is not as bad from the dollar standpoint, but Wallace suggested that if Ragan and McKinnies cared about Saline County, they would opt out of the plan and use another plan from the IMRF. He then threw out the challenge for them to do just that, telling the whole room that he had in his possession the forms they needed to do so.
Wallace stated that if Ragan opted out right now, and continued to serve for the full 18 years, it would save Saline County over $200,000 dollars.
As he was saying this, Ragan said quietly from his reserved position in a corner chair, “No it won’t.” People took notice of the quiet comment, and he repeated it, “No it won’t.”
Wallace then suggested he was irritated that he had to look this all up, when he felt the county should already have it available. He made the suggestion that bonds may be sold by the county to cover the ECO fund, bailing out some of the water.
Others on the plan
“These serious problems should have been dealt with sooner if we’d had a county board that was paying attention,” Wallace said. Over the next 20 years, Wallace stated the cost of this plan would be astronomical, and that the county has to carry the cost in the form of debt to pay for pension liability on some people who never contributed very much to the fund. Jim Fowler was used as an example, having drawn out a total of $407,372 at the time of the meeting, with an average being $26,500 a year. Documents provided showed Fowler had contributed $2,166.10, and the county contributed $4,266.52 on his behalf. The taxpayers have paid the rest.
Wallace continued, singling out more individuals, including the three following, who are past sheriffs:
George Henley paid $2,297.80 and had $6207.28 from the county on his behalf. Henley has drawn out 779,404.84, or approximately $52,000 per year.
Jim Dunn paid in $17,734.80, and the county paid in $85,439.56 on his behalf. He’s drawn $660,648, or $60,058 a year.
Ed Miller paid $19,481.18, with $89,208.22 from the county. He’s drawn out $320,918, or averaging $45,845 per year.
Former state’s attorney Rod Wolf contributed $38,475.40, and the county paid in $186,695.49. He has drawn out of the ECO $59,047 a year, for a total of $324,758 to date.
Clouds of reproach gathering
At 31 minutes and 24 seconds into the meeting, the Board was now staring at Wallace reproachfully.
“These expenses will not be manageable in the long run,” Wallace said, calling for action to reduce the county’s expenses. He suggested several methods to do this, such as enacting a hiring freeze in the county until this is fixed, putting a pay freeze on all county offices until this issue is resolved, do some efficiency studies on all of the county government, etc. He noted that his daughter Sara had pointed all of these things out to the board a year ago, along with inefficiencies in the county assessor’s office.
Lastly, Wallace stated that the Saline County Assessor’s Office should be made an elected position, so that she would be accountable to the people. He stated that, from his perspective, most people have little faith in the elected officials of the county.
Wallace then threw one more name into the mix: Bruce Tolley. Wallace stated that Tolley had been caught in an outright lie at the last meeting he had attended, defending the Saline County Assessor’s Office over his daughter’s real estate tax bill, but not saying how Tolley had apparently lied.
He closed by saying that anyone who was a part of bringing the ECO plan into the county, or who participates in it, should be ashamed of themselves for “looting the taxpayers in this county.” He started to walk off the floor, after asking for action on this matter, but he was asked to hold for questions.
Officially pissed off
It was by now 34 minutes into the meeting, and the Board was officially pissed off.
“Did you, or did you not, come to my home uninvited and ask to come in on a Sunday night at 9 pm, asking for help with your daughter’s tax situation?” Bruce Tolley asked Wallace.
Wallace averred, and said that wasn’t the issue; it was that Tolley had lied about what the assessor had done at the aforementioned meetings. Tolley tried to explain to Wallace that a statute that they had previously discussed did not have to be followed in every situation, and that was to the discretion of the assessor to regulate that.
“Why is it the law then?” Wallace asked. The board attempted to explain that there are other factors that play into every situation. Wallace’s daughter’s situation was in regards to what she had sold her home for, and it was explained to Wallace that the assessor’s office cannot follow what homes are selling for because that classifies as “Sales Chasing” which is illegal.
Chairman speaks
Harbison asked if there were any further questions, and Ragan asked if he could follow up with some comments. He stated that he found it strange that Wallace had gone to a political office to gain access to all of these IMRF documents, when he simply could have gone to the IMRF themselves.
Secondly, Ragan found it distasteful that Wallace was “trying to crucify people who worked for a pension.” He clearly stated that he does not and cannot control what the IMRF does, as they are a private organization (a claim which isn’t quite on the mark; IMRF is a group established by statute by the Illinois legislature, and governed by appointed trustees).
“I think it is very unfair that you jumped on Jim, and George Henley, and a bunch of them for drawing a pension that they work for,” Ragan said, explaining that he saw no good ideas in Wallace’s plans. He saw it that the board adopted the plan, thinking it was a good one, and when they saw that it wasn’t they dropped it.
Wallace asked to respond, and said that he didn’t think people shouldn’t get their pension, but he did believe that this deal was brought in as a “sweetheart deal” for someone. Now the taxpayers are paying for it. He addressed the fact that Ragan and the others had chosen this plan, even though the other IMRF regular plan was right beside it, knowing it was more expensive.
Battle of words breaks loose
At 40 minutes into the meeting, the battle of words broke loose and the mudslinging began. The garble being tossed across the room caused Harbison to have to bang the gavel for order to be restored.
Wallace finally came right out and said he believed these people were taking advantage of the taxpayers through this plan, which is why it was outlawed in 2004.
The board then asked if Wallace would even be there talking about this if he and his daughter were not running for political offices.
He retorted by saying that he had been there a year ago talking about the same thing, before he was running for office. He blamed the board, saying it was despicable that he was forced to find these things after finding out that the board had never done anything to fix it after his last time addressing them.
Mike McKinnies then spoke up, saying that he didn’t know why Wallace even used his name, as he only will earn five dollars a month from the plan at his pay scale.
McKinnies was interrupted by Wallace, who stated that he never said anything bad about him. When McKinnies tried to continue to see why Wallace had “dragged his name through the mud,” if that was really the case, he was again interrupted by Wallace.
“I allowed you to speak, so can I speak please?” McKinnies said, having barely gotten two sentences out.
Wallace then continued to blame McKinnies for making the choice that he felt was best for HIM, and not the taxpayers, even though in his case it only is a matter of an amount that would barely buy a cup of coffee. When McKinnies tried to explain that he just wanted to understand, Wallace then screamed “CAN I JUST SPEAK PLEASE?” McKinnines still had not gotten six full sentences out.
Harbison took over, telling Wallace that he was being way too touchy. He explained what McKinnies was attempting to do was ascertain why his name was being dragged through the mud. Harbison told Wallace that he needed to let McKinnies provide his facts, to clear his name after it had been brought into the middle of all this over a few dollars that he was attempting to explain.
“It isn’t about the dollars,” Wallace continued, “it’s about the percentage on those dollars that is killing the county.” The topic started to heat back up, and Harbison again had to claim the floor.
Microcosm of the state’s problems
Harbison then did what he could to calm the meeting, saying he felt that what they were seeing was a small synopsis of the state of Illinois.
“To dump this all on the county board to fix is nothing short of a joke,” Harbison said. “The bare hard fact is that the whole thing boiled down to Illinois laws that created the mess in the first place, which the board has no power to control. The Board cannot change something that was done in a power level that is above our control, and I think it’s unfair to attack those people for choosing the best plan that, no matter how you look at it, was offered to them as a choice that they could take. It was offered to them by the Illinois Legislature, not by them or the Board.”
Harbison thanked Wallace for providing the feedback and insight that he had. He promised Wallace that they will do what they can to work as much as they can for the betterment of the county and those who reside in it.
Tolley also wished to make a few final comments about taxation in the county. He explained that the board has control over only about 11 percent of the taxes in the county, because they do not have control over all of the taxing bodies that make up each person’s taxes. All that Saline County can do is levy the amount of money required to pay the amount that schools and other entities ask for.
Wallace responded by saying that he understood that, but that doesn’t release them of their responsibilities to the people of the county.
The whole discussion ended with the note that this board is not a full time position. This is why they can’t take the time to track down every thing like this. Because of that, they are grateful for insights like Wallace had attempted to provide.
The meeting finally moved past the visitor’s comments and questions portion of the meeting came to an end at the 56-minute mark after Chairman Harbison stated that this dead horse had been beaten enough. The board all looked frazzled and irritated by that point, but wrapped up the meeting with the rest of the agenda and officeholder reports.