Pension Issues Weigh On Lake Forest, Lake Bluff Budgets

Scranton, Pa.

San Bernardino, Calif.

The list continues to grow of communities filing for bankruptcy or whose budgets are severely impacted by a variety of factors, including suffocating pension programs that carve out signifcant money.

and are nowhere near that point, but pension programs are definitely on their radar.

Both Lake Bluff President Christine Letchinger and Lake Forest Mayor James Cowhey addressed the issue during Wednesday's annual Municipal Update at the monthly luncheon at in Lake Forest.

Letchinger, who has served as village president since 2005 and said she does not plan to run again in April, indicated Lake Bluff pays more than $600,000 in pension funds.

She noted that for a village of less than 6,000 residents, Lake Bluff offers services that towns their size would not normally have, such as a full-time police department, a fire department, a library, a school district, park district and swim pool. Letchinger said the full-time police department could become more of a budget issue as smaller communities coupled with a sagging real estate market struggle to find more sources of revenue.

Cowhey, who became Mayor in 2009 after serving as Fourth Ward alderman for six years, believes communities that have budgeted conservatively will weather the pension issue.

However, his concern is focused on how state government will pay the billions of dollars in pension funds

"One of the bigger issues on my mind is will the state try to steal more monies from the municipalties?" Cowhey said. "It's something we're certainly aware of. When (City Manager) Bob Kiely and I sit down to talk about our financial outlook going forward, I always say, 'Let's put some money aside' because we don't know what's going to happen at the state level."

Both Letchinger and Cowhey believe their respective downtowns are holding their own against a rollarcoaster economy. Cowhey cited 16 new businesses in Lake Forest with more coming, including two to fill out the East Last Forest Train Station.

Letchinger said in creating its current downtown it didn't happen on the first attempt. "We failed twice before we got it right," she said. And the village's continued survival comes from business owners who are willing to "speak their mind" in looking for other ways to promote the village.

To that end, Lake Bluff will embark on a branding campaign as part of its strategic initiatives geared at both businesses and new residents. Letchinger said the village is experiencing a "graying" effect with 50 percent of the population age 50 or higher due to a real estate market that hasn't been inviting to younger families.

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