EAST PEORIA — The East Peoria City Council on Tuesday is expected to approve a low-interest loan to pay for an early retirement incentive accepted by 22 city employees during the last two years. The incentive resulted in a required contribution of $2,538,222 to the Illinois Municipal Retirement Fund.
"The IMRF allows a party to pay the amount over time," City Administrator Jeff Eder said this week. "But what we have found is that it can be done at a savings by a private loan rather a loan from them."
Eder has recommended approval of a loan to cover the costs from Morton Community Bank. The bank offered a rate of 2.15 percent that over five years would cost the city $140,970 in interest. By comparison, the IMRF rate of 7.5 percent would cost $505,692 over those same five years.
"It's a substantial savings," Eder said.
The Morton bank rate was the lowest rate the city received from among several other local financial institutions.
Commissioner John Kahl has opposed the early retirement incentive program from the beginning. He has stated it should never have been implemented without knowing its cost and that it is now part of the reason the city is facing a large budget deficit and challenging financial times. He is expected to vote against the loan.
Eder said Mayor Dave Mingus, who is a participant in the IMRF program, has abstained from any vote on the topic.
"The other three (commissioners) are expected to support the loan," Eder said. "I needed three votes to pass it."
That's the reason the vote was pulled from Tuesday's regular meeting of the City Council: Commissioner Gary Densberger, one of the three needed votes, was absent.
To meet an IMRF deadline of Dec. 15, the council will meet to vote on the loan at 8 a.m. Tuesday in the council chambers at City Hall. Because approval requires a second reading, the first vote at the next scheduled meeting on Dec. 5 would have been too late to make the deadline, Eder said.
Scott Hilyard can be reached at 686-3244 or by email at email@example.com. Follow @scotthilyard on Twitter.