Could selling village-owned Altenheim land make dent in pensions?
With every paycheck, Forest Park police officers and firefighters pay into two respective pension funds. The village also contributes money into both pension funds with revenue from property, state and utility taxes, grants, and license and permit fees. After employees retire from the Forest Park Police Department or the Forest Park Fire Department, they get money every year from their pension funds.
Forest Park’s fire and police pensions have been underfunded by millions of dollars for decades. As the deficit continues growing, there could be serious consequences for the village in the next 15 years.
At the Feb. 24 village council meeting, Steve Rummel – a Forest Park resident, District 91 school board member and mayor-appointed trustee of the village’s police pension board – suggested that the village sell the Altenheim land that it owns to fund a small part of fire and police pensions.
The Altenheim, 7824 Madison St., provides housing for seniors. While the Altenheim owns the building, in 2001 the Village of Forest Park bought the surrounding 11 acres from the Altenheim for $3.6 million.
The last week of February, village staff walked the Altenheim property with an appraiser to find out how much its portion is worth. Though the appraiser hasn’t gotten back to the village with an amount, the land’s value will depend on its future use. If the village, or whoever it sells the land to, keeps the land as vacant green space, the property will be less valuable than if it were developed.
The village is looking into two Altenheim transactions: purchasing about 20 feet in from the curb the length of the Altenheim property to accommodate the Van Buren Bike Path; and selling back to the Altenheim about 1.5 acres to the building’s west and 0.8 acres around the building’s south and west sides – a sale the Altenheim proposed last August to add green space, parking and a buffer for repairs to the building’s exterior
“It’s the back portion that’s really going to capture the highest cost per square foot,” Steve Glinke, director of public health and safety, told the Review. According to the village’s original purchase of the land, the area south of the building is limited to R2 development for townhomes or row houses. “Almost anything within reason is on the table in terms of what we’re going to see there.”
Selling the village land could provide a few million dollars that would make no more than a 2% dent in funding the village’s pensions, according to Village Administrator Rachell Entler.
“It’s going to put us in a positive direction, but it’s not going to dig us out of a huge hole,” she said.
“It would buy us time,” Rummel told the Review. “That would put it right about where we were when I first came onto the pension board.”
When Rummel joined the police pension board in 2019, he said the police pension was underfunded by $38 million. Last May, it was underfunded by over 60%, or $41 million.
“Any little bit helps, but whatever revenue we get from the Altenheim is not going to move the funding levels,” Glinke said. “We need to get it off our books. That’s the bottom line. It’s probably equal parts asset and liability,” since the village pays to maintain the property, but hasn’t done much with the 11 acres in over 20 years.
But Glinke is confident that the village will deal with the Altenheim property this year – whether funds from that sale go toward pensions or not.
“Hopefully by the beginning of 2026 we’ve got a game plan, we’ve got somebody selected to make the improvements and we can get rolling,” Glinke said.
The pension problem
The amount of money that’s recommended to go into pension funds is determined by actuarial science. Actuaries determine funding needs based on pension assets and liabilities, plus demographics and economic factors.
Last May, the police pension board’s actuary recommended that the village contribute $3,875,689 to the pension fund in the 2025 fiscal year. Forest Park’s budget for the 2025 fiscal year projects funneling $2.8 million into police pensions – $1 million less than suggested.
But that $1 million is necessary for the village to function. Entler said that’s the cost to fund a major water project, cover a large chunk of a new fire truck, or close to the entire annual budget for the Howard Mohr Community Center.
And the fire pension is in worse shape than the police’s – about 30% funded, according to Travis Myers, a Forest Park firefighter who’s on the fire pension board.
The village’s police and fire pensions are collectively about 35% funded, but they’re supposed to be 90% funded by 2040, according to state statute.
If that quota isn’t met, pension funds can intercept state-shared revenues, such as sales and income tax, to meet the minimum requirement. And that could eventually impact the village’s police and fire departments.
“At some point, if we can no longer afford to fund the pensions, we won’t be able to hire firefighters, we won’t be able to keep our firefighters on,” Entler said. “We could be looking at not having fire services because we won’t be able to adequately provide for the benefits related to being a firefighter or a police officer.”
Myers said younger firefighters looking for jobs have more access to information about the state of pensions than he did, which affects their choice about where to work.
“When they see a pension fund that’s funded at 30%, if they don’t see a healthy village that has the ability to generate revenue … you might not come here,” Myers said. “That is a constraint when it comes to our ability to operate.”
‘The light at the end of the tunnel is a train’
“What happens if the pension fund runs dry?” Rummel asked rhetorically. “When it becomes illiquid, there’s no more money, [we] can’t cut checks. What happens?”
Based on Rummel’s personal assessment, at the rate Forest Park is going, it could be less than 15 years before the police pension runs dry. Rummel said he tried to get an actuary to give him such an estimate, and when Rummel presented an unofficial 15-year timeline, an actuary told him that’s not implausible.
Both Rummel and Myers shared the story of what happened in south suburban Harvey after it failed to make required payments into its pensions for over a decade, leaving it with a 51% funded police pension and 22% funded fire pension in 2016. According to Illinois Policy, Illinois’ First District Appellate Court ordered Harvey to increase property taxes to pay for its pensions in 2017. A year later, Harvey laid off 18 firefighters and 13 policemen.
Rummel foresees a similar path for Forest Park. If the village became a home-rule municipality, it could raise various taxes and assess fees, and address pension debt with bond issues – which are like loans, but the village would have a legal obligation to make regular payments on them. Bonds could pay for the underfunded deficit, but the village would still need to increase its payments to adequately fund pensions.
If property taxes or other fees rise significantly, Rummel said it would likely force many Forest Parkers out.
“Half the town would not be able to stay here,” Rummel said. “If you’re making less than six figures, you’re not staying.”
Rummel said that after he spoke with an actuary, he learned that it’s much higher risk and harder to dig out of a hole if the village dips to pensions funded below 20% – a statistic that led Rummel to give public comment at a village council meeting.
“That is why you see me get this work done,” Rummel said. “That’s why you see me yelling at people about this. The light at the end of the tunnel is a train.”
The path to funding pensions
The village is looking at new forms of revenue that can go toward funding police and fire pensions.
While revenue from any sale of village-owned land, like the Altenheim property, could make a dent in funding pensions, officials also mentioned diverting sales and property tax revenue generated by Parkway Dispensary and the other two approved marijuana dispensaries into the pension fund. At this point, though, officials don’t have an estimate of how much that will be.
Rummel suggested that the village explore bond issues, which could improve the village’s credit rating and appeal to potential lenders and investors.
Others suggest pension reform at the state level.
“The pension thing’s a mess. It always has been, it always will be,” Glinke said. “And until there is meaningful pension reform, we’re going to continue to chase our tail.”
Potential ways to reform pensions could be addressing the state’s Public Safety Employee Benefits Act, which says that, for law enforcement or fire personnel who are catastrophically injured in the line of duty, the village must pay the premium of the injured employee’s health insurance plan for the employee, the employee’s spouse and dependents.
“It’s something that is frequently abused,” said Glinke, who served as Forest Park’s fire chief and as a firefighter for 25 years.
He also raised concern for double pensions. For example, Glinke will collect pension payments from working for the Forest Park Fire Department and from the Illinois Municipal Retirement Fund – though he asked to opt out of the latter when he became director of public health and safety and was told he couldn’t.
“I was a proponent of moving things out of the local control and having a bigger pool of money to invest, and reducing the fee structuring,” Myers said. But he adds that pension reform would be costly. “They don’t want to do pension reform without an additional revenue source, and I don’t know where that revenue source is going to come from.”
If the revenue source is increased property taxes, locals should know why exactly that’s happening.
Rummel suggested attending pension board meetings and setting up time to talk with board members about Forest Park’s pension problem.
“People in this town and this country need to be willing to do a little bit of homework and required reading,” he said.
A culture of transparency around the village’s pensions can only help, acknowledging the problem in order to address it.
“Past practice has been to kick the can down the road,” Entler said, “and we’re trying to correct that now.”
