A local government fiscal watchdog group last week endorsed the Metropolitan Water Reclamation District of Greater Chicago's proposed $1.7 billion fiscal 2010 budget, calling it a "prudent response to revenue shortfalls."

The MWRD is prioritizing spending, controlling personnel costs, and implementing a modest increase to its property tax levy to balance its budget, said the review from the Civic Federation of Chicago. The district faced a $24 million deficit as it was crafting the budget, which cuts 18 positions.

The agency also won praise for moving towards reforming pension funding, as the agency will establish a task force on the subject.

"The MWRD has been a leader in employing good government practices such as long-term planning," said Genevieve Nolan, senior research associate at the federation. "The district will again lead the way if they commit to the reforms necessary to address an unfunded pension liability that has grown by over 50% in five years."

The MWRD has unfunded liabilities of $640 million, with a funded ratio of just 65%. The federation recommends that the district carry out comprehensive pension reform by establishing a two-tiered system with reduced benefits for new employees. The district should also work with state lawmakers to enact legislative reforms that would allow the MWRD's employer contributions to be set based on funding needs.

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