Grace Kirchner, Leader Correspondent
Clintonville officials were surprised to learn the city owes the state more than $1.1 million in an unfunded pension liability and want to know why their auditing firm didn’t tell them.
“This is serious,” interim City Administrator Chuck Kell said. “This is a large number that costs money every year. … You will have to begin thinking about how you are going to pay this.”
Appleton-based Schenck, a full-service certified public accountant and business consulting firm with eight locations throughout Wisconsin, serves as the city’s auditor.
The council this week referred the matter to the finance committee for review.
“And I want Schenck at that meeting,” council President Jeannie Schley said.
The debt, calculated through 2013, is the gap between the projected cost of future pensions and the amount set aside to pay them. All entities with an unfunded liability are required to pay interest (7.2 percent) on the balance annually to the Wisconsin Retirement System.
Clerk/treasurer Peggy Johnson said the city’s monthly payments to the WRS include interest, but the interest accruing was larger than what the city was paying. The city’s annual payment to the fund is $49,614.40.
Kell told the Common Council he was not aware of the issue until he read a report in an area newspaper. Council members also said they were surprised by the information.
“I was not aware of this,” said Alderman Mark Doornink, chairman of the finance committee.
“Schenck should have told us about a million dollar debt,” Alderwoman Gloria Dunlavy said. “This is the first I’ve heard of this.”
Kell had told the council earlier that it is a good idea to change auditors occasionally, and council members discussed advertising for bids prior to next year’s audit.
Schenck has been doing the audit for many years but has not appeared before the council for a couple of years, city officials said.