Grace Kirchner, Leader Correspondent
Clintonville’s auditor, Schenk Associates, is not to blame for the Common Council not knowing the city owes the state more than $1.1 million in an unfunded pension liability, according to interim City Administrator Chuck Kell.
In March, Kell was surprised to learn about the debt, through a newspaper article, and council members complained that Schenk representatives should have alerted the city to the problem.
Kell told the council Tuesday that the city had not asked for a presentation from Schenk for at least 10 years.
“The auditors are not at fault,” he 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 was $49,614.40 this year, but the tab was $79,227 with interest.
The city joined the Wisconsin Retirement program in 1964, and all eligible city employees participate.
Kell said the auditors would meet with city officials within the next 60 days.
“I think you want to take care of this,” he told the council. “It is water over the dam. We need to address the debt before it gets worse.
“We have $300,000 that we could use … but that still leaves $700,000 to $800,000 that we need to borrow. … This would not affect our debt limit. It would be manageable.”