BLOOMINGTON — If newly promoted Bloomington Public Works Director Kevin Kothe had retired by April 30, the city could have faced its third-highest accelerated pension payment to the Illinois Municipal Retirement Fund.
Information obtained by The Pantagraph through a Freedom of Information Act request shows the city would have had to make an accelerated payment of $202,190 to the IMRF. That would be based on Kothe's higher end-of-career salary with $83,606 in unused sick leave and $27,056 unused vacation pay earned since he was hired in 1988.
Her spike caused the highest accelerated payment statewide — $358,394.
IMRF spokesman John Krupa confirmed Friday that Bloomington's $358,394 accelerated payment in May 2015 still remains the highest ever paid statewide.
On Friday, City Manager Tim Gleason stressed eliminating the estimated accelerated payment for Kothe was not why he promoted the city engineer to public works director, effective Feb. 2.
"I didn't know what the accelerated payment amount was until this week," said Gleason. "I just knew that it would be a sizable amount. Kevin Kothe had signaled his intention to retire by April 30.
"But the reason Kevin Kothe was selected as public works director is his experience, the leadership qualities that he has. He is well respected within the organization and externally," added the city manager.
Kothe said the sick leave reimbursement was an advertised benefit at the time he joined the city some 32 years ago.
“They (the city) advertised it when I applied for the job,” Kothe said. “I’ve only used sick time a few times, usually when someone in the family needed me there for an illness.”
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The city's second highest accelerated pension payment in the amount of $223,830 was for Deputy City Manager Barb Adkins, who retired in the spring of 2014.
The city previously eliminated the benefit for employees hired after May 1, 2012, but those hired prior to that date were considered grandfathered employees eligible to receive the benefit.
The current structure has allowed sick leave payouts over the final three months of employment, which can spike the rate at which pensions are calculated. In some cases, that increase requires the city to make accelerated payments to the IMRF to cover pension costs.
Employees who wanted to retire under the city's current structure had to give notice by Oct. 31, 2019, and retire by April 30, 2020.
Kothe had considered retirement and would've been eligible for sick leave buyback. Kothe's continued employment means the city will not have pay an accelerated payment.
After April 30, employees will still be paid for unused sick leave and vacation days after they retire, but it is not part of their pension calculations, said Bloomington Communication Manager Nora Dukowitz.
"It just will not be eligible for that (end-of-career) payment that has that huge impact to the city," added Gleason.
Gleason said he expects to begin in the next month negotiating that benefit out of labor contracts with the union that represents 36 water division employees.
In his new role, Kothe will make $144,745, an increase from $120,762. The salary of his former boss, Jim Karch, will move to $115,000 from $144,745.
"Given his integrity and the respect he has in the community, Kevin probably could have retired, collecting his IMRF pension," said Gleason. "And I am sure he would have had, if not already, consulting opportunities and could have made more than as my public works director now. I think that speaks to one of the many reasons why I selected him as public works director. He is very dedicated to the city of Bloomington."
Karch, who joined the city in 2000 and became public works director in 2009, will move to the new position of special projects manager.
Contact Maria Nagle at (309) 820-3244. Follow her on Twitter: @Pg_Nagle
"Given his integrity and the respect he has in the community, Kevin probably could have retired, collecting his IMRF pension. And I am sure he would have had, if not already, consulting opportunities and could have made more than as my public works director now. I think that speaks to one of the many reasons why I selected him as public works director. He is very dedicated to the city of Bloomington."
Tim Gleason, Bloomington city manager