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Actuary tells LaSalle County trust it may need about $20.4M; committee seeks corrected exhibits and more options analysis
Summary
An actuarial report presented to the trust estimated a $20.4 million funding need through 2030; committee members asked for reconciliations, corrected exhibit pages and comparative cost runs (standard insurance vs. recapitalization/bonding) before any funding decision.
The LaSalle County insurance trust committee reviewed an actuarial study estimating the trust would need about $20.4 million to fund liabilities through 2030 and debated several funding scenarios before agreeing to gather more detailed financial reconciliations and corrected exhibits.
Bill, presenting the study, said the last page shows a cumulative need of "$20,400,000" and that the actuary included a $1,000,000 cushion. He said the trust currently holds roughly $6,000,000, leaving an additional funding gap of about $15,000,000 under the study’s assumptions. "That cumulative number ... was deemed at $20,400,000," he said while pointing to highlighted pages the committee had received that day.
He presented four broad options for the committee to consider: (1) do nothing and purchase standard commercial insurance; (2) continue self‑insurance without a trust (annual reinsurance/retention); (3) recapitalize the trust with iFiber sale proceeds to extend solvency into 2029–2030; and (4) a hybrid that uses iFiber proceeds plus bonding to reach the actuary’s projected horizon. He cautioned these were illustrative choices and that additional modeling would be required.
Members pressed the presenter and the actuary’s methodology. Craig asked why an additional 10 percent factor had been added to the projections; the presenter said the 10 percent was ‘‘actuarial judgment’’ added to implicitly fund unpredictable large claims. Members also asked why the actuary’s projection rose from earlier published figures and whether the study had reconciled projected losses with the county’s financial statements. Craig requested the prior study and more documentation; staff agreed to provide it.
Several members noted errors or placeholder symbols on the packet’s last pages (pound signs in projection tables) and asked for corrected files. Staff and the presenter agreed to obtain a corrected version and to circulate previous studies for comparison. The presenter and risk staff also committed to run comparative scenarios for the cost of a standard insurance program (ICRMT/IMRF/pools) versus recapitalizing or bonding, including sensitivity for varying retention levels.
Board members debated the possibility of using iFiber proceeds for recapitalization. Some members said using those funds would be a full board decision and cautioned about competing uses; others pointed out that those proceeds have a zero cost of capital compared with borrowing. No final decision was made on use of iFiber funds; the committee directed staff to return with clearer numerical options and impact statements for consideration at a future meeting.
The actuarial study was placed on file for committee discussion only; committee members agreed further vetting, corrected exhibits, and additional actuarial analysis are needed before recommending any funding action to the full board.
