Several contributors submitted the information here about a possible change for the North Riverside Fire Department.
From the Riverside – Brookfield Landmark:
Facing a pension-funding crisis, the North Riverside village board finds itself in a position where it may look to privatize some village services — potentially its fire department — in order to balance its budget.
No decisions have been made, but the village board’s finance committee is scheduled to meet June 30 at 6 p.m. in the council chambers at North Riverside Village Commons, 2401 Desplaines Ave., to come up with a path forward.
“We have to do something radical,” Mayor Hubert Hermanek Jr. told the Landmark during an interview on Saturday. “Nothing is off the table.”
The June 30 finance committee meeting will follow in the wake of a hearing before the Illinois Department of Insurance that village officials have been ordered to attend at the Department of Insurance, 122 S. Michigan, 19th floor, in Chicago on June 26. According to Kimberly Parker, communications manager for the Illinois Department of Insurance, the hearing is being convened to allow North Riverside to present a course of action for coming into compliance.
In February 2013, the Department of Insurance issued a notice of non-compliance to the village regarding North Riverside’s contributions to its police and fire pension funds. North Riverside was one of five municipalities to receive the notices last year. At the time, North Riverside was warned to “take immediate steps to bring itself into compliance” with the state pension code.
Since 2008, North Riverside has paid just a fraction of its pension obligations; for four years running, the village paid nothing into its pension funds. During the 2013-2014 fiscal year, which ended April 30, North Riverside contributed about $340,000 to its police pension fund and about $223,000 to its fire pension fund.
In order to fully fund its police and fire pensions for the 2014-15 fiscal year, North Riverside must contribute about $1.8 million.
On Saturday, Hermanek said that’s exactly what the village wants to do.
“My hope is that we will completely fund the pensions,” said Hermanek. “It’s going to be difficult.”
That’s because if the village is to fund both its pension obligations and maintain village services at their current levels, the village will see its general operating reserves cut by almost $2 million.
That would drop the village’s general operating reserves to just about $2.1 million, which represents about 13 percent of annual expenditures. And that reserve would disappear completely by 2015-16 if service levels remain unchanged and pensions are funded completely.
“We would have a balanced budget if it wasn’t for the pensions,” said Hermanek. “It’s imploding the village. We have to do something out of the box. It’s not fair to residents to cut services and lay off people to make our pension obligations.”
A 2011 state law requires municipalities to meet its fire pension obligations. If a municipality doesn’t meet those obligations, according to the law, the state comptroller in 2016 will deduct up to “one-third of the total amount of any grants of state funds to the municipality” to cover the shortfall.
In 2017, that amount jumps to one half of any grants of state funds; in 2018, the comptroller can deduct the total amount to meet the shortfall.
In 2014-15, the village’s fire pension obligation is almost $744,000 and is projected to rise to $950,000 by 2016-17. Officials project spending $4.74 million (including the pension obligation and a $612,000 line item for paramedic services) for fire protection in 2014-15.
The village board still hasn’t approved a budget for the present fiscal year, which began May 1. And the board hasn’t made any final decisions on service cuts or delays in capital expenditures.
The village in recent years has raised rates somewhat, but not nearly enough to keep up with substantial increases being passed along to the suburbs by the city of Chicago. As a result, the village’s water fund has been running annual deficits in excess of $350,000, leaving the general operating fund to make up the difference.
At a special village board meeting that’s been scheduled for June 23, North Riverside trustees are expected to increase water rates by $1.50 per 1,000 gallons of water and impose a $15 per month “water operations fee” on all residential and commercial water customers. The increases are expected to bring the village an additional $800,000 to its water fund.
A draft version of the 2014-15 budget shows the village is predicting sales tax revenue will recover after coming in substantially below expectations in 2013-14. During the last fiscal year, sales tax revenues fell short of expectations by almost $720,000.
But officials are hopeful that a full year of sales at Costco, a new Chick-fil-A, Red Robin and other new retail businesses at the Costco outlots will cause sales taxes to rebound.
The Village of North Riverside is considering privatizing its fire department, saying rising pension costs and a state requirement that municipalities fully fund pensions have forced it to make drastic changes.
The village is publicizing the privatization proposal in advance of a June 26 hearing with the Illinois Department of Insurance, Mayor Hubert Hermanek Jr. said Wednesday. The department summoned the village to explain how the village plans to pay a $1.8 million public pension obligation by a 2016 deadline, Hermanek said.
At next week’s hearing, the village plans to propose cutting costs by shifting firefighters to a private provider of paramedic services the village already uses. The village could save $700,000 per year by expanding its 28-year agreement with Paramedic Services of Illinois to include the village’s 16 firefighters, Hermanek said. The savings would come from a reduction in overtime, vacation, workmen’s compensation, liability insurance and other costs, in addition to reducing the village’s pension obligations to the state, he said. The firemen would move to a 401(k) style retirement plan, he said.
Derek Zdenovec, secretary of North Riverside Firefighters Union Local 2714, said when reached Wednesday that the union had no comment. He said the union did not learn of the agreement until it was publicized Wednesday.
The union’s latest contract with the village expired at the end of April. Negotiations on a new contract had not yet begun as of this week, Hermanek said.
Under a new state law, municipalities must fully fund pension obligations by 2016, Hermanek said. If towns don’t make the payments, the state may take money from their sales tax revenues, according to a Village of North Riverside news release. The village recently reviewed budget figures showing it faces a $1.9 million budget deficit for fiscal year 2014-15, $1.8 million of which is from its pension obligations, according to the release.
thanks Dan, Joe, & Richard
