Posts Tagged Foreign Fire Insurance Tax Fund

Crystal Lake Fire Rescue Department news (more)

Oct 28

Posted by Admin in Fire Department News | Comments off

The Crystal Lake firefighters union’s lawsuit against the city has been amended to include new allegations that city officials retaliated against the union and one of its members after he tried to alert authorities to illegal activity.

The amended complaint in McHenry County Circuit Court alleges that the city refused to release money from the Foreign Fire Insurance Tax Fund to the Foreign Fire Insurance Tax Board, which is comprised of firefighters union members.

According to the complaint, FFIT Board Treasurer Brian Marino disclosed the city’s alleged conduct to the McHenry County State’s Attorney’s Office in November and to the Crystal Lake Police Department in December, believing the city violated a state law on criminal theft and civil conversion.

The new allegations are part of a lawsuit that the Crystal Lake Foreign Fire Insurance Tax Board and the city’s firefighters labor union filed Aug. 2 against the city and numerous city officials, alleging that they violated state laws when they zeroed out the foreign fire insurance tax imposed on out-of-state insurance companies. The tax collected more than $60,000 a year.

The amended complaint alleges that the city retaliated against the FFIT Board and union members because of Marino’s whistleblowing by revising its foreign fire insurance tax ordinance in January and August, intending to curtail the FFIT Board’s spending and rule-making authority, as well as eliminating the board’s funding.

The complaint also alleges that Crystal Lake Fire Rescue Chief Paul DeRaedt earlier this year reduced Marino’s performance score and removed any language that reflected positively on Marino’s work with the FFIT Board. It also claimed Marino’s score on a promotional exam was reduced.

On Monday, the city requested more time to respond to the additional claims made by the union in the second amended complaint, which was filed in October.

The city was expected to file a response by Nov. 1, but on Monday, the request for more time was granted.

Crystal Lake City Attorney Vic Filippini said Tuesday that the firefighters’ attorneys asked for time to file a second amended complaint, which was granted, but noted the union didn’t indicate the amended complaint would be materially different.

But when the complaint was filed in October, it presented a “series of new and legal allegations, which raise complicated legal issues that require additional time for defendants to properly address,” according to McHenry County court documents.

In August, the City Council voted to repeal the city’s foreign fire insurance tax and use the remaining $150,000 in the Foreign Fire Insurance Tax Fund until it is depleted, according to city documents and fire officials.

“It was the belief of the Crystal Lake City Council that at this point in time, those funds were not being used for appropriate purposes,” Crystal Lake Mayor Aaron Shepley said in August. “Therefore, in order to protect the best interest of the people of Crystal Lake, we zeroed it out until we can get to a point where we reach an agreement with the foreign fire insurance board where they will return to the good practices that were in place for decades as opposed to the current desire on the part of the board to use the funds for the personal benefit of firefighters.”

Tags: chicagoareafire.com, Crystal Lake Fire Department, Crystal Lake Fire Rescue Chief Paul DeRaedt, Crystal Lake Fire Rescue Department, Crystal Lake Foreign Fire Insurance Tax Board, Fire Rescue Chief Paul DeRaedt, foreign fire insurance tax, Foreign Fire Insurance Tax Fund

Crystal Lake Fire Rescue Department news (more)

Aug 13

Posted by Admin in Fire Department News | Comments off

Excerpts from the nwherald.com:

The firefighters union is taking the city to court for nixing a tax fund firefighters tried to use to buy items ranging from Fitbits to coffee beans.

The lawsuit could add to tensions between the union and city officials. Nine Crystal Lake firefighters, including two who were arrested, face discipline in connection with an off-duty incident in March at a local bar.

The Crystal Lake Foreign Fire Insurance Tax Board and the city’s firefighter’s labor union filed a lawsuit Aug. 2 against the city and numerous city officials, alleging that they violated state laws when they zeroed out the foreign fire insurance tax imposed on out-of-state insurance companies. The tax collects more than $60,000 a year.

The lawsuit further alleged that the city council violated state laws when it decided to dissolve the tax board, to withhold foreign fire tax fees collected from insurance companies, and to return the money collected to the companies that paid the fees.

However, the city council never did any of those things. Instead, the council approved a watered-down version of the ordinance. An earlier draft ordinance had called for dissolving the board, but the city council never considered or voted on the draft ordinance.

Mayor Aaron Shepley said the tax board gave council members a draft of the lawsuit before the Aug. 1 meeting “in an effort to intimidate” council members.

He said the tax board did not amend its lawsuit to accurately reflect actions taken by council members, which solely included setting the tax rate at zero and agreeing to use the remaining $150,000 in the tax fund until it is depleted, according to city documents.

The dispute stems from the board requesting city council approval to use foreign fire tax funds for expenses that would personally benefit firefighters, including Fitbits, duffel bags, health club memberships, and day care services for children while members use the health club. Funds also were requested to buy coffee beans, which the city already provides for its departments.

The foreign fire tax is imposed for the purpose of providing maintenance, use and benefit of the Crystal Lake Fire Rescue Department, including buying and maintaining equipment for firefighting, training and conditioning; and covering training or certification fees authorized by the fire rescue chief, according to city code.

Fire Rescue Chief Paul DeRaedt, who by virtue of rank serves as a trustee on the tax board, said the board’s recent requests raised some red flags because funds are meant to be used for the benefit of the entire department rather than the personal benefit of individual firefighters.

“I felt those expenditures – such as the Fitbits, the gym memberships and the coffee beans – were not acceptable because it was more of personal use,” DeRaedt said. “It’s almost like we’re spending additional dollars on things we’ve already provided for them.”

In previous years, the city’s foreign fire tax funds have gone toward buying exercise equipment and a new firehouse alert system in all three of the city’s fire stations. Funds also have helped buy additional equipment to re-outfit a reserve fire engine, new hydraulic equipment for extrication, carbon monoxide monitors, and backup firefighting suits.

On Jan. 7, 2015, the board approved spending $44,000 annually to reimburse gym membership fees for firefighters, according to foreign fire insurance board meeting minutes. It was unclear whether the money approved also included on-site day care services while members used the gym.

In 2016, the board also approved $14,000 for 70 Fitbit devices and $2,600 a year to supply firefighters with 36 pounds of whole coffee beans each month from PI Coffee Roasters. The city already spends about $1,270 a year to buy coffee and filters for all of its departments. PI Coffee Roasters runs Rockford-based Fire Department Coffee, a firefighter-owned and operated company that gives a portion of every sale to military and firefighter charities

The latest expense the tax board approved was about $57,000 for legal services. The details of what the legal services entail are unclear from the board’s meeting minutes, but the fees would use up nearly all of the estimated $61,000 the tax board collects each year.

Since 2003, the Illinois Municipal League has collected and turned over more than $780,000 in foreign fire tax fees to the city, according to the lawsuit filed by the firefighters union.

The tax will collect about $61,000 once more in the fall before indefinitely halting future collections, unless the city and board can reach an agreement about how to spend the money.

“The current foreign fire insurance tax board has done an exact about face on their predecessors over a period of at least 20 years,” Shepley said. “For now, as long as they’ve made the decision and continue on the path that they insist they have a right, it’s better off that taxpayers not have to bear these expenses.”

DeRaedt said changes to the leadership of the board, which elects six trustees in December of even-numbered years, has led to differences in opinion between trustees and city officials in recent years on what expenses are deemed beneficial to the department.

The tax board voted in July to retain legal counsel to update its bylaws and to assist in efforts to obtain monies from the city being unlawfully withheld from the board, according to court documents. A tax board meeting in January included several tense exchanges between union members and city officials.

Shepley said that the Crystal Lake Professional Firefighters Local 3926 union, one of two plaintiffs on the lawsuit, has no business being involved in discussions that have nothing to do with the city’s collective bargaining agreement.

The union’s contract with the city is set to expire April 30. Negotiations are expected to begin in the spring.

As far as discussing the future of the foreign fire insurance tax, DeRaedt said he is unaware of any meetings scheduled between trustees and city officials, but he remains optimistic.

thanks Dan

Tags: Crystal Lake Fire Department, Crystal Lake Fire Rescue Department, Crystal Lake Foreign Fire Insurance Tax Board, Fire Rescue Chief Paul DeRaedt, foreign fire insurance tax, Foreign Fire Insurance Tax Fund

Crystal Lake Fire Rescue Department news

Aug 7

Posted by Admin in Fire Department News | 1 Comment

Excerpts from the NorthwestHerald.com:

A decades-old tax on out-of-state insurance companies that has helped benefit the Crystal Lake Fire Rescue Department no longer will be imposed after multiple requests from firefighters to spend the money on everything from health club memberships to coffee beans.

City council members voted earlier this week to repeal the city’s foreign fire insurance tax and will use the remaining $150,000 in the Foreign Fire Insurance Tax Fund until it is depleted, according to city documents and fire officials.

The tax is imposed for the sole purpose of providing maintenance, use and benefit of the city’s fire rescue department, including buying and maintaining equipment for firefighting, training and conditioning, and covering training or certification fees authorized by the fire rescue chief, according to city code.

Funds from the tax also can cover other expenses that are both authorized by the Foreign Fire Insurance Tax Board and approved by the city council.

However, Fire Rescue Chief Paul DeRaedt said the city council and the trustees serving on the board – all of whom are members of the department – have disagreed on what expenses are deemed appropriate uses of the funds.

“The city and the board are just not aligned with the interpretation [of the statute],” DeRaedt said. “You try to reason what you think is best, and I think when you go back and look at the purchases this board has made in the last 10 years, those have been good purchases for the department.”

In the past few years, the board has sought city council approval to use the funds for Fitbits, health club memberships, day care services for children, and duffel bags, which the city council said were more of personal use expenses, DeRaedt said.

Other expenses also included coffee beans, which Mayor Aaron Shepley said the city of Crystal Lake already provides for its departments.

“It was the belief of the Crystal Lake City Council that at this point in time, those funds were not being used for appropriate purposes,” Shepley said of Tuesday’s decision. “Therefore, in order to protect the best interest of the people of Crystal Lake, we zeroed it out until we can get to a point where we reach an agreement with the foreign fire insurance board where they will return to the good practices that were in place for decades as opposed to the current desire on the part of the board to use the funds for the personal benefit of firefighters.”

The fire insurance tax is levied on fire insurance companies that are based outside of Illinois, such as Ohio-based Progressive or California-based Farmers Insurance, requiring them to pay up to a 2 percent tax on all insurance policies with properties and companies within city limits.

In the simplest terms, if a Crystal Lake company paid an annual fire insurance premium to a company based outside of Illinois, the city then would require the insurance company to pay up to 2 percent of that premium.

The Foreign Fire Insurance Tax Board, which is made up of six members from the department and the fire rescue chief, then creates a budget every January that outlines proposed expenses that will use funds generated by the tax.

DeRaedt said funds have helped buy physical fitness equipment – such as treadmills and elliptical machines – in all three of the city’s fire stations, and have re-outfitted one of the reserve fire engines with additional equipment, hoses, and axes.

Purchases also have included hydraulic equipment for extrication and carbon monoxide monitors that alert firefighters to problems at the scene of a fire. In 2015, the funds also were used to buy a new firehouse alert system in all three of the city’s stations.

“We want to continue to be able to use these funds, because it is a benefit to our community,” DeRaedt said.

The tax will collect about $60,000 once more in the fall, at which point it no longer will collect money unless the city and board can reach a new agreement in the future.

“In years past, the board did a spectacular job of identifying appropriate expenditures,” Shepley said. “It was our determination that if this foreign fire insurance board was committed to moving forward in the direction we did not think was appropriate, then we would just zero out the tax … and see where we go from there.”