Posts Tagged North Riverside files lawsuit in hopes of privatizing the fire department

North Riverside considers privatizing the fire department (more) has an editorial weighing in on North Riverside’s quest to privatize their fire department:

Illinois’ municipal pension shortfall, excluding Chicago, has spiked to more than $12 billion from $1 billion just a decade ago. Municipalities are suffering the consequences. They’re cutting core services, raising taxes and adding new fees to pay for their increasing government-worker pension costs.

The problem is local governments have their hands tied when it comes to pension reform. The Illinois state legislature sets municipal pension laws with no regard to whether the local budget and taxpayers can afford them.

But the village of North Riverside found a way to get around the General Assembly’s road block to pension reform. North Riverside plans to move its entire fire department to a private provider of fire protection services – a private provider with a 401(k)-style retirement plan. The village plans to transfer its 12 firefighters and four lieutenants – and their full salaries – to the same private company that’s been providing the village’s ambulance service for nearly 30 years.

The move to a private provider of fire protection services would reduce the village’s $1.9 million budget deficit by nearly 40 percent. The savings would largely come from the private provider switching the firefighters from the traditional defined-benefit pension plans to 401(k)-style retirement plans going forward.

North Riverside’s reform plan would finally bring more stability to the village’s decade-long budget battle. Since the late 1990s, village leadership decided between making its yearly pension contributions or making a combination of service cuts and tax or fee hikes. The village made virtually no payments to its fire and police pensions in the years 2005-2006 and 2009-2011. The village blames operating deficits and volatile sales-tax revenues – more than 70 percent of village revenues come from commerce fees and sales taxes – for forcing it to short its pension funds.

According to the village, if North Riverside had not reduced its pension contributions, it would have ended 12 of the last 15 budget years with a deficit, some of them quite large.

North Riverside has run out of options and it can’t afford to wait for the state to reform local pension systems. Draining reserves and cutting services will only go so far. Taxes are already pushed to the limit, and a new law taking effect in 2016 allows the state to redirect a municipality’s funds if it fails to pay its required pension contributions.

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Contracting fire protection services with a private provider is one of the few sustainable solutions that village officials can act on immediately – without waiting for the state to reform pensions.

This reform would allow North Riverside to maintain its current level of public safety. North Riverside firefighters will be able to keep their current jobs, their salaries will be maintained, their already earned pension benefits will be protected and going forward they’ll be given ownership and control over their own retirement accounts with 401(k)-style contracts through the private provider.

Contracting fire protection services with a private provider will help protect taxpayers from higher taxes and cuts in services to fund ever-increasing pension costs. This reform will help end the cycle of credit downgrades, set the foundation for a positive outlook and spur a North Riverside turnaround.

thanks Dan

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North Riverside considers privatizing the fire department (more)

The has an article on the ongoing attempt by North Riverside to privatize the fire department:

It’s not just the future of the North Riverside Firefighters Union Local 2714 that could be at stake when both sides meet again in court on Dec. 18. It could be the future of public employee unions, period.

The village of North Riverside contends that its responsibility to honor the union contract ended when the village declared it to be at an impasse with the firefighters union in September. That’s when the village filed a lawsuit in Cook County Circuit Court, asking a judge to declare the contract, which expired on April 30, null and void in order to allow North Riverside to hire Paramedic Services of Illinois (PSI), a private company, to take over firefighting services for the village. The company has provided the village with paramedic services for almost 30 years.

On Dec. 18, Judge Diane Larsen is expected to make a ruling with respect to the village’s contention that the contract is terminated. How she will rule is the wild card.

“She may rule or she may take it under advisement,” said J. Dale Berry, the local counsel for the firefighters’ union. “But we’ll get to the merit of the claims.”

If Larsen does rule in favor of the village, it could have a monumental effect on how labor contracts with municipalities are interpreted. Language in contracts for police officers and firefighters include no strike, no lockout provisions to allow negotiations and arbitration to occur after contracts expire without putting public safety at risk. North Riverside itself has clung to that interpretation in the past. The most recent firefighters’ contract was approved more than two years after the previous deal expired.

“It’s an attractive solution for people looking for easy answers,” Berry said of the village’s belief that it can unilaterally walk away from contract negotiations by citing an impasse.

North Riverside Mayor Hubert Hermanek Jr. said that if the court rules in the village’s favor “it would change the whole playing field.”

Since the village filed its lawsuit on Sept. 12, several things have happened. The firefighters union responded to the suit by filing an unfair labor practice complaint with the Illinois Labor Relations Board and, at the same time, filed a demand for compulsory arbitration. The Illinois Labor Relations Board agreed with the union’s demand for arbitration and chose an arbitrator. The first arbitration session is scheduled for Nov. 24.

Additionally, on Oct. 1 the firefighters’ union received word that it would be granted legal assistance from International Association of Firefighters through the union’s law firm, Woodley & McGillivary, based in Washington, D.C.

On Oct. 30, the village’s attorney, Burt Odelson, filed an amended complaint in Cook County court, adding the Illinois Labor Relations Board as a defendant. And on Nov. 17, Odelson made a motion to prevent contract arbitration from beginning. While the judge ruled that arbitration could move forward, she also ruled that if North Riverside refused to participate in the Nov. 24 session, it wouldn’t prejudice the court against the village in terms of its lawsuit seeking to terminate the contract. In other words, nothing that happens during arbitration will have any effect until after the judge rules on the merits of the village’s lawsuit on Dec. 18.

While the judge could rule in favor of the village, she could also rule that the court is not the place to resolve the dispute. Rather, she could rule that arbitration is where the dispute ought to be settled. If that happens, Odelson said he would immediately appeal the case to the Illinois Court of Appeals.

Village officials had hoped to be able to privatize the fire department this year, but the court case has moved slower than officials had hoped for.

Meanwhile, North Riverside firefighters and firefighters from surrounding communities are expected to go door-to-door this weekend in the village, passing out information regarding the village’s proposal to privatize fire services. “It’ll be a quick handout of information that residents aren’t getting,” said Rick Urbinati, president of North Riverside Firefighters Union Local 2714.

thanks Dan

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North Riverside considers privatizing the fire department (more) has an article about a motion filed in court to terminate the contract with firefighters in North Riverside:

The village of North Riverside filed a motion in Cook County Circuit Court on Monday, asking Judge Diane J. Larsen to rule that it has the authority to summarily terminate its contract with North Riverside Firefighters Union Local 2714 and allow it to privatize the department on Dec. 5.

The motion comes on the heels of a lawsuit filed by the village on Sept. 12 asking for the same right to terminate its union contract with firefighters, which expired April 30.

“At issue here is the simple reality that contracts do not exist in perpetuity,” said North Riverside’s attorney, Burt Odelson, in a press release issued Monday morning. “They have a finite start and end date, unless extended by mutual agreement of the parties.”

Both sides will appear in court Wednesday for a status hearing. At that hearing, Odelson said he will ask Larsen to seek a quick response from the union to the village’s motion. The judge may or may not honor that request. The firefighters union still has not filed its answer to the original lawsuit. J. Dale Berry, the attorney for Firefighters Local 2714, must file that response by Oct. 17.

The village contends that the two sides are at an impasse after several rounds of contract negotiations, including ones in the presence of a federal mediator. Those bargaining sessions, says the village, were held in good faith.

The Sept. 12 lawsuit doesn’t ask the judge to consider anything but the village’s argument that, after bargaining in good faith and reaching an impasse, the village ought to be allowed to summarily terminate its contract with the union. The village notes in its motion for summary judgment that even though it has given firefighters 60 days’ notice, it will not move to terminate the contract on Dec. 5 without a judge’s order.

But the firefighters union argues that the village did not bargain in good faith. On Sept. 19, the union filed an unfair labor practice complaint with the Illinois Labor Relations Board against North Riverside, charging that the village had no interest in negotiating a new agreement and engaged merely in “surface bargaining.”

The complaint states that the village never intended to bargain in good faith, as evidenced by a letter sent to residents by Mayor Hubert Hermanek Jr. on June 18, outlining the village’s plan to privatize the fire department. The first negotiating session between the village and firefighters was held June 24.

In addition, on Sept. 19, the union filed a demand for compulsory interest arbitration with the Illinois Labor Relations Board, demanding an arbitrator be chosen to settle the contract dispute.

However, on Monday, Odelson told the Landmark that the village will not participate in the arbitration process. “There’s nothing to arbitrate. The contract has expired,” Odelson said. If interest arbitration moves forward anyway, said Odelson, the village would seek to stay that action in court.

If the court rules in favor of the village, it could send shock waves through the state’s public employee unions. Such a ruling would seemingly make it possible for a municipality to terminate its union contracts when they expire with 60-days’ written notice.

Meanwhile on Oct. 2, the Illinois Department of Insurance delivered its findings regarding a meeting with village officials on June 26. At that meeting, the Department of Insurance ordered the village to show cause as to why it had not made required contributions to the police and fire pension funds in 2010, 2011, 2012 and 2013. During that time, the village had underfunded its pension contributions by $5.2 million. In its ruling, the Department of Insurance ruled that the village failed to provide a sufficient reason for not making the contributions and ordered the village to submit “evidence of compliance” to the department within 30 days.

Since North Riverside does not have $5.2 to contribute to the funds, it likely will have to pay a $2,000 fine. More importantly, if the village fails to come into compliance by 2016, the state can begin to deduct up to one-third of its sales tax revenues from the village’s general fund to bring the village into compliance.

“The state is putting enormous pressure on municipalities to fully fund their public pension obligations. North Riverside is not the only community that does not and will not have the millions of dollars that will be required,” Odelson said in the press release. “Elected municipal leaders must have the ability to make legal and rational decisions that maintain vital services without being forced to declare bankruptcy.”

thanks Dan

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North Riverside considers privatizing the fire department (more)

The SouthTownStar has an article on the continuing issue of the North Riverside politicians attempt to privatize the fire department.

The state’s largest firefighters union claims that a lawsuit filed by North Riverside to terminate the village’s fire union is motivated by politics, not financial problems.

“Over the last 10 years, North Riverside hasn’t made a single full payment into the union pension fund,” said Pat Devaney, president of the Associated Fire Fighters of Illinois. “In five of those 10 years, it made no payments at all. Zero!”

A lawsuit filed on behalf of North Riverside by Evergreen Park attorney Burton Odelson contends that the west suburb no longer can afford to make payments into the fire pension fund as required by law. The first-of-its-kind lawsuit in Illinois asks a Cook County judge to dissolve the firefighters union so the suburb can privatize its fire department.

“This isn’t about the suburb’s ability to fund the pension,” Devaney said. “It’s about politics.”

North Riverside’s mayor wants a private company, Paramedic Services of Illinois, to provide fire protection for the village. The company has provided the town’s ambulance service for 28 years.

Devaney contends that PSI has made $3,800 in donations in recent years to the Voters Improvement Party, a political party whose members include the mayor and a majority of village trustees. “This is a no-bid contract worth $9 million awarded to a company that has made campaign contributions to the mayor and his political party,” Devaney said, adding that those donations represent about 25 percent of the party’s campaign funds since 2005.

“It would be illegal under state law for the state to award a no-bid contract to a company that made campaign contributions to state officials,” he said. “But the law doesn’t apply to municipalities, so North Riverside does this to reward a company that makes campaign contributions and claims it is all about saving the taxpayers money.”

The village, with annual revenue of $14.4 million and expenses of about $15.1 million, claims that required contributions to its fire pension fund have increased by a whopping 340 percent (from $175,793 per year to $773,055) from 2003 to 2013.

Pension reform legislation passed by the General Assembly in 2011 requires that all municipal pension plans be at least 90 percent funded by 2040. The law also gives public-employee unions in 2016 the right to begin intercepting sales tax revenue from the state to towns if pension funds are not adequately financed according to a state schedule.

North Riverside argues that power could mean the village might lose millions of dollars in sales tax revenue, forcing it to slash government services.

Odelson said the village would save more than $745,000 next year and $4 million over the next four years by contracting with a private company to provide fire protection.

In addition, all of the village’s firefighters would have to be hired by the private company under the terms of the contract.

“All of the firefighters would be hired by the private company for 11 years, at which time 12 of the 14 full-time firefighters would be eligible to retire,” Odelson said. “Their benefits would remain the same, the pensions would be paid, and we even offered a salary increase if they accepted the deal but they turned us down.”

But Devaney believes village officials are not motivated by budget concerns but rather “political retribution against the union. The (union), in the last mayoral election, supported the mayor’s opponent. He’s getting back at the members by refusing to negotiate with the union in good faith. “We will document that in court, and this lawsuit will be thrown out because it violates the fair labor laws and the right of individuals to engage in the democratic election process.”

Odelson said the firefighters union contributed more money to the opponent of the mayor than the mayor received from Paramedic Services of Illinois.

If North Riverside should win this lawsuit, it’s likely that several Southland towns will file similar lawsuits seeking to terminate union contracts to preserve the towns’ financial solvency.

“They have real financial problems,” he said. “North Riverside does not. While failing to fund the firefighters pension, it was making payments on a regular basis into the IMRF (Illinois Municipal Retirement Fund), which covers village employees.” North Riverside made payments of $203,375 to the IMRF in 2003 but paid nothing into the fire pension fund in the same year, according to information provided by the firefighters union. It says that in 2006, the village again made zero payments into the fire pension fund, while contributing $216,000 to the IMRF. And in 2009, 2010 and 2011, the town again failed to pay anything to the firefighters fund, while making contributions of $231,474, $248,461 and $247,741, respectively to the IMRF, according to the union.

“What that tells me is the village made a deliberate decision to create a pension crisis so it could use that as an excuse to violate the rights of the union firemen,” Devaney said.

As for the south suburbs, he said the solution lies in consolidating municipal fire departments into fire protection districts. “When you eliminate duplicative costs, the huge salaries of fire chiefs and deputy fire chiefs and other administrative costs, the savings would provide the public with the same degree of safety they have now at a much lower cost,” Devaney said.

“What we’re saying is that when a contract expires on April 30, 2014, it ends,” Odelson said. “The village has the right to privatize when the contract expires. That’s it.”

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North Riverside considers privatizing FD (more)

CBS Chicago has an article on the move by North Riverside officials to privatize the fire department:

 An attorney for a suburban firefighters union said they will continue their fight against an attempt by the village of North Riverside to privatize its fire department.

… North Riverside officials have asked a Cook County judge to allow accelerated filings and make a summary judgment in their lawsuit to privatize the village’s firefighting operationsThe village has said its contract with its firefighters has expired, and they want to speed up their privatization effort to save $750,000 on pension payments next year.

However, J. Dale Berry, the attorney for North Riverside Firefighters Union Local 2714, said the court has given the union the customary 30 days to respond to the village’s lawsuit. The union wants to resolve the dispute through arbitration, and has accused the village of bargaining in bad faith. Berry said the contract allowed for arbitration after the contract expired.

“Essentially what the city is trying to do here – it’s very, actually very radical, unprecedented type of claim – they’re essentially trying to terminate a contract that isn’t terminated by its own terms, and they’re trying to bypass the dispute resolution process,” he said.

The village has denied bad-faith bargaining, and argued it cannot afford to pay the pensions of the unionized firefighters, and has offered them jobs with the private company that would run firefighting operations.

thanks Dan

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North Riverside considers privatizing FD (more)

The Riverside-Brookfield Landmark has an article on the continuing push to privatize the fire department in North Riverside:

The village of North Riverside filed suit in Cook County Circuit Court on Friday, asking a judge to allow it to proceed with a plan to privatize its fire department in order to escape the “prospective devastating financial consequences” that would result from operating its full-time municipal fire department in the future.

In the lawsuit, the village claims that management and North Riverside Firefighters Union 2714 are at an impasse after “months” of negotiations. The first time the two sides sat down to discuss a new contract was June 24. Their final negotiation session, overseen by a federal mediator, took place Sept. 9.

At the heart of the lawsuit is the village’s contention that it should not in this instance be limited by language in its union contract with firefighters and contained in the Illinois Labor Relations Act, which states that no one side can unilaterally change employment conditions while negotiations or arbitration are pending.

The village’s position is that “it can no longer responsibly enter into a ‘new or amended agreement’ with the union” because of its financial situation, which it lays out in detail in the suit. Further, the village argues that neither the union contract nor labor law prevents the village from outsourcing its fire protection services “following a good-faith legislative determination of the present and future economic necessity to take such action, and following good-faith negotiations with the union.”

The firefighters union remains unconvinced that the village has any right to terminate the conditions of its contract, which expired April 30.

“They can’t do anything without a declaratory judgment,” said Rick Urbinati, president of Local 2714. “The fact is, it’s still in effect, and we’re still working. We’re not leaving work.”

North Riverside Mayor Hubert Hermanek Jr. stated earlier this week that he would be disappointed if the village was unable to privatize the fire department by November.

As a result, the village’s attorney, Burt Odelson, said he will be asking Judge Diane J. Larsen to expedite the case during an as-yet unscheduled hearing next week.

Meanwhile, union firefighters from North Riverside and other neighboring communities met in Berwyn on Friday to discuss the possibility of pitching consolidation as a better resolution to voters as early as next spring. Urbinati said the first step is to determine what the boundaries of such a consolidated department might be. After that, firefighters would have to get enough signatures on petitions in each community that would be affected to get a consolidation question on the ballot.

As for the lawsuit pending in circuit court, Urbinati expressed confidence that a judge would uphold the language in the contract and as expressed in labor law.

“I don’t see how any judge can allow this,” said Urbinati. “But if that’s where this needs to go, we’ll wait to hear what the judge has to say.”

North Riverside Fire Lawsuit

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