1. #1
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    Default Foreign Fire Tax

    I found this to be an interesting article in the Sunday paper.
    I get the feeling that the editor who wrote the piece doesn’t have a clear understanding of the Foreign Fire Tax as a funding mechanism.
    I must admit that I am somewhat offended by the use of the words “slush fund” in reference to the Foreign Fire Tax.
    But read the column and tell me what you think.

    From the Peoria Journal Star:
    Sunday, July 18, 2004

    OUR VIEW

    Shut down firefighters’ tax-paid slush fund

    The city of Peoria has an ambulance though it’s not in the ambulance business. The city owns the $60,000 vehicle though it didn’t buy it. The ambulance presumably works, but it can’t be driven because it doesn’t have license plates. It sits in a fire station that is also mothballed. This absurdity is not the city’s fault.

    It is the outgrowth of a preposterous state law that awards tax money to boards of local firefighters to spend as they wish and of the Peoria board’s decision to spend it to advance the firefighters’ political agenda. The law says the money must be used to benefit fire departments but gives the local governments responsible for running these departments no say in the spending.

    This time around, the Peoria board spent a large chunk of the money on an ambulance for which there is no need in a city which has many needs.

    The Foreign Fire Tax Board, consisting of four firefighters and Chief Roy Modglin, gets about $100,000 each year from a two percent tax on out-of-state insurance company premiums. By a 4-1 vote-Modglin was opposed-the board bought the vehicle in January and recently voted to spend nearly $14,000 to equip it.

    The fire chief says the board wanted an ambulance to be on call when firefighters train. But Andrew Rand, executive director of Advanced Medical Transport, the not-for-profit business that runs ambulances throughout Peoria, says he would have placed one of his vehicles at training sessions-without charge-had the fire department asked. In any event, it’s hard to make a case to buy an ambulance for just a few training days a month, particularly when the firefighters themselves are schooled and equipped in responding to medical emergencies.

    The more plausible explanation is that the board wanted the ambulance to be on call less for the training of firefighters than for the training of City Council members. The firefighters union very much wants to be in the ambulance business. One vehicle won’t get it there, but one vehicle can help make the point, even if the vehicle itself is pointless. Which it is. The mothball order came from Modglin and City Manager Randy Oliver-who wasn’t even told an ambulance was on its way until it got here.

    Not all of the local board’s spending has been so outrageous. In previous years, it has purchased defibrillators, thermal-imaging cameras and other useful devices that never made it into the city budget. But it’s also bought health-club memberships, workout shorts, T-shirts and exercise equipment for firehouses. Is this Lake Forest?

    It is not, of course. It is Peoria. And for four years running now, the Peoria City Council has been cutting services or raising taxes-sometimes both-just to stay in business. A hundred thousand dollars wouldn’t solve that problem, but it would pay a couple of firefighters’ salaries. It would be a small down payment on the $600,000 the city must find next year to provide more benefits to survivors of firefighters, as a new state law requires. Instead, the board bought an ambulance that is garaged and in April bought 15 books about the history of firefighters in Illinois. The state firefighters union was selling them.

    But even if the money always was spent well, it is simply preposterous to give government employees tax money to spend on themselves and to give elected city officials no say. No other city department has its own tax-supplied slush fund; cops, who also must stay physically fit, pay their own health-club memberships and buy their own work-out clothes. That says something about the power of firefighters unions.

    Enough! Public spending requires public oversight. Those who are responsible for city services rendered must have a say-so in what services are provided.

    Gov. Rod Blagojevich, who has been skimming money from various funds to pay for state operations, should ask the Legislature to shut this one down. If Illinois were to keep the money, its budget deficit would be as much as $15 million narrower. Or it could give the money to local governments and let them decide what to do with it.

    Now there’s a novel idea.
    So; here's how it works as far as I know.
    The Foreign Fire Tax is paid to the Illinois Municipal League and they disperse the money to the municipality, who then puts the money into the general fund of the fire department. As a trustee, naturally, I have a say-so in how the money is spent. I would assume that a city council would have the same authority as I do with a municipal fire department like Peoria. No?
    And I have a hard time stomaching the use of the term "slush fund". I happen to know departments like Galesburg fund their fire prevention programs solely with foreign fire tax revenue.
    Anyone got a perspective?
    CR
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    I may be wrong on this, but I think we only have one municipality that we protect (there are 4 total, all small) that gets us any money from this. I'll have to look into it more, but we get a check every year from them. I know that the town where I live doesn't get or give any.
    Anyway, I too would be offended by the "slush fund" comment. It's a tax that should be used for fire related programs. Whether or not Peoria should have bought an ambulance is their business. I do know that Mt. Vernon FFs are buying 1/2 of 2 new engines for their dept. with these funds. It's taking all they get for 5 years to pay their share. That's a good use of the money, as is TICs, AEDs, etc.
    If that money's supposed to go to the FFs themselves, how come ours never see any of it? Something else for the chief to do.
    Jack Boczek, Chief
    Ashley Community Fire Protection District

    FLATLANDERS FOREVER!

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    Let me help with some explanation of the foreign fire tax. All this can be found in (65 ILCS 5/Art. 11 Div. 10 heading) DIVISION 10. FOREIGN FIRE INSURANCE COMPANY FEES. Which can be found at

    http://www.legis.state.il.us/legisla...unicipal+Code. Sorry it's long.

    Once it is paid to the city by the municipal league, it is supposed to go into a separate account controlled by the FFT board, not into the general fund. It is the board that decides how to spend it. The provisions being it has to be spent for the maintenance, use, and benefit of the department.

    I sit on the board of the Mt. Vernon FD FFT. If we spend money on anything, the final approval, if it can be in the stations is up to the Chief who also sits on the board. In the past we have bought lots of stuff, stoves, TV's, computers for the stations, refrigerators, rescue dummies, fire nozzles, a defibrillator, and yes even helped the city pay for fire trucks notably M-10(pumper) and M-9(ladder). All things that were not in the budget.

    As of right now we have given a proposal to the city to use 75% of our money each year to purchase 2 new pumpers. Up to a max of 250,000. Which will probably be dependant on the city getting the 0% loan from the state.

    How and what the money is used for, comes from input from the members of the department. This is used for us not any other dept in the city. This gentleman from Peoria calling it a slush fund is woefully misinformed. Asking the Gov to shut it down is just ignorant on his part.

    This money should be controlled and spent by the members of the board and not anyone else. Only the Fire dept knows what the Fire dept. needs.

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    Ltffp91 hit it right on the nose, those that spend the money are those that know what they need. We spend ours on Pub ED, training, equipment and what ever else the city thinks we can live with out to better our selves to help protect the people that live in our community. If the person from the journal star knew what this money was used for all the time instead of one purchase that some people don't like he might think before he writes. As far as AMT putting an ambulance at the training for PFD it would probably be like the stand-by we get from GHAS during a working structure, we will be here unless there is another call.

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    Default 2% Fund

    Our fire district deposits the money received into the general fund, but a seperate record is kept to denote how much of the total funds are 2% monies. We use the money to purhcase anything for the firefighters well being...i.e. turnout gear, replace helmets, SCBA's, etc., and also to fund the premiums to the Illinois Firefighter's Association Accident Indemnity Fund.

    I don't think that anyone should change the way this fund works. If one local government body does not do what it should with the money, that is a local issue, and should be handled there. To give Blago any more reason to raid funds is moronic.

    One thing I don't understand about the 2% fund is why every third year, the check is considerably more than the other two. Anybody know why?

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    How exactly does one go about collecting this money? I doubt we would get very much, but every little bit helps.
    Omnis Cedo Domus

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    Jay:
    Go to the city treasurer, have them look up how many checks marked foreign fire tax from the Illinois Municipal League have been deposited to the City of Hinckley and then tell the city treasurer that you want the money that was suppose to go to the fire department.
    We had the same problem here where I live. They didn't give us the money until we asked. Since they hadn't been giving it to us for some time, it was a nice check!
    And if they don't, contact OSFM.
    CR
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    Even if we are a fire district, Art?
    Omnis Cedo Domus

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    Yes!
    We are also a fire district.
    Doesn't matter.
    Get your money, Jay.
    Every penny of it.
    CR
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    Jaybob:
    Take a look at this.
    HB2623


    LRB093 03402 MKM 03420 b

    1 AN ACT to amend the Illinois Municipal Code by changing
    2 Section 11-10-1.

    3 Be it enacted by the People of the State of Illinois,
    4 represented in the General Assembly:

    5 Section 5. The Illinois Municipal Code is amended by
    6 changing Section 11-10-1 as follows:

    7 (65 ILCS 5/11-10-1) (from Ch. 24, par. 11-10-1)
    8 Sec. 11-10-1. In each municipality or fire protection
    9 district, whether incorporated under a general or special
    10 law, which has a fire department established and maintained
    11 by municipal or fire protection district ordinances, every
    12 corporation, company, and association which is not
    13 incorporated under the laws of this State and which is
    14 engaged in effecting fire insurance in the municipality or
    15 fire protection district, shall pay to the treasurer of the
    16 Foreign Fire Insurance Board, or if there is not one, then to
    17 the treasurer of the municipality or to the secretary of the
    18 fire protection district for the maintenance, use, and
    19 benefit of the fire department thereof, a sum not exceeding
    20 2% of the gross receipts received from fire insurance upon
    21 property situated within the municipality or district.
    22 Each municipality and fire protection district may
    23 prescribe by ordinance the rate of the tax or license fee to
    24 be paid, but this rate shall not exceed the rate specified in
    25 this Section. Each designated corporation, company, and
    26 association shall pay at the rate so prescribed, upon the
    27 amount of all premiums which have been received during the
    28 year ending on every first day of July for all fire insurance
    29 effected or agreed to be effected on property situated within
    30 the municipality or fire protection district, by that
    31 corporation, company, or association respectively.

    -2- LRB093 03402 MKM 03420 b
    1 Every person who acts in any specified municipality or
    2 fire protection district as agent, or otherwise, on behalf of
    3 a designated corporation, company, or association, shall
    4 render to the treasurer of the Foreign Fire Insurance Board
    5 in that municipality or fire protection district municipal
    6 comptroller, if there is one, or if not to the municipal
    7 treasurer clerk or secretary of the fire protection district,
    8 on or before the fifteenth day of July of each year, a full
    9 and true account, verified by his oath, of all of the
    10 premiums which, during the year ending on the first day of
    11 July preceding the report, were received by him, or by any
    12 other person for him on behalf of that corporation, company,
    13 or association. He shall specify in this report the amounts
    14 received for fire insurance, and he shall pay to the
    15 treasurer of the Foreign Fire Insurance Board of that
    16 municipality or fire protection district if there is one, if
    17 not then to the treasurer of the municipality, or to the
    18 secretary of the fire protection district, at the time of
    19 rendering this report, the amount as determined by the rate
    20 fixed by the ordinance of the municipality or fire protection
    21 district for which his corporation, company, or association
    22 is accountable under this Section and the ordinance.
    23 If this account of premiums is not rendered on or before
    24 the fifteenth day of July of each year, or if the sum due
    25 remains unpaid after that day, it shall be unlawful for any
    26 corporation, company, or association, so in default, to
    27 transact any business in the municipality or fire protection
    28 district until the sum due has been fully paid. But this
    29 provision shall not relieve any corporation, company, or
    30 association from the payment of any loss upon any risk that
    31 may be taken in violation of this requirement.
    32 On or before the 15th of August of each year, an agent
    33 who, contractually or otherwise, collects the tax or license
    34 fee on behalf of a Foreign Fire Insurance Board, a

    -3- LRB093 03402 MKM 03420 b
    1 municipality, or a fire protection district shall pay all
    2 collected amounts, less a fee charged for its collection
    3 services, as permitted by this Section, to the treasurer of
    4 the Foreign Fire Insurance Board, if there is one, or if not,
    5 to the municipal treasurer or the secretary of the fire
    6 protection district. The maximum fee that may be charged by
    7 an agent for collection of the funds from foreign fire
    8 insurance companies is 2% of the amount collected for each
    9 Foreign Fire Insurance Board, fire department, or fire
    10 protection district. If the agent of the Foreign Fire
    11 Insurance Board, municipality, or fire protection district,
    12 fails to pay the funds to the Foreign Fire Insurance Board,
    13 fire department, or fire protection district by the 15th of
    14 August, the agent shall pay interest on the funds at a rate
    15 of 1% each month or 12% each year.
    16 Each Foreign Fire Insurance Board, municipality, or fire
    17 protection district, or any person, company, entity,
    18 organization, association, or other body that acts
    19 contractually or otherwise on behalf of a Foreign Fire
    20 Insurance Board, municipality, or fire protection district,
    21 that collects and disburses this tax or license fee shall
    22 file a written report by the 15th of August of each year with
    23 the Department of Insurance. The report shall include:
    24 (1) The name and address of the Foreign Fire
    25 Insurance Board, municipality, or fire protection
    26 district;
    27 (2) The name and address of each insurance company
    28 paying the tax or license fee;
    29 (3) The amount paid by each insurance company;
    30 (4) The date on which the payment from each
    31 insurance company was received;
    32 (5) The amount and percentage of fees, if any,
    33 charged by an agent of the Foreign Fire Insurance Board,
    34 municipality, or fire protection district for collection

    -4- LRB093 03402 MKM 03420 b
    1 services;
    2 (6) If the tax or license fee collected under this
    3 Section is collected by an agent of the Foreign Fire
    4 Insurance Board, municipality, or fire protection
    5 district and held in a bank account between the date on
    6 which the funds were collected and the date on which the
    7 funds were disbursed to the Foreign Fire Insurance Board,
    8 municipality, or fire protection district, the account
    9 number, location of the funds received, and the amount of
    10 any interest earned on the funds;
    11 (7) If the fee is collected by a municipality, or
    12 an agent of the Foreign Fire Insurance Board,
    13 municipality, or fire protection district, the date on
    14 which each payment of funds was made to the Foreign Fire
    15 Insurance Board or fire protection district; and
    16 (8) A copy of the annual accounting report that is
    17 required by this Section to be filed with the treasurer
    18 of the Foreign Fire Insurance Board, municipal clerk, or
    19 secretary of the fire protection district on or before
    20 the 15th of July of each year setting forth an
    21 accounting of premiums paid by the insurance company.
    22 Information that is required by this Section to be
    23 provided to the Department of Insurance shall be available
    24 for public inspection upon the filing of a request under the
    25 Freedom of Information Act.
    26 The amount of this tax or license fee may be recovered
    27 from the corporation, company, or association which owes it,
    28 or from its agent, by an action in the name and for the use
    29 of the municipality or fire protection district as for money
    30 had and received.
    31 The Department of Insurance, fire department, or other
    32 interested party may bring suit against each Foreign Fire
    33 Insurance Board, municipality, fire protection district, or
    34 agent of a Foreign Fire Insurance Board, municipality, or

    -5- LRB093 03402 MKM 03420 b
    1 fire protection district that fails to comply with the
    2 submission of any written report under this Section to
    3 require compliance with this Section. The party bringing
    4 suit may be entitled to compensation for damages suffered,
    5 including, but not limited to, compensatory and punitive
    6 damages, attorney's fees, and court costs, as well as
    7 injunctive relief.
    8 The treasurer of the Foreign Fire Insurance Board
    9 municipal comptroller, if any, and if not, then the municipal
    10 treasurer clerk or the secretary of the fire protection
    11 district, may examine the books, records, and other papers
    12 and documents of a designated agent, corporation, company, or
    13 association for the purpose of verifying the correctness of
    14 the report of the amounts received for fire insurance.
    15 This Section shall not be applicable to receipts from
    16 contracts of marine insurance, even though they include
    17 insurance against fire, where the premium for the fire
    18 insurance is not separately specified.
    19 (Source: Laws 1961, p. 576.)

    20 Section 99. Effective date. This Act takes effect on
    21 July 1, 2003.
    I went to the Illinois Legal Compiled Statutes and found this.
    (65 ILCS 5/11‑10‑2) (from Ch. 24, par. 11‑10‑2)
    Sec. 11‑10‑2. The corporate authorities of any municipality containing less than 250,000 inhabitants which has an organized fire department shall pass an ordinance providing for the election of officers of the department foreign fire insurance board by the members of the department. All members of the department shall be eligible to be elected as officers of the department foreign fire insurance board. These officers shall include a treasurer, and they shall make all needful rules and regulations with respect to the department foreign fire insurance board and the management of the money to be appropriated to the board. The officers of the department foreign fire insurance board shall develop and maintain a listing of those items that the board feels are appropriate expenditures under this Act. All of the money paid to the municipal treasurer as provided in Section 11‑10‑1 shall be set apart and shall be appropriated annually by the corporate authorities to the department foreign fire insurance board. The treasurer of the department foreign fire insurance board shall give a sufficient bond to the municipality in which the fire department is organized. This bond shall be approved by the mayor or president, as the case may be, conditioned upon the faithful performance by the treasurer of his or her duties under the ordinance and the rules and regulations provided for in this section. The treasurer of the department foreign fire insurance board shall receive the appropriated money and shall pay out the money upon the order of the department foreign fire insurance board for the maintenance, use, and benefit of the department. As part of the annual municipal audit, these funds shall be audited to verify that these purchases are for the maintenance, use, and benefit of the department.
    The provisions of this Section shall be the exclusive power of the State, pursuant to subsection (h) of Section 6 of Article VII of the Constitution.
    (Source: P.A. 89‑63, eff. 6‑30‑95.)
    It is my understanding that, in the case of a fire district that agrees to cover the municipality, the money is paid to the municipality and is then turned over to the fire district board of trustees.
    Check into it. Let me know.
    CR
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    COOOOOOOOL! This might just pay for our leaky tanker.....
    Omnis Cedo Domus

    www.hinckleyfd.org

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    Well, I've got good news and bad news.

    Good news: We're getting our money.

    Bad news: We've been getting it all along; the trustees just thought it was an "insurance rebate."

    Oh, well, no big windfalls.....
    Omnis Cedo Domus

    www.hinckleyfd.org

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    And my heart goes out to you, little buddy!
    CR
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    Default 2% Fund

    It is my understanding that, in the case of a fire district that agrees to cover the municipality, the money is paid to the municipality and is then turned over to the fire district board of trustees.
    We have the money sent directly to us from the IML. I don't know how it happened, but we get the checks.

    I heard at one time that part of this money collected goes to fund the IFSI. Is this true?

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    Default 2%

    Having delt with our 2% fund some, I have never heard anything about some of the money going to IFSI to my knowledge. I have never seen anything that would suggest that.

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    just a note the Illinois Municipal League gets a 7% cut for the handling of the distribution of these funds ,how gracious.

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    OK, here's my question since I just found out about the 2% funding. Is it illegal for the fire dept. or dist. to not have a board and just have the chief do what he wants with the money because there is no board formed or is there legal responsabilites that need to be address?

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    Yes according to Illinois compiled statutes it is illegal for the Chief to use the funds how he wants to with no board. ILCS has a statute covering how the board is to be made up and used. Technically the Chief doesn't even have to be on the board.

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    We have used our money to pay for everything from recliners to extrication gloves to workout equipment to refrigertators . The Chief is not on the board, but he must approve anything that is slated to be purchased. I am interested in the article that Chief R. originally posted about the ambulance service being a "non-for profit business". Is it me or does that sound like a oxymoron?
    IAFF-IACOJ PROUD

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    But Andrew Rand, executive director of Advanced Medical Transport, the not-for-profit business that runs ambulances throughout Peoria, says he would have placed one of his vehicles at training sessions-without charge-had the fire department asked.
    In order for an organization to hold a "not-for-profit" status, they must apply for and be approved for Section 501 status with the Internal Revenue Service. If the proper documentation is not evident, then an organization does not have that status.
    If AMT says that they are a non-profit service, then I believe that they possess the documentation. They are contracted by all of the hospitals in the Peoria area. Their operation is under written by the hospitals.
    However; just because a business is poorly ran and they don't make any money, doesn't mean that they are non-profit. It means that they don't know how to run a business and make money at it.
    A board must be convened to over-see the 2% money. That's not to say that they have the final say. It simply means that they are on the front end of the process.
    CR
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    Just to give you all an update, on Wed the 8th the FFT board here in Mt. Vernon, voted not to purchase a new Fire truck for the city.

    There was a very good offer made to the city to purchase one, but it was rejected by the City Manager, so the board took a poll of the department and voted against another offer to buy one.

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    Oh, that hurts. I know you guys were really looking forward to getting a couple new engines before yours fall apart. Any alternate plans, or just waiting for the city to wake up?
    Jack Boczek, Chief
    Ashley Community Fire Protection District

    FLATLANDERS FOREVER!

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