Illinois City Considers Privatizing Its Fire Department

Saying pension costs have become too costly, the Village of North Riverside is considering privatizing the fire department.

June 19--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.

"The state's not helping us; and not only are they not helping us but they're filing a complaint against us," he 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.

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