North Riverside considers privatizing firefighting services
BY BRIAN SLODYSKO Staff Reporter July 1, 2014 7:34PM
North Riverside is contemplating contracting non-union firefighting services for the village. | Richard A. Chapman/Sun-Times
Updated: August 3, 2014 6:27AM
The union representing North Riverside firefighters promises to sue if the village hands over control of the fire department to a private company, as planned.
The villages’s mayor contends his proposal would ease a pension problem. But the company poised to get the contract also is a contributor to Mayor Hubert Hermanek Jr.’s political party.
What’s more, the move could set the village up for a costly court battle. Officials had hoped it would rein in costs.
“We understand there’s a problem forcing their hand, but it shouldn’t be at the expense of the fire department,” said Rick Urbinati, president of the North Riverside Firefighters Union-Local 2714, who claims the move would break multiple state labor laws.
Since 2008, village officials have lowballed or skipped payments to police and fire pension funds, according to the Illinois Department of Insurance. As a result, both pension accounts are only about 40 percent funded.
Complicating the matter is a change in law that allows the state to garnish tax revenues from towns that are delinquent on their payments.
“If we don’t totally fund the pension by 2016, they’re going to start intercepting our sales tax,” said Hermanek, who took office a year ago after serving as trustee.
Pat Devaney, president of the Associated Fire Fighters of Illinois, said newly created or redrawn fire districts have opted to use private companies. But this is the first time he has heard of a municipality trying to privatize an existing department.
And Hermanek thinks there are others, waiting to see how the situation in North Riverside plays out before considering similar plans of their own.
Hermanek said North Riverside faces a $1.9 million deficit and is reliant on sales tax revenue, which has been low since the recession hit. But the village of 6,700 also is not large enough to receive the “home rule” designation allowing officials to hike the sales tax within their borders. Property taxes are a non-starter, because raising the $700,000 yearly to fund the pension fund would be huge hike, Hermanek said.
To sidestep those issues, Hermanek wants to award a $9 million, five-year contract to the Paramedic Services of Illinois — a company that in recent years has made $3,800 in donations to the local “Voter’s Improvement Party” — a party that counts Hermanek and a majority of trustees as members. Donations made by the company, which did not respond to a request for comment, account for 26 percent of money raised by the party since 2005, according to state records.
Under Hermanek’s proposal, which is supported by a majority on the village board, the department’s 16 unionized firefighters would be offered jobs with Paramedic Services of Illinois. The company currently provides ambulance service for the village and would train firefighters to be paramedics as well, to eliminate overlap.
The firefighters could keep their current base pay, but would have reduced benefits and would be required to surrender their pensions in favor of a 401(k) program, according to a village memo. Former employees could still collect a pension, and current employees will get a pro-rated pension based on what they’ve paid in, according to the memo. The plan is scheduled for a final vote on July 14.
Urbinati said unionized firefighters will refuse to work for the company and hope to negotiate an alternative to privatization. And J. Dale Berry, an attorney representing the firefighters, said he’s willing to negotiate a contract that would cost the village the same as their proposed deal with Paramedic Services of Illinois.
Trustee H. Bob Demopoulos, the lone critic of the plan on the village board, says the deal stinks. “We subsidized water. We subsidized garbage. They never bid out any contracts until recently,” Demopoulos said. “Now we’re in such a financial rut that they are asking our firefighters to sacrifice.”