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North Riverside considers privatizing fire department to deal with pensions

Published: Thursday, June 19, 2014 1:50 p.m. CDT

NORTH RIVERSIDE – In a letter to North Riverside residents and businesses Wednesday, Mayor Hubert E. Hermanek Jr. announced that the village is considering its options to privatize services of its fire department.

The village is exploring expanding its current contract with Paramedic Services of Illinois to also include fire protection services, according to a news release posted to the village's website.

The village has asked Paramedic Services of Illinois to develop a proposal that will offer employment to the village's current staff of 16 firefighters. Currently, the firefighters are employees of the village and represented by the International Association of Firefighters Local 2714, according to the release.

The village is hoping it can save more than $700,000 per year for North Riverside taxpayers, while also reducing their long-term pension obligations, the release stated. The village said it plans to maintain firefighters current base salaries, earned pension benefits, health insurance and a new 401K plan through the contract.

The village made the announcement after public hearings during which village officials presented a proposed budget for 2014-2015 that projects an operating budget deficit of $1.9 million. Village officials said that $1.8 million of that deficit is a result of the village's growing pension obligation. Village officials will be called to a hearing by the State Department of Insurance June 26 to explain how they will resolve the issue, according to the release.

A new state law requires municipalities to fully fund their annual public pension requirements by 2016, or the state will keep tax revenue from the village to fulfill their obligation. Village officials said this would be devastating to the village, as more than 60 percent of the village's general operating funds come from those revenues – and largely from North Riverside Park Mall, according to the release.

Mayor Hermanek said the contract extension solution is "excellent" because it would allow the village to avoid layoffs and sacrifices to village services, while also avoiding tax increases.

A representative of the North Riverside firefighter's union was not immediately available for comment.

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