Pension Crisis

Chicago 'Burb Dumping Fire Department Due to Pension Debts

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They'll still get paid better than stock photography models.
Nejron | Dreamstime.com

North Riverside, Illinois, a community of less than 7,000 west of Chicago, claims it cannot afford to sustain its own crew of firefighters. After the firefighters union apparently refused to sign on to an agreement where existing firefighters would be slowly replaced by a privatized force after they retired or left the village over the next decade, the city is now going to sue to just dump them all now and replace them with a private employer. North Riverside says the costs are ruining them:

North Riverside, with a population of 6,672 in 2,827 households, derives most of its revenue from sales tax, thanks in large part to North Riverside Park Mall. However, the village is facing a proposed fiscal year 2014-2015 operating budget deficit of $1.9 million, with $1.8 million of this deficit being a direct result of the Village's growing annual public pension obligation. All of this and more is evidence that supports the Village's inability to sustain salary and benefits of over $200,000 per fireman and $230,000 per Lt. anymore.

Contracting firefighter services from Paramedic Services of Illinois (PSI), which has provided paramedic services to North Riverside for the past 28 years, would save the village more than $700,000 annually and vastly reduce the adverse impact of future pension obligations imposed by the state.  All PSI paramedics are certified as firefighters, as well.

According to [Mayor Hubert] Hermanek, the village presented multiple compromise proposals to the union, including a progressive privatization plan based on an 11-year contract, during which 10 of North Riverside's 14 current firefighters would reach retirement age and 25+ years of service.  As they retired or normal attrition occurred, firefighters would be replaced with firefighters/paramedics from PSI. As a result, by the end of the 11-year contract, village fire and emergency protection services would be almost fully privatized, maintaining safe and reliable service, while achieving cost-savings necessary if North Riverside is to remain solvent.

According to the village's press release, current firefighters will be offered the chance to keep their current jobs in the new system with their base salaries and health insurance and will keep their current pension benefits. But they will be shifted over into a 401k savings plan (with employer-matching contributions) rather than racking up more debt in an ongoing pension program.

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  1. I’m sure Governor Quinn will swoop in to rectify this horrendous situation!

    /progs

  2. Yeah, When Quinn Gets Here, Everybody’s Gonna Jump With Joy!

      1. +3 Denzel

  3. It would be interesting to hear what the 14 firefighters think.

  4. Completely privatize all services and let the customer choose and pay for their services. This whole “we need government to solve it” is the nonsense that put them in such a predicament in the first place.

    If someone doesn’t want to pay for a service that is marked to market, that is their choice. They might opt to find a volunteer service, or go without it. Competition helps to lower prices, and companies must innovate, and be good economic actors in order for their company to survive.

    “What about someone who can’t afford to pay”? Why do you support individuals being extorted by the gov’t through property taxes, and to pay for services against their will? They surely would have more income to pay for services instead of being extorted. If you are concerned about those who can not pay, then go in your own pocket, and you could also solicit charitable donations for them. Just don’t stand behind a politician and force others to pay.

  5. I’m sorry, but how the fuck did this happen? And don’t tell me it’s union might. It’s a town of 6K. Small towns are generally diligent about the bottom line. Yes, the public employees are getting away with fiscal murder here. But I’m sorry, the blame lies squarely with the citizens.

    This is the worst part about this whole pension mess. The REAL villains, the politicians who signed off on these fat future payments, will never be held accountable because they are likely long out of office.

    The real lesson that needs to be learned here is not that unions need to be broken or that we need to “fix” pensions. Governments cannot be trusted with long term obligations because it’s impossible to put effective near term checks-and-balances in place that won’t be undermined by Public Choice theory.

    1. I live in a small town and we don’t have these kinds of problems. Like you said though, it’s up to the citizens. We have town meetings, and the selectmen actually listen. Because they know that if they didn’t, they’d get voted right out of office.
      Contrast that with a town I drive through on the way to work, and their government sucks. They hold meetings where voters are allowed input which is immediately ignored with some statement like “You elected us, so we’re going to do what we want.” They get away with it because the people keep electing the same people.

    2. Its a town of 6K right next to the union-infested hellhole of corruption that is Chicago.

      Don’t underestimate the ability of small town politicos to be corrupt as hell, and to get away with it because, in a small town, who has the time or energy to run them to ground?

      These are future obligations, too, so a council that is focused on balancing the books this year could easily get snowed on the insolvency of the pension plan.

  6. Pro firefighters in a town of 7000? I live in a township of 20,000 and we have a pure volunteer system. Works pretty damn well.

    1. That looks like 200K per year to sit around almost all of the time. Good work if you can get it.

      1. Ya unless it’s home to a Dow s’plody ordinance plant then I have no sympathy

        1. Some one has to be around to put out the fires that are triggered when the local police MRAP sets off an IED.

  7. That makes a lot of sense dude. Wow.

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