0 оценок0% нашли этот документ полезным (0 голосов)
16K просмотров89 страниц
The village of North Riverside filed suit in Cook County Circuit Court on Friday, asking a judge to allow it to proceed with a plan to privatize its fire department in order to escape the "prospective devastating financial consequences" that would result from operating its full-time municipal fire department in the future.
The village of North Riverside filed suit in Cook County Circuit Court on Friday, asking a judge to allow it to proceed with a plan to privatize its fire department in order to escape the "prospective devastating financial consequences" that would result from operating its full-time municipal fire department in the future.
The village of North Riverside filed suit in Cook County Circuit Court on Friday, asking a judge to allow it to proceed with a plan to privatize its fire department in order to escape the "prospective devastating financial consequences" that would result from operating its full-time municipal fire department in the future.
VILLAGE OF NORTH RIVERSIDE, ) ) Plaintiff, ) v. ) Case No. ) NORTH RIVERSIDE FIREFIGHTERS AND ) LIEUTENANTS UNION LOCAL 2714 ) INTERNATIONAL ASSOCIATION OF ) FIREFIGHTERS AFL-CIO, CLC, ) ) Defendant. )
COMPLAINT FOR DECLARATORY JUDGMENT AND RELATED RELIEF
Plaintiff, Village of North Riverside, by its attorney, Burton S. Odelson, Odelson & Sterk, Ltd. and John B. Murphey, Rosenthal, Murphey, Coblentz & Donahue files this Complaint for Declaratory Judgment and Related Relief. NATURE OF THE ACTION 1. The Village of North Riverside (Village) seeks a declaration from this Court that because of the extraordinary present and prospective devastating financial consequences faced by the Village if it maintains a fire department staffed by full-time, pension-eligible municipal employees, the Village has the right to outsource its fire protection services rather than maintaining a full-time and pension eligible municipal employee. The Village further seeks a declaration that nothing in either (a) the Villages now expired collective bargaining agreement with the union representing its full-time firefighters, or (b) the Illinois Public Labor Relations Act, prevents the implementation of this outsourcing decision. VENUE 2. The Villages address is 2401 Des Plaines Avenue, North Riverside, Cook County, Illinois, 60546. Accordingly, venue is proper in this Court. 2
THE VILLAGE 3. The Village is a municipal corporation located in west central Cook County. According to the 2010 census, the Village has a population of 6,672. 4. From a geographical and future development standpoint, the Village is completely landlocked. While it is experiencing some redevelopment of existing commercial retail space in and about the North Riverside Mall at 22 nd Street and Harlem Avenue, the Village has no realistic prospect of substantially expanding or otherwise growing its tax base. 5. The Village is a non-home rule municipality. Without the authority and power granted to a home-rule municipality under Article VII, Section 6 of the Illinois Constitution of 1970, the Village derives all of its powers, including the power to raise revenue, from the Illinois General Assembly, or by way of referendum. THE VILLAGES BUDGET LIMITATIONS 6. The Village has annual general fund revenues of approximately $14.4 million dollars. The Village has general fund expenses of approximately $15.1 million dollars. The primary sources of revenue available to fund general governmental expenses are the following, with the approximate revenue based on currently available data: Revenue Source Amount Percentage of Total Revenue (a) Property Tax $ 490,000 3% (b) Sales Tax $8,835,000 61% (c) Income Tax $ 650,000 5% (d) Other taxes $1,100,000 8% (e) Licenses and Permits $ 984,950 7% (f) Fines, Fees, etc. $2,370,000 16% 3
7. Because of the Villages non-home rule status, the Village only has the ability to increase its property tax revenues on an annual basis by the lesser of 5% or the increase in the Consumer Price Index for all urban consumers. Over the last two years, the Consumer Price Index has not risen by more than approximately 1.7%: CPI Index: 2011 3% 2012 1.7% 2013 1.5%
8. The amount of income tax the Village receives is based on the Villages population, which is static or declining. 9. The amount of sales tax received by the Village in any year is also relatively static and is a function of the general state of the retail economy in the Village and its general vicinity. 10. For these reasons, the Village has no realistic prospect of substantially increasing its revenues for purposes of defraying general governmental expenses at any time in the forseeable future. THE VILLAGES GENERAL GOVERNMENT EXPENSES 11. The Villages general governmental expenses (which exclude proprietary funds such as the water fund and categorical revenues and expenditures such as State of Illinois motor fuel tax) consist primarily of salaries, benefits, and pension contributions for its employees. Approximately 72% of the Villages revenues are used to defray employment-related costs. 12. The Village has approximately 70 full-time employees. Of those employees, approximately 25 are employed in clerical or public works related jobs. As such, they are members of the Illinois Municipal Retirement Fund (IMRF), a state-wide pension fund to which 4
the Village contributes an employer share and withholds and contributes money to IMRF on behalf of each IMRF covered employee. 13. The Village also has a full-time police department and a full-time fire department. Pursuant to 40 ILCS 5/301 et seq., and 5/4-101 et seq., the Village is obligated to maintain and fund a police pension fund for its full-time police officers, and a fire pension fund for its full- time firefighters. THE FULL-TIME FIRE DEPARTMENT AND THE UNION 14. The Villages Fire Department consists of one full-time chief, and 14 full-time firefighters. 15. Defendant, North Riverside Firefighters and Lieutenants Union Local 2714, International Association of Firefighters AFL-CIO, CLC (Union) is a union and duly authorized collective bargaining representative of all full-time members of the Fire Department other than the chief. 16. The Fire Department provides only fire protection service to the Village. There have been very few structural fires in North Riverside over the past several years. Sixty-five (65%) percent of calls for service coming to the North Riverside Fire Department are for paramedic service. 17. The full-time employees of the North Riverside Fire Department have no responsibility to provide any paramedic service. Since 1985, the Village has outsourced paramedic services to a private entity named Paramedic Services of Illinois, Inc. (PSI).
5
THE PENSION CRISIS AND ITS IMPACT ON THE VILLAGES ABILITY TO SUSTAIN ITS ABILITY TO PROVIDE SERVICES TO ITS RESIDENTS BECAUSE OF THE FIRE DEPARTMENT PENSION OBLIGATIONS
18. Attached hereto as Exhibit 1 and made a part hereof is a recent newspaper article summarizing the results of an extensive investigation by the Better Government Association into the depth of the public pension crisis in Cook County, The widely-publicized and much- discussed public pension crisis in Illinois has hit home in the Village. In particular, present and future obligations of the Village toward its firemens pension fund are projected to have disastrous consequences on the Villages ability to provide essential services to its residents during the foreseeable future. 19. The Villages pension-related expenses attributable to the Fire Department, as calculated by an enrolled actuary retained by the Village, have increased exponentially over the past decade. In particular: (a) In the year 2003, the Villages annual required contribution to the fire pension fund was $175,793. (b) For year 2013, the Villages annual required contribution has increased to $773,055, an increase of 340%. (c) In 2003, the Villages annual required contribution represented a cost of $8,371 per active fire department employee, the pension costs for 2013 represent $45,474 per active employee, a 540% increase. 20. Because the Village is a non-home rule unit municipality, the Village lacks the legal ability to raise revenues to continue to pay for these ever-rising fire pension costs without having to drastically cut the essential services it is charged with providing to the citizens and taxpayers of the Village. 6
21. The Village is currently responding to a complaint from the Illinois Department of Insurance that the Village must pay approximately $2,000,000 of additional contributions to its police and fire pension funds. THE PROSPECTIVE IMPACT OF THE PENSION FUNDING ACT. 22. The Illinois General Assembly adopted Public Act 96-1495, effective January 1, 2011 (the Pension Funding Act). 23. The Pension Funding Act amended Section 4-118 of the Firefighters Pension Act, to which the Village is subject, to require that if in fiscal year 2016, the Village does not fund the firemens pension to levels specified elsewhere in that section, the State of Illinois may withhold up to 33% of the Village entitlement of state funds the Village receives such as sales tax and income tax, in order to make up the shortfall. In 2017, the maximum state funding holdback increases to 67% of all entitlements; and in fiscal year 2018 and thereafter, the maximum state enticement funding holdback increases to 100%. 24. The Village does not have the ability to increase property taxes in order to pay for these increasing pension obligations. In that result, the Village having to comply with the Pension Funding Act will be that the Village stands to lose over $255,108 in 2016, $517,947 in 2017, and $773,055 in 2018 and thereon from sales tax and income tax in order to continue to fund the Villages fire pension obligations. 25. The statutorily imposed pension payments which are likely to be withheld from the Village as a result of the Pension Funding Act will result in a significant curtailing of the Villages financial ability to provide essential public services to the residents and taxpayers of the Village. The Village further estimates that as a result of the obligations of the Pension 7
Funding Act, all of the Villages fund reserves will be deleted within 3 years in order to satisfy public employee pension payment obligations. 26. To the extent the Village continues to maintain a fire department, the pension expenses, both for purposes of funding the earned pensions for current retirees, and more importantly, for continuing to absorb the actuarial expenses for firefighters currently employed or who may be employed in the future, will grow at a rate far in excess of the Villages ability to pay these obligations without crippling the Villages ability to provide basic municipal services to its residents. In simple terms, based on the Villages anticipated obligations to the firemens pension fund, unless the Village acts now to curtail its growing fire pension obligations, it will not be able to provide basic municipal services like street repair, snow plowing, parks maintenance, at a reasonable level. These pension obligations will also prevent the Village from paying reasonable raises to its present and future employees. THE DECISION TO OUTSOURCE FIRE PROTECTION SERVICES. 27. Based on the foregoing considerations, the corporate authorities of the Village have made the legislative determination that in order for the Village to survive financially over the long term, it is necessary to outsource the Villages fire protection services, to a private contracted-for firm, which firm will be responsible for paying the salaries and benefits of its employees. To that end, the Village has commenced negotiations with PSI to have that company provide fire protection services to the Village, just as PSI has been providing paramedic services to the Village for the past three decades. 28. The corporate authorities have further determined that the implementation of the outsourcing decision is necessary now to slow down the rate at which the Villages fire pension obligation is to increase over the next decades. 8
29. The corporate authorities have further determined that unless the Village outsources fire protection services on a going-forward basis, the future pension obligation will drain the Villages budget, create substantial deficits, and ultimately eliminate the Villages ability to provide basic municipal services to its residents, which is the reason for the existence of the Village as a corporate entity in the first place. 30. In simplest terms, like many municipalities across the state, the crushing burden of North Riversides present and future fire pension obligations has resulted in the determination that the Village can no longer responsibly kick the pension can down the road, by continuing to provide fire protection services by way of a department consisting of full-time and pension- eligible municipal employees. THE DISPUTE WITH THE UNION 31. The Village has a collective bargaining agreement with the Union. Attached hereto as Exhibit 2 and made a part hereof is a copy of the collective bargaining agreement (CBA). 32. By its terms, the CBA expired on April 30, 2014. See Section 24.1 (This Agreement and each of its provisions shall be effective as of May 1, 2009 and shall continue in full force and effect until April 30, 2014). 33. Section 24.2 of the CBA, Continuing Effect, provides that the Agreement shall remain in full force and effect after any expiration date while negotiations or resolution of impasse proceedings for a newer amended contract or any part thereof are underway between the parties. 9
34. Over the past several months, the Village has met on a number of occasions with the Union at the bargaining table. During the course of its various bargaining sessions, the Village has: (a) Shared with the Union information relating to the Villages current and projected financial status; (b) Explained to the Union why the Village can no longer sustain a municipal fire department in light of the crushing present and future pension obligations; (c) Offered to make arrangements to protect the future employment of bargaining unit members by, inter alia, assuring the Union that each and every member of the bargaining unit would be guaranteed stable, future employment with PSI, with health insurance benefits and post-employment pension benefits; and (d) Assured the Union that the Village would continue to maintain its statutory pension funding obligations. 35. The Village and Union next bargained on several occasions under the auspices of a federal mediator. On September 3, 2014, in a final effort to address the legitimate concerns of the Union employees, the Village offered to transition the outsourcing decision over the next decade, in order to allow a significant number of the Unions employees the opportunity to retire with fully-vested pension rights. 36. The Village offered the Union: (a) An eleven-year contract with a wage and benefits opener at years five (5) and eight (8); (b) Total Union protection with existing grievance procedures; 10
(c) Current health insurance with modest percentage increases in employee contributions; (d) A retirement incentive at twenty-five (25) years; (e) Retirement health insurance incentive for next three (3) years; (f) Layoff procedures as currently in expired contract; (g) Current holiday, sick, and personal days; (h) Overtime as is except current private ambulance service paramedics/firefighters and any new PSI hires would be worked into overtime system; (i) Three-man engine with paramedics/firefighters from PSI able to work the engine as the fourth-man; (j) Wages in year one of 0% to firefighters and 2% going directly into the pension fund; 2% in year two; 2% in year three; 2!% in year four; and 2"% in year five; (k) No Day-Lieutenant by attrition; (l) Vacation time remains as in expired contract except all vacation to be scheduled by the 15 th of November for the next year; (m) Call-back and holdover the same as in expired contract except PSI employees are part of the system; (n) Sick leave buyout phased out and used for future health care costs; (o) Continued attendance at Union meetings as per the expired contract except no attendance can cause an overtime situation; (p) Reduce RDO days by two (2) and personal days by two (2); and (q) One slot off for personal and vacation. 11
37. The offer by the Village included replacing retired municipal firefighters, by attrition, with paramedic/firefighters supplied by PSI. 38. During the duration of the proposed eleven-year contract, twelve (12) of the fourteen (14) current firefighters would have the age (50) and length of service (20+ years), with most having 25+ years, needed to retire with fully-vested pension rights. 39. The federal mediator attempted to bring the parties to agreement on September 3, 2014 and September 9, 2014. The Union rejected the proposal by the Village and offered other proposals that would not save the Village $700,000 each year. The Union proposal also made themselves part of the managerial oversight over the finances of the Village with an opener after three (3) years if they did not like what the Village was doing with its general funds. 40. The Village rejected the Unions proposals. 41. The parties having rejected, in total, each others proposals are now at impasse. 42. The Union maintains the legal position that: (a) the existence of the CBA and (b) Section 14(l) of the Illinois Public Labor Relations Act (Labor Act), 5 ILCS 315/14(l) absolutely and permanently prevent the Village from ever outsourcing fire protection services to PSI. In other words, it is the position of the Union as expressed at the bargaining table that regardless of the Villages financial plight, and regardless of the dire financial projections set forth in this Complaint, the Village of North Riverside must maintain a contractual relationship with the Union, must maintain a municipal fire department, and must continue to absorb millions of dollars of present and future pension obligations attributable to present and future firefighters in perpetuity. 12
43. Section 14 (l) of the Labor Act addresses a public employers obligation to maintain the status quo pending the results of an on-going negotiation/interest arbitration culminating in a new collective bargaining agreement. Section 14(l) provides as follows: During the pendency of proceedings before the arbitration panel, existing wages, hours and other conditions of employment shall not be changed by action of either party without the consent of the other, but a party may so consent without prejudice to his rights or position under this Act. The proceedings are deemed to be pending before the arbitration panel upon the initiation of arbitration procedures under this Act.
44. It is the position of the Village: (a) That Section 14(l) is intended to prevent a public employer from unilaterally changing certain terms and conditions of an existing collective bargaining agreement pending negotiation toward a successor agreement or pending an interest arbitration to resolve disagreements regarding the terms of a future collective bargaining agreement; (b) That by virtue of the matters set forth hereinabove, the Village has determined that it can no longer responsibly enter into a new or amended Agreement with the Union within the contemplation of Section 24.2 of the CBA or Section 14(1) of the Act; (c) That neither Section 14(1) of the Labor Act, nor the CBA in any way prevents the Village from outsourcing its fire protection service following the expiration of the current collective bargaining agreement, following a good faith legislative determination of the present and future economic necessity to take such action, and following good faith negotiations with the Union; and (d) That if the interpretation of the Labor Act and the CBA advanced by the Union were to be accepted, the Village would never be able to outsource its fire protection services, regardless of how drastically the economic circumstances of the Village deteriorate. 13
45. The Union disagrees with the position of the Village as set forth in Paragraph 37. Accordingly, there is an actual controversy between the parties ripe for judicial determination. WHEREFORE, the Village respectfully prays as follows: A. That this Court declare the rights of the parties. B. That this Court find that nothing in the CBA, the Illinois Public Labor Relations Act, or any other law prevents the Village from outsourcing its fire protection service based on a good faith legislative determination of economic necessity. C. That this Court find that the Villages decision to outsource its fire protection service is based on a good faith legislative finding of economic necessity. D. That this Court find that the Village may outsource its Fire Department. E. That this Court grant the Village such other and additional relief as is established by the proofs. Respectfully submitted, VILLAGE OF NORTH RIVERSIDE
By:/s/Burton S. Odelson One of its Attorneys
Burton S. Odelson Odelson & Sterk, Ltd. 3318 West 95 th Street Evergreen Park, IL 60805 Tel: 708-424-5678/Fax: 708-425-1898
John B. Murphey Rosenthal, Murphey, Coblentz & Donahue 30 N. LaSalle Street, Suite 1624 Chicago, IL 60602 Tel: 312-541-1070/Fax: 312-541-9191