North Riverside Fire Lawsuit

IN THE CIRCUIT COURT OF COOK COUNTY
COUNTY DEPARTMENT, CHANCERY DIVISION

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 Village’s 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 Village’s address is 2401 Des Plaines Avenue, North Riverside, Cook
County, Illinois, 60546. Accordingly, venue is proper in this Court.
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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 VILLAGE’S 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%
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7. Because of the Village’s 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 Village’s
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 VILLAGE’S GENERAL GOVERNMENT EXPENSES
11. The Village’s 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 Village’s 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
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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 Village’s 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”).



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THE PENSION CRISIS AND ITS IMPACT ON THE VILLAGE’S
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 firemen’s pension fund are projected to have
disastrous consequences on the Village’s ability to provide essential services to its residents
during the foreseeable future.
19. The Village’s 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 Village’s annual required contribution to the fire pension
fund was $175,793.
(b) For year 2013, the Village’s annual required contribution has increased to
$773,055, an increase of 340%.
(c) In 2003, the Village’s 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.
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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
firemen’s 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 Village’s 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
Village’s 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
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Funding Act, all of the Village’s 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 Village’s ability to
pay these obligations without crippling the Village’s ability to provide basic municipal services
to its residents. In simple terms, based on the Village’s anticipated obligations to the firemen’s
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 Village’s 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 Village’s fire pension
obligation is to increase over the next decades.
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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 Village’s budget, create substantial deficits, and ultimately eliminate the Village’s
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 Riverside’s 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.”
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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 Village’s 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 Union’s 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;
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(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.
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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 Union’s proposals.
41. The parties having rejected, in total, each other’s 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 Village’s 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.
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43. Section 14 (l) of the Labor Act addresses a public employer’s 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.
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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 Village’s 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