An attempt to privatize the fire department in the tiny suburb of North Riverside was dealt a setback when an administrative judge ruled the village could not cancel its contract with union firefighters.
Facing a payout of $1.8 million for police and firefighter pensions last year, village officials cut off contract negotiations with the union and planned to enter a deal for fire protection with a private company. The move touched off lawsuits and labor grievances, with union leaders notching a key victory last week in proceedings with the state Labor Relations Board.
State law does not allow the village to unilaterally break its contract with North Riverside Firefighters Local 2714, Administrative Law Judge Anna Hamburg-Gal wrote in a proposed order.
A related lawsuit by the village still is pending in state appellate court, and Hamburg-Gal’s decision on the union’s unfair labor practices complaint still must be endorsed by the Labor Relations Board. But North Riverside Mayor Hubert Hermanek said Wednesday that privatizing firefighter jobs was no longer the village’s top priority.
“I disagree with that decision, but I’m trying to get a long-term contract with (the firefighters),” Hermanek said. “If the appellate court goes our way, privatization could be back on the table. But if I can get a long-term contract that saves the village money, we’d take that and drop the suit.”
The fate of the 16-member North Riverside department could have major implications outside the boundaries of the village of 6,700 residents, said union lawyer J. Dale Berry. The village had sought to cancel the contract without going through arbitration or other steps required by state law, a move other cash-strapped towns might attempt as budget-breaking pension payments come due, Berry said.
In the months before first proposing the fire department privatization plan, the village received notice from the state that the village’s share of tax revenue would be diverted to make payments to badly underfunded pension funds for firefighters and police.
“It was very clear (the village) did this as a way to basically terminate employees that have vested pension benefits,” Berry said. “Sure, you could save money by not paying people pensions, but it’s not legal.”
The village expected to save about $700,000 by breaking the contract with the firefighters and hiring Paramedic Services of Illinois to provide fire protection. PSI had agreed to hire all the North Riverside firefighters at their previous wage, but the village would have saved money when the firefighters’ pensions were closed out and replaced with a 401(k) plan.
The privatization plan became the defining issue of local politics in the 2015 elections, Hermanek said, noting that three candidates ran for village board on the “Save Our Firefighters” slate, though only one, an incumbent, won a seat.
“There was a lot of union activity and people coming in from outside the community,” Hermanek said. “It wasn’t pleasant.”
Hermanek said a pension payment of the full $1.8 million required by the state last year, and would end up paying around $2 million on police and fire pensions this year.
“What I did last year was still the right thing to do,” Hermanek said. “These pension costs are killing the state, and killing the cities.”