Excerpts from the DailyHerald.com:
The Barrington village has filed a lawsuit against the Barrington Countryside Fire Protection District, alleging that the district is refusing to pay over $1.2 million in pension fund obligations. The dispute centers around a joint firefighters' pension fund that was left underfunded when the fire district separated from the village-run department at the end of 2013.
The fire district, however, claims it has no liability for the pension fund based on an internal audit. According to the lawsuit, the pension fund was short by $1.9 million at the time of the split. Village officials argue that in 2005, the fire district agreed to cover 64.25% of "fire services costs," which included pension expenses. That portion amounted to more than $1.2 million at the time of the separation, and the village is also seeking over $800,000 for long-term disability insurance costs.
Things may get even more complicated. The lawsuit says the fire district asked the village to recalculate the pension liabilities using a state-mandated funding formula, which increased the total to over $2 million. Now, a judge will have to decide whether the fire district owes the village anything—and if so, how much: $1.2 million or the higher figure of $2 million.
Village Manager Jeff Lawler said, “This is unfortunate, but it’s their doing. For 19 years before the split, they paid under this formula.†He added that the village has sent multiple invoices to the district since the separation, but the district has refused to pay what the village believes it's owed. In June, the village returned a $14,000 check from the district.
Before the split, the fire district paid the village to provide fire protection services. However, in the years leading up to the separation, the district became increasingly dissatisfied with how the village managed the fire department. When the intergovernmental agreement came up for renewal, both sides decided to part ways, dividing equipment and other assets.
Lawler noted that the separation agreement clearly stated the district would be responsible for all unfunded pension obligations, which could amount to “a seven-figure sum.†The lawsuit also seeks reimbursement for legal fees incurred by the village in its efforts to recover retirement and disability benefits from the district.
A recent audit of the fire protection district shows that it holds more than $2.5 million in reserves. The district earned about $5.9 million in revenue in 2014, mostly from property taxes—$5.6 million of that. However, its expenses exceeded $6.2 million, according to the audit.
The audit acknowledges the village’s invoices but states that the district does not assume any liability for the pension fund. It offers no solutions to resolve the disagreement. Regarding the long-term disability debt, the district argues that payments should only be made when the village pays out claims, rather than assuming a lifetime cost that might actually be lower.
Thanks, Dan
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