Harvey Fire Department news

Excerpts from cookcounntyrecord.com: A recent ruling by a panel of the Illinois First District Appellate Court has determined that the city of Harvey is facing a critical financial situation with its firefighter pension fund. The court found that the city's leadership had repeatedly failed to meet its legal obligations, leaving the fund on the brink of default. As a result, the pension board for Harvey’s firefighters has been granted the right to demand nearly $11 million in unpaid contributions. The court ruled that the city’s mayor and council had misused their discretionary powers under state law, failing to properly fund the pension system over many years. This led to a severe depletion of the fund’s assets, putting the future of pensions for retired firefighters at risk. The justices emphasized that while courts typically do not force cities to fund pensions, this case was different due to the clear evidence of negligence and mismanagement. According to the court’s decision, the city had not only failed to make proper contributions but also used funds meant for the pension plan to cover other expenses. This practice left the fund unable to sustain itself, forcing it to pay retirees using money that should have been invested for future benefits. The court noted that the city’s active firefighters were contributing far less than what was needed to maintain the fund’s long-term viability. The case dates back to 2010, when the Firefighters’ Pension Fund Board filed a lawsuit against the city, alleging chronic underfunding. Actuaries estimated that the city had missed out on $8 million in direct contributions and an additional $2 million in investment gains between 2005 and 2013. By 2013, the fund’s assets had dropped to around $11 million, far below the required amount. In a concurring opinion, Judge Lampkin highlighted how the city was using current firefighter contributions to pay retirees instead of investing them for the future. She warned that without immediate action, the fund would soon be unable to fulfill its obligations. Despite the ruling, the court did not order the city to raise taxes directly, stating that the decision on tax levies should remain with local officials. However, the justices made it clear that the city could not ignore its legal duty to fund the pension system. The court also criticized Harvey for broader financial mismanagement, including misuse of public funds and questionable spending practices. These issues further supported the argument that the city lacked the capacity to properly manage its finances. Ultimately, the ruling reaffirmed that while cities have some discretion in setting tax rates, they cannot abuse that power to the detriment of public pension systems. The decision sets a precedent that may influence similar cases across Illinois.

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