Excerpts from DailyHerald.com:
A recent lawsuit filed by the village of Barrington alleges that the Barrington Countryside Fire Protection District is refusing to pay over $1.2 million in pension fund obligations, which were previously shared between the two entities.
The fire district, however, disputes this claim, stating that an audit shows no financial responsibility for the pension fund. According to the lawsuit, when the fire district separated from the village-run fire department on December 31, 2013, the pension fund was already short by $1.9 million.
Village officials argue that in 2005, the fire district agreed to cover 64.25% of "fire services costs," including pension expenses. This arrangement reportedly amounted to more than $1.2 million at the time of the split. Additionally, the village is seeking over $800,000 in long-term disability insurance costs from the district.
The total could be even higher, as the lawsuit claims that fire district officials asked the village to recalculate the pension liabilities using a state-mandated funding formula. This new calculation increased the liability to over $2 million. A judge will need to determine not only if the district owes the village money, but also whether it's the original $1.2 million or the revised $2 million figure.
Village Manager Jeff Lawler stated, “This is unfortunate, but it’s their doing. For 19 years before the split, they paid under this formula.â€
The village has sent multiple invoices to the fire district since the separation, but the district has refused to pay what the village claims is owed. In June, the village returned a $14,000 check from the district.
Before the split, the fire district paid the village for 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 parties decided to part ways and divide equipment and other assets.
Lawler noted that the separation agreement specifically mentioned that the district would be responsible for all unfunded pension obligations, which could amount to “a seven-figure sum.â€
The lawsuit also includes a request for reimbursement of legal fees incurred by the village in its efforts to recover retirement and disability benefits from the fire district.
According to the most recent audit of the fire protection district, it holds over $2.5 million in reserves. The district earned approximately $5.9 million in revenue in 2014, mostly from property taxes—$5.6 million of which came from local property owners. However, the district spent over $6.2 million in the same period, 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 provides no clear resolution to the dispute.
Regarding the long-term disability debt, the district argues that its payments should align with the timing of the village’s claim payments, rather than assuming a lifetime cost that may end up being lower.
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