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Harvey Fire Department news
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Excerpts from the cookcountyrecord.com:
While the elected leaders of Harvey continue to grapple with how much tax to impose on property owners, a recent ruling by a panel of the Illinois First District Appellate Court has highlighted a looming crisis for the city’s pension fund. The court determined that the city’s firefighter pension fund is dangerously close to default, giving the pension board a legitimate basis under state law to compel Harvey to pay nearly $11 million in unpaid and underpaid contributions.
On August 4, a three-judge panel in Chicago concluded that the city's mayor and city council have misused their discretionary powers for years, failing to adequately fund the firefighter pension system. This neglect has placed the fund in dire straits, teetering on the edge of bankruptcy.
The appellate justices emphasized that previous rulings, which typically prevented courts from mandating specific funding amounts for public employee pensions, do not apply in Harvey's case. They upheld the decision of the Cook County judge, affirming the city’s obligation to rectify its underfunding, regardless of Harvey’s assertion that it lacked the means to do so.
“The evidence clearly shows that Harvey has consistently neglected its responsibilities toward the Pension Fund, leading to a rapid depletion of its assets,†the justices stated. “This situation has created an urgent constitutional imperative to ensure proper funding.â€
The lawsuit was initially filed in 2010 by the City of Harvey Firefighters’ Pension Fund, accusing the city of chronic underfunding since 2005. Court records revealed that actuaries estimated Harvey had deprived the Pension Fund of $8 million in actual contributions and another $2 million in potential investment returns due to its failure to contribute fully during that period. By 2013, the fund’s total assets had plummeted to just $11 million, far short of the $34 million needed.
In her concurring opinion, Judge Lampkin noted in 2014 that the fund was disbursing approximately $157,000 monthly to retirees, while active firefighters were contributing only $25,000 per month. She warned that the pension fund’s assets were depleting at an alarming rate, jeopardizing its ability to sustain future payouts.
Despite years of litigation, former Cook County Circuit Judge Mary Mikva ultimately ruled in favor of the pension board, ordering Harvey to pay nearly $11 million in damages. However, she refrained from dictating how the city should raise these funds, leaving that decision to local officials.
The city appealed, arguing that Judge Mikva’s ruling contradicted longstanding interpretations of Illinois law, which prohibit courts from compelling specific funding levels for pensions. Harvey claimed the order infringed on the principle of separation of powers, essentially forcing the judiciary to dictate municipal spending or taxation policies.
The appellate judges disagreed, emphasizing that Harvey’s discretion in setting tax rates is not absolute. The Illinois Pension Code explicitly requires municipalities to allocate sufficient funds annually to cover pension obligations. “While Harvey retains authority over its tax levies,†the justices explained, “it cannot exploit this power irresponsibly.â€
They also dismissed the city’s argument that insufficient tax revenue justified its failure to contribute to the pension fund. Instead, the justices pointed out that the city prioritized other expenditures—such as unregulated aldermanic expense accounts and questionable payments to political allies—at the expense of pension obligations.
Moreover, the court criticized Harvey’s broader fiscal mismanagement, citing scandals involving misuse of public funds, including the diversion of millions earmarked for a hotel project to cover general city expenses.
“Harvey has provided no credible evidence demonstrating its capacity for responsible financial oversight,†the justices remarked.
Like Judge Mikva, the appellate panel avoided prescribing specific measures for Harvey to meet its pension obligations, emphasizing that tax-setting decisions remain within the purview of the city government.
“Determining precise tax rates involves judgment and flexibility,†the justices noted. “As long as Harvey exercises its authority to levy a sufficient tax to meet the Pension Code’s requirements, it fulfills its legal duty.â€
This latest ruling underscores the urgency of addressing pension crises across Illinois, with implications that extend beyond Harvey’s borders.
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Harvey Fire Department news