Excerpts from the DailyHerald.com:
A legal battle is unfolding between the Barrington Countryside Fire Protection District and the village of Barrington, with both sides locked in a dispute over pension fund obligations. The village has filed a lawsuit against the fire district, claiming it owes at least $1.2 million that was supposed to be covered under a shared pension fund.
The fire district, however, disputes this, stating that an internal audit shows no liability 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 all fire service costs—including pensions—which totaled more than $1.2 million at the time of the split. In addition, the village is also seeking over $800,000 in long-term disability insurance costs from the district.
The situation could get even more complicated. The lawsuit claims that the fire district asked the village to recalculate the pension liabilities using a state-mandated funding formula, which increased the total owed to over $2 million. This means the court will have to determine not only if the district owes money, but how much—$1.2 million or $2 million.
Village Manager Jeff Lawler said the situation is unfortunate, but he blames the fire district. “They paid under this formula for 19 years before the split,†he said, implying that the district should have anticipated the financial responsibility.
The village has sent multiple invoices to the district since the split, but the fire district has refused to pay the full amount. In June, the village returned a $14,000 check from the district, signaling their frustration with the ongoing dispute.
Before the separation, the fire district relied on the village to provide fire protection services. However, tensions grew as the district’s board became increasingly dissatisfied with the village's management of the fire department. When the intergovernmental agreement came up for renewal, both parties decided to end their partnership and divide equipment and other assets.
Lawler noted that the separation agreement clearly stated the district would be responsible for any unfunded pension obligations, which could reach into the seven figures. The lawsuit also includes a request for reimbursement of legal fees incurred during the village’s efforts to recover funds from the district.
Despite its financial challenges, the fire protection district appears to have significant reserves. According to its most recent audit, the district holds over $2.5 million in reserves. Its revenue in 2014 came primarily from property taxes, totaling $5.6 million out of a $5.9 million budget. However, expenses exceeded $6.2 million last year, raising concerns about its financial health.
The audit acknowledges the village’s invoices but maintains that the district has no obligation to cover the pension fund. It offers no clear resolution to the conflict. On the issue of long-term disability benefits, the district argues that payments should only be made when the village pays actual claims, rather than assuming the full lifetime cost, which may ultimately be lower.
Thanks, Dan
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