Summer 2015 - Northern Illinois Alliance of Fire Protection Districts

Fire
GUARD
A Publication of the Northern Illinois Alliance of Fire Protection Districts
Summer 2015
Letter from the President
Summer time for the NIAFPD is usually a little quieter however, with the Illinois Legislators still working in Springfield our
Lobbyist and Legislative Liaison are busy. Thank you Liz Brown and Ronald Kubicki for keeping our members informed
with news from Springfield.
The NIAFPD members have asked for a current salary and benefits survey. In the past we have had very little response to
our surveys and this year we are hoping for a 75% completion rate. Members can help by completing a survey by logging
into the “members only” tab of our website – www.niafpd.org. Once a significant amount of surveys have been received
we will post the results on our website.
Remember the NIAFPD is your alliance! Please let us know if we can help your fire district.
Bill Hoffmeister, President
NIAFPD
Letter from the Executive Director
Here we are in the middle of summer but before we know the Fall
Legislative Session will be in full swing! It isn’t too early to start
thinking about issues you would like the NIAFPD to bring before our
State Legislators. Contact Legislative Liaison Ronald Kubicki by email
ronaldkubicki@comcast.net.
On October 3, 2015 the NIAFPD will offer a seminar at the LisleWoodridge Fire Protection District. The topic has not been finalized as
of this newsletter, but it will qualify for 3 hours for the Advanced Trustee
Training Continuing Education Requirement. While there is no cost to
attend the seminar we do request that you complete a registration form on-line at www.niafpd.org
which will be available in September, 2015.
The best way to be kept up to date is through the NIAFPD website and email. Did you know any
changes to your district’s information by logging into the members’ only tab of our website? If you
do not have your members’ only log-in information please contact me and I will be happy to send
you the information. Once you have your information you can change your log-in information. If I
can be of help to anyone please give me a call at 224-355-9778 or email me at khaage@dbfd.org.
Kathy Haage, Executive Director
NIAFPD
Table of Contents
Part-Time Firefighters
Enroll in IMRF... p. 2
Legislative Update
p. 3
The New ACA
Reporting
p. 4
Patience in Low Interest
Rate Environment p. 5
NIAFPD Lobbyist
Report p. 6/7
NIAFPD Conference
p. 7
Congressional Fire Service
Institute
Insert
History...IL Fire Service
Legislative Caucus
Insert
Gaffney and
the New Unforseen
Standard
Court: Part-time
Firefighters
Must EnrollEmergency
in IMRF Pension
Plan
by David T. Zafiratos, Ottosen Britz Kelly Cooper Gilbert & DiNolfo, Ltd.
by Timothy J. Hoppa, Ottosen Britz Kelly Cooper Gilbert & DiNolfo, Ltd.
In a recent court decision, a municipal fire department was forced to enroll
many of its part-time firefighters in the Illinois Municipal Retirement Fund
(“IMRF”) pension plan. While this Court decision, Village of Westmont
v. Illinois Municipal Retirement Fund et.al., 2015 IL App (2d) 141070, is
unpublished—and thus is not binding on future courts, it offers guidance
to other fire departments and districts and serves as a warning to those
considering joining IMRF.
Recognizing the potential fiscal impact of having part-time firefighters
working over the 1000 hour threshold (about 3.5 shifts per month),
Westmont contacted IMRF and sought an opinion about whether it
would have to enroll its part-time firefighters in IMRF. An IMRF Field
Representative orally advised Westmont that enrollment of its 1000+ hour
part-time employees was not required. As a result, no firefighters were
enrolled in IMRF.
The Village of Westmont established its fire department in 1938, and joined
IMRF in 1961. When Westmont joined IMRF, the part-time firefighters
were excluded from participation in IMRF—by agreement with IMRF. By
the late 1980s and early 1990s, Westmont no longer utilized volunteer
firefighters, instead opting to exclusively use part-time employees. In 1992,
the Village of Westmont recognized that there was some discrepancy in
the exclusion of part-time firefighters from IMRF. Sections 7-137 of the
Pension Code requires that all employees of IMRF participants working
over 1000 hours per year must be enrolled in IMRF. If the employer has an
Article 4 firefighter’s pension fund, part-time employees may be excluded
from IMRF, even though they cannot participate in the fire pension fund. 40
ILCS 5/7-109(2)(b). Thus, it would seem that the Village of Westmont, as
an IMRF participant, would have to enroll all of its part-time firefighters that
work more than 1000 hours. However, IMRF guidelines made Westmont’s
part-time firefighters ineligible to join.
Two decades later, the Village of Westmont became involved in a dispute
with IMRF over the status of its full-time fire administrators. “Apparently
due to the scrutiny placed on Westmont’s fire department,” IMRF examined
the status of all of the Westmont employees. As a result of this heightened
“scrutiny,” IMRF unilaterally reclassified Westmont and determined that all
1000+ hour part-time firefighters should be immediately enrolled in IMRF.
For Westmont, this was a potentially “multi-million” dollar change, and one
without much explanation. In 1992 IMRF informed Westmont that parttime firefighters could not participate, but in 2013, and without a change in
the law, IMRF told Westmont that the part-time firefighters must participate.
In deciding the case, the Court ruled that the 1992 determination by
IMRF was incorrect, and that the 2013 decision was correct. As a result,
Westmont would be required to enroll every part-time firefighter that worked
1000+ hours per year in IMRF. We are unsure whether Westmont would
seek to appeal this decision further to the Illinois Supreme Court. We do
understand that IMRF has petitioned the Illinois Appellate Court to publish
this decision to make it a binding legal precedent.
While this is a narrow and unpublished decision on an unusual set of facts,
this case contains a few lessons for fire protection districts. Some fire
districts have enrolled or are considering enrolling in IMRF to create a
pension option for their non-sworn personnel. However, it is important to
realize that once a fire district enrolls in IMRF, every employee that works
more than 1000 hours must be enrolled, unless the district also has created
a fire pension fund. This should also be a consideration when deciding
whether to enroll in IMRF. Because the decision to enroll in IMRF is not
reversible, a fire district should consider all of the potential future costs
prior to enrollment. For districts that already employ full-time firefighters,
and thus have established a fire pension fund, there is no need for worry:
the Court recognized that in such a case part-time firefighters can be
excluded from both the fire pension fund and IMRF. A further lesson can
be had in Westmont’s reliance on the interpretation of the law by IMRF
representatives. Obtaining a written determination from an IMRF attorney
would have been preferable to an oral representation of an IMRF field
representative. Seeking impact form legal counsel on these complicated
pension issues is a sound idea.
Fire Guard • Summer 2015
Legislative Update
Ronald P. Kubicki, Legislative Liaison NIAFPD
Hello everyone, I hope you are having a great summer. Well the Illinois
General Assembly has completed another Legislative session. So now it’s
time to let you know what they have done and not done to the fire service.
For this issue of Fire Guard, I have asked the Co-chairs of the Illinois Fire
Caucus, Representative Don Moffitt (R) and Representative Carol Sente
(D) to give you their views on how the fire service issues were handled and
perceived in Springfield. My hope is that by giving you their perspective of
how things went, you will have a better understanding of how our legislators
feel about the fire service and our issues. Every year as far back as I can
remember the NIAFPD along with its partners in the fire service, work very
hard on all types of issues and bills that affect the running and governing
of the fire districts in our state. The Fire Caucus along with the NIAFPD
place a wide variety of issues in front of the legislators that we feel will have
impacts on all fire districts and departments. But it is also our job to review
and hopefully stop legislation that could be damaging to the fire service.
Liz Brown the NIAFPD lobbyist has been very busy working alongside
other fire service lobbyists on a number of issues that could have a major
impact on the NIAFPD and the whole fire service. Liz’s legislative update
is also included in this issue of Fire Guard. I know most of you have been
getting her well prepared legislative updates throughout the winter and
spring. I know her reports have been a huge help to you and has helped
you to be able to stay up-to-date on what has transpired in this year’s
General Assembly. I want to thank Liz for all her great work and insights
that she has provided me over the year. I feel very good that we are in good
hands with Liz representing us in Springfield. Her knowledge of the issues
and her long line of contacts and friendships have put the NIAFPD and our
issues on the minds of many of our legislators. Through her hard work I
feel we have had a very good year and see only good things in the future.
Back in mid-April Bill and I attended the Congressional Fire Service Institute
in Washington DC. I put together a special report for you on the success of
our attendances at this year’s institute. You will find my report along with
some pictures in this issue of Fire Guard.
In closing I would want to remind you that it is never too early to start
thinking about issues for next year legislative session. So please if there
is anything you feel we need to look at or address at please contact me or
Liz. Have a great summer and be safe.
www.niafpd.org
The New ACA Reporting
by Kalli Ortega, Corkill Insurance Agency, Inc.
Questions continue to come in about the new ACA reporting requirements
under IRS Sections 6055 & 6056. If you have not already figured out
whether or not you have a responsibility to report, now is the time to
determine which section applies to your organization and exactly what you
are required to file.
What are the Requirements?
The ACA reporting requirements apply to all employers with self-insured
plans and “applicable large employers” starting in 2015. While there is
“transitional relief” from the employer mandate/shared responsibility
penalties for some organizations in 2015, the ACA reporting is required of
all affected employers. The 6055 and 6056 requirements are as follows:
Am I an “Applicable Large Employer”?
If you employed at least 50 full-time / full-time equivalent employees during
the preceding calendar year, you are an applicable large employer. For
example, your organization’s total employee count for 2014 determines
if you have to track and offer employee health coverage in 2015 for ACA
reporting in early 2016. There is a one-time special rule allowed for 2015:
you may use any consecutive 6-month period during 2014 to determine
your organization’s total employee count.
What is the difference between a “Full-Time Employee” and a “Full-Time
Equivalent” employee?
The IRS defines these employees as follows:
• A full-time employee is an employee who is employed on average,
•
per month, at least 30 hours of service per week (or at least 130 hours
of service in a calendar month).
A full-time equivalent employee is a combination of employees,
each of whom individually is not a full-time employee (has fewer than
30 hours of service per week), but who, in combination, are equivalent
to a full-time employee.
Fire Guard • Summer 2015
My organization has to report under 6055 &/or 6056, what do I do
now?
Now that you know which ACA reporting sections apply to your organization,
you have to determine your course of action to ensure compliance. There
is a lot of data required to comply, so Districts are handling this in one
of several ways. Some Districts are working with their payroll vendor for
tracking, IRS form completion, and IRS filing. Others are working with their
CPA or Health Insurance Advisor.
January 2016 will be here before we know it and the penalties for noncompliance were recently increased. So, if you have not already firmed
up your plan for reporting, I recommend that you reach out to a trusted
advisor today.
“Patience” in a Low Interest Rate Environment
Thomas S. Sawyer, Sawyer Falduto Asset Management, LLC
After sharp declines during the early months of 2015, bond yields
on longer term fixed income securities moved higher in rather
systematic fashion through the end of June. The yield on the 10-Year
U.S. Treasury note increased to 2.35 percent as of June 30, 2015
crossing through the 2.17 percent level where we began the year. Of
particular interest to us is the steepening of the yield curve. In other
words, long-term yields have increased more than short-term yields.
Specific to Illinois, concerns over the State’s troubled financial status and
“A-” bond rating (although still investment grade, it is the lowest of the 50
states) often prompts questions regarding bonds issued by local units of
government. In short, many of the local issuers of debt in Illinois have very
strong financial profiles. According to Standard & Poor’s Rating Services
(March 2014) 1 over 50% of G.O. municipal bond issuers in Illinois are rated
AA- or higher. Over 92% are rated A or higher.
When investing in municipal bonds, as is the case with any credit-sensitive
asset, investors need to be mindful of credit quality standards and
diversification. We find that municipal bonds are an important diversification
tool in portfolios, and often offer attractive yields for the level of risk.
1. Standard & Poor’s Rating Services as of March 31, 2014 courtesy
of The “Illinois Effect” on Local Municipal Bonds, Bernardi Securities.
We offer a couple of thoughts on the current structure of interest rates:
•
•
Fed policy directly affects the level of short-term interest rates. In our
view, the market isn’t discounting much in the way of rate increases
any time soon, perhaps 25 basis points for the next year.
The increased difference between short-term and long-term yields
supports maintaining portfolio durations short of benchmarks, but
moderately so.
A Few Comments on Municipal Bonds:
As is often the case, a single event can often paint an entire asset class
with the same brush. Earlier in this commentary we referenced the threat
of Puerto Rico defaulting on its debt. Much media attention was devoted
to the broader implications for the municipal bond market, much of which
carried a negative tone. Also as noted earlier, it appears that Puerto Rico
made their payments on time. We should also note that Puerto Rico has
carried a below investment grade rating of CCC for some time. This is not
new news.
“The allocation to equities, fixed income and all available asset classes should be
determined with careful consideration given to factors such as investment time
horizon, liquidity requirements, diversification and the risk tolerance. The resulting
asset allocation guidelines should be well documented in your investment policy
statement and guidelines. Information contained in this commentary is solely the
opinion of the author and obtained from sources believed to be reliable. Accuracy
can not be guaranteed. Past performance is not predictive of future returns.”
Corkill Insurance Agency, Inc.
25 Northwest Point Boulevard, Suite 625
Elk Grove Village, IL 60007
847.758.1000
www.corkillinsurance.com
www.niafpd.org
NIAFPD Lobbyist Report
by Liz Brown, NIAFPD Lobbyist
During a typical legislative year, May 31st is the end of the legislative spring
session. Legislators return to their districts and come back in the late fall,
typically late-October or early November for two weeks of veto session.
But, the 99th General Assembly is anything but typical. With our newly
elected Republican Governor and two Democratic Leaders in the Illinois
House and Senate, tensions continue to rise well into the summer months.
Governor Rauner intent on passing his “Turnaround Agenda,” has been
unwilling to work with the legislature on a state budget, besides education
until key elements of his legislative agenda has passed.
Despite the turmoil with the legislative leaders, the Northern Illinois Alliance
of Fire Protection Districts has had a very active legislative session. We
have continued to work with our allies in the Fire Caucus participating in
weekly phone calls to manage our legislative strategies.
Special Thank you to our Legislative Liaison Ron Kubicki. Without, the
guidance of Ron, we would not be able to celebrate our success that we
had this General Assembly.
Representative Carol Sente (D-Vernon Hills) and Representative Don
Moffitt (R-Galesburg) continue to be the chairs of our Legislative Fire
Caucus and be advocates on our behalf in Springfield.
Here are key legislative items of interest:
NIAFPD Supported these measures:
HB 152 (Willis/Manar) – Requires all schools to be equipped with carbon
monoxide alarms. Passed Both Houses, Awaiting Governor’s Approval.
HB 219 (Verschoore/Koehler) – Provides that the voters of the entire fire
protection district may vote on whether a territory of the district may be
disconnected and transferred to another district. Passed Both Houses,
Awaiting Governor’s Approval.
HB 220 (Moffitt/Sullivan) - Provides that a board of trustees of a fire
protection district may submit a question to increase the current special
tax rate for the purpose of providing funds to pay the costs of emergency
and rescue crews and equipment to the voters of the fire protection district
by referendum. Provides the special tax rate may be raised to a maximum
of .10%. Provides the language to be used in the referendum. Legislation
Signed into law by Governor, Public Act 99-0004.
HB 246 (Stewart/Koehler) - Designates December 23 of each year as
“Scott’s Law Day” to honor public safety workers and to remind motorists
to slow down, change lanes away from a stationary authorized emergency
vehicle, and proceed with due regard to safety and traffic conditions.
Passed Both Houses, Awaiting Governor’s Approval.
Fire Guard • Summer 2015
HB 3184 (Hurley/Mulroe) – Increases the penalties of aggravated assault
to a peace officer, fireman, emergency management worker, or emergency
medical technician while performing duties or in retaliation for performing
their duties from a Class A misdemeanor to a Class 4 felony. Passed Both
Houses, Awaiting Governor’s Approval.
HB 3203 (Moffitt/Sullivan) – Allows honorable veterans who turned 35
during active military service and is currently under the age of 40 to eligible
to take the exam for a position as a firefighter. Passed Both Houses,
Awaiting Governor’s Approval.
HB 3334 (Franks/ Cullerton, T.) - Provides that electors of a rescue squad
district may petition for a referendum to allow the board of trustees of the
rescue squad district to be elected. Further provides that if the referendum
for election of the board of trustees is approved, that the appointed members
of the board of trustees will continue until their successors are elected and
qualified. Passed Both Houses, Awaiting Governor’s Approval.
HB 3909 (Tabares/Cunningham) - Allows the Fire Marshal and the
Department of Insurance to prohibit the release of certain information to
insurance companies if it would endanger the life or physical safety of
law enforcement personnel or any other person. . Passed Both Houses,
Awaiting Governor’s Approval.
SB 740 (Holmes/Prichard) - Provides that whoever fails to comply with
any of the provisions of the Fire Hydrant Act, after receiving thirty-day
written notice of noncompliance or violation from a fire protection district
or municipality in whose jurisdiction a fire hydrant is located, shall be
responsible for all reasonable costs including attorney’s fees and legal
expenses incurred by the fire protection district or municipality in recovering
the costs from the responsible party. Passed Both Houses, Awaiting
Governor’s Approval.
SB 763 (Sandoval/ Zalewski) - Provides that certain firefighters who
participate in IMRF may be granted Sheriff’s Law Enforcement Employee
(SLEP) status with the approval of the employing municipality. The approval
resolution may specify that SLEP status shall be applied retroactively to
employment occurring on or after January 1, 2011. The legislation applies
only to municipalities that have both thirty full time police officers and fifty
fulltime firefighters that have not had an established fund; makes both the
police and fire eligible for SLEP.
NIAFPD was Opposed to these measures and was able to have them held:
HB 2717 (Ives/Connelly)- Requires all units of local governments to
maintain internet web sites and post information including – budgets,
financial audits, taxes and fees, contracts awarded, among many other
items. Require implementation without reimbursement. Passed the House;
bill was held in the State Senate.
NIAFPD
Conference
by Conference Chairman, Retired Chief James Quinn
Your conference committee has begun to put together another informative
program for the 2016 Northern Illinois Alliance of Fire Protection Districts
annual conference. Due to hotel scheduling our 2016 conference will be
held January 28 – 31, 2016 this is one week earlier than we usually hold
the conference. For our 2016 conference we will be changing locations to
the Hilton Resort and Conference Center in Oak Brook. Several years ago
this facility served as our conference hotel and since then it has undergone
some extensive renovations as well as additional renovations taking place
currently. The committee believes everyone will be pleased with the new
location.
Program format will be similar to previous years with a combined Fire District
Administrative and Pension Sessions scheduled for Thursday afternoon.
The all day Friday sessions will include the two previous mentioned
sessions but in two separate tracks and the day will conclude with our
Sponsor’s Reception. This reception will provide you the opportunity to
network with other trustees, commissioners and administrative staff as
well as vendors that provide various services to fire districts. Saturday
will include separate program tracks for Trustees, Fire Commissioners,
Administrative/Pension staff and a General Track. Also on Saturday we
will hold our annual awards luncheon. Immediately after the afternoon
programs conclude we will have the Ottosen Britz Kelly Copper Gilbert &
DeNolfo, Ltd. / NIAFPD Closing Reception. This reception will once again
give you an opportunity to network with your peers. We strongly encourage
you to stay for this reception as it is one of the outstanding events that are
provided to you as part of your registration fee.
While the committee continues to work on the programs we always
encourage input from our membership. If you have a specific program or
topic you feel would be of interest and would be a benefit to the conference
attendees, please submit your ideas to our Executive Director Kathleen
Haage via e-mail at khaage@comcast.net .
Continuing education credit will be available for both trustees and pension
board members.
The 2016 conference may seem a long way off but it’s only six months
away and it will be here before you know it. We ask that you start your
discussions on attending the 23rd NIAFPD Conference at your board
meetings now. We intend to complete the program by early fall so watch
the web site where complete program information as well as registration
information will be available. We urge you to register your entire board,
administrative staff and commissioners as early as possible. We also ask
that you seriously consider spending a night or two at the hotel to give
yourselves a better opportunity to network with your peers.
You send your chiefs to conferences, you send your firefighters to
conferences and training sessions, it’s only right that you train yourself
to provide the best for your district and its citizens. The educational and
networking opportunities provided to you at the NIAFPD Annual Conference
is a very justifiable expense of your district’s tax dollars.
NIAFPD Lobbyist Report
continued from previous page
SB 1339 (Bennett/Cloonen) - Requires each public body to post video of
its meetings on the public body’s official website within 24 hours after the
scheduled beginning of the meeting and to retain the video of each meeting
on its official website for a period of 2 years after the meeting date. Passed
Senate; bill was held in the House.
SB 1483 (Anderson/Smiddy) - Provides that any nongovernmental entities that
the county board contracts with to furnish fire protection services that display
a logo of the county on the entity’s vehicle or uniform shall also conspicuously
display on all vehicles and uniforms a disclosure stating that they are a service
or contracted entity including the name of the entity, tax designation, and
the entity’s principal place of business. Provides that a person or entity
that violates this section is guilty of a business offense and shall be fined
$1,000 per occurrence. Passed Senate; bill was held in the House. Special
Thanks to Representative Anthony DeLuca.
On a personal note, it has been a great pleasure to represent you in
Springfield this year. It has been fun getting to know you and learn your
issues. Your passion for Fire Safety and good government has been a
fulfilling experience.
www.niafpd.org
NIAFPD
OFFICERS
President
William Hoffmeister
708.641.9672
hoffmeister@frankfortfire.org
Past President
Ronald P. Kubicki
708.768.1668
ronaldkubicki@comcast.net
Secretary/Treasurer
Nicholas Kosiara
njkosi@comcast.net
630.682.4165
Directors
Bonnie Bayser
bbayser@foxvalley.net
847.515.1602
Marianne DeBoer
Beach Park FPD
mdeboer@beachparkfd.org
Phil DeRuntz
Warren-Waukegan FPD
pderuntz@comcast.net
Fire Guard is a quarterly publication of
Juan Manuel Giron
JuanManuel@gironbooks.com
312.401.2101
Newsletter design & editing by Bright Ideas Marketing
Solutions • mbuhr8@comcast.net
224.355.9778
Northern Illinois Alliance of Fire Protection Districts
P.O. Box 5819
Buffalo Grove, IL 60089
Jamie Lowe
Lisle-Woodridge FPD
jlowe@msn.com
Executive Director Kathleen Haage
khaage@comcast.net
NIAFPD
224.355.9778
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