Are Taxpayers Getting Burned?

Top officials at suburban fire department get hefty pay raises just as they retire – creating a pension windfall that could cost local residents an extra $1.5 million.

jim eggert linkedin
Former Tri-State Fire Chief James Eggert / LinkedIn

Three weeks after announcing plans to retire as chief of a west suburban fire department in 2004, James Eggert got a going-away present from his bosses: a $7,380 pay raise.

That boosted the salary of the Tri-State Fire Protection District chief from $105,420 to $112,800.

Three months later — with two months to go until Eggert's retirement — the board overseeing the department, which serves parts of Darien, Burr Ridge, Willowbrook and unincorporated DuPage County, handed him another raise. This one was for more than $11,000. That boosted his pay to $124,079 — in all, more than $18,000 in raises in his final months on the job.

Around the same time, the tax-supported Tri-State fire district board agreed to a separation agreement with Assistant Fire Chief James Krohse, giving him a pay raise of more than $10,000 shortly before Krohse resigned.


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Their golden-handshake departures pumped up their pensions and also cleared a path for the rise of a battalion chief who is now in a civil union with a member of the board that approved the deals, records and interviews show.

When Eggert and Krohse left, the three-member board elected to oversee the fire protection district promoted Deputy Chief Alan Hagy to fire chief and Battalion Chief Michelle Gibson to deputy chief.

Hagy stayed with the department, which is based in Darien, until 2008. He left after the board gave him two raises totaling $17,000 in his final three months on the job. That pushed his pay initially from $115,000 to $121,000 and then to $132,000, records show. He also was given severance pay of $60,000.

Named to replace Hagy as chief: Gibson, who lives with Jill Strenzel, a Tri-State fire board trustee since late 2003. They entered into a civil union last year with a ceremony in Darien, records show.

Strenzel was on the board when it approved the late-career raises for Eggert, Krohse and Hagy and voted to promote her partner to chief, according to agency records and interviews.

 

In a written statement, she and a second fire board trustee, Hamilton "Bo" Gibbons, the board president, who signed the deals, defended their actions. They said the going-away pay hikes were "reasonable given each employee's service" and were "in the best interest of the district."

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Tri-State Fire Chief Michelle Gibson / www.tristatefd.com

Neither would agree to an interview.

Gibson, who is paid $137,887 a year and also is eligible for bonuses, declined to comment, saying, "I cannot burden this district . . . with your questions."

Eggert, 58, Krohse, 55, and Hagy, 56. also would not comment. They cited confidentiality clauses in their separation agreements.

The three men are currently receiving pensions from the district.

Their pensions, which are based on their final salaries, go up 3 percent a year.

Eggert's retirement pay this year will total $107,401, according to Tri-State records. Without the two pay raises he was given in his final months on the job, his pension would be $91,250, based on his final salary, a source confirmed.

Eggert also was given a $10,000 severance payment that didn't count toward his pension.

Krohse's pension is $77,473, records show. It would have been $69,090 without the late pay hike, based on his final salary, the source confirmed. He also received $25,000 in severance pay, which didn't count toward his retirement pay.

Hagy's pension is $113,163, records show. Without the two salary increases he was given in his last three months on the job, he would be getting $98,589 in retirement pay this year.

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Rep. Jim Durkin (R-Western Springs)

If the three men each live to age 80, they stand to collect a total of more than $1.5 million in additional pension payouts beyond what they would have been paid without the pay hikes.

State Rep. Jim Durkin (R-Western Springs), whose legislative district includes the fire protection district, calls the pay-hikes-for-"pension spikes" deals "outrageous" and says they "should not be tolerated."

Durkin also is critical of the secrecy surrounding the deals, saying "the use of public funds . . . should never, ever be subject to a confidentiality clause."

In 2010, the Illinois Department of Insurance, which regulates government pension funds, questioned the amount of Hagy's pension. In a compliance audit, the department determined that Hagy's second raise — $11,000 — was part of a written retirement agreement and thus was a retirement incentive, which is not supposed to be considered in calculating a pension under the Illinois Pension Code, according to Kimberly Parker, spokeswoman for the state agency.

Pension boards have up to 35 days to correct any mistakes. But Parker says a lawyer advised the fire pension board not to take any action because the error, made in 2008, wasn't discovered until 2010, and making a change at that point probably would lead to a costly — and losing — court fight.

This story was written and reported by the Better Government Association's Katie Drews, who can be reached at kdrews@bettergov.org or (312) 821-9027.