Of the three candidates running for mayor of North Riverside in 2021, there’s only one whose policies and initiatives voters have seen up close. Hubert Hermanek Jr., who served as a trustee for one term before winning election as mayor in 2013 and 2017, is well-known to voters.
He understands that some of the decisions he’s made have not been universally popular. Hermanek’s most high-profile initiative, an unsuccessful attempt in 2014 to privatize firefighting services, was costly politically and financially.
But, Hermanek went down that road as a way to confront the village’s most onerous financial burden – its pension obligation – and has taken other action to both fund that obligation and keep village services flowing.
“I’m the one that stopped the subsidies in this town, and I took a beating for it,” said Hermanek, who is running as an independent after winning twice atop slates run by the now-defunct VIP Party. “But it was the right thing to do.”
Hermanek was a village trustee when North Riverside government, under the economic strain of a global financial meltdown, began rolling back subsidies it paid to fund residents’ water bills, garbage pickup and vehicle stickers.
As mayor, he used the financial collapse’s effect on retail sales taxes as a history lesson and began finding new revenue streams. Some were unpopular, like the introduction of red-light cameras at Harlem and Cermak.
Hermanek, who is a criminal defense attorney, will point out that it is that revenue – about $1.4 million each year – is about the same amount the village spends each year to fund its fire pension obligation. However, the pension obligation is growing while the red-light camera revenue has plateaued.
During Hermanek’s tenure, he’s also expanded video gambling while pursuing the taxes the state shares with municipalities from the proceeds. Those taxes amount to about $280,000 a year, though they could tick up a bit as the pandemic wanes.
The village during Hermanek’s tenure also amended its amusement tax statute in order to profit from the changing retail sector that saw large entertainment complexes, like Round One and Urban Air, set up shop in former big-box retail spaces. That tax now accounts for about $300,000 annually.
North Riverside also takes in about $1 million annually in the form of a tax imposed during the Hermanek administration on places for eating and drinking.
Those four initiatives have netted the village roughly $3 million a year. Anyone suggesting an end to unpopular revenue sources like red-light cameras and video gambling, said Hermanek, is kidding themselves.
“It’s cute to say you’re going to promise everything to everybody and get rid of video gaming and get rid of the red lights, get rid of all that,” Hermanek said. “How are you going to have the residents make up for that difference? That’s a dishonest argument to make when you promise people things that you can’t pay for.”
In recent years, the village has also begun addressing its aging water and sewer systems, including the installation of a new water main along Cermak Road west of First Avenue and lining deteriorating sewers to avoid more costly replacement.
Those projects are being funded with the help of another unpopular fee, a water operations fee tacked onto residents’ water bills. Trustee Marybelle Mandel, who is running for mayor against Hermanek and Trustee Joseph Mengoni, advocated eliminating the fee completely during budget talks last summer.
But, the fee results in nearly $400,000 a year in revenue to put toward the village’s water and sewer infrastructure maintenance, money that would be difficult to replace.
“When I first started, our water account was at a deficit,” Hermanek said. “The water service fee, if you want to call it that, that is causing us to have a surplus, which is being used for infrastructure improvements. …
“I’m proud that every year we take about $650,000 out of that water fund and we’re building new water pipes on the west end. People on the west end have noticed a significant improvement in their water pressure.”
Mandel has targeted what her campaign refers to as the “debt” the village is carrying, basing her figure of $117 million on liability data compiled by the village for its annual financial audit.
However, the overwhelming majority of that $117 million liability is not derived from what most people would understand as long-term debt, such as a mortgage. The village does carry some long-term debt, but it amounts to about $7.5 million or about 6.5 percent of total liabilities.
The village owes about $2.1 million on alternate revenue bonds issued for road improvements in 2016 and about $5.4 million for debt certificates issued to seal the deal that brought Costco to the village.
Almost all the remaining liabilities – $105.4 million – is what actuaries have determined are the village’s obligations for police and fire pensions as well post-retirement health insurance for former village employees.
The village discontinued the post-retirement health insurance perk for new employees in 2011 (for police the cutoff was 2014), because of its enormous cost. While village boards prior to 2014 either underfunded or failed to fund pensions annually, for the past seven years, the village has funded its police and fire pensions at or even a little more than 100 percent.
There is no action any village board can take to reduce that pension or post-retirement benefit obligation, short of expending more funds towards them or going to referendum to levy taxes against the pension obligations.
No candidates running for election in 2021 have shown a willingness to levy an additional tax.
Hermanek called Mandel’s focus on the “debt” a red herring.
“I think it’s misleading to the public, and I think it doesn’t help with any discussion,” Hermanek said. “These are future obligations for every single person that’s getting a pension, union or non-union, for as long as they live. We have very little debt. Basically we have the loan for Costco, which I’m sure nobody will criticize, we did a massive street repavement and we may be paying off, if not paid off already, the water meters.”
Hermanek pointed to the hiring of retired veteran urban planner Robert Kallien as village planner, and Kallien’s efforts in updating the zoning code and leading the strategic planning process, as “professionalizing” the Community Development Department.
He also warned against writing the retail sector’s obituary, pointing to North Riverside’s success in attracting new powerhouse retail tenants like Hobby Lobby, Binny’s, what appears to be a new Amazon Fresh grocery store and the apparent move of Aldi to a North Riverside Mall outlot.
Round One, Urban Air and the new Cook County Health Clinic, while not retail operations, Hermanek said, have shown the village’s shopping centers are diversifying.
“I know that we have an outdated mall. However, we’ve been very, very lucky to sustain when these big box stores [like Toys R Us, H.H. Gregg and Sports Authority] have left,” Hermanek said. “It’s such a great area and great location that as one leaves, something comes in.”
While Mengoni wants to empower the village administrator and other staff to oversee day-to-day village operations, Hermanek relishes his more hands-on approach, including his statutory responsibility of hiring and firing top village staff.
“I know what’s going on, and I’m in on every decision that’s important to the residents,” Hermanek said. “I’m the one that’s accountable for it. Whether it’s the right decision or wrong decision, I’m the one that faces the music.”
He said he hires department heads “on the basis of merit.”
“No relatives work here,” said Hermanek, alluding to a long-criticized aspect of the old VIP political organization, to which he once belonged, where members of the party’s families often landed village jobs, bypassing an open hiring process.
Hermanek named Sue Scarpiniti, the village’s longtime finance director, as acting village administrator in early 2020 after Guy Belmonte announced his retirement. He said he delegates “a lot of responsibilities” to her and that “she does make a lot of decisions.”
Still, Hermanek said, “most of those decision are run by me.”
“I admit, I’m more hands on,” he said. “I like to know what’s going on.”