* Sun-Times…

The Illinois Appellate Court on Monday lifted a temporary restraining order that had kept south suburban Harvey from receiving $1.4 million in tax revenue as it fights its police pension board over millions in back payments.

A Cook County Circuit Court judge had blocked the cash-strapped city from collecting the money last week, a move that forced officials to lay off dozens of police officers and firefighters.

Harvey will now have access to the funds — which were collected by the state, mostly through sales taxes — as the pension board’s lawsuit continues. The suburb is saddled with $5 million to $7 million in pension debt.

* Tribune…

Prior to Monday’s appellate court decision to grant the TRO, State Sen. Napoleon Harris, D-Harvey, said he was considering introducing a measure amending the state law that requires the Illinois comptroller’s office to seize a municipality’s tax revenues when a community is delinquent funding pensions.

“We need to explore options that keep Harvey on track to fund police and fire pensions without putting them in a complete financial crisis,” Harris said in a statement. “The citizens of Harvey should not be penalized or subjected to this type of situation due to missed pension payments.” […]

“What Harvey is experiencing is a contagion that has spread throughout the state,” said [Rep. Jeanne Ives], who asserted that allowing municipalities to declare bankruptcy in the face of mounting financial pressures was “the only way out.” […]

“We can say that pensions are the problem, if we know that the money is being managed correctly,” [Alderman Chris Clark, a critic of Mayor Eric Kellogg’s administration] said. “But you cannot say that pensions are the problem when there is rampant — not just mild — but rampant mismanagement. And that’s basically what this is.”

* From Heyl Royster…

Under federal law, units of local government cannot petition for bankruptcy unless they have express and specific authority from the state to do so

From Chapman & Cutler…

Until such time as the State of Illinois legislature provides specific authority to units of local government to petition for municipal bankruptcy, no such petition will be permitted.

* In the interim, there are two mechanisms in state law that might benefit Harvey…

The Fiscally Distressed City Law allows the Governor to create an authority comprised of five directors to provide a secure financial basis for and to furnish assistance to a financially distressed city according to the guidelines outlined in the statute. The Local Government Financial Planning and Supervision Act allows the Governor to create a commission comprised of 11 members, primarily charged with developing a detailed financial plan and other recommendations to ensure proper financial accounting procedures, budgeting and taxing practices to assure the fiscal integrity of the unit of local government. The state can also provide loans and state bonding authority to assist the municipalities.

The Local Government Financial Planning and Supervision Act only applies to municipalities with populations under 25,000 and Harvey just barely qualifies.

* It’s not at all certain that legislators will want to set a precedent with Harvey…

* The dollar amounts are kinda small for some of these towns, however…

Thoughts? And, please, don’t just post a drive-by “Bankruptcy!” or “Pay up! comment. This isn’t Facebook.

…Adding… Amanda Kass…

Out of 632 police and fire funds, I identified 71 (or 11%) in which actual contributions were 50% or less than what the Department of Insurance said the total contributions should have been during that time. Those funds are located in 54 municipalities, the majority of which (49 funds) are in Cook County or DuPage County. Among the group of 71 funds, the average amount that was contributed between 2003 and 2010 was only about 39% of what DOI said should have been paid. And 24% of the funds received no money from their respective municipality at least once between 2003 and 2010. As a group, these 71 funds are also in worse financial shape than most police and fire pension funds. While the average funded ratio for all funds in 2016 was 60% the average for these 71 is just 47%.

* Related…

* Appeals court: Comptroller can’t embargo over $1M from cash-strapped Harvey at pension fund’s request

* ADDED: Harvey fire pensioners paid $1.1M into fund, have collected $25M: Of the 42 Harvey fire retirees, 24 contributed zero to their pension fund. Those retirees have received $17.4 million in benefits over their retirements.