Should Key Club Associates negotiate with the Islandside Property Owners Coalition, as suggested by Longboat Key Commissioner Gene Jaleski and columnist Jim Brown?
It would be a one-way negotiation — with the Key Club backing down a second time and reducing the scale and scope of its proposed expansion.
The issues appear to be this:
1) Members of the coalition — primarily residents of L’Ambiance, Sanctuary, Sands Point Condominiums and other condos on Longboat Club Road — believe they are entitled to what they have, don’t want to live through the construction of an expanded Key Club and Resort and don’t want to pay the Key Club to preserve what they have. They want the town government to grant them a free, unearned benefit by denying through fiat the Key Club a right of ownership.
2) Key Club Associates owners want to preserve and enhance their investment through expansion. Either build long-term value for current and future generations by reinvesting or watch the value of their property decline as it becomes less competitive. That’s the way ownership works.
3) All property owners on Longboat Key — even those on north Longboat — have a stake in this as well. It’s like the dumpy house on the block. If it continues to deteriorate, values for all of the homes surrounding it also decline.
There’s really nothing to negotiate. It’s short-term, narrow interests versus a greater, long-term gain for all. The right of ownership versus unearned benefits.
+ Pension problems persist
Longboat Key’s public pension-plan problems are far from over.
Yes, the state did agree to release the $367,000 that it withheld because of a dispute between the state’s actuary and the town’s actuaries. And, yes, the town has adjusted its amortization schedule to eliminate the town’s nearly $23 million unfunded liability over the next 20 years.
But the basic problems have not gone away, nor are they going to go away anytime soon. Longboat Key taxpayers are going to be saddled with pumping more than $1 million a year into the employees’ pension plans for the forseeable future, or at least until the plans’ investment portfolios start generating returns above 8%.
Like we said, for the foreseeable future.
This is a complicated conundrum.
Here are the chief elements of the problem: defined benefit plans and unions.
Compounding corollaries: projected investment returns and retirement ages.
The town has three defined-benefit pension plans — for the firefighters union, the police union and general employees. A defined-benefit plan is typically sponsored by the employer and provides a pre-determined, guaranteed retirement benefit to an employee based on the employee’s earnings history, years of service and age. One of the risks of the defined-benefit plans is that when the value of a plan’s investment portfolio goes down, the amount guaranteed must be made up. That difference falls on the sponsor, in our case the taxpayers.
That’s a big part of the reason why the town’s unfunded pension liability is $23 million; the pension plans’ investment portfolios have lost value — just like everyone else’s stock portfolios.
With a defined contribution plan, the sponsor is not required to make up any shortfalls. There’s no guaranteed benefit. The defined contribution plan functions like a 401(k) plan. The benefit is based on the investment funds’ performance.
So the town should switch to defined-contribution plans. This is where it gets tangled.
By law, if that were done, the town would have to pay off the unfunded liability immediately. That would mean Longboat taxpayers likely would have to issue bonds and increase property taxes to cover the debt — much like paying for a beach renourishment.
If the town hired some math whizzes to explore this vis-a-vis staying where we are, taxpayers may find this to be a better alternative than to be stuck with a plan that looks certain to be big drain on them.
Ending the defined-benefit plan would not be easy with the unions. They like the guaranteed retirement benefits and would never give in.
Another option: Close the defined-benefit plans, and set up a defined-contribution plan for all new employees.
Town Finance Director Tom Kelley says now is not the time to do that — not when the town has such a large unfunded liability. The plans would not have the benefit of new employees contributing to the pension funds to make them grow and reduce the liability. Taxpayers still would have the big liability to feed — with the hope that investment returns might bail them out.
That’s another problem: The existing plans are expected to generate unrealistic 8% annual returns. When they don’t, taxpayers must make up the shortfall every year.
This should be lowered.
At the same time, retirement ages should be raised. Our firefighters and police officers get full pensions at age 55 and 10 years of service.
But like everything else in this pension web, there are complications to raising retirement ages — unions that won’t agree and a town administration that says as soon as the town reduces its benefits, it lessens the pool of job candidates it can hire. The best go to other cities.
In a matter of just a few years, taxpayers’ pension liabilities grew from about $15 million to $23 million. And even though this amount will be amortized through taxpayer contributions over the next 20 years, the town’s pension plans need some creative options. We had two, bright Longboat taxpayers delve into the budget. A blue-ribbon panel of volunteer benefit experts could be as helpful with this sticky pension condundrum.
SIDEWALK TO NOWHERE
What happens as you’re walking along the new sidewalk from the Colony Beach & Tennis Resort and you get to Longboat Club Road and the Islandside golf course?
The sidewalk ends.
If you want to continue walking on a sidewalk, you must cross Gulf of Mexico Drive and walk the length of the golf course to the entrance of the Longboat Key Club and Resort and then cross Gulf of Mexico Drive again to continue on the sidewalk.
Asked if a sidewalk will be installed alongside the golf course, Longboat Key Public Works Director Juan Florensa said:
“There are no plans to install a sidewalk there.”
Florensa said the right-of-way is too narrow.
But, Florensa noted, if the Key Club’s expansion project and golf course renovation are approved, the town will request a sidewalk be part of the deal.
MORE FAKE ‘MAKE WORK’ FROM THE NEW NEW DEAL COMMUNITY ORGANIZERS
Here’s a press release distributed Monday by Florida Chief Financial Officer Alex Sink:
ORLANDO — Department of Homeland Security Secretary Janet Napolitano and Florida CFO Alex Sink today helped launch President Barack Obama’s ‘United We Serve’ initiative in Florida during a visit to the Orlando Emergency Operations Center.
Secretary Napolitano and CFO Sink assisted the Orlando Citizen Corps Council and volunteers assembling Community Emergency Response Team Kits.
They also spoke about the need for Floridians to get themselves prepared in the case of a hurricane and encouraged them to reach out a helping hand to their friends and neighbors.
“Volunteerism strengthens a community’s capacity to meet challenges,” said DHS Secretary Janet Napolitano. “President Obama’s call for service — today and everyday — plays a critical role in our efforts to prepare and protect the nation.”
“Floridians are facing many challenges right now — none of which can be overcome without working together as a community, neighbor helping neighbor,” said Sink. “Today’s service initiative, assembling Community Emergency Response Team Kits, is just one of the ways that Floridians can work together to prepare and protect our state.”
United We Serve is a summer service initiative that begins June 22 and runs through the National Day of Service and Remembrance on Sept. 11. The initiative will be led by the Corporation for National and Community Service, the federal agency dedicated to fostering service in communities across the country.
For a minute, this sounded like a scene out of Ayn Rand’s “Atlas Shrugged” — one of her boondoggle government agencies that does absolutely nothing productive and only meddles like a busybody. For that matter, it also sounds like one of the “make-work” government organizations that Franklin Roosevelt created during the Great Depression.
Come … on … “The Corporation for National and Community Service … dedicated to fostering service in communities”?
Talk about the sickening epitome of community organizers — of which, by the way, there are far too many running around in elected offices these days.
There is no justification whatsoever for the federal government to be spending money to preach or “foster” service in our communities. Since when does the government need to tell the people in the most generous nation in the world to help their friends and others in need?
God and Moses took care of that job a long time ago. We don’t need politicians Janet Napolitano and Alex Sink doing it.
Leave us alone!