Firefighter alleges collusion in handling of pension plan

Firefighter/paramedic Matt Taylor believes he has evidence of collusion in the handling of the town’s three pension plans and presented his evidence to fellow firefighter-pension board members at a Wednesday, Feb. 22 meeting. Other board members weren’t convinced that a crime occurred, but they voted 4-0 to put out a request for proposals for the board’s actuary and attorney firms.

Taylor outlined his allegations in a letter to the board’s attorney, Pedro Herrera. He wrote:

“I think that there is enough evidence to support Foster & Foster, the former town manager and past commissioners colluded to underfund the towns three pension plans with the intent of closing them out by floating a pension bond. The commission was well aware of pension-funding requirements and intentionally lowered millage rates to create budget shortfalls with the intent to harm the plans … ”

Taylor told pension board members Wednesday that they had been lied to by their actuary, Foster & Foster, which he said gave different information to the Longboat Key Town Commission about the investment-return assumption that allowed the commission to reduce the town’s contribution to the plans, thus, increasing the unfunded liability. Taylor’s presentation included more than 75 pages of supporting documentation, along with audio from commission meetings that dated back to March 2008..

Shannon Gault, who holds one of two resident seats on the board, argued that the math used by the actuary yielded assumptions in line with historic rates aside from the past 10 years.

“If we go after Foster & Foster, you would have an entire profession against you,” Gault said.

Board Chairman Keith Tanner, who is also a firefighter, expressed skepticism of Foster & Foster and the advice the board has received. But he said that the major cause of the pensions’ problem was underfunding.

“The town has not put in proper money,” Tanner said. “That’s just the facts.”

Herrera said that the board would need to “connect a lot of dots” before it could think about a possible lawsuit. But he said that there was another issue.

“If you don’t trust your professionals, then you should get rid of them,” he said, referring to both actuaries and attorneys.

The board then voted to put out an RFP for both actuarial and attorney firms. The board also accepted an offer from Finance Director Tom Kelley to use the town’s resources for help in drafting the RFPs. The board will meet again in late March or early April to evaluate the RFPs.

Kelley said that he hadn’t seen what would amount to discrepancies but said that the town was trying to take a “big picture” approach to Taylor’s allegations.

“The basis for his concerns is fairly valid,” Kelley said. “We know we’ve got pension issues to deal with. We’re not so focused on the past as we are working with the commission to solve pension problems moving forward.”