Pension board, town clash over decision

Dissension between the firefighters and the town of Longboat Key continues to grow. Call it the Great Divide?

At a special Firefighters Pension Board meeting Monday, Dec. 13, Town Manager Bruce St. Denis became upset when he learned that part of a pension investigation will involve suspicion that the town has held improper meetings with pension board actuary firm Foster & Foster over the years.

The accusation is just one of the things that the pension board hired Benchmark Financial Services to investigate for $50,000 during a thorough review of the entire pension since its inception in 1999.

“I’m hearing things today for the first time that are very concerning, like inappropriate meetings with town staff and actuaries,” St. Denis said. “I’m concerned this is potentially one of the most destructive studies the town will have gone through.”

St. Denis warned the board that the $50,000 study is inappropriate, because it investigates all aspects of the pension without a way to resolve many accusations.

“If you can’t subpoena everyone who has been on this board in the past and you put out a study that displays bad things without finding out the answers from everyone involved, that’s a problem,” St. Denis said. “This is very close to a criminal investigation. Accusations are being made that can’t be backed up.”
Pension board members and Key residents Gerald Feder and Shannon Gault also have hesitations about the study.

“I feel this review is completely subjective,” said Gault, who questioned whether the study will take authority away from the board itself. “I’m afraid we will be at risk and hamstrung in the future because someone did a report that’s so broad and completely subjective.”

Feder also has concerns.

“I don’t know the quality of the work Benchmark does,” Feder said.

But, in the end, the concerns didn’t matter because the pension board majority is made up of firefighters Keith Tanner and Brandon Desch and retired firefighter Michael Murphy.

“These discussions have been going on for months,” Tanner said. “We are here to get the contract approved and get the work done.”

The approved Benchmark investigation passed by a 3-2 vote. Gault and Feder voted against the contract.

And a separate contract was approved by a 4-1 vote to hire actuary firm Segal Co. to research the actuarial decisions since the plan’s inception. Only Gault voted against the $15,000 contract.

The Town Commission has previously expressed an issue with the pension board’s decision to hire Benchmark because taxpayers would fund the money used to pay for the study.

The pension board wants to analyze all the decisions made by the board, its attorneys and its actuaries.
That investigation will also now include a review of town staff and potential improper meetings with Foster & Foster, which is the pension board’s actuary — not the town’s actuary.

Pension Board Chairman Tanner says the study needs to be performed because suspicions about the underfunded pension plan have continued to grow and its members want closure on what caused the issues. Tanner has said the town is using the pension’s unfunded liability as a contract negotiation tactic.

Tanner believes the majority of the issues reside with pension actuary firm Foster & Foster and a decision in 2001 to spread out losses from 15 years to 30 years.

“The only way to move forward and find out if things were done correctly is to move forward with the investigation,” Tanner said.

Pension board attorney Robert Sugarman, who has been unable to assuage concerns by both board members and plan members that the pension is sound, thinks the studies need to be done to alleviate concerns.

The investigation is not expected to be complete until summer or fall 2011.

Contact Kurt Schultheis at [email protected].