- June 27, 2012
One word in a strong city manager charter amendment will affect whether retired city firefighters lose $500,000 a year that their pension plan depends upon to pay out benefits.
The word is “administration,” and it’s in the strong city manager charter amendment that city commissioners voted to place on the November ballot.
A law firm hired by the firefighters pension board to render an opinion on whether or not a proposed charter amendment could affect future pension funds for retired city firefighters believes “the pension fund will be jeopardized should the voters approve the proposed charter change in November.”
The proposed charter amendment would transfer more responsibilities from City Auditor and Clerk Pamela Nadalini’s office to City Manager Tom Barwin’s office, if approved.
One of those responsibilities that would be reassigned if the charter amendment is approved is the “administration” of retiree pensions.
The charter amendment states the city manager shall “serve as the pension administrator of General Employees’ Pension Plan and any other city retirement plan.”
Earlier this month, city attorney Robert Fournier alerted commissioners that the referendum language could mean the city would have to forfeit state subsidy money from the state’s insurance premium tax fund it receives annually to help fund the pension plan.
Florida statutes state that a pension board of trustees shall be “solely responsible for the administration of the pension fund.”
Fournier explained that approximately 150 city firefighters are still collecting pension benefits, even though the fire department ceased operations years ago. And they risk losing millions of dollars in pension benefits if the amendment is approved and the state interprets the language to mean the board of trustees is no longer solely in charge of the plan.
If the charter amendment passes, it’s up to the state’s Division of Retirement to render a decision on whether or not the word “administration” in the charter amendment language means the city should be stripped of those pension contributions. Some argue the language and transfer of administration never intended for the city to lose those state benefits.
A Coral Gables-based law firm has rendered a decision for the firefighters pension board that was forwarded to commissioners Wednesday.
“Based upon the direct conflict between the statutory authority granted to the board of trustees and that given to the city manager by the proposed ordinance, it is our opinion that continued receipt of state premium tax monies for the pension fund will be jeopardized should the voters approve the proposed charter change in November,” wrote attorney Pedro Herrera, in an opinion dated Aug. 6.
The charter amendment language, which was placed on the ballot after Citizens for a Better Sarasota collected more than 3,000 signatures, cannot be changed without recollecting the signatures and coming before commissioners again to place the measure on the ballot. Doing so would mean the amendment would not make it on the November ballot. Citizens for a Better Sarasota, meanwhile, is currently in violation of state elections laws for failing to file financial statements. The political action group is also facing a $500 fine per day for failing to file an updated statement of organization with Nadalini’s office. Neither violation, however, affects the charter amendment the group has already successfully placed on the ballot.
While the lost pension money doesn’t affect the city’s budget, it creates an economic impact for the retirees left in that plan.
Jim McCord, chairman of the Sarasota’s retired city firefighters association, told commissioners earlier this month he’s upset the charter amendment language could affect the lives of the remaining retirees.
“We earned everything that we’ve gotten because, just like policemen, there were many times so many of us could have been killed,” McCord said. “We just went in and ate the smoke and coughed and carried on.”
The commission already forfeited the rights to the same tax dollars for the Sarasota Police Department earlier this year when it made pension changes that will save the city at least $1 million a year moving forward.