- February 6, 2013
Remember these names when you read future news stories about how the town of Longboat Key’s unfunded firefighter pension liabilities continue to rise:
They voted to ratify the latest contract with the International Firefighters Association Local 2546. And in that contract, these four commissioners pledged Longboat Key taxpayers to paying into a defined-benefit plan with no caps on the percentage of the firefighters’ pay that must be contributed to the Florida Retirement System. Those percentages and costs will be left in the hands of the Legislature, not the town, not you, the taxpayer.
This is in complete contrast to the previous contract, which capped the taxpayers’ obligation at no more than 13%. And just to give you a sense of how that changes taxpayers’ obligations: The Florida Retirement System now requires 25% of firefighters’ pay to be contributed to the fund. Before this latest contract, the town was obligated for 11.02% of that. Under the new contract, taxpayers will cover the entire 22.02%. (Firefighters are required to pay the first 3%.)
Who knows what that percentage will rise to during the next year or next recession.
In their arguments in favor of the proposed contract, commissioners articulated all of the same old, same old — how the town’s firefighters and paramedics do such a great job (agree); how people move to Longboat Key because it’s such a safe place, thanks to our first responders (it’s a reason, not the primary reason); how we need to stay competitive to hire the best. You’ve read and heard it all before.
Unfortunately, those are the same kind of arguments Congress and our presidents have used to run up $20 trillion in federal debt. In Longboat’s case, taxpayers are obligated to cover $25 million in accumulated unfunded pension liabilities, thanks to previous Town Commissions that let the feel-good stories guide their votes rather than business and economic sense.
From a taxpayers’ perspective, the town had a good contract — the one that expired. Commissioners should have let it go to impasse and kept it in place, because here is what ultimately needs to occur, at the least: The town should require firefighters to convert to the same defined contribution plans (401(k) plans) that general employees and the police union have.
Mark this point: This contract won’t be the end of the Town Commission’s pain with firefighter pension costs. As long as commissioners continue to believe they have no choice but to buy the services of one supplier — the International Firefighters Association — the costs will continue to rise.
Last year, taxpayers contributed $1.6 million on behalf of firefighter pensions. Meanwhile, the unfunded firefighters’ pension liabilities from 2014 to 2015 increased 10.8% — from $12.94 million to $14.35 million.
Remember those names.