Because of all the controversy surrounding the current pension and contract negotiations between the City of North Miami Beach and the Police Department’s union, Local 6005 of the International Union of Police Associations, I invited Mayor George Vallejo to submit a guest column to VotersOpinion.com. I offered to publish it unedited, in its entirety, for the purpose of explaining to the residents and employees of North Miami Beach his opinion and reasoning for the proposed pension reforms. If you have any questions or comments for the Mayor, please feel free to post them here or write to him directly at George.Vallejo@citynmb.com.
Stephanie Kienzle
“Spreading the Wealth”
Last week, the North Miami Beach City Council and I voted unanimously to impose contract and pension reforms for our City’s unionized Police force. These changes will curtail the ever-increasing pension expense that has grown from $500,000 per year a decade ago to $8.3 million per year, on average, every year, for the next 30 years. These unsustainable payouts drain our Police budget and leave insufficient funding to adequately meet the policing needs of our City. Shared sacrifice is necessary not only to ensure the pension systems remain viable, but also so the City has the resources to provide other essential services to its residents. This Pension Reform, long overdue, will save nearly $3 million annually, an amount that can effectively put 30 more Police Officers on our streets— a 35% increase in our force and a top priority among NMB residents.
The Union disagrees with the Pension Reform and has threatened to file a lawsuit to fight these reforms in judicial court, as well as in the court of public opinion, deeming these reforms unfair to its members. Ironically, nothing could be further from the truth. What’s unfair, and irresponsible, is to keep the status quo and continue promising exorbitant pension benefits to these very same and future NMB Officers, knowing that those benefits realistically cannot be paid. Without reform, the numbers clearly show the City would have been forced to continually cut services or eventually go bankrupt like other US cities. This is not about politics, it’s just math.
This Council has the utmost respect for all of the City’s dedicated employees, including our Police Officers. The decision for Pension Reform was well thought out and based on undisputed facts. The fact is our 88 Police Officers earn an average of $102,991 annually, retire relatively young after working just 20 years and collect pensions that start at $61,000, paid for mostly by the taxpayers of NMB. Our Officers are very well-compensated employees with exceptional benefits (click here for salaries) who work in a City where the average combined household income is $41,489. After two years of negotiations and mandatory arbitration, the impartial Special Magistrate assigned to listen to both sides agreed with the City’s position, calling it “reasonable and necessary…a more sustainable yet still generous retirement.”
Below is a FACT CHART outlining NMB Police Officers’ Pension benefits, Base salary, and Health Insurance Prior to Pension Reform and After Pension Reform. This will illustrate that the changes are reasonable and continue to be generous for our Officers.
NMB Police Officer PENSION Benefits, Salary, Health Insurance
Prior to Pension Reform and After Pension Reform:
It is important to remember that the original purpose of the Police Pension was to provide a secure retirement for our Officers after they had given the City a career of service, which is noble and justified. However, over the years the pension system has been exploited to the point where we now have retirees in their 40s collecting million dollar-value pensions at taxpayer expense. This outcome was never the intent and works much to the City’s detriment.
The numbers involved are staggering and clearly show why reform was necessary: Combined, the pension tab for all of the city’s employees added up to $11 million for 2013, which is more than ALL of the property taxes collected citywide. By implementing reform now, the average yearly taxpayer contribution for the Police Pension alone will decrease from $8.3 million to $5.4 million—a projected savings of nearly $3 million per year, each year, for the next 30 years. When you add the savings from the other two City pension plans, the combined savings is well over $4 million per year, each and every year, for the next 30 years.
From the outset, the City sought to achieve three major goals with Pension Reform:
- Create a sustainable plan that would end the financial hemorrhaging and secure the pension into the future. Savings had to be immediate, ongoing and verifiable.
- Create a reasonable plan that would enable us to recruit, develop and retain talented Officers by providing them a secure retirement after they had given us a career of service.
- Make the reforms as fair as possible by implementing the formula changes going forward, thus preserving benefits already earned for Officers closer to retirement versus those just starting their careers.
We believe, and as the attached Report & Recommendations from the impartial Special Magistrate shows, these new contract and pension reforms achieve all three goals and are the best solutions available today.
Regarding the “Vote provision” and potential lawsuits:
Now that City Council has voted to impose these reforms, it is expected that either the Police Union or the Police Pension Board will attempt to block the reforms by filing a lawsuit, possibly claiming that it is illegal for the City Council to change the Police pension plan without first obtaining approval from 60% of the participants in the plan, as stated in the current pension ordinance. Previously they have taken the position that eliminating this vote amounts to a violation of the participating Officer’s “vested rights”. They are wrong.
The City’s legal position is supported by a recent Florida Supreme Court ruling that dealt precisely with whether changes and reforms made to pensions going forward affect “vested rights.” They, in fact, do not, and the City is well within its rights to eliminate this vote provision.
Public sector pensions have been a topic of controversy and debate for several years now. The City of North Miami Beach faces the same challenges as many other cities and counties nationwide: An ever-growing pension burden that threatened to consume the budget and leave nothing to show for its tax dollars but overly-compensated retirees. The voters and taxpayers deemed this situation unjustifiable and sent a clear mandate to the City Council to fix the problem by passing fair, reasonable and sustainable pension reform.
The reforms we have enacted strike a fair balance between providing a secure retirement for our current and future Officers while ensuring funds remain available to provide the necessary and essential services our City needs to grow and prosper. We are on our way. The City of North Miami Beach, its residents and its future generations deserve as much.
Mayor George Vallejo
Mayor Vallejo and the council should be applauded for their efforts. While no one likes to have their pensions reduced, these proposed changes are very reasonable and a benefit that’s commensurate with the work that these officers perform. It’s by no means drastic or putting them in jeopardy of living like paupers.
It’s time for NMB’s officers to buck up and accept that the old pensions have gone the way of the dodo. Those days are over and we need to excercise fiscal responsibility.
Facing Facts,
Please explain to me and to Stephanie’s readers how it is fair or legal for the city to sell us retirement benefits, then take away those same benefits while at the same time keeping the money we paid for them?
As I said, we paid a lot of money for a lot of years in exchange for some of these benefits. The city has our money, but now they don’t want to give us the product that we purchased with our money. Why do you think that is fair or legal? Explain to us the legal principle you think justifies your position?
I personally have paid more than $100,000 for a 20 year retirement and a COLA. The city has my money and wants to keep my $100,000 but now won’t give me what I bought with that $100,000. If they no longer want to go through with the agreement, then give me back my $100,000 and make me whole…at least .
Otherwise it is an act of thievery, plain and simple!!!
Mayor,
This police officer wants his money back. Please give it back to him and take away the city’s obligation to fund his lifetime pension. What a bargain for the taxpayers. Do it quick before he changes his mind!!
Bob White, Tell the viewers how you came up with that brilliant solution.
NMB Cop advised he wants his 100k back. That 100k comes from the extra 2.5 percent he has been paying over his career to get the 20 year retirement. Before that the officers paid nearly 9 percent. The city also agreed to take an officers 185 monies (I’m sure you don’t know what 185 monies are, google it!!) for a COLA. So yeah, if the city doesn’t want to give the agreed COLA and due away with the 185 monies, they owe each officer more than 100k. Lets go back to the 9% contribution under the old retirement terms and call it a day. If not thats called breach of contract and in this state it’s enforceable. No go back to sleep Bob, this conversation is above your pay grade.
http://www.flsenate.gov/Laws/Statutes/2012/Chapter185
after googling chapter 185, your search term “185 monies” was useless.
i wonder what kind of breach of contract occurs because a municipality goes bankrupt due to pension liabilities.
time will tell,
http://www.governing.com/gov-data/municipal-cities-counties-bankruptcies-and-defaults.html
By changing the pension for employees for employees who aren’t vested yet. That’s how you make it fair. Florida Statutes protect pensions for vested employees. If you’re not vested you’re out of luck. Calculate the remainder of the nonvested employees years with the new multiplier. New hires get a new pension system. It’s called “bifurcation”. It’s not rocket science.
By changing the pension for employees for employees who aren’t vested yet. That’s how you make it fair. Florida Statutes protect pensions for vested employees. If you’re not vested you’re out of luck. Calculate the remainder of the nonvested employees years with the new multiplier. New hires get a new pension system. It’s called “bifurcation”. It’s not rocket science.
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you’re a fool if you think your $100,000 bought you a $1,000,000 retirement.
the very idea that unions accept and cities offer GUARANTEED return on investment is idiocy, and physically fraudulent from the get-go.
maybe they should move you all to 401k so you can see what retirement is like when you have a regular job.
we need to stop congratulating people for doing their job and fulfilling their responsibilities. Are we so accustomed to being shafted that we thank people for simply doing what they promise to do?
Mayor,
With all due respect, you make the same mistake as so many others on your side of this debate. That is, you use the exception to prove the rule. I have been a police officer for well more than 20 years and I have never ever earned $100,000 in a year. Not even close. In fact, last year my taxable income was slightly more than $60,000 for the year. Likewise, my pension is not $61,000 per year in fact it is barely $50,000 per year. And I paid 11.1% of my salary each year in return for that benefit, so it is not as if it was a gift or free to me.
I will readily admit that there are a small handful of police officers who, due to their job assignment, have qualified for much higher benefits then I. But don’t make the mistake of lumping us altogether, that is misleading and dishonest. Address the exception, don’t punish everybody whole cloth the way you are doing.
That said, there are few even within the ranks of the police officers who disagree with you when you say pension reform is necessary. But pension reform should be applied to future hires, not officers who have worked in the city for years and paid dearly for the benefits they have. For instance, as you well know, we gave up our 185 monies years ago in exchange for the COLA that you now want to take away. We bought and paid for that benefit, so who are you to come along and unilaterally decide you’re going to take it away from us? Likewise, we agreed with the city to pay an extra 2 1/2% a year to lower our retirement eligibility from 23 years to 20. For more than 10 years I have paid an extra 2 1/2% of my salary per year and now you come along, unilaterally, and take that away from me? Citizens who are ill informed of the pension might be inclined to view our benefits as free or gifted to us by the city, but you ought to know better! And that is not intended as an insult to any citizen, for our pension is extremely complicated and I don’t fault them for not understanding it well. You, on the other hand, I do hold entirely accountable. You, on the other hand, know all too well that we officers have paid a high price for the benefits that we have… more than most every other police agency in the state of Florida. For instance, officers with the Miami-Dade Police Department for years paid nothing for their pension and only recently did they begin paying 3% for their pension. Now I ask the citizens to compare their copayment to ours; 3% versus our 11.1%.
We police officers agreed 20 years ago to give the city are 185 monies and in exchange the city agreed to give us a cost-of-living allowance. For 20 years now you have collected our money, so we expect you to honor the agreement that was made, or give us back the money you took from us! For more than 10 years I paid an extra 2 1/2% for a 20 year retirement; you now want to make that a 25 year retirement, so give me back the 2 1/2% you took from me over the last decade! Otherwise, you are just a thief!
If the pension in your estimation is unaffordable, then get rid of it altogether. Or change the benefits for future hires, or simply switch on new hires into a 401(k) with a defined contribution… You have a lot of other alternatives, other than stealing the money you’ve taken from us over the years!!
185 money is money that goes directly to the officers from a third party, in this case auto insurance agencies, if the officers passed this money on to the pension so they could have pension improvements then they have a point. The city can’t justify taking their cash in exchange for a benefit then turning around and yanking it all away. What the officers did is actually “pay” for it with their money. I can see the city having a problem with that if they were to get sued. Change the pension for officers who aren’t vested and honor what was negotiated for those who are vested.
It’s pretty simple to understand. Years back this envious Mayor would stand up in front of previous councils making irresponsible statements about feeling like he should wear a bullet proof vest when around the North Miami Beach Officers. His ill feelings towards us haven’t changed. He’s the only mayor in Miami-Dade to lay off police officers. He layed off 17 officers instead of taking the concessions from the union. He gives general employees a 2.5% multiplier on their pension and police officers a 2% multiplier with his reform. He gives general employees a DROP and refuses to give a DROP to the police officers with his reform. Something is seriously wrong with this picture. They took our 185 monies for a COLA. He doesn’t want to give me the COLA, then give me my 185 monies back. I paid an extra 21/2 percent to retire at 20 years. You don’t want me to retire at 20 years, give me back my 21/2 percent back. Thats why he’s gonna lose this court battle. You can’t steal peoples money and decide to change the contract late in the game. Imagine you have one payment left before paying your house off and the bank comes to you and says the market has changed and you have an additional 5 years before paying your house off. If financial contracts meant nothing and weren’t honored in this country, could you imagine the world we’d be living in. Stephanie, I know your husband is a retired firefighter and has a pension. Could you imagine how you and him would feel if he was about to retire and they said, no you gotta work another 5, 10, 15 years after a decade or more of paying for a benefit that some new mayor and council decided to take away. Could you imagine how much money more you and your family would have had if the county, or this case the city, not taken that extra money out of your paycheck every week. In my case I’ve paid for a 20 year retirement and i’ve been an officer here for 18 years. I became a police officer at a very young age so I would be leaving at a young age. So now instead of having 2 years left to retire, under this asshole Mayors pension reform, I now have 13. What the f$&k is fair about that.
Great Post. You stated to everyone reading this blog why pension reform was needed. You went to work for NMBPD right after getting your GED when you turned 18. You worked all the overtime you could get your hands on to inflate your pension amount, that at the time, was based upon your highest 2 years of pay. Reading comic books under a tree while on duty, you dreamed about the day you would turn 38 and be able to retire with a $65,000 a year lifetime pension and go back to reading comics all day without anyone catching you on camera. Boy did the Mayor and Council ever $@#-up that career path huh?
Wow Whining Willy, you respond to the last poster as if he/she did something wrong. I’ll make sure to tell any and all future recruits if your between the ages of 20-25, no need to apply. Actually I don’t need to say anything to the new recruits, they already know this city is a dump!!
Mayor Vallejo,
I well understand the fiscal need for these reforms. What I don’t understand is why you felt no need to explain the same reforms imposed upon the rest of the city’s employees. Don’t get me wrong, I have no objection to the changes to our plan. My objection is to the fact that you have nothing to say about it. I’ve said it more than once, and I’ll say it again: as a resident, I produce garbage every day, and use water every day. In nine years living in the city, I’ve called the police only once, and they more or less laughed at me. How often do you produce garbage and use water? How often do you call the police? Please, just be honest. It’s politically expedient to respond the the cops. The electorate loves them, and takes the rest of us for granted.
Its obvious from the points of view of the three police officers who have contributed to this column that their comments made the case of the Mayor and Council.
The chart supplied as part of this article says states it all in black and white. It is what it is.
While the officers try and make the case about their 2 1/2% contributions that they “paid” they don’t explain how their 11% (plus 2 1/2%) contributions blossom into annual $60,000+ pensions for life after working 20 or 25 years. One officer even admits he is bitter after being asked to work another five years that would push his retirement age up to his early 40’s instead of his late 30’s he was planning on retiring at. Don’t you really feel his pain? Especially if the rest of us have to work twice as long as he had planned to.
Instead of being angry with the current Mayor and Council, the police officers should take their anger out on the former mayor and councilmembers they supported election after election that gave away the farm to them and now the current Council has no choice built to take away. The blame for the layoff of the best 17npolice officers in the city sits squarely on the back of the IUPA members who voted to throw them under the bus. Instead of making voluntary concessions in their million-dollar benefits, they decided their brotherly love for the more able police officers wasn’t that brotherly.
As far a the rhetoric coming from the IUPA members that it will be impossible to attract new police officers with the revised benefits package, it will be a fact that as soon as the “wanted ads” hits the internet, the city’s web site will probably crash from all the respondents applying for the jobs.
Thank-you Mayor and Council for looking out for the taxpayers of the city that have been grossly overlooked by the previous decade-long former councilmembers who made backroom deals with IUPA to get re-elected.
I’m not sure how the mayor and and councilwoman Speigal are allowed to sit on the police pension board and it not be a conflict Of interest. I mean as a board trustee they are to wear the hat that’s to look out for the interests of the pension and it’s members from what I’m led to believe. Wearing their council persons hat they are to look out for the interests of the city and taxpayers etc. My question is how they can vote as council to impose changes that violate the ordinance by which the pension is guided, yet show up the next day or week with their pension board trustee hats on.
Gee, I wonder how they are going to vote when the issue of having to file legal action against the city comes up at the pension board meeting?
The reason we have a voting ordinance in both ours and the general employee pensions is because many years ago the city was caught in a scandal that involved the 185 / 195 monies and it was enacted as a measure of protection. Neither employees nor the city could enact changes to the pension without voting to ratify it.
This will unfortunately be a long drawn out legal battle that is being pitted as us vs them. It’s not true. If the reforms were enacted to start with new hires, they’d already have a few officers and many more joining them soon in the new pension and those who have been here and paid for years could be afforded what they were promised and paid for.
I’m not sure how legal it is to have three police officers out of a total of five members sit on the City’s Police Pension Board. Talk about biased, stack-the-deck voting, does anyone think the taxpayers of the city could ever get a fair deal on how their hard-earned taxes are paid out when the conflict-of-interest police officers vote on any police pension funding? Does anyone really ever expect police offers sitting on a pension board would ever vote in the best interests of the taxpayers who are funding the bennies???? What is the city (taxpayers) paying for the former police chief to stay in a hotel and pay her travel and meal expenses when she lives in North Florida and only comes down to vote on any pension reform maters that affect other police officers and her own pension???
Thank-You former Mayor and Councilmembers for stacking that deck against the residents again too.
Thank-You Mayor and Council for spending a vast amount of your personal time dealing with this issue. After years of delays, bad city management, and bad advice from all the players, you did what needed to be done and the residents are all the better for it.
Mayor
All you doing is taking your tea party opinions and placing a wedge between the city and police union. You laid of 17 officers but expect to hire 30. Your off to a great start. Your losing officers faster then you replace them. Soon you won’t have much of a department left. You want the bottom of the barrel your going to get them. GET READY TO BE OPA LOCKA EAST ITS COMING. All the officers you have are well qualified and some of which fought i wartime, which is definitely more commendable then anything you or council have done during your lifetime. We leave our homes everyday not knowing if we will return but you don’t care because that’s what you want at least you say that with your reform. No pension till 62, life expectancy of police officers is 57 with all the stresses we endure, so what your saying you want us to die so we won’t collect?
Then again who cares what we say you and council have your agenda and are just going to do what you want anyway. By the way we’ll still do our job with honor and dignity, because we are those kind of individuals.
Both sides of this argument are guilty of chronic hyperbole. Instead of talking about “hard-earned taxes”, why don’t we talk about how those hard-earned taxes are distributed? Has anyone bothered to look at their tax bill? Does anyone know that only 23 cents of every dollar come to the City? Divide your total tax bill by 23 and it may give you a new perspective on how this city (barely) runs, and perhaps then you can look at, and treat employees with a little more kindness. And on the other side, our geographic location makes it simply impossible for us to become “Opa Locka East”, our land is way too valuable, 100% east of I-95. While crime rate may fluctuate, it will not be what takes us down. We may become mortally stale, but our location will be our salvation. So please stop the end-of-the-world predictions and start the rebirth-of-the-city compromises.
Exactly!!!! There’s many investors right now spending time in federal prison that guaranteed their investors a great rate of return that in the end took their money. Well this mayor is taking away my original contract upon employment of 23 year retirement with my contribution of 8.6%. He’s taking away my increased 2.5% (11.1%) that i’ve been paying for the past 10 years. He’s taking away my 185 monies (3rd party money given to officers for handeling accidents) that I agreed to give to the city for a guaranteed COLA. Thats’s a lot of money I invested in this city who’s now stealing it from me and saying were gonna take away your money officer and there’s nothing you can do about it. Thats why our lawsuit is more likley than not going to win in court. Gov. Scott won his pension lawsuit against its law enforcement division because the employee at that time contributed ZERO to their pension, NADA, ZILCH. City of Hollywood won their lawsuit against the officers but their reform was nothing near to what this Mayor is doing so the judge presiding saw it as reasonable. Put it this way, Hollywood’s NEW pension system is better than what our current pension system is. In the United States, when you pay for something and you have contract stating such, that’s a hard one suit to win. Good luck with that!
the police officers commenting on this threat and others related to pension obviously don’t understand the phrase “bought and paid for”.
When you go to Publix and buy a pack of beer, then leave the Publix, that beer is “bought and paid for”
when you sign a contract of employment where the employer promises you money for nothing (which is what a public pension is: we aren’t making any profit off you an an employee, but we are going to promise to bring profit to your life until you die) that is not “bought and paid for”
it’s neither bought nor paid for
it’s definitely not paid for
and you guys certainly didn’t buy it. you put it on lay-away and you only paid a fraction of what it really costs.
the tax payers, making less money than you, are expected to make up the difference between the fraction you pay and the amount you were promised.
as usual no mention of what’s best for the citizens of NMB, only the wallets of public servants who were under the impression the public is here to service them.
NMB should make it a point to hire some humble people tot heir police department. I hope they’re not using the same national standards which give hiring preference to selfish pricks with anger management problems.