As many of you are probably aware by now, pension reform is a hot topic. Here in North Miami Beach, it’s been a sticking point between the City Council and the two unions representing the city’s employees – AFSCME (American Federation of State, County and Federal Employees) and IUPA (International Union of Police Associations). While the members of AFSCME have already negotiated their contract with the city, the police union is stuck in a heated battle with the city, which I understand is most likely going to end up in court.
The negotiations ended in an impasse and a Special Magistrate, Stanley H. Sergent, Esq., was called in to make recommendations for an agreement. He was asked to rule on six issues: group insurance, leave, retirement for police officers, retirement for police communication officers, wage and salary provisions, and terms of a new agreement. Accordingly, the Special Magistrate recommended that all but two of the city’s proposals be adopted. The union asked for salary increases in years 2 and 3 of a new contract [CORRECTION: I was advised that the union did not ask for raises, but a “reopener” for years 2 and 3, which means they wanted to reserve the right to once again bargain with the city for those years], and to bring the salary levels of nine police officers, whose pay has been frozen since 2009, to current levels. On all other issues, he sided with the city.
On September 17, 2013, the City Council held a special meeting and voted 7-0 to adopt the Special Magistrate’s recommendations. Needless to say, the members of the police union are not happy with this decision. I’ve been researching several of the issues that are sticking points with the members, and I’ve discovered a few items that I believe need to be addressed.
Just to give you an idea about how contentious this issue is, Rolling Stone columnist Matt Taibbe wrote an excellent article on September 26, 2013 called Looting the Pension Funds, which describes in detail how the crash on Wall Street was directly responsible for the huge losses government pension plans sustained. The article credits the State of Rhode Island with being on the forefront of pension reform by “ramming through an ingenious new law slashing benefits of state employees with a speed and ferocity seldom before seen by any local government.” He went on to state, “In state after state, politicians are following the Rhode Island playbook, using scare tactics and lavishly funded PR campaigns to cast teachers, firefighters and cops – not bankers – as the budget-devouring boogeymen responsible for the mounting fiscal problems of America’s states and cities.” His article went on to criticize the Rhode Island State Treasurer, Gina Raimondo, for doing so, but also questioned her ties to Wall Street and her motivations in general.
Raimondo responded to Taibbe’s accusations with the following statement:
“This is clearly a political propaganda piece driven by the critics of pension reform, including those who are paid by local labor leaders to discredit the state’s reforms and its investment policies. The author does not appear to have a clear understanding of the 2011 pension process and its goals, and conveniently omits many important facts.”
Taibbe rebutted her statement with:
“The pension reform debate is the ultimate political and ideological argument…The advocates of pension reform, not just in Rhode Island but across the country, believe that ordinary public workers — teachers, police, firemen — are inherently overcompensated, politically over-empowered by unions, and receive unsustainably high incomes and benefits…All of this falls in line with certain trends in political thought nationwide.”
Regardless of ideology, and regardless of who was at fault in the mess, everyone seems to be in complete agreement that pension reform is a necessity. No one is arguing that point. However, at what point do we ignore legitimate claims by public employees under the guise of “reform?” It has certainly gotten to the point that public employees have become collateral damage in this pension reform war and who are now deemed to be expendable at best and useless at the very worst.
The stereotype of the “lazy” government worker has become just one excuse for the trending attacks on the public workforce as a whole. Public union reps have also done their share of the damage by bullying and getting in the face of the very elected officials who have the power to make or break their membership. The truth is that most government employees are truly excellent at their jobs and more than earn their salaries. Unfortunately, they are now at the mercy of anti-government sentiment that seems to be sweeping the nation as a result of the recession and continuing sluggish economy.
As most of you know, I am a fiscal conservative. It was quite easy for me to be swept up in the pension reform issue and be rather harsh in my judgment of government in general. In light of recent developments with the current battle between the city and the unions, however, I decided to do my own research on the pension issues being contested between the City and the police union. What I discovered was quite surprising. It also made me rethink my own myopic view of the public sector.
In the past several months I have read and reviewed tons of material, including the aforementioned Special Magistrate’s recommendations, our city’s Charter, Florida Statutes, case law, as well as a slew of articles. I have interviewed lawyers, pension administrators, pension board members, elected officials, union officials, and police and general employees, both in and outside of North Miami Beach. I wanted to get as clear and concise a picture of the issues before I put them out there for discussion. I will now present my case.
Of all the issues on the table, I am more convinced than ever that the key ingredient that’s being overlooked in the negotiations, as well as the City’s proposal, is contained in Florida Statute 185, also known as “Marvin B. Clayton Police Officers Pension Trust Fund Act.” This Statute established “for all municipal pension plans now or hereinafter provided for under this chapter, including chapter plans and local law plans, minimum benefits and minimum standards for the operation and funding of such plans, hereinafter referred to as municipal police officers’ retirement trust funds.” This Statute and its multiple subsections describe the laws regarding police retirements and in great detail all aspects of municipal police pensions, including rules for pension boards, actuaries, accounting and reporting, and the like.
For the purposes of this column, I am specifically going to discuss the “Municipal Police Officers’ Retirement Trust Fund,” which is described in Florida Statute 185.03. This Trust Fund is also referred to as “185 money.”
The State of Florida set up a “Municipal Police Officers’ Retirement Trust Fund” for the benefit of police officers working for municipalities. Excluded from this fund are police officers working for unincorporated areas or who are eligible for retirement benefits from the Florida Retirement System (FRS).
Florida Statute 185.07 states that this Trust Fund is to be funded “by the net proceeds of the .85-percent excise tax which may be imposed by the respective cities and towns upon certain casualty insurance companies on their gross receipts of premiums from holders of policies, which policies cover property within the corporate limits of such municipalities.” FS 185.07 also lists several other sources which may also fund this account.
The funding discussed in Florida Statute 185.08, also referred to as “185 money,” describes how the .85-percent excise tax is assessed and collected.
Florida Statute 185.11 states that the local municipality’s Pension Board “shall deposit such moneys in the Municipal Police Officers’ Retirement Trust Fund immediately.”
Florida Statute 185.35 specifically discusses what the “185 money” may be used for. This is probably the most important and relevant section of the law. Accordingly, the Pension Board may deposit the funds in one of two ways:
“(a) Place the income from the premium tax in s. 185.08 in such pension plan for the sole and exclusive use of its police officers, or its police officers and firefighters if included, where it shall become an integral part of that pension plan and shall be used to pay extra benefits to the police officers included in that pension plan; or
(b) May place the income from the premium tax in s. 185.08 in a separate supplemental plan to pay extra benefits to the police officers, or police officers and firefighters if included, participating in such separate supplemental plan.”
And finally, the money in this trust, which was funded by the “.85-percent excise tax,” is supposed to be legislated by each individual municipality which chooses to participate in this state plan. Per FS 185.60 , a municipality may terminate its participation by “rescinding the legislative act, or ordinance which assesses and imposes taxes authorized in s. 185.08.”
Now that you know all the technical stuff, you’re probably wondering why this is important. I can sum that up in four words: A deal’s a deal.
I know of at least three cities in Miami-Dade County, Miami, Miami Beach and North Miami, that hold Section 185 funds in a separate trust account, to be invested and held in trust for officers and distributed to them when they retire. These municipalities keep these funds separate and apart from their retirement accounts. Neither the cities nor the officers are required to pay anything into these Section 185 trust accounts, nor are these funds used for anything other than distribution directly to retiring officers.
This is not the case in North Miami Beach, which deposits the Section 185 funds into the police officers’ pension account, and they are used as needed to fund certain pension expenses, in accordance with FS 185.
Here’s where it gets interesting. Before 1989, the City of North Miami Beach held all employee pension funds in one account. In settlement of a lawsuit filed and won by the Police Pension Board, the City passed Ordinance 89-18, which separated the Police and Fire Pension funds from the retirement plan for the general employees. The city created a new plan called the “Retirement Plan for Police Officers and Firefighters of the City of North Miami Beach,” which became effective January 1, 1990. This Retirement Plan was rewritten in 2009 and amended by Ordinance in 2012.
On October 2, 1995, the City Council passed Ordinance No. 95-10 to amend the 1990 Retirement Plan in order to provide for early retirement, cost of living increases, among other items, “in settlement of all outstanding issues,” i.e., the lawsuit referred to above. This Ordinance specifically mentions the utilization of Section 185 funds that were collected from the State and which were “currently available to fund additional pension benefits for active participants of the Police Officers Pension Fund” and those who retired since the passage of Ordinance No. 89-18.
These “additional benefits” included a “cost of living (COLA) benefit for eligible retirees” and furthermore, that the “active participants therein have voted to accept the aforementioned COLA benefit in settlement and resolution of all pending issues regarding use of Section 185 funds.”
Most importantly, by passing this Ordinance No. 90-10, “the City of North Miami Beach hereby commits to the funding of the COLA benefit granted herein…” The city also agreed to continue funding this benefit even if the State discontinues the distribution of Section 185 funds.
Here’s the thing. The North Miami Beach Police Officers voluntarily agreed to give up the right to direct payment of Section 185 funds IN EXCHANGE for a GUARANTEED COLA.
The new proposal [link added 10/06/13] handed down from the North Miami Beach City Council to IUPA specifically does away with this guaranteed COLA and merely states that “an AD HOC cost of living may be applied to benefits…”
In my opinion, this is a direct violation of the guaranteed COLA granted to the police officers by Ordinance No. 90-10 “in settlement and resolution of all pending issues regarding use of Section 185 funds.” This in itself seems actionable to me.
But, wait! There’s more!
This has nothing to do with Section 185 funds, but I believe it’s important nevertheless.
On June 17, 2003, the City of North Miami Beach passed Ordinance No. 2003-4, amending the Retirement Plan yet again, this time “to allow police officers to achieve normal retirement eligibility after completion of 20 years of credited service” or “attainment of age 52″ in exchange for “an additional 2.5% of pay contributed by the police officers.” The Ordinance declares that the participants “voted overwhelmingly to increase their mandatory pension contribution from 8% to 10.5% to fully fund the additional cost to the plan for this benefit enhancement.”
According to the new proposal, the city has changed the requirements to “age 55 with 25 years of service.”
Again, in my opinion, this new proposal is not only in direct violation of Ordinance No. 2003-4, but it also disregards the additional 2.5% of pay the officers have been contributing for the last decade for the ability to retire at age 52 or after 20 years of service.
How is that fair? How is that even legal?
[NOTE: For a complete Legislative History of the North Miami Beach Police & Firefighters Retirement Plan click here.]
I’m no expert on pensions. And I’m certainly no lawyer. But I don’t think anyone needs to be an actuary or an attorney to see that something is amiss here. I fully understand the need for pension reform. I also understand that the Mayor claims he ran on that platform and was elected to do the will of the electorate. I fully supported him in this endeavor.
However, I was also under the impression, as were many others including the police officers, that drastic pension reforms were going to be imposed on new hires. I did not believe for one second that the current police officers would be stripped of benefits they already earned, and especially those they paid for out of their own pockets. That’s just wrong.
Maybe I was naive about pensions in general, and reform in particular, but I’m not anymore. For the past several months I have been totally immersed in educating myself about pensions. Believe me, I’d much rather have been doing something else. Anything else. Trust me.
I support this City Council is just about everything they have accomplished and have attempted to legislate so far, especially with bringing new development into our city. But when I see something that doesn’t sit right with me, I am compelled to investigate it and bring it to the attention of my readers. Otherwise, this blog has no reason to exist. This issue begged to be investigated.
The way I see it, the North Miami Beach police officers are rightfully entitled to a guaranteed COLA as per the terms of Ordinance No. 90-10, and an age 52/20 year retirement as per the terms of Ordinance No. 2003-4. They gave up their rights to the Section 185 funds for the first benefit, and have been paying a 2.5% premium for the second. If the city wants to take away these benefits, the officers should be fairly reimbursed for the loss of them, with interest. The city needs to either pay the officers back for their lost investment or honor the agreements.
This is beyond fairness. It’s simply a matter of the police officers getting what they paid for.
After all, a deal’s a deal.
Stephanie Kienzle
“Spreading the Wealth”
UPDATED 10/05/13 7:56 pm
UPDATED 10/06/13 6:15 pm
Slam dunk
Sorry to burst your bubble Ms. Keinzle but what the City Council did HAS to be legal because they voted on the changes based upon the advice of the impeccable City Attorney, one of the best city attorney’s money can buy. At over $300,000 in annual compensation her advice has been unchallenged in all her years employed by the City of NMB, the Council this year even voting to give her an almost $6000 bonus for good measure.
The police union would be wasting their money if they were ever to challenge her legal opinion and advice to the City Council.
Worst case scenario is that if a court ever does rule against the city in this matter, what’s the worst that can happen? The millions of dollars in question would be simply paid by the city and the city attorney would still continue to receive her bargain $300,000 annual salary. The only downside is that the City Council would have to vote to increase property taxes to pay the money.
No big whoop.
I hate to see it come to a lawsuit, but based on my research it appears that the city erred in taking away benefits that the employees not only contracted for, but paid for out of their own pockets. Unless I’m missing something, which is always possible since I’m no attorney, I just don’t see how the city can justify this action. Then again, I’m a stickler for commitments. When I give my word, it’s as good as being written in stone. I expect the same from others. Silly me, right?
Excuse me Ms. Kienzle but agreements made in previous decades do not get carved in stone for all eternity. Wages have changed, costs of living has changed, insurance costs have increased, as well as a myriad of other costs. Cities, Counties, and even the Federal Government cannot be bound forever to abide by agreements, made in the distant past, forever. Elected officials have been given the authority by the electorate to make necessary changes to any agreements, property taxes, and enact other legislation for the greater good of the public.
As an example, when we all started paying social security taxes when we earned our first paychecks, we were all “promised” a full retirement check when we turned 65 years old. A decade or so ago, Congress voted to raise the retirement age to 66 for those born after 1950 and age 67 for those born after 1954. which includes me. I was promised I could retire at age 65, but now I must work to age 67. Where are the class action lawsuits suing Congress for making those changes? They don’t exist because the Supreme Court has ruled that elected bodies have the right and ability to enact new laws or change existing laws for the good of the public. Congress changed the retirement age because the current retirement age made social security payouts unsustainable. Likewise, the City of NMB pension system also had to be modified, because it too, was unsustainable.
As a litigator myself, I too have felt the pain of changing laws and agreements, however, I do understand the term “for the greater good”.
Gerald seems like Congress created a two tier system and made REASONABLE changes like extending social security one or two years. This council refused a two tier system when offered. Secondly, and most important is the UNREASONABLE changes they are making. If you knew what they have done to this PD you would be ashamed in supporting this tyrany. We are all big girls and boys and offered more then a couple of ideas to reform. But because of their cruelty we will fight this fight to the bitter end. They have tried to break us but only made us stronger. In the end good will conquer evil.
Yeah Gerald I don’t like the way the United States constitution was written back in the 1700’s. I’m going to look into having it completely changed. After all why should we be locked into following laws written way back then.
That was good. 🙂
Probably having no more than a GED education, you apparently are not aware of the Amendments made to the Constitution over the years due to changing circumstances. According to you, women and blacks should not have the right to vote because back in the 1700’s it was written into the Constitution.
You might be a lawyer, Gerry, but you need to take a refresher course in Constitutional law. Anyone with a sixth grade education is well aware of the Constitutional Amendments and that they either updated, repealed or added to the Constitution. The ONLY Amendments that actually changed the law were the 13th, banning slavery, the 15th and 19th, which gave voting rights to blacks and women, respectively, the 22nd, which limited the President to two terms, and the 26th, which lowered the voting age to 18 from 21. The remainder of the Amendments added to the Constitution, while some repealed those same Amendments. An example of such s the 18th, which instituted prohibition, and the 21st, which repealed the 18th. The basic rights afforded Americans by the Constitution have not changed since its inception.
More importantly, but you’re not too well versed in the fine art of sarcasm. Anyone with a humor gene understands that Guest was being sarcastic. You are obviously missing that gene. Too bad there’s no app for that.
Your my star witness. You made my case better than I explained it myself. You confirmed the fact that the Constitution of the US has been amended many times to take into consideration changes that needed to be made. Likewise, the NMB pension has also been amended for the very same principles. Thank-you for setting Guest straight on the issue.
Although you might be my star witness, you apparently are a hostile witness by making a point simply to justify your article and ignoring the facts of the case that all laws, ordinances, codes, and rules that are made by man can also be changed by man to suit the needs of the greater good of those affected.
I have no use for anyone, especially lawyers, who don’t know the proper usage of the word “your.” If you want me to take anything you have to say seriously, go back and check your spelling and grammar. Then you may resubmit your comment.
You lost me at “your my star witness.” Frankly, Gerry, YOU’RE becoming my biggest pain in the ass. Goodbye.
given the ways police in this city and others routinely violate the 1st and 4th amendments rights of citizens, this comment is actually kind of pathetic.
Right, Gerald. Congress always enacts legislation for “the greater good…” And then it exempts itself from the laws it legislates for everyone else. It works out very well for them. Not so much for the rest of us.
Are you comparing the NMB City Council with the Congress of the US? The NMB City Council cannot receive a pension, nor have a DROP account, so that is not a viable comparison. The NMB City Council, that were elected by the residents of NMB, to represent them, voted to do what was necessary to keep from having to raise their taxes and have funds leftover to invest in their city. Please stay on point.
Are you f***ing serious? No wonder you don’t know proper grammar! You can’t even read. I made no such comparison. You are officially a moron. Don’t even bother to reply to me anymore. You will not get a response. I’m done with you. Buh bye.
I find it funny that Gerry and others here try to make themselves look smarter than us by continually referring to our supposed GED level educations. Gerry it’s quite obvious reading your comments that you are the uneducated one. Slavery and women’s rights were not even addressed in the 1700’s. Slavery was accepted in all states back then and women had no rights. So get a grip on reality before you start playing the race card. It really makes you look silly.
I also meant to mention that Darcee Siegel did not represent the city in the negotiations. As I wrote in a previous blog, Robert Norton argued on behalf of the city. Darcee had nothing to do with this.
You’re correct Stephanie, the city attorney never has anything to do with any real litigation, she simply hires outside attorneys to do the heavy lifting, all the while telling the Mayor and Council how much money she is saving the city. They apparently don’t know any better and when she asks for a bonus due to the money she claims she saves, they give it to her, while she laughs all the way to the bank.
I heard many more officers are leaving……I wonder if that is true. All the king’s horses and all the king’s men couldn’t put Humpty back together again….
Maybe Council could fix their error before our police department is beyond the point of return?
Thank you very much for looking into this and helping to show our point. We’re not asking for anything that we haven’t already paid for. 11.1 percent of your pay is not chump change. How about if we told the city we’re going pay 5 percent now but we still want the same benefits. We would look like complete idiots. The Mayor and his crew forget to mention how much we pay every time they go on one of their rants about how disgusting our pension benefits are. How convenient. Speaking of rants I was really disgusted with the city’s labor attorney when he went crazy and ranted about citizens not receiving the types of benefits we do. He forgot to mention his hourly rate which I’m sure is probably close to or more than some of our citizens make in a week. I’m quite sure he didn’t do his part and give our poor struggling city a break. No I’m sure he gets paid a pretty penny to stand up there a spew his exaggerations and bs propaganda. So thank you for really looking into this and speaking the truth about what’s going on here.
sorry…beyond the point of no return…
To the Entitled Ones, I’m sorry that the crash of 2007 ruined your businesses and collapsed your hedge funds. Does it make you feel better to trash the retirement futures of those who nurtured your children, revived your mom, or took a bullet defending your well groomed streets? These public servants never aspired to the fortunes you expected to be awarded in private enterprise. They dealt with the public, the great unwashed masses, every day. They were often bullied into dancing to the beat of every “citizen” who slithered up to the microphone at a city council or PTSA meeting, who was so sure they could do their job, better than them. The truth of this “pension reform” is ugly and green with a slimy envy only the formerly rich can wear. “I can’t get mine back so I going after yours”. The truth is they couldn’t serve “the people” because they don’t know what it means to be a public servant. It is a calling, a vocation suited only to a small group of thick skinned individuals. It’s hard to fathom what kind of people begrudge cops, firefighters and teachers the pensions they were promised and labored years to collect. It’s hard to imagine that we have a city council who turns to our finest men and women and declares, “Sorry suckers, we lied.” What the hell?
the issue is not, not in the eyes of any reasonable individuals, will it ever be about public servants being paid too much.
it’s about them being paid more than the citizens can afford.
two separate issues.
I think everyone can agree that in a better world public servants, particularly teachers and peace keepers, should have some of the highest salaries around. They provide services which bedrock a society.
But in a better world teacher’s wouldn’t have F-CAT, and cops wouldn’t arrest people for non-violent chemical ingestion.
Honestly I can’t remember the last humble cop I met, though I can at least say the my most recent interactions have all been extremely polite, a great improvement to being shouted at, having a gun pointed at me, or being told that my “rights” are the reason the twin towers were knocked down.
Yup, a cop said that to me.
How much have your taxes gone down since 17 officers were laid off? Go back to ingesting your weed or whatever other non violent chemicals your smoking. Your drug use is obviously affecting your brain.
i don’t even live in NMB, but i’ll make sure to tell all those people working for minimum wage in factories and doing labor that people who get to sit in air-conditioning most of the day have it tough.
NMB cops make more than at least 50% of the city they protect.
Your an idiot. That’s about all I can say.
You are correct Miss Kimball. MANY more officers are in the process of leaving or attempting to leave. It’s sad for us and the citizens of this city but I’m sure the Mayor and council are thrilled. It’s EXACTLY what they wanted. After all what do they care. Most of them live behind a guard gate unlike the rest of the city that’s left to live with higher crime and less protection. “From my chair” that looks pretty selfish. But what do I know. I’m just a peasant police officer that makes to much money and whose pension will be the down fall of our city according to his majesty. By the way I won’t make anywhere near 100,000 like he claims we all apparently make. Nope sorry probably not even 90,000. He also failed to mention that most guys that do make that kind of money do it by working off duty jobs after their shifts or on their days off. Often working until 6am at some bar after already working their regular 8 hour shift. They WORK for the money. It’s not part of our salary like he likes to imply in his effort to make it look like the city is paying us that kind of money. Typical sneaky politician. Can’t any of them tell the truth? But really the most disgusting and sad part of this is his continuing effort to rally the citizens of this city against the police that are sworn to protect them. He does it and he allows his cronies to get up at council meetings and do it. I’ve never once heard him speak up and stop someone who crossed the line and got out of hand with their bashing of us during council meetings. And I’m not talking about people who get up and respectfully voice their concerns about our salaries or benefits. I’m talking about people that he allows to get up and say whatever they want no matter how rude or distasteful. But before each meeting they read a statement about being polite to one another while speaking. What a joke.
Steph,
A super high-quality post, remarkably researched and thought out, and a great discussion among your commenters. A++, Steph.
Fred
PS: Check for the typos.
Thanks, Fred. I am so horrible with typos! I can read the same thing ten times and STILL find typos I missed the first nine. This is the problem with blogging and not having the luxury of an editor. Then again, look at how many typos get by the Miami Herald editor! I’ll go check my column again, but if any of my readers find typos, PLEASE let me know so I can fix them. I will never be offended. I need all the help I can get. This is a community effort! 🙂
Why hasn’t anybody looked at what was done to management? Just because there were 15 or 16 members in the pension plan, which made it impossible to fight back, this group of employees got a much worse deal than what the larger groups are being “offered” and are currently fighting. Meanwhile, management wilts away in the background. If you want to talk about morale, let me tell you the trickle-down low morale is pretty insidious.
So many “down” votes!
Is it something I said?
Is someone afraid of the truth?
Of course it was something you said…”management.” The IUPAs despise management, and basically consider all non-police city employees so much worthless dead weight. Sadly our residents, or at least those who post comments here, seem to feel the same way. Now the only worthy “public servants” are peace officers, firefighters and teachers. It’s still okay to malign the rest of us as leeches.
Wow, if true, that’s really sad. Every employee who works hard to keep the city running is valuable. Otherwise, we may just as well unincorporate and get sucked up by the county. Then let the residents figure out who to call to get their garbage picked up. IF they can get through county voicemail from hell, that is.
So angry at the police officers, firefighters & teachers. There’s no need for that. I guess your upset because IUPA isn’t fighting your battle and they’ve decided to fight theirs. Whats upseting is that Stephanie decided to write a piece on our pension and other employees are now mad at us. Some important aspects of a police officers benefits and bill of rights are protected under state laws. If you want that changed, petition the governer. If you want your job given the same protections, petition the governor. Your playing into that us vs. them game and thats exactly what politicians want, a dumbed-down society.
FYI, this column has been in the works for several months since I received a tip to look into “185 money.” I was told that NMB cops had once given up their right to receive these funds in exchange for certain pension benefits, and that these benefits had been taken away over the years. I didn’t ask for this “assignment” but it was too intriguing to pass up. I thought it was important enough for me to write about.
It was not my intention to cause a class war between the police and the general employees/management. That would make me very upset because it’s not about which class of employee is more important than another. You’re right, C’mon, some politicians thrive on pitting people against each other, although I don’t think that’s the case here.
If any one of the general employees or management had come to me with a similar discrepancy I would have delved into it. The police contract and pension negotiation issues fell into my lap first so I tackled it. That’s all there is to it. The squeaky wheel gets the oil, as they say.
Not angry at all. Just making a point, which you confirmed with your derisive subsequent comment directed at “Mr or Mrs Administrator.” (What about Ms.?)
Some helpful hints: “tuff” is not a word. Upseting, likewise. “Their” and “they’re” are not the same thing. “Your” and “you’re” are not the same thing. And the apostrophe is a most useful piece of punctuation.
“Your playing into that us vs. them game and thats exactly what politicians want, a dumbed-down society.”
I couldn’t have said it better myself.
We appreciate your work on this Stephanie and we don’t think your trying to create a class war here. The city is doing a good enough job trying to do that (if you remeber Robert Norton stated in his closing arguement during the impass council meeting when he stated something like “the citizens in this city aren’t getting pensions like the police how fair is that”.
And to “What about the rest of us?” You gotta give me a break on the spelling, I used my phone to reply to these comments, between the size of the keyboard and my screen size, I’m surprised there wasn’t more grammatical errors.
I know when times are tuff, you find much of society wanting the same hardships their feeling for others. The public sector becomes the blame-all because those careers are somewhat protected. Every job has their pros, cons, and different benefits and thats life. We don’t compare the salary and benefits of the city attorney to the salary and benefits of the police chief just like we don’t compare the salary and benefits of a firefighter to the salary and benefits of the city manager. Police Officers are granted certain benefits (185 monies, high-risk classification=earlier retirement, heart bill,etc…) thats not given for most jobs or your adminstration position. When they imposed your pension cuts, did your adminstrative group file a lawsuit or did you just sit back and take the punches because you might be an at-will employee and didn’t want to risk your employment with the city? If you are at-will, I can completely understand why no lawsuit was filed. Unlike your position, a police officer is not an at-will employee and we have much stronger protection provided by florida state statues. Again, this is the profession we chose right? Could we all have gone and received degrees to become doctors or attorneys making $200k++ and paying for our own retirement accounts?? Of course right! When we took employment here, they forced us into the citys pension system and either we accept that, or seek employment elsewhere. So now that I accepted their offer and accepted to invest my money and my 185 monies into that offer, they want to now say what their going to change that benefit too using my money, I don’t think so Mr or Mrs Administrator. Were not backing down from this injustice. Were gonna bring that fight to them and were gonna be relentless in our efforts. So lets stop comparing us to them and them to us. That game is played out already. Maybe thats why your getting the thumbs down votes. Like Stephanie says, A Deals A Deal!!!!
I am very excited about the possibility of you guys getting the justice you deserve, I also hope that once truth and justice win, the wrongs done to others may be undone. That’s all.
I agree! Hope our legal fight helps all city employees and lets the mayor and council get back to real city business. So many hours have been spent on reducing employee benefits and so much money has been spent on outside council to do the same. It’s time that money is spent on beautification, improving roadways and promoting this city for new business. I hope we can put all this behind us soon, make responsible pension reform for new hires and improve the quality of life for all our tax paying citizens. If the city doesn’t change their stance, this is gonna drag on for several more years, cost taxpayers ridiculous amounts of money and like Stephanie wrote in “A Deal’s a Deal”, it confirms we will prevail.
Excellent piece, really opens my eyes as to what the Mayor is trying to do to our City. Seems that his political ambitions are getting in the way of reasonable decision making. The rest of the council are just riding his coattails and drinking the CoolAid.
I predict major changes in the next elections.
Stephanie only seems to point out that current reforms violate previous contractual obligations on the city’s part.
Since a third party made the recommendations his council eventually passed, how is his decision making either unreasonable or politically ambitious?
What kind of re-election chance does he have if he ruins the police department?
Kudos to Stephanie on an excellent, well written article!
As unfortunate as it is for the citizens, it seems this mayor and council are committed to a my-way-or-the-highway approach to problem-solving. If the officers don’t totally and completely surrender to their point of view, they respond punitively; even if it means cutting off the noses of the citizens just to spite their face. What exactly do I mean by that? Before the layoffs occurred, the city wanted something like 15% concessions from the union and the union was only willing to offer 9%. Rather than take the 9%, the city refused all concessions and instead chose to fire 17 police officers. That, to me, is an unforgivable and poor decision made by the city entirely out of spite and only to be punitive. It was a decision that did not serve the best interests of the residents. And with regards to the pension, here we go again. The city could have had meaningful pension reform long, long ago. The union has made many, many offers to try and resolve this issue but once again since they are not willing to completely and totally surrender to the city’s point of view, this mayor and council have taken the extreme step of imposing a contract as well as massive changes to the pension. They are not tinkering with the pension like adding a year or two to Social Security, they are cutting our benefits by 50% or more! These changes, no doubt, will result in lengthy and expensive litigation paid for by the taxpayers. The morale of the police department remains at an all-time low and service to the residence has no doubt been badly affected. A police department that was 113 strong, now has only 88 members. A police department that once offered a myriad of services to the taxpayers, now is a 100% reactive, report writing Police Department that provides no extra services. All due to poor decisions, punitive decisions made by this mayor and council.
It is well past time to put this labor dispute behind us and once and for all focus on doing what is right for the citizens, voters and taxpayers of North Miami Beach. Let’s put ego and political ambitions on the back burner and focus on fair, legal and meaningful pension reform now!
Thanks again, Stephanie!
You can post all the information you want, but the truth is that all members of the pension will receive all that is owed to them. It’s unfortunate that the economy squashed many dreams of money and “earlier” retirement than what the new reform will now allow for its pension members from this day forward. It is my understanding that the police officers must now work a few years longer (I can’t feel sorry for the one’s in their early 40’s or even 50’s) and the vacation days that were accumulated will now be capped. I think it’s like anything after 1000 hours banked, they will not receive extra time in the form of dollars, but will need to use that time. So nothing was taken from them its just being used differently now. I guess a lot of officers will be taking a lot of time off over the next several years. Not sure why the contracts never implemented a use it or lose it policy. You can see where the city gets smacked after employees leave. By banking so many hours the city had to pay the money out to the employee when they retired. That is a very difficult way to budget our finances.
Contracts were never made to be indefinite or dates would be included in them. This is the new reality for everyone and I can never see it going back to what it once was. NMB needs help now, not later when it is too late. The pension still sounds like a winner and apparently it is as it was compared to other cities.
Now the city will have the needed funds to hire back all of the police officers that were relieved from the department a couple of years ago. With a good leader the NMBPD will shine again and morale will balance itself out with new officers ready to start their careers in a well equipped and better funded department.
The officers have been contributing an additional 2-1/2% of their pay for the last ten years for the benefit to retire after 20 years of service. Assuming an officer has already worked 15 years and is expecting to retire in five BECAUSE he has paid an additional sum toward his retirement, are you going to tell me that it’s okay for the city to keep his additional money if that officer now has to work an additional five years? The city decided to move the goal posts, which you claim is its right. Fine! Then give that officer back his 2-1/2% since he’s not going to get what he paid for.
If I purchase a product, I expect that product to be exactly as it was advertised. If it isn’t, I return it and expect a full refund. This is the same exact thing.
If you don’t see the pure logic and business sense of this, I’m not even sure we’re on the same planet.
Stephanie,
As we wait for the mayors response, please allow me to expand on my thoughts.
Both Scott and the Mayor seem to be using an argument wherein the ends are used to justify the means. They both seem to say… “If only you will allow me to steal all of this money back from these police officers, imagine the fantastic, well-funded, well-equipped police department that I can then afford go out and buy with all that money I took”. Well that would be equally true for all of us. Imagine how much great stuff we could all afford to buy if we simply chose to stop paying our mortgage or our car payment or our credit card payments? I can invent a rationalization for any of those three scenarios. My mortgage broker was actually a “predatory lender quote, therefore I don’t need to pay the remaining balance. I bought a car that turned out to be a lemon, therefore I shouldn’t have to pay the rest. My credit card company charges unfairly high interest rates and takes advantage of the consumers, therefore it is only fair that I stop paying my bill to get some of that money back. Do you see how fun and easy that is?
The truth of the matter is that North Miami Beach should only be allowed to break these types of agreements under the most dire of economic circumstances, not to go on a promised spending spree and buy a bunch of new police officers with the money you stole.
As we speak, the city is building it’s cash reserves and retains ownership of a very lucrative Waterplant that generates tons of revenue. Never once have they legally declared a state of financial urgency. This is simply theft being rationalized under the guise of fiscal responsibility via pension reform. This phenomenon is sweeping the nation and politicians, as we all know, never let a crisis go to waste.
Right on with your comments. the City of NMB owns a billion-dollar water treatment plant that can be sold to allow certain cops to retire in their 40’s. Besides, the financial straights NMB is experiencing is all made up and the city has plenty of cash to fund millions of dollars in improvements everywhere. That’s why all you cops want to live in our piece of paradise because of all our wonderful amenities that the residents enjoy and you would love to raise your kids here. Just like Chicago, Detroit, and other cities, they are not going down the tubes because of their pension loads, that’s all made up, as there’s plenty of money there too. Intelligence at its finest.
Gerry,
Since the mayor seems unable to explain to everyone how this is fair and legal, perhaps you would like to try?
The city sold certain benefits to police officers, collected their money and I submit that only in extreme circumstance should they be allowed to unilaterally break that contract. One such circumstance would be bankruptcy. The city should be allowed to amend these contracts in order to avoid bankruptcy, but they can’t possibly be bankrupt if they own a Waterplant worth more than $1 billion. Agreed?
Now I realize that haters like you can’t get past the fact that some officers will be able to retire in their 40s, your hatred blinds you to the fact that whether you personally agree or not it was a contract knowingly entered into by the city. Haters like you don’t rely on reason or the law, you gladly give in to your emotions and in so doing you cast the rule of law aside.
My question to you was a very simple one; what theory in the law allows this city to sell us a product, change their mind and take the product back but keep the money we paid and continue charging us for the product we no longer have?
Riddle me that, hater.
Answering your question. Your benefit package was agreed to in a previous contract voted on by a previous council who never anticipated the unsustainability of what they voted on. Just like take home police cars were agreed to by former councils because they were sold to them as being crime deterrents in the city’s neighborhoods. Of course they never anticipated that none of the take home cars would ever be parked in NMB neighborhoods. Same with the pension benefit package, no one could anticipate that police officers would milk their overtime in a single year just so they could receive a pension based upon the overtime income of the one year period. That contract term was changed due to the abuse of it and so has other contract terms been changed due yto costs involved. NMB is not unique in the extreme costs associated with “promises” made by previous elected bodies. Noboy is perfect and its obvious previous elected bodies erred in voted to pay benefits that they could not anticipate would ever mushroom as they have. Hence this issue is being dealt with in almost every major city across the country. Is not personal, its what’s needed to sustain viable local governments.
As someone who worked in NMB’s finance department over a decade ago, I know firsthand when the 2 1/2% was implemented. In 2003 there were numerous police officers who retired in the next couple of years after the 2 1/2% was implemented. they all took advantage of the buyback of service time and retired early, some only paying 2 1/2% in total. There was also the overtime abuse that was being done on a mass scale to pump up the average salary for a year or two so that their pension was based upon the one year of overtime. Some were even paying other officers to work their overtime. No one is bringing that up now. Anything that was abused by the cops or taken advantage of in past years by them will never be a part of the current equation in which everything is looked at through the rose-colored glasses of the police officers who only complain about their gravy-train ride coming to an end, kicking and screaming all the way down the hill. The pension actuarials made by whoever aniticpated that an additional 2 1/2% contribution by police officers that would cover 5 years of early retirement was as flawed as the take-home police car program was that was supposed to be a deterent to crime in NMB’s neighborhoods where the take-home cars were supposed to be parked.
Woody your obviously out of touch with the current pension situation so stop crying about what a small group of officers got over a decade ago. They were given that deal so they would retire and make room for new officers. Yes they got a great deal but they paid a lot more than the 2.5 percent that you claim they paid. Get your facts straight before you come on here a post erroneous information. Our current pensions have nothing to do with and are calculated completely different than those pensions which like I said were given to those who retired a decade ago. Obviously you didn’t keep your job long enough to know this.
A decade ago? Almost two decades ago. Woody, 2003?!?! Thats when we started paying AN ADDITIONAL 2.5 percent on top of our already 8.5% contribution, the window your mentioning happened way before that. Why aren’t we bringing that up now? Why would we dumb dumb, we don’t even know those people. They retired and the city hired me at half their cost. BTW, since your so negative abour offering officers windows, get with North Miami PD, there getting ready to give their senior officers a window. Seeing how North Miami PD and it’s city has surpassed NMB with development and progress, you might want to let them know how a window for it’s officers will cause desparity and decades of financial hardship. If you let them proceed with this, their future financial wreckaning will sort of lay on your shoulders since, after all, you hold the crystal ball to North Miami’s Great Depression.
Woody,
Tell everyone why it is fair or legal for the city to keep our money? You’re talking about guys who retired a decade ago because you do not have a good answer to my simple question.
Scott, you stated “The pension still sounds like a winner and apparently it is as it was compared to other cities”. Please tell me what city they compared it too. I’m part of this game and I can’t think of any in the county that have taken this act of theft on our pension and not one has layed off police officers. Please tell.
Stephanie,
Not only is the city trying to keep the 2 1/2% extra that we paid in exchange for a 20 year retirement for more than a decade, they also intend to continue forcing us to continue making those payments going forward even though they’ve taken back the item they sold to us so long ago.
They are not only stealing our money going backwards in time, but they intend to continue stealing them even going forward.
I would very much like to hear the argument in defense of this seemingly indefensible act of theft.
Scott? Mr. Mayor? What say you?
I would, too. I invited the Mayor to respond to this and several other questions. Like I did with his other column, I will publish his response in its entirety, unedited, as soon as I receive one from him.
Not one word about the guaranteed 8% interest the residents of the city were forced to pay for decades on the retirement checks of police officers who continued to work and collect their full paycheck, many accumulating over $400,000 to $500,000 a year in this tax-protected savings account that paid them up to $40,000 a year in interest alone. Let’s keep that one a secret as we whine about the 2 1/2% extra we had to pay so we could retire in our 30’s or early 40’s. That’s not fair , right? Who protects the $35,000 a year income taxpayer who has to fund this excess?
Gerry,
Stephanie took a great deal of time to post links connecting to all of the documents regarding all of the legal proceedings regarding all of the decisions regarding all of the benefits that police officers have paid for.
If you had bothered to read them, you would not need to ask who is looking out for you. You would already know the answer to that question.
These decisions were made by the same politicians elected to office by the voters. They were made in strict accordance with the process, knowingly entered into by the same city officials the voters elected and I have no idea where you get the nerve to come now and suggested that somehow these decisions are illegitimate just because you don’t happen to personally agree with them.
Maybe you, sir, should move somewhere that might be more to your liking. Say, Cuba, for instance? Down in Cuba, 90 miles from Key West, they have a leader that thinks just like you do. They have a leader who has no need or regard for the rule of law. They have a leader who follows the rules he likes, ignores the ones he doesn’t like and sometimes he makes them up as he goes along, just like you.
Adios,
Gerry
Again, Gerry, you need instruction on the Deferred Retirement Option Program (DROP). Then again, most people have trouble understanding it. While the 8% rate is quite high, NMB’s DROP was established when interest rates were at their highest. The Administration in power at the time did not have the foresight to imagine that they would drop significantly. This was not their best legislation. However, the DROP is not a “tax-protected savings account” by any means. The money paid by the city into a DROP account is the money it is expected to pay an officer upon retirement. While the officer continues to work during his DROP period, he no longer accruing pension benefits on his salary. There is a huge misconception about how the DROP works, and I do intend to write a column about this issue as soon as I recover from writing this one. As for the 2-1/2% that the officers have already paid for the last ten years for the additional benefit of retiring after 20 years, they purchased five years off their service fair and square. Where in the world did you come up with “the $35,000 a year” figure that taxpayers are funding? That so-called “excess” was paid by the officers, not the taxpayers.
BTW, you’re starting to really annoy me. Can you tell?
DROPs are pension funded accounts that defer income taxes on the entire amount until the funds are withdrawn from the rollover account they are rolled into when an employee retires permanently from the City. Previous city councils agreed to pay a guaranteed 8% interest rate on all retirement funds that are deposited into those accounts. Until the recent change was made, Police Officers were allowed to retire and continuing working at their full senior pay scale while their monthly retirement funds were accumulated in an 8% interest bearing account. Many police officers retired with $70,000 plus annual retirement amounts that, (many with much more) accumulated over 8 years, amounted to over $1/2 million dollars in their DROP account. No problem with that.
But then, on top of that, the taxpayers, thanks to previous city councils, were mandated to pay 8% interest on those accounts. 8% x $500k = $40,000 a year in taxpayer funded interest. The total amount of mandated interest that the taxpayers had to fund for all the DROP employees was getting to the $1,000,000 a year amount and growing at the 8% annual interest obligation. Remember, this is interest costs on an employees retirement check that he is receiving while continuing to earn 100% of his highest pay amount, essentially a double-bill to the taxpayers on employee retirement checks.
The $35,000 figure quoted was written poorly. I asked the question who is looking out for the NMB average taxpayer, whose income is approximately $35,000 a year. These are the people who are being mandated to pay these egregious amounts.
I know what you are going to explain about how the city benefits from those employees in the DROP by not having to continue to fund retirements of those in the DROP however, keep in mind those in the DROP are being paid the highest salary of all police officers, as much as double what a starting salary police officer makes. Any savings to the city on the lack of pension funding is more than made up by the much higher pay scale being paid to the senior employee while he stays on the payroll in lieu of hiring a new employee. Nothing against senior employees, just stating a fact.
One more point to clarify that you seemed confused about.
The City does not put money into an employees DROP account. the money deposited into the DROP accounts are retirement pension funds deposited on a monthly basis by the City’s pension administrator. The city funds the employee pensions by having to deposit a sufficient amount each year to guarantee the amounts being paid out by the pension administrator. Unlike our own retirement accounts in which we are responsible for the rate of return we receive on our retirement money, city pensions are guaranteed no matter what the stock market does, meaning in order to guarantee the promised amount, the city may have to fund extreme amounts in years when the stock market has dropped substantially. Fortuinately, although the city’s pension load went through a horrific negative investment period in the past decase, in the past two years, the city has had to fund a much lesser amount. However, all that could change in the blink of an eye.
One more point to clarify that you seemed confused about.
The City does not put money into an employees DROP account. the money deposited into the DROP accounts are retirement pension funds deposited on a monthly basis by the City’s pension administrator. The city funds the employee pensions by having to deposit a sufficient amount each year to guarantee the amounts being paid out by the pension administrator. Unlike our own retirement accounts in which we are responsible for the rate of return we receive on our retirement money, city pensions are guaranteed no matter what the stock market does, meaning in order to guarantee the promised amount, the city may have to fund extreme amounts in years when the stock market has dropped substantially. Fortunately, although the city’s pension load went through a horrific negative investment period in the past decade, in the past two years, the city has had to fund a much lesser amount. However, all that could change in the blink of an eye.
Stop it already Gerry!!!! Your so blinded with your personal feelings about our benefits that it’s killing your credibility. Those that have already retired and entered the DROP are there to stay. You can blame previous councils until your tongue turns red. What good does that do anyone. Now Gerry, since your so well versed on this topic, what is the UNION’s position on the DROP?? My guess is you don’t have a clue since you can’t seem to move past the 8% guaranteed rate of return. Well lets move forward shall we. Our union president has presented our offer to the city on the DROP moving forward. It’s a 5 year DROP with a sliding scale of return (0-5%). Meaning we get what the market is doing and anything over that scale, the city keeps. Now how has the market been doing? I assume you know that answer since this topic, along with constitutional law, seems like your specialty. Hmmmm, does 19% sound about right. Hold on a second, so if the officers are currently getting 8%, but the market has been giving 19%, who’s getting that additional 11%. The City!!!!!!!! Now could you imagine if the city agreed to our DROP reform 2 years ago when we first presented it to them. They would be making even more money off OUR money and they wouldn’t be responsinble to cover any return.
Now you also mentioned how our take home car program was no longer a given benefit because the costs involved. What exactly was the cost of that??? Well we know, because we agreed to pay for it!!!!!!!!! So instead of taking that offer and the city having one less expense, the city gets to pay for that entire expense all by themselves and I get to drive it at work for my entire shift, to and from court, to and from off-duty details and to and from schools without paying a dime, woohoooo!!! Ohhh Gerry Gerry, it’s not about the expense is it, it’s more like you and our mayor and council despise seeing a police officer taking his car home. So now I have the benefit of not having to pay for the car and the benefit of a safe neighborhood since all my neighbors are cops with take-homes. :))))))
I could go on and on but it’s like trying to explain why a square doesn’t fit inside a circle. If you brought to the table some valid arguements, credible ones that is, I wouldn’t have to resort to sarcasm Gerry.
Gerry,
You’re making an argument for future pension reform, but you’re not making a legally-compelling case for unilateral and retroactive pension reform.
Only as a last resort and for the most dire of reasons should anyone be allowed to just tear up a legally binding contract. For instance, no one should be legally permitted to renege on a contract due to buyer’s remorse, because years later they begin having second thoughts about the deal that was made. Imagine if all the people who bought homes when the market values were at their highest now decided to unilaterally ignore the terms of their mortgage and only pay what THEY think the home is worth NOW? What if you bought a home when the market values were low and years later the previous seller comes back around and sues you for the difference between the amount they sold the home to you and the current market value? That would be insane and is precisely why we don’t allow anyone to unilaterally amend a deal just because they decide later on that they struck what now seems to them to be a bad deal…which is just what you, the mayor and council are trying to do with regards to the pension benefits you sold to us 24 years ago. You sold us a COLA for the cost of our 185 fund. For 24 years you’ve collected and spent our 185 money. Now you have a bad case of buyers remorse and you not only want to back out of our deal and deny us a COLA, but you also want to keep the 24 years of cash payments we’ve made to you. And you intend to continue depositing OUR 185 cash into your account for nothing to us in return.
And in order to get away with this robbery being committed in broad daylight in front if plenty of bystanders, you use false and misleading class warfare rhetoric to get those bystanders to hate and resent us in hopes their anger and resentment towards us will cause them to look the other way as you hit us over the head and take our wallets, watch and the gold fillings in our teeth.
Stephanie summed this up well in just four little words….a deal’s a deal!!!