BELLEAIR BLUFFS – The day of reckoning has come for the city of Belleair Bluffs in the long-standing dispute over pension payments due its former firefighters.
The final bill is $1.58 million, which is what the pension board’s attorney has determined the city owes.
The City Commission voted unanimously at a special meeting March 11 to authorize City Clerk Debra Sullivan to cut a check in that amount. That money will be used to purchase the annuities and lump sum payments requested by the firefighters.
The total costs to the city will likely exceed $1.7 million when legal and related costs are added.
The cost is substantially more than previous estimates of the expenses, which had been expected to run around $1.2 million, and more than double the $659,000 the firefighters had been willing to accept when the pension issues were first discussed two years ago. The costs have risen as market conditions forced the price of annuities up.
Despite the cost escalation, Mayor Chris Arbutine said the time had come to “pay off the firefighters and move on to better things.”
“It is time to get out of this quicksand debt and stop the bleeding right here,” he said.
The city will still have “plenty of money and plenty of reserves” once the money is paid, Arbutine added.
The fire pension board had approved the pension settlement at a meeting earlier on March 11.
The settlement ends a long battle between the city and its former firefighters over the type of annuity payout. The firefighters had wanted annuities, which are backed by insurance companies. The city offered “substitute trusts,” which function like annuities but are backed by the city. The firefighters rejected that option as less safe.
Arbutine said the city is agreeing now to provide the money for the annuities but had no input into the decision.
“We didn’t agree to this,” he said, “but we were told by the courts and the state this is all we can do.”
Former pension board member Dave Fynan chastised Arbutine and the rest of the commission for not settling the pension matter when the cost was much less.
“You had the opportunity to pay $659,000. There was no need for this,” he said.
Arbutine said the city “was never offered a $600,000 payout.”
“I sat in this room when the offer was made,” Fynan shot back.
A report in the Belleair Bee of a workshop meeting of the commission on March 14, 2011, quotes City Attorney Thomas Trask as saying a plan agreed to by the firefighters would cost $784,000. That included fire insurance tax money that was later taken out, leaving the actual cost at $659,000. Trask went on to propose an alternate plan including substitute trusts in place of annuities.
Arbutine commented at that time, “We don’t want to spend $784,000 right now, in a down economy.”
Pension Board chairman firefighter Steve Langere had a mixed reaction to the final pension settlement. He said in a later interview, “We got what we were rightfully owed, but it is long overdue.”
“I am sad the city had an opportunity to settle this on multiple occasions, didn’t do it, and now it is costing about a million dollars more. And all those years, the firefighters had to go without their money,” Langere said.
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