BELLEAIR BLUFFS – The city of Belleair Bluffs is ready to fight another round in the battle with its pension board and former firefighters over pension payouts.
In a surprise move, the city’s attorney in the matter asked for a hearing on a directive by the state Department of Management Services. It ordered the city to purchase retirement annuities for senior firefighters requesting them.
The city had asked the state to settle the pension issue after failing to reach an agreement on the issue with its pension board.
The action, which petitions the state for a formal administrative hearing, is the latest in a series of moves by the city that have delayed the final pension payouts.
Meanwhile, the cost of the annuities has risen to nearly $1.2 million, an amount approaching the city’s entire annual budget, up from $700,000 a year ago. The rise in costs is due to fluctuating economic conditions.
The city has about $2.5 million in reserve funds, money that is typically set aside to meet unexpected obligations, such as damage from major storms.
In challenging the directive to pay the firefighter pensions, the city charges the state “grievously expands the city’s financial obligations” and “undermines the city’s home rule authority,” doing so “without so much as a hearing.”
The city contends Florida law requires the ensuring of “minimum benefits and standards for the operation and funding of … firefighters’ pension trust funds.”
The petition asks the state to provide, at a minimum, “a formal hearing to determine which option best ensures the minimum standards (required).”
The city has offered the firefighters substitute trusts, which are backed by the city, in place of annuities, which are purchased from insurance companies. The trusts would cost the city about half as much as annuities, but the firefighters consider the trusts less safe.
The city pension board has backed the firefighters on the issue, and the petition accused the state of “rubberstamping the Board’s decision.”
The City Commission unanimously backed the request for a hearing at its regular meeting on March 19. Mayor Chris Arbutine said the city couldn’t afford the annuities firefighters are requesting. He said the annuity payments would require spending $800,000 more than the substitute trusts offered by the city.
“We can’t give a million dollar bonus to four firefighters just because they don’t trust the city,” Arbutine declared.
The commission members agreed. Fire Commissioner Suzy Sofer said the annuity payments would likely require a tax increase. Sofer said she is willing to spend extra money on legal fees fighting the issue “to protect the residents.” The estimated cost of legal fees is $7,000 to $10,000, according to City Attorney Thomas Trask.
Commissioner Jack Nazario said he favored a position that would require minimal costs to the taxpayer.
However, former fire pension board member Dave Fynan said the city has watched the costs of the annuities rise from $700,000 to $1.2 million while “doing nothing.”
“You asked the state to decide the (pension) issue, then you disagreed with their decision,” Fynan said. “Now you want to wager taxpayer money that they may come up with a decision you like.”
Fynan urged the commission to go ahead and pay the firefighters annuities he said they are entitled to by law and “stop the hemorrhaging of the city’s resources.” Naming each of the commission members, he said, “You have a fiduciary responsibility to the taxpayers of Belleair Bluffs.”
Resident Will Miller, a former firefighter, said the city has had “a poor showing in trying to buy off public employees on the cheap.”
Former Commissioner Dave Shimkus offered to try and negotiate a settlement between the city, the firefighters and the pension board.
“I don’t want to spend another two-and-a-half years in legal fees on this,” he said.
The pension payment issue will now go before an administrative judge, Trask said. He estimated the matter would be settled in another 100 to 120 days.