BELLEAIR BLUFFS – A Tallahassee judge’s decision that Belleair Bluffs owes its former firefighters pension annuity payouts will be a costly one for the city.
The city has long fought making annuity payments, rather than the less costly “substitute trusts” it preferred. The debate with the firefighter pension board began shortly after the fire department merged with Largo’s three years ago. During that time, the cost of annuities has nearly doubled, so that now the amount the city will have to pay is estimated to total over $1.3 million.
A directive by the state Department of Management Services that instructed the city to make the pension annuity payments last March was appealed. A state judge who has been looking into the matter has now issued his decision.
Administrative Law Judge Thomas P. Crapps issued a 23-page ruling on the matter Dec. 7. In doing so, Crapps agreed with the city’s Fire Pension Board, which has argued all along that the firefighters are entitled to annuity payments, if they want them, rather than the substitute trusts the city was proposing.
The trusts, which function like annuities but are backed by the city instead of insurance companies, had been rejected by the firefighters as being less secure. The substitute trusts would have cost the city about half as much as the annuities.
Mayor Chris Arbutine said at the commission workshop on Dec. 10 that the city’s prolonged effort to fight its pension board over the annuity issue is over.
“A judge has said a second time, Belleair Bluffs has to do annuities,” Arbutine told the commission. “I’m taking this to heart. (The firefighters) requested annuities, we have to pay. We can’t get out of it. We have to do it.”
However, Arbutine went on to propose a second option that had previously been under consideration, and which he said the judge’s directive would allow. That scenario, which involves “share money” that comes from the state, would presumably save the city around $250,000 and give the firefighters more money, Arbutine said.
Under this plan, those who choose a lump sum payout rather than an annuity would receive an extra payment of share money based upon their years of service. The city also receives a portion of the share money.
That option had been accepted by the fire pension board in the past but the city never followed up on it. It would still require purchasing annuities for those who want them.
Arbutine said the judge’s decision allows the city and pension board to come up with a solution that benefits both parties.
“This saves us money and gives (the firefighters) extra money,” he said.
The commission agreed to put the share plan option on the agenda of the Dec. 17 regular commission meeting.
Commissioner Suzy Sofer viewed the mayor’s latest proposal with caution.
“We’ve been down this road too many times, where we think we have a solution, then it gets shot down and we don’t,” she said.
Sofer said the issue needs to be resolved once and for all.
“We need to stop the bleeding. It needs to stop,” she said.
Former pension board secretary Dave Fynan, who has urged the city to settle the pension matter to avoid escalating costs, was cautiously optimistic about the mayor’s stance.
“It took three years and a judge to convince you,” Fynan told Arbutine, but added he viewed the mayor’s proposal as “a big step forward.”
Fynan also reminded Arbutine that the share plan option “was before you in September and you took no action.”
“This is a step, and it will probably help,” Fynan said.
He also said, “There are still some hurdles to cross and a lot of pieces that have to fall in place” before a final agreement is reached.
The pension board meets on Friday, Dec. 15, and will presumably consider the share plan option. In the past when that plan was under consideration, a number of the firefighters said that under that scenario they would choose lump sum payouts rather than annuities because of the extra payment for years of service.
In an action that could complicate matters, the commission also agreed to hold a shade (non-public) meeting on Monday, Dec. 17, before the commission meeting to hear advice from the city’s attorney handling the pension case. That meeting was requested by City Attorney Thomas Trask.
Arbutine initially opposed the shade meeting, saying it would lead the pension board members to suspect something else was coming.