Latest Briefs Filed on 401(a) Case: Compensation is Salary--Retirement Benefits are NOT Salary

Three briefs were filed last Friday in the circuit court related to the county's suit against the clerk of the court for her refusal to fund the lawful retirement accounts of three sitting commissioners.

Two of the briefs (here and here) were filed by the clerk's attorneys and essentially argue that the retirement contributions are salary--and thus the higher rate of return for the local plan amounts to an unlawful increase in commissioners' "salaries".

The county's brief goes into great detail in demonstrating that the retirement benefits of the local plan are not salary under Florida law.  Further, the county brief describes why the clerk's insistence on focusing on the "57%" figure is a political argument not relevant to the issue before the court.  From the county's brief:

"The County's opinion is that the Clerk's injection of "57 percent" is more about politics and policy choices than the actual legal issues. The fact is that, until June 2021, the County, the Clerk, and ICMA all agreed that the contribution amount toward the Local Plan would be equal to whatever the FRS's charge was in a given year. This is why the County is correct to say that the Local Plan does not cost the taxpayer a penny more than the FRS. The amount the County spends on the Local Plan is exactly the same.      The Clerk's injection of this figure into this motion (and her statements to the press) just shows that what the Clerk really seeks is to make policy: to overturn a legislative choice made by the Board of County Commissioners which she finds personally objectionable."

Retirement Compensation

I received a somewhat cynical, sardonic, and accusatory email late yesterday evening on everybody's favorite topic: the County's 401(a) program.  Here, below, is the email I received from this person with whom I am acquainted.  My response to his email follows below.....

"Jeff,

            The actions of you and the rest of the BOCC over the previous 12 months take me back to the W.D. Childers days. It’s unfortunate that our elected officials tend to lose sight of what their duties and responsibilities are as it relates to supporting their constituents and overall needs of the County. Of course the latest debacle is over Commissioners retirement compensation as it relates to the County’s contribution and subsequent payout. It’s apparent that the Board feels their duties and responsibilities are more important and hazardous than our Public Safety employees. It’s evident the retirement language as it relates to the Board and upper management is not crystal clear and without ambiguity. Knowing this, why doesn’t the Board simply accept a rate that is more reasonable and commensurate with the part-time job they currently hold?  Doing the right thing these days has become the exception rather than the norm – morals and ethics have become words of the past.

            I would hope the BOCC will regain their senses and remember who they actually serve and support. If the Board feels they are entitled to this rate of retirement, then the military retirees have been severely under compensated.

            The typical County employee receives a retirement contribution rate of less than 13%, while the Board feels their rate should be greater than 50%. Although I am not confident, I am hopeful the voters remember this compensation grab especially if additional County funds are expended via a law suit to assist the Board in obtaining this ridiculous compensation package.

XXXX"

My response---below:

XXXX,

Thanks for the frank and candid opinion you’ve provided below.  Thanks also for your military service, which I respect and appreciate strongly—as I grew up in a military family with a dad that did 33 years in the Navy, a brother who is a retired Marine, and two of my children who have now served or are serving in the US Military.  Knowing what I know about military retirements—I do believe they are deserved and very generous.  However—the public sector and the state and some local Florida governments offer some programs such as a deferred retirement (DROP) plan as well as pensions for many employees and classes of employees that are legal, appropriate, and MUCH more generous than a military pension.

This all said--  I must strongly disagree with some of the assumptions you have mentioned in your below email which no doubt have been generated via media coverage of this debacle that has been one-sided, incomplete, and downright dishonest. 

So before you flippantly relegate me and my professional reputation to the rubbish heap—I certainly hope you will hear me out, below, on what the realities are surrounding the 401(a) plan. 

First off—a couple of points of note worth consideration.  

Number 1—WD Childers was a dishonest, criminal politician who was eventually indicted, tried, and convicted for his criminal behavior.  He spent time in jail. Years.  Deservedly.

Conversely-I have spent 15 years in local elected office, living under a microscope, and have not ever once even been accused of doing anything unethical, immoral, or-----illegal.  It’s because I follow rules, do my job, and am a “Boy Scout” that plays it straight.

Number 2 is I have never taken one dime from the taxpayers, not one red cent, that was not afforded to me as a salary, benefit, or emolument of my position enumerated in the constitution of Florida and/or local ordinance.

Number 3 is this: I do not take the 401(a) plan.  I am in the standard Florida Retirement System (FRS) pension plan, just like teachers, deputy sheriffs, firemen, and other county employees---which is a formulaic program that calculates an employee’s salary average and length of service to determine a monthly stipend for the elected official-- when such an official reaches retirement age.  For me, that will be when I turn 62.

(It is worth mentioning here that if the board decided to voluntarily reduce the return rate on this 401(a) plan by even as little as 1% for the three members who take it Bender, Barry, and May-----it would save taxpayers’ dollars when juxtaposed with the costs of other elected officials like me who are stuck in FRS with their overhead which is obscene!)

Number 4 is this:  The 401(a) plan at issue----complete with these concomitant payments with higher levels of interest rate returns for some senior managers and those elected officials that have chosen this plan----has been established in the County since 1997 and paid in full by our current clerk and the former clerk, Ernie Lee Magaha. These plans are ubiquitous around the state—in counties, cities and other municipalities.  This is not something Escambia just cooked-up one day out of the clear blue sky for self-enrichment—regardless of what the liberal PNJ and their cartoonist espouse.

Sadly—the current clerk’s recent and unilateral decision to withhold funding and constructively void this BCC contract appears to be a political one, and one that does not stand up to the scrutiny of legal

Is Legality of 401(a) Plan a "Grizzly Bear Trap?"

 

Yesterday's board discussion about the county's 401(a) retirement plan was inartful.  And I said so multiple times.  It was a discussion that did not need to happen.  It should have been worked out between the lawyers in the background and the facts brought to us for a decision.  But nope, we had to make sausage even though we didn't need to have this discussion in public.

But it happened, nonetheless.  (Starting at 1:08:25 of this video)

Full disclosure, I do not take the 401(a) plan, I never knew it existed until two months ago, and obviously the rate of return for elected officials (over 51% for next year) is obscenely high.  These are the facts upon which we can ALL agree.  Do I believe these rates are too high?  Yes, of course I do, and I said so at the meeting.

Furthermore, the additional facts of the matter are very clear:  The county has had this plan in place for nearly 25 years (since 1997) and many current and former employees and current elected members of the board have made irrevocable elections out of the standard FRS plan to join this local plan.  This plan and the administration and rates for reimbursement to the accounts of employees and elected officials are memorialized in a contract the board approved in 2016 before I was on this board.  At the meeting yesterday, I again asked our attorney if this plan was legal, to which she replied "Yes."

Now comes the strange, artless, choppy, sloppy, and unusual stuff.  The Clerk's office put an "information item" on their portion of the agenda, stating they would unilaterally be reinterpreting portions of the board's 2016 executed contract with ICMA because they felt the "rate of payment into these accounts was too high."  They did not say, in their agenda backup, however, that they felt it was "illegal" to make these contributions.  So I asked the clerk and the clerk's attorney both point blank:  Is this illegal?  After pressing them---after wading through a lot of gibberish and gobldegook--they both finally stated at the meeting in answer to my query that yesthey believe it is "illegal."  But our attorney, again, believes otherwise.

So here's where it gets interesting and the questions come in rapid fire fashion:  

If it is indeed illegal--why has the clerk's office signed off and sent in the checks to pay these astonishingly high rates of return for the last 8 years?  If it is illegal today, was it illegal then?  Does paying from the treasury an illegal charge carry any penalty under state statutes?  Is ignorance of the law a defense?  Robert Bender made a very subdued, modest statement that resonated with me when he disclosed to us all via a statement to the clerk that he indeed sought a clerk's opinion about the plan shortly after he took office, specifically about the high rate of return and if this was legal, to which he apparently received reassurance from the clerks office that it was legal.  I mean, this must have been their opinion--otherwise the payments to Bender's account should have stopped right then and there, in early 2019.  

But no, the clerk's office continued to approve these huge payments ever since.   Apparently these queries from Bender to the clerk's office were made in writing.  (Someone should look at these).

So here's the bear trap.  If it is/was legal to pay these plans--then the clerk has NO legal authority to take action to prevent or pause payment--this is up to the BOCC to fix or adjust, our issue.  A clerk unilaterally not paying or attempting to void or reinterpret an executed contract is imporper at least-and could be that office acting ultra vires at worst-- according to our attorney.  (Yes, I asked that question yesterday, too)

On the other hand--if the clerk is right and this is in fact illegal--then why the heck have these payments been made for all these years?  How the heck could the clerk's office say yes--it is legal to Robert Bender in 2018 and continue to pay if it was illegal?  And why in the heck would it take them 3 years to finally figure out it is illegal and not simply problematic?  And if they figured out this past week, that it is/was illegal---why not just indicate that within the backup?  Why make me pry it out of the clerk's attorney like a pearl diver opening a clam?  Why not say "YES WE THINK IT'S ILLEGAL!"  Why the doublespeak about it being "problematic."  What the hell does that even mean, anyway?

Too many questions--but meanwhile we, the BOCC, have requested formal legal opinions on all these questions from an outside counsel.  The answers will be interesting to read.  Either way though, this spectacle of a discussion yesterday turned into a grizzly bear trap about to be sprung........ 

And whatever happens there with that---the BOCC will fix this issue--because It's our issue to fix.