By William Gjebre, BrowardBulldog.org
Ex-Hallandale Beach City Manager Mike Good
Hallandale Beach taxpayers quietly coughed up nearly $500,000 in 2009 to settle a complaint by a ranking city official that his bosses had failed to include him in a generous management retirement plan for top city leaders.
BrowardBulldog.org recently obtained a copy of the settlement. It shows that then city manager Mike Good had a confidentiality clause inserted into the agreement in hopes of keeping news about it from the public.
To collect the hefty payout, which he got without having to sue, former Utilities/Sanitation Assistant Director Gordon Dobbins agreed not to contact the media and almost anyone connected with the city and to refrain from making disparaging statements “in perpetuity.”
The city appears to have gotten off cheap.
The cost could have been closer to $1 million if the city had to pay Dobbins for all the benefits it failed to provide him from the time the plan was implemented, and he was eligible to join, in October 2001.
The settlement with Dobbins ended the possibility of a legal battle that could have been both costly and public.
The Dobbins payout case surfaces at a time when the Broward Inspector General’s Office continues to investigate past mismanagement at the city.
TOO GOOD OF A DEAL
Dobbins, a 30-year city employee, worked during a period in which the city offered a lucrative retirement plan to its top managers, a benefits package they withdrew after only six years, in 2007, because of its cost.
The city administration in 2008 told the city commission it would include Dobbins in the lucrative plan, but backed off after discovering the high cost, ranging from $727,000 to $955,000.
Three former city managers who now draw pensions under the management retirement plan offered no explanation for what happened. Randolph J. (RJ) Intindola said he had “no idea” why Dobbins was excluded; Good did not respond to a request for comment; and Mark Antonio said “I no longer work for the city; call the city.”
The Dobbins case illustrates high costs of the plan and what critics say is the city administration’s bungling by overlooking a long-time employee who worked his way up through the ranks.
“This shows how expensive the plan was,” said local activist Csaba Kulin. “It also shows how incompetent the city manager was…for not putting him in” the plan. “This is also indicative of the way the city handles matters, keeping everything quiet and muscling everyone,” Kulin said, referring to the settlement terms that required Dobbins to keep his mouth shut.
CONFIDENTIALITY ‘NOT APPROPRIATE’
Veteran labor attorney Ron Cohen of Miami Lakes questioned the city’s use of a confidentiality clause in the settlement.
“While it’s not illegal, confidentiality is not appropriate when public funds are involved,” Cohen said.
Dobbins was in a management position when the plan was created, but nonetheless remained a participant in the city’s General Employees Retirement Plan.
The city admitted no wrongdoing in the settlement, which suggests the error was inadvertent.
Dobbin’s exclusions meant he did not receive the enhanced retirement benefits under the management plan, including being eligible for full retirement benefits this January at age 52, after 25 years of service.
For example, a city pension calculation in 2008 showed that Dobbins would receive a monthly pension of $6,350 if he were placed in the management plan.
The same analysis stated Dobbins would collect about $3,800 under the General Employees Plan, which provides full benefits at age 60 with 30 years of service.
The settlement, approved by the city commission in a 4-1 vote in August 2009, was labeled as “severance” pay by the city. The dissenting vote came from then city commissioner Keith London.
Under the deal, Dobbins retired from the city effective January 1, 2010 under the general employees plan. Specifically, it called for Dobbins to receive $300,000 in a lump sum, another receive approximately $126,000 in salary for the final quarter of 2009 to be used for pension calculations and $24,000 for unused vacation and sick time. Dobbins will start drawing his city pension in 2021.
City personnel officials would not say how much he would be entitled to. However, the additional salary he received under the settlement will likely raise his monthly pension considerably.
LONG TIME CITY WORKER
Dobbins, who today lives in another state, began his career with the city in June, 1979, in an entry position at the Public Works Department at the age of 18. By Aug. 2001 he worked his way into a management position in the city’s utilities division.
Two months later, the city began the management retirement plan. But Dobbins’s name wasn’t on the list of eligible employees.
It wasn’t until 2005 that Dobbins was sent a letter by the city asking him if he wanted to transfer into the retirement plan. For reasons that are unclear, it didn’t happen.
In June 2008, then city manager Good informed the city commission that Dobbins would be switched from the General Employees Pension Plan to the management plan, retroactive to the time he should have been included in the plan. Good changed his mind a year later, however, telling commissioners that “due to an oversight” Dobbins wasn’t in the plan.
At the same time, he announced the settlement, saying it was in the best interest of the city.
By William Gjebre and Dan Christensen, BrowardBulldog.org
Hammered with “thousands of emails and hundreds of phone calls” from angry police officers across the state, a rookie legislator Thursday withdrew his week-old bill seeking to overhaul Florida’s public retirement plans.
“The purpose of this bill was to get peoples’ attention about what significant, sustainable pension reform can look like,” said Rep. Fredrick Costello, R-Ormond Beach. “I wanted to get the discussion going, and I did.”
Broward Bulldog reported Thursday that HB 303 proposed slashing retirement benefits for state and local government employee. It would have restricted overtime from being used in pension calculations, and shut down Florida’s Deferred Retirement Option Plan (DROP).
All state employees – including police, firefighters and teachers – and many municipal workers would be affected.
But Thursday afternoon, after meeting with lobbyists for the Florida Police Benevolent Association and the Fraternal Order of Police, Costello emailed the House clerk asking that HB 303 be withdrawn.
“I withdrew it as a show of good faith,” Costello said. “They told me they would come back with significant compromises.”
Others who attended, including PBA Deputy Director Matthew Puckett, could not be reached for comment.
But Jack Lokeinsky, president of the FOP Lodge 31 in Fort Lauderdale, said he was “pleased that it was withdrawn.”
“Who is this guy?” he said, referring to Costello, who served eight years as mayor of Ormond Beach before his election to the House last year. “I’m disgusted that he filed a bill despite all the sentiments against it.”
Lokeinsky predicted, however, “we’re in for more” bills aimed at pension reform. “But maybe,” he added, they “won’t be anything like the nuclear bomb” version filed by Costello.
The rank-and-file’s display show of unity notwithstanding, Costello said union leaders arrived for their meeting knowing their public support has eroded in the wake of the state’s fiscal crisis.
“They told me that because we had filed something so far out there, and because they felt the media and the public is ready for change, they understood that something significant needed to happen and that they were ready to come to the table with some compromises,” Costello said.
No specific concessions were offered. When they are Costello and the unions will take them for review by House Government Operations Subcommittee Chair Jimmy Patronis, R-Panama City.
Police weren’t the bill’s only vocal opponents. The web site of the United Teachers of Dade called the bill “one of the most egregious and devastating proposals for members of the Florida Retirement System.” The union urged its members to contact the Miami-Dade delegation and other legislators to point out the negative impact of the bill.
For his part, Costello said he doesn’t necessarily want the brand of drastic reform he wrote into his 57-page bill. Rather, he said, he seeks “to get rid of the abuses” in the retirement system that he says have allowed some to unfairly benefit.
By William Gjebre, BrowardBulldog.org
With the state facing a mounting financial crisis, a new bill has been proposed that would slash retirement benefits for state and local government employees.
The proposal would eliminate overtime and other earnings beyond base pay as a basis for pension calculations, and allow optional plans that would require government workers to make contributions to their retirement plans.
The bill would also eradicate the state’s Deferred Retirement Option Plan (DROP) that allows employees to accumulate savings accounts, some of them lucrative, during their final years of employment.
At present, the approximately 760,000 active employees in the Florida Retirement System do not make pension contributions, only the employing agency.
The bill targeting these and other changes was filed last week as HB 303 in the state House by Representatives by Republican Rep. Fredrick W. Costello, whose district covers parts of Flagler and Volusia counties.
The bill is awaiting assignment to a committee by the Speaker of the House. There is no companion Senate bill. The state legislature goes into full session in March.
Costello, elected to the House last year after serving as mayor of Ormond Beach, said he has been working on pension reform for the past five years. It is needed, he said, because municipalities are struggling under the weight of fund pension costs.
“Any local government should be pleased because this provides reform,” Costello said. He added he is “committed” to development of a “fair and sustainable” plan that doesn’t burden government agencies and taxpayers.
He said his bill is “comprehensive” and the recommendations come from various groups studying reform. “I’m putting my best foot forward,” he added.
But opponents to the measure want Costello to step back and go away on the issue.
“Pensions for public employees in the state are already weak, and anything that further erodes them is an insult,” said John Ristow, a spokesman for the Broward Teachers Union. “BTU opposes the changes and proposals.”
“The bill is very poorly drafted” and would violate many commitments made to teachers and other public employees under current pension provisions, said Artie Leichner, vice president of the United Teacher of Dade, representing Miami-Dade school teachers.
Local police unions aren’t happy about Costello’s efforts either.
Rep. Fredrick Costello
“The proposed bill dictates” new and lesser pension provisions for municipalities that already have separate and different provisions in municipal agreements, said Jack Lokeinsky, President of Fraternal Order of Police Lodge 31, representing City of Fort Lauderdale police officers.
For instance, he said, Fort Lauderdale’s plan uses a different method of calculating benefits than what’s offered in the proposed bill. The city only factors in up to 40 hours of overtime annually for pension purposes while the state has allowed unlimited overtime. He added his group will do all it can to oppose the measure.
While all state and local employees would feel the proposed changes many particularly affect police officers and firefighters who generally have more in pension benefits.
League of cities supports change to the pension system
Rebecca O’Hara, communications director for the Florida League of Cities in Tallahassee, said the bill contains many of the recommendations her group supports for police and fire reforms because pensions have been too costly for some local government agencies.
“We are setting out to correct the imbalance,” O’Hara said. “Florida taxpayers have had to pay for the imbalance and the only way to correct it is to change the law.” She added the League supports a “fair and equitable plan.”
Miami, which uses approximately 20 percent of its budget for pension costs, reduced salaries and pensions last year. Hollywood, faced with pension fund shortfall, has raised its required contributions by employees to 9 percent, from 7 percent.
The League’s position was no surprise to Matt Puckett, Deputy Director of the Florida Police Benevolent Association, based in Tallahassee. The proposed bill, Puckett said, attempts to force municipalities to join the Florida Retirement System because their pension costs will be lower.
“The bill is heavy-handed,” Puckett added. “We will try to slow it down or defeat it.” His organization has 22,000 employees in various state and local government agencies.
Commissioner Bruce Roberts
Fort Lauderdale City Commissioner Bruce Roberts, the city’s former police chief, likened the changes proposed in the bill to using “a nuclear weapon on an ant hill.” He said there needs to be pension reform but he believes his city is moving in the right direction. He pointed out that unlike the state, Fort Lauderdale requires employees to contribute part of their salary for pensions, new officers pay 8.5 percent of salary.
One of the key provisions of the bill is limiting the yearly pension multiplier for future years of service for most employees to 1.6 percent for each year of service beginning June 30, 2011. Pension calculations are generally based on years of service, times the multiplier. An employee with 30 years of service, multiplied by 1.6 percent would receive a pension of 48 percent of the average salary of the highest five income years.
Current state law allows a multiplier up to 1.68 percent for each year for regular employees; 2 percent for upper management employees, such as school superintendents; 3 percent for elected officials; 3.3 percent for judges; and from 2-3 percent for various special risk employees that include police officers, fire fighters and correctional officers.
The 1.6 percent appears to be aimed at all employees in the state retirement system and those now working for municipalities, according to an analysis by pension consultants working for the FOP Lodge 31.
Another key provision is eliminating the DROP program. Costello’s bill would end the program December 31, 2012, with all those in the program receiving their accumulated funds by that date. DROP has been highly popular among state employees, providing some with saving accounts in the hundreds of thousands of dollars at retirement.
Some of the other provisions in the bill are as follows:
- Removes overtime, unused leave, or any other compensation beyond base hourly or annual salary for the purposes of retirement calculations; this is applicable to all employees, including and police officers and firefighters.
- Stipulates that the normal retirement for employees will be 55, unless higher under a local plan.
- Provides that a public employer may also offer a pension plan that requires employees to make contributions equal to that made by the employer. The bill stipulates that the public employer is not and may not be required to make a contribution to a public retirement system or plan that exceeds 15 percent of the collective payroll for the participants of the system or plan.
- Permits municipalities or special fire districts to unilaterally establish one or more new plans for police officers and firefighters with different benefits than the existing plans, or to join the FRS.