Fort Lauderdale's Police and Fire Pension Plan:
Is There a Better Way?:

Police and Fire pensions are a major cost to the City, but are a vital part on our competitiveness in hiring and retaining public safety professionals. Can we find a better way to do this?

This panel will consist of Commissioner (and former Police Chief) Bruce Roberts, FOP President Jack Lokeinsky, former City Manager George Hanbury (currently VP/COO of Nova Southeastern University) and Robert D. Klausner, Esq. (attorney specializing in public employee pension funds).

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Wednesday, September 23, 2009

7:30 am: Coffee & Networking
7:45-8:45 am: Presentation/Discussion

FAU/BCC Higher Education Complex, 111 E. Las Olas, Room 1110 

     

Executive Summary Notes – Fort Lauderdale Forum meeting
September 23, 2009, FAU downtown

With September’s annual return of our civic focus to city issues, budgets and politics, it was perfect timing for the popular Fort Lauderdale Forum to get back to its business by hosting a timely panel discussion on the issue of Fort Lauderdale Police and Fire pension benefits in the context of contract negotiations with the City of Fort Lauderdale.

The Forum’s September 23rd meeting, hosted by former Fort Lauderdale Mayor Rob Dressler, featured a panel of real world experts with direct experience on the subject, including former Chief of Police and now Vice Mayor Bruce Roberts; former City Manager Dr. George Hanbury, now COO of Nova Southeast University; Fort Lauderdale Police Sgt. Jack Lokeinsky, also President of the local Fraternal Order of Police Lodge and a member of the contract negotiating committee; and Robert Klausner, former Professor of Labor and Industrial Relations at Nova and a specialist in pension law. Also invited to sit on the panel was City Auditor, John Herbst, who answered several questions about the negotiations process during the course of the event.

Dr. George Hanbury led off the discussion recounting his experiences with the subject during his 8 years in City Manager, noting that the current economic environment which we find framing the contract negotiations now in 2009 were quite similar to those facing both sides in the early 90s negotiations. Times had been quite good in ’89‐’90, much like our robust economy of 2003‐2006, and because of those prosperous times, some of the benefits of those contract negotiations may have been a little too generous. So then, just like now, when tough times and recession hit with an unanticipated severity, the benefits granted during the good times came under greater scrutiny and the dynamics of the city and union relationships were negatively affected. Dr. Hanbury also discussed the DROP program, Deferred Retirement Opportunity Program, which has also seen some controversy during these times of increased benefits scrutiny. In closing, he framed the questions as basically being: ‘How do we reward our Police and Fire employees for the time they worked ‘at risk’?’ and ‘How much does the taxpayer pay and what is fair to expect in times like these?’ He closed by suggesting that the city and unions look back at the experience they shared in the 90s, where they took the approach that things will better in the future and they can look to regaining then some of the things they had in the good times and that had to be forgone in the tough times.

Sgt. Jack Lokeinsky, President of the FOP, was the next panelist to speak and responded to previous remarks about the need to make sacrifices when times are tough, noting that in 2003‐2004, officers took 6 days of unpaid leave and no pay raises at all so that they wouldn’t have to lay off fellow officers and leave the departments shorthanded and put citizens at greater risk. While unable to comment specifically on current negotiations, he spoke generally about the need for the City to be good, responsible managers of the pension monies during good times so that the projected funds needed to meet contractual benefits would still be there in the lean times. The Sergeant also noted that the law dictates how certain benefits funding can be spent and cannot be spent, citing the differences between defined benefit plans and defined contribution plans and the impacts on state and cities and employees when the differences are taken into account. He further discussed the impact on police force staffing levels of Florida’s portability features, bringing more ‘What’s in it for me?’ applicants for positions these days that are seeing turnover levels continuing to increase, and at the same time stated that it’s a tough issue as the cost of training new officers is also growing and the real cost is borne by the residents of the cities who need experienced cops on the street.

Vice Mayor and former Fort Lauderdale Police Chief Bruce Roberts was the third speaker and also reminded that he could not speak about ongoing current negotiations, but noted that he was involved in the same negotiations Dr. Hanbury previously mentioned and agreed with many of the comments and suggestions made by Dr. Hanbury. He also addressed the issue of police compensation and benefits as related to efforts to keep up staffing levels and the difficult challenges of attracting the best and brightest to our city while keeping training costs and retention costs to manageable levels when city revenues were being severely reduced by falling property taxes. Vice Mayor Roberts discussed the effects of COLA proposals, officer compensation levels, the DROP situation and cited the need for fair and equitable reforms to police benefits on a statewide basis to reduce the uncertainty and transiency of officers from city to city within the state.

Robert Klausner, Labor and Industrial Relations Attorney and specialist in public employee pension funds was the fourth and final speaker, opening his comments with elaboration on some earlier comments on the differences and desirability (or lack thereof) of closing the current defined benefits plan and switching to defined contribution plans, stating that it would take approximately 24 years to break even doing so. He also stated that over $1.3 trillion dollars in market value had been lost in the recent market meltdowns, ruining many defined contribution plans in the process and further complicating today’s situation. Mr. Klausner asserted that local government is the biggest bargain in our country for taxpayers, as the level of service is substantial, particularly for relatively low local taxes, citing all the many services provided by cities like citing water, garbage, clean streets, libraries, emergency management and 911 services and more. In reality, the pensions of city employees are a deferred part of their salary that’s a contractually binding obligation, and public pension funds give back by being among the largest investors, property owners and providing most of the public financing in the country and in the world.

Each of the panelists addressed several audience questions in the closing minutes, including questions about the city unfunded pension liabilities, actuarial studies used in calculating future pension liabilities and the challenges of structuring fair, equitable and affordable plans for the good of everyone involved today and in the future.

By George Mihaiu, GMStrategic Media Aka ‘George Q. Public’ georgeqpublic.blogspot.com

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