The city of North Miami Beach is suing three police representatives serving on the Police and Firefighters Retirement Board, along with the board, after they voted to ignore a court opinion that supported the city’s right to enforce a pension reform ordinance.
Earlier this month, the Third District Court of Appeal ruled in favor of the city when it determined changes made to the General Employees Pension Plan last year were lawful and that a vote by 66 2/3 of active members was not required to implement the changes. The three-judge panel ruled that to do so would violate the city’s right to collective bargaining. In addition, the court upheld the city’s right to amend the pension ordinance by simply adopting a new one, which North Miami Beach did in 2013.
The City Council voted 6-0 to sue the pension board last week. Councilman Frantz Pierre was absent. Mayor George Vallejo, who is one of the five trustee members of the Police and Firefighters Pension Board, said the police representatives acted irresponsibly.
“You have a pension board that is an agency of the city that has gone rogue and is not following the law,” Vallejo said.
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Councilwoman Beth Spiegel noted that the pension board’s attorney advised board members to abide by the pension reforms but in the end they “voted 3 to 2 not to implement the new rules,” Spiegel said.
Robert Sugarman, attorney for both the General Employees and Police and Firefighters Pension boards, said in the General Employees’ legal decision, “those employees agreed upon collective bargaining and they agreed and ratified their decision.” In the situation with police and firefighters negotiations, “no decision was reached and the city imposed a decision over union objections.”
North Miami Beach City Attorney Jose Smith said the city contributed nearly $800,000 more than it should have during the 2013-14 fiscal year.
The city has been unable to achieve the reductions in contributions and unfunded liabilities it anticipated, Smith said.
A retirement plan actuary, which prepared the financial impact of the city ordinance, determined North Miami Beach would reduce its pension contributions $790,366 and the employees contributions by nearly $130,000 if the board had adopted the rules.
The savings come from reduced pension benefits that changed the minimum retirement age for workers to 62 years old with 10 years of service or age 55 with 25 years of service. Among other things, the plan gives future retirees a pension payment equal to 2 percent of their final working salary per year of service, down from 3 percent. There is also no longer a Deferred Retirement Option Program (DROP) program, which allowed employees to technically retire but continue working while banking their pension.
Sugarman said that once the city has filed its lawsuit, there will be a public meeting. In the meantime, he said the recent court opinions in favor of the latest pension reforms have not been finalized.
The three trustees that voted against adopting last year’s pension reforms are police representatives Sgt. Leo Socorro, Sgt. Mo Asim and former Police Chief Linda Loizzo. As of Monday afternoon, both Socorro and Asim did not respond to calls. Loizzo hasn’t been reached.