Miami-Dade County

The legacy of Miami’s political pensions

Miami Mayor Tomas Regalado
Miami Mayor Tomas Regalado EL NUEVO HERALD

In her eight years as Miami city commissioner — including two in which she was suspended from office — Michelle Spence-Jones never received more than $58,200 in salary. Yet, when she turns 55, she will receive a $127,000 yearly pension, heaped out in $10,600 monthly installments for the rest of her life.

Miami Mayor Tomás Regalado, her former colleague, leaves office in 2017 with a yearly $84,550 retirement benefit. His predecessor, Manny Diaz, receives $82,500 a year. And former City Commissioner Angel González began receiving $4,794.17 every month starting Nov. 16, 2009 — the day he resigned and pleaded guilty to exploiting his office.

The pensions afforded Miami’s politicians were made possible by a once-modest retirement trust created in the 1990s and made far more valuable by tweaks and significant pay raises during the 2000s. Commissioners closed the system in 2009 for political reasons, and when Marc Sarnoff steps down this November, his pension, worth more than $62,000 a year, will be the last benefit promised by the Miami Elected Officers’ Retirement Trust.

But the legacy of a trust created by commissioners for commissioners still weighs on politics and purse strings in Miami.

“Elected officials, if they’re really doing this for the greater good … they shouldn’t be receiving a pension,” said Lt. Javier Ortiz, president of the city’s police union. “That should be for first responders, not politicians.”

Commissioners first created the retirement trust in 1994, back when they and the mayor were paid a paltry $5,000 salary. The results were modest. Maurice Ferré, Miami’s longest-serving mayor, gets a pension worth just $326 a month.

But then the commission raised the mayor’s salary to $97,000 and later voted to allow themselves to earn a pension after seven years of service instead of the previous 10, after voters set eight-year term limits. In 2003, voters raised commissioners’ salaries to $58,200, and with elected officials’ pensions based on their W-2 tax form compensation — their total packages run around $103,000 today — that meant for some sizable retirement benefits.

“I guess I was mayor at the wrong time,” said Ferré.

And yet, unlike Miami’s cops, firefighters and general employees, Miami’s elected officials never paid a cent from their own pocket into their pension system. Taxpayers, meanwhile, are paying $840,000 to fund the system this year. The most recent actuarial report on the Elected Officers’ Retirement Trust states that cost of funding the overall value of Sarnoff’s pension alone would cost the city $109,000 in 2014.

“Public service was never intended to be a profession resulting in great personal wealth, and it certainly should not come at the expense of Miami's hardworking taxpayers,” said Dominic Calabro, president of fiscal watchdog group Florida Tax Watch.

Sarnoff and other current and former elected officials defend their pensions. Sarnoff said politicians who are elected to Miami City Hall are giving up private-sector compensation to become full-time servants, even though the job is considered part-time. Sarnoff said different elected officials are worth different amounts to the public.

“A good elected official is probably priceless,” he said.

And a “bad” commissioner is, in the case of Angel González, worth $57,530.04 a year.

That’s how much González receives, according to the pension fund. González resigned from office Nov. 16, 2009, after negotiating a deal with prosecutors and pleading guilty to a second-degree misdemeanor. He admitted to misusing his public position to land his daughter a no-show job with Delant Construction Co.

González did not return phone calls. Reached by text, he texted back “D.D.” and then “D.D. B I H.”

He declined to elaborate.

Former Commissioner Michelle Spence-Jones’ case is a little different. Spence-Jones was removed from office by the governor four days before González resigned, and charged with a single count of grand theft for allegedly redirecting $50,000 in county funds to a family business.

A jury found her not guilty in March of 2011, deciding she did nothing wrong in 2006 when she asked a developer for a charitable donation while he was awaiting a commission vote. She returned to office in August 2011 after being suspended for nearly two years.

When she returned, she received credit earned toward her pension for the time she missed, as well as back-pay that inflated the value of her city W-2 tax form to $231,292. That became the base value for the formula used to calculate her benefit. Under the system, commissioners receive 50 percent of their highest year’s taxable earning, plus an extra 5 percent for every additional year served beyond their seventh.

Spence-Jones did not respond to multiple phone calls and a text message. Having technically served for eight years, she’ll begin receiving $127,210.66 when she turns 55 in 2022.

The only other analogous case to Spence-Jones in Miami is former Mayor Joe Carollo, who earned a pension worth $15,000 more than his mayor’s salary after he received back-pay one year due to being reinstated to office following the discovery of absentee ballot fraud. The commission responded by slashing his retirement benefit down to about $85,000 a year.

Then-Mayor Manny Diaz also passed legislation that reduced the mayor’s pensionable compensation to salary only — but then he received a $53,000 raise, allowing him to retire with an $82,500 pension. Diaz’s successor, Regalado, will be the last mayor to receive a pension under the plan. He noted that he earned his pension as a long-time commissioner, and hasn’t increased the value of his retirement benefit while mayor because of changes to the system in 2009.

He said he’ll make good on a 2009 pledge to donate a quarter of his annual pension to charity.

The pension changes made that year at the urging of then-Commissioner Joe Sanchez came during an oncoming financial crisis. Commissioners closed the pension system to newcomers, froze the benefits of officials who were already vested, and created a minimum retirement age of 55. Elected officials now have access to a defined contribution program.

But the pensions accrued by Spence-Jones and Sarnoff continued to grow because elected officials who’d served less than seven years were allowed to continue adding to the value of their benefit. That allowed Spence-Jones to earn a pension worth more than $100,000 a year — the cap now in place for police and firefighters.

Still, Sanchez said the legislation was good for the city, noting that because of his proposal he won’t get his own $75,000 pension until 2020.

“I could have walked away and I’d have already collected that money,” he said. “It was good legislation compared to what was there before.”