If incumbents Phyllis Smith and Frantz Pierre win their council seats in the upcoming North Miami Beach municipal elections this May, they won’t be eligible for the cushy lifetime benefit of city-funded health and dental insurance when they leave office.
That was the legal opinion by outside counsel, David Miller, an expert in labor and employment law who was assigned to sort out the long history and “conflicting information about this business of lifetime benefits,” Mayor George Vallejo said.
In the 20-page report, the two currently elected officials — Smith and Pierre — “might have become vested in the benefits but failed to do so before the benefits were eliminated.” Both Smith and Pierre were first elected to their council seats in May 2007 and are running for their fourth terms.
Part of the confusion stemmed from a resolution passed in 2008 (R2008-51), which eliminated benefits for officials elected after October 1, 2008.
For members who were already elected to four terms and retired, they became vested (entitled to benefits) once they left office. Members who were elected before Oct. 1, 2008, could potentially become eligible after being elected to four terms while those members elected after Oct. 1, 2008, would not be eligible for post-service benefits.
According to the report, the city must continue paying lifetime benefits to the small number of former elected council members — seven in all — and a larger number of former management employees because they became vested.
Pierre said that when he was first elected in 2007, he was told that after eight years of service, council members were entitled to lifetime benefits.
“Back then, I thought it was absurd and I still think it is absurd. For that same reason, I never took insurance.” Pierre said it was his idea to stop the lifetime health benefits because of “a lot of abuses of the system.”
In the resolution Pierre sponsored in 2009 (R2009-57), the council went a step further and eliminated city-paid healthcare benefits for all current and future elected officials.
For the city to challenge those benefits would require “ a compelling state interest” because the vested benefits are considered “substantial rights.” However, the report did not rule out the removal of the benefits for senior management employees whose benefits have not “ ripened into vested rights. ”
But in 2010 the issue came up again. Resolution 2010-41 allowed council members to participate once again while they are sitting council members. But that resolution did not address post-service benefits.
“The bottom line of all this is that there is a small group of former council persons out there, who become legally entitled to benefits at the time they ended their service. There is an even smaller group of former council members who were sitting on the dais at the time (resolution) 2008-15 was passed and they are legally entitled and vested in that larger package of benefits,” Miller said.
“We are 1,000% confident that this opinion is sound. The amount of documents we looked at is massive. This is the final answer you’re going to hear on this subject. Some people may like it and some people may not like it but we’re prepared to defend it to the end,” said city attorney Jose Smith at the April 7 council meeting.
“So are you saying basically, everybody up here is not entitled to post-service healthcare,” Vallejo said.
“Not only not entitled, but can not become entitled unless the counsel were to pass another resolution,” Miller said.
Smith called the controversy a “ nonissue” because she said when she was elected to office she didn’t even know council members got a salary let alone insurance.
“We now pay for our own insurance, even though I’m Medicare. I kept the group insurance because the more healthy people that are in your group insurance the less it costs for everyone. So it cost me twice as much a month for the last five years and I’m happy to do that.”
Follow Patricia Sagastume on Twitter @patsagastume