When City Council decided in February to indefinitely postpone a settlement about John Keane’s hefty retirement payments, it left the door slightly open for more negotiations.
On Thursday, Mayor Lenny Curry essentially kicked that door off the hinges.
Armed with a legal opinion from General Counsel Jason Gabriel, Curry ordered the city stop paying into a benefit plan illegally created by the Police and Fire Pension Fund board. The plan has three members: Keane, the fund’s longtime administrator who retired last year; the widow of former deputy director Dick Cohee; and a fund employee.
Instead, Curry wants the three to receive retirement payments as if they were in the General Employees Pension Plan.
For Keane, it means a drop in annual payments from about $234,000 to $187,000.
In addition, Curry asked that the city’s lawsuit over the legality of the fund board’s creation of the Senior Staff Voluntary Retirement Plan be dropped.
Curry asked Gabriel for the opinion April 14, seeking it “in light of the City’s pension reform efforts.”
The mayor is pushing a half-cent sales tax extension to pay down the city’s more than $280 billion worth of unfunded pension liabilities in the coming year.
He wants voters to decide that in August, but said Thursday the legal opinion and his decision aren’t about “taking a hardline stance” to help sell the measure.
“This action is about protecting taxpayers,” said Curry. “It’s about doing the right thing.”
Council members have wrestled with the issue since 2012, when former General Counsel Cindy Laquidara opined the pension fund board didn’t have the authority to create the special plan.
Gabriel’s opinion issued Wednesday strongly backs that up.
“I think he’s taking the right course of action,” said council member Bill Gulliford, who spent months working with the pension board on retirement reform.
For all the gains that package made, the senior staff plan was still out there, much to the dismay of many council members.
“It puts an end to all this foolishness,” said Gulliford.
Council member John Crescimbeni has been one of the loudest critics over the years of the pension fund board and Keane. Crescimbeni has initiated challenges to the board’s spending and authority several times.
He said Thursday he hoped for this type of opinion and action by a mayor more than three years ago, when Laquidara’s opinion was issued. Curry took office July 1 and has since been working on pension issues.
“The tone I am getting from today’s correspondence is there is a new sheriff in town,” he said.
He said the effort likely will help Curry and others as they try to sell the half-cent sales tax extension to residents this summer, as Keane often is seen as “public enemy No. 1” when it comes to the distrust in pension-related matters.
Council President Greg Anderson also said he thought the effort sends a message to voters who aren’t happy with how things have been handled.
“It’s decisive,” said Anderson. “I think people will understand how serious we are about it.”
Fund interim Executive Director Beth McCague said Friday she was unaware of the situation until Thursday afternoon.
She said the fund likely would wait to hear from its attorneys before any possible action is made. The next board meeting is May 20.
Keane’s attorney, Jake Schickel, was not available Thursday or Friday for comment.
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