by Bradley Parsons
Staff Writer
The City Council took a step toward approving additional retirement benefits for members of the Police and Fire Pension Fund after making certain the City wasn’t footing the bill.
Several members of the City Council’s Finance Committee were concerned about the perception created by adding to benefits during tough budget times. But the bill passed unanimously.
The legislation would release about $1 million annually to Fund members from an account funded by insurance premiums statewide. The account is fueled by a state tax on home insurance premiums. The Fund had previously dispersed from the account bonuses to its retired members every other year. If the legislation passes the full Council Tuesday, those windfalls would pay out every year.
The payouts range from $800-$1,600 per year. The Fund wants to give the bonuses annually to help defray climbing medical costs for retirees, said Fund Administrator John Keane.
“We have more than $8 million in the (reserve) account right now,” said Keane. “So it seems like an appropriate time to step up and offer relief to our retirees faced with the climbing costs of health care.”
The Council members agreed that Fund members needed help with health care costs and liked that the money came from “Uncle Florida,” as Keane identified the funding source. But some members worried about the message the increase would send.
With the City facing what Council Vice President Michael Corrigan called “a budget crisis,” the pension hand-outs might send the wrong message, said several members. Those members wanted to require Council approval before the annual bonuses could be paid out.
“Perception is reality,” said Council member Lad Daniels. “And during really tough budget times I think the Council should convey that we’re keeping engaged.”
But Keane said annual Council votes on the bonuses would increase the perception that the City is loose with money.
“I don’t know how you dampen that perception by voting every year,” said Keane. “That means more people are going to be asking every year, ‘Why are you doing this?’”
The Council removed its request for approval authority. Finance committee chair Daniel Davis told Keane that he wants annual reports on the bonuses and the health of the reserve fund.
Corrigan was concerned that the insurance premium fund might run low in future years, depriving pensioners of the benefits. But Keane said the insurance premiums had been stable sources of income since the reserve fund’s inception in 1939.
“As long as people keep building houses in Florida, they’re going to have to insure those houses and the fund will continue to grow,” said Keane. “The state keeps part of the tax so they’re not going to repeal it.”