City Council member John Crescimbeni asked for an opinion from the City’s top lawyer on whether or not the Jacksonville Police and Fire Pension Fund board had the authority to create a Senior Staff Voluntary Retirement Plan and presented the answer to the board Wednesday.
“Our general counsel is of the opinion that the board had no authority to implement that plan and that power rests solely with City Council,” said Crescimbeni.
The Senior Staff Voluntary Retirement Plan was created and adopted by the Police and Fire Pension Fund Board of Trustees Sept. 20, 2000. It was created for senior staff employees and other employees of the board not otherwise enrolled in the City of Jacksonville Retirement System. The asset value of the plan as of Sept. 30, 2011 was $2,345,679.
“I believe this will be a lawyer to lawyer talk. We’ll have our lawyer talk to the general counsel,” said John Keane, executive director of the Police and Fire Pension Fund and one of the beneficiaries of the plan.
The City’s General Counsel, Cindy Laquidara, issued a legal opinion Tuesday stating that the board did not have the authority through the City Charter to create the fund.
“Article 16 of the charter establishes the pension system of the Consolidated Government, and does not authorize any agency other than the council to amend existing plans or create new plans,” Laquidara stated in the opinion.
“Article 22 establishes the board for the purpose of administering the Police and Fire Pension Fund, not to create pension plans,” she further stated.
The Fund’s attorney, Robert Klausner, argued that the board had the ability to compensate employees and he considered the plan “deferred compensation.”
“If it has the ability to compensate, then it has the ability to defer compensation,” said Klausner.
Keane reported that the fund has one retiree, one surviving spouse and one active member.
The City’s director of its Ethics, Compliance and Oversight Office, Carla Miller, began to study the plan after a story in The Florida Times-Union stated the plan had been created for a small group of people working for the Police and Fire Pension Fund. The story also said that Council auditors were unaware of the plan until recently. Miller is working with the Office of General Counsel as she studies the plan.
New board member Adam Herbert questioned if the City’s general counsel was able to review the plan when it was created in 2000.
“(In 1986), then General Counsel (James L.) Harrison said that in light of the independent structure of the board it would have been an irrevocable conflict of interest for the general counsel’s office to represent the (pension fund),” said Klausner.
The fund advertised for its own outside counsel and Klausner has served the fund since 1987. The board and its legal counsel developed the retirement plan in 2000.
Crescimbeni also informed the board of the decision of the Council’s Finance Committee during a recent budget hearing.
“The committee felt that the budget for the Police and Fire Pension Fund was not a reasonable budget as compared to the other two plans (general employees and corrections officers),” said Crescimbeni.
The committee has voted to place $650,000 of the fund’s budget, “below the line with the caveat that I visit the board and discuss the possibility of the board submitting a revised budget,” said Crescimbeni.
He explained that the committee had a problem with the fund’s administrative overhead and legal expenses.
Board chairman Bobby Deal explained to Crescimbeni that the new members of the board needed some time for review before providing a response to the committee’s decision on the fund’s budget.
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