Pursuing legal action over the creation of an unauthorized pension plan “won’t be a quick turnaround,” says the city’s general counsel.
It might end up costing taxpayers up to $1 million, says one City Council member.
Yet, despite those real possibilities, many on council believe it’s time to hold the line.
“Sometimes we have to stand up for the city ... instead of being allowed to be run over,” said council Vice President Lori Boyer.
After taking a step back, a resolution reauthorizing the city’s legal team to pursue litigation over the validity of a much-criticized senior staff voluntary pension plan is heading back to a final vote. The measure was up for a full council vote last week before members by a 13-6 vote decided to let the Finance Committee hear it.
Finance Chair Bill Gulliford pushed for that move, saying Monday he wanted the entire debate — including the possible city expenditures — framed on what’s become an emotional issue.
Gulliford, though, said he isn’t sure it’s worth it. Early figures, he said, show the move costing $500,000 to $1 million. And the process could take at least 2 1/2 years, he said.
For many on the committee, though, it is a matter of principle. The special pension plan was created in 2000 and has three members, including Police and Fire Pension Fund administrator John Keane. It wasn’t discovered by city auditors until 2012, with a binding legal opinion coming down shortly after. That opinion said the fund’s board wasn’t authorized to create the plan.
That plan is closed for new members, but the fund’s board in November decided to keep the plan in place because it was the cheapest option until Keane retires. Keane recently announced his retirement date for the end of this week. The plan is estimated to annually pay him more than $227,000.
Since 2012, several council members have pushed back, citing the legal opinion being ignored.
“We can’t allow that to happen,” said Boyer, a member of the finance committee.
If the fund board, independent authority or any other entity ignored such orders, “we might as well not be here,” she said.
“It’s important we maintain relevance,” said Boyer.
Jason Gabriel, the city’s general counsel, suggested the case wouldn’t be quickly resolved. It’d also be a situation needing hired pension experts as consultants.
Gabriel said the legal opinion, issued by his predecessor, hasn’t been overturned and he agreed with it.
“The law is the law,” he said. “The opinion is the opinion.”
He characterized the situation as “troublesome.”
Council member John Crescimbeni, one of the more vocal critics of the fund, pushed for the council resolution to move forward, saying the board was irresponsible.
Still, not everyone agreed.
The group passed it 6-1, with council member Danny Becton dissenting.
Becton said that with fund board members being replaced and a new executive director soon taking over for Keane, he wanted that transition to play out.
“At this point, everything is changing,” he said. “Hopefully, the attitude is changing.”
And despite voting for it Monday, Gulliford said he’s inclined to vote against it next week — his Monday decision was to ensure it advanced.
It will be back up for a final vote Monday.
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