I just spent four hours and sixteen minutes listening to the City of North Miami Beach Police & Fire Pension Board’s Special Meeting held on October 13, 2011, so you don’t have to. Most of you are unable, unwilling (or both) to sit through these meetings, which are always held during business hours so that you, the residents, will most likely NOT be able to attend. I felt it was my civic duty to listen to the audio of the meeting and report to you exactly what went on at the last meeting. I apologize in advance for the length of this blog, but I hope you take the time to read it and understand what we are up against in the fight to save our city from financial ruin and the bleeding of your tax dollars. Keep these things in mind as you are reading:
A. The Pension Board consists of five Trustees, as follows:
Sgt. Leo Socorro, Chairman & Employee Representative, CPPT
Sgt. Mo Asim, Employee Representative, CPPT
- Linda Loizzo, Appointee, CPPT
- Beth E. Spiegel, Councilwoman
- Mayor George Vallejo
B. The Board is charged with the administration of the Police & Fire Pension Plan, a/k/a the Plan.
C. Three of the members are the cops who are beneficiaries of the Plan.
On the Agenda were three items:
1. LEGAL CONCERNS – THE SECURITY OF THE MEMBERS [sic] ACCRUED BENEFITS IN LIGHT OF PENSION REFORM PROPOSALS; ORDINANCE 2011-17
2. ESTIMATING ANTI-SELECTION COST FOR STATE MANDATED CHANGES – SECTION 6.06
3. SGT TODD SCOTT – QUESTION OF HIS BUYBACK CALCUATION [sic]
Okay, I’m going to look beyond the horrendous spelling and grammatical crimes committed by the person who prepared that Agenda and try to somehow summarize the proceedings of that cluster f**k of a meeting so that y’all know the status of the War on City Hall being waged by the members of the North Miami Beach Police Department.
For starters, Trustee Beth Spiegel (also Councilwoman Beth Spiegel when she wears her Council person hat) wanted to know why Chairman, Sgt. Leo Socorro, called the “special” meeting to discuss concerns about “pension reform proposals” when there were no pension reform proposals on the table. Chairman Socorro’s response was, “I couldn’t come up with nothing but legal concerns.”
Aside from the fact that this sentence contains a double negative, can someone please interpret that nonsensical comment for me? Still scratching my head, but that was just the start of the insanity.
Trustee Spiegel also noted that she asked via email what pension reforms were on the table. She got no response to her email. She also got no response from the Board.
Trustee Spiegel then asked why the meetings can’t be called for late afternoon instead of morning, since both she and Trustee George Vallejo (a/k/a Mayor Vallejo) have to take time out of their jobs, unlike the Cop Trustees, to attend. The Cop Trustees said they’d consider it, but promptly ignored her request. Again. For the third time.
A motion to table discussion of pension reform proposals was made by Trustee Spiegel, which failed by a vote of 3 Cop Trustees vs. 2 non-Cop Trustees.
Chairman Socorro then went on to explain that the cops are concerned about rumors of pension reform and it was soon made clear that the purpose of this “special” meeting was so that the Cop Trustees can try to force the hand of the two non-Cop Trustees, who also happen to be sitting Council members, to propose specific pension reforms. He wanted to know how the Board can protect its members. Soccoro then stated that he wanted cops to monitor council meetings to see what pension reforms they discuss. Helloooooo! They’re public meetings! No one needs permission to “monitor” them. He also wants “the city” to speak to the Board before “they propose legislation,” and brought up “legal concerns” for the purpose of having a mechanism in place to contact Bob Sugarman, Pension Attorney, whenever the Council wants to do anything. (Pssst! Hey, Bob, can I go to the loo?)
Trustee Linda Loizzo (a/k/a former Chief of Police) said the members want to be able to bring up their concerns without being inhibited. Inhibited? NMB cops? Really??? The members of the North Miami Beach Police Department are no more inhibited about doing freaking anything at all than they are about telling residents to GO F$&K YOURSELF (http://www.votersopinion.com/
With respect to the proposed Ordinance 2011-17, one of the items addressed is that the Council wanted the ability to create the criteria by which the fifth Board member was chosen, making sure the person had “expertise in accounting or financial planning or have an actuarial background AND be independent of the Plan.” Sounds perfectly reasonable to me. By Florida Statute 185.05, the Board must be comprised of two cops, two residents of the city, and a fifth member chosen by the remaining four. This is the seat presently held by former Chief of Police/Trustee Loizzo, who ALSO happens to be a beneficiary of the Pension Plan. Talk about a stacked deck, huh?
Now the Cop Trustees (and by extension, their fellow cops) are all worried about the Council having a say about appointing the “fifth member” because they don’t want to lose their bullying majority. Chairman Socorro told the Board he wants the right to hire outside counsel to determine if the Council proposals about this “fifth member” are legal.
Trustee Spiegel complained that she did not get the documents needed for this particular “special” meeting and instructed Attorney Sugarman to send documents to ALL the Trustees and not just a select few, i.e., only the Cop Trustees. Trustee Loizzo complained that she didn’t get advance notice of the proposed Ordinance despite the fact that it was advertised at least ten days prior to the meeting and spelled out in its entirety on the city’s website. All she had to do was click her mouse. DUH!
Trustee Loizzo then accused Trustees Spiegel and Vallejo of only looking out for the best interests of the city and not the best interests of the members of the Plan, i.e. cops. That’s interesting, huh? What about the Cop Trustees, of which there are three out of five, who are only looking out for the best interests of themselves? I’m just saying.
For lack of anything coherent to say, Chairman Socorro, speaking unilaterally on behalf of the Board (but really on behalf of the cops), threatened to sue the city.
Trustee Loizzo kept insisting that “things are coming before the Council and not the Pension Board.” Then the three Cop Trustees decided they wanted to give Chairman Socorro the power to spend up to $10,000.00 to hire an attorney on a whim. Of course, according to the Cop Trustees, “whim” means “in case of emergency.” But when asked to define “emergency” by Trustee Spiegel, that was too complicated a chore for them to perform. Sit, Ubu, sit. Good dog.
Trustee Spiegel noted that the Cop Trustees are using their position on the Board to negotiate the pension instead of simply administrating the Pension Plan, which is SUPPOSED to be their job! She wanted to clarify the separation of powers between the Board and the bargaining unit.
She was promptly and unceremoniously ignored.
Undaunted, Trustee Spiegel stated that by granting Chairman Socorro the right to pilfer $10,000.00 from the Plan to hire “outside council” on a whim, that this was granting one person too much power to take action on behalf of the entire Board without guidelines. DUH!!!
She was promptly and unceremoniously ignored.
Chairman Socorro and Trustee Loizzo stated that the “member concerns” included those retired members who are concerned about their pensions if the city decides to replace its Police Department by outsourcing to Miami-Dade County or the City of Miami Gardens, and they wanted to know how this will affect their retirement funds. I am guessing they meant to say “their MEMBERS’ retirement funds” since they were supposed to have taken off their cop hats and put on their Trustee hats for the purpose of this meeting. The irony is that the cop Trustees accused the non-Cop Trustees of doing exactly what they themselves do all the freaking time.
Attorney Sugarman reassured them that no matter what happens, the last penny will be paid to the Plan beneficiaries as long as the city remains in existence. Someone (and I don’t know who because this meeting was only recorded in audio and not video) then asked the attorney if the State would take over the Pension Plan if the city were to dissolve. The attorney said he’s not aware that the State would do such a thing.
Sure seems to me that the police UNION should think twice about trying to bankrupt the City of North Miami Beach, eh? I’m just saying.
Trustee Spiegel stated that in all the years she has lived in North Miami Beach, she never heard a word that the city was contemplating bankruptcy. One of the Cop Trustees made a comment to the effect that this wasn’t true, which prompted Trustee Spiegel to snap at him that he has no idea what she has or has not heard. Now there’s a Thought Police? The freaking NERVE!
Chairman Socorro then stated his “concern” that the two Board members, who also happen to be Council members, i.e. non-Cop Trustees, should be replaced by “citizens who are concerned about the pension members” and not by council members who can’t switch hats.
Here they go again with the hat switching! The Cop Trustees have the chutzpah to accuse the non-Cop Trustees of doing EXACTLY what they themselves are doing – PROTECTING THEIR OWN INTERESTS AND NOT THE PENSION BOARD’S INTEREST! Guess they know their own tricks best!
Some heated words ensued between the Cop Trustees and the non-Cop Trustees, and finally Attorney Sugarman stepped in to referee. He stated that the non-Cop Board members served them well, and he also thinks the Cop Board members served them well, too. According to the LAW, the Cop Trustees cannot forbid the Council members from sitting on the Board. Attorney Sugarman also stated that all the members sitting on this Pension board are “serving dual roles,” and while the Council has the right to appoint any two residents it wants to the Board, the cops also have the right to put who they want on the Board. They could even appoint the Chief of Police or the UNION president if they so desired. What’s good for the goose is good for the gander.
Just listening to this meeting so far, I am beginning to see that the Cop Trustees will NOT take off their cop hats and serve the Board as impartial Trustees. They are ALWAYS going to vote in favor of the members, who are the beneficiaries of the pension of which they are supposed to be administrating. The three Cop Trustees are also pension beneficiaries. SO WHO THE FREAK DO THEY THINK THEY’RE KIDDING?
Just when I thought I had enough fun, Mike Pons (who has been officially crowned Asshole of the Year by the Gadfly of the Year) stepped up to the podium to address the Board. According to UNION president Mike Pons, these are his UNION members’ concerns:
1. The cops want a training record of the Board with respect to pension issues. Board response: A public records request will be made.
2. He wanted to know if the Board had any information if the city has the intention to take away the members’ right to vote. Board response: NO.
3. He asked if anyone on the board was presently consulting with pension attorney Jim Lynn? City Manager Lyndon Bonner, who I didn’t even know was in attendance until that moment, answered that once pension negotiations take place he will be conferring with Mr. Lynn.
Not satisfied with the answers he was given, Asshole of the Year UNION president Mike Pons had the freaking chutzpah to state that “the mayor has a financial issue and that the ‘members’ have a great concern about that matter.”
WTF? RED HERRING ALERT!
Trustee Spiegel immediately called Pons on his bullshit by telling him that this personal attack against the mayor is inappropriate. That’s an understatement at the very least! It may be inappropriate, but it is totally within the realm of behavior we have come to expect from this jerk. He didn’t earn the title Asshole of the Year for nothing!
After the schmuck finally left the podium, the Board went on to discuss whether or not the proposed Ordinance 2011-17 is in accordance with State law. Attorney Sugarman stated that while it is not illegal, this Ordinance would violate provisions of Florida Statutes 175 and 185, causing the city to lose State funding of approximately half a million dollars. Trustee Spiegel wanted to clarify that if the city lost the State’s funding, then the city would simply have to make this payment directly to the pension fund. She also clarified that the passage of Ordinance 2011-17 would have ABSOLUTELY NO IMPACT on the benefit that the retirees receive. Once she received those answers, Trustee Spiegel then asked if there was any other negative impact to the board by the passage of this Ordinance?
Trustee Loizzo was insulted and personally attacked Trustee Spiegel for even having the audacity to ask a legitimate question. Even though it was determined that if they abandoned the provision of Florida Statute 185 for the purpose of passing the Ordinance, the members will not be impacted. But, by giving the Council the right to appoint the “fifth member” to the board, the COP MAJORITY THAT NOW SITS ON THE BOARD WILL BE IMPACTED. Obviously that’s why Trustee Loizzo got so pissed off. Now who’s not wearing their Trustee hat? DUH!
The bottom line here is that in order to pass Ordinance 2011-17, the Council would first have to decide whether or not it would be fiscally beneficial to lose the half million dollars a year from the State in order to institute necessary pension reform and potentially save MILLIONS of dollars by making sure the “fifth member” of the Pension Board is a financial expert, and most of all, NOT A BENEFICIARY OF THE PLAN. Of course the Cop Trustees raised holy hell and tried to argue the merits, but they were sufficiently smacked down by Attorney Sugarman, who told them that “the Board has no authority to decide whether or not it’s worth it for the city.” In other words, Cop Trustees, it’s none of your freaking business. Gotta love it!
Believe it or not, up to this point the meeting was relatively tame. Then the Board addressed the second item on the Agenda and all hell broke loose. Get ready to hear about one of the craziest requests by the pension members outside a funny farm. In order to understand pension benefits, I will simplify it here as much as possible. A pension beneficiary must choose from several options how he would like to arrange his benefit payments when he retires. He can either claim himself as the sole beneficiary, which will give him the largest amount of money upon retirement, or he can claim his spouse (or some other person) as a co-beneficiary, or joint annuitant, to receive the benefits upon his death, which lowers his monthly check but ensures that his spouse will keep getting money after he dies. There are several other options, but the bottom line is that when the cop retires, the dollar amount of his monthly check depends on which of the options he has chosen.
At one time, the only co-beneficiary, or joint annuitant, that could be named was the cop’s spouse. Several years ago, the State of Florida passed legislation that allowed the cop to name pretty much anyone else as the joint annuitant, and that it didn’t necessarily have to be a family member. The State also allowed them to change beneficiaries even after they retired. According to State Statute, these changes were supposed to be “cost neutral to the plan.” The unintended consequence was that if a cop found out that his spouse was ill and would most likely die before him, he could then change his joint annuitant to his child, for example. This change, in effect, increased the costs of the payouts because the child was likely to outlive the cop and the cop’s spouse. Since this is supposed to be “cost neutral to the plan,” someone or something has to come up with the money to pay for these additional benefit payments.
Pension Board Trustee George Vallejo made an interesting observation. He said, “This is like buying property insurance after the house burned down.” The actuary agreed. Trustee Vallejo followed up with, “What would an insurance company do in this situation?” The actuary responded with, “They wouldn’t sell the policy.” DUH! Trustee Vallejo then stated, “This is unheard of in the real world.” He continued, “Then really it seems to me that this comes back to we’re forced to offer it so we need to determine what is our cost so that it doesn’t damage the plan.” When told the high end of the cost would be 15%, Mr. Vallejo responded with, “It’s obviously not zero. Clearly the plan would be impacted by this so it’s now a matter of us having to debate more or less what we think is the reasonable [solution].”
The actuary suggested that the Board could amend the plan to abandon State law and limit the choice to a spouse or a dependent child, and that if the cop were to choose another person, such as a sister or a grandmother, then the cop’s benefits would be reduced accordingly. As it stands, the Plan requires that the payment schedule should be based on the joint annuitant’s age, regardless of the relationship, and that the younger the person, the greater the reduction in benefit. The Board suggested that they might want to perhaps take into consideration the relationship of the joint annuitant, as opposed to age, so that if the person is a spouse or child there would be a lesser reduction, but if it were someone not a spouse or child, the benefit would be reduced more.
Whichever choice the Board makes, there is nothing “cost neutral to the plan” about it.
The Board then then discussed the possibility of charging everyone more up front to spread the risk, but then they considered the possible risk that more cops will take advantage of these changes on purpose simply because they are paying more, thereby increasing the cost to the Plan even more. The alternative solution would be that only the cop electing this joint survivor option should have his benefits adjusted. The problem occurs when someone wants to change options after the fact. Yada, yada, yada.
Somebody’s gotta pay for all these increases, right? The real problem arose when someone mentioned that in order to pay for these changes, we could “raise the unfunded liability of the Plan.” WHAT? Hold up there, cowboy! RAISE THE UNFUNDED LIABILITY OF THE PLAN WHICH ALREADY STANDS AT OVER SEVENTY MILLION DOLLARS! Folks, that’s real money that you and I owe for pensions already being paid out to cops. And the Cop Trustees want to INCREASE OUR DEBT so they can party on our dime!
Trustee Spiegel jumped in and said that if there is to be “no additional cost to the Plan,” none of these “solutions” solve the problems at hand because it will most definitely affect the cost of the Plan. Trustee Vallejo spoke up, “Even if we allow these changes at zero cost to the members, then it still needs to be paid for without cost to the plan, right? So this necessarily will raise our unfunded liabilities? Is anyone here arguing that utilization is going to be zero? Then clearly, whether it’s a dollar or ten million dollars, it’s something. So clearly it will impact our unfunded liabilities by some number, right? RIGHT! So, since we cannot affect the cost of the plan, that number must be paid for by the city as an additional make up.” At that, Trustee Spiegel noted, “Which is not what the [State] legislation intended.”
So, what did one of the Cop Trustees do at that very moment? He made a motion to FIRE THE ACTUARY! Yes, folks, you got that right. They didn’t like the message so they’re going to fire the messenger!
Trustee Vallejo was obviously frustrated at this point, and stated, “You have fired an actuary in the past and replaced him with another actuary. I am concerned because no one here is refuting and saying that their work is wrong. I’m concerned because it’s as if you’re telling me, “You’re not happy with what I’m going to tell you so you’re going to go find someone else who will tell me what I want to hear. That to me is wholly inappropriate and that’s not proper.” Trustee Vallejo went on to say that, “If the math or the actuary studies are wrong, that’s one thing. But to say that you just want to shop for the answer that you want to hear then that means we are not performing our Board duties in the proper way.”
Trustee Spiegel then made a motion to table the vote to fire the actuary until the first meeting of 2012. She was then accused of assuming that all police officers are going to defraud the plan. HUH? RED HERRING ALERT!
On that motion, the two Cop Trustees voted “no,” while Trustees Spiegel and Vallejo voted “yes.” Trustee Loizzo, who did not hear the entire discussion because she was on another phone call, came back on the line and was allowed to vote. Of course she voted “no” even though she had no idea what was going on. Once the vote on the motion to table failed, the Board had to finish voting on the motion to fire the actuary. Trustee Loizzo then broke in with a motion to table the firing of the actuary until November, 2011 instead of firing him right now. There was no second, and the motion failed. The Board then had to go back AGAIN and vote on the motion to fire the actuary. Talk about a cluster f**k! THIS is supposed to be a PROFESSIONAL Board! And here I thought voting on a Little League motion was insanity personified. This Pension Board is even more laughable than the former City Council with ousted idiot mayor Myron Rosner at the helm.
During discussion on the motion, Trustee Spigel wanted to know if the Cop Trustees had an actuary ready to step up and take over. Um, no. She wanted to make sure that this actuary isn’t being fired because he’s telling the truth and because the Cop Trustees don’t want to hear the truth. BINGO!
Trustee Vallejo stated that it is GROSSLY irresponsible to fire the actuary because the cops don’t like what he’s telling them. BINGO!
In fact, when Trustee Vallejo asked for facts that the actuary did not do his job, the Chair said “We’re not talking about facts. We’re talking about opinions.”
The ensuing discussion on this motion included more nonsense, but the bottom line is that the Cop Trustees were basically shooting the messenger. Trustee Spiegel tried to “call the question” (which means to halt discussion and go to a vote on the motion), when a clueless Trustee Loizzo wanted to know why the actuary was being fired. Then she said she wanted attorney’s opinion, and he had to remind her that he already advised them to wait until November, which Trustee Loizzo thought was a good idea. Hellooooo! Trustee Loizzo JUST VOTED NO on the motion to table the vote until November. Did she NOT know what she voted on???
FINALLY, the vote was called. Two out of three Cop Trustees voted yes. Non-Cop Trustees and Loizzo voted NO!
Hallelujah! Praise the Lord and pass the potatoes!
After all was said and done, Trustee Loizzo then made a motion to table the firing of the actuary until November. WTF? DEJA FREAKING VU, EH? She had to be reminded by Attorney Sugarman that she voted that down! She then wanted to change her mind but the issue was voted on and off the table. Can someone say DUH?
She then made a motion that until we decide to hire another actuary that we keep the one in place. Attorney Sugarman had to smack her down again by explaining that this is already the plan. Can someone say DUH?
By the time the third item on the agenda came up for discussion, Attorney Sugarman told the Board that this hearing would require about an hour and a half to deal with and that the Sergeant (Todd Scott) would need to make a presentation and bring expert witnesses. The attorney also said he had another appointment and needed to leave. Right now.
After dithering for a while and figuring out whether or not this particular matter could be dealt with at the next regular Board meeting, it was added to the November meeting’s Agenda.
Another item added to the Agenda, which was brought up by Trustee Spiegel early on, was that the Board does not have a budget. Considering that this Pension Board spent FIFTY THOUSAND DOLLARS in TWO YEARS FOR TRAVEL EXPENSES, INCLUDING TRIPS TO NEW YORK CITY AND LAS VEGAS, I’d say a budget is definitely in order. DUH!
As a motion to adjourn was made, Trustee Loizzo claimed she was confused about what she voted on and wanted to continue the meeting. The motion to adjourn was a disaster in and of itself because after four hours and fifteen minutes Attorney Sugarman definitely had to leave and he basically told them they’d be fending for themselves. Trustee Loizzo then made a motion for the Board to put out an RFP to hire a new actuary before the November meeting, even though the present actuary is still on staff. After much confusion, I’m pretty sure that motion passed. Whatever.
A motion to adjourn was FINALLY made, voted on and passed.
Oh yeah. This was a total cluster f**k.
To be continued in November. Or December. Or whenever the Board can get its act together enough to schedule a meeting.
Aren’t you sorry you didn’t take the day off from work to watch this Mexican Hat Dance? Yeah, right.
“Spreading the Wealth”