UPDATE 5: Legal Battle
St. Louis –In what has to be considered tantamount to an admission that it screwed up, the City of St. Louis crammed changes to its new fire fighters pension bill through an aldermanic committee last week (Oct. 22) amending a previous pension bill that a judge ruled illegal.
The City originally tried to strip all fire fighters, current and possibly retired as well, of their current pension plan and its benefits and replace it with a new plan with substantially lower benefits and much tougher vesting requirements.
The Firemen’s Retirement System (FRS) board of trustees immediately sued charging that, among other things, the bill was illegal as the Missouri Legislature had not authorized it, as state law requires. Fire Fighters Local 73 and the International Association of Fire Fighters Washington, D.C. counsel joined the FRS in the lawsuit.
Circuit Court Judge Robert Dierker in late September stopped the City from implementing the bill and issued an injunction, citing several flaws he felt were patently illegal and unconstitutional. The injunction remains in force until Judge Dierker makes a final ruling.
However, the judge rule that he felt the City had the right to terminate the old plan and create a new one, but with protections for retirees and all vested fire fighters (those with 20 years of service). Judge Dierker also questioned the City’s ability or right to move existing FRS assets to a new plan.
FRS attorney Dan Tobben noted there will be appeals regarding the “local control” issue, the rights of firefighters with less than 20 years of service, and for other legal and constitutional reasons as well, even if the new board bill passed out of committee last week is approved by the full Board of Aldermen.
FIRE FIGHTERS PARTIAL VICTORY
The amended bill rushed through the aldermanic hearing on Oct. 22:
• Concedes that current retirees receive benefits committed under the original plan.
• Concedes that vested fire fighters (20 years or more of service) will get pensions based on the original plan when they retire.
• Concedes that vested fire fighters only have to pay eight percent into the fund instead of the nine percent proposed under the new plan.
• Concedes that for vested fire fighters, all contributions they made under into the plan will continue to be refunded to them upon retirement.
• Reinstates a deferred retirement plan for vested fire fighters.
• Restores the ability for vested fire fighters to retire after 20 years of service instead of having to wait until they were 55 as the City’s new plan demanded.
• Eliminates the lifetime cap on cost-of-living raises a totally disabled fire fighter hurt on the job could receive. The City tried to set the lifetime limit on increases at 25 percent no matter what the actual cost-of-living increases were.
For new hires, or anyone with less than 20 years of service, the nine percent payroll deduction and all the other benefit cuts in the City’s previous bill could be implemented, if the law is ultimately found to be legal.
The one exception: retirement benefits due fire fighters with less than 20 years of service will be calculated based on the original plan for their years of service before any new law is finalized. After that, their benefits would be calculated on the new law’s provisions.
“At first glance, it does appear that the City, by offering these changes, is conceding that a number of issue asserted by FRS and the firefighters were correct, and that the fire pension legislation was significantly flawed,” Tobben noted.
The FRS lawsuit went to trial also on Oct. 22 at the same time the aldermanic _______ committee was in the process of passing revisions to the ordinance ruled illegal by the judge.
At the trial, 18-year fire fighter John Brewer, an FRS Trustee, and Jeff Glorioso, Local 73’s secretary-treasurer (and a former paramedic with seven years of service as a firefighter), testified as to the numerous problems created by the City’s new ordinance for firefighters with less than 20 years of service.
“This will really hurt veteran fire fighters who are not yet vested,” Williams said. “If you have two or three years in, you can make a decision to go elsewhere to earn more money. (St. Louis fire fighters are among the lowest paid in the region.) For the guys with 15 and 16 years, they are locked in and can’t go anywhere. That just not right, it’s just not fair.”
As the six-hour trial ended, Judge Dierker left open the possibility that he would re-open the evidence to consider possible new legislation the City was in the process of passing. “We pointed out to Judge Dierker that since we did not have an opportunity to see Alderman Fred Wessel’s proposed changes prior to them being introduced, we reserved the right to file additional pleadings or lawsuits relative to the City’s proposed new ordinance,” Tobben said, adding: “We are now analyzing this latest Board Bill in great detail.”
TAXPAYERS ARE THE LOSERS
“The sad part of this all is that any savings the City might get from this amended bill is little more than what the union had proposed last year in Jefferson City, a move fought by the City,” said Bruce Williams, a FRS trustee and former Local 73 president.
“After all is said and done, legal costs for the Thompson Coburn law firm — now more than a quarter of a million dollars — and the savings that have already been lost from the initial cost-saving proposal made by the fire fighters but fought by the City, taxpayers will be the big losers,” said Local 73 President Chris Molitor.
CITY ACTS AGAINST ITSELF
Tobben noted that, during the first hearing, the City actually requested a temporary restraining order against its own new ordinance because of problems they perceived regarding the pension ordinances.
Williams said it was “crazy” the way the bill was rushed through the committee hearing, noting that committee members didn’t have the bill before the meeting nor was it distributed to anyone else.
And there has been no actuarial study yet, as required by law, he said.
“The City had to believe their original bill was illegal, or they wouldn’t be rushing to try to amend it,” he added.