Part 10 – Using ‘blackmail’ against fire fighters
By ED FINKELSTEIN
St. Louis – Strange twists in the fire fighters pension issue occurred last week that border on the bizarre; they include a “blackmail” attempt that’s being called “insane,” an administrative screw-up that pushes off any potential savings the mayor expected into the next fiscal year, the potential revival of the only legal pension bill, one that could see $1 million in savings this year (a bill that was intentionally held up by the Slay Administration) and a full-fledged lawsuit to stop everything.
Confused? No kidding. It is indeed bizarre. But here it is:
• ‘Blackmail’ attempt
In a brand new tactic to strangle fire fighters pensions, St. Louis Mayor Francis Slay has proposed what some are calling alternatively “blackmail,” a pubic relations “enticement,” a political stunt or simply “insane” — a proposal to the Board of Police Commissioners that the City would not cut 30 police officers jobs by attrition this year IF the Board of Aldermen passed his plan to dramatically gut the fire fighters’ pension plan. The police board accept the “if” proposal last week.
Then this “enticement” was substantially enhanced when an administration official told a local TV station that the city could probably put another 300 police officers on the street if the mayor’s plan was approved. That suggestion was termed both “ridiculous” and “blackmail” by several knowledgeable sources that requested to remain anonymous.
• Lawsuit filed
On the same day (June 12) the mayor made his “IF” proposal, the Firemen’s Retirement System (FRS) filed suit in Circuit Court to stop implementation of the mayor’s overall plan now pending before the Board of Aldermen.
Calling the City’s plan and its three implementing ordinances “a violation of Missouri state statutes and the U.S. and Missouri Constitutions,” the six-count FRS lawsuit also seeks to prevent enforcement of a bill approved by the Board of Aldermen last Friday that would prevent fund trustees from suing the City in order to protect pensioners, thus denying them their legal rights, and fiduciary responsibilities, to protect the plan. An injunction hearing is set for July 6.
“This ordinance and the proposed board bills are clearly unconstitutional… even at a more basic level, the City’s actions and proposed actions ignore and disregard the Missouri Constitution Missouri statutes and decisions of the Missouri Supreme Court,” said Dan Tobben, the FRS attorney with the law firm of Danna McKitrick.
• Administrative screw-up?
As if things couldn’t become more complicated, it was publicly acknowledged last week that the mayor’s staff had not filed an actuarial report on the mayor’s proposed plan in time for any financial savings to be felt in the City current fiscal year, should his plan be approved and then ruled legal. State law requires an actuarial study be filed with the Missouri Joint Committee on Public Employee Retirement 45 days before any pension plan changes could take effect. Based on when the staff finally submitted the study, that period ends July 11. Thus implementation of any changes could not be felt this fiscal year.
The rush to judgment that was demanded by the Administration by June 30 was a pressure tactic to force the Board of Aldermen to act quickly on the premise that savings could be felt in the current fiscal year, thus allowing their ‘blackmail’ attempt using police officers as the bait, the source told the Labor Tribune.
“The fact is,” the source said, “the City knew all along it had not submitted the cost study in time, thus it could not implement any changes in next year’s budget in time, but didn’t tell anyone in the hopes of keeping the pressure on the Board.”
It’s yet another example, the source added, that the proposed changes in the fire fighters pension plan are not being driven by the City’s budget concerns, but rather a control issue.
• Pension savings bill revival?
Talk began circulating last week after all these disclosures, that there is only one guaranteed way for the City to see savings in the next fiscal year: passing Board Bill 2 introduced last year by 23rd Ward Alderman Joe Vaccaro, estimated to save the City $1.1 million annually. His bill would implement cost-saving changes in the fire fighters disability retirement plan, changes originally agreed to by Fire Fighters Local 73 and authorized by legislation passed in Jefferson City in 2011 as required by state law, but held up in Alderman Craig Schmid’s Public Safety Committee at the mayor’s request.
Had Vaccaro’s bill been given a hearing last fall and passed, it would have saved the $1.1 million beginning July 1, real savings that could have been spent on any budgetary item that the Board of Estimate and Apportionment and the Board of Aldermen agreed on. It’s now money lost because of the political fight over “control” of the retirement system.
Vaccaro last week was seeking 15 votes to by-pass Schmid’s committee and bring the bill to the full Board for a vote when Schmid announced that he would finally give the bill a hearing this past Monday as the Labor Tribune went to press.
Why the change of heart now? Speculation offered to the Labor Tribune is that when the FRS sued, realizing the lengthy period of time the entire issue will be tied up on court, Schmid decided that the City needs the $1.1 million savings that could be legally generated by the passage of Vaccaro’s reform bill and opted to give it a hearing.
The original bill was co-sponsored by Aldermen Dionne Flowers, Freeman Bosley and Samuel Moore and Board President Lewis Reed. Vaccaro said that others have now signed on.
Both Reed and Comptroller Darlene Green agreed that Vaccaro’s bill saving $1.2 million would at least achieve enough pension savings to avoid cutting the several dozen firefighters proposed by the mayor. In fact, observers point out, had the bill not been held up, the City would be seeing those savings in the current fiscal year as well as every year in the future.
“The problem is not the pension overall, but the abuse by some fire fighters of the disability pension,” Vaccaro told the Labor Tribune. “This bill is not the total solution, but it will mean real money savings for the city, over $1 million a year.
“The fire fighters are willing to compromise, the City should be as well; I believe there is a middle ground that will allow us to solve this without all the legal fighting and get this resolved to everyone’s advantage.”
PITTING POLICE AGAINST FIRE FIGHTERS
Alderman Antonia French (21st Ward) told the Labor Tribune that the mayor’s efforts to pit police against fire fighters was “insane,” adding that “Rainford (Mayor Slay’s chief of staff) picked up the tempo by saying they would add another 300 more police” if they could beat the fire fighters. That number was reported on local TV as well.
To reinforce his argument that this is basically a “control” issue for the mayor not really a financial issue as much as it’s being portrayed, French said that a suggestion was made that the City and the fire fighters sit down, agree on a dollar amount savings needed and then go to Jefferson City together to get appropriate, and legal, implementing legislation that’s required by state law.
Once they had the proper legislation, they would come back to the Board of Aldermen, where control already exists, for approval or rejection, “That offer was rejected by the City,” French said.
Sgt. David Bonenberger, president of the St. Louis Police Officers Association, also criticized the pitting of police against fire fighters.
“It’s not fair to put police back on the street on the backs of fire fighters… it’s a back-handed threat, that if the Board doesn’t pass the mayor’s bills, they will have to lose police protection.”
Bruce Williams, FRS trustee and former president of Fire Fighters Local 73, called it the “stick and carrot approach. The Mayor’s arguably illegal pension bill is the carrot being held out to the Aldermen at the end of a stick, in an attempt to entice them to vote for it with the promises of more police officers hired with any savings.”
It ignores the fact that the fire fighters agree that reforms are needed, but “sane and legal” reforms, not total gutting of the pension plan.
Williams praised Bonenberger and the Police Officers Association stating, “Our brothers and sisters in blue know what is going on here; they are aware that the firefighters supported pension reform legislation that legally needs to begin in Jefferson City and they also know that the mayor’s office worked against those reforms by testifying against them in committee and working behind the scenes to kill them.”
‘ATTACK ON PUBLIC SERVANTS’
Bonenberger told the Labor Tribune: “This is a full blown attack on public servants, not only in St. Louis, but across the nation. We are the convenient ones to try and blame for the real money problems all cities are facing. Fire fighters’ pensions are not the reason we don’t have more police officers on the street.
“And make no mistake, the handwriting is on the wall from the statements of several Administration people: once they are done with the fire fighters, they’re coming after us and the other City employees,” Bonenberger said.
‘CONTROL’ NOT $$ IS THE ISSUE
“Certainly we need pension reform, but we have to be honest about it. Money is not the issue; they want to take over the fire department pension plan to control it. The mayor is fixated on control,” French said.
WHAT’S THE LEGAL TAB?
As for the new lawsuit by the FRS, Reed noted that the City has had three major legal battles with the FRS and lost all three. “If the City loses again, the taxpayers are going to pick up another huge tab.”
Efforts by the Labor Tribune to determine just how much previous lawsuits have cost the City are being ignored by the City. An initial Freedom of Information request received a commitment from the City’s legal office to cooperate. However, once our stories continued, numerous phone calls for the information have been ignored.
ART: Thumbnail: REED
Why are fire fighters being
wrongly vilified? Reed asks
St. Louis – Agreeing that fire fighters pension reform is needed, St. Louis Board of Alderman President Lewis Reed asked why fire fighters are being vilified by the Slay Administration over pension and disability issues that were approved by the Board of Aldermen and signed into law by various mayors?
“There were at least 17 board bills over the years regarding the fire fighters pension issues that were approved by the Board of Aldermen and then signed into law by the then current mayors. Why didn’t they ask questions about affordability then?”
Reed argued that the resolution to this controversy lay in a blended solution, one that both sides could agree on. A plan he has proposed would do just that, but it’s being ignored by the Administration “because they want control, not a real solution to the pension issues.”
Reed’s plan included substantial changes in the disability pension to avoid retirees taking advantage of the system, mandatory testing every other year to insure a disability still existed, hiring inspectors to weed out fraud, checking disabled fire fighters tax returns annually to see if they are earning outside income and sharing personal medical records that could be helpful to the City’s doctors who do the disability exams.
As others have been, Reed was also critical of the pension cost figures being thrown about by the City because those numbers are based on the returns the pension fund has had in the past few years while the economy has been in recession. “The pension fund returns on their investments are coming back but the mayor won’t ask for a new evaluation because it could prove that his projected savings via his plan to gut the fire fighters pension would not be accurate. We should have the facts.”
Bruce Williams, a retired fire fighter serving on the Firemen’s Pension board, echoed the same issue. “When pension investments earn more, it costs the City less, and that’s what is starting to happen now. That critical point is being ignored in the mayor’s current comments about the ‘dire’ situation.”
Reed said he’s asked the Administration to do another fiscal review to determine if the previous numbers are still valid. “They have refused,” Reed said.
“As the economy improves, I think we’ll see the returns on the pension investments come roaring back, which means it will cost the City a lot less to fund,” he added.
Reed lamented the fact that the FRS felt compelled to file suit, which will cost the city another small fortune. “This could have been avoided.”
Killer pension changes are modified after Labor Tribune reveals existence
St. Louis – After disclosure two weeks ago by the Labor Tribune that the current debate over the fire fighters pension plan was a smokescreen for actually eliminating the plan based on several paragraphs buried in the 51-page bill, several of those killer paragraphs have been removed from the revised bill now pending before the Board of Aldermen.
But even with the alterations made in the current proposal, “there’s still the danger that a future ordinance could simply kill the pension,” warned Bruce Williams, a retired fire fighter, a former president of Fire Fighters Local 73 and a member of the fire fighters pension system board.
“That’s why we continue to need the checks and balances offered by the Missouri legislature first having to pass enabling legislation that then is in the hands of the Board of Aldermen for approval or rejection,” Williams pointed out.
Local 73 President Chris Molitor echoed those exact sentiments.
Removed from the current pending bill were paragraphs that would have:
• Allowed complete elimination of the plan.
• Forced pension trustees to personally pay the cost of any lawsuit they might file.
• Eliminated the City’s contractual obligation to pay into the pension plan.
However, a number of onerous changes still remain in the bill.
Because fire fighters receive no Social Security to supplement their pensions, that state enabling legislation check and balance is important to their survival in retirement, Molitor said, adding: “You only have to look at what is happening now at the Board to understand why this issue is so important to fire fighters. Without those checks, our pension plan is only a board bill away from being eliminated.”