Miami Commission Considers Different Pension Rules for Executives

Miami city commissioners, who in recent years have cut severance pay and pensions to balance budgets, could vote Tuesday to allow four of the city's highest earners to return from retirement and collect their pension on top of their hefty salary.
by | May 23, 2013

By Charles Rabin

Miami city commissioners, who in recent years have cut severance pay and pensions to balance budgets, could vote Tuesday to allow four of the city's highest earners to return from retirement and collect their pension on top of their hefty salary.

The plan could mean millions of dollars of extra pay over the long haul for the city clerk, auditor, city attorney and the city manager. But it isn't sitting well with the unions representing lower-paid employees, whose leadership call the idea "double dipping" and an abuse of power.

Commission Chairman Marc Sarnoff, who is sponsoring the item, said the change would allow the city to keep experienced employees on board in the four key positions.

It's even possible that the commission could negotiate lower salaries should the employees want to come back, he said.

The salaries for the four positions already have dropped significantly in recent years as commissioners negotiated new terms. City Manager Johnny Martinez makes $195,000. City Clerk Todd Hannon makes $125,000. City Auditor Ted Guba makes $145,000, and City Attorney Julie Bru makes $228,000.

Bru, who is set to retire in September, is expected to receive a pension in excess of $150,000 a year. If the city rehired her, her combined salary and pension would be more than $378,000 a year.

Javier Ortiz, president of the city's 1,100-strong Fraternal Order of Police union, called the plan a slap in the face to rank-and-file workers who won't have the same opportunity and who have suffered severe cuts the past five years.

"It's an insult," he said. "There are people who have lost their homes. All we're asking for is equality."

City employees who want to continue working after retirement have two choices: They can go into an early retirement program, known as the deferred retirement option program, or DROP. The plan allows employees to "retire'' but continue working at full pay for a specific length of time while accruing their pension. They cannot touch the pension earnings until their leave date, when they receive a lump sum. Or they can retire and then return to the city, but forego their pension until they retire again.

Pay and benefit reductions have been hot-button issues in the city since the economy tanked in 2007. To plug budget shortfalls the past three years, Miami has taken advantage of a state statute that allows commissioners to bypass contracts terms they negotiated and make selective cuts.

Police, fire and other employees have been hit hard, taking cuts that, when factoring in lost perks, amounted to a third of their salaries for some. Just last September the city's four unions agreed to $20 million in cuts to help close a $40 million budget hole.

Severance packages took a hit in October 2011 when commissioners, steaming over a series of payments to departing employees, took control from the city manager and slashed the payouts by up to 75 percent. The previous June, Chief Financial Officer Larry Spring and City Manager Tony Crapp Jr. resigned within a week of each other, departing with a combined total of $154,000 in severance.

Commissioner Francis Suarez, who along with Commissioner Frank Carollo voted on first reading against the proposed plan to carve out special treatment for the four high-ranking employees, said it's not entirely fair to the city's nearly 3,000 employees.

"My issue is the tendency in government to set up a situation where it appears to be a double dip," said Suarez, who said he will vote no again on Tuesday.

Fire union President Robert Suarez said if commissioners change the rules, they should apply them to everyone.

"We have firefighters and police officers coming to the end of [early retirement plans] who have to leave. Why can't they stay?"

(c)2013 The Miami Herald

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