The rank and file of the Sarasota Police Department has unanimously rejected the city’s contract proposal. All 142 eligible officers, sergeants and specialists cast their votes against the contract agreement.
Michael “Mick” McHale, president of the Southwest Florida Chapter of the Police Benevolent Association, told The Sarasota News Leader, “It was the first time in our history of 38 years with the city that we had a unanimous vote, in this case to reject the proposal.”
The primary sticking point is pensions. Sarasota police are totally dependent upon their city pensions for retirement, because they do not pay into the Social Security System. Underperforming investments, declining property values and a smaller workforce have put the city’s pension plans under stress.
Last month City Commissioner Paul Carragiulo said cost-of-living adjustments are already causing headaches. “The ratio of workers-to-retirees was four-to-one. Now it’s close to one-to-one,” he said.
McHale told the News Leader June 7, “For many years, those in charge of the funding failed to accurately plan for the changes. For many years, the city put in the minimal amount required by the ordinance. This is too drastic a change. The city can impose the change on the employees, if the city passes the [new] ordinance.”
There’s plenty of responsibility to pass around. Generally accepted accounting procedures were amended to require better financial support for public pensions. And people are living longer. McHale notes police officers have a shorter life expectancy than civilians, but he acknowledges the gap is narrowing because of bulletproof vests and other safety improvements.
However, the pension liability doesn’t stop with the officer. Spouses are eligible to draw a hefty fraction of an officer’s pension once he passes away. If the spouse is significantly younger than the officer – the so-called Confederate widow problem – the pension liability can extend decades beyond the officer’s life.
McHale’s biggest concern is a fear the contract proposal, contained in a proposed city ordinance, will forfeit between $20 million and $60 million in state support because of the way the ordinance is drafted. “There has been a perception through the League of Cities that the [Florida] Legislature could amend the current state law to lower the mandatory minimums,” he said. “But the session is over and there were no changes made.”
The city police long ago forfeited their right to Social Security. Instead, they agreed to pay 8% of their salaries into the pension fund. When the force was more robust, their contributions – coupled with stock market gains – meant the city needed to make only small contributions.
And because the police force was not participating in Social Security, the city skipped the mandatory employer contribution into the federal program, saving millions over the years. Literally adding compound interest to the problem was an automatic cost-of-living adjustment for police pensions that outpaced inflation. And existing benefits are off the table.
“We cannot go back and change the benefits already earned,” said City Finance Director Chris Lyons.
However, the new ordinance does contain some changes. “The city commission reduced the [cost of living adjustment] by one percent, and there is no longer an automatic two-thirds spousal benefit,” said Lyons.
The News Leader over the past few weeks has spoken with several city leaders about the police pension plan. They all agree on one aspect of the problem.: “It’s a monumental issue,” said McHale.
The next step is a series of two public hearings on the police contract. No date has been set.