MY VIEW: The pension operation can't simply be punted

The notion of punting the town’s pension “operation” (whether the firefighters’ or all three of the town employees’ pension “operations”) does not confront the complexity of the issues facing the town with respect to employee benefits.

If the town needs to have the services of a fire department, and if the town chooses to retain those services by directly employing its firefighters and emergency medical services employees, it must be prepared to deal with the issue of compensation, including pension benefits, on an ongoing basis and the issues of collective bargaining, which that entails.

Our town is facing the same problems as the overwhelming majority of public employers (towns, cities, counties, states). We have committed ourselves to the expenses for providing services during a period of “feast” (relatively speaking) but are facing the need to pay for those expenses during a protracted period of “famine.”

A major source of the town’s funds for paying employee benefits is the tax base, including the real property tax. The tax is based on the value of property, which has dropped precipitously since 2006. During that same period, the value of most retirement funds has also dropped dramatically and is only now beginning to recover. Even if the town were able and willing to issue bonds adequate to fully fund the “pension operation,” such an action, by itself, would only deal with the past.

As a trustee of the firefighters’ fund appointed by the Town Commission six months ago, I voted against the pension board expenditure of $50,000 for the (Edward) Siedle investigation, because I believed that the money would be better invested in developing a plan to deal with the future. I also voted to withhold future payments to Morgan Stanley, pending the outcome of the investigation.

At the pension board meeting May 25, I will urge the board to immediately request proposals from alternative investment managers. Sufficient questions have been raised about the fund manager’s performance that fiduciary duty requires the board to explore the availability of alternative providers. I am not as impressed as you with the qualities of the current manager. Nor was I at all pleased to be provided by Morgan Stanley with the extensive documentation purportedly supporting what you describe as “complicated and intricate” simultaneously  with the commencement of her presentation.

The Town Commission has begun the process of determining how to deal with the problem going forward. The commission’s efforts should be encouraged and supported by the town. In my opinion, the town does not have the luxury of simply punting.

GERALD FEDER is a Longboat Key resident and retired attorney. He became a member of the Longboat Key Firefighters Pension Board in November.