State Attorney Willie Meggs, after an investigation, concluded that the City of Tallahassee did not violate any law or ordinance related to pension calculations implemented after the 2005 controversial vote on deferred compensation.
In a letter to local businessman Erwin Jackson, who asked for the review, a State Attorney investigator wrote:
the City Commission’s decision to extend their employer funded deferred compensation program to include the elected Commissioners and all of the appointed officials as a retirement benefit revealed no evidence of a crime nor a criminal conspiracy on the part of the City officials, as all matters were publicly noticed and vetted through both the City Attorney and Treasurer in order to comply with the law.
The State Attorney’s investigation revealed new details about the deferred compensation program supported by the City Commission in 2005. Mayor John Marks and City Commissioners Andrew Gillum, Allan Katz, and Debbie Lightsey voted for the program while City Commissioner Mark Mustian was the lone dissenting vote.
The investigation revealed the program cost taxpayers more money than was originally disclosed and reported by local media. The original cost of the program for the elected officials was estimated to be $500,000.
However, with the revelation that the vote also impacted pension calculations for some elected officials, the cost of the program for taxpayers is closer to $900,000.
Of this amount, City Commissioner Debbie Lightsey, who voted for the program, will eventually receive approximately $350,000 in additional income due to the vote. Read our earlier report here.
In addition, the investigation revealed the implementation of the deferred compensation program for appointed officials -which is still in effect today – is contributed by taxpayers, not the employee. The amount of this contribution is the maximum allowed by IRS regulations. In 2015 this amount was $24,000.
What does this mean to taxpayers?
It means that the published salary of appointed officials does not tell the whole story. For example, documents show the salary for City Attorney Lew Shelley is currently $204,276. However, the deferred compensation plan adopted by the City of Tallahassee allows for an additional $24,000 benefit funded by taxpayers.
Also, when appointed officials retire their pension calculation includes the $24,000 deferred compensation as salary. Therefore, Mr. Shelley, if he retired in 2015, would have his pension calculated on $228,276 and not his salary of $204,276.
The total impact of this benefit for the four appointed officials is difficult to calculate, but an estimate easily exceeds a $1,000,000 since the vote.
How common is this benefit?
TR is in the process of verifying salaries and benefits for appointed officials in other comparable government jurisdictions.
The investigation also revealed that elected officials and city staff cleverly avoided the intent of the City of Tallahassee Charter through the ambiguities associated with the terms salary and compensation.
The City of Tallahassee Charter sets the salary of City Commissioner with the following language:
Each member of the city commission, except for the mayor, of the City of Tallahassee shall be paid an annual salary equal to one-half (½) of the annual salary set by state law for members of the Board of County Commissioners of Leon County, Florida.
The Mayor shall be paid an annual salary which shall be the same as that set by state law for the Chairman of the Board of County Commissioners of Leon County, Florida.
The Charter also defines the pension calculation:
The average base salary used in calculating the pension payment amount of a participant shall be the highest consecutive 130 bi-weekly period’s base salary divided by 60.
Despite this language, the State Attorney determined no laws were broken when the City of Tallahassee secured an additional and significant benefit for elected officials and appointed officials through the use of the deferred compensation program.
The State Attorney investigator told TR that his interpretation of the City Charter gave city staff the ability to develop a pension program for elected officials that was not constrained by the salary language in the City of Tallahassee Charter.