Fiscal Folly In Fort Lauderdale City Hall
BY BUDDY NEVINS
If you are a Fort Lauderdale home owner, I would be afraid. I would be very afraid.
The city appears at the end of its financial rope to knowlegable observers.
The problem is the out-of-control pension costs in the city.
My proof?
The annual budget.
Pension costs are rising…fast.
They were $36 million five years ago. They are now approaching $60 million.
The city can’t pay the bill. Fort Lauderdale borrowed $30 million last year to cover the pensions.
Last week the city agreed to issue $340 million in pension bonds. To cover the pensions.
They are a special kind of bond called pension bonds.
Pension bonds are the ultimate kick-the-can down the road form of financing: Pay pensions now with money you’ll pay back later…with interest.
And this was a city hall that used to be fiscally conservative?
I can’t believe there isn’t a revolt of taxpayers at city hall. There will be, but that will be in the future when the bills come due.
Pension bonds have proven a spectacularly bad bet. Simply put, they are borrowing money to pay retirement benefits and paying them off by speculating in Wall Street.
Just two paragraphs from a Bloomberg story last week about Fort Lauderdale’s bond issue:
“Stockton, California, sold pension bonds in 2007. The city defaulted and became the biggest U.S. city to go bankrupt.
New Jersey sold $2.8 billion in pension bonds 15 years ago. The state’s pension-fund shortfalls soon appeared again.”
I could go on and on. Every financial news outlet has exposed them.
There is no way around it: This is an insane gamble with the public’s money.
For the bonds to make sense, they would have to have an investment return of more than 4 percent a year. Any less than that and “we’re going to be dealing with bigger problems,” City Manager Lee Feldman conceded to Bloomberg.
Anybody who has money invested know that counting on a return of 4 percent a year is as risky as roulette at the Hard Rock.
Or as Bill Gross, co-founder of the $1.7 trillion Pimco investment firm, wrote about the future this week:
“Historic returns are just that – historic. ..Returns from both stocks and bonds will be stunted.”
Oh, and here is the latest blow: Moody’s just downgraded the city’s credit rating. Downgraded ratings traditionally mean the bonds will have a higher interest rate, thus taxpayers will pay even more.
Then again, when your playing with the public’s money and not your own, you are willing to take risks.
Commissioners Bobby DeBose and Charlotte Rodstrom wisely voted against the bonds
Mayor Jack Seiler and commissioners Bruce Roberts and Romney Rogers voted for the bonds.
These three pols don’t have the brass to deal with the pension problem today. So they dumped it on future taxpayers.
Seiler, Roberts and Rogers should hang their heads in shame.
September 13th, 2012 at 7:33 pm
Wow !!! I was not aware the City was down graded with its Credit and how fast the pension cost was growing I agree the Commission needs to address the Legacy Cost for the Police I think everybody understands the Police work is very much needed and we want the Officers to stay but also I think their is a breaking point where we cannot Pay and the Legacy cost is the problem we cannot afford.
September 13th, 2012 at 8:18 pm
Here are the options. Buy pension bonds and derivatives (swap) to protect against down market fluctuations, resulting in a stabilized yet synthetic and costly rate of return. Or declare the pension funds bankrupt and liquidate them.
Pay as you go is not an option. It would tax Fort Lauderdale businesses and residents too greatly.
The first option is a risk that must be managed over time. The second is political suicide which will rob current and future retirement benefits from workers that earned them.
Which of the two were you suggesting again, Buddy?
Those are the choices.
September 13th, 2012 at 9:47 pm
Take a look at what Coral Springs did a few months ago. They took the issue on and had an immediate savings of 25% on their pension!
September 13th, 2012 at 10:04 pm
And you did not include Moodys might lower are credit rating. This was just in the Paper Buddy yesterday. Lets gamble w/ Mayor Seiler’s money. Oh yeah Mr.Millionaire(must have been great to grow up w/ a silverspoon in his mouth). I mean talk about a part time Mayor, oh but he is great for kissing babies and marching in parades. I mean this Mayor has his hands in everything from”pet cemtries to Krspy Kream dough nut stock(no wonder he’s riding that bike every morning). Spending is so out of control(its not $eiler’$ money so who cares huh Jack). That is why I am running for City Comm. (district2),and I am not taking campaign donations(you can’t buy me). We have a Budget hearing on the 18th. Mr.Feldman hired over a million dollars worth of staff, start cutting Lee, and start w/ your staff Lee. Enough is enough.
September 14th, 2012 at 4:16 am
Great work, I’ll have another “Chardonnay Roberts,” You ran a corrupt police department when you were chief, had a temper tantrum when you were called out by the city manager about your inept management skills as chief look at you now …… an inept commissioner. Bad decisions as chief, worse decisions as commissioner. Your legacy….. Fort Lauderdale Police full of corruption, police officers robbing, planting drugs, covering up crimes by officers, deleting official records ( Internal Affairs Data Base). Shame on you Roberts you and your minions are a disgrace to every honest officer.
Seiler is just picking bones…….. getting millions for it.
September 14th, 2012 at 4:27 am
When will the Fort Lauderdale Police involved in the Rothstein Ponzi, this includes you Franklin Adderley have to return the stolen “CASH” money and “DIAMONDS” they received, everyone else had to return the cash and bobbles, are the Fort Lauderdale Police above the law?
September 14th, 2012 at 4:42 am
$60 million divided by the 166,000 population of Fort Lauderdale equals $361.45 per person.
September 14th, 2012 at 5:31 am
During the last election Romney Rogers spoke frequently about the fact that the pension bonds was a “No Brainer” I remember sitting in the Sun Sentinel interview having to listen to him talk about what a great idea it was adnauseum. Romney thinks this is just like refinancing your home. I applaud Bobby and Charlotte for making the right decision and voting NO.
September 14th, 2012 at 8:28 am
Is it true that lobbyist/not a registered lobbyist in FTL Judith Stern spent the night of the vote sitting with and conferring with the bond guys outside the chambers?
She was Roberts campaign manager and many believed involved through her friend’s ECOs’ MARKPAC and Common Sense which paid for the mailings against Jackie Scott that certainly benefitted commissioner Rogers.
Feldman is it not time to look into Stern and make her comply and register as a lobbyist like all the rest, if she is lobbying the City?
September 14th, 2012 at 9:17 am
Time to force all new City of Fort Lauderdale hires (including police and fire) into the state’s FRS system. Those already in the City pension system could remain in it. FRS is stable, and over time, would eventually lead to the gradual end of the entire separate city pension plan when the last living participants die. FRS may not be quite as generous as the City’s plan, but it is still a decent plan, costs are reasonable, it is large, and stable. Other cities have switched to this over the years, including I believe Hollywood for new hires, in order to cut these costs.
September 14th, 2012 at 12:22 pm
to: Plain Language,
You list two choices for the city and defaulting on retirees through bankruptcy, another choice is available.
We need to save the plan.
Modify the plan.
Through a financial emergency, bankruptcy, or imposing a contract, the city could modify the Police and Fire Plan to bring it in line with the reality of today’s economics. It would go like this: Keep those retired in the plan as it stands. Change the plan for current employees by honoring those years accrued, but modify future years as follows, change for new hires as follows:
Fort Lauderdale Pension Survival Modification Plan (FLPSMP)
Raise retirement age from 47 to 55. Make accrual for retirement 2 1/2 % instead of the 3.38% it is now. Consider a cap at 50% of wages. Get rid of the drop (right now some retirees are getting close to a million cash at retirement in addition to pension…that is called the drop) When the actuary figures these changes, the city contribution will plummet.
The city years ago ended defined benefit pensions for non Public Safety employees, no city can afford to continue a system that give folks who retire in their 40’s 80% of wages for the next 40 years. It is simply not sustainable.
By the way, recently a list of total compensation was made for each of the city’s 2200+ employees and the list showed that the top 1200 employees were receiving over $100,000 when you count benefits and overtime. That is in comparison to the income of about $50,000 for the resident they work for. Things are upside down.
Create the FLPSMP and save the tax payers and it’s retirees now.
September 14th, 2012 at 12:35 pm
Hey, but the good news is Jack Seiler wants to be Governor!
So maybe we can add that to Broward’s list of exports – shitty and corrupt politicians
September 14th, 2012 at 2:40 pm
To ‘Jackie Scott, like Joan Rivers says “your nothing but a poker plaaayer” And to the other commnet about Comm.Bruce Roberts yeah its all his fault. And to state that he is corrupt, this is a man that brought down every cocaine cowboy, every wanna be Tony Soprano, and never took a dime. Do you realize the harrassmnet suit he could have filed against Gretsas(I am very privillaged to recite the whole debackle-told Gretsas the probation wa s enough-did he listen no-thats why he’s working in the boonies.)Yes Comm.Roberts coul d have filed suit against the city, and damn near bankrupted us. He is like me fine , force me into retiremnet and i’ll come right back and bite you in the ass. Respect earned…
September 14th, 2012 at 6:18 pm
Speaking of fiscal folly, it looks like the 1% will lose 100% of the cash they’ve invested in Mitt Romney…
The Intrade market now has Romney’s likelihood of winning at: 32.8%
http://www.intrade.com/v4/markets/contract/?contractId=743475
Obama’s odds of winning: 67.1%
http://www.intrade.com/v4/markets/contract/?contractId=743474
September 14th, 2012 at 8:39 pm
Seiler is responsible for this, so this is what a fiscally conservative Democratic produces.
September 14th, 2012 at 8:42 pm
http://blog.timsmith.com/2012/09/13/district-ii-special-election-costs-rise.aspx#Comment
Charlotte Rodstrom is costing the city over 200k for the special election she caused by decided right after she was reelected to her City seat that she wanted a bump up to the County Commission.
Maybe the pension bonds work, maybe they dont, but that will not be known anytime soon.
What is known now is that Charlotte in her greed and ego to keep the family seat on the County Commission is costing the citizens of Fort Lauderdale $200,000 or more.
September 14th, 2012 at 11:04 pm
Robert Walsh has Seiler’s financial statements. Release them Robert. You say “you have our backs, prove it”.
September 15th, 2012 at 12:12 pm
Whose backs does Walsh have? I hope he doesn’t have my back – for Fort Lauderdale City Commission we don’t need any more Lawyers, we don’t need any Politicians, we don’t need another Idiot, we sure don’t need another Crazy person, and we don’t want a Convicted Felon who can’t spell
Okay, so Walsh isn’t a Lawyer………………..
September 15th, 2012 at 12:56 pm
is Robert Walsh pursuing these financial records via a public record request? whats the hold up? We have a state ethis commission if the foot dragging takes too long. See post at link below on Roberts efforts a few weeks back.
http://www.browardbeat.com/website-many-broward-officials-face-fines-for-failing-to-disclose-finances/
September 15th, 2012 at 2:10 pm
To “realease those records Robert”. First of all why do I get the feeling you are not a District2-resident-and I do have their backs. I did say that at the CBA meeting, and I meant it. As far as Mayor Seiler’s financial statements what i do have is his Financial Disclousre documents. Which by the way is Public Record which he by law had to file by JUly 1-By the way according to the Stamp he did just that on July 1-gee, nothing like waiting to the last very secound huh Jack. As far as revealing to the Public if district 2 residents(Ft.Lau) want to see them call me or email me, etc, and your request shall be granted. Now to Mayor Seiler directly, piece of advice-you ready- they say be careful who you “step on” on your way up, because those same people will remember you on your way down…..
September 15th, 2012 at 6:00 pm
wow way to go robert
you’ll be a great commish
two seats over from the mayor chair
keep up great work
even funnier that the guy in mayor chair now will never be gov. with his vote for nutty bond deal
September 15th, 2012 at 9:17 pm
>> As far as Mayor Seiler’s financial statements what i do have is his Financial Disclousre documents.
A real fucking Edward R. Murrow in our midst.
September 16th, 2012 at 2:59 pm
Mr Stevens
Wonderful to see your involvement back into the City of Fort Lauderdale (P & W) Commissioners exposing their corrupt and inept ways of conducting the peoples business. I equate your tireless effort in exposing these ne’er-do-wells as cleaning out a large plugged restaurant grease trap with a teaspoon, you leave no chunk behind. The community’s as a whole owes you a debt of gratitude for all that you have done, keep up the tremendous work. I do hope to meet you some day to thank you personally. Just remember P & W.
September 16th, 2012 at 3:45 pm
http://www.miamiherald.com/2012/09/15/3004181/what-coral-gables-did-about-high.html#storylink=misearch
The pension costs compared in today’s Herald makes Salerno worth three times what they are currently paying him in Coral Gables. Fort Lauderdale tax payers need to take note of these police and fires stats. No wonder they had to do the Pension Bond deal. To kick an unsustainable unfunded mandate down the road till the 5 are out of office.
September 16th, 2012 at 3:46 pm
The pension costs compared in today’s Herald makes city mgr Salerno worth three times what they are currently paying him in Coral Gables.
Fort Lauderdale tax payers need to take note of these police and fires stats. No wonder they had to do the Pension Bond deal. To kick an unsustainable unfunded mandate down the road till the 5 are out of office.
http://www.miamiherald.com/2012/09/15/3004181/what-coral-gables-did-about-high.html#storylink=misearch
September 16th, 2012 at 4:40 pm
Listen to Fatso- I know they are the same thing. This is exactly why i agree w/ Mayor Bloomberg(NYC), restricted sugary sodas etc. You get sick who pays the taxpayer. I agree w/ Mayor Bloomberg(100%). The truth will set you free, but at first it will make you miserable-. Huh Chaz.
September 16th, 2012 at 4:52 pm
This commission fired Gretsas, who had built up the city reserves and then burned thru the reserves, keep giving raises and keep throwing parties and parades, hoping no one would notice. Remember when they all first got elected, they all loved each other, loved everybody, etal. How’s that working out now.
They all have turned on each other, encouraged people to run against each other, and are now pointing at each other. We were warned this was coming with this burn and spend commission.
September 16th, 2012 at 5:52 pm
Mr Stevens
Thank you for putting the City of Fort Lauderdale Commissioners in your cross-hair, the work you do equates to unplugging a restaurant grease trap with a teaspoon turning over every chunk. You have done an outstanding job holding the elitist politicians feet to the fire. The earlier post complementing you was censored by the nanny. Keep up the great job, love to see them in the new wardrobe you so graciously fit them for ….orange jump suits.
September 16th, 2012 at 7:03 pm
I stand corrected my apology to the nanny. But not to you Mr John “Jacqueoph” Seiler,I’ll have another “Chardonnay” Bruce Roberts and harlotte Rodstrom the bouncing politician (P&W)
September 17th, 2012 at 8:54 am
the police fire pension has been blowing through the fund with six extravagant trips a year to “seminars” in such places as Half Moon Bay, La Jolla, Las Vegas, NYNY and Washington DC. Seven members plus their families at five-star resorts plus meals and activities. look into it
September 17th, 2012 at 9:55 pm
I know gang bangers that have more intergrity, class then alot of these elected officals, and canidates. These ar emen,woman that would cut your throat, leave you for dead over oweing them ten dollars. Some of these people are so despicable, scum bags, they are not worthy of my spit. No different then som e ten dollar crack whore. Honestly. All going to change soon. Robert Walsh has your back people.
September 18th, 2012 at 8:39 am
Confusious say: If Walsh “has your back”, don’t bend over when the soap drops.