With Hollywood’s Pensions 60% Funded, City Negotiates With Three Employee Unions

Hollywood welcome sign

After putting in a lifetime of dedicated service, many look forward to their golden years as a time to spend with loved ones and enjoying the activities they love. And pension plans are supposed to be a way for employers and employees to put some money aside to be paid back to them upon retirement.

According to the pension fund website, “The City of Hollywood Employees’ Retirement Fund was established in 1958 to offer a monthly benefit to its employees and their surviving beneficiaries upon retirement due to age, disability or death.”

But City of Hollywood employees may have to find another source of retirement funding if projections of the city’s pension plan remain as melancholy as they currently are. According to City Manager Wazir Ishmael, Ph.D. negotiations are currently underway with the three unions that represent most City employees.

“Each year the City’s required contribution to fund pension costs increases and is now estimated at approximately $60 million annually, yet our pension funds hover around only 60% funded,” explained Ishmael in the city’s quarterly newsletter.

The problem with the pensions

“Many baby boomers count on a future stream of income from Social Security, a pension, or both, starting around age 65 and continuing for the rest of their lives.,” said Richard W. Paul, author of The Baby Boomers’ Retirement Survival Guide. “But those retirement benefit programs didn’t count on people spending 30-plus years in retirement, which is becoming more and more common.”

The City of Hollywood has three pension boards tasked by the Commission with maintaining and running the city’s pension funds: the Employees’ Retirement Fund Pension Board, the Firefighters’ Pension Board, and the Police Officers’ Pension Board.

And the Hollywood Commission has historically gone head to head with the pension boards for years. Facing revenue shortfalls in 2010, the City of Hollywood declared financial urgency and began working with the Police Benevolent Association to find cost-saving solutions.

The 13th check controversy

Back in 2015, legal action was taken by the city attorney to sue the boards over 13-month bonus checks sent to retired city employees.

One of the conditions that must be met in order for these 13th-month bonus checks to be sent is that the pension fund must not be underfunded — a condition that all three city of Hollywood pension funds have not met.

According to a Sun Sentinel article written by Susannah Bryan on July 10, 2015 titled “Hollywood suing pension boards over perk known as ’13th check’,” the payments in question “have ranged from $200 to more than $26,000. The cost of the payouts next fiscal year comes to $9 million for all three pension boards, city officials say.”

City spokeswoman Raelin Storey said that the City Commission and city officials are hoping that by stopping these bonus payments to retirees, the fund can heal.

2018 commission candidates weigh in

Candidates for the city commission were asked how they felt about the fund’s current condition and how they would improve it if elected to office.

“Having lived in Hollywood for close to 18 years I know this is a gimmick that the city has used repeatedly. It has appeared in the papers before, even in years when city finances are good, the city claims the employee’s pension plan is bankrupt, or severely underfunded, and the taxpayers have to bail it out,” Joseph Kaplan, a candidate District One. “Who makes millions off of these deals? What Wall Street investment houses are profiting from these mismanaged pensions? And do they have a history of mismanaging ours, or any other city’s pension plan in the past?”

If he is elected, Kaplan would make sure a reputable management company is watching over the city’s pension system, and he would take heed of whatever recommendations they may have for improvements. Kaplan wrote that this will ensure the pension fund is properly managed “so the taxpayers don’t have to keep bailing it out.”

If necessary, Kaplan is prepared to support a citywide financial emergency like the one Mayor Peter Bober declared several years ago to help the pension.

Another commission candidate, Thomas R. Ungleich who is running in District Three, said that “[E]mployee pension costs were a driving force behind the City of Hollywood’s decision to declare a financial emergency several years ago.”

He added that “The main problem, is that prior Commission members erroneously voted for generous union retirement benefits several years ago.  It is very difficult to now attempt to convince pension plan members, and especially those pensioners already collecting their benefits, to voluntarily agree to give up those specific benefit provisions that are costing the City almost half of its entire annual budget.”

Since, according to Ungleich, the residents of Hollywood have benefited from having professional fire and police protection over the years, the city should not create an adversarial relationship with these employees by trying to unilaterally cut or get rid of some of the more generous benefit provisions.  

“Rather, the City needs to re-open negotiations with the unions, identify the most egregious provisions, and address them for modification,” he wrote in an email to the Hollywood Gazette. “Possibly, future cost-of-living raises, etc., could be held up pending the outcome of those negotiations. If elected, I will make balancing the City Budget my highest priority, realizing that pension plan benefits make up a substantial portion of the total budget.”

For current commissioner Kevin Biederman, who is running for his second six-year term on the commission, the pension fund’s condition has improved greatly since when he began his first term. He sees the unfunded pension fund gap closing up more and more every year, and that if progress continues the way it is, the pension fund could be fully funded in 27 years.

Biederman is staunchly opposed to raising any resident’s property tax rates to help fill in the gap. Instead, he is looking to bring in more businesses to certain areas, and use the tax revenues from those businesses to help fill in the gap instead.

One example Biederman gave was to rezone certain parts of State Road Seven (US 441) to allow for business development.

Who is responsible for administering the pension funds?

The Employees’ Retirement Fund itself is administered by a Board of Trustees, consisting of seven members plus support staff, who are to act “in accordance with the terms of the governing Ordinance solely in the interest of the participants and beneficiaries of the Fund.”

Board members meet monthly to discuss fund issues and vote when necessary.

According to the fund’s bylaws, the seven members of the board are chosen as follows: two general city employees are elected by their fellow general city employees for a five year term; two are Hollywood residents chosen by the commission for five year terms; one is a fund retiree chosen by other fund retirees for a five year term; the City Manager, or his/her designee, and a city employee not included in a collective bargaining unit serve without term limits.

The current board members are: Phyllis Shaw, chair; Jeffrey Greene, vice-chair; Christopher Cassidy, Mel Standley, George Keller, Charles Howell, and Robert Strauss.

The Police Officer’s Pension Board members are: Christopher Boyd, Paul Laskowski, Cathleen Marano, Van Szeto, David Strauss (board chair), Ronald Wise (the Mayor’s appointment), and Richard Brickman (the commission’s appointment).

The Firefighters’ Pension Board members are: Jason Rosner (Chair), Christopher Del Campo (the Fire Chief’s representative),  Rafael Fuentes, Derek Fleischner, and Brian Wilkie.

Each of the three pension boards have their own rules and bylaws and represent the employees under their jurisdiction.

Hope on the horizon

In June, the Hollywood Commission agreed to an ordinance amending the section of city ordinances regarding the Firefighters’ Pension Plan. This creates a new benefit to be known as the Reformed Planned Retirement Benefit. A Reformed Planned Retirement Benefit was adopted for Hollywood Police in March of last year.

Hollywood’s city manager says personnel costs the largest part of any municipal budget and he is “exploring all options for controlling this continually rising expense.”

“This is a shared concern of the City and our employee unions,” said Ishmael. “Already we have worked to restructure our collective bargaining agreements to reduce this cost for new hires. Now we’re working together to fully explore all options for managing these benefits so we can ensure sustainable and dependable retirement benefits both for the present and into the future.”

Picture of Author: Amanda Jones
Author: Amanda Jones

Amanda Jones specializes in social media marketing. She holds a Master's degree in Social Media Management from the University of Florida and a Social Media Professional Certificate from the University of Miami.


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