Southpinellas: Pension analysis bill brings lawsuit threat

Pension analysis bill brings lawsuit threat

A longtime actuary's bill for his services - $115,325 - exceeded Pinellas Park's original budget of $30,000.

By SHEILA MULLANE ESTRADA

PINELLAS PARK -- Angry words and a threatened lawsuit greeted the City Council's longtime actuary Tuesday as he tried to justify a bill for $115,325.

EFI Actuaries consultant Ed Friend says the city authorized him to analyze the pensions of municipal employees. The city then would use his conclusions during collective bargaining with city employee unions.

According to Friend, he discussed the pension analysis with personnel director Tom Owens and on Sept. 12 faxed an estimate without a figure. He admits the estimate was "cryptic and difficult to read." Then Friend says he and Owens discussed the estimate further by telephone and on Sept. 13 he faxed his understanding that the city had authorized him to proceed.

The city agrees that it hired Friend but says it never authorized that level of work. City Manager Jerry Mudd says the city never received the Sept. 13 fax.

Plus, City Council approval would be needed to spend more than the $30,000 originally budgeted for the analysis.

In December, Friend left a telephone message for Owens that the work was almost finished and that he was owed $115,325.

The city's finance director, Dick Wheaton, told Friend on Dec. 21 to stop work.

Friend said he learned then for the "first time" that there was a limit on how much the personnel department could spend for his services. He could not explain Tuesday why the city had no record of receiving his September fax.

On Tuesday, Council members took issue with Friend's proposal to spread his bill over three years, which they said would be tantamount to a cover-up.

"Mr. Friend, you lost a lot of credibility with me when you said we could spread out (the payments) over three years so it wouldn't be so noticeable," said Council member Chuck Williams. "I find it hard to believe that a man who would go to this much detail would not have a fax agreeing to the price. Just show me the authorization for you to go through all this."

Tempers flared further as Council members reviewed a half-inch binder of faxes and letters between Friend and the city dating to 1998.

"You've been with us for 15 years. You know that $115,000 would not have been authorized without a contract. I recommend we suspend all actuarial services with EFI and have our attorney handle this," said Council member Rick Butler.

Butler agreed that Friend had done "excellent work" for the city and had saved the city "hundreds of thousands of dollars" but pointed out that "one mistake could be our careers."

"Let me tell you where this is going. It's going to court," said Council member Ed Taylor. "By us accepting this, it puts us in a very precarious situation. We could be removed from office for violating the city's charter. I will not support anything short of litigation on this."

Taylor's anger was eventually tempered as his colleagues took their attorney's advice to negotiate.

"My recommendation is to take some time and try to negotiate a price," said City Attorney Tom Reynolds, who said he would report back to the council within two weeks. "The city just doesn't owe what the actuary is saying is due."