Earlier this month, County Clerk & Comptroller Pam Childers told the Board of County Commissioners she would no longer pay the invoice for their 401(a) retirement plan as of Oct. 1.
The BCC hired Troy Rafferty and the Levin Papantonio Rafferty law firm to represent it. Yesterday, Rafferty issued a letter responding to Childers’ claims on which she based her decision to defund the commissioners’ 401(a) plan.
Rafferty stated the obvious point” “Escambia County contributes the exact same amount of money to ICMA plans as it would if participants had chosen the Florida Retirement System.”
“It is clear that the County’s 401(a) program is fully authorized by state and federal law,” he wrote. “It was created in 1997, decades before the current Board was elected, and has stood unchallenged until now. This program is just like retirement programs maintained by other Florida counties. The Clerk has been a part of administering it for years. The program is legally sound, and we request that the Clerk withdraw her objections and continue making contributions under the contract as required in her capacity as Clerk and Comptroller.”
Repeatedly Childers has said the plan lies “outside the law” – though orginially she called it “illegal.”
Rafferty responded:
“The program rests on a firm legal basis, including but not limited to:
- First, Escambia County is a home-rule county, which means that under the Florida Constitution, it has broad powers to act within its good judgment, not inconsistent with state law. Fla. Const. art. VIII, section 1(f). So long as the Legislature has not taken a subject away from the County’s scope of authority, the County retains the right to act on that subject. See Speer v. Olsen, 367 So. 2d 207 (Fla. 1978). So we begin with the presumption that the program is authorized because it isn’t forbidden.
- Second, there is no statute taking this subject out of the County’s scope of authority or restricting the County’s authority to maintain a supplemental retirement program like its 401(a) program.
- The only statute of any plausible relevance is Section 121.182, Fla. Stat., which the Clerk raised in the September 3 letter. But in fact, Section 121.182 expressly authorizes the County’s 401(a) program. The law states: “Municipalities and counties are authorized to invest funds, purchase annuities, or provide local supplemental retirement programs for purposes of providing annuities for city or county personnel.†That is what the County has been doing since its inception in 1997.
- The Clerk does not challenge the fact that the plan also complies with federal law, in that the distributions will ultimately be made in accordance with Section 401(a) of the Internal Revenue Code.”
He adds, “The Clerk argues that a different part of Section 121.182 ties the County’s hands, making its 401(a) plan improper. This is simply incorrect. She cites irrelevant parts of that law which authorize local governments to ‘purchase retirement annuities  for county personnel 50 years of age or older with 25 or more years of creditable service.’
“That has nothing to do with the other part of the statute—which expressly authorizes supplemental retirement programs for county personnel. The express authority to have a 401(a) plan is not canceled out by the irrelevant part the Clerk cites. Indeed it’s not unusual for statutes to do multiple things or even address multiple subjects.”
Rafferty also notes that if the plan is illegal, the Childers may be liable for any checks written to it since she took office.
As far as Florida Attorney General opinions, the attorney writes, “The Clerk’s letter generally references Florida Attorney General opinions that supposedly support the Clerk’s view, but the Clerk makes no citation to any specific opinion letter. So, we did our own search. There is nothing we could find in the Florida Attorney General Advisory Legal Opinion database on Section 121.182, or touching on the legality of having a contract with ICMA.”
He continues, “In our view, the fact that no one has ever made an issue of such a plan, and that no such complaint has ever crossed the Attorney General’s desk, is telling. The Attorney General hasn’t opined on this because the statute is clear and the plan is straightforward.”
Rafferty makes several other points in the letter but does offer to sit down with Childers’ legal team: “The Board would prefer to avoid that, however. On behalf of the Commissioners, we remain willing to sit down with the Clerk’s legal team rather than engage in unnecessary, costly, and protracted litigation.”
He added, “If the Clerk is willing to drop her objections to the 401(a) plan or is inclined to have discussions with us, we would request the favor of a reply within one week. If not, we are prepared to resolve this matter in court.”
Here is the letter:2021-09-29 Letter to M. Dannheisser
Let’s see how Childers responds.
Troy Rafferty writes, “It is clear that the County’s 401(a) program is fully authorized by state and federal law….†Well, if it was all that “clear” there would be no dispute. The authorization on which the county relies is the fifth sentence in Section 121.182 which is part of Chapter 121 Florida Retirement Systems, Florida Statutes. The dispute is really just over what the Florida Legislature intended in 1996 when it voted to include the fifth sentence in a new six-sentence law. The most authoritative answer to the mystery might be found in two key places: 1) the final Florida House of Representative’ Staff Analysis of House Bill 961 in 1996; 2) the record of statements made by the bill’s sponsor Al Lawson (now in Congress) during committee hearings and debate on the floor of the House. In addition, Florida’s Division of Management Services (DMS) prepares a “Substantive Bill Analysis†for those bills that affect it. There should be such a report in 1996 for HB 961 even if kept on microfiche. Further, each year prior to each legislative session the Florida Association of Counties (FAC) prepares an expansive report on all proposed legislation that affects counties “and†a report after each session to describe new laws and their effects. FAC’s legislative director might be helpful if asked the right questions. Both the County and the Clerk should be able to get all of those reports and maybe more just by picking up the telephone and calling the appropriate offices in Tallahassee. As of 2019, DMS monitored 485 municipal, special district and school board local retirement systems such as the City of Pensacola’s three plans. The “Florida Local Government Retirement Systems 2019 Annual Report†mentions the ICMA Executive Program. [It incorrectly describes the organization as the “International City Managers Association.â€] For the City of Minneola there is a unique notation: “All employees, other than elected officials, are allowed to participate in the ICMA-RC retirement plan through payroll deduction.” It seems that Minneola allows “most†employees to be in the IMCA plan. I could see how that might be beneficial if employees moved between states with different retirement systems. However, Minneola is a municipality, the only one listed this way and elected officials are not eligible for this program. One way to get some “action” would be for the County and/or Clerk to ask Senator Broxson to ask DMS if counties can purchase annuities and limit enrollment to elected officials and members of the senior management class.