As most of you know, Curtis Lee, shares information about the police and fire pension fund, and this is a new letter with more information about the folks and the fund.  This is informational and appreciate Curtis sharing his his hard work with us as I know he puts many hours into research and many hours contacting various members of our city government about his findings.  He is truly a watch dog.  I do have his his permission to post the information he sends me.  Letter below!

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Via hand delivery                                                                                                       

                                                                                                                                       June 1, 2012

Jacksonville City Council

117 W. Duval St

Jacksonville FL 32202

                                             Re: More waste at the Jacksonville Police & Fire Pension Fund (PFPF);

                                             John Keane’s lavish 2^nd pension plan, worth over $1.7 million to him

Dear City Council Members:

               I had previously alerted you to the fact that, for more than 10 years, John Keane has been the beneficiary of a lavish defined benefit pension plan, courtesy of the Board of Trustees of the PFPF, and therefore, of course, courtesy of City taxpayers.    The PFPF adopted the plan in 2000, and amended it in 2002, 2004 and 2009.    The plan is called the Senior Staff Voluntary Retirement Plan (SSVRP).     My expectation is that no one at the PFPF told you about this plan and the benefits it provides.

Before Dick Cohee died, he also participated in the SSVRP.   His surviving wife receives benefits under the SSVRP, as well as other pension benefits.     Plus, another PFPF staffer who had worked for the PFPF and recently retired now receives benefits under the SSVRP.    Currently, John Keane is the only PFPF employee who currently accrues benefits under the SSVRP (unless of course the PFPF has recently added someone to the SSVRP; the PFPF does not go out of its way to keep me up to date on its doings).

               I attach as Exhibit 1 a letter from the SSVRP actuary, who is also the PFPF actuary, that provides information included in the summary below.

               Here are some of the disturbing highlights of the SSVRP:

(1)    Its benefit formula is better than the PFPF benefit formula.   The crediting rate is 3% per year of service.     Under the PFPF, the crediting rate drops from 3% to 2% per year of service, after 20 years, and there is an overall 80% salary replacement cap, even if persons work for the JSO or JFRD for more than 30 years.    The SSVRP has no such cap.   Thus, the SSRVP is better in 2 ways.     E.g., if Mr. Keane decided to, and were allowed to, continue as PFPF Executive Director – Administrator for a total of 34 years, his SSVRP pension would equal 102% of final average salary, plus he would get a 3% COLA thereafter.     This would equate to close to $300,000/yr.    

(2)    I do not know exactly what Mr. Keane’s SSVRP pension would be if he retired soon, but I can estimate.    It is likely to equal or exceed $155,000 per year.      Via Exhibit 2, I have requested documentation from the PFPF.   If I receive anything, it will likely be stale, because it will be based on older data, and will not reflect the full impact of Mr. Keane’s more than 18% raise, to a base salary of about $284,000 per year, which was effective 1/1/12.     (This reflects yet again the limitations of the Public Records Act – I can only ask for documents;  I cannot compel the PFPF to compute anything if it has not already been computed.)

(3)    The cost of the SSVRP is outrageous and unprecedented in these further ways:

(a)    The “normal cost” of the SSVRP is 219.14% of Mr. Keane’s payroll for fiscal 2011 – i.e., the SSVRP had a fiscal 2011 cost of $523,102, just for Mr. Keane, the only current accruer thereunder.    I doubt that there is a 1 - person or other small (or large) defined benefit pension plan anywhere in FL with such a huge/distended cost – either in terms of cost per beneficiary, or normal cost percentage.

(b)    The current liability associated with the SSVRP exceeds $3.3 million, and associated assets exceed $2.3 million.    The bulk thereof relate to Mr. Keane.

(c)    Over the years, taxpayers have set aside funds so that John Keane, Mr. Cohee’s widow and another beneficiary have more than $2.3 million in assets (as of 9/30/11) devoted to fund their SSVRP pensions.   Mr. Keane has made sure his SSVRP pension is notably better funded than the PFPF is.   Would a true fiduciary put himself first like this?

(4)    Plus, the costs described in Exhibit 1 hereto  will zoom because Mr. Keane, effective January 2012, received pay raises exceeding 18%.   His base pay is now approximately $284,000 per year.   This big increase will flow through into zooming SSVRP costs.    Plus, the PFPF foolishly gave Mr. Keane lucrative contractual rights in 2009, despite wretched PFPF investment returns - promising him 3% increases per year, which will lead to 2013 and later 3% raises for him.    

               I still have some further questions about the SSVRP, and will update you if I learn anything more that is material.      See Exhibit 2.

               When all is said and done, Mr. Keane will retire with his current PFPF pension (about $60,000 per year – I am awaiting an update - see Exhibit 2), plus at least $155,000 per year under the SSVRP, for a grand total of at least $215,000 per year.    Mr. Mullaney clearly will be dethroned in the annals of pension abuse in Jacksonville.    

               As you know, Mr. Keane has caused, aided and/or condoned  7 adjudicated violations of the law to date by the PFPF or one of its trustees, Peter Sleiman.    Mr. Keane has, also, plundered the PFPF, an entity already in great financial distress.    In my view, there is no question that Mr. Keane, and all current PFPF trustees, violated their fiduciary duties, and that Mr. Keane richly deserves to be fired for cause, and sued for violations of his fiduciary duties, etc.     It is my hope that, once the City takes control of the PFPF:  (a) Mr. Keane is replaced, and sued (b) current PFPF counsel is replaced, and sued, (c) other PFPF trustees are replaced, and perhaps sued, if the facts and law permit same, and (d) the State Attorney should consider, and the City should advocate that it consider, prosecutions.   Beware  – Ms. Corey appears to have substantial and long-standing ties with Peter Sleiman, PFPF trustee, and further, has been allied with the FOP and IAFF, both of which have been supporters of Mr. Keane and the PFPF status quo generally.   Therefore, Ms. Corey  may need a strong push, if the City agrees that prosecutions are in order.

               (Don’t expect me to commence any lawsuits – the City must do so, for standing and financial reasons.    However, you are welcome to pick my brain.)

               I find it shocking that the PFPF board of trustees, at the behest of Mr. Keane, can (or purports to) create and exacerbate pension obligations such as these, at City (taxpayer) expense, especially whilst the City and the PFPF are both in great financial distress.     I am also disturbed that no one at the City apparently is following such things, or doing anything about them.     I hope that powers greater than I do their utmost to undo the damage, and punish the miscreants.     Large sums are at stake.   Obviously, I am hoping that OGC will be tasked with the project of considering how to undo, unwind and claw back such abuses and losses.     I expect that current PFPF trustees have insurance, and clearly many of them, as well as Mr. Keane, have substantial assets.    And, the costs and losses are great enough such that litigation along the lines I suggest appears likely to be worth the candle.

               Please consider these matters carefully, and please contact me if you have questions.    Thank you.

                                                                                                                        Sincerely yours, 

Exhibit 1 – Letter from SSVRP actuary dated 2/1/12, with attachments

Exhibit 2 – My public records request to the PFPF, dated 5/31/12

P.S. – I have a copy of the SSVRP as amended through 2009, which I obtained from the PFPF earlier this year.    I believe it is current.   Please contact me (or preferably the PFPF – I spend enough already on paper and ink) if you would like a copy.    It is rather bulky.

P. P. S. – I am hobbled in my research concerning this matter, both because the PFPF is seldom prompt in providing documents, and also because I am not entitled, as a mere member of the public, to demand answers to questions.    Mr. Keane, of course, sees me as a personal enemy, and is not inclined to cooperate beyond what the law clearly requires.    I have already informed you about his scorched earth tactics vis-à-vis me.     However, if you are inclined to require Mr. Keane to testify before any committee, or otherwise, about his many machinations to line his pockets at taxpayer expense, including SSVRP -related matters,  I would be happy to assist in educating you, developing questions to be asked, etc.

Cc:       Mayor Brown, K. Hyde, C. Hand, R. Belton, C. Laquidara, K. Sherman