A Macon City Council committee voted 3-1 Wednesday to set a $20,000 cap on the amount the Macon Fire and Police Employees Retirement System board can spend without city authorization.
The ordinance would add a new section to the pension board rules in the city charter, saying that any contract for spending more than $20,000 -- for lawyers, auditors or any other service -- must be a “competitive selection” and must be approved by Macon City Council.
The proposal before the council’s Employee Development and Compensation Committee drew immediate opposition from Jimmy Hartley, retired fire chief and current pension board member, and Charlie Bishop, a retired police detective and former pension board member. And they were joined in questioning its motivation by Councilman Henry Gibson, a retired Macon police captain, who cast the sole opposing vote on the committee.
“Why now?” Gibson asked.
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The fire and police pension board has been a vortex of controversy for more than two years, including a long-running fight over the city’s regular contribution and a recent fear that legal-language changes demanded by the IRS might be used to shut down the fund. Both of those disputes involved the board hiring multiple attorneys because some members and pension recipients didn’t trust the city’s statements.
Gibson said he was uneasy about the proposal coming so soon after various legal disputes.
“It sounds like the pension board is being locked in to not be able to really protect themselves,” he said.
The final cost of almost any lawsuit is impossible to judge at the outset, making the $20,000 limit impossible to guarantee, Gibson said.
Sam Henderson, executive assistant to the mayor, told the committee the ordinance would bring the pension board in line with existing city rules for contracts and spending.
City ordinances already say that all contracts made by city departments must be approved by the mayor and council if they’re above $20,000, Senior Assistant City Attorney Judd Drake said.
Hartley alleged the city is trying to keep the board from acting independently in managing its finances.
“As far as I know there has never been an outside audit,” he said. “That’s what this really is about. We’re trying to audit this fund, and they’re trying to keep us from it.”
Many of the police and fire pension board’s hiring choices are likely to exceed $20,000 per year, such as bond managers, the fund actuary, investment consultants and lawyers, Hartley said.
In the fiscal year that ended June 30, the fire and police pension fund spent $432,215.19 on outside services, including investment management, consultants, lawyers and actuarial expenses, according to city Finance Department figures. The general employees’ pension fund spent $121,626.94 on outside services during that year. That’s close to the same percentage of the funds’ respective assets, but the fire and police fund’s $181 million in assets is nearly three times the size of the general employees’ fund.
Bishop alleged that the city continually has interfered with the board’s management of the pension fund.
“I think there’s some ulterior motives there,” he said.
Councilman Charles Jones, chairman of the Employee Development and Compensation Committee and a former pension board member, co-sponsored the ordinance with Mayor Robert Reichert.
Jones said that because the city ultimately is responsible for keeping the pension fund actuarily sound, any substantial amount spent on lawyers or other services ultimately would be made up by a higher city contribution from taxpayers’ money, so it’s only right that the city should have some control.
“It’s sort of like if I give my wife a credit card and she goes to the store, and I tell her, ‘If you go over $100, call me. We might have to borrow some money,’ ” Jones said.
Councilman Tom Ellington, chairman of the council’s Appropriations Committee, said every city department has a specific budget line for professional services, but right now the pension board can “impose unlimited financial obligations on the city.” Whether $20,000 is an appropriate limit is negotiable, but some maximum should be set since ultimately the city has to foot the bill, he said.
Hartley said a blanket ordinance for all boards might pass as acceptable, but one limited to the fire and police pension board smacked of persecution. He recited past board conflicts with the city as evidence of city bias.
Following the meeting, administration spokesman Chris Floore said similar legislation is being considered for the general employees’ pension board, but there hasn’t been an issue because the city already reviews big contracts of that board before they’re approved.
Jones was joined by Councilwoman Nancy White and Councilman Larry Schlesinger, who currently is on the board, in voting for the measure. Councilwoman Lauren Benedict was absent.
Since the ordinance involves a city charter change, it would have to pass two consecutive meetings of the full council to take effect. If approved, it would be effective Sept. 1.
To contact writer Jim Gaines call 744-4489.