Mehlville fire district administrative staff requests pension contributions

Early retirement incentive OK’d for longtime district employees

By MIKE ANTHONY

Eight members of the Mehlville Fire Protection District’s administrative staff are requesting distribution of their 2006 and 2007 pension contributions, according to a memorandum filed in St. Louis County Circuit Court by the district’s legal counsel.

Mehlville Fire Protection District Chief Jim Silvernail supports the request of the eight administrative employees, according to documentation filed in Circuit Court by Mathew Hoffman, the district’s legal counsel.

Union employees’ request for a permanent injunction prohibiting the Board of Directors from changing the fire district’s pension plan to a defined-contribution plan from a defined-benefit plan was denied in August by Circuit Court Judge Thea A. Sherry.

Local 1889 of the International Association of Fire Fighters filed the lawsuit in March 2006, just days after the Board of Directors voted on March 16, 2006, to adopt an amendment and two resolutions changing the district’s pension plan from a defined-benefit plan to a defined-contribution plan. Sherry initially granted a temporary restraining order and later a preliminary injunction prohibiting the board from taking any action to change the pension plan.

Sherry’s Aug. 27 ruling dissolved the preliminary injunction and denied Local 1889’s request for a permanent injunction prohibiting changes to the pension plan.

John Goffstein, an attorney representing Local 1889, since has filed a motion for a new trial and a motion for an injunction pending appeal. Sherry heard Goffstein’s motions on Oct. 22, but has yet to rule on them.

“The district was successful at trial, but a request to extend the injunction pending an appeal was filed by the plaintiffs and is currently before the court,” Hoffman told the Call Sunday. “The plaintiffs seek to limit any pension changes previously approved by the board pending review by the court of appeals.”

In his motion for a new trial, Goffstein alleges Sherry erred in several instances in her ruling. For example, Sherry stated in her ruling, “The court further finds that plaintiffs have not proven that plan assets were, in fact, improperly commingled with other district funds.”

But Goffstein states in his motion, “The court erred when it held there was no evidence of breach of fiduciary duty by the commingling of pension assets and district assets because the uncontroverted evidence is that dedicated pension-account funds were distributed to the district’s ambulance fund and pension assets were transferred to employee 401(a) accounts without any district board authorization, even though the parties’ memorandum of agreement required that 401(a) payments be paid from district accounts, not restricted pension funds and this board business was transacted without authorization or quorum in violation of R.S.Mo. (Revised Missouri Statutes) Sections 321.200 and 105.662.”

However, in his memorandum opposing the motion for an injunction pending appeal, Hoffman states, “… If an injunction pending appeal is granted, future pension contributions will be limited by Section 415 of the Internal Revenue Code, which places limits on benefits and contributions under retirement plans.”

Under Section 415 of the IRS Code, the district cannot make contributions for 2006 as the deadline for payment was June 15, according to Hoffman.

In his motion, the district’s legal counsel noted, “At this time, new hires of the Mehlville Fire Protection District have not received any pension contributions due to the prior temporary restraining order is-sued by St. Louis County Circuit Court …

“Former employees of the Mehlville Fire Protection District have not received pension contributions due to the prior temporary restraining order issued by St. Louis County Circuit Court,” he wrote.

Hoffman’s motion also states, “Current employees of the district are also concerned about pension contributions and potential financial damages.”

In a letter sent to Silvernail and filed with the court, the eight administrative employees state, “The administrative staff would like to request distribution of the 2006 and 2007 401(a) contributions as stated in Resolution 3-06-2, dated March 16, 2006. As you are aware, the administrative staff is not part of the bargaining unit represented by Local 1889 and does not have a vote in their actions. Members of administration have not been solicited as to their desire to continue with litigation. The staff does not wish to be penalized or suffer negatively for the actions and continued litigation of the union.

“We have discussed our request with legal counsel and were advised to submit the request in writing to potentially eliminate losses that may be incurred due to the ongoing litigation filed by Local 1889. If a contribution of this nature does not satisfy the courts, we would request that alternatively an equitable formula be utilized.”

The eight administrative employees are: Assistant Chief Steve Mossotti, Deputy Chief James Hampton, Deputy Chief David Waser, Deputy Chief Joseph Schmidt, Deputy Chief EMS Craig Walk, Fire Marshal Ed Berkel, Comptroller Judy Krieder and District Clerk Carla Juelfs.

In a letter sent to the Board of Directors and filed with the court, Silvernail asks the board to grant the request made by the administrative employees.

“… I would ask your consideration in granting their request. As I know you are aware, my staff has fulfilled all of your directions as well as policy and procedural changes,” the chief wrote. “I wholeheartedly agree that these individuals should not be penalized due to the fact that they do not belong to the union and have no vote on any of these issues. Granting this request would only ensure that these employees receive pension funding that was promised to them in Resolution 3-06-2 and nothing more.

“Furthermore, I feel that the administrative staff has given me ‘100 percent’ and always carries out my wishes as well as those of the board,” Silvernail wrote.

On Monday, Goffstein said he had not read Hoffman’s motion. Asked about the request by the administrative employees, he said, “… I will tell you this, if it’s a matter of the overall equities, OK — I could tell you this: What these directors have done does not pass the smell test, OK?”

Hoffman said that the administrative employees’ request was discussed by the board in a closed session last week.

“The board has agreed to assist in the potential resolution of this matter for members of the administrative staff,” he said.

In a related matter, the Board of Directors voted unanimously Oct. 30 to approve a resolution offering an early retirement incentive to up to 10 employees with 25 years or more of service to the district who apply in writing before Dec. 1.

The incentive includes a $15,000 bonus, $1,000 for each year of service and 19 percent of gross wages for 2007 placed in the district’s 401(a) defined-contribution plan.