Mehlville fire district proposes to provide defined-benefit retirement plan for new hires

Hilmer states district legal fees caused by union, not fire board


The Mehlville Fire Protection District Board of Directors is proposing to provide retirement benefits to new employees under a plan that current employees have challenged in court.

The Board of Directors voted 2-1 last week to provide a defined-contribution retirement plan for new employees instead of a defined-benefit retirement plan. Chairman Aaron Hilmer and Treasurer Bonnie Stegman voted in favor of the change. Secretary Dan Ottoline Sr. was opposed.

As proposed, the district would contribute 8 percent of a new employee’s gross wages to a 401(a) retirement plan instead of the current contribution of $20 per pay period.

The board’s decision to provide a defined-contribution retirement plan to employees was challenged in a lawsuit filed last year by Local 1889 of the International Association of Fire Fighters. The defined-benefit plan was set to end March 31, and the defined-contribution plan was to begin April 1 after the board voted 2-1 to approve an amendment and two resolutions. Ottoline was opposed.

However, St. Louis County Circuit Court Judge Thea A. Sherry granted Local 1889’s request for a temporary restraining order against the change. In her ruling, she stated that the board “shall maintain the current retirement and disability plan in full force and effect, without modification, as relates to the defined-benefit plan, while this temporary restraining order remains in effect or until such further time as designated by the court in granting further temporary, preliminary or permanent injunctive relief.”

In May, Sherry also granted Local 1889’s request for a preliminary injunction that prohibits the board from making any changes to the pension plan. In her ruling, she wrote that after Hilmer and Stegman were elected April 2005, “the directors set out to terminate the defined-benefit plan, ostensibly to reduce the cost to the (district), but without regard to the effect on the plan participants. The assurances from defendants that there will be no reduction in benefits to the current retirees and vested members were unpersuasive.

“The change in the plan affects future employees, retired employees and current employees, both vested and non-vested,” Sherry wrote. “There is no credible evidence that the aforedescribed Amendment 5 does not adversely affect the protected interest of at least the retired employees and vested current employees.”

Since the board’s action Feb. 12, the district’s legal counsel has filed a motion to amend Sherry’s preliminary injunction to permit the change in the retirement plan for new employees.

The motion, filed by attorneys Mathew Hoffman and Paul Slocumb, states that the district seeks to hire new employees and would like to provide the new hires with a defined-contribution plan instead of the defined-benefit plan. The motion states that a Florida attorney who testified as an expert witness for Local 1889 said the board had the ability to offer a different retirement plan to new employees.

“Certainly they (the Board of Directors) have the ability to create a defined-contribution plan for all future hires,” attorney Robert Klausner testified last April.

After the vote to amend the pension plan was approved last week, Hilmer said that — in light of the union’s ongoing lawsuit against the district — he considers it a small victory.

“The reason why we’re doing this is because we need to move this district forward,” Hilmer said. “We’ve been underneath a lawsuit for the past year just under the pension. And because of the constant obstructionism and delay tactics used by the union’s lawyer (John Goffstein), our plan is basically at a standstill. So this is in one small way where Bonnie and I are trying to just push things forward.

“This was something that was instituted before Bonnie and I came in there — to give the employees a defined-contribution plan in addition to the defined-benefit plan. So just one more way for them to get some more money.

“So what we’re going to do is we’re going to say we’re going to use that existing defined-contribution plan and just change how we contribute to it. And all new hires won’t be on the DB (defined-benefit) plan. And eventually, our goal is to terminate that plan, but that’s what’s being tied up in court … What’s ironic is we haven’t even gone to trial. We’ve been involved in this case for a year. But this same attorney can go in in less than 24 hours and take away people’s freedom to vote on a tax decrease (Proposition TD),” he said.

On Feb. 8, St. Louis County Circuit Court Judge James R. Hartenbach removed the Mehlville Fire Protection District’s Proposition TD, or Tax Decrease, from the April 3 ballot.

A lawsuit filed Feb. 7 by Concord resident Dennis Skelton, founder of Protecting our Protectors, or POP, sought the removal of the tax-rate-decrease proposal from the ballot. Skelton’s lawsuit named the county Board of Election Commissioners and the Mehlville Fire Protection District as defendants.

The ballot language for Proposition TD proposed that district voters “decrease the general tax levy available to the district by 45 cents per $100 of assessed valuation.”

The ballot language further stated: “This proposition is based upon the 2006 assessed valuation for the district and equates to a total tax reduction of approximately $9.75 million per year. The foregoing shall not be subject to any tax rate reduction rollback.”

During a period for public comment Feb. 13, resident Norbert Geniec said he is concerned about the legal fees the district has incurred since Hilmer and Stegman took office.

“One thing that concerns me since you’ve taken office is all these legal fees,” Geniec said. “Now how beneficial is that towards the fire district on all the programs that you have? Who’s going to pay for these legal fees? Is it the responsibility of the board? The taxpayers? I’m a taxpayer in St. Louis County for 28 years, Mehlville fire district for over 20 and I haven’t attended a meeting. I do read the Concord Call. They’re great for starting barbecues. My question to you is who’s going to pay and who’s responsible for these legal fees? I just heard you say something about going on along in this next … what is it … the 8 percent or whatever compared to whatever. Is that going to be another legal fee that this district’s going to have to pay for?”

Board members did not verbally respond to Geniec’s question about the district possibly incurring more legal fees, but Ottoline nodded his head up and down.

Hilmer said after the meeting that if Local 1889 were to challenge the change in pension plans for new employees, he would not be surprised.

While he did not address Geniec’s questions during the Feb. 12 meeting, Hilmer told the Call that legal fees the district has incurred are a result of lawsuits filed by Local 1889 — not the Board of Directors.

“As far as Mr. Geniec’s comment about his supposed outrage of these legal fees, I find that laughable,” Hilmer said. “Maybe Mr. Geniec doesn’t realize we’re not the one filing the lawsuits. He should go complain to the district employees with their $140,000-a-year pay packages. They’re the ones suing the public to stop changes to an out-of-control disability and pension plan that’s 100-percent non-contributory, meaning the employees don’t put a dime into it. It’s 100-percent taxpayer funded.

“Yet the union thinks they control it 100 percent, which isn’t surprising because consider, until two years ago, they pulled 100 percent of the strings of the puppets they ran for the board. So will it incur more money? I don’t know. I’m not the one filing the lawsuits.”