ETHICS COMPLIANCE AND OVERSIGHT OFFICE CITY OF JACKSONVILLE

CARLA MILLER
DIRECTOR CITY HALL, ST. JAMES BUILDING 117 WEST DUVAL STREET, SUITE 450 JACKSONVILLE, FLORIDA 32202
ETHICS@COJ.NET

May 7, 2013

Cindy Laquidara General Counsel 117 West Duval Street Jacksonville, Florida 32202

Dear Cindy: On August 6th, 2012, as the Director of the Ethics Office, I started a study on the Senior Pension Plan (SPP) of the Police and Fire Pension Fund (PFPF). On behalf of the citizens of Jacksonville, I have been monitoring the citys handling of this situation. This is a function of the Ethics Office as, by Code, the Office shall ensure the investigation of all situations involving fraud, waste, corruption and conflicts of interest by city officials. As you know, the SPP was a special pension plan set up within the PFPF for 3 top executives, only one of whom is still working, Director John Keane. A week after I started studying the Plan, (8/14/2012) you issued a legal opinion that the PFPB was not authorized under the Charter to create this Senior Pension Plan. Representations were later made to the City Council that a lawsuit would be filed in this matter. In the interim time period, I have had several conversations with city officials about the potential illegality of the plan and other related PFPB salary expenditures. (Such as Director Keanes salary which increased annually from $128,346 in 2001 to the current amount of $291,000; numerous retroactive salary payments; and a recent vacation time bonus of $163,400.) It has been 9 months since OGC issued its opinion on the Plan and a lawsuit on this has not yet been filed by the City. Additionally, City Council Auditor started an audit on the PFPF over a year ago. That audit has not been released to date.

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In February, 2013, a suit was filed by Randy Wyse of the Firefighters Union as to whether or not the PFPB should be the entity (through its Director, Keane) to negotiate for the firefighters union. The Wyse case is now in mediation, which makes its proceedings confidential and not transparent to the public. Since mediation is now occurring in the Wyse case and the lawsuit on the Keane Senior Pension Plan has not yet been filed, I am concerned about the possibility that the Directors compensation and pension issues will be rolled into a global settlement in the Wyse case. If this path is taken, I believe it would be detrimental to the public trust. The public deserves an answer from the Court on the legality of the special pension plan created by the Board for 3 people. If this Senior Pension Plan is an illegal plan, it should be cancelled. If it is a legal plan, the Board and its attorneys who approved it should be exonerated from any accusations that it wasnt legal. It is my opinion that the issues involving special financial benefits to Director Keane be handled separately and not be used as a bargaining chip to get other issues resolved in the Wyse litigation. And, an audit on the Police and Fire Pension Fund that has been worked on for over a year should be issued and made public so that any findings in that audit can be considered in the litigation and settlements. Perhaps my apprehension of this scenario occurring is unfounded (and you are free to clear up any of my misconceptions on this) but there seems no other way to explain the delay in filing suit on the Plan which was announced 9 months ago. The Wyse suit was filed in February-- only 3 months ago. While a global settlement wrapping up all pension issues for the city is a laudable goal, it should not come at the price of condoning potentially illegal and/or corrupt actions and in the absence of the audit information. Sincerely,

Carla Miller Director Office of Ethics Compliance and Oversight Copy: City Council President, City Council Vice President, City Council Finance Chair