From its office in Clayton, Missouri, Danna McKitrick, P.C., delivers legal representation to new and growing businesses, financial institutions, non-profit and government-related entities, and families throughout the greater St. Louis region and the Midwest.
Danna McKitrick attorneys practice across many areas of law, both industry- and service-oriented.
Attorney Dan Tobben, representing Firemen’s Retirement System of St. Louis (FRS), argued before the Missouri Court of Appeals against the City of St. Louis and its attempts to replace the pension plan with the City’s new pension plan for firefighters.
A lower court ruling in 2013 found that the City could change the plan, with stipulations. Tobben and the FRS maintain that City of St. Louis did not have the right to make changes under Missouri state law and based on both the Missouri and the U.S. constitutions. Continue reading »
In the original decision in October 2012, Jasper County Circuit Court Judge David Mouton ruled in favor of Robertson and three younger firefighters who represented the active-duty firefighter members of International Association of Fire Fighters Local 2618. Judge Mouton agreed that the city was not calculating Robertson’s disability benefits at a rate of 50 percent of wages according to the language of the plan.
The pension board appealed on the grounds that the amount should be reduced based on “years of service” less than 20 years. Such a position would be especially harmful to younger firefighters without many years on the job if they become disabled.
Attorney Dan Tobben will represent Robertson and the local IAFF in the appeal.
On January 2, 2013, the Firemen’s Retirement System of St Louis (FRS) and its trustees filed a lawsuit against the City of St. Louis regarding its recently-passed pension ordinance, Board Bill 109 – which is now known as Ordinance 69353.
According to the press release from FRS:
The lawsuit seeks a temporary restraining order and preliminary injunction during litigation to prevent the amendment of [the] city ordinance [affecting] … the existing pension plan, as well as to order the parties to continue to operate under the existing FRS plan during this litigation.
In addition, the lawsuit asks for a declaratory judgment that Board Bill 109 is illegal, unconstitutional, and that it fails to correct the multiple flaws pointed out by Judge Robert Dierker when he issued an injunction against enforcement of Board Bill 12.
Less than one day after FRS filed its lawsuit against the City of St. Louis and its most recent ordinance involving the firefighters’ pension plan, Judge Robert Dierker issued an injunction against the City, prohibiting the City from proceeding with Ordinance 68353. He also consolidated this latest lawsuit into the existing litigation involving two other city ordinances relating to the same issue. Read the official press release from FRS.
Dan Tobben, principal with Danna McKitrick and attorney for the Firemen’s Retirement System, commented in the St. Louis/Southern Illinois Labor Tribune on changes the City of St. Louis made to its firefighters’ pension bill after a circuit court judge for the City of St. Louis issued an injunction against the City from implementing the original bill.
FRS attorney Dan Tobben noted there will be appeals regarding the “local control” issue, the rights of firefighters with less than 20 years of service, and for other legal and constitutional reasons as well, even if the new board bill passed out of committee last week is approved by the full Board of Aldermen.
The amended bill concedes many, but not all, of the issues being argued by FRS. Continue reading »
A St. Louis judge has entered a preliminary injunction against the City of St. Louis in all matters relating to Board Bill 12. Board Bill 12 (Ordinance 69245 of the City of St. Louis) was passed by the Board of Aldermen and signed into law by Mayor Francis Slay to allegedly reform the firefighters’ pension plan. The Firemen’s Retirement System litigated this case because it strongly believes the City of St. Louis did not have the right to make the proposed changes under Missouri state law and based on both the Missouri and the U.S. constitutions.
A St. Louis judge has ruled that the Firemen’s Retirement System of St. Louis can sue the City of St. Louis to stop reform of the pension. The Board of Aldermen for the City of St. Louis has passed ordinances to reform the pension. Firefighters believe that the city does not have the legal right to make changes to the pension system under Missouri state law.
There is a lot of distortion going on these days regarding public pensions. A recent You-Tube video captured this well, especially as regards the current battle in Wisconsin and the ongoing disputes in New Jersey (two places with very different situations–Wisconsin’s plans are actually rather well funded for state employees).
Seeing the effects the smear campaign is having on the general public, the International Association of Fire Fighters (IAFF) has responded back and has begun an ad campaign to educate people about the truths and myths of public safety pensions. Harold Schaitberger, president of the IAFF, made a lot of important points in his interview featured on the video and it is worth listening to.
After watching this video, I turned on the local St. Louis news to find a story about a 20+ car pile-up on a local highway. The news crew reported that the St. Louis City firefighters rushed to the scene, rescued over twenty people from their cars, and handled the catastrophe quickly and efficiently. After seeing both of these items, it makes me think that people should not rush to judgment regarding public safety pensions until they know all of the facts. The level of the rhetoric in St. Louis hasn’t reached the level in the two previously mentioned states, but the City’s distortions have been there for quite awhile. Add in the fact that the police have to go on the streets of America’s highest crime city, and it makes you wonder ‘what are these City officials thinking or are they thinking at all.
According to the SEC, offering documents connected to the bond sales created the false impression that the state could fund pension obligations with existing resources. However, the SEC alleged that New Jersey could not make contributions to its public pensions without raising taxes or cutting services that could impact its budget. As a result of failing to properly disclose its pension obligations, and the related financial issues, investors were not given adequate information to gauge the state’s ability to fund the pensions or assess the impact on its financial condition.
For several years now, cities and states have watched the funding of their public pensions worsen and many have filed to take any substantive action. Some of these public pensions have become dramatically underfunded, leaving the city or state in a fiscal crisis, but politicians continue to minimize the severity of these problems. They have glossed over the issues and are trying to push these issues off into the future, but the SEC has now sent out a warning that public pension underfunding can result in serious consequences. Besides penalties and fines, governmental units or responsible individuals may be criminally charged for securities fraud, which raises the stakes for the individuals involved. If the city or state creates a false impression with its citizens about its fiscal health when issuing bonds, it is also creating this false impression with potential investors.
In particular, the state of Illinois should be concerned by the SEC’s fraud charges brought against New Jersey. Recently, the state of Illinois issued a $3.5 billion bond issue and will issue another $11 billion bond issue in 2011. During this time, the state’s unfunded pension obligations have been estimated to be between $61 billion by the Illinois General Assembly’s Commission on Government Forecasting and Accountability and $166 billion by independent parties. If the state of Illinois makes misleading statements regarding its public pension underfunding issues when it issues bonds, Illinois may be the SEC’s next target. Full disclosure can solve these problems, but that would almost surely the raise the cost of borrowing funds during this time of economic uncertainty and reduced tax collections.
The SEC has taken a very important step to deal with how some cities and states mischaracterize their public pension obligations to its citizens and bond investors. Cities and states cannot be allowed to mislead investors about its pension obligations when it issuing bonds. Although there were no criminal charges or a financial penalty in the case of New Jersey, there is no guarantee this will occur again when the SEC files charges against another state or city. In fact, in San Diego, the SEC based remedies were much more severe. From this point forward, cities and states must be careful when they make statements about their public pension obligations and their ability to pay such obligations, because they could be the SEC’s next target if there is not proper and full disclosure.