Appeals court hears fight on firefighters’ fund bill
Mayor Mitch Landrieu’s office pursued a two-pronged strategy in court on Tuesday as it tried to fend off a $17.5 million bill from the city’s firefighters pension fund, arguing first that the city shouldn’t owe anything and second that the fund’s trustees can’t force the city to pay without a full trial.
If the first argument is successful it would save the mayor and City Council from having to patch a substantial hole in the city’s already strained budget. If the second works it would at least buy the city more time while the two sides go through discovery and another round of oral arguments.
The city made its case before a three-judge panel for the state 4th Circuit Court of Appeals, asking the judges to overturn a previous ruling against the Mayor’s Office by Civil District Court Judge Robin Giarrusso.
Arguments over how much, if anything, the city owes turned on whether state law requires that each year the city set aside exactly what the pension fund’s actuary estimates is needed to pay current retirees and sustain investments to cover future benefits.
Jim Garner, the city’s attorney, acknowledged that state law directs the board governing the pension fund to hire an actuary and come up with such an estimate. But Garner said there is no explicit rule that says the City Council then has to budget that much in any given year. “The statute doesn’t say you absolutely have to do it,” Garner argued.
He said the only explicit requirement stems from an older statute that calls for an annual contribution that’s as least as much as 1 percent of what the city takes in from licensing fees and 5 percent of the overall budget for the Fire Department. That requirement, Garner said, the city has met.
The city’s case for a full trial over the pension obligation stems from the same reasoning. Giarrusso, the district court judge, issued the city what’s known as a writ of mandamus, a legal order instructing the city to pay up immediately.
But the city argued that a mandamus can only be used to compel the city to perform a required “ministerial duty,” not to force the city’s hand on an issue where the City Council has room within the law to make one decision or another. So, the thinking goes, if the city can decide to follow the actuary’s advice or not, the court cannot issue a mandamus ordering the city to pay in full.
The attorney for the plaintiffs, Louis Robein, argued that there is no such ambiguity in the statute that set up the pension fund in the late 1960s. He said it was clear that lawmakers intended the new actuarial funding method to replace the old 1 percent and 5 percent formula. And in that case, he said, it is not the fund’s actuary suggesting what the city should pay but the state Legislature ordering what it should pay.
“This is the big Legislature telling the little Legislature what to do,” he said.
The 4th Circuit judges — Terri Love, Daniel Dysart and Sandra Cabrina Jenkins — offered little indication Tuesday of which direction they might be leaning.
Dysart asked most of the questions during the half-hour hearing, and, like Robein, he seemed skeptical that the Legislature would establish the new pension system’s funding formula without meaning for it to supersede the old one.
But he also seemed incredulous that the city has no formal mechanism for challenging the actuary’s estimates of what the pension fund needs to remain solvent. In district court, the city brought in an expert witness, Adam Reese, who suggested that different actuarial methods could produce different estimates of what the city owes.
“If you’ve got three actuaries, you’re going to get six different estimates,” Garner quipped.
Robein countered by pointing out that city officials did not challenge the actuary’s estimate back when they were making decisions about how much money to actually budget. And he said that Reese has never provided a competing figure that would replace the $17.5 million the city allegedly owes.