Town needs to rethink Colony
Editor & Publisher
There is not enough paper in all the warehouses of Weyerhaeuser paper products to present the unravelled Colony in a linear manner. In short, we must slice open the Colony problem like a juicy and messy cantaloupe and attempt to scoop out some meaning and direction and avoid the proverbial mess.
The future of our once gilded resort
The steps leading to Town Hall may be paved with good intentions, but our Town Commission has erred in its effort to cajole the Colony toward resolution.
Last March, commissioners told the warring Colony parties that it would grandfather its 237 units until the end of this year and no further. The Commission was icy and angry and admonished the groups as if they were insolent, greedy and selfish children and the millions of dollars in value in those development rights they lorded over the feuding parties.
And while the Commission was attempting something admirable — to prod a resolution, it is backfiring. Here is how:
Instead of the parties resolving a legal mess that took decades to materialize and unravel, the Town has unwittingly instigated all manner of schemes and half-baked ideas to avoid the Colony death sentence the Commission can impose.
Some owners are taking steps to do ad hoc renovation of a pod or a few pods of units and hope to qualify that as a reopening of the resort and avoid the abandonment of the units.
That prospect is alarming. We have a Colony sign with the letters fallen off, we have debris and rot and termites and decay. We have units that were barely habitable, and now left stagnant for two years. And are resources really going to be squandered in such an initiative? To what end? All these machinations to avoid what the Commission thought would be an effective stick.
Let us remember what the Colony needs to be. As Colony founder Dr. Murf Klauber eloquently said, “Building the reputation of the Colony took decades and a fast push to reopen to preserve zoning would be the worst thing for the image of Longboat Key and especially for the future of the Colony.”
Even his counterpoint, Association of Unit Owners President Jay Yablon says the Town action is creating undesirable plans and schemes to preserve the owners’ rights.
The sane approach and smart approach is for our Town leaders to not take any action to take away the units from the Colony. The smart move would be for the Commission to continue the grandfathering, minimally until the end of 2013 with requirements of the parties maintaining a level of landscaping and signage that at least to the public driving by masks the rat maze of beachside tenement houses and soiled nest of legal entanglements. And this needs to be done quickly.
The Town should not play the role of pushing or discouraging development; the market and owners ought make those decisions.
It is our Town that said it wants a revitalized resort as a main priority. If that is so, we need to allow the process to run its course and demand the property look manicured from the public roadway.
Town Manager Dave Bullock gets it. We are here to make sure codes are not violated and intrinsic dangers are not present. Beyond that, we are taking what little decision-making authority we have, and yielding it in a way that is creating all manner of contrivances to get around the rules. That is not effective governance — it is mixing up cause and effect.
The Commission really ought to consider using the carrot rather than the stick.
Longboat’s pension headache needs a smart remedy
It could be argued that all of civilization is a construct against nature. And in a way pensions are a contrivance to go against nature by forcing a savings and accrual so instead of living large, a worker can float through retirement toward his grave on a reasonable raft of income.
And in the eyes of most Americans, the raft of pension income for public servants has grown to a financial titanic. And we know where that metaphor ends.
As we all should know, the Town is currently negotiating with the Fire Department to get rid of its defined benefit plans and to adopt a defined contribution model.
In many ways the defined benefit programs on Longboat Key are under assault because of the unfunded obligations and the strain on payroll and taxes.
But how we got here is open to interpretation and simplisms from every side.
In short, the dark night of public pensions on our island comes down to poor market returns on investments, major enhancements to benefits and conscious and deliberate actions by the Town Manager and past Town Commissions and those managing the funds to allow senior employees and department heads to opt-out, to allow early retirements and to make budgets look less onerous by assuming 8% returns on investment.
So while the beneficiary got enhancements, the Town continually benefitted from using actuaries to twist and turn the pay-in, which allowed the liability to grow. In short, guilt runs through all parties.
What to do?
The simple response, and the one the Town is proffering, is to convert Longboat Key employees to a defined contribution model. And that has business leaders and most residents applauding.
I believe this is a case of getting what you wish for. We, as a Town, can through the Commission impose this measure. But the end result will not be what has been advertised.
In fact, the Town’s annual pension obligation, which is now staggering, will more than double under any of the scenarios offered with the 401A proposal.
That is because while the current liabilities must be paid off, the 401A plan must also be funded. In essence, the current residents will see a more than a doubling of pension costs for the next 10 to 15 years. And then the good news is the cost will fall off to between 10% and 13% of payroll. That is the good news; unfortunately many of us will only get to feel good about it after our coffins shut.
But here are the real consequences: Longboat Key will lose the quality of fire and police coverage it now enjoys. The best employees will not work under this model. A few have left and many are looking to leave with a wait-and-see attitude. Longboat has always made one thing clear: we want the best medical EMS service available or executable as a goal.
This effort directly undermines that effort. No performance contract will mask that the Town will sink from an A-list for employees to a D-list. And telling hires that working on Longboat is paradise works if you are a realtor talking to a buyer, but let’s be real. Our public servants cannot afford to live in the paradise they protect — and that is fine. But this solution is not a real solution. It’s riding some populist wave and not thinking the matter through.
Remember: your cost will double for 10 to 15 years and be far higher than the defined contribution model could or would be if employees make concessions.
The firefighters and police will have to make contractual concessions to keep a defined benefit plan. And that immediately decreases the liability. That liability is nothing more than the equivalent of an amortized amount on an adjustable rate mortgage. If the market zooms again, guess what? The liability starts to disappear.
This is not 9-11. We do not have to charge into unknown countries, destroy what exists, only to realize we have destroyed what ultimately protects us. Let’s think this through.