Vero Beach officials boasting in a City Council meeting and on social media earlier this month of the city’s “strong and liquid” financial reserves and lack of money problems has since led the city’s own Police Pension Fund to put Vero on notice it owes it more than $2 million in overdue pension contributions, including $140,000 in interest.
Since receiving that notification, City Manager Monte Falls is not being so talkative – or at least not responding to questions from Vero Beach 32963 – about this invoice.
According to an April 10 letter from Foster & Foster Actuaries and Consultants, the firm which administers the $55 million Vero Beach Police Pension Fund, the city failed to deposit the employer pension contributions into the fund that were due on Oct. 1, 2023, and Oct. 1, 2024, incurring 7.25 percent interest ever since.
Should the city transfer the money into the pension plan account by April 30, the total needed to make the plan whole would be $2,052,000.
The missed $805,000 payment for 2023-2024 that should have been made in October 2023 pre-dates the city’s failure to complete and file its 2022-23 audit in June 2024.
Interim Finance Director Lisa Burnham said on April 14 in a response to the pension fund administrator, “I will work on getting these payments made.”
An April 8 public records request submitted to the City of Vero Beach for the dates and amounts of the city’s last four annual employer contributions to the Police Pension Fund had not yet been fulfilled as of press time.
City officials have publicly acknowledged the missing contribution $1,105,289 for the current 2024-25 fiscal year, citing the city’s current financial reporting challenges as the reason – not a lack of funds.
Vero Beach failed to complete its 2022-23 audit by the state’s deadline, and failed to respond to an Oct. 29 non-compliance notice sent by the Florida Joint Legislative Auditing Committee, setting off a series of enforcement actions in February, resulting in Vero losing access to state funding as of April 3.
“As of this date, the city is determining what pension contributions are outstanding and will make those required contributions on or before the submission of the audit,” City Manager Monte Falls said on April 8.
But the previous unmade payment from October 2023 possibly came as a nasty surprise. To be clear, police employees contributed their portion of the pension contributions to the fund, but the City of Vero Beach did not put in the employer’s portion for two years.
On top of the missing contributions from the city, the pension fund is also missing State of Florida Section 185 funding which comes from certain taxes and fees. The city won’t have access to those funds until after it comes into compliance with state auditing requirements.
“The Division of Retirement announced a current distribution from the State in the amount of $319,088.92. However, it is our understanding that the 2023 State Report was not approved prior to September 30, 2024; therefore, no State premium tax moneys may be applied toward the Plan’s funding requirements for the fiscal year ending September 30, 2024,” the April 10 Foster & Foster letter states.
The discovery of the missing $805,000 employer contribution for the 2023-24 fiscal year invites the question, what other unpaid liabilities will crop up as the city staff catches up on its annual financial reporting and audits?
Questions Vero Beach 32963 asked Falls and Burnham by email, not answered at press time, include:
- Do you know how the city’s October 2023 employer contribution to the Police Pension Plan was overlooked and not made on time, or at all during FY 2023-24?
- Was the letter from Foster & Foster the first you knew of this?
- How could a missed payment of $800K+ not show up on the city’s periodic financial reporting to the City Council and the Finance Commission?
- Is there a target date for depositing the $2.05M cited in the April 10 Foster & Foster notice into the Police Pension Plan?
- Is someone currently making sure that all other required employer pension contributions (Fire, General Employee, Closed General Employee DB Plan?) were made into those plans for FY 2023-24?
While these questions remain unanswered, the good news is, according to the boasting by city officials, that Vero’s coffers should have plenty of money to make the Police Pension Plan whole.
“Our financial reserves remain strong and liquid,” Mayor John Cotugno said on April 1, in an effort to convince the public that Vero’s financial woes were being blown out of proportion by media reports.
But that leaves unanswered the question of whether other major unpaid liabilities are embedded in those reserves.
