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Has Harvey C. “Jack” Eads been employed by the City of Coral Gables for twelve or thirty years? For the manager of the City Beautiful, that's the two-million-dollar question.
The city contends the answer is thirty, despite the fact that Eads's first day as city manager was in 1988. When he was hired, the commission and mayor agreed to count his nineteen years of public service with the air force, Dade County, and the City of Miami for the purposes of Coral Gables' retirement plan.
The problem is, city rules prohibit crediting any employee with more than five years of work elsewhere. Several current and former city workers have been pointing out this double standard for years, but recently an ex-cop named Mark Scanlan took his complaint to his former brothers-in-arms. In July he wrote a letter detailing what he calls “the illegal, unethical, illegitimate, and corrupt manner in which ... Mr. Eads obtained retirement benefits from the City of Coral Gables.” He then sent it to several law-enforcement agencies, including the Miami-Dade County State Attorney's Office.
Eads, who did not return phone messages seeking comment for this story, has had a close call or two before. Last year the city's retirement board considered the manager's application for the Deferred Retirement Option Plan. Under DROP employees can begin collecting their pension while they are paid a city salary. Eads hoped to garner some two million dollars over eight years. But DROP is only supposed to be available to employees with 25 years or more in the system. Based on the irregularity, the board voted to deny Eads's application in May 1999. At the next meeting, the nine-member board received assurances the retirement system had enough funds to cover the payout to Eads, and then voted to accept the city manager to DROP. Two members dissented.
“A lot of people are still upset,” says George Rosso, a retirement board member and an officer in the Coral Gables Employees Association who voted against Eads. “We feel it's not fair. Basically it's discrimination. Our members don't have any great benefits like this.”
Although it appears Eads has beaten the administrative challenges to the deal, Scanlan says it's not over. The 57-year-old left the Coral Gables police force in 1987 because of numerous ailments, including esophageal cancer and heart disease. A past president of the Coral Gables lodge of the Fraternal Order of Police, he formed the Disabled and Retired Police Officers of Coral Gables as an independent watchdog group shortly after his retirement.
Although Scanlan had known something about Eads's retirement deal for several years, it wasn't until after the DROP vote that he made a public-records request for the manager's retirement file. When he received it this past June and sifted through the paperwork at his Lake County home, he couldn't believe what he was reading.
First of all the whole thing had been delayed. When then-Mayor George Corrigan and the Coral Gables City Commission hired Eads in 1988, the final item on Eads's appointment was “military buy-back and retirement program to be resolved at a later date.” To Scanlan that seemed like a blank check. In 1992 Eads cashed it. Not only had the manager been allowed to “buy back” more years in other retirement programs than city law allowed, he also appeared to have received a substantial discount. The city's retirement ordinance specifies that any employee who wants to transfer service time from another public employer has to pay a lump sum amounting to eighteen percent of his current salary, per year bought back. Yet in 1992 Eads took out all the money in his City of Miami retirement account, $85,700, and paid it into the Coral Gables program, in order to purchase fifteen years of credit in that city's system. That was almost $200,000 short of the required sum.
In addition none of these transactions and negotiations was brought before the city's retirement board, which is supposed to consider all transfers of retirement credit. Although the city commission had voted on Eads's hiring, community activist Roxcy Bolton is among those who questions the legality of the retirement package. “He came [to the retirement system] through the back door and never went to the retirement board,” Bolton says. “It irritated city employees.”
Union leaders and city officials publicly challenged Eads's buy-back in 1994, when the deal came before the retirement board for the first time. The board decided to refer the question to the city commission, which voted 3-2 in favor of upholding the deal. One of the dissenters, Mayor Raul Valdes-Fauli, declared in the meeting that the deal “didn't pass the smell test.”
Marvin Smith, president of the Coral Gables Employees Association union, says Eads's deal has long been a sore point with his membership. “We just don't think it was fair for him to buy back more years than we were able to,” he sighs.
Scanlan doesn't consider the DROP vote to be the final word on the subject. After poring over the contents of Eads's file and cataloguing what he considers numerous and egregious violations of federal, state, and local laws, he fired off his letter; the first copy went to Valdes-Fauli. In this thirteen-page broadside, Scanlan lists the shenanigans and the various laws they violated and then fumes about the inequity. “Internal Revenue Service regulations preclude any entity from providing “super retirement benefits' to members of management when same are unattainable by others in the system,” he warns.