published Tuesday, June 11th, 2013

Two Chattanooga City Council members get pay, pension


by Cliff Hightower
Chattanooga City Hall
Chattanooga City Hall
Photo by Jake Daniels /Chattanooga Times Free Press.

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Should city employees be able to draw a pension while working?

Two Chattanooga City Council members together are drawing close to $100,000 in city salaries and pensions, causing heartburn for the city's pension board.

As city employees, they're paying into the same pension fund they draw checks from as retirees. The city's General Pension Board isn't exactly sure how to handle it, and officials said the two officials will continue to draw dual checks at least until August.

The councilmen don't see any problem.

"I didn't know it was an issue," said council Chairman Yusuf Hakeem.

"I'm entitled to draw the pension and I'm entitled to my salary," said Councilman Moses Freeman.

Hakeem is paid $27,650.90 a year as City Council chairman and collects $10,379 a year in pension for serving on the council from 1990 to 2006. He also collects a pension for seven years of service on the state Board of Probation and Parole.

Freeman is paid $22,650 a year for his council service and a $34,724 annual pension for 17 years as a city employee. He retired as Neighborhood Services administrator in 2000.

The subject came up at a recent pension board meeting. Board Chairwoman Daisy Madison, the city's finance officer, said it's a first in her 20 years of service at the city.

  • photo
    Moses Freeman celebrates with supporters while at the Southside Democratic headquarters after winning the District 8 Chattanooga city council position during Tuesday's elections.
    Photo by Dan Henry /Chattanooga Times Free Press.

"It was a situation we had not really anticipated," she said.

City officials said there was a similar situation when former Mayor Pat Rose, who served from 1975 to 1883, came back on the city payroll in 1987 as Public Works commissioner.

But the city attorney's office said that case didn't set a precedent. Chattanooga switched from a commission to a mayor-council form of government in 1990.

Employees contribute 2 percent of their salaries to the pension fund. Their pension checks are based on years of service.

Freeman and Hakeem said they were surprised to learn their dual compensation was causing consternation with the pension board.

"We're going to review this, and we'll come to a full understanding from there," Hakeem said.

Assistant city attorney Valerie Malueg said the board has a couple of options.

One is to suspend the pensions while the councilmen are in office. The other is to stop the current pension and start a new one. It would take five years of service for the councilmen to become vested.

The city's actuary, Kennesaw, Ga.-based Cavanaugh MacDonald Consulting, will study the question and make a recommendation for the board's August meeting. From there, an ordinance could come before the City Council.

Madison said it's unclear whether the ordinance would be specific to Hakeem and Freeman or a change to the city's overall pension rules.

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"Generally, you don't make decisions on individuals," she said.

Council Vice Chairman Chip Henderson said an employee handbook is being prepared and could include a rule on dual payments of pension and salary.

"That's one of these little holes that hasn't been addressed before," he said.

Councilman Jerry Mitchell, chairman of the council's Personnel Committee, is eligible for a city pension as he served as the city's Parks and Recreation director from 1998 to 2005.

Mitchell said he's not in the same situation as Hakeem and Freeman because he chose not to take the pension immediately after leaving.

He said he'll wait for the actuary's recommendation, but he doesn't have a problem with his colleagues collecting pension and salary at the same time.

"Folks work and they earn that, so they should receive it," he said.

Contact staff writer Cliff Hightower at chightower@timesfreepress.com or 423-757-6480. Follow him at twitter.com/cliffhightower or facebook.com/cliff.hightower.

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