Dade County Water Authority manager Doug Anderton said he'd been told he would know when it was time to retire and that that knowledge had recently come to him. He will step down this June.
And certainly Anderton has had plenty of time to plan his retirement. When the big day comes this summer, he will have worked at the water company for 49 years.
But the financial terms of his retirement seem to have come as something of a surprise to the governing authority of the water authority, or so-called water board, which is in effect Anderton's boss. The water board held a special called meeting Monday afternoon to discuss a resolution okaying the arrangements that Anderton had long understood to be in place for him--but of which Dade Executive Chairman Ted Rumley, who also chairs the water board until its planned reshuffle via pending legislation, and other board members professed deepest ignorance.
"It's been there," said Anderton by phone after the meeting. "The auditors report on it every year."
What "it" is, is a life insurance policy purchased by the water board back in 2004. What the plan was, explained Anderton, was to provide Anderton with a retirement income while not costing the water company anything. The board purchased the policy for $400,000 in 2004. When it matured its value would be double, enough to pay Anderton $40,000 a year for 10 years, or $400,000, the remainder to be paid as a death benefit to his heirs should he not live to claim the full amount, while at the same time reimbursing the water authority for the original cost of the policy.
According to the resolution put together by county attorney Robin Rogers, the policy is well on its way there, with a current cash value of $604,452.
"The important thing for everybody to know is that it's revenue-neutral." said Anderton. "It doesn't cost the authority a dime."
That's the gist of it, though the resolution adds some zigs and zags by specifying Anderton's benefit be paid not directly from that policy but from a certificate of deposit account once used for a reserve on a loan now paid. The water board discussed the matter in executive, or closed-door, session for well over an hour at the April 2 meeting, but in the end okayed it unanimously. Anderton will be paid his first $40,000 on July 1 of this year and another installment of the same on succeeding July 1s until the total retirement benefit of $400,000 has been disbursed.
It seems straightforward enough. So why did the board seem surprised? One reason is probably a function of Anderton's de facto supervisor being a board of volunteer directors, though Anderton said he's tried, as new members come on, to keep them apprised. He said Charles Breedlove, who recently stepped down from the board, knew all about it since he was around in 2004 when the policy was purchased.
But perhaps the more interesting reason is the odd situation that led the water board to set up the special benefit for Anderton in the first place: He hadn't had Social Security funds withheld from his pay for the first 26 years he worked for the water company.
When he first came to work for the water company in 1971, 21 years old and fresh out of school, explained Anderton, he had tried to have money withheld, but the Social Security Administration wouldn't accept it. "They said we were a nonprofit, exempt organization" said Anderton.
So nothing was done about employee retirement at the water company at all until 1987, when a "457," or employee-contribution-funded retirement plan, was adopted. "Everything seemed to be fine, and we rocked on until 1999," said Anderton.
That year, SSA found the 457 plan not to be a "qualified" plan. The program is still in place, and employees can still pay into it the way they would into a 401(k), but SSA began to treat water company workers like other employees and collect withholding.
Anderton said other employees at the water company had of course been affected by not having SSI collected during those years. "But I was the only one who had been there my whole life," he said, "that that had been my only job."
Thus the water board as it was composed in 2004 bought the policy to help Anderton make up for having missed those 26 years of contributing into--and eventually collecting from--Social Security.
Anderton will step down June 1. The board has hired Jeff Pendergrass, an Alabama water plant careerist, to replace him. Pendergrass will start in May and work with Anderton a month before assuming the reins solo.
