Updates: trains, pensions & ag reserve

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All aboard vs. off the tracks

It’s been another week with a lot of news about All Aboard Florida, which few people seem to have no opinion about.

The Palm Beach Post reported that All Aboard Florida will not seek the $1.6 billion federal loan it had wanted for the northern portion of the project. I reported last month that the company’s plan, if the government didn’t approve the loan, was to seek private financing. That’s the new approach, using high-risk bonds.

Critics had cited the loan request to claim that All Aboard Florida isn’t viable as a private venture. And the loan would have been the largest ever granted by the Federal Railroad Administration. The largest to date is roughly $562 million, which went to the heavily subsidized Amtrak in 2011. The second-highest was $233 million.

Despite the company’s decision, those critics won’t back off their argument that the 32 new trains a day will harm those living near the Florida East Coast Railway tracks and navigation, since gates will have to come down much more often. U.S. Rep. Patrick Murphy, who represents northern Palm Beach County and the Treasure Coast, where opposition is strongest, didn’t budge much even after hearing the change in financing.

There also remains the issue of having cities sign agreements with All Aboard Florida to maintain the crossing equipment. Those agreements must be updated because of safety improvements that will remove the need for train whistles between Boca Raton and West Palm Beach.

Boynton Beach approved its agreement Tuesday night. Mayor Susan Haynie says Boca Raton’s legal staff is still “hammering out” the language.

We do finally know which improvements will be necessary at which crossings. They were listed last week in a letter from Palm Beach Metropolitan Planning Organization Executive Director Nick Uhren to city managers.

Four-quadrant gates—two gates in each direction, so drivers can’t go around them—will be installed at nine of the 12 crossings in Delray Beach, including Atlantic Avenue and Linton Boulevard. Four of Boca Raton’s 10 crossings will get four-quadrant gates—Northwest 20th Street, Glades Road, Palmetto Park Road and Southwest 18th Street. Some of those crossings also will get sidewalk improvements, as will most of the crossings in Delray.

All Aboard Florida wants the agreements quickly, probably because construction on the southern portion has started. Next up: Coast Guard hearings on All Aboard Florida and navigation. You can assume that they will be well-attended.

Power line update

The Trader Joe’s store in Boca Raton, like the one in Delray Beach, is humming along. Unlike the one in Delray, though, the Boca store won’t be cleared to open for good until the developer of East City Center buries those ugly power lines in the parking lot.

Getting the lines underground means getting with Florida Power & Light on the work. According to an FPL spokesman I contacted Wednesday, the utility’s schedule seems to be on track with the city’s order to bury the lines roughly 90 days after the store opening on Sept. 26.

Bill Orlove of FPL said in an emailed response to my question that the work will start this month and should be done by “the end of the year,” which would be just about 90 days. What will be involved? How much disruption will there be, since the work on what amounts to a city block should have been done during construction of the center? Here is Orlove’s answer:

“The work will be continuous. Due to safety concerns, there may be some temporary road closures, and some of the parking spaces will be closed off. However, all entrances and exits will be open to and from the parking lot, and traffic will be able to move through the area.”

Delray pension reform update

We still haven’t heard publicly what approach Delray Beach will take on fire and police pension reform. Two numbers, though, make clear why reform is necessary.

In an interview this week, Mayor Cary Glickstein said that in 2000 the fire-police pension fund was fully funded and was running a surplus of perhaps $2 million. By 2013, unfunded liabilities had hit $90 million.

Even with the Great Recession, how could things have gone so wrong and so quickly? One reason, Glickstein said, is that a previous city commission raised the multiplier— used to calculate pension benefits per years of service—to 4 percent. In Boca Raton, it has been 3.5 percent for the police, and the city wants to make it 3 percent.

But in Delray Beach, Glickstein said, the much bigger problem has been bad investment decisions. On that $90 million hole in the fire-police pension fund, $88 million of it was dug by investment losses.

Pension fund managers are supposed to make conservative investments. Granted, the recession caused the market to bottom out in March 2009, but it is reasonable to assume that with a better investment policy the fund would be in much better shape. The Leroy Collins Institute at Florida State University just rated the fund ‘F’ for 2012.

Full-service cities like Delray Beach and Boca Raton find themselves in a bind in trying to manage their own fire and police pensions. By taking money for those pensions from a state-imposed assessment on insurance policies, the cities must abide by state guidelines that include the makeup of board that administer the pensions.

Under those rules, the boards are stacked in favor of the unions. The Delray board has nine members, but six represent police officers and firefighters, and they may not be city taxpayers themselves. The board chairman is Commissioner Adam Frankel, but he a favorite of the unions and is on record as opposing pension reform.

As a result, the cities don’t make investment decisions, but they get stuck with the results of bad decisions. A consultant said last year that Delray’s contribution to the fund nearly had doubled since the financial crisis of 2008.

At its August meeting, the pension board did agree with a proposal by Chief Financial Officer Jack Warner to pay down the plan’s unfunded liability over 20 years as opposed to 30 years, which will save an estimated $21 million in interest payments. But that is just a start. Delray Beach needs to go long on police and fire pension reform.

Ag reserve updates

On Tuesday, I wrote about a vote by the Palm Beach County Commission on transferring developments between properties in the county’s Agricultural Reserve Area. The reserve has been in the news because of the county is taking a new look at how much development to allow in the reserve 15 years after voters approved $100 million to buy land for continued farming or for preservation.

I said there could be concern about allowing such a transfer —an owner gives up rights in one place in exchange for being allowed to build more elsewhere—because of the precedent it might set. One option property owners are pushing for is the increased use of such transfers.

The commission unanimously approved the transfer that was on Tuesday’s agenda. Commissioner Steven Abrams, who represents the southeast part of the county, responded to my Tuesday post by saying in a text message that “what we did is within existing rights” for the reserve and allowed “no net gain of units.”

Some farmers, Abrams said, want a new program for transferring development rights that would mean more housing allowed overall in the Agricultural Reserve. There will be other votes on this topic before the commission’s discussion of new rules, scheduled for January.

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You can email Randy Schultz at randy@bocamag.com

For more City Watch blogs, click here.About the Author

Randy Schultz was born in Hartford, Conn., and graduated from the University of Tennessee in 1974. He has lived in South Florida since then, and in Boca Raton since 1985. Schultz spent nearly 40 years in daily journalism at the Miami Herald and Palm Beach Post, most recently as editorial page editor at the Post. His wife, Shelley, is director of The Learning Network at Pine Crest School. His son, an attorney, and daughter-in-law and three grandchildren also live in Boca Raton. His daughter is a veterinarian who lives in Baltimore.

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Randy Schultz, a native of Hartford, Connecticut, has been a South Florida journalist since 1974. He worked for The Miami Herald until 1976 and for The Palm Beach Post from 1976 until 2014, where he served as managing editor and editorial page editor. Since 2014, he has written a politics blog, commentaries and other articles for Boca magazine. His writing has earned first-place awards from the Florida Magazine Association and the Florida Society of Newspaper Editors. Randy has lived in Boca Raton with his wife, Shelley Huff-Schultz, since 1985. His son, daughter-in-law and their three children also live in Boca Raton.