Tuesday I had an hour-long talk with Coral Gables Commission Group 4 candidate Frank Quesada. He is a commercial litigator with Fowler, Rodriguez, Valdes Fauli, a well-respected Coral Gables law firm. Some of it was off-the-record chat, but I also asked him some questions on the record. His answers in the inset quotes below are verbatim as are the parts in quote marks; parts without quote marks on in [brackets] are my paraphrase.
Quesada brought with him an annotated copy of the City budget and walked me through some of the things he thought were problems. He said the #1 issue in the race is the pensions issue. “I can guarantee you that I’ve done more work than any other candidate on this issue. …. I sat down with independent actuary.” A big part of the problem is that the pension plan presumes a 7.5% return on investment, but returns fluctuate. If the return is below 7.5% then the city is on the hook for the deficit. At present there is a $197 million unfunded liability; Coral Gables is part of a national problem.
Switching to a cash balance plan will solve the problem going forward, but will not deal with past shortfalls. A cash balance plan will protect the city from new unfunded liabilities. (Cash balance plans are defined benefit plans that have features of defined contribution plans. In particular they shift the risk and (if they exist) the benefits of fluctuations on the rate of return to the employees, thus removing the need for the employer to put up cash if there are shortfalls.)
Quesada also noted that the City expects a report from a pensions actuary in May, and it must base any plan going forward on that report. The next milestone is that the agreement with the firefighters ends Sept. 30. That said, the City’s freedom in the past was not as great as some candidates are making it sound. For example, he said, state legislation requires that municipalities allow a minimum of 300 hours of overtime be allowed in final pension calculations if it uses the current type of plan. The cash balance option is more attractive due to relatively recent changes in federal pension legislation. [I think this is would be the Pension Protection Act of 2006?]
More generally, “Polls show voters think things are on the right track. I tend to disagree somewhat, in that I think our budget has gone higher than t should be.” In 2005 the city had $52million in property tax revenue; now it gets $69-71million, thus there is $18 million of additional revenue from the property tax. Yet the size and population of Coral Gables hasn’t changed. “Why does it take an additional $20 million to run the same city?” The answer, he said, was primarily pensions. “Fixing pensions will help … that’s half of it.” The other half seems to be to try to get lots of smaller savings, such as by moving the election date to one where the county is having an election.
I asked him one of the tough questions people working for other candidates have been feeding me: Given that he used to work for Bill Kerdyk, and indeed trumpets this as part of his experience, if elected, will he just be a Kerdyk clone? Mr. Quesada answered by first describing how he came to be working for Bill Kerdyk.
I started [getting] involved in high school, I started a music program, petitioning the administration…. When I went to Villanova I was the only student on the Board of Trustees….I was involved in student government…it was a great feeling to make changes on campus … and to see people happy with the results.
I took a year off before law school. … [I have] no desire for state or federal office. … [a person] can make more change on the local level. …
[When I returned to Coral Gables I] volunteered for Kerdyk, [but] had no previous connection [with him] … I was very involved with the trolley … with the public works department … the biggest issue was the funding.
Quesada also suggested that he’s more independent than Kerdyk.
I am very conservative, but it depends on the issue …. I don’t like to be told how to vote … I like to gather facts… I like to hear expert opinion.
(For what it’s worth in this nonpartisan election, Quesada is a registered Independent.)
I also asked about the candidate’s forum in which I thought his answers were not substantive – they tended to be of the form, ‘I will be researching this very very carefully’ rather than, ‘I have researched this and here is my answer.’ Quesada blamed the format and suggested that at the Ponce Business Association Forum about a month ago (audio is here) he’d given meatier answers when allowed more than 30 seconds to do so.
Mr. Quesada seems to be hard-working and very earnest. In particular he seems well up to speed with the fine details of the city budget, and has clearly given both the pensions issue and some other savings issues some serious thought. He makes a strong case for his candidacy.