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City's loss in EMS pension case could spur others
Thursday, March 25, 2010

A Pittsburgh emergency medical services supervisor who claims that an agreement made during Mayor Tom Murphy's administration to allow management to retire five years earlier without penalty won his court case on Wednesday.

The verdict, which awarded James D. Holman nearly $50,000 plus interest, will now likely clear the way for other nonunion managers to be able to take full retirement at age 55, as well.

The good news for the city's embattled pension fund, according to Pittsburgh Controller Michael Lamb, is that the agreement to cover the five years on the early retirement cost was originally designed to -- and will -- come out of the general fund.

"It will have an impact only on the city general fund," he said. "We're talking about a handful of people so it won't be a huge impact even if it were from the pension fund."

Sam Cordes, Mr. Holman's attorney, estimated that 20 to 30 managers would be affected.

Mr. Holman filed his lawsuit in Allegheny County in May 2009.

He works as a district chief in the Pittsburgh Bureau of Emergency Medical Services and was first hired by the city in June 1975, becoming a supervisor six years later.

According to the complaint, Mr. Murphy agreed in June 2003 to extend to nonunion managers in the EMS bureau the ability to retire at age 55 without taking a pension reduction. Previously, they were unable to retire until age 60.

In the lawsuit, Mr. Holman claimed that he filed for his retirement to be effective in June 2007 but received a letter on Aug. 22, 2007, telling him that the pension fund declined to grant the nonreduced pension, claiming that the city of Pittsburgh had failed to provide funding for management employees.

Mr. Holman filed suit claiming breach of contract. He chose not to retire early and continues to work for the city even now -- at age 58.

As part of the case, Judge Ronald W. Folino had to decide a legal question of whether Mr. Murphy had the authority to make the pension enhancement deal with the EMS bureau.

Judge Folino agreed on Wednesday that the mayor did, which then sent the specific question to the jury of whether the delegation of that authority to the city solicitor's office was authorized.

The jury, after deliberating less than two hours, said that it did.

They awarded Mr. Holman $778 per month for a period of five years.

Testifying on Mr. Holman's behalf were Mr. Murphy, as well as his longtime director of operations, Bob Kennedy.

The city called Scott Kunka, Pittsburgh director of finance, as well as former assistant solicitor Hugh McGough.

While Joe Quinn, the attorney who represented the city in the lawsuit, said that the jury verdict only applies to Mr. Holman, Mr. Lamb said that it will carry over to other EMS bureau supervisors, as well.

During Mr. Murphy's term, union medics won the right to retire at age 55 with full benefits, rather than the age 62 retirement of the city's non-public-safety employees.

The EMS bureau's nonunion management argued that they deserved a similar earlier retirement benefit, and Mr. Murphy granted them the right to retire at age 55. However, by the time Mr. Holman tried to retire, administrations had changed and a premium was placed on preserving the struggling pension fund.

The decision comes at a tough time for the pension fund. At last count, in February, the fund contained $296 million, and had long-term obligations estimated at $1 billion. State legislation passed last year would have the commonwealth seize the city's pension fund and eventually force higher annual contributions, unless it contains enough money to cover roughly half of its obligations by year's end.

Paula Reed Ward: pward@post-gazette.com or 412-263-2620. Staff writer Rich Lord contributed.
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First published on March 25, 2010 at 12:00 am