West Volusia Hospital Authority,
% Mr. William Sherman, Esq.,
145 E. Rich Ave.,
DeLand, FLA 32724.


I address this note to you through your counsel due to the pendancy of litigation between us. Though I believe it does not address our litigation, and does not require legal review, nevertheless I would not proffer legal advice and especially would not ask you to do without. I am confident that your counsel will pass this along promptly to the board, and enjoy also a blithe certainty that (should he have any comment to accompany it) he will courteously copy me by mail or fax.

As you may be aware, I have been involved with the determination and exercise of the public’s right of access to records and meetings of Memorial Hospital-West Volusia, Inc., which for convenience I shall hence term ‘‘Ormond’’. For records created prior to 30-May-1998, the primary burden in that determination had been carried by the News-Journal Corporation, who were able to obtain a ruling of the Supreme Court (2001 WL 420865, case #SC00-892, 26-Apr-2001) that paved the way for access.

Based largely on that determination, and following considerable delay, I have had the opportunity to examine Ormond’s records relating to the ‘‘mirror’’ retirement plan which was to have been implemented and funded pursuant to the Lease Agreement. You will find enclosed a ‘‘summary’’ sheet prepared by the plan administrator; it is page ‘9’ of the 1998 report, which is the most recent available. Inspect the entire report at the Hospital.

I would call your especial attention to the line showing the ‘‘unfunded frozen actuarial accrued liability’’. This is the amount which is required to make the plan solvent, and reflects the fact that Ormond did not initialize the plan with sufficient funding to meet the requirements. Instead, they hoped, over time, to make the plan solvent.

Look at the top line, being the number of active employees: Ormond reduced the pension liability by simply getting rid of people.

Even with the blood-letting, however, the fact remains that during the period for which we have records, they never brought the pension plan up to solvency. They were trying to make payments, at least until 1999-2000, when they had to ‘‘borrow’’ the employee paycheck deferrals.

Ormond finally utterly collapsed shortly after the auditors from the bond trustees and insurers arrived. Had they managed to avoid that, from the numbers we have, it would have been about sixty (60) years before their retirement plan would have become solvent, with solvency defined as zero unfunded liability.

Commissioner Long regularly regaled us with tales of how Ormond was solvent and doing well (tho’ his tales have slowed since they went belly-up) and was fully funding the plan. It would appear that Ormond took advantage of his credulity. Perhaps Mr. Long simply had to believe because his wife worked for Ormond’s parent company. It’s hard to express public opposition to bad practice of your spouse’s employer, even if you do understand what is happening; no doubt it proved easier to just shovel more money to them.

I urge your attention also to the line ‘‘normal (current year’s) costs’’ and the percentages directly underneath. Here is where we see the benefit of running off or sacking the experienced employees. If you get rid of employees, can reduce your accrued liability. We presume of course that, as these people continue to build pensions elsewhere, that Ormond (its heirs, assigns, and successors) will properly account for the increase in liability due to increase in their share.

The Ormond plan does not enjoy the portability of Florida Retirement System (hence, ‘‘FRS’’). That means that employees who go to other state agencies, including other public hospitals, will continue to build anticipated pension value but will not be credited with the time worked under Ormond’s plan. One would expect a true mirror plan to make up the shortfall in FRS payments caused by the time outside of the system in the ‘‘mirror’’ plan.

The worst case could be someone who accrues 19 years in FRS, and a year with Ormond’s ‘‘mirror’’ plan: FRS won’t want to pay anything, and Ormond will be obliged to provide the equivalent of an FRS pension. While Ormond has collapsed, there is no doubt that either Adventist (as successor) or Authority (as the one who provided for closing the plan) will provide obvious targets should any pension pay-out prove unsatisfactory.

I also call your attention to the footnotes, because they inform us that straight line comparisons may not be sound. For each full year, we had either a change in plan or a change in assumptions.

I also reproduce for you the name of the company who prepared the paper, because it was cut off in reproduction when I received the papers. The name is ‘‘Gabriel Roeder Smith & Co.’’, which you will be able to verify by inspection of original records.

This information provided thanks to §119.07, F.S., sometimes known as the ‘‘Open Records’’ law.


Tanner Andrews

CC: Steve Deluca / Delco Oil / [addr] / [city]
CC: Sidney Pittman / [addr] / [city]
CC: Danny Gainin / [addr] / [city]

Posting of this letter is a paid political advertisement provided by

Tanner Andrews, P.O. Box 1208, DeLand 32721,
independent of any campaign or committee. This material is also on display at the offices of the West Volusia Hospital Authority. No candidate has approved this material.

from @(#)hosp0201.txt 1.0 13-Feb-2002

proc with @(#)hmac.ta2 1.1a 01-Jun-2000