HOW THE JACKSONVILLE CITY COUNCIL CAN BURN $500K A WEEK

January 28, 2015
by
2 mins read

Jacksonville needs to get on top of pension reform, and failing to do it now amounts to playing politics with taxpayer money. And contrary to what a recent Lenny Curry direct-mail piece would have us believe, it’s not Mayor Alvin Brown who’s playing fast and loose with our dollars.

Our past rates of payment on the Police & Fire Pension Fund’s (PFPF) unfunded liability, much like modest payments applied toward a maxed-out credit card, have resulted in higher, untenable overall costs. Basically, we’re talking about $1.7 billion — money the city doesn’t have.

Legally, we can’t change benefits for current pensioners or for current employees who have already become vested. The Times-Union‘s coverage criticizing retired employees for their “rich” pensions contributes nothing constructive to the conversation. The reality remains: Only future benefits can be altered.

State Rep. Janet Atkins relied on the T-U‘s questionable reporting to advocate for an investigation into PFPF practices. Then, two things happened. First, City Council President Clay Yarborough declared he would not put pension reform back on the agenda. Second, the political action committee Together for a Greater Jacksonville, affiliated with Curry, sent out a flyer bemoaning Brown’s “pension disaster.” Adkins, Yarborough and Curry are all Republicans, of course; the mayor is not.

Clearly, it’s not in Republicans’ interest to pass pension reform before the mayoral election. The strategy is to obstruct Brown’s progress and then blame him for its failure.

It’s a fiscally irresponsible move.

According to figures provided by the mayor’s office, in consultation with actuaries, the delay in passing pension reform will cost the city another $8.7 million over the next four months, leading up to the May runoff. And you can add to that another $57 million — the amount squandered through inaction since October 2012, extrapolating from the mayor’s data on new hires.

The mayor, the fund and the City Council have come very close to striking a deal on future benefits. While the City Council amended and passed the mayor’s restructuring package in December, the fund has sent back some minor tweaks. The relatively small sticking points are: ranges for cost-of-living allowances (COLAs), the interest-rate ranges for the DROP program, and the length of the agreement. The fund wants a 10-year agreement. The city wants a three-year deal.

Statutes relating to collective bargaining allow the process to take place every three years. That’s when the employer-city comes to the negotiating table to hammer out employment issues with collective bargaining representatives, e.g., the police and fire unions.

But here’s the tricky part: Pension plans are long-term instruments that must, in order to protect the integrity of their investments, contemplate strategies years into the future.

It doesn’t make sense to collectively bargain the nuts and bolts of a pension plan every three years. In fact, most municipalities that collectively bargain with their public safety unions in regular, three-year intervals don’t regularly address their pension plans.

The parties in Jacksonville — the city and its public safety employees — have traditionally handled collective bargaining regarding pensions by deferring to a long-term “agreement” with the PFPF.

Some council members have balked at approving a pension agreement whose life exceeds the three-year collective-bargaining cycle. The fund, meanwhile, wants the city to give up its bargaining power on pension matters for 10 years — a request that’s likely not legally enforceable, given the statutory three-year framework.

It’s conceivable that the council could still sign off on the agreement, however, knowing that the fund can’t enforce the 10-year item. It’s like signing an agreement for no rain for the next decade — it means nothing, so why not go ahead with it? Restructuring for future employees would be accomplished, the COLA and DROP rates would be settled, and the city would still be able to call the parties to the table under the three-year scheme. And once future pensions are settled, the council could get around to deciding how to pay for the whole thing.

They’d better do it soon: Taxpayers are losing a half-million dollars each week that our elected representatives fail to act. The clock is ticking.

Last week, the mayor filed a new pension reform bill incorporating the PFPF’s desired changes. The earliest City Council could sign off, after the bill moves through committees, is Feb. 24 — and it’s quite likely that before then the council will bend Brown’s proposal to its own will.

A version of this column previously appeared on Context Florida.

Folio is your guide to entertainment and culture around and near Jacksonville, Florida. We cover events, concerts, restaurants, theatre, sports, art, happenings, and all things about living and visiting Jax. Folio serves more than two million readers across Jacksonville and Northeast Florida, including St. Augustine, The Beaches, and Fernandina.

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