After years of uncertainty, debate and compromise, Jacksonville’s pension reform is in place.
That could be a good sign for the business community.
The City Council voted 18-0 to approve Mayor Lenny Curry’s package of sweeping reform legislation in a special session Monday.
Although Curry declined to speak with the media after the votes, he did address the council.
“Do not let this be lost on us today, this is history,” Curry said. “We are out of the pension business.”
Council member Aaron Bowman, a Republican representing District 3, said the passage of the reform legislation signals to outsiders, including economic developers, that the city can meet its challenges.
“We can scratch this one off the list,” he said.
Bowman is also senior vice president for business development at JAXUSA Partnerships.
Several council members voiced opinions about how they would like to earmark money that now can be directed elsewhere.
Bowman said the legislation gives the city some immediate relief from having to make cuts to services, and that the list of needs is long.
But, he cautioned, “this is not a cash cow.”
Now that the city isn’t bogged down with the pension debate, business leaders said council will be more inclined to spend on items like infrastructure for developers who seek some form of financial relief when bringing jobs to Duval County.
Kerri Stewart, Curry’s chief of staff, said companies and economic development consultants know that “every big city in our country” is facing issues.
The pension reform legislation could make them look at Jacksonville differently by making more funds available for infrastructure, public safety and economic development, “the things that mean a lot to site selectors,” she said.
Jeanne Miller, president of the Jacksonville Civic Council, said her group of community leaders backed the plan because of the dedicated funding, which she said will afford the city more freedom to offer incentives to prospective employers.
“This has really been the issue blocking out the sun for any kind of investment in Jacksonville,” Miller said.
The Civic Council is bullish on the future of economic growth in areas of the city that desperately need it, including Downtown, she said.
“The message this sends to businesses here in Jacksonville, or those outside of the city, and internationally, is that this is something we’ve taken care of and now we’re ready for investment,” she said.
Both the Civic Council and JAX Chamber supported the legislation, and both are glad to see the city moving on.
“It’s something that we’ve been talking about for several years,” said JAX Chamber President Daniel Davis.
While Davis declined to say if any companies have backed away from investing in Jacksonville specifically because of the pension challenges, he said the issue wasn’t a positive.
“Companies who make an investment here want to make sure that we’re investing in ourselves,” Davis said. “They’re looking to see how stable we are.”
Council President Lori Boyer, a Republican representing District 5, said companies should be more inclined to do business with the city without the stigma of the pension crisis.
“The specter of the unfunded liability, which was growing on the side of our balance sheet, created a scenario of uncertainty,” she said.
Boyer admitted the plan isn’t perfect.
However, she said it was the only plan presented to the council that was paid for by a permanent, dedicated funding source.
“We now have that certainty,” she said.
The package of bills reforms pension plans for current city employees, moves new employees into another retirement plan and changes how the current pension debt is paid off.
The legislation closes the existing pension plan to new police officers and firefighters and gives employees raises.
It defers much of the repayment of the city’s $2.8 billion pension debt until a half-cent sales tax dedicated to paying it off begins after the Better Jacksonville Plan expires in 2030.
Voters approved the pension tax last year.
Jacksonville is the first major city in the country that won’t offer new city employees, including fire and police, a pension. Instead, they’ll be enrolled in a 401(k) plan.
There’s still no clear consensus of when the city could become free of pension debt, but projections from the mayor’s office, and outside of it, place that date sometime in the 2050s.
The city should begin seeing budgetary relief in 2018.
Critics of the plan say Curry and the council are delaying the financial challenges of reform for the next generation, although none spoke during the public comment portion of the meeting.
Mike Hightower, chief public affairs officer for JEA, said the plan provides much-needed certainty.
“To all those whiners and ankle-biters, leadership is not about popularity. It’s about doing the right thing. It’s about standing tall,” said Hightower, who has decades of experience in Jacksonville, including as a past chair of JAX Chamber.
Although the reform process will require oversight and management, Hightower says the key is that it’s in place.
“My granddaughter’s generation will appreciate this,” he said of his son’s 3-year-old.
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