Pew Trusts offers to analyze city pension problems
The Pew Charitable Trusts, a world-renowned public-policy research organization, will make an offer Monday to the Jacksonville Retirement Reform Task Force that likely won't be refused.
Pew studies city and state pension problems and issues reports, including a 56-page report in January called "A Widening Gap in Cities, Shortfalls in Funding for Pensions and Retiree Health Care."
That study of 61 cities for the 2009 fiscal year found that Jacksonville's pension was 63 percent funded, one of 37 cities with funding below 80 percent.
Pew reports that public pension plans around the country have "racked up" a debt of $757 billion.
Three Pew executives, including senior researcher David Draine, are expected to make a presentation at the special task force meeting called for 9 a.m. Monday at City Hall.
Draine said Thursday that Pew has been studying pension issues for seven years and would present an overview of its findings.
He also would offer Pew's analysis and assistance for the task force, created by Mayor Alvin Brown, as it develops recommendations for solving Jacksonville's pension problems.
"This is going to be driven by local leaders and local stakeholders," Draine said. "They need to decide where they want to go and we can be helpful in drawing a map and saying this is how much gas to put in."
Task force Chairman Bill Scheu said Thursday that the task force would discuss the next step at its regular meeting Sept. 20.
Neither Scheu nor Draine would offer specifics about how Pew was enlisted to look at Jacksonville's pension issues, led by a $1.7 billion Police and Fire Pension Fund unfunded liability.
Scheu said that would be explained Monday.
"We've been talking with them for a couple of weeks and they bring a lot of credibility and expertise," he said.
"They will make a presentation about what they do, their history and their experience, so we are very hopeful," he said.
Draine said Pew does not charge a fee for the reviews.
"Pew is a nonprofit. We do this work because that's our mission and we don't ask for any money from state and local government," he said.
It also partners with the Laura and John Arnold Foundation of Texas.
Scheu did not discuss timing of a Pew study, but said he would like to be able to present a report and recommendations to the mayor and City Council by the end of December or mid-January at the latest.
Draine said "good data" will provide the best outcome. He said Pew works with city actuaries to make sure "the analysis is going to be looking at issues appropriately."
"We will take as long as we need to make sure policymakers have all they need," he said.
David DeCamp, Brown's spokesman, said, "This opportunity presented by Pew and the foundation is exactly the kind of vision and leadership from Mr. Scheu and the task force that Mayor Brown sought when he set the goal of a long-term solution for retirement reform."
He said the administration will provide any support requested.
"This group is an intellectual powerhouse on this issue and obviously it brings an independent expertise to finding a solution in Jacksonville if that is what the task force chooses to do and pursue," he said.
A report this week by the Jacksonville Civic Council Pension Task Force stresses the need for a quick solution to the ballooning costs of pensions.
The private group of business leaders delivered letters Tuesday to Brown, Scheu and City Council President Bill Gulliford with recommendations for resolving the pension issues.
In an interview with reporters that day, Civic Council Chairman Steve Halverson and inaugural Chairman Peter Rummell said a resolution was needed by year-end.
The private group of business and civic leaders that has studied the city's pension problems delivered a report to Brown, Scheu and Gulliford that, in summary, recommended that the city:
• Contribute $1 billion in assets to the pension fund.
• Maintain a defined benefit plan for police and fire service.
• Lower the gross investment return assumptions to no more than 7 percent.
• Modernize the investment authority to match the Florida Retirement System.
Scheu said Thursday he was grateful for the Civic Council report and said it was his understanding the group will work through the task force.
Scheu said Halverson gave a presentation at the first task force meeting. Scheu said the group would consider this week's recommendations and decide whether to ask for another presentation.
Scheu said he wanted to further review the Civic Council recommendations before commenting about them.
This week, DeCamp said Brown was concerned about the idea of borrowing $1 billion "and opposes increasing the burden on taxpayers."
Gulliford said Thursday that he was unaware of the plans for the Pew presentation, but wasn't concerned about any timing issues with it.
"I think it's important that we look at every option available," he said.
Gulliford said he was investigating other options that he was not at liberty to disclose.
He said he would call a City Council meeting the week of Sept. 23, after the JAX Chamber leadership trip which he is attending, for the Civic Council report.
Brown announced a pension reform agreement in May between the City and public safety unions that he said will save $1.2 billion over 30 years, including $45 million in the fiscal 2013-14 budget. Gulliford discharged it from Council on July 23 so that it wasn't a factor in budget discussions.
Halverson said Thursday that Scheu had told him about the likelihood Pew would assist.
"I haven't had a chance to meet them, but I look forward to the opportunity to do so," he said. "It's a good idea and hopefully they can help."
Halverson said he would attend the Monday meeting.
The Pew work likely means the retirement task force has no need to raise private funds to pay for a study by Atlanta consultant John Mellott, former publisher of the Atlanta Journal-Constitution.
Mellott told the task force after an August presentation that he would put together a proposal for services. The Florida Times-Union reported that Mellott said the proposed fee would "easily be six figures."
Scheu said Thursday he told Mellott last week that the task force had engaged a national foundation, but did not say which one.
"I told him we were going to have a presentation and I didn't want to impose on his time until after the presentation," Scheu said.