Council eager for answers on the $40M pension question; mayor's office says they're coming soon
After three weeks of talks, there was light applause from the audience Wednesday when Mayor Alvin Brown and Police and Fire Pension Fund leadership struck an agreement on retirement reform.
If early feedback is any indication, the deal’s next audience — the City Council — will substitute applause for a barrage of questions.
The latest accord makes some changes in benefits and contributions for all employees and the way the fund is governed. It also lays out how to more quickly pay down $1.6 billion-plus in unfunded liability.
It’s the latter that tended to be a common concern among most of the 10 council members reached by the Daily Record.
With the city pledging to pay an additional $40 million annually toward unfunded liability, council members want to know what the plan is to pay for it.
“It’s unconscionable to agree to something without knowing the source of payment,” said council member Matt Schellenberg. “That’s my first reaction. Where is the $40 million coming from that he (Brown) promised?”
Warren Jones said he thought “we are all relieved they reached an agreement,” but had the same question about the money. Given Brown’s political position against supporting a tax increase, “that’s the biggest question,” Jones said.
A half-cent sales tax increase to cover additional payments was recommended by the Jacksonville Retirement Reform Task Force that Brown created. Its ideas were used as a springboard for the latest round of talks between Brown and fund administrator John Keane.
“I think they owe it to the council to have a plan for that,” said council member Bill Bishop, who has filed to run for mayor against Brown in the 2015 election.
Greg Anderson has a distinct vantage point about the deal. He served on the task force and is the current council Finance Committee chairman that plowed through the current year’s budget. He said the $40 million shows the commitment the task force recommended.
“The big issue is that we need to identify the source,” Anderson said. “I don’t know whether this plan goes far enough to be specific.”
Anything that entails $40 million a year needs specifics “spelled out up front,” said council member John Crescimbeni.
As proposed, the details could come from a standing committee Brown wants to create that comprises the council auditor, chief financial officer, task force chairman and others who annually will determine how to come up with the $40 million.
That could be through additional JEA payments — an idea Brown has pursued — and other means, according to a handout.
JEA leadership has shown early hesitancy to the idea, citing flat revenue. The utility is reviewing a proposal and could have a response by the end of the year.
The sales tax recommended by the task force was not included in the handout about the newly formed committee.
Schellenberg called establishing the group a way to “defer and deflect” leadership responsibilities onto another group after the task force spent months dealing with the issue.
Just the opposite, said Chris Hand, Brown’s chief of staff.
Hand said the committee will ensure the city funds the obligation in a “very disciplined way” and make such recommendations to the mayor and city council.
“It’s the exact kind of leadership and responsibility needed,” Hand said.
He said Schellenberg’s statements are consistent with past comments of opposing “anything and everything” the mayor proposes.
Council inquiries will not end with the $40 million, either.
Several council members said they have questions and concerns about the Deferred Retirement Option Program return rates and cost-of-living adjustments agreed upon for current employees. The two were part of the handful of last-minute deals that secured the agreement.
Council member Richard Clark lauded the efforts of both sides, but said the one surprise he had was the 5 percent floor on DROP — up from a proposed 0 percent — and an unchanged cost-of-living adjustment for current employees.
“I need to understand why we walked away from COLA and need to understand the window for DROP,” Clark said.
Bishop also said he’ll seek an answer to those questions.
“It’s very expensive,” said Bishop, referring to cost-of-living adjustments. “Nothing changed on that and that’s a concern.”
Both were among several who said they wanted to see the financial details of the plan.
Hand said those details are coming and the administration will meet individually with council members over the next week to review each element of the deal and explain its stance on why it’s a comprehensive reform plan.
There was some early kudos for the plan, too. In addition to Jones and Clark, there were several council members who said they were happy a deal was reached. Some questioned why the pension board’s fifth member won’t be appointed by the mayor, while Anderson and Yarborough were among those who commended the changes on the governance front.
Whether it’s enough to garner a majority vote will be decided in the coming weeks.