by Mike Sharkey
Staff Writer
It looks like the City is in the process of implementing a recommendation made last year by Florida Tax Watch, which reviewed the City’s finances and operations.
Monday, the City Council Finance Committee approved a bill that will allow the City to stop paying Social Security for part-time, temporary and seasonal employees. Instead, the City will contract with a financial services provider who will operate a retirement savings plan similar to a 401(k). This, according to the legislation, will allow the City to save 6.25 percent of the salaries currently paid to part-time, temporary and seasonal employees.
“This is really good for the employers,” said Finance member Stephen Joost. “It’s a big benefit to do these kinds of things.”
Joost, the chief financial officer for Firehouse Subs, said he did a little research and discovered the rate of return on Social Security investments is about 2 percent while the rate of return on pension plans typically runs between 7 and 8 percent.
“The rate will vary as the economy changes,” said Millie Reeves, senior manager of personnel services, operations and benefits for the City. “It’s better for employees to participate in something they have control of.”
The mayor’s office is sponsoring the legislation. The City is also seeking a third party provider to create and maintain the plan. That provider will be either a deferred compensation service provider or a defined benefit pension plan provider. Employees under the plan will also be able to transfer their retirement accounts to future employers and merge them with other retirement savings plans.
In other news from Finance:
• The committee approved a settlement with a property owner on Kernan Boulevard between Beach Boulevard and J. Turner Butler Boulevard. The property was needed for a retention pond and between the value of the property and legal fees, the Finance Committee approved a settlement of $994,562.50.
“That seems like a crazy amount we are spending,” said Finance member Art Graham.
Tom Beverly, an attorney with the Office of General Counsel, did say it was an “expensive way to acquire property” but explained the City was not only getting the land needed for the retention pond but also an extra 37 acres of wetlands.
“The property was necessary for the project,” said Beverly. “Once we take the property, we start the process of litigating the values.”
According to the legislation, the City appraised the original 1.73 acres at $365,000. A private appraiser — who included the 37 acres of wetlands that can’t be developed— valued the property at $1.336 million. A settlement of $825,000 was reached with attorneys’ fees of just under $170,000.
• An item that didn’t require a formal vote but did require approval was a request from the City’s Information Technology Department to upgrade existing Jacksonville Sheriff’s Office radios as opposed to purchasing 40 new radios. The Finance Committee was told that since all of JSO was upgrading its radio infrastructure system some time next year, it was cheaper to upgrade the current radios as opposed to purchasing new ones.
A request for proposal for the system upgrade is currently out. Once a vendor is selected, it will take about a year to integrate the entire system and it will cost between $18 million and $20 million.
• June 15, the Council Performance and Audit Subcommittee will meet at 12:30 p.m. During the meeting, auditors Ernst & Young will make a presentation on the City’s 2007-08 comprehensive annual financial report.
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