by Mike Sharkey
Staff Writer
Police and Fire Pension Fund Executive Director/Administrator John Keane is one step closer to being able to invest his contributors’ money in the same manner as the City’s general employees’ pension plans as well as state pension plans.
Tuesday, the City Council Finance Committee approved legislation that will allow Keane to use the Fund’s money in a wider range of investments. The bill would then need the approval of the State Legislature. Keane said State Rep. and Duval Delegation Chair Audrey Gibson has agreed to sponsor a bill on the House level and he’s looking for a sponsor on the Senate side.
“As soon as the legislation passes in Tallahassee, we’ll start (investing differently),” said Keane. “The deadline to file the bill is this week. So, we hope to get something moving soon.”
Keane has argued in the past that because the diversity of his investments are limited, the rate of return is limited due to the narrower scope of investment options. He has taken that argument to the Special Committee on City Pension Sustainability, which sponsored the bill the Finance Committee passed Tuesday.
If the full Council passes the bill, Keane will be able to invest in foreign stocks or even bonds rated below “A” — which is riskier, but yields a higher return. If Keane is able to make more on Pension Fund investments, it could reduce the City’s annual contribution to the Pension Fund.
“It’s a good bill,” said Keane.
Currently, Keane is able to invest 35 percent in domestic equities, 20 percent in international equities, 25 percent in fixed income and 20 percent in real estate. He said the new percentage won’t be determined until the legislation passes.
“This will put us on the same footing as the State,” said Finance Chair Stephen Joost. “We can do the same investments as they can.”
The bill would amend Ch. 112 of the Florida Statutes which relates to public pension plans. Keane said the current portfolio guidelines are “old, outdated and restricted investment options.” If approved by the Legislature, the Pension Fund’s Trustees will have a wider range of investment options.
“It will change significantly because we need to broaden our type of investments,” he said.
In other news from Finance:
• An amended ordinance pertaining to a loan agreement with Belet’s Millworks was approved. The new agreement extends the loan payoff to Sept. 1, 2012 and doesn’t require the owner of the company to double his monthly payments from $557 a month to $1,114. It also allows him to meet the job creation clawback by the same date without penalty.
“This is a flat-out three-year extension,” said James Richardson of the City’s Neighborhoods Department, which oversees the Northwest Economic Development Trust Fund, which financed the original loan. “The outstanding balloon payment at the end of the loan is $67,000.”
Finance member Clay Yarborough asked Richardson if he or the owner of the company would be back in front of the Finance Committee seeking another extension.
“Part of the amendment is not to entertain another request for an extension,” said Richardson.
Finance member Johnny Gaffney said the days of businesses getting loans from the City and not making good on the terms and conditions are over, in his opinion.
“In 2010, with clawbacks, we have to hold these people accountable. I hope, with all of the agencies, it’s not business as usual,” said Gaffney. “These are taxpayer dollars and we need to hold them accountable. We can’t afford to give away the candy store anymore.”
• The Committee also approved a bill that appropriates $431,250 from the Tree Protection & Related Expenses Fund for landscaping and tree planting along Hendricks Avenue in Council member Art Shad’s district. That leaves about $1.6 million in that fund and the bill prompted discussion of putting a moratorium on spending that money.
Finance member Denise Lee asked the Council Auditor’s Office to provide a breakdown of where the money has come from that was put into the fund and in which areas of town it was spent. She’d also like to see the City create a maintenance fund and plan for areas that get new trees and landscaping.
356-2466