by Mike Sharkey
Staff Writer
According to City Council President Richard Clark, if everything Mayor John Peyton is proposing to help trim the 2010-11 budget is implemented, there will still be a $20 million shortfall.
Much of that shortfall can be attributed to the City’s obligations to its three pension plans — the police, firefighters and general employees.
On Tuesday, Clark and Council Vice President Jack Webb met with members of the Jacksonville Community Council Inc. Finances Steering Committee to talk about the pension plans and what can be done, if anything, to prevent the City from essentially going bankrupt in the next two to three years.
J.F. Bryan IV chaired the committee that also consisted of Jim Rinaman, Jack Diamond, John Anderson, Steve Rankin and Pat Hannan.
“There is no way around it. It’s huge,” said Bryan, adding it would be a mistake to simply rely on what appears to be a slowly recovering stock market to make up the difference in what is owed from the City to the three pension plans. “Ultimately, we have got to get to shared risk so all of the eggs are not in one basket.”
Overall, there is more than $1.3 billion in combined unfunded liability among the three plans. The JCCI subcommittee on pensions, headed by Rinaman, researched the issue and developed several recommendations. Clark and Webb are under no obligation to take the recommendations. Webb, who expects to succeed Clark, understands the potential the unfunded liability can present. He also plans to address the issue and the 2011 budget early. Webb says it’s important for the City to look at the budget as a multiyear issue as opposed to an annual task.
“If we marry the budget with the election cycle, the mayor and the City Council will both take office Jan. 1 and that way the Finance Committee has ownership of the budget for the entire year,” said Webb, referring to a proposal to move the next City election from April 2011 to November 2011. “If and when I get elected (as Council president) in May, I will appoint a Finance Committee chair immediately.”
That chair will have the immediate task of dealing with the budget and the pension issue. Bryan pointed out that the JCCI recommendations include a different plan for new employees, a new minimum service and retirement age, raising the employee contribution from 7 percent to 8 percent and eliminating the guaranteed return on investment.
Jacksonville isn’t alone in facing pension problems. It’s an epidemic in the state and across the nation.
“Five of the top seven metropolitan areas in Florida are in the same ditch we are in,” said Bryan. “It’s a critical thing we can’t put off. It’s going to take a lot of time to resolve. We need to get started.
“We could go bankrupt if we go to 50 percent of the budget (being pension contributions). We are headed to layoffs and other things. The City is going to do whatever it takes to protect itself,” said Bryan.
Rinaman believes much of the answer lies with the state legislators.
“The answer is legislation in Tallahassee. We recommend the mayor get with other distressed communities,” he said. “The Legislature is not going to help just Jacksonville with its unions. This is not something we can let go. We have got to do something about the police and fire unions. I think we can deal with the general employees.”
Clark agreed.
“I think the healthiest way to deal with this is long-term. We need to take a much closer look at other municipalities, both the good and bad,” said Clark.
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