A day before City Council will review the latest public safety pension bill, the Jacksonville Civic Council came forward to publicly oppose it.
“We continue to assert that the stabilization of the City’s finances is the single most important issue facing Jacksonville, and this requires a comprehensive pension solution,” a letter by Steve Halverson reads. Halverson is the chairman of the group, which comprises about 60 civic and business leaders. He goes on to say council should oppose the police and fire pension deal in its current form and “propose a better solution.” He outlined five specific needs:
• Having a dedicated funding source. The plan proposes an additional $40 million each year to pay down the unfunded liability, but doesn’t identify a source. “This is unacceptable,” Halverson wrote. “Comprehensive reform must include a dedicated funding source to pay down the pension debt.” Mayor Alvin Brown has proposed striking a deal with JEA to contribute more to the city each year in exchange for allowing the public utility to spin off its employees from the pension plan. JEA officials have been hesitant to support the plan, saying it could lead to rate increases.
• Lower cost and more shared sacrifice. “The overall cost of the plan is too high and the burden of changes is too heavily borne by future employees,” Halverson said. The cost-of-living adjustments and guaranteed rate of return for the Deferred Retirement Option Plan program “should be eliminated or greatly reduced,” the letter said. As part of the deal, Brown and fund administrator John Keane came to an agreement that the COLA for existing employees would not be changed. Also, the DROP returns would turn to a scale, although the floor was not as low as the administration sought.
• Greater transparency and sound governance. The public, Halverson said, deserves full transparency in all fund board action. The proposed deal falls short, he said, because it “fails to implement the governance suggestions” made by Brown’s Retirement Reform Task Force. That includes the composition of the board and the selection of the fifth board member. Brown sought for mayors to select the person, which Keane called a non-starter during negotiations. Instead, it remained that the first four members of the board — one police member, one fire member, two City Council appointments — select the last member.
• A shorter term of agreements. “The length of the agreement is too long given the number of unresolved issues,” he said. Brown said the deal will save taxpayers $1.5 billion over 30 years.
• No suspension of legal rights. Halverson said the city shouldn’t waive its legal rights, nor should the police and fire pension fund. Each should be maintained.
Several hours later, Chris Hand, Brown’s chief of staff, sent an email to City Council members saying the Civic Council’s position contained factual errors.
He said the COLA rate for new employees is cut in half and the DROP rate is no longer guaranteed for current employees and is abolished for new employees. And the agreement implements “virtually all” of the governance suggestions of the retirement task force.
Halverson, though, countered and said the council “did not” make such errors. Instead, he said COLA cuts should extend to current employees, any DROP guarantee should be eliminated altogether and the composition of the pension fund board remains in place within the deal.
The Civic Council took a similar position more than a year ago after Brown and Keane reached a similar deal in meetings behind closed doors in Gainesville. That deal was quickly rejected by council members and a judge later determined those meetings violated state Sunshine Laws.
City Council discussion on the latest deal begins at 3:30 p.m. today at City Hall.
Brown, his administration, Retirement Reform Task Force Chair Bill Scheu and others are scheduled to be in attendance to speak.
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