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Jacksonville Pension Reform Hits Another Snag As JEA Says: “Take It Or Leave It”

Jacksonville’s pension reform proposal – if and when it passes – would require the city and public utility company JEA to borrow a combined $240 million.

But that aspect of the plan has hit a road bump, and now JEA is telling the city to accept the plan as-is or count JEA out entirely.

From the Florida Times-Union:

JEA finance and audit committee members learned Tuesday that city officials have been trying to claw back a key concession that enticed the utility to become a partner in financing Mayor Alvin Brown’s major pension-reform legislation.

That concession — which in essence would amount to a reduction in JEA’s annual contribution to the city’s general fund over 20 years — is non-negotiable for JEA and could be a tricky sticking point for city officials going forward.

“It is a take it or leave it,” committee Chairman Peter Bower said.

[…]

JEA’s annual general fund contribution currently increases by $2.5 million each year, maxing out at a total $114.2 million in 2016. That contribution formula — which expires next year — means that even as JEA’s revenues have declined in recent years, its contribution to the city has ballooned. That gulf has become a concern for JEA officials.

In exchange for borrowing $120 million for pension reform, however, the city had agreed to, in broad terms, reduce those contributions by $2.5 million for the next several years and ultimately revert to a formula linked to JEA revenues.

Those changes were to be locked down for 20 years beginning next year.

But JEA CEO Paul McElroy told audit and finance committee members Tuesday the city now wants to be able to revisit, and potentially change, the new contribution formula in as soon as five years.

That didn’t sit well with JEA board members, who said they conceptually agreed to help the city pay its pension debt only on specific terms, including the new 20-year contribution formula.

The committee will meet again in 10 days to see if staff has been able to address the issue.

The city’s pension reform measure aims to improve the funding and sustainability of the city’s Police and Fire system. JEA is a key part of that plan, because the city cannot afford by itself to shoulder the cost of the proposal.

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Video: More Voices Join Call For State Investigation into Jacksonville Public Safety Fund

Several Jacksonville city council members and a state representative have called on Florida Gov. Rick Scott to launch an investigation into the DROP fund administered by the Jacksonville Police and Fire Pension fund.

This week, another voice joined the calls for an investigation. Watch the video for more.

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Dispute Over Closed-Door Pension Meetings Could Go to Florida Supreme Court

Did pension officials violate Florida’s Sunshine Law when they held negotiations with unions behind closed doors?

Yes, according to the 1^st District Court of Appeal. But the Florida Supreme Court may soon get its chance to weigh in.

From the Jacksonville Daily Record:

A Jacksonville municipal pension fund has asked the Florida Supreme Court to take up a dispute about whether officials violated the state’s Sunshine Law by holding closed-door mediation sessions to negotiate changes in the pension system.

The 1st District Court of Appeal in October ruled in favor of Florida Times-Union Editor Frank Denton, who contended in a lawsuit that the mediation sessions amounted to collective-bargaining meetings, which were required to be open to the public.

But the Jacksonville Police and Fire Pension Fund Board of Trustees filed a brief asking the Supreme Court to review the case.

The brief argues that issues related to collective bargaining should be determined by the Florida Public Employees Relations Commission, rather than going to circuit court.

The appeals court ruling upheld a decision by Circuit Judge Waddell Wallace.

The case stemmed from mediation sessions that were held after Randall Wyse, chief negotiator for the Jacksonville Association of Firefighters Local 122, and other plaintiffs filed a lawsuit in federal court against the city and the Jacksonville Police and Fire Pension Fund Board of Trustees, according to the ruling.

The mediation sessions led to a tentative agreement about changes in the pension system.

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Jacksonville Pension Reform Vote Delayed by Council

The Jacksonville City Council has decided that “more time is needed” to review a newly-amended pension reform measure. A vote on the measure has been pushed back.

The Council originally passed the measure in December. It was then sent to the Police and Fire Pension board, who requested several changes. Now, the measure is in limbo once again.

Watch the video for more.

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Jacksonville Council President Latest to Support State Investigation of Public Safety Pension System

Florida Rep. Janet Adkins last month sent a letter to Gov. Rick Scott calling for an investigation into “impropriety…questionable practices and possible mismanagement” of Jacksonville’s Police and Fire Pension fund.

Specifically, Adkins wanted an investigation into how the fund administered its DROP accounts, and whether they ignored regulations and city auditors.

Shortly thereafter, city Councilman Bill Gulliford sent a letter supporting the idea of an investigation.

On Tuesday, council President Clay Yarborough threw his support behind the investigation.

From the Florida Times-Union:

Jacksonville City Council President Clay Yarborough sent a letter on Tuesday to Gov. Rick Scott supporting a state investigation into the Jacksonville Police and Fire Pension Fund.

In his letter, Yarborough said he stands with state Rep. Janet Adkins, who asked Scott in December for the state’s chief inspector general and the Florida Department of Law Enforcement to conduct a “review and investigation” of the pension fund.

“The Jacksonville City Council recognizes and appreciates the sacrifice and dedication of all public safety personnel,” Yarborough said. “That withstanding, Representative Adkins prudently identified … that restoration of public confidence in the management of the pensions is imperative. This is in the best interest of taxpayers and employees alike.”

The focus of the potential investigation:

The city’s attorneys and the pension fund have disagreed in recent years over several issues, including the creation of a special pension plan for senior staff members, including its longtime executive director, John Keane.

Despite city attorneys saying the pension fund lacked the authority to create the special pension plan, the fund’s own attorneys said they disagreed. As of now, Keane’s special pension plan is fully funded and is set to pay him benefits when he retires.

Adkins, R-Fernandina Beach, has asked Scott to investigate the special pension plan, as well as determine whether state rules and laws were followed in regard to the creation, management and regulation of Deferred Retirement Option Program accounts.

In October, the Times-Union reported how the pension fund ignored findings by the City Council Auditor’s Office and city lawyers that the pension fund incorrectly applied regulations for participation in DROP. The paper found that three individuals who entered DROP will collectively receive about $1.8 million more than they would have under strict interpretation of the code.

The Governor’s Office has remained mum on whether it will begin an investigation.

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Pension Board Changes Might Be “Deal Killer” For Jacksonville Reform

On Monday, the Jacksonville Police and Fire Pension board made several changes to the city’s pending pension reform measure and sent it back to city council for approval.

But the changes could be a “deal killer”, according to one council member.

One major change was the length of time the measure would be in effect. The council wanted three years, but the board changed it to ten.

Reported by the Jacksonville Daily Record:

“If it’s not at least 10 years, I’m not voting for any of it,” said Lt. Richard Tuten III, the firefighter’s representative on the board.

Police representative Chief Larry Schmitt and fifth member Nat Glover also were leaning that way — a majority.

That vote would mean the meat of council’s decisions had been undone, a move board Chair Walt Bussells said might doom reform and leave it for a judge to decide.

So, he asked members to reconsider the benefit components. The board did and approved rates that weren’t what council passed, but did eliminate fixed guarantees.

It didn’t budge on the length of the deal, though. And that could be a “deal killer,” said council member Lori Boyer.

“If that’s the case, then that’s a real big problem for me,” she said.

Boyer maintains state law says such deals can’t extend beyond three years. And like the police and firefighters who uphold the law on a daily basis, she says she took an oath to do the same.

“We can’t start putting politics above the law,” she said.

She said she possibly could handle changes to the benefits side, but without the three-year term it’s a non-issue.

Council member Bill Gulliford authored the amendments to those benefit changes on cost-of-living adjustments and DROP. He said if the only issue had been the former, he probably could have lived with it. But all the tweaks?

“I can’t buy the changes, I’m sorry,” he said.

After council passed what he thinks was the best offer, he said he thought the board’s decisions rendered the deal “dead.”

“I think council pretty much spoke,” he said, referring to the 16-3 vote in December that passed the deal the pension board weighed in recent weeks.

Both the council and the pension board must approve the measure before it is passed into law.

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Jacksonville Pension Board Sends Reform Measure Back to City Council With Changes in Mind

The board of Jacksonville’s Police and Fire Pension fund was set to vote on the city’s pension reform measure on Monday. But instead of an up-or-down vote, the board has requested several changes to the measure and sent it back to the city council for approval.

Both entities need to approve the measure before it is passed into law.

The changes the board is requesting, according to News4Jax.com:

John Keane, executive director of the fund, said the board has several concerns that it will express to the city:

– Calls on city council to guarantee a funding source for its $40 million annual contribution required by the agreement.

– Not willing to accept reduced cost-of-living increase from the agreed 3 percent annual to a variable rate between 0 and 6 percent for active and retired police and firefighters. The board is requesting it be increased to 0 to 6 percent.

– City council approved a 0-10 percent rate for deferred retirement (DROP) each year. Pension board wants higher rate: 2-14.4 percent.

– The original deal with the mayor allowed the terms of the plan to be renegotiated after 10 years. City council changed that to three years, which is not acceptable to the pension board.

The board said a primary concern is making sure current employees are confident that the revised pension plan will give them a secure future.

Members feel the funding deficit was created by the city, so the changes should be made strictly on the backs of the employees.

“We’ve gotten to this point today simply by fact that city has not saved for a rainy day,” said Richard Tuten, a member of the pension fund’s board.

The board and the council have a self-set deadline of January 15 to come up with a final proposal.

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Pension Board to Cast Final Vote on Florida Reforms

The board of Jacksonville’s Police and Fire Pension Fund will vote Monday on a pension reform measure that would improve its funding status but also affect member benefits.

The measure was passed by the City Council in early December. More from the Jacksonville Business Journal:

The final status of the pension reform package, which calls for a mix of surging money into the pension fund and cutting benefits, rests with the board, who can either reject it altogether, elect to modify it or accept it.

Rejecting it would kill the legislation, while modifying it would mean that City Council would have to agree to changes proposed by the board.

The city’s latest estimates of the savings the pension reform legislation could bring come to about $1.33 billion over 30 years.

The legislation’s approval, however, will mean nothing unless the city decides how to pay off the $1.6 billion in debt it already owes the pension fund. Some of the suggestions by the city include infusing $300 million to the fund by increasing its and JEA’s annual contribution to the pension fund.

Pension360 will track the outcome of the vote.

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Florida Pension Changes May Unravel As Board Debates Reforms

The Jacksonville City Council and Mayor Alvin Brown spent most of the summer months debating and constructing a pension reform measure that aimed to improve the funding of the city’s Police and Fire Pension Fund.

The Council approved the measure earlier this month. Now, the measure sits in front of the Police and Fire Pension Board, which will vote on it by January 15.

There’s no guarantee the board will approve the measure. From the Florida Times-Union:

It’s always been expected that changes to the 3 percent COLA and the guaranteed 8.4 percent return on DROP accounts for current employees were going to be stumbling blocks.

But the benefit changes for new hires hadn’t caused much of a stir until the board met last week to review the agreement.

Board members Richard Tuten and Larry Schmitt, representing the firefighters and police, said the changes are hard to swallow and will make it difficult to recruit good people needed to protect the city.

A third member of the board, former Sheriff Nat Glover, said he is uncomfortable with the changes and also concerned about the safety of the city.

Walt Bussells, the board’s chairman, said if a vote were taken, it would be 3-2 against.

“If we did do that, it kills the whole deal,” he said.

[…]

Tuten was the most vocal in his criticism of the changes for new hires and current employees.

He offered what he said was a string of broken promises and fear of more changes by politicians that “we can’t trust any farther than we can throw them.”

“If we are going to get keistered here, let’s go to court right now,” he said. “That’s what I get from my members.”

The measure calls for benefit changes for new police and fire hires, as well as COLA changes for current employees. In return, the city would pay an additional $40 million a year into the Police and Fire fund for the next 10 years.

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Several Jacksonville Council Members Support Investigation into Pension System

Earlier this month, Florida state Rep. Janet Adkins sent a letter to Gov. Rick Scott calling for an investigation into the Jacksonville Police and Fire Pension Fund – specifically, the “questionable practices and possible mismanagement” of its DROP fund.

Now, several members of the Jacksonville City Council say would support such an investigation and are planning on writing to Gov. Scott as well.

From the Florida Times-Union:

Councilman Bill Gulliford said he sent Scott a letter last week asking him to take a “hard look” into the pension fund’s practices. Councilman Bill Bishop and Council President Clay Yarborough said they plan to send letters to Scott, as well.

[…]

In October, the Times-Union reported how the pension fund ignored findings by the City Council Auditor’s Office and city lawyers that the pension fund incorrectly applied regulations for participation in DROP. The Times-Union found that three individuals who entered DROP will collectively receive about $1.8 million more than they would under strict interpretation of the code.

“You have members of the public and taxpayers asking leaders how they can get away with this,” Yarborough said. “I don’t have a good answer for them.”

When asked Monday what they thought of Adkin’s call for a state investigation, many council members said they supported the idea.

“I think it’s a worthwhile exercise,” said Councilman John Crescimbeni. “I think the taxpayers have a right to know whether there’s any waste or fraud.”

Other council members say they don’t support an investigation, or remained non-committal:

Councilman Jim Love said a state investigation may be “overkill”, while Councilman Richard Clark said it would serve as a distraction to the city’s attempt at pension reform.

“It puts a bad taste in my mouth,” Clark said. “I don’t know what it solves by accusing them of something. We need to solve our pension issues. We need to solve them in a fashion that’s constructive.”

Councilwoman Denise Lee said she didn’t “really have an opinion on it,” and Councilman Robin Lumb said he had no comment.

Mayor Alvin Brown’s office didn’t respond to a message seeking comment.

The Jacksonville Police and Fire Pension Fund is currently deciding whether to approve the city’s pension reform measure, which was passed by the City Council earlier this month.

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