jacksonville police and fire pension fund | Pension360

Jacksonville Pension Reform Bill, Approved by Council, Could Still Stall

The Jacksonville City Council approved the city’s long-debated reform plan last month, which increase future employees contributions to the city’s Police and Fire Pension Fund, as well as boost the city’s payments by $40 million annually.

But now the proposal is awaiting approval from the Police and Fire Pension Fund, and one big question remains: how will the city pay for its higher payments? From News4Jax.com:

The Police and Fire Pension Fund met Monday to look at the city’s proposal to deal with the $1.7 billion pension deficit and the members are stuck on a major issue: how the city will pay for it.

The Jacksonville City Council approved a plan without designating a funding source and gave the pension board a little more than a month to approve or reject it.

The pension board is debating several issues again, including whether new members should carry the brunt of reform.

Under the plan approved by the council, future police and firefighters would undergo significant changes in the way their retirement is funded. They would pay more and the city would pay more into the retirement fund to bring it in line.

The pension board previously agreed to those changes in the plan, but now it might change its stance.

The board will reportedly meet again on Jan. 5 to vote on the reform measure.

Photo by pshab via Flickr CC License

Video: Lawmaker Calls for Investigation into Jacksonville Police and Fire Pension

Florida State Representative Janet Adkins called this week for state Governor Rick Scott to consider launching an investigation into possible misconduct at the Jacksonville Police and Fire Pension Fund.

According to Rep. Adkins, the investigation would focus on:

– Why “a special pension plan…was designed for one or two beneficiaries”

– Whether rules and laws have been broken “in regards to the creation, management and regulation of the DROP accounts”

Watch the video for more.

Cover photo by pshab via Flickr CC License

Jacksonville Will Vote On Pension Reform Measure This Week

After months of debate, the Jacksonville City Council could approve this week a measure to reduce the city’s pension debt.

Observers say the measure, which would increase city pension contributions, change retiree COLAS and give the Council the right to change benefits, has the votes needed to pass through the Council.

From the Florida Times-Union:

The full council will meet Tuesday and could take a vote on the legislation.

Thirteen council members — more than a necessary majority for passage — voted last week in favor of the bill during two committee meetings after making several changes they said make the agreement a financially better deal for taxpayers.

After years of failed attempts to reform the police and fire pension and reduce the city’s $1.65 billion debt obligation to it, council members appear close to passing a bill that Brown’s administration says will save the city $1.2 billion over a 30-year period.

“I suspect there will be limited discussion on it, and I suspect the vote will be significantly in favor, maybe even an unanimous vote,” said Councilman John Crescimbeni.

If the Council passes the bill, it will still need to be approved by the Police and Fire Pension Fund Board. There’s no guarantee they will accept the deal. From the Florida Times-Union:

The pension fund board is composed of five members. The police and firefighters union each appoint one member, the City Council appoints two members and the fifth member is chosen by the four other members.

Whether the board members pass the bill remains a major question, because it includes some significant differences from Brown’s original legislation that they supported.

Council amendments include changes to guaranteed annual cost-of-living adjustments that current police and firefighters will receive to their pensions and interest rates earned in their Deferred Retirement Option Program accounts. The council would also retain the power to impose pension benefit changes in three years if future collective bargaining talks reach an impasse.

When Brown negotiated his deal with the pension fund earlier this year, pension board members nixed the concepts now included in the council’s changes.

Officials from the mayor office told the council last month that any changes made to the deal could effectively kill it.

The reform measure would increase city contributions to the pension system by $40 million per year for the next 10 years. It would also change the way COLAs are calculated and would give the Council the right to change worker benefits for the next three years.

Photo by pshab via Flickr CC License

Jacksonville Poised to Pass Amended Pension Reform Plan

After months of debate, the Jacksonville City Council is as close as ever to passing an oft-amended pension reform bill.

The bill originally was designed to force the city to pay higher annual payments into its Police and Fire Pension Fund. But new amendments will likely force pensioners to shoulder some of the burden, as well.

Details on the new amendments to the bill, from the Florida Times-Union:

One amendment favored by City Council would give the city the power to unilaterally impose changes in pension benefits in three years if there is an impasse between the city and police and firefighter unions in future collective bargaining talks.

Gulliford said that would put Jacksonville in the same posture as other Florida cities.

Another amendment would change the cost-of-living adjustments that current police and firefighters would get for pension benefits earned after a new agreement takes effect. Instead of a guaranteed 3 percent COLA annually, the COLA would float based on Social Security’s cost-of-living index, with a maximum COLA of 4 percent.

That change would reduce the city’s pension cost in years when Social Security is less than 3 percent, but the city’s cost would be higher if inflation pushes that index above 3 percent.

According to the calculations of the Times-Union, the bill, amendments included, is likely to pass a vote by City Council:

Most Finance Committee members previously backed the amendments during an initial round of voting last week.

Though nothing would be final until the full council meets Dec. 9, the votes so far show an emerging majority of council is lining up to approve the pension legislation, albeit with significant differences from the tentative agreement put forward by Mayor Alvin Brown.

In the Rules Committee, the unanimous votes for the amended bill were cast by Bill Bishop, Johnny Gaffney, Bill Gulliford, Warren Jones, Robin Lumb, Don Redman and Matt Schellenberg.

[…]

In addition to the seven City Council members who voted to move forward with the amended bill Monday, the amendments drew support at last week’s Rules-Finance committee meeting from council members Richard Clark, Lori Boyer, John Crescimbeni and Jim Love. City Council President Clay Yarborough also supported the amendments.

That would add up to at least 12 members voting for the bill, which would exceed the 10 votes needed to get a majority on the 19-member council.

The city’s Police and Fire Pension Fund is 43 percent funded.

Public Utility Company: We Can’t Afford Jacksonville’s Pension Reform Deal

A key part of Jacksonville Mayor Alvin Brown’s pension reform proposal was forcing the city to pay an addition $40 million every year for 10 years into the city’s Police and Fire Pension Fund.

But the question was always: where does the city get that money?

The solution, pushed for months by Brown, was to have JEA, a public utility company, make the payments.

But after further analysis, JEA says it simply can’t foot the bill.

From the Florida Times-Union:

In a closely-watched report completed with help from outside attorneys and financial consultants, JEA says it can’t afford Mayor Alvin Brown’s proposal to use the utility’s financial muscle to help pay off the city’s $1.65 billion Police and Fire Pension Fund debt, according to a draft copy of the document.

The report’s conclusion is a body blow to Brown’s efforts to pass his signature pension-bill, and it echoes skepticism some JEA officials have aired for months about the idea — which would have JEA pay an additional $40 million a year for 10 years on top of the more than $100 million it already contributes annually to the city’s general fund.

“JEA recognizes the challenges for our community resulting from very significant unfunded pension liabilities for the Police and Fire Pension Fund and General Employee Pension Plan, which includes JEA employees,” the report says. “However, at this time, we are unable to increase our contribution to the City of Jacksonville without increasing rates, and even with a rate increase an increase in contribution to the city threatens our bond ratings.”

JEA says that it has other challenges it needs to address, and shifting more money towards the pension system would hurt its credit. From the FTU:

The report details many of the financial challenges facing JEA: industry-wide declines in electric and water sales, impending federal regulations that could come with massive costs and billions of dollars of its own in existing debt.

Several City Council members quickly dismissed Brown’s idea earlier this year, saying it’s clear JEA has too much on its plate.

The nation’s major credit-rating agencies have cautioned JEA that increasing its city contribution — which historically has been higher than the industry average — to address Jacksonville’s pension crisis could hurt its credit.

Officials in surrounding Northeast Florida counties that also use services from the city-owned utility have said they’re wary about the plan if it means higher rates for customers.

JEA already contributes about $100 million to the city’s pension system.

Jacksonville Pension Reform Bill Faces Obstacles As It Heads To City Council

Jacksonville Mayor Alvin Brown’s pension reform bill is headed to the City Council, where it will be scrutinized and approved by two separate committees.

But it won’t be smooth sailing for the bill, as several council members will likely push for unpopular amendments to the measure.

The bill aims to improve the funding of the city’s public safety pension system by forcing the city to make higher payments to the system – to the tune of an extra $40 million a year.

From the St. Augustine Record:

When Mayor Alvin Brown’s pension reform deal heads to a City Council committee today, the meeting will be led by a councilman pushing for several significant changes that could jeopardize the bill.

Rules committee Chairman Bill Gulliford said he’ll try to convince his colleagues to adopt one of the six amendments he’s proposed to the pension package, which was based on negotiations Brown conducted earlier this year with the Police and Fire Pension Fund.

Gulliford’s amendments would seek further reductions in pension benefits for current police and firefighters, which the pension fund rejected during negotiations.

If the council approves any amendments to the pension deal, the pension fund’s board also must approve the changes.

Brown has touted his deal as the city’s best shot yet at fixing its pension crisis and its looming $1.65 billion pension debt. He has said the deal would save the city $1.5 billion in the next 35 years.

[…]

In recent weeks, some council members questioned the deal’s merits.

The leading criticism: Brown hasn’t identified a realistic funding source for the $400 million more the city and its taxpayers will contribute to the fund over 10 years — on top of the yearly required amount — a major component of the deal’s saving.

The extra $40 million per year in contributions would expedite the paydown of the city’s debt obligation to the pension fund and save money over the long haul, just as homeowners benefit by making extra payments on their mortgages.

Brown’s legislation would use money from the pension fund’s reserve accounts to cover this year’s $40 million payment and then $21 million in the 2015-16 budget. But there isn’t a definitive plan yet to pay the rest.

Other critics say current police and firefighters really didn’t sacrifice anything to help resolve the pension plan’s woes.

For the bill to pass, ten council members need to support it. Currently, only seven council members are on board.

Florida Fund Seeks Audit After Newspaper Reports On Officials Skirting DROP Payout Rules

Over the past few weeks, the Florida Times-Union has run a series of articles detailing how high-ranking public safety workers, and top pension officials, were able to rack up benefits by staying in the Jacksonville Police and Fire Pension Fund’s (JPFPF) DROP program for longer than rules allowed.

The articles have now gotten the attention of the JPFPF – the fund says it will hire an auditor to look into the allegations.

From the Florida Times-Union:

The head of Jacksonville Police and Fire Pension Fund said he will ask his board to hire an independent firm to review the fund’s practices and determine if the fund has been too lenient when it comes to senior members’ participation in the lucrative Deferred Retirement Option Program.

Pension executive director John Keane announced his decision in a four-page statement sent to City Council that takes issue with a Florida Times-Union investigation, “Too Much of a Good Thing.”

The Oct. 19 story exposed how, under strict interpretation of city code, at least three high-ranking police officers and firefighters with strong ties to Keane were able to skirt the rules and participate in the DROP program for too long, or even altogether, piling up excess pension benefits totaling $1.8 million.

The pension fund’s desire for an audit of its own comes as some city leaders are suggesting the fund be subjected to a forensic audit, which typically investigates whether there are grounds for criminal charges.

Details of the DROP program and the city code that employees may have breached:

The DROP allows police officers and firefighters to continue drawing a regular salary while at the same time having a pension placed into a special account for up to five years.

DROP calculations are based on math.

The number of years one works for either the police department of fire department determines the value of one’s first year of pension payments into DROP. Years of service also determine how long one may participate in DROP.

The code says once a member of the pension fund has worked 30 years, he or she is able to participate in the DROP for three years. Those falling into that category are entitled to 80 percent of the average salary they earned over the previous two years. Those with less than 30 years of service may participate for the full five years, but the percentage of their first year’s pension would be less. For instance, someone with 20 years would get a first-year pension that is 60 percent. That percent grows by two percentage points per work year. So someone with 29 years of service would get 78 percent.

The system is set up so one doesn’t get the best of both perks.

But some people did.

Bobby Deal, a retired police officer and long-time chairman of the pension fund’s board of trustees, and Richard Lundy, a retired firefighter and business partner of Keane and Deal, started their DROP participation after they hit the 30-year mark. And instead of participating for three years, they were allowed to remain in the DROP for the full five years.

Because the city does not currently require that a retiree cash out his or her DROP earnings upon retiring, the norm in states that offer DROP, including the Florida Retirement System, these DROP accounts are being re-invested in the pension fund and are guaranteed to grow 8.4 percent regardless of the true market value of the stock market.

Deal and Lundy now stand to make $1.3 million in questionable benefits on top of their regular pensions.

Read the previous Florida-Times Union investigations here.

Auditors: Jacksonville Pension Officials May Be Skirting Payout Rules

Auditors and watchdog groups are asking questions about the “questionable benefits” of some members of the Jacksonville Police and Fire Pension Fund.

This comes in the wake of a Florida Times-Union investigation that claimed some of the system’s top officials, and active members, were breaking city rules by participating in the Deferred Retirement Option Program (DROP) even if they weren’t eligible.

From the Florida Times-Union:

The long-time chairman [Bobby Deal] of the troubled Jacksonville Police and Fire Pension Fund will collect $610,000 more in retirement funds than a strict interpretation of the law says he is entitled to, a Florida Times-Union investigation found.

Even more alarming to City Council members, city auditors and independent analysts is that Deal is not alone.

There is also former fire chief Richard Barrett, who was allowed into DROP even though he had passed the point of eligibility. And there is Richard Lundy, a former fire captain and business partner of Deal’s. Together they stand to receive more than $1.8 million in questionable benefits.

They are among what is expected to be potentially more than 1,000 former police officers and firefighters who were allowed to skirt the rules and participate in the DROP either too early or — like Deal — for longer periods than city law allows.

Most of the special arrangements allow employees into DROP prematurely, which has a negligible impact on the troubled pension fund. But others like Deal who participate longer than the city law states will end up costing taxpayers hundreds of thousands of dollars each in DROP payouts.

DROP payments are secondary pensions on top of regular pensions that sometimes stretch out for four to five decades.

Pension officials and city officials seem to disagree on what the rules have to say about DROP eligibility. From the Times-Union:

The police and fire pension fund’s executive administrator denies any favoritism or improper application of the law.

“It’s absolutely done properly,” John Keane said.

[…]

Under rules set up by the police and fire pension fund — and agreed to by the city in the late 1990s — an employee who already has worked 30 years is allowed to be in DROP for only three years. Workers with 20 years of service but fewer than 30 years are able to participate in DROP for the full five years. Those with 32 years of service may not participate in DROP at all.

Not so, says Keane.

Keane said it takes time to process paperwork and emphatically denies that rules were skirted for Deal or any other member.

“It’s like going out and catching an airplane; you have to go out and get a ticket before you can board the plane,” Keane said. “When you have 40 to 50 people signing up for the DROP, [all that paperwork] cannot be cleared in just a few days.”

[Jacksonville City Council auditor] Kirk Sherman said there is no quarrel about paperwork deadlines, only about eligibility and following the rules.

The Jacksonville Police and Fire Pension Fund is 43 percent funded.

Read the entire Florida Times-Union investigation here.

Jacksonville Shelves Controversial Pension Appointment Bill

The Jacksonville City Council unanimously agreed yesterday night to shelve a proposal that could have given the Mayor the power to appoint a member to the city’s Police and Fire Pension Fund board. Reported by the Florida Times-Union:

A wall-to-wall crowd of police and firefighters only had to wait a few minutes Wednesday evening to learn the fate of legislation aimed at giving city leaders the ability to appoint a majority of the Police and Fire Pension Fund board.

In contrast to the debate two weeks ago, the discussion Wednesday night among City Council members only lasted long enough for City Councilman John Crescimbeni to make a motion for withdrawal of his bill.

The council agreed 18-0, resulting in a win for police and firefighters who rallied in opposition to the legislation. Mayor Alvin Brown’s aides also lobbied against the bill, arguing it might unravel a proposed package of pension reforms negotiated by Brown and the Police and Fire Pension Fund.

Crescimbeni’s bill would have scheduled a November referendum for voters to decide whether the mayor should have the power to appoint the fifth member of the Police and Fire Pension Fund board.

Currently, two members of the board are chosen by police and firefighters, two are selected by City Council, and those four members jointly pick the fifth member.

Leaders representing city firefighters applauded the council’s decision But at least part of the reasoning behind shelving the bill had less to do with pension reform and more to do with logistical issues. From the Florida Times-Union:

Randy Wyse, president of the Jacksonville Association of Fire Fighters, said the demise of the bill clears the way for City Council to consider a separate bill containing a host of changes to the police and fire pension system.

“We can move on and get true pension reform,” Wyse said after the vote.

In asking to withdraw the bill, Crescimbeni said there wouldn’t be enough time for election officials to take the procedural steps for placing the referendum on the November ballot.

Duval County Supervisor of Elections Jerry Holland has said the legislation needed to be wrapped up this week.

A handful of council members tried to pass the bill earlier this month, but the council postponed the passage of the bill in a 9-8 vote.

Judge: Florida Violated Open Records Laws When It Stonewalled Pension Record Requests, Sent Investigators To Man’s Home In “Chilling” Incident

Over the last few years, Curtis Lee—Jacksonville resident and retired pension attorney—has filed dozens upon dozens of public record requests relating to the Jacksonville Police and Fire Pension Fund.

But Lee claims that instead of getting access to the public records he requested, he was stonewalled by the State Attorney’s Office for the Fourth Judicial District.

In one instance, says Lee, the Office waited a full year to provide an initial response to his requests. In another, the Office sent investigators to Lee’s home to tell him to stop contacting the Office and to question him as to his purpose for requesting the documents.

So Lee filed a lawsuit against the Office alleging they violated public records laws with their actions.

And the law gave Lee some solace this week when a judge sharply criticized the Office and ruled that they will have to pay for all of Lee’s legal fees. The judge, however, did not rule that the Office intentionally broke public records laws, which would have carried more serious penalties. More from the Florida Times-Union:

A judge ruled State Attorney Angela Corey’s office broke Florida’s public-records law, scolding the prosecutor’s office for sending investigators to question the citizen in his home and never demonstrating why the unusual visit was “necessary and appropriate.”

…

Judge Karen Cole also criticized Corey’s office for refusing to accept Lee’s cash for records and in some cases taking more than a year to provide even an initial response.
The State Attorney’s Office will have to pay Lee’s legal fees for his lawsuit against it. Cole will need to figure out exactly how much that is. Lee’s attorney, Brooks Rathet, said it should be somewhere around $20,000.

The State Attorney’s Office also violated public records laws by requiring the public to pay for records with business checks, cashier’s checks or money orders. Cash and debit cards were not accepted.

To get a money order, Lee and others had to pay a third-party service a fee. That, Cole said, “unlawfully burdens” citizens. From now on, the State Attorney’s Office has to accept cash for records. If the office wants to, the judge said, it can also allow other types of payment.

Cole also described how the State Attorney’s Office violated the law by taking too long with its response to requests.

As one example described, Lee sent Corey’s office six letters with 27 categories of public records requests in February 2011.

About five days later, two State Attorney’s Office investigators came to Lee’s door, according to Judge Karen Cole’s final judgment.

Sending investigators to tell someone to stop calling the State Attorney’s Office “would have a chilling effect,” Cole wrote, for most people. Most people might not have continued requesting records after a visit like that, she wrote.

After the judgment, the Office told Lee that they would produce the records he had requested by Thursday, August 14.

Lee filed a similar lawsuit against the Jacksonville Police and Fire Pension Fund. Lee won certain aspects of that case, but the case is now being appealed to the Supreme Court by the fund.

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