Public Utility Votes to Help Jacksonville With Pension Reform — With Some Some Conditions

Florida

The Jacksonville Electric Authority (JEA) has agreed to help the city in its efforts to fund its pension system – but there are a few strings attached.

JEA would make a one-time, $120 million payment to the city’s pension fund. In return, JEA wants the city to slash the utility’s future contributions and let it create its own pension plan for employees. (Since JEA is a public utility, it’s employees belong to the city’s pension plan.)

More from First Coast News:

The [JEA] board voted unanimously to support the deal on Tuesday following little debate, but months of work studying to determine if it was a good move for the authority.

The JEA, in turn for providing $120 million, would see its annual contributions to the city slashed plus allow the JEA to break away and create its own pension plan for its employees.

Mayor Alvin Brown has touted the JEA option as a good move because the city could match the $120 million to make a lump sump payment to drive down the pension obligations that push $1.6 billion.

The Jacksonville City Council still needs to approve the agreement.

 

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Jacksonville Pension Task Force Member: Use Sales Tax to Fund Pensions

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A member of Jacksonville’s Pension Reform Task Force is calling for the levy of a sales tax, with revenues going toward the city’s Police and Fire Pension Fund.

Dr. Sherry Magill, the president of the Jessie Ball Du Pont Fund and a member of Jacksonville’s Pension Reform Task Force, is latching on to a sales tax measure proposed last month by Councilman Bill Gulliford.

Gulliford’s measure would put a half-penny sales tax on the May ballot. Voters would then decide its fate.

More from the Florida Times-Union:

As a member of the mayor’s task force on pension reform, I urge members of City Council to pass Councilman Bill Gulliford’s bill to place a half-penny sales tax on the ballot.

I appeal to voters to pass the measure. Without a dedicated revenue source to pay down the police and fire pension obligation we incurred over many years, City Council will have no choice but to close libraries, stop mowing parks and eventually eliminate the basic functions of local government.

[…]

The city’s finances will only get worse over time. The fairest method of raising revenue is the sales tax, spreading our obligation across the community.

Since the task force released its report 11 months ago, many City Council members have reached the identical conclusion: We cannot maintain basic functions of local government if we do not raise new funds to spend down the debt. Both the Fitch and Moody credit rating agencies downgraded the city’s bond ratings, warning us to pay our debts.

[…]

The task force called for shared sacrifice. Police and firefighters have agreed to make additional pension payments and reduce benefits. It’s time for the public to keep faith with the people who protect us and to pay our debts.

Jacksonville Mayor Alvin Brown has said he will veto any measure to put a sales tax on the ballot.

 

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Florida Gov. Rick Scott Rejects Call for State Investigation Into Jacksonville Pension Fund

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A state lawmaker, Jacksonville city council members and others have called repeatedly for a state investigation into the city’s Police and Fire Pension fund since late 2014.

Specifically, they want an investigation into whether regulations were broken in the administration of the fund’s DROP.

Florida Gov. Rick Scott finally addressed the issue on Tuesday, and declined to launch a state investigation. The matter, his office said, should be “handled on the local level”.

More from the Florida Times-Union:

Gov. Rick Scott rejected Tuesday state Rep. Janet Adkins’ request for him to call for an investigation of the Jacksonville Police and Fire Pension Fund.

Scott’s office will deliver Adkins a letter today signed by his chief inspector general, Melinda Miguel, who wrote that her office was choosing to stay out of the pension issues in Jacksonville.

“Based on our review, it appears that your concerns would be more appropriately handled at the local level,” Miguel wrote. “If you are aware of specific criminal violations, you may refer this information to local law enforcement or the state attorney’s office.”

Adkins’ letter to Scott on Dec. 15 requested that he assign his inspector general and the Florida Department of Law Enforcement to look into the pension fund’s operations to see if any state laws or regulations had been broken.

Adkins cited Times-Union coverage of Jacksonville’s pension issues in describing why she felt a state investigation was warranted.

The Atlantic Beach City Commission and various members of the Jacksonville City Council, including President Clay Yarborough, sent letters of support backing Adkins’ request.

This doesn’t mean, however, that Florida is letting pension funding slip under the radar. The state sent out letters to 19 pension funds last month demanding that they formulate a plan to shore up their funding levels.

 

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Jacksonville Mayor Submits New, Updated Reform Bill

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Jacksonville Mayor Alvin Brown has submitted a reworked version of the city’s pension reform proposal, which was previously passed by City Council but wasn’t approved by the city’s Police and Fire Pension Fund.

The bill needs to be approved by both entities before it passes into law. The City Council may vote on the new bill next month, according to the Jacksonville Business Journal.

More details from the Jacksonville Business Journal:

Brown’s bill comes in the wake of a City Council version of pension reform legislation, which was approved by a 16-3 margin in December, being sent back by the Police and Fire Pension Fund.

City Council worked with Brown to come up with changes that will, hopefully, appease the board. City Council still expects to make some changes, though, President Clay Yarborough told the Florida Times-Union.

Some of the sticking points of the council-approved bill were the interest rate that firefighters and police officers get on Deferred Retirement Option Program accounts, cost-of-living adjustments and City Council’s power to change benefits.

The council’s agreement with the Police and Fire Pension Fund will go until 2030. After 2030, the city and unions will have to settle all disputes through collective bargaining.

Additionally, City Council will be able to make changes to benefits if the groups are not able to reach an agreement.

The city’s Police and Fire Pension Fund was 43 percent funded at the end of 2013.

 

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

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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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Jacksonville Pension Reform Vote Delayed by Council

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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

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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

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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

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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

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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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