Several Jacksonville Council Members Support Investigation into Pension System

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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.


Photo by  pshab via Flickr CC License

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

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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.

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