Tag: Jacksonville pension reform

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

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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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Public Utility Back in Fold of Jacksonville Pension Reform Plan

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Jacksonville public utility company JEA is back on board with the city’s pension reform plan.

The company is helping to finance much of the city’s current reform proposal; JEA will make a $120 million lump sum payments to the city’s Police and Fire Pension Fund.

Last week, it was unclear whether JEA would go through with the plan.

More from the Florida Times-Union:

After a series of fast-paced negotiations between Mayor Alvin Brown’s administration and top JEA officials, prompted by a public rift last month, a plan to use the financial wherewithal of JEA and the city to pay the hefty price tag of Jacksonville pension reform is back on track.

JEA audit and finance committee members Thursday unanimously approved an agreement that stipulates the utility would — in exchange for financial and administrative concessions — make a $120 million lump sum payment to the city. Brown wants the city to use that payment, plus an additional $120 million the city would borrow, to more quickly pay down the $1.62 billion debt to the Police and Fire Pension Fund.

[…]

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, a gulf that has become a top concern for JEA officials in recent years.

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

JEA’s participation isn’t yet fully guaranteed; the utility’s board will meet later this month to vote on its participation.

 

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Former Jacksonville Mayor Calls for Tax Increase to Fund Pension Reform

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Former Jacksonville mayor and current city Chamber president John Delaney said Monday that a tax increase is likely the best way to fund the city’s pension reform measure.

The city has been weighing a pension reform bill for months, and one of the points of debate has been the source of funding for the measure. Current Mayor Alvin Brown’s plan was to team with a public utility company and borrow the money.

But Delaney says a tax increase is more likely.

From the Florida Times-Union:

JAX Chamber Chairman John Delaney said Monday a pension financing plan supported by Mayor Alvin Brown is “not viable” and the solution “probably is going to be a tax increase to solve that problem.”

[…]

In regard to pension reform, Brown favors a plan for the city and JEA to borrow $240 million to more quickly pay down the city’s $1.62 billion debt to the Police and Fire Pension Fund.

JEA would pay off its $120 million in borrowing by getting reductions in the amount it pays in annual contributions to City Hall. The city would repay its $120 million by using savings from its annual pension contributions to the Police and Fire Pension Fund, along with projected growth in tax revenues from an improving economy.

[…]

But Delaney said City Hall already is financially strained in paying the day-to-day costs of city services, so reductions in future JEA revenue would hurt the city. He said the same financial constraints affect the city’s ability to borrow $120 million and repay it.

He said to “dig out of the pension hole, it’s going to take a new independent slug of money, which ultimately probably is going to have to be a tax increase to solve that problem.”

Read more Pension360 coverage of the Jacksonville pension reform saga here.

 

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

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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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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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City Council Shakeup Could Affect Jacksonville Pension Reform

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Jacksonville Councilman Johnny Gaffney is stepping down from his post next month.

Gaffney was likely to vote in favor of the city’s pension reform measure. But with his departure, the chances of the measure passing become murkier.

There are 19 seats on the Council, and the measure needs 10 votes to pass.

From the Florida Union-Tribune:

Because Gaffney ran for the Legislature — unsuccessfully, as it turned out — he must step down from the council next month, making Feb. 10 his last City Council meeting.

There’s no guarantee that the council will be ready by then to cast votes on pension reform, so Gaffney might be off the council before the final decision.

Gaffney’s impending departure is just one of the moving pieces Brown faces as he strives to secure 10 votes on the 19-member council. Some City Council members have already said a counter-offer made last week by the Police and Fire Pension Fund is dead on arrival.

[…]

The pension legislation approved 16-3 by the City Council last month would let City Council impose further benefit cuts on current police and firefighters in three years.

The pension fund’s counter-offer would prevent the council from unilaterally imposing further benefit cuts for 10 years. The pension fund called that a big concession because it shortens the existing agreement running through 2030.

City Councilman Bill Gulliford said that, in his view, three years is the maximum term for benefits allowed by state law, so it’s a non-starter for him to approve a 10-year provision.

“I’m not going to vote to codify something that most people feel is illegal,” he said. “Some really bright legal minds feel it’s illegal. Every other jurisdiction in the state operates under the three-year directive. What’s so special about our folks? Why do they have to be 10?”

City Council members Bill Bishop, Lori Boyer, John Crescimbeni, and Matt Schellenberg also said they have a real problem with any term longer than three years for pension benefits. Along with Gulliford, they voted in December for the council-approved version of pension reform.

If the reform measure isn’t passed, the city may decide to go directly to unions to negotiate pension changes.

 

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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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