Jacksonville, FL - Concern already emerging about the potential impact of the newly proposed pension reform plan on your safety and your wallet.
Jacksonville Mayor Alvin Brown has unveiled a new proposal on how to reform Jacksonville’s pension system, a plan he believes would save $2.75 billion over 35 years, including $130 million over the next five years.
“That means less pressure on our important services in our parks, for our seniors, for our children, for our families,” says Mayor’s Office Spokesman Dave DeCamp.
But the key stakeholders who need to sign off on this deal say those savings come at a cost.
“These kinds of conversations create a lot of heartburn for the employees on what their future is,” says Jacksonville Association of Fire Fighters President Randy Wyse.
Wyse says they already had concerns about recruitment capabilities because of the increased contribution and similar changes to new employees that were laid out in the last reform plan, and closely mirrored in this newest one. The new concern here, however, is steeper changes for current employees- something Wyse says will affect their retention of trained firefighters.
“I think you’re going to see them possibly moving away, going back to the department they came from or another department that’s under the Florida Retirement System,” Wyse says.
A dispute continues between the city, the police and fire unions, and the Police and Fire Pension Fund over how to negotiate these changes. The city maintains it should negotiate directly with the unions, while the unions believe the Fund is their negotiating body. Because of this, and the ongoing litigation relating to it, the city tells me they did not discuss this plan with other parties ahead of the Retirement Reform Task Force meeting where the plan was unveiled.
“It was unexpected, I was surprised,” says Fund Executive Director John Keane.
While Keane shares concern over the increased contribution by current employees under this newest plan, he’s also very closely reviewing a portion which would have the fund redirect $4.5 million in state grants annually in to paying down the unfunded liability, or essentially the pension debt.
“That’s not something that I would be interested in, or strongly interested in, at all,” Keane says.
DeCamp tells me the city has no desire to put any great burden on fund employees, and they’re closely examining exactly what would happen as a result of increasing current employee contributions.
“That’s an important consideration, and we’re looking at that,” he says.
And while they’re examining the impact on pension fund workers, there’s also a big question mark over the direct cost to you.
“I don’t think the tax payer can bear it solely, I don’t think the pensioners can bear it solely,” says Councilman John Crescimbeni.
There’s question still on potential cost that could be coming down the pipe for you under this plan. The Mayor wants JEA to contribute $40 million annually to paying down the unfunded liability.
“Bottom line, there is no way that we can add an additional $40 million to the additional $200 million that we, by the charter, must give to the City of Jacksonville,” says JEA Board Chairman Mike Hightower.
He says paying that would have a direct, negative impact on JEA customers. And that doesn’t sit well for many Jacksonville City Councilmen, who will have to give the final approval to any change in the city pension plan.
“This is going to be passed on the taxpayers, so it’s not a whole lot different than a tax,” says Councilman Don Redman.
While he says, on the surface, this plan seems to make progress over the prior proposal, he still have questions on whether savings estimates will truly stack up.
Despite these concerns, DeCamp says the Mayor is confident JEA can figure out how to make this contribution without increasing rates. One option the city wants JEA to put on the table, is looking at more efficiencies and cost savings within their own pension system. He says they hope to hear more from JEA and the Task Force about the idea.
Keane says before the Task Force meets again, the Fund will be reviewing all the Mayor’s actuarial projections to determine whether they can achieve the $2.75 million savings projected. He plans to have that study available by the next Task Force meeting.
This plan comes after a different proposal to save $1.1 billion over 30 years was voted down by City Council last year. The agreement was reached by the City, Fund, and unions.
“We shot it down because it wasn’t enough, it wasn’t well thought out,” says Councilman Matt Schellenberg.
He says he’s disappointed there hasn’t been more progress made in finding a “fix”, even though it’s been a topic of discussion and debate for years. He tells me he’s also concerned we’re on track to see another stalemate, pushing eventual savings even further down the road. This fiscal year, Jacksonville paid $150 million into pensions, and could pay $180 million in the upcoming budget.