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Final report in: Task Force plan brings estimated $1.8 billion savings
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Final report in: Task Force plan brings estimated $1.8 billion savings

Final report in: Task Force plan brings estimated $1.8 billion savings
Photo Credit: Stephanie Brown

Final report in: Task Force plan brings estimated $1.8 billion savings

After nearly seven months, Jacksonville’s Retirement Reform Task Force has settled on its final recommendations- and plan it says has some big savings.

The 50-page report breaks down what the Task Force believes is a comprehensive look at Jacksonville’s pension system for police and fire workers, and highlights potential changes in major areas like governance, pension debt and benefits. Task Force Chair Bill Scheu kicked off this final meeting by calling pension reform the most significant fiscal decision the city has faced since consolidation and saying reform can’t be kicked down the road any further.

All-in-all, the proposed changes put forward tally nearly $1.8 billion in savings over the current system over the next 30 years.

“That’s a significant amount of money for libraries, parks, and public safety, and all the kinds of things that we want to have to make this an even better city than it is today,” says Scheu.

The $1.7 billion pension debt raised some of the most spirited debate among task force members and the city at large through this process. The Task Force agreed that the City should pay more than the minimum requirement, ultimately voting to require $200 million be earmarked each year to cover the cost of pension obligations and added debt payments. Jacksonville paid $150 million toward pension this year, meaning under the new obligation- if adopted- another $50 million would be available for an added payment on the debt.  The discussion centered mostly on how to get that money.

Since the Task Force began meeting, Jacksonville Mayor Alvin Brown came out with a new pension reform plan that sought to pay down the debt through an increased annual contribution from JEA. In exchange for paying the city an additional $40 million each year for a designated time period, the Mayor offered to allow JEA to form its own pension system and find other cost savings to use in an effort to keep the contribution from impacting rate payers.

The report, and testimony from the JEA Board Chair and CEO, both cast doubt on whether that could truly happen.

“The proposed pension savings would take decades to be fully realized and the JEA would need to find a way to make the annual payments in the interim,” the report says.

Because no agreement currently exists between the city and JEA on this, the Task Force says it is not a viable solution.

They instead favor a half-cent sales tax boost. Bringing in that added revenue and using it specifically toward the pension debt will generate double the savings of any plan that does not include the added debt payments, according to the report.

“It’s significant to pay the ‘credit card’ off in advance,” Scheu says.

Other issues, like benefits, are addressed as well. The Task Force concurs with the Mayor’s proposal to have both new and current employees increase their contributions. On governance, the Police and Fire Pension Fund says some of the recommendations don’t fall in line with Florida statute, but they will give all a review.

While the Task Force wants this report to be considered in its entirety, Council President Bill Gulliford believes it’s important to think about the separate aspects- and who can act on each- including governance, funding, and benefits.

“The decision is going to be made by the council as to how this thing is ultimately funded,” he says.

Gulliford announced his intention to call at least one special council meeting to review his report and hear from any of the interested stakeholders. He says the intention is to make sure Council is educated on the latest developments and think about “parameters”, like what they can do about funding. He doesn’t personally intend to introduce any proposal on the funding, however, until some collective bargaining takes place.

“To take some kind of action before we get some sense of where the benefits side of its going to go, I think, would be inappropriate,” Gulliford says.

It’s a fine line, because generally the City Council stays out of pension-related conversations until an agreement is put in front of them to vote on. There are legal reasons as well, because Council becomes a quasi-judicial body and votes on the final outcome of an agreement if an impasse has been reached and cannot be broken in mediation.  Councilman Greg Anderson has served on the Task Force, but abstained from many of the votes because of those restrictions.

While the Task Force is now dissolved, Scheu will formally introduce their findings to the Police and Fire Pension Fund, Mayor, City Council President and others Thursday morning. Police and Fire Pension Fund Executive Director John Keane says he will immediately forward the report to trustees. Mayor’s Office Chief of Staff Chris Hand says they will reach out to the Fund and unions to begin talks. Hand tells me they still hope to have a deal agreed upon before the budget is introduced.

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