Jacksonville, FL - How Jacksonville will fund an additional $40 million annual contribution to pay down the police and fire pension debt is still unclear, but a new draft of the latest pension reform deal will make sure that bill is paid.
The Police and Fire Pension Fund Executive Director and Fund Attorney met again with Jacksonville’s collective bargaining team- including the Mayor, Chief of Staff and CFO- today to address some of the concerns that have been raised in the two weeks since a tentative deal on pension reform was reached. The meeting itself was called by the moderator of these negotiations, Rod Smith, who opened by saying he was getting the feeling there had been some second thoughts on the deal since it hadn’t been formally filed.
Chief among the list of concerns raised by the PFPF Board was the guarantee for the City to make an annual contribution to the debt.
Under the tentative agreement, Jacksonville agrees to pay $40 million beyond its annual required contribution specifically to go to the roughly $1.6 billion pension debt. The proposal would form a committee- including the CFO, Council Auditor, head of JEA, Retirement Reform Task Force Chair, and others- that would meet annually to determine where that money should come from. The committee would examine a range of options, including a sales tax, property tax, JEA contribution, COJ property sale, etc. That recommendation would then be given to the Mayor and City Council President. The Mayor would use the recommendation when writing the budget, which is presented by July 15. It would then be up to City Council to follow through with the allocation.
The concern from the Board was whether there was enough guarantee that the City would follow through with the payment.
The City Council is the body which allocates City dollars, so while the recommendation is put forth every year there is no legal way to bind them every year to committing to funding without knowing whether the money will exist. If the City doesn’t pay this $40 million, the Pension Fund is relieved of its requirement to pay annual chapter funds toward the debt.
Ultimately, the Fund Attorney acknowledged there is only so much they can do to compel the Council. All parties settled on an agreement adding language that the Mayor must including the funding in the budget every year, even if the committee fails to make a recommendation. Further, the Council would have to explain, in writing, why they didn’t commit funding- if in fact that happened.
The other big question was on interpreting the terms of how long the agreement lasts.
Jacksonville currently operates under a settlement known as the “30 year agreement” when governing pension negotiations. This has prompted other legal disputes, including who should actually be at the bargaining table.
This proposal aims to put that to rest. Rules on governance- including transparency in the Fund- would be tied to the full length of the 30 year agreement, which expires in 2030. Other provisions, including benefits, would lapse in 2024. Over that ten year time frame, the unions or certified collective bargaining agents will be the ones who meet the City at the bargaining table, not the Fund. Additionally, the unions can request a collective bargaining session, for example if they want to look at new benefits, but an impasse cannot be declared and unilateral action cannot be taken.
With these questions now tentatively settled, the City will file the bill outlining the deal on Wednesday, meaning it will appear on next Tuesday’s Council agenda.
This last-minute bargaining will likely not lead to smooth passage. Over the last two weeks since the tentative deal was first announced, several Councilmen tell WOKV their primary concern is funding the $40 million. They have concerns about committing to a plan which would require annual funding, but does not designate a funding line.