H 69° L 54°
  • cloudy-day
    Current Conditions
    Clear. H 69° L 54°
  • clear-night
    Clear. H 69° L 54°
  • cloudy-day
    Mostly Cloudy. H 75° L 62°

The latest top stories

00:00 | 00:00


The latest traffic report

00:00 | 00:00


The latest forecast

00:00 | 00:00

Paying $1.7 billion pension debt will mean direct cost to you

Paying $1.7 billion pension debt will mean direct cost to you

Paying $1.7 billion pension debt will mean direct cost to you
Photo Credit: Stephanie Brown

Paying $1.7 billion pension debt will mean direct cost to you

Since the first day of discussion on how to reform Jacksonville’s pension system, the $1.7 billion dollar unfunded liability, or pension debt, was the cloud hanging over a final plan.

Now, on one of the final weeks where a special Retirement Reform Task Force is gathering to figure out their recommendations for changing the current system, the debt is the central focus.

And I’ve learned paying that down will almost definitely cost you.

I’ve obtained a spreadsheet put together at the request of the Task Force detailing five options to be considered for beginning to pay down the debt. The goal, generally speaking, is to create about $50 million in annually recurring funds which would be earmarked each year specifically for the unfunded liability, at least until the debt is 80% funded.

On Monday, the Task Force is set to review each of these options and put forward a recommendation to the City Council. Whatever they recommend would still have to be vetted by the Council and possibly other partnering agencies or departments before taking effect.

1) JEA funding

This plan has become increasingly scrutinized in the month since the Mayor first proposed the idea. The Mayor’s team wants JEA to contribute an additional $40 million each year specifically toward the unfunded liability. JEA already pays about $200 million in to the pension system each year.

In exchange for the agreement, the Mayor says he would grant JEA’s longstanding request to create its own pension system. He believes this would save more than $500 million, and those savings could be applied toward this payment. His team also offered to partner with JEA to find other cost savings and efficiencies to make up the money.

The plan is currently under review by JEA. After the initial proposal about one month ago, JEA Board Chair Mike Hightower told WOKV any increased contribution would have to translate in to a rate hike for you. Since new details, including the independent pension option, were put forward, he has declined to comment directly on what this contribution could mean for you.

The Task Force has been hesitant to this point to commit to this plan without hearing more from JEA.

2) Ad Valorem Tax

The ad valorem tax, or property tax, is one that Jacksonville is familiar with, coming off a year when the property tax rate was hiked 14.4% by Jacksonville’s City Council to make up for declining property values, the growing pension budget, and city services which could not sustain another year of cuts.

The Task Force is entertaining another hike, with one mill estimated to generate $44,300,000.

3) Franchise Fee

According to the Council Auditor’s Office, the franchise fee is paid to the City of Jacksonville by JEA customers, with the utility collecting the bill. The fee itself is used to cover cost of the administrative oversight of JEA, the use of City right-of-ways, and for the exclusive right to serve electric, water and sewer customers.

The franchise fee right now is 3% of JEA’s revenues from electric, water and sewer. According to the Task Force spreadsheet, the fee could be doubled with the vote of 13 council members.

Raising the rate from 3% to 6% would bring in an additional $40,200,000.

4) Sales Tax

To better understand the sales tax option on the table, as interpreted by the Task Force Chair Bill Scheu, it needs to be considered in partnership with the ad valorem rate, because any increase in the sales tax would be required to be offset by a reduction in the property tax rate.

There can be a Fire and Rescue surtax created as part of the sales tax which would be used toward operations. A half cent surtax would bring in an estimated $68,000,000.

For the sales tax to effectively bring in the additional revenue, Scheu says an ad valorem increase would likely happen first. At that point, there would be a referendum for the voters to decide whether they wanted the sales tax.

If voters decided against the sales tax, the ad valorem increase would stay. If you favored the sales tax, it would take effect and the ad valorem rate would be decreased.

While there is still some legal review taking place, Scheu is confident in the ability of the Task Force to use this recommendation.

5) General Fund Budget Cuts

While a cut to the city’s billion dollar budget would not immediately impact your taxes or fees, it has a potential to resonate in city services. During lengthy budget negotiations this year, City Council raised the tax rate because many of the proposed cuts and lapses put in the budget for city departments were considered too deep to bear, especially considering cuts that have come in years leading to this point.

A 4-5% cut would be needed to generate the $40-50 million sought.

6) Other options

There are still other options not listed on this spreadsheet that could be discussed, however the support is not as strong. One example is selling some of the city’s underutilized or vacant property, and using that money to pay down the unfunded liability. This would be one-time money, however, and not recurring funds which the Task Force favors.

Big Picture

There is still another meeting on the calendar for the Task Force, which was initially supposed to have completed its review by February 12th. These most recent meetings, however, have included some of the most significant actions- like a recommendation on benefits cuts for new and current employees.

Once their recommendation on the unfunded liability is finalized, the Task Force will issue its full report compiling recommendations they have made on different portions of the pension system along the way.  Scheu is confident some of their recommendations, including this debt funding question, will be acted on by the upcoming budget debate. Some recommendations, like benefits, are subject to collective bargaining.

I will be at Monday’s meeting bringing you instant updates on Twitter (@NewsAndNom) on the latest recommendations, and what it will mean for your wallet.

Read More

There are no comments yet. Be the first to post your thoughts. or Register.

The Latest News Headlines

  • David and Louise Turpin are facing a string of charges, including torture, after police say the couple kept their 13 children locked away in subhuman conditions in their Perris, California, home. On Thursday, the Turpins made their first court appearance. >> Watch the video here >> On Rare.us: Here’s what the children in the California torture house did to cope with the alleged abuse David Turpin appeared in chains, wearing a lavender shirt and black jacket while his wife sat nearby, also in chains and a black jacket. The Turpins entered not guilty pleas to all of the charges, some of which date back to 2010. The district attorney says the couple is facing 94 years to life in prison if convicted on all counts. >> Dogs found in perfect condition in home where 13 siblings held captive During the arraignment, the Turpins were quiet and spoke only to say they acknowledged their right to a speedy preliminary hearing, CBS reports. They will appear in court again on Feb. 23, and their bail was set at $13 million. District Attorney Mike Hestrin said in a press conference, “As a prosecutor, there are cases that stick with you, that will haunt you. Sometimes, in this business, we’re faced with looking at human depravity, and that’s what we’re looking at here.” Authorities said the parents were able to keep their children hidden away by listing their home as a private school. Some of the kids, who ranged in ages from 2 to 29, reportedly didn’t know what a police officer was. The children were only allowed to eat once a day and shower twice a year, authorities said. However, the parents reportedly did allow them to keep journals, and authorities said the kids filled hundreds of notebooks. Those have not been released and are still being reviewed by law enforcement. The children are currently being cared for in the hospital, authorities said. The Riverside University Health System has set up a fund for the children that will go to their long-term needs, according to a press release. The hospital said the children have already seen a tremendous outpouring of support. >> Read more trending news  Brian Rokos of the Press-Enterprise was present at the hearing and reported that David Turpin is being represented by a public defender, while Louise Turpin has outside counsel. During Thursday’s arraignment, the public defender requested that media be banned from the trial, but the judge shot that down. Rokos said reporters from around the world were in the courtroom. The Turpins' lawyers have not announced whether they will try to have the case moved out of Riverside County.
  • A new ad released by President Donald Trump's campaign is claiming that Democrats are “complicit” in killings by undocumented immigrants. The ad was released after Senate Democrats opposed a short-term spending bill to keep the government from shutting down. >> Click here to watch “President Trump is right — build the wall, deport criminals, stop illegal immigration now,” the ad said, showing clips of top Democrats. “Democrats who stand in our way will be complicit in every murder committed by illegal immigrants.” >> Trump cancels Florida trip as government shutdown looms “President Trump will fix our border and keep our families safe,” the ad concluded. The ad was released on the one-year anniversary of Trump’s inauguration. >> Government shutdown: What closes; will you get your Social Security check; what happens to SNAP, WIC On Friday, Senate Democrats opposed a short-term spending bill to fund the government and keep it from shutting down after Republicans refused to include a provision to protect thousands of immigrants brought here as children. >> Read more trending news  President Trump bashed Democrats after the failed vote, saying that they wanted “unchecked illegal immigration.” “Democrats are holding our Military hostage over their desire to have unchecked illegal immigration. Can’t let that happen!” he tweeted Saturday morning. Earlier on Saturday, he again bashed Democrats, tweeting that they were more “concerned with Illegal Immigrants than they are with our great Military or Safety at our dangerous Southern Border.” (H/t: The Hill)
  • A pair of well-kept dogs were taken from the Perris, California, house where 13 children were found shackled and severely malnourished last week. >> Watch the news report here David Turpin, 57, and Louise Turpin, 49, are facing a minimum of 94 years for charges including child neglect and torture after police said their children, ranging from ages 2 to 29, were discovered in their home severely malnourished. >> Neighbors of parents accused of holding 13 kids captive describe family as odd, reclusive In a statement on Wednesday, city spokesman Joe Vargo said authorities recovered two Maltese terrier dogs in far better condition than the Turpins’ children. The 1-year-old female puppies were reportedly healthy and were taught skills, People reported. “The animals, one white and one black, appear healthy and friendly and are leash-trained, according to Christina Avila, a senior animal control officer,” a press release from the city of Perris said. >> Read more trending news  The dogs — one was named Fluffy — were featured in photos from the city appearing well-groomed and in sweaters. An adoption raffle for the pups is being held through Jan. 26 to find them new homes. Investigators said the children were only allowed showers a few times per year and were fed only once per day. In a press conference with reporters Thursday, District Attorney Mike Hestrin alleged that the last time any of the children had seen a doctor was four years ago and they had never been to a dentist. Police said the parents allegedly kept themselves well-fed and regularly ate pies in front of their children to taunt them, ABC News reported. >> Police: 13 siblings held captive in California residence The 17-year-old who reportedly escaped the home through a bedroom window to alert authorities was initially believed to be just 10 years old due to the severity of her malnourishment, while the oldest victim, a 29-year-old woman, weighed only 82 pounds when the children were found. According to Hestrin, the children “lack a basic knowledge of life,” although they were allegedly homeschooled, KTLA reported. According to the Daily Mail, the parents face a combined total of 75 charges, and each was being held on $12 million bond.
  • Neighbors described the reportedly nightmarish situation at the Turpin home, where parents David and Louise allegedly kept their 13 children shackled to their beds and malnourished, as seeming like a “cult.” Former neighbors said the children were made to march around for hours in the middle of the night, they told the New York Post. A man named Mike, who did not want to give his full name and was a neighbor of the Turpins when they lived in Murrieta, California, told the Post, “I thought they were like a cult. They would march back and forth on the second story at night. The light would be on the whole time, and they would be marching the kids back and forth.” >> Police: 13 siblings held captive in California residence Mike said he would arrive home late from his job at a hospital and see the children marching through the upstairs rooms of the Turpin home between midnight and 3 a.m. David and Louis Turpin were arrested Sunday in their Perris, California, home after one of their daughters called police for help, saying she had managed to escape the house with a cellphone. When police arrived, they reportedly found the siblings, ages 2 to 29, living in squalor and looking very thin, with several of the kids shackled to furniture. Mike said his wife, Myrna, called the family “clones,” saying the Turpins all spoke “robotically, in a monotone and at the same” time during the few occasions on which Myrna interacted with them at a local grocer. However, Mike told the Post that he and Myrna never called the police because they didn’t see anything that suggested they needed to. They just thought the parents were a bit odd. Mike, as well former neighbors from when the Turpins owned a farm in Rio Vista, Texas — which the family left due to foreclosure — remarked on the amount of trash that the family accumulated. “I ended up calling the police because of the trash and everything that was left there,” said former Texas neighbor Randy McClain. “There was a brand new pickup truck covered in [trash] — a whole truck bed full and overflowing to the ground with trash: diapers, Spam cans, potted meat cans, just overflowing.” The Daily Mail got access to the Turpin’s Perris backyard and found a Disney-themed fountain situated in a messy yard in which “piles of metal pipes could be seen strewn around, along with a rusty set of metal garden furniture and some diaper boxes.” >> Read more trending news  Through the screen door, the Daily Mail spied piles of clutter, including what appear to be stacked books, within the house. Neighbor Leticia Gomez, 45, who lives directly behind the Turpin home, told the Daily Mail that she wasn’t aware there were any kids in the house. She described the Turpins’ garden as unkempt and “scruffy.” Another neighbor, Andria Valdez, said she did know there were children living in the home and that she had seen them before. She joked that the Turpins reminded her of the vampire family in the “Twilight” books and movies, because they were “really, really pale” and “only came out at night.”

The Latest News Videos