Some City Council members said Thursday a tentative pension reform deal is flawed because it lacks any certainty about how the city would live up to a pledge of paying an extra $40 million a year to the Police and Fire Pension Fund.

“I don’t think the council will go anywhere without the mayor having a full description of how that’s going to happen and without his 100 percent support,” City Councilman John Crescimbeni said. “I think it’s going to be an uphill battle.”

The extra $40 million a year is part of a “shared sacrifice” framework in which taxpayers would boost their annual contributions to the pension fund while current police and firefighters bear some changes to their pension plans.

The agreement reached Wednesday by Mayor Alvin Brown and the Police and Fire Pension Fund would require a special committee to meet in public each June and recommend to City Council what financial resources would be tapped to pay the $40 million, which would be above and beyond the minimum payment required by law.

This year’s minimum payment, for instance, was $144 million. The city expects to have a year-by-year breakdown next week of the minimum annual payments that will be required in future years if City Council approves the pension deal.

The extra $40 million would pay down faster the $1.65 billion debt the city owes to the pension fund for future pension obligations.

The tentative pension agreement spotlights some potential sources for rounding up that $40 million, such as “innovative” budget savings, growth in property tax collections and state revenue sharing, and contributions from JEA to City Hall.

Councilman Warren Jones said the city needs to resolve the pension issue as soon as possible, but he has a major concern about how the city would come up with the additional money.

“I don’t see how we can do that without a millage increase or some sort of tax increase,” Jones said.

City Council President Bill Gulliford said it would be tough to convince residents that a tax increase is justified when current police and firefighters will still be receiving 3 percent cost-of-living adjustments on their pensions in retirement.

“I certainly suspect there would be a lot of pushback on that,” Gulliford said, adding a pension task force report emphasized “shared sacrifice” by taxpayers and employees. “Does this really share the sacrifice?”

The Police and Fire Pension Fund board is scheduled to vote Tuesday on the agreement reached this week by Brown and John Keane, executive director of the Police and Fire Pension Fund.

Then the City Council will take it up. Last June, it voted 11-7 to reject a previous pension agreement reached by Brown and the Police and Fire Pension Fund.

Chris Hand, chief of staff for Brown, said the best way to approach the new agreement is to assess and vote on it “as an entire package.” He said it’s the result of the give-and-take involved in any negotiation.

“While the city did not prevail on every proposal we made, we reached a strong retirement reform agreement that comprehensively addresses the city’s public safety pension challenges,” Hand said.

He said if the City Council were to amend the agreement during its review, any changes would have to get approval by the Police and Fire Pension Fund board.

Gulliford said there’s no telling how fast a final decision will come.

Council members will change leadership posts and committee assignments July 1, and Gulliford said he’s not sure the committees will decide whether to back the agreement before then.

“You can’t take it out of committee consideration,” he said. “If it continues into the next president’s term, we’re just going to have to live with that. ... I’m not going to push it.”

City Councilman Stephen Joost, who voted against last year’s agreement, said he likes what he’s heard about the new proposal.

He said boosting the paycheck contribution by current police and firefighters, and modifying the Deferred Retirement Option Program so interest earnings on employee accounts rise and fall with the pension fund’s actual investments are signs of “good progress.”

He said it’s “just unrealistic” to expect that pension benefits that built up over a 25-year period can be rolled back for current employees in one fell swoop.

“I’ll look at the totality of the agreement,” he said. “There are going to be some good things in there, and some things I don’t necessarily agree with. At the end of the day, if the pluses outweigh the minuses, you’ve got to take the deal.”

City Councilman Ray Holt, who backed last year’s deal, said if the new version “is an improvement from the city’s standpoint, I will be likely to support it.”

Jones said keeping the COLA at 3 percent for current employees isn’t a deal-killer for him. He said the pension fund’s agreement to give City Hall about $28 million that could otherwise be used for enhanced pension benefits is a sign of shared sacrifice. He said the longer the city takes to enact pension reform, the higher the toll of pension obligations becomes.

“Each day we hire a new police officer or firefighter, we’re adding to the problem,” he said.

But City Councilman Matt Schellenberg said he’ll oppose the tentative deal, calling it a “huge disappointment.” He wanted the COLA reduced for current employees and he said the lack of specifics about the city’s $40 million contribution is troubling.

“To actually commit to something and not have any revenue source is sophomoric,” he said. “I’m incredibly disappointed.”

“That, I think, is a big missing link,” said City Councilman Bill Bishop. “It is the administration’s job to put forward a proposal.”

He said he doesn’t believe the agreement was much of a shared sacrifice on the pension fund’s behalf, and it would be a “very difficult sell” to raise taxes to cover the city’s increased pledge.

 

david.bauerlein@jacksonville.com: (904) 359-4581

christopher.hong@jacksonville.com: (904) 359-4272

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