The rift among City Council members over police and fire pension legislation isn’t trivial.

 

There’s a fundamental dispute over what the length of the agreement should be, and millions of dollars of taxpayer money are at stake.

The Police and Fire Pension Board of Trustees previously rejected a council-approved limit of three years before the council could unilaterally impose changes to pension benefits for current police officers and firefighters.

The board insisted that the restriction last for 10 years.

During a Rules Committee meeting earlier this week, Councilman Stephen Joost said that the board had “drawn a line in the sand” and that crossing it would mean years of expensive litigation.

And the years of work to come up with pension reform, which is critical to relieving the fund’s drain on the city’s finances, would have been for naught, he said.

The Rules Committee, however, voted 4-3 to reimpose the three-year limit.

Two other council committees have approved the legislation without that amendment, and that likely will be the main battleground when the full council takes up the measure Tuesday.

There are legitimate concerns about acquiescing to the board’s 10-year demand.

One of those is the fact that the projected savings from the agreement, sorely needed to begin reducing the $153 million payment taxpayers had to put into the fund this year, are based on old mortality tables.

The Wall Street Journal reported in October that new mortality tables done in 2014 show that Americans are living longer.

Retirees living longer lives will add pressure to already underfunded pension plans, increasing liabilities by as much as 8 percent, the newspaper reported.

That’s a problem for Councilwoman Lori Boyer.

“We are off $150 million starting right now,” she said during the Rules meeting.

Her point was that with a three-year deal, there would be time to see if the agreement was working as projected.

If not, a future council could make changes through the impasse procedure if needed.

But the 10-year limit would mean future councils would be forced to live with the agreement for a decade even if it proved to be a bust.

Another concern is the projected savings are predicated in part on the contributions made to the plan by current employees rising from 7 percent to 10 percent.

The final 2 percent of that, however, would only come after raises were given, which some council members don’t see happening anytime soon.

On the other side of the argument is that the longer this draws out, new hires will be covered by the current benefits plan, which is more expensive than the one already agreed to for new employees.

Over time, that would cost taxpayers significantly more.

The vote by the full council Tuesday appears to be close.

Here’s one thing all the council members should agree on.

The decision on pension reform needs to be made by this council.

The new council that will take office in July will have at least 10 new members.

After this much effort, starting anew would be a travesty.

If the full council sides with the three-year limit and the pension board rejects it, then go to court and settle this issue once and for all.

If the three-year limit fails and the legislation passes, step one will be completed.

Step two is going to be just as complicated.

Finding the $400 million over 10 years to pay down the $1.62 billion pension debt more quickly is by no means going to be an easy task.

A proposal by Councilman Bill Gulliford to put a half-cent sales tax on the ballot, a complicated and difficult process to explain to voters, was deferred in the Finance Committee Tuesday, which makes it highly unlikely it could be put on the May ballot.

The proposal to have the city and JEA each borrow $120 million to be used to pay down the pension debt hasn’t been met with enthusiasm on the council.

Council Robin Lumb suggested at Rules Monday that the JEA franchise fee be doubled to come up with the $40 million annually, but residents and businesses in Baldwin and the three Beaches communities don’t pay that.

A property tax increase is highly unpopular.

No easy task indeed.

ron.littlepage@jacksonville.com: (904) 359-4284