The crossroads for pension plans for new hires in Jacksonville is here, and is casting a shadow over virtually every aspect of the city’s future.
The latest bond rating trip for the city, for example, saw the pension issue – and whether or not Jacksonville Mayor Lenny Curry will succeed in getting at least one union’s new hires to accede to a 401K plan – casting a shadow over the proceedings.
The municipal debate over pension plans has elicited the interest of free-market groups such as Americans for Prosperity and, ineluctably, the national and state Fraternal Order of Police.
On other issues, Curry has called for a “Jacksonville solution.”
On the matter of pension reform, outside stakeholders may not be at the bargaining table as the city attempts to close the old plans that incurred $2.8 billion in debt to unlock future sales tax revenue, but they do have their talking points.
Caught in the middle of the maelstrom between city negotiators and police officers: the elected sheriff.
One man who knows what that’s like better than most in Duval County: Rep. John Rutherford, who was sheriff for three terms before term limits kicked in.
On Wednesday, Rutherford spoke to the issue, offering more extended comments than his successor, Mike Williams, delivered on this subject earlier in the week.
“I think a pension is absolutely necessary,” Rutherford told FloridaPolitics.com, noting that a defined contribution plan is a pension.
Albeit one that may not consider the full risk an officer assumes.
“I supported for years a defined benefit [plan], because if I have two officers who are facing a man with a gun – one has 20 years, one has two years – the guy with two years under a 401K is putting a lot more at risk than the guy who has twenty years,” the congressman-elect asserted.
“If you can come up with a defined contribution plan,” Rutherford added, “that levels that playing field, that might be okay. But you have to guarantee that, if an officer dies [during] his first year in office, his family’s going to be taken care of.”
“I hear people say ‘well, look, people die in all kinds of different disciplines, different jobs.’ The difference is my guy’s putting his life on the line. He knows what he’s going into,” Rutherford continued.
“An accident is one thing. Putting your life on the line because somebody’s in there shooting at you and you’re trying to save someone’s life, that’s a completely different situation,” Rutherford added.
“As long as you can make that defined contribution significant enough that it takes care of their family, then that might be doable, but I’d have to see it.”
Rutherford stresses that a defined contribution plan is a pension, which is not a universal view.
Despite that qualifier, many of Rutherford’s words are closer to the position of the police union than they are to the current sheriff.
During the collective bargaining session between the Fraternal Order of Police and the city before Thanksgiving, the union made many of these points.
While officers bear the non-negotiable burden of physical risk, a 401K plan floats with the market. And for officers who are younger and drawing more dangerous details, the 401K doesn’t come with a downside guarantee.
However, Rutherford isn’t completely sold on the Florida Retirement System option for new hires, which is a position held by all the public safety bargaining units.
“FRS is not bad. But let me say this – this is my concern about FRS and defined contribution. What I liked about our defined benefit plan is that it anchored officers in Duval County,” Rutherford contended.
“You look at South Florida. You see these guys moving all over, going from one agency to another. They come in at different ranks, and go away.”
“In Jacksonville,” Rutherford continued, “when I saw a recruit at the academy, I expected him to be here 25 years later. A defined benefit plan will do that for you. It will keep that stability in your agency.”
“Defined contribution has that as a possibility, but it’s much more portable. Because he can take that 401k with him. And FRS is the same way. They can take that with them.”
“So,” Rutherford added, “there’s a lot to be considered when you start talking about defined contribution versus defined benefit.”
Rutherford, of course, found himself in the position of having to advocate for the stability of the sheriff’s office during much of his time in leadership.
The economic downturn of 2007 and the crash of 2008 caused millage revenues in Jacksonville to nosedive, and the recovery in revenue has been slow.
In 2009, Rutherford faced proposed cuts from Mayor John Peyton, with the general fund contribution being $76 million.
The sheriff told the Florida Times-Union that a big part of the issue was a trough in millage revenue, and that another part of the issue was that the city took breaks from paying its part of the obligation during economic booms.
When confronted with a proposal to raise the retirement age, Rutherford was blunt.
“Crime is a young man’s game. Running the street is a young man’s game,” he said. “And I’m not sure there’s a savings there. If you leave at 25 years, you leave with more pension than you had at 20.”
In 2013, Rutherford and the Jacksonville Sheriff’s Office faced a potential $29.2 million cut in the JSO operating budget.
Rutherford advocated a tax increase, refusing to make the cuts Mayor Alvin Brown pushed for.
By 2015, Rutherford’s patience with the tax-averse Brown – and the impacts that tax aversion had on public safety – was exhausted.
The sheriff was, if not a surrogate for Lenny Curry, a definite asset when it came down to messaging.
And his message was that Brown couldn’t be trusted when it came to securing resources for public safety.
“Crime has gone up since 2011,” he said, asserting that violent crime especially has gone up increasingly as the Brown administration has progressed, with an 11.6% increase in 2014 being the direct “result of cuts to this office.”
Brown’s team touted nominal budget increases. Rutherford countered that “ninety-five percent of the budget increase was related to the unfunded liability.”
Soon thereafter, Rutherford was co-branded with Lenny Curry in a television spot.
“Lenny Curry understands that the Mayor’s first priority must be to reduce crime and ensure public safety,” the Sheriff said, adding that “for a safer city and a better Jacksonville, I support Lenny Curry to be our next Mayor.”
Curry won, of course, and so did Mike Williams – Rutherford’s preferred candidate.
While Curry has come through on long-delayed force enhancements and technological adds, and while Williams (much like Rutherford was during the Peyton era) is on the sidelines of the pension debate, history tells us that a sheriff walks a fine line between labor and management.
When asked about the union position on Monday — that if benefits fall behind the rest of the departments in the state, then retention and recruitment will suffer — Williams had this to say.
“I will say this: that’s my concern really,” Williams said, before ameliorating that concern with his characteristic optimism.
“As long as it’s a competitive pay and benefit package, I’m not sure the vehicle matters. But again, I’m going to leave the negotiations up to them. and I’m confident they’ll come up with something that will work,” Williams said.
History tells us that a recurrent motif in the Jacksonville model involves tough negotiations between labor and management … a consequence of when a low-tax regulatory model collides with the realities of a big city union.
And on Wednesday, Rutherford spoke to that history, clearly pointing out that a non-negotiable value in the transaction is the risk assumed by an officer.
A challenge for Curry’s team: to find a way to meaningfully address that idea within a defined contribution model.