A.G. Gancarski
On Monday, the Jacksonville City Council Finance Committee mulled a packed agenda, including pushing forward on inquiring into the validity of the Police and Fire Pension Fund Senior Staff Voluntary Retirement Plan, a measure that will yet again be considered by the full Council next Monday.
• 2014-769, which was referred back to Finance under the urging of Finance Chair Bill Gulliford, was the highlight. The measure to authorize the General Counsel to look into the legality of the Police and Fire Pension Fund Senior Staff Voluntary Retirement Fund was questioned by Gulliford. The city, he said, would bear the legal costs on both sides; the General Counsel legal costs are, he said, a real costs. And the PFPF representation during a previous action cost $300,000.
Gulliford wondered whether “price” or “principle” was the reason for this action. Price, he said, could exceed half an million dollars.
John Crescimbeni, bill sponsor, said “I stand on principle” and “principle is priceless.” He noted that the Plan, created in 2000, didn’t show up on actuarial reports until 2012, and noted a legal opinion from former General Counsel Cindy Laquidara that the plan was “unauthorized.”
“It is a matter of principle… and seeking the truth sometimes costs money,” Crescimbeni said.
Reggie Gaffney wondered what the current General Counsel, Jason Gabriel, thought. Gabriel asserted that her opinion was on the “question of legal authority.”
He agrees with Laquidara, saying that Council is the party authorized to set up pension funds.
“You’ve got two options… an option to pursue this in court… or to seek settlement,” Gabriel said, pointing out the “authority issue” and that “only the City Council can create such a thing.”
Gabriel observed that the OGC is in a “data gathering mode” and mentioned that the forensic audit of the fund might “tease out some facts” regarding the voluntary retirement fund for senior staff.
Lori Boyer asserted that the binding authority of the city’s opinion was ignored in terms of behaviors by the fund itself, a fact that Gabriel agreed was “troublesome.”
She then asserted that, despite the cost of legal action, it needed to be pursued, in part to protect Council’s “relevance” and role as the policy making body for the city.
Aaron Bowman, a new Councilman, said this PFPF situation kept coming up during his campaign, with many voters voicing an opinion that Council wasn’t looking out for them.
Gabriel also mentioned that the discovery process, including depositions, would be extensive. He urged that pension experts be hired to serve as consultants on this matter also. He also noted that the decision that the court might take is not predictable and could go in many different directions, including a couple that are adverse to the city’s position.
A charter amendment to rectify this happening in the future was presented as an option.
This issue was discovered by the Council Auditor office in 2012, during a holistic audit. That same year, the PFPF included the plan in its actuarial reports for the first time. It was discovered through review of contracts with Keane.
“What that tells you is this agency does what it wants to,” said Crescimbeni, describing them as “irresponsible.”
“We already have a provision in the ordinance code that says they can’t do this … they don’t care.”
Another concern that he and others had: If this gambit by the PFPF is ignored, what stops other independent authorities from setting up a similar pension fund?
While Crescimbeni is “open to a settlement,” he asserted that resolving the legal question is essential. He also asserted that Council has been trying to take action on this since 2012, but was thwarted by the previous administration.
Gulliford observed that it may be a “crapshoot,” in terms of ROI, if the city goes to court. General Counsel Gabriel concurred with that read.
The Finance chair went on to say that “we needed to frame this debate… so that citizens understand … the financial implications.”
This bill, which had passed Rules already 6-1, also passed Finance by the same margin. Danny Becton was the outlier.
• 2014-553, a bill which increases the fines for snipe sign violations and has had lots of discussion in recent weeks, was also on the agenda. The latest version of the bill, amended to increase fines for every offense and to add directional real estate fines to the definition, was approved without dissent.
• 2015-620, an amended and restated contract between the city and the Equestrian Center, was altered to adjust the accounting of the contract. Previously, there was a city operating account; now, they will have three accounts of their own, for ticket sales, revenues, and sponsorships. The city would still have oversight, but the new deal would shift the accounting onus to the operator. The city would also be in a position to give the Center a $40,000 buffer for operation costs. As well, audits would be based on the calendar year. Beyond that, some language cleanup in the terms and conditions were included. The bill was approved unanimously.
• 2015-581, which approved $26.275 million for Shands, was approved, but not before an extended discussion of familiar talking points from the hospital (which would like more money) and councilmembers (who expressed a concern about solving the institution’s funding issues long term).
• $200,000 was appropriated from Council Contingency for the city’s membership in the Jacksonville Chamber of Commerce. Aaron Bowman, an active Chamber member who had recused himself from voting, explained that the money was for marketing purposes. Crescimbeni quibbled with the language of “membership.” A floor amendment next Monday during the full council meeting will tweak the wording accordingly.
