A.G. Gancarski
The hot story in Jacksonville politics this week has been the blockbuster forensic audit of the beleaguered Police and Fire Pension Fund.
Numerous irregularities, ranging from lavish travel budgets and lack of oversight to questionable investments, were spotlighted in the audit.
However, at least one former mayor familiar with the Police and Fire Pension (indeed, the 2001 deal was established under his administration) advises taking it with a “grain of salt.”
As John Delaney told FloridaPolitics.com during a Friday phone interview, certain aspects of the audit’s presentation raise questions.
“It seems a bit shrill in tone,” Delaney said.
So shrill, in fact, that to Delaney, “it doesn’t sound like [the tone of] an auditor.”
Beyond that issue, Delaney concedes that there are merits to some criticisms made by Jacksonville City Council members this week.
“John Crescimbeni was right,” said Delaney, when the councilman said that when the Legislature made the PFPF independent it removed the oversight component.
Regarding the investment underperformance of the fund (“poor investment decision-making [which] has resulted in at least $370 million in underperformance losses”), Delaney was not surprised, saying that the city’s pension fund always was “managed better historically” than that of the PFPF.
As well, Delaney related, there has always been something of a double standard.
“If the fund hits well, [they] ask for additional pension benefits.”
And if the fund underperforms? “They need more money.”
Delaney points out that the PFPF historically has provided an audit to the city, so there has been a measure of transparency.
And regarding the trips to conferences, Delaney described it as “crazy travel,” adding that “it’s not like they hid it.”
Meanwhile, regarding the calls for investigation by state and federal authorities, including the Securities and Exchange Commission, Delaney seemed to think it was a bit much.
“I’ve never seen anything like it,” he said.
Delaney noted that the board is a “volunteer board” with one permanent employees, and that the “police and fire units were always happy” with the performance of the fund.
In recent years, Delaney has taken slings and arrows for being the architect of the 2001 deal, which he claims was mislabeled a “30-year agreement” because of clauses in the wording that were ignored since.
“There wasn’t a damned thing wrong with the deal,” Delaney said. “It was right for the times” and “fully funded when I left office.”
It was in “fine shape in 2003” when Delaney left office, until City Council, just before the Great Recession, added more benefits, ignoring the threat of a veto from Mayor John Peyton.
“He couldn’t get seven votes to sustain a veto,” Delaney said, which points to the unique political power of the public sector unions.
“The unions wanted to call it a 30-year deal,” Delaney said, “yet they ignored a [key] paragraph.”
That paragraph boiled down to the principle that benefits could be reduced in light of changed economic circumstances.
“The media has never understood the 2001 deal. It was never a 30-year deal,” he said, citing language in the accord that allowed for exemptions.
Delaney also adds that, contrary to popular belief and media assertion, it’s “not a rich plan” and “compared to other police and fire pension funds, it’s the cheapest in the state.”
The pension fund, said Delaney, was “underfunded over the last 12 years.”
“At it’s core, it needs money. It’s needed money for the last 12 years.”
Delaney also took issue with the Peyton pension deal being spiked by the Alvin Brown administration.
“I’m not faulting council for not doing the Peyton deal since Brown asked them not to,” Delaney said, “but the Brown proposal was so bad that it was opposed by the Chamber” which “shows you how bad the deal was” since that was an unprecedented action from that group.
Whether investigations happen or not, and the precise topography they take, the issue ultimately is funding, Delaney said.
The two-term mayor said, “$30 million a year does it” and that figure could be accomplished via a “modest property tax increase or a half-cent sales tax [hike.]”
That would, he added, “solve the problem overnight.”
