A.G. Gancarski
The Jacksonville City Council Finance Committee meeting on Tuesday OKd the settlement with John Keane, while it OK’d the JEA Agreement, and increased property donation limits.
The settlement between the city and John Keane, a bill described as the “gorilla in the room,” was the big talker. The settlement version of the plan would pay Keane $225,000 in the first year, and he would be responsible for $6,262.26 in repayments because of a lower contribution rate to the Senior Plan versus the General Fund.
The measure helps avoid “protracted and costly litigation.”
Chair Bill Gulliford noted, in the front of the discussion, that he understands both sides of the issue. Gulliford noted $600,000 of additional cost with survivor benefits, saying that “another consideration” is “public sentiment” which is “strongly against us settling this deal.”
Gulliford also noted the sentiment, opposing settlement, might adversely impact the pension tax referendum.
Committee member Matt Schellenberg asked the city treasurer to verify that the fund actually lost money last year, and the treasurer verified that, and the “very volatile” nature of the fund’s performance this year. Schellenberg lambasted the city “not being very good at negotiating,” with Gulliford saying the city did as well as it could, given the “stonewalling” of the Fund during the Keane era.
Lori Boyer posited that there were potential savings from the settlement also.
“The public perception is… that the attorneys in the Office of General Counsel are already on staff,” Boyer said, wondering if “outside counsel” would be needed to handle litigation.
Jason Gabriel said yes, given the likelihood of “hardcore discovery,” an outside pension litigation expert would have to come in, at a cost of $75 to $150 thousand, in addition to the “soft costs” of General Counsel fees. As well, the Police and Fire Pension Fund attorneys would be piled on, and those would be a multiple of three or four of the city costs.
The PFPF hires the best counsel available, and would be especially inclined to do so to defend its establishment of the Senior Staff Voluntary Retirement Fund.
Costs would be, said Boyer, “well over a million dollars,” and “the longer we pursue it, the costs just go up incrementally every month.”
Boyer also expressed concerns on the referendum impact. Momentum was moving toward deferral, as Gulliford and Boyer wanted to seek outside advice on how to proceed.
John Crescimbeni spoke next, addressing the “marketing of a sales tax extension in the shadow of this kind of settlement.”
“The resolution was about answering one question… did the board have the authority to create the plan…. isn’t it about whether the statutes allowed that or not?”
Crescimbeni questioned the need of outside counsel and witnesses; Gabriel brought up the deep inquiry into a plan formulated in 1999 requiring resources.
Crescimbeni didn’t bite: “I see this as a very, very simple question.”
Gabriel: “there’s a whole history that has to be dealt with in this case,” and the defense ultimately would pull out every trick in the legal toolbox to defend its position.
Discussion moved toward the “life expectancy projection” of Keane and his wife; Keane is expected to live another 12 years, and his wife is expected to live another four years, in a delightfully Chicago School flourish in the discussion.
Gulliford described these projections for the Keanes as “overly aggressive.”
After more discussion of the costs of inaction, Crescimbeni observed that “I don’t want to lose the referendum for the cost of $600,000.”
“Everywhere I go, the public’s enraged,” Crescimbeni added, but given Keane’s salary, his pension even under the general fund would be $187,000.
Anna Brosche spoke up next, addressing the non-negotiable nature of the “inputs of this calculation” ensuring a pension number that no one will be happy with.
“While I don’t enjoy the resulting numbers… I don’t know what we are going to get” if the city litigates, Brosche said of the “ugly” and “painful” reality as the city attempts to close the “John Keane chapter.”
Schellenberg: “the citizens don’t care if they lose the case. They’d be willing to pay $2 million on the principle… the money means nothing to me… if you look at where we’re going on the unfunded liability, we’re going the wrong way,” the Councilman said about potential acquiescence on this deal.
Aaron Bowman observed that Council was elected to make the “hard decisions,” and he’s “ready to move forward” and approve the settlement.
Crescimbeni suggested an amendment, splitting the difference between the general fund benefits and the Senior Staff plan for Keane. The amendment carried.
The bill carried also, 7-0, even as Boyer and Gulliford reserved the right to vote against the measure in front of the full Council.
- Property donation limits were approved to be increased from $25,000 to $50,000, which was described by Chair Bill Gulliford as a “great step for affordable housing.” The “residential donations” bill, 2015-519, which would increase the value limit from $25,000 to $50,000 for abandoned property that the city may donate, occasioned discussion. It would cover abandoned properties with structures, or just vacant land.
- The JEA Agreement was approved with no discussion.
- “Project Omega” will bring 450 jobs to Jacksonville with $450,000 of local support and $2.25 million from the state; half of its jobs will be IT jobs. This project, said OED director Kirk Wendland, was closed by the “personal involvement” of the mayor and the governor.
- The committee heard about Jacksonville’s mosquito control efforts, newly relevant in light of the Zika virus. The mosquito that carries Zika was described as a “lazy mosquito” prone to daytime biting, one that “doesn’t travel very far.” Public education efforts will be key to controlling this, including advice to “drain and cover” sources of standing water.
