A.G. Gancarski
On Tuesday, Jacksonville Mayor Lenny Curry offered remarks ahead of a collective bargaining session with the Jacksonville Supervisors Association, presaging a series of negotiations with the city’s seven bargaining units that he said could be a “big, transformational thing.”
If successful, he told FloridaPolitics.com yesterday, it could “set the stage for a dialogue beyond Jacksonville.”
As part of the mayor’s reform of Jacksonville public pensions, which currently bear an unfunded liability approaching $3 billion, Curry was able to get a referendum passed dedicating a current infrastructure sales surtax to pension liability once that tax sunsets in or before 2030.
However, that revenue source is conditional on renegotiating terms with at least one of the city’s pension plans: general employees, corrections, or police and fire.
With that in mind, media was very interested to know how Curry would address the delicate issue of renegotiating terms from the current defined benefit framework, which the mayor believes to be unsustainable.
Curry has spoken before about balancing the needs of two sets of stakeholders: taxpayers and employees. His remarks Tuesday to the JSA were delivered in that vein.
For current employees, there would be some immediate benefit, if the terms advanced by the administration are accepted.
These benefits include salary increases and a one-time, lump-sum payout to employees, which would vary across unions.
“Raises are simply to make employees whole,” Curry said.
“If accepted by union membership, and approved by the Jacksonville City Council, JSA employees will receive salary increases of 9.5 percent over the next three years and a one-time, 2 percent lump-sum payout. In addition, new employees will be placed in a new defined contribution plan as a retirement benefit,” read the proposal from the mayor’s office.
There would be a 4 percent raise in Oct. 2017, a 3 percent raise a year later, and a 2.5 percent raise after that.
“For fiscal year 2017, all employees would receive a one-time, lump-sum consideration equal to 2 percent of their annual salary,” the proposal continued.
For new employees, “new plans” would be in order; specifically, cost-sharing defined contribution plans, which would give them more control while liberating the city from “legacy pension plans.”
The city contribution would be 10 percent in the first 15 years of a given employee’s plan, and 12 percent thereafter. The employee match would be 8 percent throughout.
“This final step is bold,” said Curry, and “I am asking all of you to be bold.”
For Curry, the stakes are big.
The city is, said the mayor, “on the cusp of putting the $2.7 billion pension debt behind us.”
Employees have made sacrifices, said Curry, and the “hardworking people of Jacksonville” understand those sacrifices.
Yet, added Curry, most people outside of government simply don’t have “guaranteed” pension plans, which Curry called “things of the past.”
“This offer walks away from dinosaur plans that no one can afford,” the mayor noted, adding that “defined contribution plans are used all over.”
Of course, given the Balkanized nature of Jacksonville’s unions, nothing is easy.
For the plan to fly with general employees, all unions representing them will have to agree to the terms.
“Without agreement,” Curry said, reform “doesn’t happen.”
And police and fire, as well as corrections, offer their own challenges in the days ahead.
While it is possible Jacksonville city employees (some at least) could end up in the Social Security system also, the option of the Florida Retirement System has been ruled out.
“We would not have control over the cost structure,” Curry said.
Curry noted the referendum gave him a mandate to negotiate.
“When 65 percent of taxpayers said yes,” Curry said, they were “counting on us to represent them in the process.”
Jacksonville has had a long and tortuous road toward striking a balance between satisfying general fund needs and keeping the unions happy.
It hasn’t been easy.
It hasn’t been pretty.
But at long last, meaningful resolution may be approaching.
