A.G. Gancarski
Jacksonville Mayor Lenny Curry got a political boost today when his allies at the Jacksonville Chamber of Commerce endorsed his pension reform package.
“This is a collaborative solution that addresses a longstanding issue facing our city finances and balances the interests of taxpayers and our hard-working, dedicated city employees,” JAX Chamber Chair Darnell Smith said.
Curry’s Chief of Staff Kerri Stewart made the sale to the Chamber’s policy group, which then recommended that the full Board of Directors support the pension reform proposal.
The Chamber backed the entire push toward pension reform, including a trip last year to Tallahassee to show support for giving Jacksonville an ability to extend its current 1/2 cent infrastructure tax to pay off the $2.8B pension debt.
“Mayor Curry identified pension reform as a top priority of his administration and we are now one step from historic reform,” Smith said. “We applaud the mayor for his leadership on this issue and encourage the City Council to approve this plan so we can move forward as a city.”
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The Jacksonville City Council meets on Wednesday to discuss the pension reform legislation, and time is of the essence, as the city is on the hook for $360M in costs next fiscal year without pension reform. Those costs would cripple the city’s general fund, and imperil political careers on both sides of the aisle.
With reform, the number is a much more manageable $218M.
2017-257 creates a new ordinance section: Chapter 776 (Pension Liability Surtax).
Bill 2017-258 affects the general employees and correctional worker plans, closing the extant defined benefit plans to those hired after Oct. 1, 2017, and committing the city to a 12 percent contribution for those general employees and a 25 percent contribution for correctional officers hired after October.
Bill 2017-259 implements revisions to the Police and Fire & Rescue plans.
258 and 259 both offer fixed costs via a defined contribution plan for new hires, while offering generous contributions from the city to those hires, and raises for all current employees.
The best deals are for public safety: long-delayed raises to current employees (a 3 percent lump sum payout immediately, and a 20 percent raise for police and fire over three years) and gives all classes of current employees the same benefits.
As well, all police and fire officers will have DROP eligibility with an 8.4 percent annual rate of return and a 3 percent COLA.
The deal, if approved without modification, will bring labor peace through 2027 — though it can be renegotiated by the city or the unions at 3, 6, 9, and 10 years marks in the agreement.
For new employees, however, the plan is historic — a defined contribution plan that vests three years after the new employee for police and fire is hired.
The total contribution: 35 percent, with the city ponying up 25 percent of that — with guarantees that survivors’ benefits and disability benefits would be the same for new hires as the current force of safety officers.
The Curry model, rooted in a deferred contribution approach that increases a re-amortized liability and spreads out costs to hit hardest when the sales tax extension money starts coming in after 2030, is intended to provide fixed costs and certainty for budgets.
