Julie Delegal: Pension politics squanders millions in Jax tax dollars

Jacksonville needs to get on top of police-and-fire pension reform, and failing to do it now amounts to playing politics with taxpayer money. And contrary to what a recent direct mail piece would have us believe, it’s not the mayor who’s playing fast and loose with our tax dollars.

Our past rates of payment on our pension’s unfunded liability, much like modest payments applied toward a maxed-out credit card, have resulted in higher overall costs, which we can’t afford. Basically, we’re talking about $1.7 billion – money we don’t have.

Legally, we can’t change benefits for current pensioners or for current employees who have already vested. The Times Union’s coverage criticizing retired employees for their “rich” pensions contributes nothing constructive to the conversation. Only future benefits can be altered.

State Rep. Janet Adkins relied on this questionable reporting to advocate for an investigation into pension fund practices. Then, two things happened: First, City Council President Clay Yarborough declared he would not put pension reform back on the agenda. Second, the PAC “Together for a Greater Jacksonville,” which is affiliated with mayoral candidate Lenny Curry, sent out a flier declaring Mayor Alvin Brown’s “pension disaster.” Adkins, Yarborough and Curry are all Republicans while the mayor is a Democrat.

On Wednesday, Mayor Brown filed another pension reform bill with the City Council. The earliest possible date for a final vote, after the bill moves through committee, would be February 24.

Clearly, it is not in the Republicans’ political interest to pass any pension reform before the mayoral election. The strategy is to obstruct Mayor Brown’s progress on pension reform and then blame him for its failure.

It’s a fiscally irresponsible move.

According to figures provided by the Mayor’s Office, in consultation with actuaries, the delay in passing pension reform will cost the city another $8.7 million over the next four months, when the May 19 runoff for our unitary elections will occur. Add the $8.7 million sum to $57 million, which is the amount that has been squandered by lack of action since October 2012, extrapolating from the mayor’s figures.

The mayor, the pension fund, and the City Council have come very close to striking a deal on future benefits. While the City Council amended and passed the mayor’s restructuring package in December 2014, the fund has sent back some minor tweaks. The relatively small sticking points are: ranges for cost of living allowances (COLAs), the interest-rate ranges for the DROP program (a special retirement program), and the length of the agreement. The pension fund wants a 10-year agreement. The city wants three years.

Statutes relating to collective bargaining allow the process to take place every three years. That’s when the employer-city comes to the negotiating table to hammer out any number of employment issues with collective bargaining representatives, i.e., the police and fire unions.

But here’s the tricky part: Pension plans are long-term instruments that must, in order to protect the integrity of their investments, contemplate strategies years into the future.

It doesn’t make sense to collectively bargain the nuts and bolts of a pension plan every three years. In fact, most municipalities that collectively bargain with their public safety unions in regular, three-year intervals don’t regularly address their pension plans.

The parties to negotiation in Jacksonville, the city-employer and its public safety employees, have traditionally handled collect-bargaining regarding pensions by deferring to a long-term “agreement” with the Police and Fire Pension Fund. The PFPF comprises officials appointed by the city and by police and fire employees.

Some City Council members have balked at approving a pension agreement whose life exceeds the three-year collective-bargaining cycle. The fund wants the city to forgo declaring an impasse on pension matters for 10 years, a request that’s likely not legally enforceable given the statutory three-year framework.

It’s conceivable that the Council could still sign off on the agreement, however, knowing that the fund can’t enforce the 10-year item. It’s like signing an agreement for no rain for the next 10 years – it means nothing, so why not go ahead with it? Restructuring for future employees would be accomplished, the COLA and DROP rates could be settled, and the city would still be able to call the parties to the table under the three-year statutory scheme. And once those future issues are decided, the Council can find a way to pay for the $1.7 billion that remains.

Here’s why the city should sign on now: Taxpayers are losing half a million dollars for each week that our elected representatives fail to act.

Julie Delegal, a University of Florida alumna, is a contributor for Folio Weekly, Jacksonville’s alternative weekly, and writes for the family business, Delegal Law Offices. She lives in Jacksonville. Column courtesy of Context Florida.

Julie Delegal


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