Back to the drawing board.....
QuoteBy Christopher Hong Wed, Mar 25, 2015 @ 11:35 pm | updated Thu, Mar 26, 2015 @ 12:42 am
A plan to reform the city's ailing pension fund was rejected in a tie vote by the Jacksonville City Council on Wednesday night, setting an uncertain path for Mayor Alvin Brown to accomplish one of the top goals of his first term before the May 19 runoff election.
The legislation, which would change pension benefits for new and current public safety employees, force the city to aggressively pay off its $1.62 billion pension debt and save the city an estimated $1.3 billion over the next 30 years, was championed by Brown as the best solution offered in the city's years-long quest to fix its pension fund.
However, council members voted 9-9 on the final bill — one vote short of a necessary majority — which didn't include any of the changes sought by some council members, like reducing the amount of time that must pass before the council could impose further changes to current police and firefighters' pension benefits or removing language from the agreement that affirms a long-disputed pension plan for the fund's senior employees and prevents others from joining it.
Council members Greg Anderson, Reginald Brown, Doyle Carter, Kimberly Daniels, Ray Holt, Warren Jones, Stephen Joost, Jim Love and Don Redman voted to approve the pension reform package worked out by Brown last summer.
Councilmembers Bill Bishop, Lori Boyer, Richard Clark, John Crescimbeni, Bill Gulliford, Denise Lee, Robin Lumb, Matt Schellenberg and Clay Yarborough voted to scuttle the proposal.
Moving forward, any pension reform agreement submitted to the council in the next year must differ substantially from the deal rejected Wednesday.
Chris Hand, the mayor's chief of staff, said Brown will continue to work toward pension reform. Hand lambasted the council members who voted against the legislation. "What the nine City Council members did was an insult to taxpayers and our brave public safety employees," he said. "The failure to achieve pension reform is on those nine City Council members."
Full article: http://jacksonville.com/news/metro/2015-03-25/story/jacksonville-city-council-rejects-pension-reform-package-tie-vote
Does anyone know if the basis under which the payback, ETC was based on was updated? I thought that was one of the big stumbling blocks to this - that the numbers were based on a bad foundation.
In big political terms, the vote is a bit strange....6 Republicans voted for the plan (w/ 3 Dems)....but more importantly, 2 Democrats voted against the plan (w/ 7 R's).
If Mayor Brown wants to win re-election, he needs to get all Democrats back under one big tent!
Just like at the federal level, unfunded liabilities promised in the past threaten to eclipse everything else in the budget in the future without reform. Very very hard choices have to be made.
QuoteJudge strikes down 30-year agreement between city and Jacksonville Police and Fire Pension Fund
By David Bauerlein Thu, Mar 26, 2015 @ 12:35 pm | updated Thu, Mar 26, 2015 @ 5:15 pm
A circuit court judge ruled an existing 30-year agreement between the city and the Jacksonville Police and Fire Pension Fund is invalid because it was negotiated in private meetings.
http://jacksonville.com/news/metro/2015-03-26/story/judge-strikes-down-30-year-agreement-between-city-and-jacksonville#.VRQ1540YlpE.twitter
Quote from: tufsu1 on March 26, 2015, 08:32:29 AM
In big political terms, the vote is a bit strange....6 Republicans voted for the plan (w/ 3 Dems)....but more importantly, 2 Democrats voted against the plan (w/ 7 R's).
If Mayor Brown wants to win re-election, he needs to get all Democrats back under one big tent!
This is the kind of thinking that makes me want to pull my hair out.
Who really gives a rat's ass what politikal side you're with if a proposal doesn't make sense?
I'm not disputing whether the reform plan is good or whether it's bad, but the side of the aisle you sit on shouldn't matter.
Quote from: sheclown on March 26, 2015, 05:24:36 PM
QuoteJudge strikes down 30-year agreement between city and Jacksonville Police and Fire Pension Fund
By David Bauerlein Thu, Mar 26, 2015 @ 12:35 pm | updated Thu, Mar 26, 2015 @ 5:15 pm
A circuit court judge ruled an existing 30-year agreement between the city and the Jacksonville Police and Fire Pension Fund is invalid because it was negotiated in private meetings.
http://jacksonville.com/news/metro/2015-03-26/story/judge-strikes-down-30-year-agreement-between-city-and-jacksonville#.VRQ1540YlpE.twitter
Yep, that does seem to open up some interesting possibilities. In fact, I am now even more grateful for the thoughtful votes of folks like Bishop, Boyer and the others who voted no on Tuesday. Wonder what Boyer and company can find to help us out with this new info?
I haven't dug into the details of the city's pension problems, so I may be way off base thinking about where the problems are, but after reading this article (http://www.ibtimes.com/cities-states-paying-massive-secret-fees-wall-street-report-1887034) over the weekend about massive fees being paid out the people being asked to invest our money, I'm wondering how much of that plays into the problem the city has with its pension fund.
It reminded me of another article I read last month about changes made to the pension system in Pennsylvania's Montgomery County that were suggested as a solution to the state's pension issues:
QuoteFollow the Montco model on pension reform and save billions
Pennsylvania has a pension problem and there has been little action to address the nearly $50 billion shortfall that threatens to undermine key investments in our future like education. The good news is that responsible leaders of both parties, including Gov. Wolf and some in the legislature, have stepped up and said they want to fix the mess.
In Montgomery County, we've proven that you can reform a pension system, generate millions in savings, and not unfairly target workers or taxpayers. If the commonwealth follows our lead, the savings will be in the billions.
Here's how we did it:
In 2013, after a thorough review of the performance of Montgomery County's half-billion-dollar pension fund and discussions with experts, our county pension board, which I chair, voted to move 90 percent of our pension-fund assets to a "passive" portfolio offered by Vanguard, a Valley Forge-based, investor-owned firm with hundreds of employees in our county.
Passive investing focuses on establishing a diversified portfolio aimed at achieving a return that reflects the total market. It attempts to mimic the market, rather than take speculative risks to beat it. Few other funds nationwide have shown a willingness to abandon the more traditional approach to investing, which features expensive money managers.
The results in Montgomery County have been very positive for the retirees who depend on the fund for their retirement and the taxpayers who help pay for it. Our decision has reduced the fund's management-fee expenses by more than two-thirds, a savings of more than $1.3 million annually. This gives us an advantage before market performance is even considered.
Read more at http://www.philly.com/philly/opinion/inquirer/20150301_Follow_the_Montco_model_on_pension_reform_and_save_billions.html
While there's certainly an argument to be had on the value of high-fee (private equities, hedge funds) investing, the idea that lower fees is an actual solution is laughable. In the case of the widely shared NYT article citing $2.5 billion in fees for the NYCERS over 10 years, Bloomberg (http://www.bloombergview.com/articles/2015-04-09/new-york-discovers-wall-street-charges-fees) calculated that to be 0.20% per year, for an ACTIVE portfolio. That is a bargain when compared to normal fees for active investing and well within line of how much other OECD countries spend on fund management. The NYT article makes sense when you realize that the comptroller is running for re-election.
In the Montgomery County case cited above, doesn't take rocket science to see that $1.3 million in annual savings is a difference of only 0.002% per year, hardly enough to make or break a system. The reason why funds have gone into more exotic vehicles with higher fees is that they would otherwise not have sufficient returns from traditional safe, low-cost investments to support themselves. High fees didn't create the problems, and low ones won't solve it.
Appreciate the insight. The $1.3 million in savings in Montgomery County seemed like it would barely be a drop in the bucket here, but I wasn't sure how the size of their pensions compared to Jacksonville's. While every little bit helps, it's clear that no one thing is going to solve this problem here. It's like believing we can solve the nation's fiscal issues by attacking foreign aid. :) Hopefully the people trying to solve our pension problems get that...
Interesting press conference for the first business day of 2016:
QuoteMayor Lenny Curry on Monday will unveil his long-awaited plan to pay off Jacksonville's massive pension debt, which could free up as much as $100 million each year for priorities like roads, parks and public safety that have suffered beneath the weight of the city's billions in retirement costs.
Curry plans to give a brief presentation and answer questions during a Jacksonville City Council committee meeting, the first time he'll publicly discuss details of his plan since he was elected.
The stakes are high for Jacksonville, which has long struggled with yearly cash crunches inflicted by the pension debt and the economic recession.
The specifics of Curry's plan aren't clear, but his chief of staff said it could broadly resemble a proposal his chief financial officer, Mike Weinstein, floated in 2014, prior to Curry's election.
http://jacksonville.com/news/metro/2015-12-31/story/mayor-lenny-curry-monday-unveil-plan-pay-jacksonvilles-crippling-pension
The article quotes Crescimbeni stating, "I would describe this plan as extremely bold and visionary." Crescimbeni is usually a guy who I think "gets it", even though I don't always agree with him.
^Would this make 2014-769 go away?
67 counties in the state of Florida
Visit- Entitlement County
Come back when you can make sense, Noone.
This is good news. Glad they're making a real crack at it.
Quote from: Noone on January 01, 2016, 07:00:38 AM
^Would this make 2014-769 go away?
67 counties in the state of Florida
Visit- Entitlement County
actually I understand this...and it is a good question'
Sales tax referendums are currently restricted to capital improvements. I am ok if the Legislature gives more flexibility for local sales taxes, but it would still need to go to the people. I would be VERY concerned if Better Jax. funds were diverted for pension payments, and I am very skeptical that a majority of voters in Duval County will say yes to additional taxes to pay down the pension debt.
^Thank you.
So Jax is going it alone and not participating in the state retirement plan? The state of Florida has had one of the best state run retirement plans going back decades.
http://www.flaflcio.org/sites/default/files/Florida%20Retirement%20Security%20Primer.pdf (http://www.flaflcio.org/sites/default/files/Florida%20Retirement%20Security%20Primer.pdf)
http://www.myfrs.com/pdf/forms/frs_ip_spd.pdf (http://www.myfrs.com/pdf/forms/frs_ip_spd.pdf)