Gulliford wants voters to decide on half-cent sales-tax to pay down pension

[Chris Hand]

What progress/initiatives/proposals do we have to fix the actual problem?  It seems we're tackling this issue by trying to figure out which bucket to use to collect the water from a leak in the roof rather than ripping up shingles to figure out why it's leaking in the first place.

Everything else discussed at this point doesn't fix the leak. Ultimately, we'll need to change our sprawling growth pattern. It would be interesting to compare the number of employees and pension costs in Jax verses a more compact city of similar size.

Lakelander, what does fix the leak is the pending agreement between the COJ and the Police and Fire Pension Fund (PFPF). It will be up before City Council committees next week as proposed ordinance 2015-54. The City's actuary found that the latest version of the agreement (as revised by the Police and Fire Pension Fund Board of Trustees at their January 2015 meeting) would lower City pension costs by nearly $1.7 Billion (yes, with a b) over the next 30 years. It would create a financially sustainable yet competitive benefit package for public safety employees that reduces financial risk to the COJ. It would implement important governance reforms to promote accountability and transparency at the Police and Fire Pension Fund and return the negotiation of pension benefits to collective bargaining. And it would commit both the COJ and the PFPF to restoring the latter to a healthier funded status more quickly. 

[Chris Hand]

If I'm not mistaken, this hit a fever pitch around FY11/12/13 did it not?  There were task forces, meetings, commissions,etc.. to try and get to the root of the issue. 

Were ANY of the proposals then implemented?

I guess this is where I stand on the issue:  Now that we're entering yet another election cycle, the PFRPF (sic) is getting brought back to the front of discussions, but has there been any movement, positive or negative, at all or are we pretty much exactly where we were this time last election (resolution-wise, not $$$-wise) on the issue? 

Short answer is there has been no real or meaningful progress on the pension issue in spite of some hopeful soundbites from the mayors office and we will likely see non before the election.
Actually, this issue hit a fevered pitch during Peyton's second term in office where he effectively put himself at odds with the JSO and JFRD who had helped put him in office.  He failed to resolve it and the hot issue was carried forward into the next election cycle.  Three and a half years later, under Brown the issue is still unresolved.

Cheshire Cat (Diane), with all due respect, that statement about "no real or meaningful progress" simply isn't the case. Thanks to a lot of hard work from Mayor Brown and our administration, City Council, the Police and Fire Pension Fund, public safety employees, the 17 members of the Jacksonville Retirement Reform Task Force, the Pew Charitable Trusts which supported the Task Force, and a variety of other community leaders such as the Jacksonville Civic Council, the COJ is closer than ever before to a comprehensive pension reform solution. in December, the Jacksonville City Council for the first time enacted pension reform legislation. The Police and Fire Pension Fund accepted most of the Council amendments and made a relatively small number of revisions to the tentative agreement between the COJ and PFPF. On a very complex financial and operational issue, we're down to a very few issues. That is huge progress.

If you will email me at chand@coj.net, I would be more than happy to send you our latest Power Point presentation showing you just how far Jacksonville has come on this issue in the last 2.5 years. Jacksonville could soon be one of the leading examples of a community that has addressed the single biggest financial challenge facing many cities, counties, and states across the nation: the cost of public pensions.

[Chris Hand]

Sounds like the real problem is the COST of the pension. Has there been any talks about eliminating it for new hires and offering a 401k? It's not like crime is down and we don't have red light cameras, why the sense of entitlement?
I am thankful for our police, but it seems like the market says this spending is unsustainable.

This.  My thoughts exactly.  It's a two part problem.  This 1/2 cent tax increase only addresses paying for it, and not fixing it.

Can someone explain to me like I'm 5 about why pensions are still needed in this day and age?  Why can't public employees have a 401k, with vested match, like everyone else?  Heck, since most new employees would be young, get them going on a Roth 401k. 

I'm probably voting no unless there's a clear plan to fix the pension, not continuing to kick a growing can down the road.

Southsider, we do have a clear plan to fix it -- namely, the pending agreement between the COJ and the Police and Fire Pension Fund (PFPF). It will be up before City Council committees next week as proposed ordinance 2015-54. The City's actuary found that the latest version of the agreement (as revised by the Police and Fire Pension Fund Board of Trustees at their January 2015 meeting) would lower City pension costs by nearly $1.7 Billion (yes, with a b) over the next 30 years. It would create a financially sustainable yet competitive benefit package for public safety employees that reduces financial risk to the COJ. It would implement important governance reforms to promote accountability and transparency at the Police and Fire Pension Fund and return the negotiation of pension benefits to collective bargaining. And it would commit both the COJ and the PFPF to restoring the latter to a healthier funded status more quickly. Feel free to email me at chand@coj.net and I can share more information.

[Chris Hand]

I'm not sold on the JEA solution - I think it reduces (eliminates?) their current contribution to the General Fund, which puts more strain on already strained services.

Charles, if you can email me at chand@coj.net, I can send you the white paper on the plan formulated by former City Council President Matt Carlucci and long-time business leader Charlie Appleby to partner the City of Jacksonville and JEA. It makes a lot of sense as a way to help the City of Jacksonville address its biggest financial priority -- pension funding -- while helping JEA with some of its financial and administrative priorities. JEA has stated that the plan will not impact utility rates. For the City, it will help us meet our entire additional financial obligation under the pension reform agreement up front. Moreover, this is a plan that can be passed with the approval of the JEA and the City Council. No voter referendum would be required.

As to the JEA contribution over time, please remember three things. First, JEA's rating agencies have made a big deal about the size of JEA's annual contribution to the City, which is a viewed as high compared to other public utilities. Second, under the current COJ-JEA agreement, the annual JEA contribution will drop from approximately $111 Million now (Fiscal Year 2015) year to approximately $82 Million in Fiscal Year 2017 if the City and JEA cannot reach a new agreement. The Carlucci/Appleby plan provides a much more gradual path to stabilize the JEA annual contribution.  Third, the relatively small reductions in the annual JEA contribution under the Carlucci/Appleby plan pale in comparison to the massive increases we will see in our annual police and fire pension contribution if nothing is done to address that challenge. 

[Charles Hunter]

Chris, first, welcome to MetroJacksonville.
It would be more efficient to email the PowerPoint and the White Paper to MetroJacksonville
metrojacksonville@metrojacksonville.com

or to the thelakelander through MetroJacksonville.  I would just send them what you sent me. 

[thelakelander]

Yes. Send me a copy of the presentation and I'll post it on the front page of Metro Jacksonville.

[Non-RedNeck Westsider]

... Jacksonville could soon be one of the leading examples of a community that has addressed the single biggest financial challenge facing many cities, counties, and states across the nation: the cost of public pensions.

Mr. Hand, thank you for responding directly through MetroJax, but you can still paint me firmly in the 'when I see it, I'll believe it' camp.

Frankly speaking, your office has already been a shining example of how a city can address financially challenging decision that many other cities, counties and states face: A self-adjusting method on the assessing and distributing of funds generated from development that rewards smart, long-term financial sustainable projects while discouraging sprawling, long-term financially burdonsome tendencies.

You office followed that wonderful example up by dismissing the main architect of the plan and then allowing our City Council to put it on indefinite hold in the interest of making reelection a lot easier by ensuring campaign donations from developers the public.

So forgive me if I take a 'wait and see' approach.

[vicupstate]

Mr. Hand, thank you for your informative input.

Can you explain why this is true:

Second, under the current COJ-JEA agreement, the annual JEA contribution will drop from approximately $111 Million now (Fiscal Year 2015) year to approximately $82 Million in Fiscal Year 2017 if the City and JEA cannot reach a new agreement.

Why is the JEA reducing it's contributions to begin with?

[vicupstate]

From what I've been told (by a few folks on the pension board), the COJ diverted pension funds into other projects without reimbursing the fund back in the 90s.

This was my understanding as well. Does anyone know how much the pension was 'shorted' during this period? Concurrent with this diversion were annual cumulative property tax cuts.  It would seem to me that the tax cuts were at least partially 'paid for' with money that could and should have gone to the pension. Since it was the property taxpayers that got the 'holiday', they should be the first to pay the deficit now.  Of course, the loss of time for those funds (had they been paid in the first place) to compound is gone forever. I would expect that to be a big source of how this problem has ballooned so fast.     

[edjax]

^^ what difference does it make now? So we can point fingers? It is what it is now so we just need to deal with it.

[edjax]

Mr. Hand, thank you for your informative input.

Can you explain why this is true:

Second, under the current COJ-JEA agreement, the annual JEA contribution will drop from approximately $111 Million now (Fiscal Year 2015) year to approximately $82 Million in Fiscal Year 2017 if the City and JEA cannot reach a new agreement.

Why is the JEA reducing it's contributions to begin with?

Because I believe their contribution would revert back to a percent of revenue instead of the set amount they are required to make under the current agreement.

[strider]

Maybe I missed it, but do we know that a 1/2 % sale tax bump will actually take care of the pension issue?  How long would it be needed for?  If it "catches things up", can it be diverted for other capital improvements?  Can part of it be diverted for capital improvements?  What are the unintended consequences of a sales tax increase?  Do overall proceeds drop from being the highest sale tax rate in the state and if so, does that drop wipe out the increased revenue from the 1/2% and so moves the financial issue somewhere else rather than solving it?

It seems to me that we are in this pension mess because we (as a city) robbed Peter to pay Paul and it would be nice to know we are not doing the same thing today, regardless if it is a sales tax increase or something else.

Mr Hand, thanks for responding. However, I would like to point out that for the most part, this current Mayoral administration has not been one that comes across like it likes the sunshine and prefers those dark back rooms to do it's real business.  So many of us find ourselves wondering what is really up every time something like the JEA plan is proposed.

[edjax]

Maybe I missed it, but do we know that a 1/2 % sale tax bump will actually take care of the pension issue?  How long would it be needed for?  If it "catches things up", can it be diverted for other capital improvements?  Can part of it be diverted for capital improvements?  What are the unintended consequences of a sales tax increase?  Do overall proceeds drop from being the highest sale tax rate in the state and if so, does that drop wipe out the increased revenue from the 1/2% and so moves the financial issue somewhere else rather than solving it?

It seems to me that we are in this pension mess because we (as a city) robbed Peter to pay Paul and it would be nice to know we are not doing the same thing today, regardless if it is a sales tax increase or something else.

Mr Hand, thanks for responding. However, I would like to point out that for the most part, this current Mayoral administration has not been one that comes across like it likes the sunshine and prefers those dark back rooms to do it's real business.  So many of us find ourselves wondering what is really up every time something like the JEA plan is proposed.

Per the T-u it would be for 10 years and expected to generate 60 million annually.

[Chris Hand]

Maybe I missed it, but do we know that a 1/2 % sale tax bump will actually take care of the pension issue?  How long would it be needed for?  If it "catches things up", can it be diverted for other capital improvements?  Can part of it be diverted for capital improvements?  What are the unintended consequences of a sales tax increase?  Do overall proceeds drop from being the highest sale tax rate in the state and if so, does that drop wipe out the increased revenue from the 1/2% and so moves the financial issue somewhere else rather than solving it?

It seems to me that we are in this pension mess because we (as a city) robbed Peter to pay Paul and it would be nice to know we are not doing the same thing today, regardless if it is a sales tax increase or something else.

Mr Hand, thanks for responding. However, I would like to point out that for the most part, this current Mayoral administration has not been one that comes across like it likes the sunshine and prefers those dark back rooms to do it's real business.  So many of us find ourselves wondering what is really up every time something like the JEA plan is proposed.

Strider, respectfully, this administration has made important improvements in local government transparency. Here's information about some of the work we have done through our Office of Public Accountability to give citizens better access to the City of Jacksonville.  http://www.coj.net/welcome/featured-news/city-website-scores-highest-in-state-for-governmen.aspx

Additionally, this JEA plan is not the Administration's plan. The Mayor has endorsed it, but the credit belongs to former City Council President Charlie Appleby, business leader and former JEA Board member Charlie Appleby, and more recently Retirement Reform Task Force Chair Bill Scheu.

[Chris Hand]

Mr. Hand, thank you for your informative input.

Can you explain why this is true:

Second, under the current COJ-JEA agreement, the annual JEA contribution will drop from approximately $111 Million now (Fiscal Year 2015) year to approximately $82 Million in Fiscal Year 2017 if the City and JEA cannot reach a new agreement.

Why is the JEA reducing it's contributions to begin with?

Because I believe their contribution would revert back to a percent of revenue instead of the set amount they are required to make under the current agreement.

EdJax is correct, and JEA Paul McElroy said as much at Tuesday's special committee meeting on the JEA Agreement. Under the COJ Charter, our current contribution agreement with JEA ends on September 30, 2016. If a new agreement is not in place by then, the contribution will revert to the millage/revenue formula set forth in the Charter. That formula would produce an annual contribution of approximately $82 million.