Mayor comments on pension proposal
"It's the number one financial issue the city has to deal with..."
JACKSONVILLE, Fla. – Mayor Brown stopped by The Morning Show Thursday for a live interview about the job fair he's hosting, and also spoke with us about the pension reform legislation that was introduced.
"We introduced legislation this past Tuesday and we're going to work with City Council to make sure we get comprehensive retirement reform solved once and for all. I think it's very important," said Brown.
A bill that spells out details of a years-long fight on how to catch up on $1.7 billion hole in the Jacksonville Police and Fire Pension Fund was introduced to City Council on Tuesday night.
The latest agreement is spelled out in a 57-page bill, 2014-386, which incorporates all of the changes and agreements Mayor Alvin Brown and Pension Fund executive director Keane came to during more than two months of talks that were moderated by former state Sen. Rod Smith.
"It's the number one financial issue the city has to deal with. As mayor, I'm going to continue to provide the leadership to really solve the issue. I think working with City Council and all the stakeholders, we'll get it done. I'm optimistic because we've come a long way, we're working with stakeholders. I want to be fair, to the public safety employees and fair to hard-working taxpayers. We have to take this approach. It's good for the city and it's a win-win for everyone," said Brown.
The pension fund also agreed to contribute about $61 million to the city when the deal is agreed upon and another $8 million for the next seven years, all of which will benefit paying down the plan's $1.7 billion unfunded liability.
"This retirement reform will allow us to have $40 million up front so we already have $40 million for the first year and $20 million for the second year. So we have about a year and a half already on the table," said Brown. "This gives us time to work with all the stakeholders, City Council President, the auditors, JEA, and our finance team to really look at the options."
The city agreed to contribute an additional $40 million above normal payments toward the liability until its 80 percent funded of when the financial aspects of the deal end in 2024, whichever is sooner.
The agreement also increases the contribution of current and future employees contributing more, a shortening of the agreement from 30 to 20 years and an increase in transparency and accountability in the fund.
A dedicated funding source is still not identified for the city's $40 million. A retirement task force meeting early this year recommended a property tax increase that could be replaced by voter-approved sales tax. The mayor's office has repeatedly resisted any tax increase.
"I don't think we have to raise taxes. We really don't have to put the burden on so many people. When you rally think about it, Jacksonville still has some challenges. The economy is going in the right direction. When I came in, the unemployment rate was 11% and now it's 6%," said Brown.
Several council members have expressed concern over aspect of the deal, including a guaranteed 3 percent cost-of-living increase for each year of agreement.
While the legislation will be introduced Tuesday, it will likely take a month or more for committees to review the bill and send it to the full council for a vote.
"At the end of the day, it's about quality of life. I want Jacksonville to become a destination. I want more people moving to Jacksonville, working in Jacksonville and we have to position the city to create jobs to foster that environment for economic growth and development," said Brown.
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