City Council unanimously approves 'historic' pension overhaul

Legislation closes current pension to new hires, defers debt payments

JACKSONVILLE, Fla. - The members of Jacksonville's City Council were all smiles on Monday afternoon after unanimously passing a package of bills to address what has been described as the biggest problem facing Jacksonville: reforming pension plans for existing city employees, moving new employees into a different retirement plan and changing how current pension debt is paid off.

The pension reform bills proposed by Mayor Lenny Curry close the existing pension plan to new police officers and firefighters, give employees substantial raises and defer the bulk of the repayment of the city's $2.8 billion debt until a half-cent sales tax begins in 2030. That tax, passed by the voters last year, will be dedicated to paying off the deficit.

After the vote, numerous council members praised Curry and his staff for finding a solution to a problem that was demanding a growing percentage of the city's budget.

"Thank you to our quarterback, Mayor Curry, and his team," Councilman Greg Anderson said. "He really had to orchestrate a lot of different parties to pull this together."

"Now the police officers will get what we promised them 10 years ago, 15 years ago, and I’m happy for that," Councilman Jim Love said. "Everybody will be able to enjoy having a police officer next door that’s retired and not broke -- so that’s a good thing."

“Is it perfect? No, it’s not perfect. I would prefer that the tax started today, but that’s not what the legislature give us,” said Councilman John Crescimbeni, who said he seen four proposals to fix the problem fail over the years.

After the voting, Curry thanked the council for its support and invited the members to join him Tuesday afternoon for a signing ceremony.

"This is history. We are out of the pension business," Curry said. "We did this together. I'm grateful. I know the taxpayers are grateful."

To encourage a favorable vote, the political-action committee that supported Curry's election paid for a six-figure television and social media campaign encourage citizens to encourage their council members to pass the ordinance.

Earlier this month, Curry presented City Council with 35 pages of details on what the plan will cost and how the city will fund 20 percent raises for police and firefighters over the next three years, a 25 percent 401(c)3 match for new employees and other promises made by the Curry during contract negotiations with unions.

Curry said that if the plan goes as expected, the pension deficit would be completely paid off around 2049-2051. But his presentation acknowledged that there are costs associated with the new pension plan, including $37 million to fund raises next year, $77 million the following year and $120 million in 2020.

Council Auditor's Office review presented last week found few issues with the numbers in Curry's proposal.

"The sales tax growth rate appears to be reasonable when you compare what happened with the Better Jacksonville tax plan," the auditor wrote. "The savings to the city next year will be offset by salary increases in the next three years."

Critics of Curry's plan have said reducing the bulk of the repayment of the pension debt 17 years until the sales tax kicks in will push the total amount due from just under $3 billion to nearly $6 million.

Councilman Danny Becton is planning to propose a bill that would require the city to apply any unused money from its budget to pay down the pension debt even faster.

"Just like paying off a charge card: If you make the minimum payments, it might take you forever to pay off that balance that you have," Becton said.

While Council has passed the changes and Curry will sign them, there is still a pending legal challenge to the August 2016 sales tax referendum before parts of the new rules can go into effect.
 

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