Mayor Curry files Jacksonville pension reform legislation

March 28--After winning support from state lawmakers a year ago, Duval County voters in August and unions this month, Mayor Lenny Curry's campaign for pension reform officially moved Tuesday into its final phase when he filed legislation with City Council.

City Council expects to start deliberations next week with an April 6 workshop devoted to the ins and outs of Curry's proposal, which would reduce the city's pension costs by tens of millions of dollars per year by shifting a big chunk of its $2.85 billion pension debt into the future.

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Approval by City Council of the "implementing legislation" would allow the city to use a half-cent sales tax for pension costs that voters overwhelmingly approved in August. The council's support also would close all three of the city's pension plans -- police and firefighters, general employees, and corrections officers -- to new hires after Sept. 30 by placing them instead in 401(k) style accounts.

The sales tax for pension costs wouldn't start until the existing sales tax for the Better Jacksonville Plan expires around 2031. But the city would gain financial relief sooner by transferring a large portion of the pension debt to the period after the sales tax begins. The trade-off of gaining financial relief in the coming years is that the longer it takes to pay off the debt, the more it will cost in the long run, just as a credit card or a home mortgage costs more if the paydown period is extended.

The legislation filed Tuesday does not have any financial analysis attached to it. The number-crunching will come into play later when City Council begins its review.

To gain financial relief before the sales tax starts, Curry's proposal asks City Council to approve a novel approach that projects how much money the city will collect from the half-cent sales tax after it starts in 2031 and then coverts the amount into a present-day value that counts on paper as financial assets for the pension plans. Counting future tax revenue as a current asset would show for accounting purposes that the pension plans are better funded, which in turn will reduce the annual contributions paid by the city.

Curry has said in the past that he was considering that option. The details of the legislation filed Tuesday marked the first time he has publicly put his support behind that option, which the Legislature gave to the city when lawmakers authorized the sales tax for pension costs.

In addition, the state would let the city stretch out its paydown of pension debt over a longer period of time, which also would reduce costs in the short run.

For example, the contribution to the General Employees Retirement Plan is about $95 million this year and slated to be around $108 million next year, according to reports from Segal Consulting, an actuarial firm hired by the city. But if the City Council approves the pension legislation, the contribution next year would be about $70 million.

For the Corrections Officers Retirement Plan, this year's cost is $19 million this year and would be almost $21 million next year. But if the council passes the legislation, the contribution amount would be $14 million.

The annual contribution amount for the Police and Fire Pension Fund, which is the heaviest toll on city finances, also would drop. The Police and Fire Pension Fund has not given a report yet on what the difference would be.

Curry also sent over a raft of bills for recently completed union negotiations. Those collective bargaining pacts would boost salaries for current employees and bump up the amount they contribute for their pension, increasing it to 10 percent of pay from the current 8 percent rate. The collective bargaining talks also would close the pension plans to all future city hires after Sept. 30 by putting them all into 401(k) style accounts.

For future police and firefighters, the city's contribution to the investment accounts would equal 25 percent of the employee's salary, and the employee would make a 10 percent match. For general employees, the city's contribution would be 12 percent of pay and the employee would chip in an amount equal to 8 percent of his or her salary for the retirement accounts.

David Bauerlein: (904) 359-4581

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