Jacksonville City Council hangs up its gloves on pension reform

The City Council that sits down Monday to take a final vote on Mayor Lenny Curry’s high-stakes pension reform plan is a kinder and gentler group than the skeptical, hands-on legislators who routinely put Curry’s predecessor through the wringer.

Council members have largely avoided going public with their concerns about Curry’s plans — preferring private meetings with his team — even as some of those same members routinely aired withering criticism of former Mayor Alvin Brown, who struggled with pension reform for years. Those members said there is a simple explanation for this discrepancy: Curry’s top administrators have earned their trust in a way Brown’s finance team never did.

But political observers and critics — including veterans of past pension reform discussions — said less noble reasons are also in play.

“People can make the claim that (Curry) is a CPA and has these great skills, but I think the more obvious one is partisanship,” said Michael Binder, a University of North Florida political science professor who conducts polling on local issues.

“When Alvin was putting this out, there was a lot of, ‘Well what ifs.’ There was a lot more specific focus on the dollar amounts,” Binder said. “That’s not here in this set of discussions.”

Brown, a Democrat, had to face a majority Republican council. The GOP still holds the edge on the council, and many of them supported Curry’s campaign to oust Brown from office.

Curry’s office did not respond to a request for an interview.

The mayor’s path to victory through the council has been remarkably smooth.

Despite its complexity, large cost and some unanswered questions, the labyrinth of bills that make up Curry’s reform package has moved through the council in less than a month, and with limited public criticism. In some cases, the administration still refuses to release some of its internal calculations around the mayor’s reform plans.

Curry’s reform plan would be the city’s largest ever financial transaction and cost taxpayers billions more than the status quo, while providing near-term financial relief. Issues that have lower financial and practical stakes sometimes face a more twisted and uncertain path than the mayor’s proposal has.

Even now, council members have spent months picking apart a proposed settlement to a housing discrimination lawsuit brought by the Department of Justice rooted in a neighborhood’s opposition against a housing complex for people with disabilities.

And council members have already spent about two months on their version of a popularity contest: Who will be the next council president.

A special council committee unanimously backed Curry’s plan Thursday. The full council is expected to OK the legislation Monday.

“Nobody is responding saying they need more time. I pushed it with the auditors,” said Council President Lori Boyer. “If every council member is of that mind and if the auditors are of that mind, then extending the time period is of no value if everyone feels like they’ve made their decision.”

PAST EFFORTS

The Times-Union successfully sued Brown’s administration after it emerged with a pension-reform plan in 2013 that was illegally negotiated with the city’s public-safety unions behind closed doors. The council rejected that first reform package, saying it did not go far enough in cutting benefits for current employees and in having a long-range plan for reducing the pension debt.

His administration subsequently opened the process up significantly on his second try at reform. He established a community task force that produced reams of records and brought in outside experts to help shape the contours of a 2015 reform law that was highly celebrated at the time. The law adopted a theme of shared sacrifice: Pain from taxpayers and employees would help solve the city’s pension problems.

Curry’s reform plan completely reverses that dynamic. He wants to restore older and more costly benefits to current police officers and firefighters, and — rather than accelerating the pay down of the city’s pension debt, as the 2015 law called for — he wants to defer the bulk of those payments far into the future. That will gain near-term financial relief for the city but increase the total cost of paying off the pension debt by $4.5 billion or more.

Curry’s plan to defer payment on the pension debt centers around a special half–cent sales tax that voters approved last summer.

The sales tax would not start until the Better Jacksonville Plan’s tax ends around 2030, and it would be dedicated solely to paying off the pension debt. The city would gain financial relief in the near term by shifting a big chunk of pension costs to the years after the new sales tax starts.

It’s not clear when the pension debt would be paid off.

Curry’s administration has said it believes the debt will be fully paid by 2051-53, but the financial projections it released to the council don’t show that. An actuary with the Police and Fire Pension Fund — which is the most financially troubled of the city’s three pension funds — shows its debt paid by 2058.

Council members have signed onto Curry’s plans, but there has been little public discussion about why reversing major tenants of the 2015 law would be wise. They also seem unbothered over the uncertainty about when the pension debt will be paid.

“This is not a golden egg. Nobody is saying this is solving every problem that Jacksonville has,” Boyer said. “It does not.”

“But it does provide a permanent, dedicated funding source that we had no other way to do … I think there’s tremendous value in having the dedicated source.”

Curry has defended his approach by arguing that the status quo — making yearly pension payments that are projected to reach $360 million next year — is not sustainable and would require drastic cuts or a tax increase, which he does not support. He said establishing the future sales tax as a dedicated funding source for pension debt ensures it will be paid.

His plan would also enroll future employees into 401(k)-style retirement accounts with city contributions that range as high as 25 percent of pay for police officers and firefighters. Although such accounts reduce risk to taxpayers, it’s not clear the annual cost in a normal year would be less than the pension benefits created for public-safety workers in the 2015 law.

‘HALF BAKED FINANCIAL PLANS’

Some council members have raised deeper concerns.

“Why are we giving away the house to buy a car?” Councilman Matt Schellenberg wrote in a series of text messages to a Curry administration official.

“This mayor wants to scrap $1.5 (billion) in savings from the 2015 plan at a cost of $4 (billion) just to save a few million each year in his term!!!…We need growth from city hall, not MORE debt, MORE expenses and nothing to show for it in return.”

Schellenberg said those were comments that residents had sent him, and he was passing them along to the administraion so they knew what was being discussed at the constituent level.

Schellenberg did not bring up those comments during public workshops. The Times-Union obtained his text messages through a public-records request.

When asked if he still had any concerns about the pension plan, Schellenberg replied: “As an elected official, I always have concerns. What I was shown, I hope is fulfilled.”

He added: “I think that in my opinion, my hard questions were all answered.”

Schellenberg, who was a constant thorn to Brown’s pension reform plan, said he expressed his concerns about Curry’s legislation in private because it isn’t his job to “embarrass” anyone. He said he afforded Curry that courtesy because he trusts him and his team more than the Brown administration.

“Council members had various issues that bothered them, but they’re willing to give this administration wide berth to see how it works,” Schellenberg said. “I think that’s so important, the trust factor. In two years, they’ve given us a great reason to trust them and that we’re all on the ship together.”

Boyer also said that trust is a major factor this time around.

“There is a greater sense that we have people on board whose financial responses we can rely upon,” she said. “There has been a really strong effort to build relationships with council members among the staff.”

OTHER EXPLANATIONS

Former Councilman Stephen Joost was a Republican who was one of the biggest advocates of Brown’s pension reform efforts. After watching his colleagues question every number and assumption baked into Brown’s ideas, he was bewildered to watch the same people “bend over backwards” to approve a new plan that costs more money and includes some of the same concepts members were gravely concerned about several years ago.

“If I told you what goes through my head, you wouldn’t be able to print it,” Joost said.

Jacksonville attorney Tad Delegal, who served on a pension reform task force in 2014, said the reams of information compiled by the task force is “night and day” compared to what City Council has in hand for its vote on Curry’s pension reform.

“I think there is such a level of pension fatigue that everyone wants it to be over with, and the mayor has promised this is the last time that we’ll ever have to deal with it,” Delegal said. “They’re trusting the mayor at his word, and they’ve seen enough to convince themselves this is financially acceptable.”

Joost said he believed many factors were behind the council’s stark change in attitude, including partisan politics, fatigue over pension reform and a higher trust in the Curry administration, which he said is “more competent” than the previous mayor.

He also said Brown lacked momentum going into his pension reform push during his final year in office. By then, Brown was facing a serious Republican contender in a mayoral race in Curry, and Joost said he had completely lost the trust of a council that already earned some major wins against him.

“He just allowed the council to criticize him ruthlessly,” Joost said. “And he never fought back. I don’t know why.”

Curry, who is fiercely competitive, seems to relish the perception that he does not brook dissent.

He has reacted harshly when critics have raised questions about his plans, calling them out-of-touch elites or “cronies.”

When Joost and Bill Bishop, also a former member of the City Council, raised concerns about Curry’s plans in local media last year, Curry’s political consultant issued a statement calling them “desperate to seem relevant.”

Earlier this month, Curry twice tweeted out a quote frequently attributed to actor Will Smith: “If you’re absent during my struggle, don’t expect to be present during my success.”

“You can muscle people around, especially when your coattails got them into office … but you can only push them so far,” Binder, the political science professor, said. “And what happens when that time expires? That’s the real issue.”