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Author Topic: Civic Council does not want Mayors Pension Plan approved  (Read 1605 times)

Cheshire Cat

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Civic Council does not want Mayors Pension Plan approved
« on: June 20, 2013, 10:42:29 AM »
The Civic Council, a private group of 59 individuals who have proved to be very influential in Jacksonville politics and development says the mayors pension plan comes up short.  They do not want it approved.  This group is just one agency that is asking questions.  The TU is suing the city over alleged "Sunshine Law" violations regarding the pension deal and even the City Ethics Office has contacted the GC's office with their concerns.

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But in our considered view, the proposed plan has four primary shortcomings.

First, plan assumptions, which are markedly more conservative than the current plan, still present too much risk for the City. This is particularly true of the assumed rate of return of 7.25%. While this is well within the range of other public pension plans, it still presents more risk than is prudent to the City. We don't think comparing to other public pension plans is an especially good barometer; most suffer from the same kinds of problems that Jacksonville faces and Jacksonville is in worse condition than almost all other plans.

Second, the burden of changes is borne almost entirely by future employees. As a result, the savings are very much back-loaded and less certain. That isn't a fair or an adequate solution.

Third, the term of the agreement is 17 years. That is a very long duration. When considering the guarantees inherent in a defined benefit plan, it imposes too much risk on the City.

Fourth and most importantly, the plan doesn't go far enough. Absent reform, the City's pension contributions, over the next 30 years, discounted at 7.25%, have a present value of $2.5 billion. Nearly $1.5 billion of this amount represents existing liabilities for retired and vested benefits that already have been earned. The remaining balance of about $1 billion is the prospective pension costs that can be addressed through pension reform. The Mayor's plan impressively reduces these expected costs by about 65% but because these reforms primarily affect new employees, the present value of the plan savings is only about $350 million. The length of this agreement (17 years) makes it especially important to fully solve the problem. This plan doesn't get there. We need to do more.
  For full story:http://www.jaxdailyrecord.com/showstory.php?Story_id=539803
« Last Edit: June 20, 2013, 10:48:21 AM by Cheshire Cat »
Diane Melendez

Tacachale

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Re: Civic Council does not want Mayors Pension Plan approved
« Reply #1 on: June 20, 2013, 12:02:08 PM »
I wish there was more information about the mayor's plan available.
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Cheshire Cat

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Re: Civic Council does not want Mayors Pension Plan approved
« Reply #2 on: June 20, 2013, 12:27:26 PM »
I wish there was more information about the mayor's plan available.
This is true and troubling when we understand the huge impact this issue has on our city's budget now and in the future.  The secretive negotiations have many concerned even about the legality of them.  Interestingly, while the public has remained largely in the dark when it comes to the specifics of the plan, it appears as though the Civic Council as a private entity had no problem getting the specifics which resulted in their detailed critique of the plan and it's problems. We can glean some of what is proposed by reading the Daily Record Article posted above about that details the CC response but that still leaves the public to wonder about specifics.
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Re: Civic Council does not want Mayors Pension Plan approved
« Reply #3 on: June 20, 2013, 12:31:14 PM »
In addition... the mayor is holding libraries hostage to get his secret deal passed...  :o
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Cheshire Cat

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Re: Civic Council does not want Mayors Pension Plan approved
« Reply #4 on: June 20, 2013, 12:37:23 PM »
In addition... the mayor is holding libraries hostage to get his secret deal passed...  :o
Which of course is intended to impact what happens to his current budget.  Here is a hint for everyone, even if the secret deal were passed, we will still have serious budget issues needing to be tackled by a mayor and staff who do not seem up to the task.  Last go round they handed off a budget that the city council was left to tackle and repair.  What will the next one be like?  Already it is clear by what is in the proposed budget that much of what is being considered as income is in fact nothing more than predictions and speculation.  You can't make up the numbers as you go along when it comes to budget and expect anything to actually balance.  I wonder how many citizens eyes are being opened to the incompetence and dysfunction in the city under this Mayor not to mention the rifts between him, his administration and the council?  We currently do not have transparency in government nor a clear balance of power, but rather a mayor operating as if the city is his private "fiefdom"! 
« Last Edit: June 20, 2013, 12:43:36 PM by Cheshire Cat »
Diane Melendez

Cheshire Cat

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Re: Civic Council does not want Mayors Pension Plan approved
« Reply #5 on: June 20, 2013, 01:03:46 PM »
Then there is this:

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Mayor Alvin Brown recently announced a deal on pensions with the public safety unions. The deal appears to be geared toward the unions and not the taxpayers. It is preferable that the Jacksonville City Council directs the mayor and the unions to modify this deal or send it back to the judge for ruling using its own ideas.

The first problem with the pension deal is that the city will guarantee a return of 7.75 percent on the pension fund. This may be acceptable during certain years when the market does well; however, during other years, it can be a disaster.

Consider how such a guarantee might play out in the current 2012-'13 fiscal year:

The market has increased by 17.1 percent since the new fiscal year started Nov. 1, 2012. If a normal correction, a market decline of 10 percent or less in a short period of time, occurs, the fund is still in good enough shape that the city doesn't have to pay this year. If a major correction occurs, the city could end up paying in $90 to $100 million above its normal contributions.

Admittedly, a market gain of 73 percent over the last 10 years would almost meet the guarantee. However, there were years when the market fell by several thousand points. During similar time periods in the future, the city will be required to pay in millions of dollars
  For full story:  http://folioweekly.com/Pension-Deal-Helps-Unions-Not-Taxpayers,5543
Diane Melendez

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Re: Civic Council does not want Mayors Pension Plan approved
« Reply #6 on: June 20, 2013, 01:25:51 PM »
Then there is this:

Quote

Mayor Alvin Brown recently announced a deal on pensions with the public safety unions. The deal appears to be geared toward the unions and not the taxpayers. It is preferable that the Jacksonville City Council directs the mayor and the unions to modify this deal or send it back to the judge for ruling using its own ideas.

The first problem with the pension deal is that the city will guarantee a return of 7.75 percent on the pension fund. This may be acceptable during certain years when the market does well; however, during other years, it can be a disaster.

Consider how such a guarantee might play out in the current 2012-'13 fiscal year:

The market has increased by 17.1 percent since the new fiscal year started Nov. 1, 2012. If a normal correction, a market decline of 10 percent or less in a short period of time, occurs, the fund is still in good enough shape that the city doesn't have to pay this year. If a major correction occurs, the city could end up paying in $90 to $100 million above its normal contributions.

Admittedly, a market gain of 73 percent over the last 10 years would almost meet the guarantee. However, there were years when the market fell by several thousand points. During similar time periods in the future, the city will be required to pay in millions of dollars
  For full story:  http://folioweekly.com/Pension-Deal-Helps-Unions-Not-Taxpayers,5543

This is such balderdash.  The writer apparently wants to have the luxury of not paying for the pension that the City would otherwise have to fully fund during years that the Fund performs well, but then also have the option of not paying them anything when the market is down.

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Starbuck

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Re: Civic Council does not want Mayors Pension Plan approved
« Reply #7 on: June 20, 2013, 01:34:15 PM »
So how and why does the Civic Council have provided access to information that the rest of the public do rs not have?

Cheshire Cat

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Re: Civic Council does not want Mayors Pension Plan approved
« Reply #8 on: June 20, 2013, 01:52:50 PM »
So how and why does the Civic Council have provided access to information that the rest of the public do rs not have?

It appears as if the information was given to them by the Mayor's office for review some time ago.  I do not know exactly what private individuals are being told today should they ask for a copy the current pension agreement.  One way to find out is to call and ask for a copy.
« Last Edit: June 20, 2013, 07:30:11 PM by Cheshire Cat »
Diane Melendez

Cheshire Cat

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Re: Civic Council does not want Mayors Pension Plan approved
« Reply #9 on: June 21, 2013, 02:15:19 PM »
Oh my, this is getting good. Let's see we have Richard Clark claiming the mayor dissed the Civic Council and the mayors office says "that is unimaginable".  lol  This tidbit coming as a result of the Civic Councils non approval of the entirety of the mayors pension agreement.  I wonder will they be serving Coke or Pepsi with the popcorn during this show? 

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By Timothy J. Gibbons   

The Jacksonville Civic Council – a group whose members were highly influential in getting Alvin Brown elected mayor of Jacksonville – is pushing back against Brown’s pension modification proposal.

Meaningful reform, the group said, requires current employees to contribute more and taxes to be raised so the plan can be fully funded more quickly.

The urging that taxes be raised has set up a conflict between the Civic Council and Brown, who has categorically ruled out taking such a step. A statement released by Chief of Staff Chris Hand said that “when Mayor Brown submits his budget in July, the tax rate will be exactly the same as it was last year.”

The Civic Council has not yet discussed its opposition to Brown’s proposal directly with the mayor.

At 8:30 Thursday morning, three representatives from the Civic Council met with the city’s retirement reform team, who had been supplying the Civic Council with information as it did its six-week study.

Brown was not at that meeting. He was traveling Thursday to attend a U.S. Conference of Mayors gathering, Hand said, although it was unclear what time his flight left.

“He wasn’t available this morning,” Hand said. “He’s a busy guy. He obviously had some sort of conflict.”

At 8:45 a.m., Brown began a pre-scheduled meeting with Councilman Richard Clark, in Clark’s office, that the councilman described as “a 45-minute campaign speech.”

“He did belittle the Civic Council,” Clark said, saying Brown described them as an upper-crust group that left gated communities to be civic do-gooders.

“I was a little taken aback,” Clark said.


Read more at Jacksonville.com: http://jacksonville.com/news/metro/2013-06-20/story/civic-council-opposes-jacksonville-mayor-alvin-browns-pension-plan#ixzz2WsLIo9Qe
Diane Melendez

m74reeves

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Re: Civic Council does not want Mayors Pension Plan approved
« Reply #10 on: July 03, 2013, 09:48:42 AM »
SEE latest press release from mayor"s office:

MAYOR CREATES RETIREMENT REFORM TASK FORCE
Eleven-member Panel Will Review Pension Agreement

 
JACKSONVILLE, Fla., July 3, 2013 – Mayor Alvin Brown today announced the formation of the 11-member Jacksonville Retirement Reform Task Force, which will be led by attorney William Scheu of Jacksonville as chairman.
 
The Task Force is comprised of community leaders committed to Jacksonville’s future who will review the proposed public safety pension reform agreement, seek input from stakeholders and other interested citizens, and make recommendations on how the City should proceed.
 
“A fair, cost-effective retirement reform solution is crucial for our city’s future,” said Mayor Brown. “We remain very confident in our work, but want to do everything possible to answer any questions as we move toward a solution that benefits taxpayers and respects employees.”
 
Task Force members include: Council Finance Committee Chairman Greg Anderson, Chester Aikens, Charles Appleby, Kirsten Doolittle, Bob Miller, Kelli O’Leary, William Rupp, Robert Shircliff, Greg Smith and John Wilbanks. Brief biographies on the members are attached.
 
The Task Force will have its first meeting from 2 to 6 p.m. on Wednesday, July 10, at City Hall. Scheu said that the Task Force is expected to conclude its review and produce recommendations no later than August after studying the community’s options on an issue critical to Jacksonville’s future.
 
“This will be a thorough, though expedited, independent review that will consider the full range of issues involving pension reform,” Scheu said. “These panel members are longtime community leaders with a variety of experiences and perspectives.”
 
Scheu will participate in a conference call with news media at 10 a.m. on Wednesday, July 3. Please email ddecamp@coj.net for the call-in phone number and passcode.
 
Mayor Brown has proposed pension reform legislation (2013-366), which is currently being reviewed by the Jacksonville City Council. Information on the retirement reform proposal can be found online at coj.net/retirementreform. 
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mbwright

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Re: Civic Council does not want Mayors Pension Plan approved
« Reply #11 on: July 03, 2013, 10:11:20 AM »
if they call it retirement reform, do they think we won't know it's about the pension?

m74reeves

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Re: Civic Council does not want Mayors Pension Plan approved
« Reply #12 on: July 03, 2013, 10:38:39 AM »
^ ;)
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carpnter

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Re: Civic Council does not want Mayors Pension Plan approved
« Reply #13 on: July 03, 2013, 11:48:34 AM »
What is this, an attempt to legitimize the secret negotiations?   I saw that the city has asked the suit to be dismissed.  We need a serious challenger or challengers to Mayor Brown in the next election, the city deserves better than this. 

Cheshire Cat

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Re: Civic Council does not want Mayors Pension Plan approved
« Reply #14 on: July 03, 2013, 12:15:05 PM »
I find it interesting that this step was undertaken only "after" the Times Union failed to fold and back down from their lawsuit in response to the threats issued to them by attorneys representing the city and pension.  Now seeing that the strong arm approach failed, they want to change the way this administration does business.  Nice!
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