John Delaney: Pension Myths and the Future of Jacksonville

Michael Hallett

Former Jacksonville Mayor John Delaney spoke out last week about several issues facing the City of Jacksonville, including its longstanding pension crisis. Since discussing the debt crisis with him two years ago, I’ve not had a chance to follow-up. While a lot has changed in those two years, sadly, a lot has also not changed.  So at 4:00pm last Friday afternoon, I caught up with Jacksonville’s former mayor for an update. Delaney is very open-door and gracious to people around him, and he is also of course my boss here at the University of North Florida. That said, I determined all of the questions asked in the interview. Delaney answered every question and we explored issues including: the DROP program for public employees; the so-called “30 year agreement”; JEA as a solution to the Police and Fire pension crisis; the virtues of Defined Benefits plans for public safety employees, which he supports; “pension holidays”; Jacksonville’s millage rate;  governance of the Police and Fire Pension Fund Board; the role of the General Counsel’s Office; the myth of “$5 million dollar cops;” and more.  Delaney identifies 4 key “myths” about the pension crisis: that the City took “pension holidays”; that there is a “30 year agreement”; that “$5million cops” caused the pension crisis; and that there is such a thing as a “20 year” retiree. Listen to the full interview here (find parts 1-4).

Pension Holidays: “One Pot of Money”

A frequent refrain of Jacksonville public employees is that city government took irresponsible “holidays” from paying down its pension debt, resulting in “settlement agreements” that complicated the process of collective bargaining.  In other words, from the perspective of employees, as the city fell deeper into debt by way of making increasingly complex arrangements to cover its mounting pension debt, two things happened: first, routine bargaining for employee benefits (say every three years), got lumped into much higher-stakes game of negotiating full resolution of longer-term outstanding debt to the fund. As the cost of this outstanding debt came to dwarf the terms of short-term contracts, “collective bargaining” morphed into the production of “settlement agreements,” addressing  both long-term debt and routine collective bargaining. This helps explain the evolution of what has become a murky distinction between the City’s negotiations with the Union (FOP) versus its negotiations with the Pension Fund. Says Delaney: “The pension fund and the Union are alter egos–they’re one and the same. Now the Pension Fund would often say they don’t want to talk about benefits at the “bargaining table,” but you take a break and step out in the hall and they’d say this is what we’d like to see happen with the pension.” Along the way, PFPF leadership took over negotiation with a focus on the outstanding debt, while union officials were of course still concerned about collective bargaining.  In a series of modifications within the parameters of what became known as a “settlement agreement,” the City has repeatedly signed off on both short term benefits and long-term debt issues.

While Delaney doesn’t deny that the City owed money to the PFPF going back to the 1980s, by 2001 the Pension was fully funded–with the Police and Fire Pension Fund not only being thoroughly solvent, but also swimming in additional “Chapter Funds.” From Delaney’s perspective, these funds could and should be used to pay for benefits and offset other costs as well.  The City’s use of Chapter Funds to help pay debt and benefits is not “borrowing against the fund,” so much as enabling the City to use its rightful assembly of all assets to pay costs. While advocates for PFPF often present a multi-page document titled “Exhibit A,” which they offer as evidence of the “pension holidays,” Delaney calls the document inaccurate and incomplete.  Under Delaney’s tenure, and working cooperatively with John Keane, the City both increased benefits and managed costs. In that process, it became functional to work with John Keane and the PFPF rather than head of the FOP, since membership of the two groups is virtually identical. About the “evidence” for pension holidays:

Well, number one, I’ve never understood this chart. Number two, it doesn’t take into account all of the money that’s deposited into the funds. What we did do, during Ed’s years and my years, we had to put a substantial amount of payroll into the pension fund, because it was way out of whack from the 1980s. And so, by the year 2000, we finally had the pension funds funded. And so what we did do in ‘01, ‘02, and ‘03 is we didn’t use City general fund money to deposit into the pension fund, we had a deal with the pension fund where we used their reserve monies or “chapter monies” to go into the fund. And we did some swaps and some concessions–and the concessions never get talked about either–but there really was no pension holiday. It’s just a question of the sourcing of funds. …It really doesn’t matter the source of the money, if you get it off earnings, if you have a deal to use Chapter monies in exchange for something else, or if you use City general fund money, it doesn’t really matter. The question is, money was put into the fund in the years that some people are trying to say there was a holiday taken. It’s just not true. That statement is not true.”

“30 Year Agreement”

Delaney expressed frustration over the ongoing failure to resolve the pension crisis in a timely manner and rejects the notion of a “30 year contract.”  That was not a 30 year contract, Delaney says, but a simple ‘statement of intention’ inserted into the body of a longer document(Restated Agreement). If you read the signed agreement, paragraphs 31 and 32 specifically mandate a renegotiation in the event of “changing economic conditions.” And the Great Recession certainly comprised “changing economic conditions.” City Hall could negotiate and if necessary impose a new contract on employees, Delaney insists. When queried as to why he thinks this hasn’t happened, he states: “Well, that’s a great question.” Delaney believes threat of a lawsuit by PFPF against the City was overplayed and that the City can and should just impose lowered benefits if compromise cannot be reached:

JD: “What the Fund did was to say, ‘Well, we think that this paragraph that has the words ‘30 year’ is binding and we’re going to sue you.’ And the City has basically been frozen now for five years over that particular component.”

MH: “So the City got spooked by an agreement that it signed but failed to understand?”

JD:  “Correct.”

Oversight of Police & Fire Pension Fund

Despite concerns about the governance structure of the PFPF, Delaney has great respect for John Keane and believes he has done a good job managing the fund. He believes Keane has been unjustly attacked in the media.  At the same time, Delaney characterizes PFPF’s current governance structure as contrary to the interests of the City.  As Delaney explains, however, it was the Florida legislature that took the PFPF out of the direct control of City Hall, rendering it “too independent.” Given Tallahassee intransigence on the issue, it has been difficult for the City to govern the fund, both in terms of investments made and internal operations. While getting “some kind of reasonable leverage” over the Pension Fund at the Board level would be ideal, Delaney sees that as a “fight for another day.”  Right now, the City needs to shore up its debt to the PFPF and broaden its attention to other mounting crises as well.  In Delaney’s view, the City should still seek to gain more control over the governance and internal operations of the PFPF and he supports amending the structure of the Board, but doing so will require a public referendum.

DROP & Defined Benefits for Public Employees

Delaney sees the DROP program as good for the City.  While employees are enrolled in DROP, the City stops making pension contributions for enrolled employees during a 5 year period just prior to retirement. “So it basically saves 10% per employee in DROP. So DROP is a winner for the Administration, and employees like it because they walk with a lump sum five years later.”  During that five year period, the employee’s money is in an escrow account with an expected rate of return on pension fund investments (8.5% annually). That rate, in the context in which it was established when Delaney was mayor, was “really reasonable” given the much higher returns made by the City at the time. “Now what needed to change when the recession hit, was that that expected payout should have been reduced. Because it’s an unreasonable interest rate over the last five years.  Over a 50 year period, it’s completely reasonable.”  Delaney would not shift to 401k style pension plans for public employees, believing Defined Benefits are critical for retention of good employees and the market itself for public safety is dominated by such plans. Moreover, because employees are technically already drawing a pension while in DROP, the City saves on making pension payments for its senior-most employees five years before they stop working.

General Counsel’s Office

I queried former mayor Delaney about the arguably tautological status of Jacksonville’s General Counsel’s office in the pension process, serving as both the City’s own lawyer and simultaneously its de facto internal “Supreme Court.”  The General Counsel’s authority within the consolidated government enables it to both render binding legal opinions on City agencies and then to subsequently render its own opinions legal and binding when agencies appeal. Within the broad framework of Jacksonville’s consolidated government, however, the “independent” authorities, the co-executive elected sheriff, JTA, JEA, etc, often find themselves often feeling not so independent, living under the thumb of the General Counsel’s office. Delaney thinks that tension is just fine, preventing independent authorities from trying to sue the City. “Sometimes the General Counsel is viewed as the ‘mayor’s lawyer,’” Delaney says, “so these other entities sometimes feel like they’re not getting a fair shake.”  Delaney believes the system has “worked really well until the last few years,” but agrees there should be added input into the process of selecting the person who becomes General Counsel. He did not identify any mechanisms that might limit the authority of the General Counsel.

Should JEA Help Solve the City’s Pension Crisis?

After discussing some of the complexities and history of JEA and its role in the City budget, and noting that JEA also has its own pension liability as part of the General Employees Pension Plan, Delaney flat rejected a proposal for tapping JEA resources for solving the Police and Fire Pension Crisis. The proposed deal leveraging $120 million in the short term to save $300 million for JEA later, is simply not in the City’s best interest.  “In other words, to save $300 million for JEA, they only have to give us $120 million? I’d like part of that action myself.

State of Consolidated Government: “It Always Depends on Leadership”

Despite his frustration with the lengthy, mired, and unnecessarily belabored pension crisis, Delaney sees Jacksonville’s Consolidated government as basically sound.  Despite some internal contradictions regarding the “political science” of appointed vs. elected officials, Jacksonville has achieved amazing economies of scale and has been blessed with outstanding leaders “almost to a person.”  According to Delaney, however, the City must absolutely now get serious about its mounting debt.  This debt extends beyond its unfunded pension liabilities to include a growing fiscal crisis at UF Health Hospital (formerly known as “SHANDS Jacksonville”), the need to support what he sees as a “huge economic opportunity with the port, ” and an alarming increase in the prominence of basic crumbling infrastructure in the form of potholes and street collapses.

Conclusion: Headed for a Train Wreck

While to his credit Delaney wrested control of pension debt by 2001, he did so with the benefit of a growing economy that facilitated tax cuts while sustaining a good quality of life. He took a systematic look at an over-built employee base and cut the number of employees by one third while raising pay. Delaney is proud he was able to cut taxes 10% during his administration and deserves credit for building faith-enough in local government to win robust voter support for the Better Jacksonville Plan.  The JCCI Report on city debt, however, clearly demonstrates that underfunding of pensions has been a chronic problem for the consolidated government of Jacksonville since the 1970s.  While a high-energy mayor in good times can manage low taxes and high quality of life, conditions obviously change administration to administration.  Delaney wrested control of City pension debt through large-scale restructuring and achieving economies of scale in the context of good times. Good times, of course, come and go. Delaney earned the mantle of “tax cutter” through different means than any previous mayor–and did so in a way that preserved quality of life. Cutting taxes in a down economy–or worse–grandstanding with “no new tax” pledges, while the City bleeds from wounds not of its own making, is irresponsible. Moreover, for the past 12 years, the City has not paid its rightful amount into the PFPF, adequately maintained civic infrastructure, and lost focus on the future.  As Delaney argued recently, the City needs to raise taxes and those running for office must do their homework and define the appropriate millage rate.  At one point in the interview, Delaney agreed that Jacksonville’s widespread poverty should also inform deliberations about its millage rate.  Stated Delaney:  “Jesus said ‘the poor will always be with us.’ He didn’t say that means you can just ignore them.

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Stop the Madness: Will New Employees Really Show Up to Fund Jacksonville’s Pension Debt?

Michael Hallett

So here we are. 2015.  And Jacksonville is still belaboring a strategy for resolving its debt obligation to the Police and Fire Pension Fund.

I shouldn’t call it a strategy. Strategy implies a focused and time-limited plan of action for achieving a finite goal. The current discussion has been active since the summer of 2009, when former mayor John Peyton made a concerted effort to “Fix it Now” involving a counter-intuitive combination of a tax increase and potential cuts in services. Yes–that’s how bad it was in 2009.  While that plan surfaced with the same buoyancy of a lead brick, it’s been the most responsible plan we’ve seen so far (read and watch the embedded video).

A new proposal (not fully vetted in public yet hypocritically unmolested by the Times-Union) has emerged involving further leveraging debt with JEA, which has it’s own unfunded pension liability (also largely unexplored by the Times-Union), in hopes of securing a funding source for a $400 million resource gap to make mayor Alvin Brown’s version of pension reform viable without a tax increase. Ah, there’s the rub. Alvin Brown, a Democrat posing as a Tea Party conservative, has lacked the courage of Republican oil man John Peyton to say what needs to be said: the fundamental problem is Jacksonville’s absurdly low millage rate.  If 2009 seems a long time ago,  allow me to highlight the Executive Summary of the best synopsis yet of Jacksonville’s pension debt, the JCCI report Our Money, Our City:

“The first study in JCCI’s 35-year history was Local Government Finance, in 1977. The volunteers found Jacksonville’s financial position “to be basically sound, with the exception of the underfunding of its pension plans.” As a result of that study, the City Council took actions to address the solvency of the pension funds, legislative actions at the state level set standards for local government pension funds, and the City Council adopted a formula for the JEA’s annual contribution to the city. Fifteen years later, JCCI was asked to return to the same issue. The 1992 Long-Term Financial Health of the City of Jacksonville found many of the same problems of the prior study had returned, bringing new challenges along with them. Pension underfunding was a problem, and the City was engaging in short-sighted financial planning without forecasting models to adequately plan for future needs. ….Another fifteen years have come and gone, and JCCI has been asked to address City finances once again. This time, the problems were worse than before. On top of the underfunding of pensions and long-term effects of short-term financial planning were actions by state and federal governments that hurt local government budgets. Then came the trauma of a national economic crisis…”

Allow me to offer a three point plan: 1) Do the Math. 2) Get Real. 3) Raise the Millage.

Do the math. At the moment, PFPF leadership is assessing the likely impact of lower salaries for new hires in policing and fire on recruiting new employees.  Much of the projected savings achieved by Brown’s current proposal are taken from people not yet at the table: new employees.  Boy, that was easy.  But what if they don’t show up?  Not only are savings generated through cut-rate salaries for new employees too little to solve Jacksonville’s pension crisis, the plan is predicated entirely on hypothetical employees who have yet to apply.

Get real. The above plan could seriously backfire.  But what’s really going on?  Jacksonville’s political class, which fancies itself to be fiscally conservative because it has to be, lacks the courage to state the obvious: Duval has skated by for far too long on millage rates that cheated future generations and failed to adequately fund the civic infrastructure it supported with false promises. And it’s time to pay the piper.  Kudos to former mayor John Peyton for having the guts to say so (in his second term).

I could digress about the irony of COJ’s General Counsel’s Office signing, then declaring illegal, yet then again supporting the overall structure of pension oversight in Jacksonville, but that seems to be getting the attention it deserves. Embarking now into a series of“investigations” could well delay–and thereby again deny–pension reform.  STOP THE MADNESS.

Raise the Millage. As Mayor Peyton pointed out in 2009, the fiscally conservative move at this point is to raise the millage rate.  Just compare Peyton’s $50 million annual payout to float pension debt in 2009 to 2015’s $155 million. “Fix it Now” indeed. Even if Council does belatedly raise the millage, Jacksonville will still be well within the lower 25th percentile of millage rates in the state. And still have the largest rates of poverty and highest rates of violent crime committed with firearms. Hiring cops and firemen who are getting shot at for less money trust me is going to be a problem.  The root concern has been generations of political actors trying to survive in Jacksonville’s low-oxygen neoliberalism. Jacksonville’s pension crisis is no one’s “fault” per se–excepting multiple generations of leaders catering to the conceit of “lower taxes.”

But there’s much to love about Jacksonville.   Despite coping with some of the most regressive tax policies in the nation (some imposed by Tallahassee, some inflicted locally), organizations like the Jacksonville Children’s Commission and a top-flight assembly of local non-profits operate vital programs on shoestring budgets, share resources and innovate to make life survivable for the many thousands of impoverished citizens living here.  There are progressive undercurrents to the COJ that make it less Darwinian and backward than it might be otherwise.  Literally tens-of-thousands of impoverished children populate the Duval County Public School system.  While it has become popular of late to vilify those whom my church calls “the least of these”–as “takers”–the criminological evidence remains clear: poverty is real, has consequences, and is not simply caused by the laziness of the poor. So, from my perspective, Jacksonville is not a backwater–it is the frontier. A working-class city, where you can literally smell the coffee every day walking around–hey, I love Jacksonville.  But Jacksonville’s pension crisis dates not to 2009–it dates at least to 1977.  May the posturing stop. It’s past time to “Fix it Now.”


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Jacksonville Police as Contingent Workers: The Neoliberal Shell Game Called Duval County

By Michael Hallett

The past few weeks have served up a witches’ brew of stories documenting the neoliberal shell game that has become Jacksonville’s “consolidated” government.  Undertaken in 1968 in the name of achieving “economies of scale” in delivery of services across city/county governments, today the city features among the nation’s lowest paid teachers working in failing schools, unsupported police officers amid state-high violence, cuts to social programs for the poor, and massive unfunded pension liability caused in no small part due to the city’s own borrowing against the pension fund.  To my criminal justice students who want to serve Jacksonville, my message is this: don’t. Move on. Jacksonville can’t keep its promises. Look elsewhere. Move south. Move west. Jacksonville refuses to establish a tax base sufficient to meet the needs of its citizens. Just look at millage rates in other large Florida cities:


Say what? That’s right.  Don’t even consider it. Why? Because, you have become the new public school teachers of Duval County–in short, the new overburdened, underpaid, scapegoats for a dramatic series of political and economic failures in the ecosystem that is Jacksonville politics. Each of these far pre-dated your arrival here and it is too late to fix them now. You deserve better, so look elsewhere. Jacksonville has become a hollowed out shell of neoliberal “tax-cutting” debt, effective only in catering to those with deep-enough pockets to make campaign contributions but lacking civic engagement enough to foster real accountability through local on cycle elections. And look, you don’t need it. There are still plenty of jurisdictions solvent in their dealings with employees and credible in their promise making.  Jacksonville’s neoliberal political culture promised tax cuts would shrink government, and people ate it up with a spoon. Lots of people gamed the low-tax promise system, including the cops for a long time, but that game is now over.  And no one has the courage to step up and change it, so, it is what it is.

But in this instance, rather than fully investigate why Jacksonville can’t keep its promises across the broad scope of unfunded liabilities that are Jacksonville city politics and the neoliberal ideology that created them, the Times Union has curiously chosen simply to scapegoat the head of the Police and Fire Pension Fund and leave it at that, with what one prominent citizen and even critic of PFPF has called “tabloid” journalism.

Yet the largest failure in the community conversation as a whole about Jacksonville’s “pension debt,” has been a complete and utter lack of exposition of those on the other side of the table from John Keane during those negotiations. I mean, wait a minute:  there are signed contracts. (Jax Police _ Fire Pension Fund001 (2))Who signed them and why?  What was their thinking at the time? (Jax Police _ Fire Pension Fund001 (1)) We’ve got literally nothing on this aspect of the crisis from the Times-Union–yet multiple mayors and past council presidents have signed off on agreements. “But how can this be?” you ask?  I haven’t a clue.  Past agreements were in fact negotiated settlements of unfunded debt going back decades–all of which mounted into a fiscal crisis triggered by the Great Recession.  Don’t like those benefits?? Well, where did they come from and why were they approved multiple times?  Nada. My theory: If the TU would have fully explored these aspects of the crisis, it would have been much more difficult to demonize the participants. 

Of course, a much more compelling explanation for the current crisis is the fact that the City of Jacksonville has chronically under-funded its overall civic infrastructure and operating budget with an inadequate millage rate–therein failing to pay for the promises made by elected officials over many years. The combination of already extremely low property taxation, a laissez-faire attitude about mounting pension debt, and the dramatic market crash of 2008, all exploded the unfunded liability.  Had the City not lived on a knife-edge with pathologically-low millage rates across multiple decades, the crisis would be nowhere near as bad as it is today.  Comparatively lower property values in Jacksonville also did not help and would justify a higher millage relative to the benefits promised. Just look at the record of cuts and the above graph produced by Jacksonville’s own mayor, John Peyton.


While the city’s PFPF pension liability is a whopping $1.65 billion, the General Employees Pension fund also has a liability of ~$400+ million (or more), while insolvency problems also exist with the Correctional Officers Pension Fund. In addition, a federal lawsuit involving employees excluded from participation in the city’s pension process has added potential liabilities of another $500 million.  Needless to say, the city’s pension problems extend well beyond the PFPF.  Yet where is the coverage on the problem as a whole? $400 million here, $500 million there, pretty soon you’re talking about a lot of money.  While the Times-Union repeatedly characterizes Jacksonville’s “pension crisis” as that of the $1.65 billion Police and Fire Pension Fund–it clearly extends well beyond that, involving a lot more taxpayer money than that. It’s more like a near $2.5  – 3.0+ billion dollar pension liability, not $1.65 billion. All three funds are insolvent, not just the PFPF. THAT is the story. Or at least it should be. But no. Also, the average pension received by a retired member of PFPF is only about $50,000 (Jax Police _ Fire Pension Fund001 (2)).

Meanwhile, a new proposal (fully negotiated in the sunshine??) has emerged involving further leveraging debt with JEA, which has it’s own unfunded pension liability (largely unexplored by the Times-Union) as part of the General Employees fund, in hopes of securing a “funding source” for a $400 million gap to secure the deal.  Borrowing from Peter to pay Paul.

Finally, amid much gnashing of teeth about securing a “funding source” why can’t local leaders embrace the obvious answer–a millage increase?  For the same reason we are in this crisis in the first place:  the neoliberal lie that tax cuts shrink government.  Good government shrinks government.  Unfortunately, that’s not what we’ve got here.

I urge Jacksonville’s leadership to look at the data (if not the news coverage) and responsibly raise the city’s millage rate. Cops and teachers form the fabric of what is real community. If you want to have community, you need to support it.






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FTU: Unfair, Inaccurate on COJ Pension Crisis

By Michael Hallett

The Florida Times-Union is a great paper. I read it every day and frequently use its many excellent series on life in Jacksonville to inform my classes at UNF. What makes a daily newspaper worth the price of subscription is not its national coverage nor even its representation of geopolitics; these stories are largely supplied by wire services amid a small monopoly of global media corporations.  What makes a daily newspaper worth the price is its local coverage and that’s why I’m an avid reader of the FTU.  For example, Jacksonville would never have responded in the way that it did to the city’s violence crisis of 2006-2008, with formation of the Jacksonville Journey, but for the coverage of the Florida Times-Union. The paper’s constant drumbeat of stories demanded action and the Florida Times-Union made it happen.  In a similar way, the Times-Union is now pushing Jacksonville to deal with its longstanding pension crisis–but in ways that are not as constructive as with Journey.

The paper’s coverage of the pension crisis could have been orchestrated in such a way as to not demonize the people involved, without taking a thing away from the facts or the story. This demonization compromised full presentation of the facts and obscured details necessary for understanding the macro-dynamics of the crisis overall. In short, the Times-Union has failed to look systematically at the broadest elements of Jacksonville’s pension crisis, myopically focusing on the Police and Fire Pension Fund (PFPF) while failing to investigate a much more systematic and broad-based insolvency among all three major pension funds in Jacksonville. Ironically, as a result, the Times-Union has dramatically under-reported the pension problem in the city, curiously limiting the vast majority of its reporting and its headlines to the PFPF.

While the city’s PFPF pension liability is a whopping $1.65 billion, the General Employees Pension fund also has a liability of ~$400+ million, while insolvency problems also exist with the Correctional Officers Pension Fund. In addition, a federal lawsuit involving employees excluded from participation in the city’s pension process has added potential liabilities of another $500 million.  Needless to say, the city’s pension problems extend well beyond the PFPF.  Yet where is the coverage on the problem as a whole? $400 million here, $500 million there, pretty soon you’re talking about a lot of money.  While the Times-Union repeatedly characterizes Jacksonville’s “pension crisis” as that of the $1.65 billion Police and Fire Pension Fund–it clearly extends well beyond that, involving a lot more money than that. It’s more like a near $2.5 billion dollar pension liability, not $1.65 billion. All three funds are insolvent, not just the PFPF. THAT is the story. Or at least it should be. “Secret negotiations” had nothing to do with it.

My second problem with the TU’s coverage of Jacksonville’s pension crisis is that the paper seems desperate to convince citizens that lavish benefits thrown at police officers and firefighters are the cause of the current crisis–even when it’s own analysis shows that these benefits are roughly equivalent to employees in surrounding jurisdictions.  In a classic case of falsely portraying the extremes as the average, the Times-Union’s  coverage has recently emphasized the retirement packages of a few senior employees and the director of the Police and Fire Pension Fund itself, without offering near as detailed a look –or hardly even mentioning–the average take-home retirement made by retired officers and fire fighters. I feel this was unfair.  (Click table to enlarge; background story here).

jacksonville police benefits - Google Search

The fact is, that employee benefits in Jacksonville are “comparable” to other jurisdictions.  While the Cost of Living Adjustments (COLAs) are indeed higher in Jacksonville–except for COLAs, the benefits package of city employees is generally weaker than other jurisdictions and includes no Social Security. More  importantly, these benefits were not negotiated in secret, but signed off upon by multiple Mayors and City Councils over many years.  If these benefits were perceived as lavish or somehow unfair, plenty of people had plenty of time to say so and do something about it. But that’s not what happened, not because the COLAs are outrageous for the timeframe in which they were negotiated, but because in fact they are not the main issue. Only recently have the COLAs come to the attention of anyone. The main issue is Jacksonville’s pathologically low millage rate.

Key to Understanding the Crisis: Context Matters

A much more compelling explanation for the current crisis is the fact that the City of Jacksonville has chronically under-funded its overall civic operating budget with an inadequate millage rate–therein failing to pay for the promises made by elected officials over many years. The combination of already extremely low property taxation, a laissez-faire attitude about mounting pension debt, and the dramatic market crash of 2008, all exploded the unfunded liability.  Had the City not lived on a knife-edge with pathologically-low millage rates across multiple decades, the crisis would be nowhere near as bad as it is today.  Comparatively lower property values in Jacksonville also did not help and would justify a higher millage relative to the benefits promised.

Arguably the single most damaging factor in Jacksonville’s pension crisis is not lavish benefits, but the razor-edge millage rate relative to sometimes flat, sometimes rising property values–amid a laissez-faire attitude about unfunded liability across multiple mayoral administrations and empaneled city councils. But this debt was not driven by either lavish benefits nor “secrecy” in negotiations.


My remaining criticism is that the Times-Union has failed to thoroughly explore the issue of “pension holidays”–documented thoroughly in the JCCI report.  While the pattern of tax-cuts shown above is consistent across administrations and city councils, the key to understanding the crisis overall is to examine pension fund reserves relative to taxation and property values at various points in time. See page 7 of JCCI’s 2009 report. With property values rising or stable, unfunded liability on pension debt remained an abstract concern. But the debt was still mounting.  Throw into the mix, however, a bare-bones millage taxation rate, creeping pension debt, numerous instances of borrowing against the fund, and a sudden dramatic crash in property values, then you have the makings of a real crisis.  It was not lavish benefits–it was a failure to fully fund the benefits agreed upon in public.  Jacksonville has not just taken pension holidays–it has been on permanent vacation. But the Times-Union could have elaborated this point and advanced the discussion by pointing out periods of flat versus accelerating debt.

Jacksonville is taking the real “pension holiday” RIGHT NOW

In the ultimate irony, just this past Friday, the Jacksonville City Council –facing a budget shortfall–deferred its payment to the PFPF in order to make ends meet.

As John Delaney explained in a previous interview, the Settlement Agreement he signed with PFPF increased benefits for employees while achieving a tax cut for the City. But these changes were achieved only by first reducing starting pay for city employees by 3% and reducing the overall number of city employees by about one third.  This produced “compounded savings” over many years, generating more in savings than the employee benefits cost in the first place–at the time they were made.  Where is that in the Times-Union coverage? You can only understand the pension crisis in Jacksonville relative to the circumstances of various administrations and contexts.  The “pension crisis” is not just one story.  There are many moving parts to the crisis–and it was not created by evil public employees.  As Delaney points out, at any point in time, the term “crisis” is relative according to property values, the millage rate, stock market performance and retirements. Whoever is in charge has to manage it.  And arguably right now, we are failing miserably.

In sum, the key to understanding Jacksonville’s pension crisis is not lavish benefits but the city’s longstanding pathologically-low millage rate and laissez-faire attitude about mounting pension debt.  But that debt did not rise evenly over the years–and only recently has been exploding exponentially. My personal view is that more fiscal oversight of the city’s pension plans as a whole has been necessary all along–not just the PFPF. Simply demonizing the PFPF and its personnel is both counter-productive and inaccurate. The TU’s coverage of Jacksonville’s pension crisis treats the pension crisis as if it were a conspiracy committed by evil cops and fire fighters getting one over on tax payers.  That’s simply not what happened.  In fact, all the terms of the pension agreements were signed off upon by multiple elected leaders over many years.

Right now, Jacksonville needs to have the courage to raise its millage rate to a responsible level to get out in front of this debt.  Doing so will save taxpayer money.



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SCLC: Priority Agenda for Jacksonville’s Poverty/Crime Problem


Opio Sokoni, President, Southern Christian Leadership Conference of Jacksonville

Michael Hallett, University of North Florida

Men often hate each other because they fear each other; they fear each other because they don’t know each other; they don’t know each other because they can not communicate; they can not communicate because they are separated. -Martin Luther King, Jr. Stride Toward Freedom: The Montgomery Story, 1958



Just prior to the explosive events in Ferguson, Missouri, alarm about the state of crime in Jacksonville was making headlines. The membership of the SCLC of Jacksonville has come together out of a sense of concern for our community, out of a sense of exasperation about the state of criminal justice in Florida and the nation, and out of a deep desire to see that peace, equality and fairness dictate justice policy and practice. But justice and fairness are not what we have today.  Unfortunately, criminal justice policy in Florida has devolved into advocacy of “warning shots” and “standing your ground” instead of civil dialogue and community outreach.  We have lost all common sense and attention to the common good.  In Jacksonville, black children comprise only roughly one-third of all children but two-thirds of juvenile arrests and ninety percent of juveniles under confinement. Jacksonville is a city where literally tens of thousands of children live in poverty and where the majority of these children have no after school resources. While crime is down, the concentration of Disproportionate Minority Contact of juveniles with the criminal justice system in Jacksonville has increased since 2005.  But we speak of a Jacksonville that is sadly typical of the American urban landscape.

As Jacksonville develops its annual budget, SCLC wishes to highlight the importance of community-building efforts that include the poor. While we’re not unsupportive of efforts to promote entertainment and expand commercial development, literally thousands of already impoverished children in Jacksonville stand to lose after-school and educational resources in the proposed budget.  More importantly, amid a statewide downturn in crime, Jacksonville arrests are down nearly 50% since 2008. Now is the time to invest in community-building programs that instill personal responsibility while renewing conversation about long-term improvements to crime and civic infrastructure, not just in policing. A Comprehensive Strategy on Crime and Poverty with meaningful benchmarks as was achieved by Jacksonville Journey, which now appears to be being abandoned. Despite the roughly $70 million dollar investment in Jacksonville Journey since 2007, momentum is being lost. Citizen oversight is being abandoned and resources cut.

JSO Arrests 2008 – 2013 * Source: FDLE

Total for Year Juvenile Arrests
2008 49,841 5135
2010 37,567 3586
2013 25,922 2286

Jacksonville’s starvation/crisis-driven budget cycle has got to stop. It has become a perfect self-perpetuating failure system with regard to crime and blight: expand the workload of agencies while cutting resources until crises emerge, then use crises to reluctantly patch, entrenching big government agencies all the more while failing to address root problems. In always trying to get by on the cheap, Jacksonville is blighting the city even further while failing to capitalize on the investments it does make, such as in Jacksonville Journey.  In the political economy of crime control versus funding for other city “priorities,” police and poor children find themselves revealingly in the same boat.

All of that said, we don’t feel that Jacksonville has necessarily even dealt with its own police officers fairly, in terms of continually passing budgets that deepen the unfunded liability for agreed-upon employee retirements. While Jacksonville prides itself on being a low tax city even as it loses population to surrounding counties with more robust services, it continues to over-rely on its criminal justice system as its civic infrastructure of last resort–and has failed to fund even that at adequate levels. A prosperity agenda for Jacksonville cannot be founded simply upon hiring more police, but increasingly Jacksonville’s poor children and police are in the same boat. Jacksonville must step up and set a responsible millage rate in order to SAVE taxpayers money and make progress on long-term poverty and crime.  Doing so will be far cheaper for the City in the long-run.


First: Stop Demonizing the Poor: Recognize Identity Thwarted and Denigrated.

Today racial division dominates American criminal justice practice. The incarceration rate for African-American males in the United States is five times higher than that for whites and constitutes the demographic under strictest confinement in any democratic nation on earth. Just because Barack Obama is President of the United States, our nation is not one today that is in any way post-racial. Indeed, we believe Dr King would suggest we’re becoming a post-Civil Rights society: back on the road to limiting black citizens’ opportunities to vote; back on the road to re-segregation of public schools; back on the road to persistent, dramatic and increasing economic inequality; and fully on the road to seeing a “New Jim Crow” featuring Hyper- Incarceration of black men and boys, that merely facilitates all the previously mentioned exclusions. In the spirit of Dr King, our ongoing work is devoted to changing that dynamic.  Today we have a justice system that destroys people, not one that heals them; a system where recidivism is higher after release from prison than prior to confinement; a justice system perpetrating a costly, ineffective and unfair war on drugs that disproportionately impacts and impoverishes minority families.

If Dr. King were alive to witness the state of American criminal justice today, he would testify that the “war on drugs” and the “war on poverty” have become, in fact, wars on the same people. Both amounted to highly-racialized containment strategies that further ghettoized the poor, by locking citizens into isolated housing projects well outside of the flow of commerce and politics–after which the “war on drugs” locked these same citizens into a prison industrial complex now so vast that it operates in part for profit and actively donates to political campaigns.  In short, the “war on drugs” weakened neighborhoods and made crime worse.  As illicit drug markets now dominate the collapsing economies of America’s de-industrialized ghettos, Dr King would have to repeat his message: The self-perpetuating failure system of managing poverty through “containment strategies” that rely on race and demonizing the poor has got to stop. We are one community of citizens. Willful neglect and seeking to police our way out of poverty fails taxpayers and citizens.

Please stop trying to obscure the complexities of history, economics and race by reducing lives of impoverished citizens to soundbite policies that demonize the poor. For example, advocating policies like “drug testing for all welfare recipients” needlessly shame poor citizens while falsely justifying a failed “drug war” mentality, even as no evidence whatsoever exists showing welfare recipients use drugs in any higher proportion than the general public. The criminological evidence is clear: most poor people work hard and are law-abiding. Addiction and illicit drug markets predominate poor neighborhoods, but this is due to a lack of viable economies and social isolation. Only when citizens are treated with concern and dignity can we heal our community, encouraging all citizens to fully develop their talents. Instilling personal responsibility as the guiding ethic of young people is the answer: how do we instill it? Not through aggressive prosecution and expansion of the American prison system. Reverse the longstanding pattern of the American criminal justice system being used as a blunt instrument that has actually weakened impoverished minority communities. Stop the politics of hate.

Second. Prioritize Love and Concern for Neighbor/Common Good

Dr. King “stood his ground” by pointing to what he called the “unarmed truth”—the merciful and loving example of Jesus Christ and His repeated statements of concern for the poor and excluded as the first standard for all conversations about justice.  If you’re going to follow Jesus, you have to be concerned about the suffering of your neighbors.  To be concerned about suffering means you have to be honest about history.  Being honest about history requires we talk about present day structural violence and meeting citizens’ basic needs: we don’t have a dropout problem in our schools, we have a push-out problem; we don’t have a criminal justice problem, we have a criminal INJUSTICE problem; we don’t have an low tax austerity problem in Jacksonville, we have a generosity and fiscal responsibility problem.


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Duval Pension Crisis: Florida Times-Union Way Off

By Michael Hallett

It wasn’t too long ago in Jacksonville that local “conservative” politicians had a lock on votes from police and firemen. Jacksonville’s carefully crafted bevy of off-cycle elections guaranteed low voter turnout.

Public sector workers, having the most direct stake in local election results, actually showed up to vote. If you’re upset about Jacksonville’s pension situation, be upset first about the false promise of “shrinking government” when so few voters participate.


The Times-Union frequently bemoans Jacksonville’s lack of civic identity even while sensationalizing a brand of politics governed by local magnates (Shad Khan, Peter Rummell) and wannabe magnates (Civic Council) instead of citizens themselves.

Whether in crime, education or public finance, Jacksonville’s root problem is not fiscal austerity. It is lack of civic engagement. The city desperately needs more on-cycle and nonpartisan elections for Sheriff. Spare me the rhetoric about how local elections highlight local issues. Off-cycle elections help obscure local issues from public comment.

In that context, I’ve been disappointed with the Times-Union’s coverage of Jacksonville’s pension crisis. I’ve studied public finance of criminal justice for many years. And I think the Times-Union got the pension issue wrong from the very beginning.

First, while demonizing the Police and Fire Pension Fund and John Keane especially, the paper offered almost zero coverage of the fact that the city’s two other large pension funds are also badly insolvent, to the tune of several hundred million dollars.

It failed to mention a pending federal lawsuit involving city employees excluded from opportunities to enroll in the pension, with probable liabilities of several hundred million dollars. Clearly the city’s failed oversight of public pensions extends beyond anything unique to the Police and Fire Pension Fund.

But the Times-Union inserted itself into the story with its public records lawsuit and lost all objectivity, blowing that out of proportion as well, given that City Council still had to approve the deal negotiated in “secret” in public deliberations and a public vote. And turned it down.

Instead of “pension holidays,” an irresponsibly low millage rate, weak formal oversight by the city of pension plans and a serious financial crisis, John Keane was to blame.


But the pension crisis does offer a window into that eroded sense of community rightly of concern to the Times-Union. When cops are finally thrown into the same meat grinder as teachers, firemen, poor children and inmates in the local jail, it seems to me a criminological moment of epiphany.

The “rabble management” budget includes the cops because public schools and public health and public safety is all just rabble management, right? Calling for a renewal of Jacksonville Journey, yet failing to make explicit the connection between no money for cops and no money for poor kids and no money for teachers, while curiously highlighting the connection between blighted neighborhoods and “human blight” and more need for community, I think you found it!

It is among cops and teachers and firemen that community actually begins to flourish and becomes sustained. It used to be clear that cops and teachers and firemen held up the community. And they still do.

Perhaps this got obscured by that new scoreboard.


This piece also published as a Guest Column by Florida Times Union, 6/13/14:


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Evidence, Not Anecdotes, Should Govern Justice Policy

By Michael Hallett

Given Jacksonville’s noted fiscal conservatism, I often wonder how long it is going to take taxpayers here to recognize failed big government when they see it. At root in Jacksonville’s current debate about using Civil Citations for resolving minor delinquency, the policy’s nationwide proven effectiveness has received little direct attention. As a policy endorsed by the Florida Department of Juvenile Justice and implemented widely by jurisdictions including Miami-Dade, diverting first-time juvenile offenders away from the criminal justice system rather than throwing them into it, saves taxpayer money and redirects the behavior of children on the wrong path.  Allow me to share some unsurprising news: overwhelming evidence shows that American prisons do nothing to promote good behavior nor pro-social values. Recidivism is the norm. There is also overwhelming evidence that when children are thrown into prisons they become victims, recidivate at higher rates, and become institutionalized (adopt the anti-social values they learn in prison). So, when Angela Corey recently noted that “cost evaluations have to include the cost of when individuals reoffend”–I had to agree entirely! Which is exactly why we need to do everything in our power to keep children away from the experience of incarceration. Stop causing crime by sending so many children to prison! Even conservatives like Jeb Bush and the organization RightOnCrime see criminal justice as failed big government. So I’m elated to hear so many voices rising up in Jacksonville reminding the community that every “successful prosecution” of a child is in fact a community failure and not a success.

Proven alternatives to the criminal justice system that cost less and shrink government, include other “soft” notions like after school programs and early literacy agendas. Yes, many parents in Jacksonville are failing their children. Sending these children to prison or saddling them with an unnecessary arrest record will do nothing to set them right. Unfortunately, these failed policies have been in place for so long, that they have created a self-fulfilling prophecy: the solid majority of inmates in Florida Department of Corrections prisons have no higher than a 6th grade achievement level. Please don’t allow horrific anecdotes to continue to overwhelm the evidence. Expand use of Civil Citation in Jacksonville and continue to fight for our children.



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Duval: Black children 2/3 of Juvenile Arrests 2011-12

By Michael Hallett

While African-American children under 18 comprised only roughly 37% of the total juvenile population in Jacksonville for FY 2011 – 2012, black children constituted fully 2/3 of all juvenile arrests in Duval County according to DJJ data (below). While crime is down, the concentration of minority children who are the focus of Duval’s criminal justice system is increasing.  African American males comprise by far the largest category of juvenile arrests.

The extent to which juvenile arrests in Jacksonville are almost exclusively an experience of minority children, is the extent to which Jacksonville is not moving to the next level.  Keep in mind, too, that these arrests are almost entirely of children between 10 – 18, not the full population of under 18 juveniles in the county. Jacksonville’s over-leveraged but under-funded criminal justice system diverts community-building resources away from programs that might help and exacerbates Disproportionate Minority Contact with the criminal justice system.  As in a previous post on juvenile prosecution in Duval, Jacksonville also prosecutes a large number of juveniles as adults once arrested.  In short, Jacksonville has got money to prosecute and jail these children, but few resources to work with them in the context of prevention and intervention. This is structural racism at its worst, with high concentrations of arrests in Jacksonville’s black neighborhoods (click on maps to enlarge).

no streets Duval Active Delinquents 2011-12 update no streets.pdf-1

First Contact Violence: 84% of Juvenile Arrests for Violence are Child’s First

Another complexity of Duval juvenile violence is “first contact violence”–that is, when a juvenile’s first arrest is for a violent crime. Of the roughly 3,000 juvenile arrests in Duval for FY 2011-2012, 1146 of these involved “first-contact” violence–when a child’s first arrest is for a violent crime. Violent crimes depicted here are felonies. A clear concentration of these arrests take place in poor black neighborhoods, but they are spread throughout the county. In part because of Jacksonville’s under-funding of crime prevention programs of the sort sponsored by Jacksonville Journey, a large number of juveniles have as their first arrest a violent crime–after which, they are prosecuted as adults.  By then, all opportunity for intervention and prevention has been lost.  Yet every “successful” prosecution of a child for a crime is arguably a defeat for the community, not a victory. But when all you’ve got is a hammer, the whole world looks like a nail. And often, violence gets worse.

DJJ Referrals-1st Referral Violent-Duval 2011-12 update no streets.pdf-1In the most alarming statistic, of all the juveniles who have arrests for violence (1351), 84% of these have as their first arrest a violent crime (1146). At the same time, more than half of juveniles transferred to adult court in Duval last year faced minor crimes.  What is going on?  A simplistic, indiscriminate harshness describes Duval’s approach, with no real strategy for addressing the longer-term underlying causes of violence. As prevention and intervention resources are slashed, with so many juveniles having as their first arrest a violent crime, Jacksonville has created a self-generating ecology of violence.  Alternatives to prosecution and incarceration of juveniles are proven to be more effective. Of the 1351 juvenile arrests for violence, 963 of these are African-American children (over 70%).

DJJ Referrals-Ever Violent-Duval 2011-12 update (1).pdf

Bold New City? Let Us Begin Again

I’ve come to believe Jacksonville’s public safety mess served the interests of those who refused to change it for so long, while citizens most severely affected by crime lacked the power to do so.  When will Duval learn that interventions like therapeutic counseling and family-focused treatments lower delinquency more effectively and at a fraction of the cost of incarceration?

Addressing this structural violence through intervention programs saves tax payer money and improves the lives of children. Many of Jacksonville’s at-risk juveniles–through no fault of their own–live lives that involve school separation, family breakdown, and poverty.  Conditions in the social environment put them at a disadvantage relative to their more affluent peers, in education particularly.  Until the basic needs of these children are met, regardless of race, these data reveal a desperate pattern of violence and arrest for more than 1/3 of Jacksonville’s juveniles.

Check out FL DJJ’s own Statistical Breakdown of all FY 2011-2012 juvenile arrests for Duval by Gender/Race here (use the link to explore statewide as well):

Duval Juvenile Arrests by Race/Gender

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Consolidation Fails Jacksonville Public Safety

By Michael Hallett

I am not surprised Mayor Alvin Brown came to agreement with police and fire employees over pension benefits that had long been agreed upon and reasserted in multiple contracts over many years — and run through the General Counsel’s office.

These employees deserve what they were promised repeatedly across diverse sets of political leadership, including multiple mayors, council presidents and council members.

Given all the bluster about the need for “reform” — and Jacksonville supposedly facing “bankruptcy”— it is indeed a surprise that the resulting agreement is so favorable to current employees.

I suspect this means that:

– The strong legal position of the employees was finally recognized and conceded in the privacy of mediation.

– And more importantly that the strong political position of employees reasserted itself all the more.

Unions are No. 1 force
For as everyone knows, public sector employee unions are the single most powerful force in Jacksonville’s off-cycle local elections.

None of this is unique to Jacksonville, nor the fault of Brown. If you’re hoping for some major reform, I am not optimistic about City Council’s ability to stand up to these same pressures.

My beef with the current arrangement is not fair pay and benefits for public employees, who provide essential public service. Other Florida cities experienced the same economic downturn and are nowhere near as insolvent on pensions.

The problem is Jacksonville’s old-fashioned patronage style off-cycle election politics that renders office seekers captive to the endorsement of police and fire while also toadying up to the conceit of “no new taxes.”

The inconvenient truth is that elected officials repeatedly signed off on the benefits packages they now claim to hate and cannot afford.

City Council is caught in the cross hairs of its own contradiction — and now they want their own lawyer.

In addition, that is, to the lawyer they already have in the city’s General Counsel’s office, which helped to negotiate the very contract they said is illegal.

Come on, this system is broken. City father Ed Austin said as much in the last Charter Revision Commission hearings.

Consolidation needs changes
Establishing a structure that requires all parties to work together is key.

The whole idea of “consolidation” was that everyone does not get their own lawyer; so much for that.

This is precisely why almost all consolidated governments in the United States have gone to appointed chiefs and metropolitan police departments.

Fiscal and political oversight for public safety is spread across City Council and mayor, with chiefs unable to tender layoffs as the “only alternative” to budget reductions as Sheriff John Rutherford did recently.

Recall when Brown’s office recently “forgot” to tell the sheriff about an abrupt $6 million dollar cut.

This would not happen with a co-appointed chief, which provides for deeper fiscal oversight, spreads accountability and renders [filtered word] safety less of a political football.

For example, as a result of having an appointed chief for fire, the city has more direct control over spending on equipment, has made numerous station closures over the objections of employees and generally comes to agreement more quickly on everything else.

Yes, fire has pension issues, too, but that’s because they are bundled together into one managing entity, the Police and Fire Pension Fund — the result of agreements signed repeatedly by elected officials going back decades.

The solution to structural contradictions is to fix the structure.

About the author: Michael Hallett,is professor and chairman in the Department of Criminology & Criminal Justice at the University of North Florida.

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Delaney Would Meet with PFPF: Jacksonville’s Pension Crisis

By Michael Hallett

After participating in WJCT’s First Coast Forum on Jacksonville’s pension crisis last week, two things were abundantly clear:  1) the complexity of the issue fogs the public’s brain and inhibits comprehensive dialogue; and 2) the conversation is headed in the wrong direction, with positions already hardened to such an extent that timely resolution of the pension crisis in Jacksonville seems unlikely. With Jacksonville leading the state in both homicide and violent crime committed by assailants using firearms, this does not bode well for the City.  So I took the opportunity to sit down with UNF President John Delaney to dig deeper into his unique understanding of the issues–and to get his take on how the City should move forward at this critical time.

Delaney had a lot to say, including:  that if he were mayor he would sit down with the Police and Fire Pension Fund to negotiate benefits; that those promoting the notion Jacksonville took a “pension holiday” during his tenure “don’t know what they’re talking about”; and that talk of Jacksonville falling into bankruptcy is “hyperbole.” Also John Keane, President of the Police and Fire Pension Fund, is a “decent man” and a “deal maker” who is “not the devil he is being made out to be.”

Delaney mapped out a vision showing optimism and commitment to employee fairness, albeit while maintaining a pretty laissez-faire attitude about what looks like high turnover in JSO due to fears about pension reform.  As to the Sheriff’s and others’ claims about a pension holiday:  “The Sheriff is really a great sheriff and a friend, but he doesn’t know much about pensions or how they work. If the Sheriff thinks we ought to raise taxes and give him that money, then let him make that case. Is he real efficient, I don’t know if he is or isn’t.” Overall, however, Delaney thinks that a protracted dispute on the pension would hurt Jacksonville.

Big Picture. To frame the interview, I offered four prominent constructions about what has caused Jacksonville’s pension crisis: 1) city government took a “pension holiday” and failed to meet its fiscal obligations by paying sufficiently into the fund to keep it solvent (and by some accounts, even “raided” the fund of its reserves when times were good); 2) Jacksonville’s pathologically-low millage rate reflects a “government on the cheap” philosophy and has long been inadequate for meeting the needs of its citizens; 3) the near unprecedented market crash of 2008 is entirely to blame for the pension crisis, with stocks losing half their value and Jacksonville property valuations falling to levels insufficient for generating sufficient revenue; and 4) mismanagement of the pension fund by its managers and board led to both weak performance and waste of resources.

Pension Holiday.  A pension holiday “never happened,” says Delaney. While both JCCI and the PFPF frequently point to an actuarial table published by JCCI (frequently referred to as “Exhibit A” by both JCCI and Keane), Delaney has no way of digesting the numbers.  Delaney doesn’t know where the numbers used for Exhibit A come from, he says, but it appears the authors mixed and matched numbers into “combined rates” and “budgeted rates” in ways never actually used by city budget managers in practice.

While the supposed “pension holiday” occurred mostly prior to Delaney’s time in office–the table is still completely inaccurate, he says.  While it is true that Delaney spent less on government during his tenure–achieving a 10% tax cut over time while actually increasing benefits in the 2000 Settlement Agreement–he did so only by first reducing starting pay for city employees by 3% and reducing the overall number of city employees by about one third.  This produced “compounded savings” over many years, generating far more in savings than paying for employee benefits.  This fact never gets reported in revisitations of fiscal Jacksonville during his tenure as mayor and he finds that frustrating.  In addition, retrospectives on the pension debt also fail to adequately capture how large the pension fund reserves really were relative to taxation and property values, he says –and that it was Keane who offered access to these reserves as part of the restated settlement agreements of 2000 – 2001. Today he feels some salaries at the top are too high and that these disproportionately exacerbate pension debt, but that overall some salaries at the bottom are probably too low.

Sit Down with PFPF. In the current dispute, a major contention of both FOP and the PFPF is that pension benefits need to be negotiated with the Pension Fund and not the FOP.  On WJCT, Delaney explained in an exchange with Tad Delegal– Jacksonville FOP’s former lead attorney–that while he never negotiated pension benefits formally at the FOP table, they would simply move out in the hall to discuss it because the membership was essentially exactly the same.  While legally they are separate bodies, the FOP and PFPF “speak with one voice” and have literally almost 100% overlap in membership. “The membership of the FOP always knows exactly what’s in the PFPF benefits package and you’re talking to the same people.”  While both sides may try to use semantics for tactical advantage, Delaney explained it really doesn’t change the bargaining position of the City–which in the end still has to find the right balance of pay/benefits the market commands to keep employees.

Delaney said if he were mayor today he would sit down with the Pension Fund to negotiate benefits and sees Keane as a “deal maker” who can be worked with.  Regarding the negotiations while he was mayor, Delaney explained “I wasn’t going to go back and forth for separate conversations about all of that.  When we left the pension was fully funded and they were pretty happy with the package.  But we’d cut taxes and the size of the city payroll by one third without a single layoff, through attrition and efficiencies. So we more than paid for all that with savings.”

Millage Rate. “I don’t think the millage rate is necessarily too low,” said Delaney.  “If people want to raise taxes for social services they need to go out there and make that case.”  But Delaney did express concern that there is a point where any city can become a hollowed out shell and that without adequate funds for things that make a place “livable,” like swingsets and parks and libraries they start to suffer.

Mismanagement of the fund.  As Delaney sees it, John Keane has done a good job managing the pension and notes that PFPF is under certain restrictions in terms of the kinds of investments it can make by law. He notes, however, that Keane has inaccurately promoted the notion of a “pension holiday” in public, but ultimately thinks of Keane as a deal maker who can be worked with.  Delaney wouldn’t shy away from talking to the Pension Fund for resolution of the benefits dispute, but notes that reform of current benefits structure is going to be a necessary part of successfully resolving Jacksonville’s pension crisis. As he said on WJCT, Delaney believes the crisis is really the result of the market crash. It’s counter-productive now to point fingers and we really should get to work.

Hallett’s Take. Get Smart: Jacksonville Cannot Exclusively Prosecute or Police its Way Out of Poverty.  President Delaney is extraordinarily well-qualified to address the complexities of Jacksonville’s pension crisis in a comprehensive way, something that he believes has not been fully achieved in most journalistic accounts of the issue nor in several policy papers exploring the topic.  Having served two terms as Jacksonville’s mayor (from 1996 – 2003),  a stint as the City’s top lawyer and Chief General Counsel, not to mention Chief of Staff to his predecessor Mayor Ed Austin (under whose tenure most of the supposed pension holiday took place)–Delaney’s perspective is literally incomparable.

But I disagree about the millage rate.  Jacksonville’s millage rate is too low and has long been too low, not only in comparison to peer cities in the state–but in regard to the numerous risk factors facing the City in terms of concentrated poverty, crimes of violence and homicide, the proliferation of firearms, education failure and family breakdown. Jacksonville’s main problem has not been a lack of fiscal austerity, but a lack of generosity.  Long term, intervention programs ARE CHEAPER AND MORE EFFECTIVE than harsh punishment and incarceration. And because children are incredibly resilient, programs far cheaper than incarceration really can turn children around.

In sum, Jacksonville chronically fails to meet the needs of its own citizens, a pathology I ultimately ascribe to lingering institutional racism. Jacksonville’s most blighted, challenged neighborhoods are disproportionately black, containing literally tens of thousands of children living in poverty and relative political and social isolation. In response, Jacksonville currently leads the state in prosecuting children as adults and in rates of adult homicide–unlike, Miami, for example, which in response to similar problems established the Miami Children’s Trust to address similar issues. Instead, Jacksonville currently incarcerates five times more children than Miami-Dade county. For deeper exploration of that pernicious cycle, see the earlier Jacksonville Justice Project post.  And I’m not advocating some large tax increase, but suggesting that matching citizens’ needs to a millage rate more on a par with cities facing far fewer challenges is long overdue. It’s also about fundamental fairness to men and women of JSO –who do not get social security–and who serve Jacksonville citizens in crisis on a daily basis.  Reform is necessary, all agree. Let’s make it happen.


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