BRADENTON, Fla. - A long-running debate over how to cure Jacksonville's $1.62 billion police and fire pension liability has sparked a call for an audit and state investigation into the finances of Florida's largest city.
Republican mayoral candidate Lenny Curry, a CPA, said if elected that one of his first actions as mayor would be to order an audit.
"Until I have a clear, verified audit conducted, I will fight against anyone who wants to raise taxes or increase our debt," Curry said in a statement Feb. 12 to the Florida Times-Union. "It's time for more accountability in City Hall."
Curry, whose campaign did not reply to The Bond Buyer's request for comment, has been critical of recent, competing proposals to fund the pension liability.
The obligation was a major reason Moody's Investors Service downgraded Jacksonville's issuer credit rating to Aa2 from Aa1 in June 2014.
The city has spent the last few years trying to devise funding plans that suit elected officials as well as fire and police unions.
City Council member Bill Gulliford filed legislation Feb. 11 proposing a referendum that would ask voters to impose a half-cent, local sales tax increase. The tax revenue would be used as part of a strategy to pay pension obligations, though the tax could not be leveraged with bonds.
Mayor Alvin Brown, a Democrat who is seeking reelection in March, recently issued his latest proposal to fund a portion of the liability, which includes the potential for issuing up to $240 million in pension obligation bonds.
Part of the city's plan also involves a possible bond issue by the city's combined utility, JEA, to fund all or a portion of a $120 million upfront payment to the city that also would be used to pay down pension costs. While the deal has not been finalized, it also calls for a slight reduction in the annual transfer JEA makes to the city's general fund. That payment was $87 million in fiscal 2014.
Heavy reliance on JEA to address the underfunded Police and Fire Pension liability could pressure the utility's Aa2 senior bond ratings, Moody's said in a Feb. 12 credit report ahead of an upcoming $84.3 million bond sale. The bonds have been rated Aa2 by Moody's, AA-minus by Standard & Poor's, and AA by Fitch Ratings. All have stable outlooks.
Separately, state Rep. Janet Adkins, R-Fernandina Beach, and local officials have asked Gov. Rick Scott to investigate whether any regulations have been violated by operators of the pension fund. Scott, through his chief inspector general, Melinda Miguel, declined to conduct an inquiry.
Adkins has said she would consider filing a bill this year about Jacksonville pensions. A bill had been filed as of Feb. 13.
In late January, the state Department of Management Services sent letters to 19 local government pension funds that are less than 50% funded, including three operated by Jacksonville.
The DMS letters ordered the pension operators to correct the funding problems.
