Jacksonville, Fla., to Conduct Forensic Pension Audit

BRADENTON, Fla. — Jacksonville, Fla., will hire a forensic specialist to audit the city's Police and Fire Pension Fund.

The City Council voted unanimously April 28 to contract with Edward 'Ted" Siedle to conduct the audit for $85,000, according to the Florida Times Union.

Siedle is founder of Benchmark Financial Services Inc. and a former attorney for the Securities and Exchange Commission. The audit is expected to take about three months, the paper said.

The paper said it conducted an investigation into certain practices of the fund last year, and found questionable pension benefits had been received by certain police officers and firefights.

"As city officials, we owe it to the people of Jacksonville to ensure transparency and to provide an accounting of every dollar. This investigation is long overdue," Council President Clay Yarborough told the paper in a statement after the council vote.

The city has considered pension reform measures for several years to deal with severe underfunding of police and fire fund. The police and fire pension has $1.7 billion in unfunded liabilities.

On March 25, the council voted down the latest reform proposal.

Moody's Investors Service said April 2 that rejection is a credit negative.

"Florida's largest city remains politically gridlocked in addressing mounting pension pressure despite wrestling with the issue for years," Moody's analyst Ted Damutz said.

In 2013, after the council rejected a previous pension proposal, Moody's downgraded the city's issuer credit rating to Aa2 from Aa1 primarily because of growing pension payments that negatively affected $2.4 billion dollars of debt.

While the city has historically contributed at or near its annual required contribution, the plan's unfunded liabilities have grown substantially due to worse-than-expected investment performance, benefit increases, and actuarial factors such as the deferred recognition of asset losses, Moody's said.

The city's fiscal 2015 public safety ARC is about $154 million, or 15 times greater than $9.7 million in fiscal 2003. Without reform, the city's annual public safety pension contributions are projected to escalate dramatically, peaking at $469 million in fiscal 2036.

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