BRADENTON, Fla. - Jacksonville, Fla., which spent much of last year trying to negotiate police and firefighters' pension reform, hit a stumbling block when a judge ruled city officials broke the state's open meeting law in the process.
In a lawsuit brought by Florida Times-Union Editor Frank Denton, Circuit Judge Waddell Wallace ruled Dec. 31 that city officials and police and firefighters' unions improperly held collective bargaining sessions in private.
The sessions resulted in changes to an existing agreement covering benefits that were negotiated as part of a mediation process in a federal civil court action filed against the city by an employee of the firefighters' union.
Florida requires that collective bargaining occur in properly noticed public meetings, Wallace said, adding that violations of the state's so-called Sunshine Law occurred during multiple mediation conferences and resulted in "significant" changes in pension benefits.
The "court finds that the federal mediation sessions were in violation of the Sunshine Law because they included negotiations over pension benefits," the ruling said in part. "As bodies subject to the Sunshine Law, the Pension Fund Board and city were required to conduct their negotiations in the public realm."
City officials argued that representatives of elected officials attended the mediation sessions, and they were not covered by the Sunshine Law. Wallace rejected that contention because he said the representatives had decision-making authority.
Although federal court rules require mediation to be conducted in private, Wallace ordered the city to inform the federal court of his ruling and to try to seek a waiver of the court rules.
Wallace said federal judges have discretion to waive court rules.
City officials said they are reviewing the ruling.
In May, Jacksonville Mayor Alvin Brown said that a new agreement over pension benefits was reached with the board of trustees overseeing the police and fire pension fund.
The City Council rejected the mayor's agreement in July. Brown then appointed the 17-member Jacksonville Retirement Reform Task Force, which has been considering plan changes to help alleviate the city's $1.68 billion of unfunded police and fire obligations.
In December, the Task Force rejected recommending to the city that it issue up to $1 billion of pension obligation bonds and change to a 401(k)-style retirement plan for police and firefighters to address the unfunded mandate. Other measures are under consideration.
The Task Force's next meeting is Wednesday, and its report to the city is due later this month.
The difficulty and delay in addressing pension reform troubled Fitch Ratings, which said in August that the disagreement between the mayor and City Council raised "questions" about the efficiency of decision-making and level of cooperation between the two branches.
Fitch revised its outlook to negative on the city's ratings due to "uncertainty as to how the city will resolve a large unfunded pension liability and rapidly rising pension contributions." Fitch also said the city's pension burden is considered high, particularly for its AA-plus implied unlimited tax general obligation bond rating.
Moody's Investors Service affirmed Jacksonville's Aa1 issuer rating and stable outlook in August, reflecting the city's large and diverse economy, and a consistently strong financial position "albeit with looming pension pressures which officials are attempting to address."
Pension costs as a percent of general fund expenditures increased from 11.8% in fiscal 2011 to 16.2% in fiscal 2013 partly due to market losses and outdated assumptions, which have since been changed, Moody's said. Pension costs are projected to increase to 17.5% in fiscal 2017.
Jacksonville, in the northeast corner of the state, consolidated with Duval County in 1967. It is Florida's largest city in land mass and population with 836,507 residents.
