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HomeMy WebLinkAbout11-30-2001 Workshop Minutes Workshop Session Of the CITY OF OCOEE GENERAL EMPLOYEES PENSION BOARD December 3,2001 At 150 N. Lakeview Drive Ocoee,FL 34761 Chairperson Ison called the workshop session to order at 3:12 p.m. Board Members Cornell, Smith, Vogt, and Miller were all present. Others present,by invitation,were: Fran Diedrich,Human Resources Director Jim Gleason,City Manager Wanda Horton,Finance Director Jean Grafton,City Clerk Chairperson Ison called the attention of those at the session to the agenda,comprised of four items. He stated that the reason for this work session was to discuss some of the concerns which came up at previous Board meetings. At the last meeting,he was instructed to meet with the City Manager to discuss these concerns. He has done that. The four items discussed were: 1. The cost to the City and the cost to the employee of the$100 supplement and the information received from Ward Foster. 2. Administrative support for the Secretary[Pension Board member] who is a City employee and exit interviews of employees leaving the City being done in the past by the Board Secretary. 3. Board members who are City employees having travel time off to attend pension board oriented mandated education sessions. 4. Storage space for Pension Board records and fireproof cabinets to be purchased. City Manager Jim Gleason was asked for his comments on these items. He stated that there is a change of philosophy in terms of the role and the relationship of the Pension Board and the head of the City and that those employees who serve on the Board should do so in the context of their jobs. Because of the percentages and the amount of money involved[contributions by the City]it is to everyone's advantage to play a strong partnership role. The records and storage are to be a part of the City in terms of that and contact has been made with the Fire Chief about the possibility of a larger fire vault on the new station as a place to store some of the material. He informed the Board members that they are not expected to be financial experts,but 327 employees have confidence that the members and the City are looking out for their best interests. He also indicated that he fully supports the training and certification of the Board members and also believes that some of the duties should be taken on by others. Chairperson Ison confirmed that the storage considerations have been handled. Board members attending other training sessions has been handled. The working relationship between the Board member's secretary and getting the duties done has been handled. Still to be considered is the matter of the$100 supplement. He directed attention to the new letter received from Foster&Foster,dated November 29,2001,along with the cost analysis of the same date. It shows the impact on take-home pay for a$300 a week employee and a$400 a week employee. He stated that he would like to add one thing to that as it doesn't really show the increase to the City in total. The first page of the report says required City contributions as percentage of payroll projected,in the last column,is$617,788 and going to$650,995. Looking at the fiscal year prior to that,the City's contribution rate was going up from$447,993 to$617.788. So this fiscal year,the City's contribution rate was going to go up$169,795. City Clerk Grafton reminded that there was an outstanding increase in payroll for that one year. Chairperson Ison responded that the explanation had been there was a 16%pay rate increase generally across the board,plus the average age of the employee had gone up. He went on to point out that if the insurance supplement plus the normal increase is added,that is a$203 thousand increase in one fiscal year and looking at going from$447 thousand to$617 thousand to$650 thousand,is a fairly significant increase and he was not sure that the Mayor or the Commissioners had that information in front of them when they 1 started work on the Ordinance. Finance Director Horton advised that staff was not informed of that. They were told$22 thousand and that is what was put in the budget. Chairperson Ison responded that number had been given by memory and in error by a member of the Pension Board,that there had not been a secondary report asked for of Ward Foster. He indicated that he would like to apologize to the staff and the City Commission for that error. He stated that in the future he would be reminding the Board before doing any Ordinance that it will be necessary that they do a better job of educating the employees prior to going to them on what it is going to cost them in conjunction to working with Human Resources to make sure it is a coordinated long-term goal of Human Resources and making sure that any financial impact on the part of the City is given to the City in advance of the Board even writing the Ordinance so they can indicate whether it is even worth spending the money to get the Ordinance drawn up. They can be given a conceptual Ordinance with conceptual costs and the Board can work together with the City Manager and City staff team in conjunction with the Commission. A general discussion ensued about where the additional funding could come from,perhaps from the Commission contingencies and that there are$33 thousand attributable to the$100 supplement instead of the $22-$23 thousand originally estimated. It appeared that this was something that was pushed through and there was not a full understanding of the numbers that were used showing the level of employees who were going to support it in terms of what was there. There were some questions as to the original"survey" that was done for this proposed Ordinance. Chairperson Ison responded that it was sent out strictly as a survey and there was a favorable response, however,it didn't spell out how much would be taken out of the employees'pay. It was just a survey and caused surprise to most of the Pension Board members when it appeared on the Commission's agenda because they did not feel they had completed their work on it. He explained that was the reason he had attended the last Commission meeting to ask if it could be postponed until the Pension Board could have another meeting on it. City Manager Gleason asked for clarification of the amount needed for this year. He indicated it was his understanding that the total cost for the year would be$33 thousand and since$22-23 thousand had already been budgeted,the additional amount needed would be$10 thousand. This figure was confirmed and there was general discussion about which year this supplement would be in effect. Chairperson Ison indicated that the way the Ordinance was drafted and sent to the Commission,it was already supposed to have been enacted. There was more discussion regarding whether this would be made retroactive to October 1 and the benefits for someone retiring October 1 even if they had not paid into it.That if it were retroactive,there would be lump sum payments determined for everyone to get caught up. It was also asked if the employees were resurveyed today,would the results be the same? The discussion continued about the Ordinance and the fact that the Pension Board had no input on the language and the terminology did not sit well with some of the Board members,that the Ordinance as it was presented,was not the Ordinance the Board had envisioned. Particularly,there was a part about beneficiaries and spouses and the Board had never had that discussion nor did it go out in the survey. City Manager Gleason advised that the language of the Ordinance is standard language. It wasn't written to exclude anything. Board Member Smith agreed,stating that he had contacted Attorney Lee Dehner to have him explain it. He was told that it was taken directly out of a standard supplemental package. Board Member Vogt reminded that the last communication the employees got stated,"Remember,this is only a survey to determine interest in this proposal. It is not a commitment on your part at this time." Board Member Cornell confirmed that was the intent of the survey,to find out if the employees were interested and,if so,the Board would delve into the subject deeper. Chairperson Ison added that at the last Pension Board meeting,several City employees came forward to let the Board know it had not done a good job of telling them what was going to come out of their pockets. They also mentioned that it was not a good time for something else to come out of their pockets. Board Member Smith said he had taken an 2 informal show of hands at Public Works and,among 50 employees,it was almost unanimous the employees were still in favor of it. Some of them have major problems with the terminated vested clause. He stated that,regardless of the City's point of view,the Board owes it to the employees to better explain the Ordinance. City Manager Gleason stated that he can make a recommendation,however the Commission will make the decision and though he could not speak for them,he knows there was initially some reluctance on the$23 thousand and that he was not sure there was unanimous support. He said he would not prefer to take it back to the Commission until there is a very clear picture of exactly how much more money it will cost and what the future impact is then,not just this year,but the year after,at so on. He also said that it is important to find out what the general employees truly feel about it. Board Member Smith reminded that one of the driving factors here is that the City is getting a more mature work force,therefore,there are more employees thinking about retirement and benefits instead of how many digits are on their paychecks every two weeks. Discussion continued into whether it would be appropriate at this time to make a motion to postpone consideration of the Ordinance. It was reminded that this was only a workshop and the appropriate thing to do would be to get everyone's feelings about it and decide how it should be handled. City Manager Gleason stated that the Commission did not expect it back until the 18th of January and for them to make a decision on that date,they would need clarified the two things he had previously mentioned:the financing necessary[an additional$10 to$15 thousand from their contingency];and,input from the employees. It should be put together in a neat little package so that it can be put on the Agenda and fully explained. Chairperson Ison advised that the Pension Board could call a Special Session before the next Board meeting and deal with it at the pleasure of the Board. He stated that he would personally like to postpone all activity on this. He stated that there is a new City Manager and a new Human Resources Director and that he would like to Agenda on the next meeting for employee education and discussion purposes, feedback from the Human Resource Manager. He reminded that this is only$100. It will not buy insurance as insurance rates have gone up three times in the past year. Board Member Cornell stated that she did not want to see this benefit go by the wayside,however, whatever is done on it should be documented and officially agreed upon by the Board. Board Member Vogt reminded that there is a motion from the last meeting that is to pull the Ordinance from the City Commission for consideration,receive input from the membership and prepare a new Ordinance specifically identifying benefits and beneficiaries based on input received,and to authorize Foster&Foster to do a cost on these specifics. Chairperson Ison stated that the Foster&Foster report with the cost to employees is needed before anything is sent out to the employees. They have to know what the costs are. The Ordinance and information about beneficiaries and spouses needs to be clarified and Attorney Dehner needs to do that. There has got to be something that explains the way it works because it is too vague. Board Member Smith suggested that instead of the"whereas"language there should be just a fact sheet for each employee if it were to go to another vote. He stated that if it didn't get implemented until next October,there is no problem with it as long as every employee who checks"yes"fully understands what "vested terminated"and any other of the language means. Chairperson Ison reminded that it is up to the discretion of the City Commission to make the effective date on this any time they choose. Human Resources Director Diedrich asked the history of this particular benefit. How long ago was it suggested and by whom? Board Member Smith advised that this all started early last year. Police and Fire now has the 30-and-out program. Ward Foster was asked at that time what it would cost the City for General Employees to have a 3 30-and-out program. It was astronomical,over one million dollars a year. This was a compromise to the General Employees. Board Member Cornell explained that the difference between Police and Fire and General Employees is, under the statues,the General Employees cannot have a better pension program than Police and Fire. The multiplier must be lower and the program cannot even be equal to that of Police and Fire as a better pension program is an incentive to become a fireman or policeman, so the Board must work within those parameters. Board Member Smith stated that a percentage of homeowners insurance goes into a state fund that comes back to the City to supplement Police and Fire retirement. It's a state statute. Chairperson Ison stated that he had a different understanding than that of what this Board can and cannot do,that he would have to read the language. Board Member Cornell told him it could be found in Chapter 12 and went on to say that the comment was to address HR Director Diedrich's questions about the history on this Ordinance. The survey was done and the results are available. It was very well received as the program was understood to be at that time and the survey was based on that information. There was further discussion about the sense there was of pushing this through quickly and it is hard to put$23 thousand in the budget for it when people's merit raises are being cut. Board Member Miller stated that,from what he had gathered after listening to all of this discussion,is that this is the only thing that was been looked at. He said he felt there must be far more options than just this one,respecting that it has to fit under the pension of Police and Fire. $100 isn't that much supplemental money,especially 10 or 15 or 20 years from now. He suggested there must be a way that something can be looked at where the numbers that are being put will grow,not a fixed number being$100 this year and $100 twenty years from now and there must be other ways to look at investing money more so than just a $100 supplement. HR Director Diedrich mentioned that there are things like cost of living increases which are not in the program now,and disability retirement possibilities which Police and Fire have in theirs. She stated that they are other options that employees may look at more favorably if they are going to take these dollars out at a time when their dollars are very limited. Chairperson Ison stated that he was absent at the Pension Board meeting when this$100 supplement moved forward and had he been in attendance,he would have spoken against it from the standpoint that this is piecemealing the pension plan.Everybody knew about there being a recession even before September 116. And,of course since September 11th,there are a lot of considerations when doing the budgets with tax revenue coming down and so forth. Board Member Miller stated that one of the things he has heard for the general employees is that the cost of this$100 supplement is approximately fifty cents per hundred dollars on a paycheck. He said he doubted they would have a problem with fifty cents,however,how could those funds best be utilized. This was a plan to help pacify the general employees,however if this is for over 300 employees,there must be more options and if the employees are okay at the fifty cents per hundred dollars rate,that's the kind of basis you can utilize to study. What can our fifty cents per hundred dollars do? Board Member Smith stated that he would rather see the multiplier go from 2.5 to 2.51 than this$100 supplement that he could conceivable pay into for another 10-15-20 years. 20 years from now, $100,if the inflation rate continues,isn't going to be worth much money,but contributions have been made at that fixed rate over all the years while the value of the outcome has continuously decreased. Discussion continued and Board Member Cornell thanked Board Member Miller and HR Director Diedrich for their suggestions. She stated she would like to pursue those and again stated that she does not want to see the benefit be lost. Board Member Vogt stated that the Board must be looking at what can be done to continually tweak and improve. This is one idea and a place to start and he said he does not think it will go by the wayside as long as the Board actively looks at ways to make sure there is a progressive and aggressive policy that is there to support people. L 4 Chairperson Ison stated that he is still looking at a postponement of it. It is not dead. He stated that we know what the costs are and what needs to be clarified. Foster has the cost. It needs to be clarified by the attorney. It needs to be communicated to the employees and then,at some point in time,it could be brought back in front of the Commission after that activity is done. He said he would like to call a Special Session where the Board can possibly take some action on this and make a recommendation to the City Commission by the Pension Fund Board Members. This would be a one item only session,a brief meeting and then it can be carried forth on the next Agenda. Board Member Cornell said she would research different ideas if HR Director Diedrich could give her some direction. HR Director Diedrich said she could give her some ideas but would not know what the costs would be. They would have to be reviewed actuarially. Board Member Cornell said if the Board had some ideas to discuss,they could be tossed around among them. Board Member Vogt said they could be run by the Actuary and they can give the Board a proforma of what they may or may not do and,while it is separate from the pension side,we are looking at things in terms of looking at trying to allow people to have all of their benefits taken out prior to tax,so that it creates less of a tax burden on the employee. HR Director Diedrich stated that she been looking at ways to save the City money and the employee money especially after what happened on their health insurance. Chairperson Ison stated that he would like it, in the Pension Board's February meeting,if HR Director Diedrich could attend and speak to this$100 supplement,with possible new concepts. At that point Ward Foster could be directed to do the actuarial study and get any other comments needed by the Pension Board Attorney. And when we get that information back we could have another special session to communicate it to the employees and we won't have to wait a quarter. Then we will make some good progress with it. Board Member Smith asked if the State was still in Special Session on the budget. City Manager Gleason stated that they were done. When asked if there is still the potential of an impact on this years'budget from the State,he responded by saying there will be an impact. What is not known is how good or bad. Not good,it is just real bad or not as bad. Board Member Smith then asked if that information would be available by the Pension Board's February meeting so it would be known by then how much of a whack the City is going to take from the State. Finance Director Horton stated that they feel they will not really be able to tell until sometime in January, after the first quarter. City Manager Gleason said it should be known by the February meeting. He stated that he did not want to be negative,but that means we should not just look at this year. They are going back in session in January because of redistricting so they are early which means they already will continue the cuts and tightening in terms of the next budget. There is now a full-blown recession. Sales tax is down in Orlando because people are afraid to visit Orlando and Las Vegas. These are the two cities, other than New York City, which are hardest hit. Because of this,our area could feel it longer and as lay-offs happen and companies file,it continues to set that trend. This area is in for a tough couple of years. Further discussion followed and City Manager Gleason asked Chairperson Ison if his intent with the Special Session was to bring some closure to the Commission saying for the January 18th meeting that you table this and will bring it back at some point. Chairperson Ison stated that he wanted to echo one thing that has been said here just so we will know where we are going to be with spending the City's money and the employee's money,the State will call another Special Session about in February because all they are doing now is projections. Travel in Florida is down and sales tax collections are down. There have been conventions cancelled out here at the Orange County Convention Center that have been unbelievable and the impact of that won't be seen until the retail sales at Christmas are over with. December is the biggest sales tax collection of the year for the retail industry and that is going to be down so,as a City government,we don't know where we're going to be. It is impacting the employees too. Another thing to point out is that there was a statement made that our Lor employees need to know what is going to be taken out of their pay checks before we take it out. He stated that he feels bad that this Board was not afforded the opportunity to do that job,but they were not aware of 5 the process. He promised that it would not happen again in the future because these Board members do not operate in that manner. Board Member Vogt asked if he understood correctly that this would never be retroactive. Chairperson Ison responded with a"no." City Manager Gleason answered that it cannot get to the staff and the Commission level without this Board fully understanding what it is or isn't,and retroactive may not necessarily be enacted,if it is something that is fully explained. Chairperson Ison stated that we could recommend they make it retroactive but they have got to do it,it's their money. Board Member Smith added that we came very close to having an Ordinance that was based on incorrect data that the employees and the City were operating on one set of numbers which were not valid. Discussion followed about employees who are currently in limbo because this Ordinance has not been passed. Board Member Smith stated that he told his employees that,as of right now,there is no$100 supplement and that he cannot guarantee that they will ever see it. He went on to say that he is more concerned about the larger majority of employees who are going to retire over the next several years than the few who are due to retire in the next couple of months. Chairperson Ison stated that the employees could be told that we have a new City Manager,a new Human Resources Director,and new Board members. Over 50%of the representation is directly by employees and,through the year 2002,the Board will be looking at possible enhancements to the retirement program. City Manager Gleason stated that in ways, such as the cafeteria,there is the enhancement of the idea that you can put more dollars in somebody's pocket and not raise anything. These are small items,There are going to be small raises. There won't be any other 16%across the board average raises. Chairperson Ison asked City Clerk Grafton about the time required for notice of an official meeting of the Board to take up a one item Agenda. Her answer was 24 hours. He then set the meeting for Wednesday, December 5,2001,at 4:00 p.m. cor Board Member Cornell asked if exit interviews had been addressed. City Manager Gleason responded saying that he did not think anyone,a Board Member or any employee would give anybody any financial advice whatsoever. HR Director Diedrich had a discussion that since we talk to people about their package as an employee coming in,in terms of what is there,that ought to be at least the place that all of that information is given on the way out. City Manager Gleason discussed possibly preparing a form which the employee would sign which says you have been advised to talk to your CPA,tax attorney, etc. He was advised that the form already is in place. He went on to say that he felt all of that needs to stay in Human Resources in the standpoint of advise of helping them out in the beginning and if there is an exit interview, that should be done by HR,not by a general employee to a general employee. Discussion between HR Deidrich and City Manager Gleason about HR employees being able to do these interviews if they receive the same education session that the Board members receive. City Manager Gleason states that he thinks Human Resources is the central clearing house and that somehow the process has to be streamlined and efficient enough so there is no confusion when it comes to questions of beneficiaries and some of the things that are there. He went on to say that when he hears the term"exit interview"it makes him think that the employee is being asked how he liked his job,etc. Board Member Cornell stated that it is an exiting process only. Board Member Smith said that it is a benefit briefing. City Manager Gleason went on to say that he hoped that the Board would work with HR Director Fran Deidrich knowing there is a different philosophy of a partnership here now. Chairperson Ison stated that this goes along with some of the questions that have been asked and that perhaps,working together,there could be a guide put together with information and general questions that everyone seems to have and they could be answered right there. Board Member Cornell mentioned to HR Director Diedrich the concern about getting this particular function into the HR Department because of the nature of the information that is on the documents, some of which is not public record. City Manager Gleason stated that there is a good relationship in all of the money,whether it is the employees'money or the City's. It is all in a collective pot and he assured the Directors that the role they 6 have is important,that they were either elected or chosen to be the representatives, and they should not be LP' penalized for doing what is necessary to cover their position. Board Member Cornell stated that serving in this position was competing with the job she was hired to do. Board Member Miller asked if the information for the non-exit interview could be put together in a package where they employees are given all of their pertinent information again with the instruction that they should contact their attorney, CPA,etc.,not as a matter of trying to answer questions on their leaving but giving them a package with directions of where to go. Board Member Cornell stated that they did not want them to go to the Actuary or the Pension Board attorney to which Board Member Miller responded that he meant for their own personal contacts. Board Member Smith stated that when an employee comes into his office to say that he wants to retire at some effective date,there is a form that is filled out. It is then sent to Finance where the high five years of salary are computed. When it is returned,it is then forwarded to Foster&Foster. They do all the work. It comes back and says, "if you take regular retirement on the specified date,here is what you draw. If you take the social security offset,here is what you draw. If you take it with survivor benefits,here is what you will draw." It is idiot proof. All the supervisor or department head has to do is say; "here are your options. If you don't understand them,I cannot help you;you need to go to talk to a tax advisor or fmancial advisor." Board Member Miller asked why,if the procedure was so standard,it should go to Human Resources. If the employee is handed that information and must sign for it,does it not become their own responsibility? Board Member Smith stated that the paperwork that goes outside the City,i.e.,to Foster&Foster,or SunTrust,or the Board attorney,has to be signed by one of the five Board members. Chairperson Ison said that that process would end. He stated that he is not going to spend money as a Board Member,every time someone feels like running to his or her supervisor about retirement. The companies,in their Crir agreements,notify what the employees'retirement benefits are and generally is once a year. If a person wants to request,they can only be allowed to have one request every 18 months or something like that. That does not have to come through Board. They can go to Human Resources for that. That's part of operations. We don't have the authority individually to spend the Pension Fund Board's money;it must be done collectively by a majority vote. City Clerk Jean Grafton stated that the policy right now is that each employee is entitled to two of those reports in a lifetime. HR Director Diedrich stated that there are a lot of places that time them to receiving them only if you are within so many years of retirement or if you are leaving the organization. Board Member Miller said that with this information, it appears that the process is already streamlined,it is just a matter of finalizing. Chairperson Ison stated that he wanted to clarify something he had said earlier. If the Board member feels he/she needs to call Foster&Foster to bring something up to date or ask the attorney a question,they certainly have the authority to do that,but it shouldn't be a part of the day to day duties to go do things for employees. There will be times when something needs to be explained and the Board member certainly has a right to pick up the phone and do that. He went on to say that he thinks there is a new spirit of cooperation between the Commission,Human Resources,the City Manager and this Board. Board Member Smith stated that he has been involved for five years and this is the first time there has been a Work Session between all these parties. That in itself speaks volumes of the difference and he personally likes it. Chairperson Ison reminded the Board that there would be a Special Session on Wednesday at 4:00 p.m.to address the one issue. It should be a short meeting,lasting no longer than 15 minutes. Work session ended. CieTranscription by Jo Ann Lacey West Orange Secretarial Services,Inc. 7