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HomeMy WebLinkAboutItem #16 a.b. Second Reading of Proposed Ordinances Amending the Police Officers' & Firefighters' Retirement Trust FundContact Name: Contact Number AGENDA ITEM COVER SHEET Meeting Date: September 17, 2013 Item # 1 �0 a Reviewed By: Charles J. Brown Department Director: Charl X3022 City Manager: Rob Fran Subject: Proposed Ordinance Amending the Police Officers' & Firefighters' Retirement Trust Reflecting Internal Revenue Code (IRC) Changes (Second Reading) Background Summary: The Pension Board for the City of Ocoee Police and Fire Retirement Trust Fund is governed by ordinance. Issue: Amendment to the Police and Fire Pension Ordinance Section I, Definitions to amend the definitions of Credited Service, Section 4, finances and Fund Management, and Section 15, Maximum Pension, to comply with recent changes to the Internal Revenue Code (IRC) relating to tax qualified pension plans such as this plan. These amendments clarify language required by the IRC and are mandatory amendments that must be made by September 30, 2013 to ensure the continuation of the plan's tax qualified status. With these additional changes, the pension plan will comply with all required applicable IRC changes and updates. Recommendations: It is the recommendation of the Police and Fire Pension board that the attached Ordinance amendment by approved as proposed. Attachments: An Ordinance amendment drafted by legal counsel for the Police and Fire Pension Board and Actuarial report of No Impact from Foster & Foster Actuarial Consultants Financial Impact: No Financial impact as stated by Foster and Foster Actuarial Consultants Type of Item: (please mark with an "x ") Public Hearing Ordinance First Reading Ordinance Second Reading Resolution Commission Approval Discussion & Direction For Clerk's Dept Use: Consent Agenda Public Hearing Regular Agenda x Original Document/Contract Attached for Execution by City Clerk Original Document/Contract Held by Department for Execution Reviewed by City Attorney N/A Reviewed by Finance Dept. N/A Reviewed by 0 N/A ORDINANCE NO. AN ORDINANCE OF THE CITY OF OCOEE, FLORIDA, RELATING TO THE CITY OF OCOEE MUNICIPAL POLICE OFFICERS' AND FIREFIGHTERS' RETIREMENT TRUST FUND; AMENDING ORDINANCE NUMBER 2010 -019, AS SUBSEQUENTLY AMENDED; AMENDING SECTION 1, DEFINITIONS BY AMENDING THE DEFINITION OF "CREDITED SERVICE "; AMENDING SECTION 4, FINANCES AND FUND MANAGEMENT; AMENDING SECTION 15, MAXIMUM PENSION; PROVIDING FOR SEVERABILITY OF PROVISIONS; REPEALING ALL ORDINANCES IN CONFLICT HEREWITH AND PROVIDING AN EFFECTIVE DATE. SECTION 1 . Authority The City Commission of the City of Ocoee has the authority to adopt this ordinance pursuant to Article VIII of the Constitution of the State of Florida and Chapter 166, Florida Statutes SECTION 2 . That the City of Ocoee Municipal Police Officers' and Firefighters' Retirement Trust Fund adopted by Ordinance No. 2010 -019, as subsequently amended, is hereby further amended by amending Section 1, Definitions, by amending the definition of "Credited Service ", to read as follows: Credited Service means the total number of years and fractional parts of years of service as a Police Officer or Firefighter with Member contributions, when required, omitting intervening years or fractional parts of years when such Member was not employed by the City as a Police Officer or Firefighter. A Member may voluntarily leave his or her Accumulated Contribution in the Fund for a period of five (5) years after leaving the employ of the Police or Fire Department pending the possibility of being reemployed as a Police Officer or Firefighter, without losing credit for the time that he or she was a Member of the System. If a vested Member leaves the employ of the Police or Fire Department, his or her Accumulated Contributions will be returned upon his or her written request. If a Member who is not vested is not reemployed as a Police Officer or Firefighter with the Police or Fire Department within five (5) years, his or her Accumulated Contributions, if one - thousand dollars ($1,000.00) or less, shall be returned. If a Member who is not vested is not reemployed within five (5) years, his Accumulated Contributions, if more than one - thousand dollars ($1,000.00), will be returned only upon the written request of the Member and upon completion of a written election to receive a cash lump sum or to rollover the lump sum amount on forms designated by the Board. Upon return of a Member's Accumulated Contributions, all of his or her rights and benefits under the System are forfeited and terminated. Upon any reemployment, a Police Officer or a Firefighter shall not receive credit for the years and fractional parts of years of service for which he has withdrawn his Accumulated Contributions from the Fund, unless the Police Officer or Firefighter repays into the Fund the contributions he has withdrawn, with interest, as determined by the Board, within ninety (90) days after his reemployment. The years or fractional parts of a year that a Member performs "Qualified Military Service" consisting of voluntary or involuntary "service in the uniformed services" as defined in the Uniformed Services Employment and Reemployment Rights Act (USERRA) (P.L.103 -353) after separation from employment as a Police Officer or Firefighter with the City to perform training or service, shall be added to his or her years of Credited Service for all purposes, including vesting, provided that: A. The Member is entitled to reemployment under the provisions of USERRA. B. The Member must returns to his or her employment as a Police Officer or Firefighter within one (1) year from the earlier of the date of his or her military discharge or his or her release from service, unless otherwise required by USERRA. C. The maximum credit for military service pursuant to this paragraph shall be five (5) years. D. This paragraph is intended to satisfy the minimum requirements of USERRA. To the extent that this paragraph does not meet the minimum standards of USERRA, as it may be amended from time to time, the minimum standards shall apply. In the event a Member dies on or after January 1, 2007, while performing USERRA Qualified Military Service, the beneficiaries of the Member are entitled to any benefits (other than benefit accruals relating to the period of qualified military service) as if the Member had resumed employment and then died while employed. In the event that a Member of this System has also accumulated Credited Service in another pension system maintained by the City, then such other Credited Service shall be used in determining vesting as provided for in Section 9, and for determining eligibility for early or normal retirement. Such other Credited Service will not be considered in determining benefits under this System. Only his or her Credited Service and Salary under this System on or after his or her date of membership in this System will be considered for benefit calculation. In addition, any benefit calculation for a Member of this System who is or becomes eligible for a benefit from this System after he or she has become a member of another pension system maintained by the City, shall be based upon the Member's Average Final Compensation, Credited Service and benefit accrual rate as of the date the Member ceases to be a Police Officer or Firefighter. extent reauired by Sect 414(u)(12) of the Code, an shall be treated as compensation for purposes of applying the limits on annual additions under Section 415(c) of the Code This provision shall be applied to all similarly situated individuals in a reasonablequivalent manner. SECTION 3 . That the City of Ocoee Municipal Police Officers' and Firefighters' Retirement Trust Fund adopted by Ordinance No. 2010 -019, as subsequently amended, is hereby further amended by amending Section 4, Finance and Fund Management, subsection 6., to read as follows: 6. The Board shall have the following investment powers and authority: A. The Board shall be vested with full legal title to said Fund, subject, however, and in any event to the authority and power of the Ocoee City Commission to amend or terminate this Fund, provided that no amendment or Fund termination shall ever result in the use of any assets of this Fund except for the payment of regular expenses and benefits under this System, except as otherwise provided herein. All contributions from time to time paid into the Fund, and the income thereof, without distinction between principal and income, shall be held and administered by the Board or its agent in the Fund and the Board shall not be required to segregate or invest separately any portion of the Fund. -2- B. All monies paid into or held in the Fund shall be invested and reinvested by the Board and the investment of all or any part of such funds shall be subject to the following: (1) Notwithstanding any limitation provided for in Chapter 185 and 175, Florida Statutes to the contrary (unless such limitation may not be amended by local ordinance) or any limitation in prior city ordinances to the contrary, all monies paid into or held in the Fund may be invested and reinvested in such securities, investment vehicles or property wherever situated and of whatever kind, as shall be approved by the Board, including but not limited to common or preferred stocks, bonds, and other evidences of indebtedness or ownership. In no event, however, shall more than twenty -five percent of the assets of the Fund at market value be invested in foreign securities. (2) The Board shall develop and adopt a written investment policy statement setting forth permissible types of investments, goals and objectives of investments and setting quality and quantity limitations on investments in accordance with the recommendations of its investment consultants. The investment policy statement shall be reviewed by the Board at least annually. (3) plans qualified under Section 401(a) of the Code, individual retirement accounts that are exempt under Section 408(e) of the Code, eligible governme plans that meet the requirements of Section Code For this purpose a trust includes a custodial account trial is treated as a trust under Section 401(f) or under Section 457(g)(3) of the Code. W hile any portion of the assets of Fund are invested in such a group trust, such group trust is itself adopted as a part of the System or Plan. K. The Board shall sustain no liability whatsoever for the sufficiency of the Fund to meet the payments and benefits herein provided for. M L. In any application to or proceeding or action in the courts, only the Board shall be a necessary party, and no Member or other person having an interest in the Fund shall be entitled to any notice or service of process. Any judgment entered in such a proceeding or action shall be conclusive upon all persons. K M. Any of the foregoing powers and functions reposed in the Board may be performed or carried out by the Board through duly authorized agents, provided that the Board at all times maintains continuous supervision over the acts of any such agent; provided further, that legal title to said Fund shall always remain in the Board. -3- In addition, the Board may, upon recommendation by the Board's investment consultant, make investments in group trusts meeting the requirements of Internal Revenue Service Revenue Ruling 81 -100 and Revenue Ruling 2011 -1 or successor rulings or guidance of similar import, and operated or maintained exclusively for the „ - - -- _• r ..: 1_A fl-f 0- SECTION 4 . That the City of Ocoee Municipal Police Officers' and Firefighters' Retirement Trust Fund adopted by Ordinance No. 2010 -019, as subsequently amended, is hereby further amended by amending Section 15, Maximum Pension, to read as follows: SECTION 15. MAXIMUM PENSION Basic Limitation Notwithstanding any other provisions of this System to the contrary, the Member contributions paid to, and retirement benefits paid from, the System shall be limited to such extent as may be necessary to conform to the requirements of Code Section 415 for a qualified retirement plan. Before January 1, 1995, a plan member may not receive an annual benefit that exceeds the limits specified in Code Section 415(b), subject to the applicable adjustments in that section. On and after January 1, 1995, a plan member may not receive an annual benefit that exceeds the dollar amount specified in Code Section 415(b)(1)(A) ($160,000), subject to the applicable adjustments in Code Section 415(b) and subject to any additional limits that may be specified in this System. For purposes of this Section, "limitation year" shall be the calendar year. 2. Adjustments to Basic Limitation for Form of Benefit le IN The annual amount of the straight life annuity commencing at the percent (5 %) interest assumption (or the applicable statutory interest assumption) and W for years prior to January 1 2009, the applicable mortality tables described in Treasury Regulation Section 1.417(e)- 1(d)(2) (Revenue Ruling 2001 -62 or any subsequent Revenue Rulm W be determined in accordance with "Treasury Regulations. not n ctrni (yht life annuitv or a aualited joint anct survivor annuity , Lnen Laic [21ct;CU111V JGiilCiil l 13 CD The annual amount of the straight life annuity (if any) payable to the Member under the Plan commencing at the same annuity starting date as the form of benefit to the Member, or 1. 2008. the applicable or any subsequent Internal Revenue Service guidance implementing Section 417(e)(3)(B) of the Code); or B. For a benefit paid in a form to which Section 417(e)(3) of the Code applies enerally, a lump sum benefit) the actuarially equivalent straight life annuity benefit that is the greatest of. LD The annual amount of the straight life annuity commencing at the particular form of benefit payable computed using a tive and one nail percent (5.5%) interest assumption (or the applicable statutory interest assumption) and (i) for years prior to January 1 2009, the nnnlicnhle mortality tables for the distribution un Treasury 417 tD The annual amount of the straight life annuity commencing at the annuity starting tarting date that has the same actuarial present value as the particular form of benefit payable (computed using the the applicable interest rate for the distribution under Treasury Regulation Section 1.417(e)- 1(d)(3) (the 30 -near Tr easury rate (prior to January 1, 2007, using the rate In eIIect Ior me II10111,11 Pllut w icLiiF'iiIk:;IIL' aiiu vii auu after January 1 2007 using the rate In effect for the first day of the Plan Year with a one -year stabilization period)) and (i) for years prior to January 1 2009 the applicable mortality tables for the distribution „ntler Trencl,ry Regulation Section 1.417(e)- l(d)(2) (the mortality or any SL visions of Ruling 2001 -62). and (ii) for y ears after December 31, 2008, the in S guidance implementing Section 417(e)(3)(B) of the Code), divided by 1.05. C. Benefits Not Taken into Account For purposes of this Section, the following benefits shall not be taken into account in applying these limits: -5- and mortality table or tabular factor, specrtled In the Tian Ior actuarial experience; subsequent Internal Revenue Service Vuidance implementmV, section 417(e)(3)(B) of the Code); or A. Any ancillary benefit which is not directly related to retirement income benefits; B. Any other benefit not required under §415(b)(2) of the Code and Regulations thereunder to be taken into account for purposes of the limitation of Code Section 415(b)(1) and C. That portion of any joint and survivor annuity that constitutes a qualified joint and survivor annuity 4. COLA Effect Effective on and after January 1, 2003, for purposes of applying the limits under Code Section 415(b) (the "Limit "), the following will apply: A. A Member's applicable limit will be applied to the Member's annual benefit in the Member's first ealenda limitation year of benefit payments without regard to any automatic cost of living adjustments; B. thereafter, in any subsequent calendar limitation year, a Member's annual benefit, including any automatic cost of living increases, shall be tested under the then applicable benefit limit including any adjustment to the Code Section 415(b)(1)(A) dollar limit under Code Section 415(d), and the regulations thereunder; but C. in no event shall a Member's benefit payable under the System in any calendar limitation year be greater than the limit applicable at the annuity starting date, as increased in subsequent years pursuant to Code Section 415(d) and the regulations thereunder. Unless otherwise specified in the System, for purposes of applying the limits under Code Section 415(b), a Member's applicable limit will be applied taking into consideration cost of living increases as required by Section 415(b) of the Code and applicable Treasury Regulations. 5. Other Adjustments in Limitations A. In the event the Member's retirement benefits become payable before age sixty -two (62), the limit prescribed by this Section shall be reduced in accordance with regulations issued by the Secretary of the Treasury pursuant to the provisions of Code Section 415(b) of the Code, so that such limit (as so reduced) equals an annual straight life benefit (when such retirement income benefit begins) which is equivalent to a one hundred sixty thousand dollar ($160,000) annual benefit beginning at age sixty -two (62). B. In the event the Member's benefit is based on at least fifteen (15) years of Credited Service as a full -time employee of the police or fire department of the City, the adjustments provided for in A. above shall not apply. C. The reductions provided for in A. above shall not be applicable to disability benefits pursuant to Section 8, or pre - retirement death benefits paid pursuant to Section 7. D. In the event the Member's retirement benefit becomes payable after age sixty - five (65), for purposes of determining whether this benefit meets the limit set forth in subsection 1 herein, such benefit shall be adjusted so that it is I on actuarially equivalent to the benefit beginning at age sixty -five (65). This adjustment shall be made in accordance with regulations promulgated by the Secretary of the Treasury or his delegate. Less than Ten (10) Years of Participation or Service The maximum retirement benefits payable under this Section to any Member who has completed less than ten (10) years of Credited Service with the City shall be the amount determined under subsection 1 of this Section multiplied by a fraction, the numerator of which is the number of the Member's years of Credited Service and the denominator of which is ten (10). The reduction provided by this subsection cannot reduce the maximum benefit below 10% of the limit determined without regard to this subsection The reduction provided for in this subsection shall not be applicable to pre- retirement disability benefits paid pursuant to Section 8., or pre- retirement death benefits paid pursuant to Section 7. 7. Participation in Other Defined Benefit Plans The limit of this Section with respect to any Member who at any time has been a member in any other defined benefit plan as defined in Code Section 4140) maintained by the City shall apply as if the total benefits payable under all City defined benefit plans in which the Member has been a member were payable from one plan. 8. Ten Thousand Dollar ($10 000) Limit; Less Than Ten Years of Service Notwithstanding the f6tegoing an3ihing in this Section 15 the retirement benefit payable with respect to a Member shall be deemed not to exceed the limit set forth in this subs ection 8. of Section 15 if the benefits payable, with respect to such Member under this System and under all other qualified defined benefit pension plans to which the City contributes, do not exceed ten thousand dollars ($10,000) for the applicable wear limitation Year and for any prior Pfan-Y limitation year and the City has not any time maintained a qualified defined contribution plan in which the Member participated provided however, that if the Member has completed less than ten (10) years of Credited Service with the City, the limit under this subsection 8. of Section 15 shall be a reduced limit equal to ten thousand dollars ($10,000) multiplied by a fraction the numerator of which is the number of the Member's years of Credited Service and the denominator of which is ten CUO - 9. Reduction of Benefits Reduction of benefits and/or contributions to all plans, where required, shall be accomplished by first reducing the Member's benefit under any defined benefit plans in which Member participated, such reduction to be made first with respect to the plan in which Member most recently accrued benefits and thereafter in such priority as shall be determined by the Board and the plan administrator of such other plans, and next, by reducing or allocating excess forfeitures for defined contribution plans in which the Member participated, such reduction to be made first with respect to the plan in which Member most recently accrued benefits and thereafter in such priority as shall be established by the Board and the plan administrator for such other plans provided, however, that necessary reductions may be made in a different manner and priority pursuant to the agreement of the Board and the plan administrator of all other plans covering such Member. 10. Service Credit Purchase Limits A. Effective for permissive service credit contributions made in limitation years beginning after December 31, 1997, if a Member makes one or more contributions to purchase permissive service credit under the System, as -7- allowed in Section 26 and 28, then the requirements of this Section will be treated as met only if: (1) the requirements of Code Section 415(b) are met, determined by treating the accrued benefit derived from all such contributions as an annual benefit for purposes of Code Section 415(b), or (2) the requirements of Code Section 415(c) are met, determined by treating all such contributions as annual additions for purposes of Code Section 415(c). (3) For purposes of applying subparagraph (1), the System will not fail to meet the reduced limit under Code Section 415(b)(2)(c) solely by reason of this subparagraph and for purposes of applying subparagraph (2) the System will not fail to meet the percentage limitation under Section 415(c)(1)(B) of the Code solely by reason of this subparagraph B. For purposes of this subsection the term "permissive service credit" means service credit— (1) recognized by the System for purposes of calculating a Member's benefit under the plan, (2) which such Member has not received under the plan, and (3) which such Member may receive only by making a voluntary additional contribution, in an amount determined under the System, which does not exceed the amount necessary to fund the benefit attributable to such service credit. Effective for permissive service credit contributions made in limitation years beginning after December 31, 1997, such term may, if otherwise provided by the System, include service credit for periods for which there is no performance of service, and, notwithstanding clause B.(2), may include service credited in order to provide an increased benefit for service credit which a Member is receiving under the System. 11. Contribution Limits. E A. For purposes of applying the Code Section 415(c) limits in this S" -ice which are incorporated by reference and for purposes of this subsection 11., only and for no other purpose, the definition of compensation where applicable will be compensation actually paid or made available during a ealend-ar limitation year, except as noted below and as permitted by Treasury Regulations Section 1.415(c) -2, or successor regulations. Unless another definition of compensation that is permitted by Treasury Regulations Section 1.415(c) -2, or successor regulation, is specified by the System, compensation will be defined as wages within the meaning of Code Section 3401(a) and all other payments of compensation to an employee by an employer for which the employer is required to furnish the employee a written statement under Code Sections 6041(d), 6051(a)(3) and 6052 and will be determined without regard to any rules under Code Section 3401(a) that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Code Section 3401(a)(2). in (1) However, for calend limitation years beginning after December 31, 1997, compensation will also include amounts that would otherwise be included in compensation but for an election under Code Sections 125(a), 402(e)(3), 402(h)(1)(B), 402(k), or 457(b). For calendar limitation years beginning after December 31, 2000, compensation will also include any elective amounts that are not includible in the gross income of the employee by reason of Code Section 132(f)(4). (2) For limitation years beginning on and after January 1, 2007, compensation for the ealenda limitation year will also include compensation paid by the later of 2'/2 months after an employee's severance from employment or the end of the calenda r limitation year that includes the date of the employee's severance from employment if (a) the payment is regular compensation for services during the employee's regular working hours, or compensation for services outside the employee's regular working hours (such as overtime or shift differential), commissions, bonuses or other similar payments, and, absent a severance from employment, the payments would have been paid to the employee while the employee continued in employment with the employer; or (b) the payment is for unused accrued bona fide sick, vacation or other leave that the employee would have been able to use if employment had continued. (3) Back pay, within the meaning of Treasury Regulations Section 1.415(c)- 2(g)(8), shall be treated as compensation for the limitation year to which the back pay relates to the extent the back pay represents wages and compensation that would otherwise be included under this definition. B: B. Notwithstanding any other provision of law to the contrary, the Board may modify a request by a Member to make a contribution to the System if the amount of the contribution would exceed the limits provided in Code Section 415 by using the following methods: (1) If the law requires a lump sum payment for the purchase of service credit, the Board may establish a periodic payment deduction plan for the Member to avoid a contribution in excess of the limits under Code Sections 415(c) or 415(n). (2) If payment pursuant to subparagraph (1) will not avoid a contribution in excess of the limits imposed by Code Section 415(c), the Board may either reduce the Member's contribution to an amount within the limits of that section or refuse the Member's contribution. C. If the annual additions for any Member for a limitation year exceed the limitation under Section 415(c) of the Code the excess annual addition will be corrected as ermitted under the Employee Plans Compliance Resolution System (or similar IRS correction program). W a ++ 12. Additional Limitation on Pension Benefits Notwithstanding anything herein to the contrary: A. The normal retirement benefit or pension payable to a Retiree who becomes a Member of the System and who has not previously participated in such System, on or after January 1, 1980, shall not exceed one hundred percent (100 %) of his Average Final Compensation. However, nothing contained in this Section shall apply to supplemental retirement benefits or to pension increases attributable to cost -of- living increases or adjustments. B. No Member of the System shall be allowed to receive a retirement benefit or pension which is in part or in whole based upon any service with respect to which the Member is already receiving, or will receive in the future, a retirement benefit or pension from a different employer's retirement system or plan. This restriction does not apply to social security benefits or federal benefits under Chapter 67, Title 10, U.S. Code. SECTION 5 . Repeal of Ordinances All ordinances or parts of ordinances in conflict herewith are hereby repealed. SECTION 6 . Severability In the event any section, subsection, paragraph, sentence, clause, phrase or word of this ordinance shall be held invalid by a court of competent jurisdiction, then such invalidity shall not affect the remaining portions hereof. SECTION 7 . Effective Date This ordinance shall take effect upon second reading and adoption. PASSED AND ADOPTED this day of 2013. ATTEST: Beth Eikenberry, City Clerk (SEAL) APPROVED: CITY OF OCOEE, FLORIDA By: S. Scott Vandergrift, Mayor ADVERTISED READ FIRST TIME READ SECOND TIME AND ADOPTED -10- FOR USE AND RELIANCE ONLY BY THE CITY OF OCOEE, FLORIDA APPROVED AS TO FORM AND LEGALITY THIS day of 1 2013. CHRISTIANSEN & DEHNER, P.A. Special Counsel C APPROVED BY THE OCOEE CITY COMMISSION AT A MEETING HELD ON , 2013 UNDER AGENDA ITEM NO. ksh \ocoee \pA07- 19- 13.ord -11- Orlando Sentinel City Of Ocoee 150 N Lakeshore Drive CITY OF OCOEE OCOEE, FL 34761 -0000 Before the undersigned authority personally appeared Pam L. Davis /Tamela Vargas /Deborah M. Toney, who on oath says that s/he is the Legal Advertising Representative of Orlando Sentinel, a daily newspaper published in Orange County, Florida; that the attached copy of advertisement, being a Public Hearing in the matter of September 17, 2013, at 7:15 p.m. in the Orange County _, was published in said newspaper in the issue(s); of 09/05/13 Affiant further says that the said Orlando Sentinel is a newspaper published in said Orange County, Florida, and that the said newspaper has heretofore been continuously published in said Orange County, Florida, each week day and has been entered as second -class mail matter at the post office in said Orange County, Florida; for a period of one year next preceding the first publication of the attached copy of advertisement; and affiant further says that s/he has neither paid nor promised any person, firm or corporation any discount, rebate, commission or refund for the purpose of securing this advertisement for publication in the said newspaper. The foregoing instrument was acknowledged before me this day of September, 2013, Pam L. Davis /Tamela Vargas /Deborah M. Toney, who is personally known to me and who did take an oath. cl DCOEE - - -- PM C REARfNG A Public Hearing before The Ocoee City Com- mission will be held Tuesday, Septem- ber 17, 2073, at 7:15 p.m. or as soon thereofter as may be heard, in the Commission Chambers of City Hall of 150 North Lakeshore Drive, Ocoee, Florida, to consider the following: ORDINANCE NO. 2013.012 AN ORDINANCE OF THE CITY OF OCOEE, FLORI- DA, REVISING CHAPTER 54 OF THE CITY CODE; PROVIDING FOR APPLICABILITY AND SEVER - ABILITY; PROVIDING FOR CODIFICATION; PRO- VIDING AN EFFECTIVE DATE. ORDINANCE NO. 2013 -013 AN ORDINANCE OF THE CITY OF OCOEE, FLORI- DA REVISING CHAPTER 108 OF THE CITY CODE; PROVIDING FOR APPLICABILITY AND SEVER - ABILITY; PflOYIDING FOR CODIFICATION; PRO- VIDING AN EFFECTIVE DATE. ORDINANCE NO. 2013 -014 AN ORDINANCE OF THE CITY OF OCOEE, FLORI- PAL PO IL CE N OFFICERS' AND FIREFIGHTEPS TIREMENT TRUST FUND; AMENDING ORDI- AMENDEDUAMENDING SECTION 1, DEFINITIO BY AMENDING THE DEFINITION OF "CREDITED SERVICE" AMENDING SECTION 4, FINANCES AND FUI4D MANAGEMENT; AMENDING SEC- TION 15 MAXIMUM PENSION PROVIDING FOR ORDINANCES IN CRONFL1ICfT9HEREWITG HAND PROVIDING AN EFFECTIVE DATE. If a Person decides to appeal any deci- sion made by the above City Commis- sion with respect to any matter consid- ered at such hearing, they will need a record of the proceedings, and for such Purpose they may need to ensure that a verbatim record of the proceed- ings is made, which record includes the testimony and evidence upon which the appeal is to be based. All interested parties are invited to at- tend and be heard with respect to the above. In accordance with the Ameri- cans with Disabilities Act, persons needing a special accommodation or an interpreter to participate in this Proceeding should contact the CitY Clerk's Office at 407- 905 -3105 at least two days prior to the date of hearing. Beth Eikenberry City Clerk COR1251761 9/5/2013 1251761 (S NOTARY PUBLIC Y STATE OF FLORIDA Comm# DD938521 r Expires 11/1812013 cJ �/ �JU 1111 :f U \�zlu uu"I� u uw uu yue ue..:,u .•,. �. w=' --" [date PubUshed and Media Name, Orland Senti THURSDAY_ SEPTEMBER 5, 2013 El A dverNserrnent ®r Awflde A Public Hearing before the Ocoee City Core- mission will be held Tuesday, Septem- ber 17, 2013, at 7:15 p.m. or as soon thereafter as may be heard, in the Commission Chambers of City Hall at 150 North Lakeshore Drive, Ocoee, Florida, to consider the following: ORDINANCE N0, 2013 -012 AN ORDINANCE OF THE CITY OF OCOEE, FLORI- OA REVISING CHAPTER 54 OF THE CITY CODE; PROVIDING FOR APPLICABILITY AND SEVER - ABILITY; PROVIDING FOR CODIFICATION; PRO- VIDING AN EFFECTIVE DATE. ORDINANCE NO. 2013.013 AN ORDINANCE OF THE CITY OF OCOEE, FLORI- DA REVISING CHAPTER 108 OF THE CITY CODE; PROVIDING FOR APPLICABILITY AND SEVER - ABILITY; PROVIDING FOR CODIFICATION; PRO- VIDING AN EFFECTIVE DATE. ORDINANCE NO. 2013 -014 AN ORDINANCE OF THE CITY•OF OCOEE, FLORI- DA RELATING TO THE CITY OF OCOEE MUNICI- PAL POLICE OFFICERS' AND FIREFIGHTERS' RE- TIREMENT TRUST FUND; AMENDING ORDI- NANCE NUMBER 2010 -D19, AS SUBSEQUENTLY BY bINGTH NEDEFINITI 1, SERVICE" AMENDING SECTION 4, FINANCES TION 15�MAXIMUM PENSI SEVERAbILITY OF PROVISION$; REPEALING ALL ORDINANCES IN CONFLICT HEREWITH AND PROVIDING AN EFFECTIVE DATE. If a person decides to appeal any deci- sion made by the above City Commis- sion with respect to any matter consid- ered at such hearing, they will need a record of the proceedings, and for such purpose they may need to ensure that a verbatim record of the proceed- ings is made, which record includes the testimony and evidence upon which the appeal is to be based. All interested parties are invited to at- tend and be heard with respect to the above. In accordance with the Ameri- cans with Disabilities Act, persons needing a special accommodation or an interpreter to participate in this Proceeding should contact the City Clerk's office at 407 -905 -3105 at least two days prior to the date of hearing. Beth Eikenberry City Clerk C O R 1251761 9/5/2013 i 1Wk4*V10wW AGENDA ITEM COVER SHEET Contact Name: Contact Number: Meeting Date: September 17, 2013 Item # � �0 Reviewed By: Charles J. Brown Department Director: Cha X3022 City Manager Rob Frank I-A Subject: Approval of Amended Ordinance for the City of Ocoee Municipal Police Officers' and Firefighters' Retirement Trust Fund Reflecting Changes Made By CBA (Second Reading) Background Summary: The Pension Board for the City of Ocoee Municipal Police Officers' and Firefighters' Retirement Trust Fund is governed by City of Ocoee ordinance. Changes to the Police and Fire pension benefits were agreed upon in the Collective Bargaining Agreements of the Police and Fire unions with the City of Ocoee. The Pension Ordinance must be amended to reflect the changes. Issue: Amendment to the Police Officers' and Firefighters' Pension Ordinance to include the following changes: - Amending the definition of Salary to comply with the regulations set forth in Senate Bill 1128 regulating the calculation of overtime hours to 300 per calendar year, and unused paid time off at final compensation. - Increase the Members Contribution rate from 7.6% to 8.0 %, effective September 17, 2013. -City shall make quarterly contributions to the Fund in an amount equal to the required City contribution, as shown by applicable actuarial valuation of the system, but in any event, not less than 12% of the payroll of the bargaining members - Implementing a maximum accrued benefit cap equal to 91% of Average Final Compensation for all Members hired on after October 1, 2012. - Amending the DROP (Deferred Retirement Option Plan) provision for Members who enter DROP on or after October 1, 2012 to reduce the fixed interest accrual from 6.5% to 2.0% per year compounded monthly. Recommendations: It is the recommendation of the board of trustees that the attached ordinance amendment be approved. Attachments: An Ordinance amendment drafted by legal counsel for the Police and Fire Pension Board. An Actuarial Impact Statement provided by the Plan Consultants. Financial Impact: Please see Actuarial Impact Statement. Type of Item: (please mark with an "x ") Public Hearing For Cleric's Dept Use: x Ordinance First Reading Consent Agenda Ordinance Second Reading Public Hearing Resolution Regular Agenda Commission Approval Discussion & Direction x Original Document/Contract Attached for Execution by City Clerk Original Document/Contract Held by Department for Execution Reviewed by City Attorney N/A Reviewed by Finance Dept. N/A Reviewed by 0 N/A ORDINANCE NO. AN ORDINANCE OF THE CITY OF OCOEE, FLORIDA, RELATING TO THE CITY OF OCOEE MUNICIPAL POLICE OFFICERS' AND FIREFIGHTERS' RETIREMENT TRUST FUND; AMENDING ORDINANCE NUMBER 2010 -019, AS SUBSEQUENTLY AMENDED; AMENDING SECTION 1, DEFINITIONS, AMENDING THE DEFINITION OF "SALARY "; AMENDING SECTION 5, CONTRIBUTIONS; AMENDING SECTION 6, BENEFIT AMOUNTS AND ELIGIBILITY; AMENDING SECTION 8, DISABILITY; AMENDING SECTION 27, DEFERRED RETIREMENT OPTION PLAN; PROVIDING FOR SEVERABILITY OF PROVISIONS; REPEALING ALL ORDINANCES IN CONFLICT HEREWITH AND PROVIDING AN EFFECTIVE DATE. SECTION 1 . Authority The City Commission of the City of Ocoee has the authority to adopt this ordinance pursuant to Article VIII of the Constitution of the State of Florida and Chapter 166, Florida Statutes SECTION 2 . That Ordinance No. 2010 -019, adopting the amended and restated City of Ocoee Municipal Police Officers' and Firefighters' Retirement Trust Fund, as subsequently amended, is hereby further amended by amending Section 1, Definitions, amending the definition of "Salary ", to read as follows: Salary means the total compensation for services rendered to the City as a Police Officer or Firefighter reported on the Member's W -2 form, plus all tax deferred or tax sheltered items of income derived from elective employee payroll deductions or salary reductions, excluding, pay for police officers' extra duty details and employers contribution into the Voluntary Employee Benefit Account (VEBA). ' extra duty details, plus all tax s„ l afy feduetions Any paid time off unused at the time of termination of employment with the City of Ocoee as a Police Officer or Firefighter will not be used in the pension credit calculation. For service earned on or after October 1 2012 Salary shall not include more than three hundred (300) hours of overtime per calendar year. Provided however in any event, payments for overtime in excess of three hundred (300) hours per year accrued as of October 1, 2012 and attributable to service earned prior to the October 1 2012 may still be included in Salary for pension purposes even if the payment is not actually made until on or after October 1, 2012. Compensation in excess of the limitations set forth in Section 401(a)(17) of the Code as of the first day of the Plan Year shall be disregarded for any purpose, including employee contributions or any benefit calculations. The annual compensation of each member taken into account in determining benefits or employee contributions for any Plan Year beginning on or after January 1, 2002, may not exceed $200,000, as adjusted for cost -of- living increases in accordance with Code Section 401 (a)(1 7)(B). Compensation means compensation during the fiscal year. The cost -of- living adjustment in effect for a calendar year applies to annual compensation for the determination period that begins with or within such calendar year. If the determination period consists of fewer than 12 months, the annual compensation limit is an amount equal to the otherwise applicable annual compensation limit multiplied by a fraction, the numerator of which is the number of months in the short determination period, and the denominator of which is 12. If the compensation for any prior determination period is taken into account in determining a Member's contributions or benefits for the current Plan Year, the compensation for such prior determination period is subject to the applicable annual compensation limit in effect for that prior -1- period. The limitation on compensation for an "eligible employee" shall not be less than the amount which was allowed to be taken into account hereunder as in effect on July 1, 1993. "Eligible employee" is an individual who was a Member before the first Plan Year beginning after December 31, 1995. SECTION 3 . That Ordinance No. 2010 -019, adopting the amended and restated City of Ocoee Municipal Police Officers' and Firefighters' Retirement Trust Fund, as subsequently amended, is hereby further amended by amending Section 5, Contributions, subsection 1., Member Contributions and subsection 3., City Contributions, to read as follows: Member Contributions. A. Amount Each Member of the System shall be required to make regular contributions to the Fund Effective September 17, 2013, Police Officer Members and Firefi�4hter Members shall make contributions in the amount of seven and six tents „° ent 7 .69%) eight percent (8 %) of his or her Salary. Member contributions withheld by the City on behalf of the Member shall be deposited with the Board immediately after each pay period. The contributions made by each Member to the Fund shall be designated as employer contributions pursuant to §414(h) of the Code. Such designation is contingent upon the contributions being excluded from the Members' gross income for Federal Income Tax purposes. For all other purposes of the System, such contributions shall be considered to be Member contributions. City Contributions So long as this System is in effect, the City shall make quarterly contributions to the Fund in an amount equal to the required City contribution, as shown by the applicable actuarial valuation of the System but in any event not less than twelve percent (12 %) of the payroll of the bargaining unit Members SECTION 4 . That Ordinance No. 2010 -019, adopting the amended and restated City of Ocoee Municipal Police Officers' and Firefighters' Retirement Trust Fund, as subsequently amended, is hereby further amended by amending Section 6, Benefit Amounts and Eligibility, subsection 2., Normal Retirement Benefit, to read as follows: 2. Normal Retirement Benefit A Member retiring hereunder on or after his or her normal retirement date shall receive a monthly benefit which shall commence on the first day of the month coincident with or next following his or her Retirement and be continued thereafter during Member's lifetime, ceasing upon death, but with one hundred twenty (120) monthly payments guaranteed in any event. The monthly retirement benefit shall equal three and one -half percent (3.5 %) of Average Final Compensation, for each year of Credited Service up to a maximum benefit not to exceed ninety -one percent (91%) of Average Final Compensation of the Member hired on or after October 1. 2012. -2- SECTION 5 . That Ordinance No. 2010 -019, adopting the amended and restated City of Ocoee Municipal Police Officers' and Firefighters' Retirement Trust Fund, as subsequently amended, is hereby further amended by amending Section 8, Disability, subsection 1., Disability Benefits In -Line of Duty, and subsection 3., Disability Benefits Not -In -Line of Duty, to read as follows: Disability Benefits In -Line of Duty Any Member who shall become totally and permanently disabled to the extent that he or she is unable, by reason of a medically determinable physical or mental impairment, to render useful and efficient service as a Police Officer or Firefighter, which disability was directly caused by the performance of his or her duty as a Police Officer or Firefighter, shall, upon establishing the same to the satisfaction of the Board, be entitled to a monthly pension equal to three and one -half percent (3.5 %) of his or her Average Final Compensation multiplied by the total years of Credited Service up to a maximum benefit not to exceed ninety-one percent (91 %) of Average Final Compensation of the Member hired on or after October 1, 2012 but in any event the minimum amount paid to the Member shall be forty -two percent (42 %) of the Average Final Compensation of the Member. Terminated persons, either vested or non - vested, are not eligible for disability benefits, except that those terminated by the City for medical reasons may apply for a disability within thirty (30) days after termination. 3. Disability Benefits Not -In -Line of Duty Any Member with ten (10) years or more Credited Service who shall become totally and permanently disabled to the extent that he or she is unable, by reason of a medically determinable physical or mental impairment, to render useful and efficient service as a Police Officer or Firefighter, which disability is not directly caused by the performance of his or her duties as a Police Officer or Firefighter shall, upon establishing the same to the satisfaction of the Board, be entitled to a monthly pension equal to three and one -half percent (3.5 %) of his or her Average Final Compensation multiplied by the total years of Credited Service up to a maximum benefit not to exceed ninety -one percent (91%) of Average Final Compensation of the Member hired on or after October 1, 2012 Terminated persons, either vested or non - vested, are not eligible for disability benefits, except that those terminated by the City for medical reasons may apply for a disability within thirty (30) days after termination. SECTION 6 . That Ordinance No. 2010 -019, adopting the amended and restated City of Ocoee Municipal Police Officers' and Firefighters' Retirement Trust Fund, as subsequently amended, is hereby further amended by amending Section 27, Deferred Retirement Option Plan, subsection 3. Funding, to read as follows: (2) Except as otherwise provided in subsection 2.D.(2), a Member's DROP Account under this subsection 3.B. shall be debited or credited after each fiscal year quarter with either: (a) For Members who enter the DROP prior to October 1, 2012, i nterest at an effective rate of six and one -half -3- percent (6.5 %) per annum compounded monthly on the prior month's ending balance, For Members who enter the DROP on or after October 1, 2012 interest at an effective rate of two percent (2 %) per annum compounded monthly on the prior month's ending balance or (b) Earnings, determined as follows: The average daily balance in a Member's DROP Account shall be credited or debited at a rate equal to the actual net rate of investment return realized by the System for that quarter. "Net investment return" for the purpose of this paragraph is the total return of the assets in which the Member's DROP Account is invested by the Board net of brokerage commissions, transaction costs and management fees. Upon electing participation in the DROP, the Member shall elect to receive either interest or earnings on his account to be determined as provided above. The Member may, in writing, elect to change his election only once during his DROP participation. An election to change must be made prior to the end of a quarter and shall be effective beginning the following quarter. SECTION 7 . Repeal of Ordinances All ordinances or parts of ordinances in conflict herewith are hereby repealed. SECTION 8 . Severability In the event any section, subsection, paragraph, sentence, clause, phrase or word of this ordinance shall be held invalid by a court of competent jurisdiction, then such invalidity shall not affect the remaining portions hereof. SECTION 9 . Effective Date This ordinance shall take effect upon second reading and adoption. PASSED AND ADOPTED this day of , 2013. ATTEST: Beth Eikenberry, City Clerk (SEAL) APPROVED: CITY OF OCOEE, FLORIDA LOW S. Scott Vandergrift, Mayor ADVERTISED READ FIRST TIME READ SECOND TIME AND ADOPTED FOR USE AND RELIANCE ONLY BY THE CITY OF OCOEE, FLORIDA APPROVED AS TO FORM AND LEGALITY THIS day of , 2013. CHRISTIANSEN & DEHNER, P.A. Special Counsel APPROVED BY THE OCOEE CITY COMMISSION AT A MEETING HELD ON 1 2013 UNDER AGENDA ITEM NO. ksh \ocoee \pf\07- 15- 13.ord -5- ORDINANCE NO. AN ORDINANCE OF THE CITY OF OCOEE, FLORIDA, RELATING TO THE CITY OF OCOEE MUNICIPAL POLICE OFFICERS' AND FIREFIGHTERS' RETIREMENT TRUST FUND; AMENDING ORDINANCE NUMBER 2010 -019, AS SUBSEQUENTLY AMENDED; AMENDING SECTION 1, DEFINITIONS, AMENDING THE DEFINITION OF "SALARY "; AMENDING SECTION 5, CONTRIBUTIONS; AMENDING SECTION 6, BENEFIT AMOUNTS AND ELIGIBILITY; AMENDING SECTION 8, DISABILITY; AMENDING SECTION 27, DEFERRED RETIREMENT OPTION PLAN; PROVIDING FOR SEVERABILITY OF PROVISIONS; REPEALING ALL ORDINANCES IN CONFLICT HEREWITH AND PROVIDING AN EFFECTIVE DATE. SECTION 1 . Authority The City Commission of the City of Ocoee has the authority to adopt this ordinance pursuant to Article VIII of the Constitution of the State of Florida and Chapter 166, Florida Statutes SECTION 2 . That Ordinance No. 2010 -019, adopting the amended and restated City of Ocoee Municipal Police Officers' and Firefighters' Retirement Trust Fund, as subsequently amended, is hereby further amended by amending Section 1, Definitions, amending the definition of "Salary ", to read as follows: Salary means the total compensation for services rendered to the City as a Police Officer fighter reported on the Member's W -2 form, plus all tax deferred or tax sheltered items of for police officers' extra duty details and employers contribution into the Voluntary Employee Benefit Account (VEBAZ , Any paid time off unused at the time of termination of employment with the Citv of Ocoee as a Police Officer or Firefighter will not be used in the pension credit calculation. For service earned on or after October 1, 2012, Salary shall not include more than three hundred (300) hours of overtime per calendar year. Provided however, in any event, payments for overtime in excess of three hundred (300) hours per year accrued as of October 1, 2012 and attributable to service earned prior to the October 1, 2012, may still be included in Salary for pension purposes even if the payment is not actually made until on or after October 1, 2012. Compensation in excess of the limitations set forth in Section 401(a)(17) of the Code as of the first day of the Plan Year shall be disregarded for any purpose, including employee contributions or any benefit calculations. The annual compensation of each member taken into account in determining benefits or employee contributions for any Plan Year beginning on or after January 1, 2002, may not exceed $200,000, as adjusted for cost -of- living increases in accordance with Code Section 401(a)(17)(B). Compensation means compensation during the fiscal year. The cost -of- living adjustment in effect for a calendar year applies to annual compensation for the determination period that begins with or within such calendar year. If the determination period consists of fewer than 12 months, the annual compensation limit is an amount equal to the otherwise applicable annual compensation limit multiplied by a fraction, the numerator of which is the number of months in the short determination period, and the denominator of which is 12. If the compensation for any prior determination period is taken into account in determining a Member's contributions or benefits for the current Plan Year, the compensation for such prior determination period is subject to the applicable annual compensation limit in effect for that prior -1- period. The limitation on compensation for an "eligible employee" shall not be less than the amount which was allowed to be taken into account hereunder as in effect on July 1, 1993. "Eligible employee" is an individual who was a Member before the first Plan Year beginning after December 31, 1995. SECTION 3 . That Ordinance No. 2010 -019, adopting the amended and restated City of Ocoee Municipal Police Officers' and Firefighters' Retirement Trust Fund, as subsequently amended, is hereby further amended by amending Section 5, Contributions, subsection l., Member Contributions and subsection 3., City Contributions, to read as follows: Member Contributions. A. Amount Each Member of the System shall be required to make regular contributions to the Fund Effective September 17, 2013, Police Officer Members and Firefighter Members shall make contributions in the amount of seven and six tents pefeent (7. eight percent (8 %) of his or her Salary. Member contributions withheld by the City on behalf of the Member shall be deposited with the Board immediately after each pay period. The contributions made by each Member to the Fund shall be designated as employer contributions pursuant to §414(h) of the Code. Such designation is contingent upon the contributions being excluded from the Members' gross income for Federal Income Tax purposes. For all other purposes of the System, such contributions shall be considered to be Member contributions. 3. City Contributions So long as this System is in effect, the City shall make quarterly contributions to the Fund in an amount equal to the required City contribution, as shown by the applicable actuarial valuation of the System but in any event not less than twelve percent 12 %) of the payroll of the bargaining unit Members SECTION 4 . That Ordinance No. 2010 -019, adopting the amended and restated City of Ocoee Municipal Police Officers' and Firefighters' Retirement Trust Fund, as subsequently amended, is hereby further amended by amending Section 6, Benefit Amounts and Eligibility, subsection 2., Normal Retirement Benefit, to read as follows: 2. Normal Retirement Benefit A Member retiring hereunder on or after his or her normal retirement date shall receive a monthly benefit which shall commence on the first day of the month coincident with or next following his or her Retirement and be continued thereafter during Member's lifetime, ceasing upon death, but with one hundred twenty (120) monthly payments guaranteed in any event. The monthly retirement benefit shall equal three and one -half percent (3.5 %) of Average Final Compensation, for each year of Credited Service p to a maximum benefit not to exceed ninety-one percent (91%) of Average Final Compensation of the Member hired on or after October L 2012. -2- SECTION 5 . That Ordinance No. 2010 -019, adopting the amended and restated City of Ocoee Municipal Police Officers' and Firefighters' Retirement Trust Fund, as subsequently amended, is hereby further amended by amending Section 8, Disability, subsection 1., Disability Benefits In -Line of Duty, and subsection 3., Disability Benefits Not -In -Line of Duty, to read as follows: Disability Benefits In -Line of Duty Any Member who shall become totally and permanently disabled to the extent that he or she is unable, by reason of a medically determinable physical or mental impairment, to render useful and efficient service as a Police Officer or Firefighter, which disability was directly caused by the performance of his or her duty as a Police Officer or Firefighter, shall, upon establishing the same to the satisfaction of the Board, be entitled to a monthly pension equal to three and one -half percent (3.5 %) of his or her Average Final Compensation multiplied by the total years of Credited Service up to a maximum benefit not to exceed ninety -one percent (91 %) of Average Final Compensation of the Member hired on or after October 1, 2012 but in any event the minimum amount paid to the Member shall be forty -two percent (42 %) of the Average Final Compensation of the Member. Terminated persons, either vested or non - vested, are not eligible for disability benefits, except that those terminated by the City for medical reasons may apply for a disability within thirty (30) days after termination. Disability Benefits Not -In -Line of Duty Any Member with ten (10) years or more Credited Service who shall become totally and permanently disabled to the extent that he or she is unable, by reason of a medically determinable physical or mental impairment, to render useful and efficient service as a Police Officer or Firefighter, which disability is not directly caused by the performance of his or her duties as a Police Officer or Firefighter shall, upon establishing the same to the satisfaction of the Board, be entitled to a monthly pension equal to three and one -half percent (3.5 %) of his or her Average Final Compensation multiplied by the total years of Credited Service up to a maximum benefit not to exceed ninety -one percent (91 %) of Average Final Compensation of the Member hired on or after October 1, 2012 Terminated persons, either vested or non - vested, are not eligible for disability benefits, except that those terminated by the City for medical reasons may apply for a disability within thirty (30) days after termination. SECTION 6 . That Ordinance No. 2010 -019, adopting the amended and restated City of Ocoee Municipal Police Officers' and Firefighters' Retirement Trust Fund, as subsequently amended, is hereby further amended by amending Section 27, Deferred Retirement Option Plan, subsection 3. Funding, to read as follows: (2) Except as otherwise provided in subsection 2.D.(2), a Member's DROP Account under this subsection 3.13. shall be debited or credited after each fiscal year quarter with either: (a) For Members who enter the DROP prior to October 1, 2012, i nterest at an effective rate of six and one -half -3- percent (6.5 %) per annum compounded monthly on the prior month's ending balancei For Members who enter the DROP on or after October 1, 2012 interest at an effective rate of two percent (2 %) per annum compounded monthly on the prior month's ending balance or (b) Earnings, determined as follows: The average daily balance in a Member's DROP Account shall be credited or debited at a rate equal to the actual net rate of investment return realized by the System for that quarter. "Net investment return" for the purpose of this paragraph is the total return of the assets in which the Member's DROP Account is invested by the Board net of brokerage commissions, transaction costs and management fees. Upon electing participation in the DROP, the Member shall elect to receive either interest or earnings on his account to be determined as provided above. The Member may, in writing, elect to change his election only once during his DROP participation. An election to change must be made prior to the end of a quarter and shall be effective beginning the following quarter. SECTION 7 . Repeal of Ordinances All ordinances or parts of ordinances in conflict herewith are hereby repealed. SECTION 8 . Severability In the event any section, subsection, paragraph, sentence, clause, phrase or word of this ordinance shall be held invalid by a court of competent jurisdiction, then such invalidity shall not affect the remaining portions hereof. SECTION 9 . Effective Date This ordinance shall take effect upon second reading and adoption. PASSED AND ADOPTED this day of 2013. ATTEST: Beth Eikenberry, City Clerk (SEAL) in APPROVED: CITY OF OCOEE, FLORIDA S. Scott Vandergrift, Mayor ADVERTISED READ FIRST TIME READ SECOND TIME AND ADOPTED FOR USE AND RELIANCE ONLY BY THE CITY OF OCOEE, FLORIDA APPROVED AS TO FORM AND LEGALITY THIS day of , 2013. CHRISTIANSEN & DEHNER, P.A. Special Counsel C APPROVED BY THE OCOEE CITY COMMISSION AT A MEETING HELD ON ,2013 UNDER AGENDA ITEM NO. ksh \ocoeeApfl07- 15- 13.ord -5- FOSTER & FOSTER May 16, 2013 VIA EMAIL AND MAIL Board of Trustees c/o Charlie Brown, Chairman City of Ocoee Municipal Police Officers' And Firefighters' Retirement Trust Fund 646 Ocoee Commerce Parkway Ocoee, Florida 34761 Re City of Ocoee Municipal Police Officers' and Firefighters' Retirement Trust Fund Dear Board: Enclosed is the following material, which has been prepared it) support of the proposed benefit changes to the Fund: 1. Three (3) copies of the required Actuarial Impact Statement, which outlines the costs associated with implementing the proposed changes. 2. Drafts of transmittal letters to the Bureau of Local Retirement Systems and the Bureau of Police Officers' and Firefighters' Retirement Trust Funds. It will be necessary for the Chairman to sign one (1) copy of each Actuarial Impact Statement as the Plan Administrator and forward the Impact Statement, along with a copy of the proposed Ordinance, to the two Bureaus prior to adoption. If you have any questions concerning the enclosed material, please let me know. Sincerely, L/ Douglas Lozen DHL/lke Enclosures 13420 Parker Commons Blvd., Suite 104 Fort Myers, FL 33912 • (239) 433-5500 • Fax (239) 481-0634 • www. foster-foster. cam CITY OF OCOEE MUNICIPAL POLICE OFFICERS' AND FIREFIGHTERS' RETIREMENT TRUST FUND ACTUARIAL IMPACT STATEMENT May 16, 2013 Attached hereto is a comparison of the impact on the Total Required Contribution (per Chapter 112, Florida Statutes), and the Required City Contributions, resulting from implementation of the following changes: 1) Amending the definition of Salary to comply with the regulations set forth in Senate Bill 1128. Effective October 1, 2011 for Firefighters and October 1, 2012 for Police Officers, Salary will include the frozen amount of paid time off accrued as of the respective effective dates stated above. These frozen amounts cannot be increased and any paid time off time taken after the effective dates will reduce the applicable frozen amount for each Member. The frozen accrual amount will be determined using the rate of pay in effect as of the effective dates for Firefighters and Police Officers, and the resulting balance upon termination of employment with the City will be used in the calculation of pension benefits. Any paid time off accrued after the effective dates and unused at the time of termination of employment with the City will be paid out at the then current rate of pay, but will not be used in the calculation of pension benefits. 2) Increasing the Member Contribution rate from 7.6% to 8.0 %, effective upon the adoption date of the corresponding proposed Ordinance. Please note for purposes of this impact statement, we have assumed an effective date of July 31, 2013, which is the date of the next regularly scheduled Pension Board meeting. 3) Implementing a maximum accrued benefit cap equal to 91% of Average Final Compensation for all Members hired on or after October 1, 2012, 4) Amending the DROP provisions for Members who enter the DROP on or after October 1, 2012 to reduce the fixed interest accrual from 6.5% to 2.0% per year, compounded monthly. Additionally, such Members will no longer have the election to accrue interest at the net rate of investment return realized by the System. Please note that for purposes of this impact statement, the load assumption for the projected salary at retirement to account for lump -sum accrued paid time off payouts was modified from a fixed 20% per individual to an amount equal to their individual current frozen accrual, determined as of October 1, 2012, as provided by the City. It is important to point out that the load assumption, and individual frozen accruals, will be subject to further modification based on future experience. Subsequent changes will be reflected in future actuarial valuations. Additionally, please note that there is currently no measurable impact for the change listed in Item 3 above, as it pertains solely to new hires. CITY OF OCOEE MUNICIPAL POLICE OFFICERS' AND FIREFIGHTERS' RETIREMENT TRUST FUND ACTUARIAL IMPACT STATEMENT May 16, 2013 (Page 2) The cost impact, determined as of October 1, 2012, as applicable to the fiscal year ending September 30, 2014, is as follows: * The City may use up to $421,323.57 in State Contributions for determining its minimum funding requirements. The changes presented herein are in compliance with Part VII, Chapter 112, Florida Statutes and Section 14, Article X of the State Constitution. Additionally, the undersigned is familiar with the immediate and long -term aspects of pension valuations and meets the Qualification Standards of the American Academy of Actuaries necessary to render the opinions contained herein. Douglas ozen, EA, MAAA Enrolled Actuary #11 -7778 Current Proposed Total Required Contribution % of Total Annual Payroll 39.66% 38.69% Member Contributions (Est.) % of Total Annual Payroll 7.60% 8.00% City and State Required Contribution % of Total Annual Payroll 32.06% 30.69% State Contribution (est.) * 421,324 421,324 % of Total Annual Payroll 5.46% 5.46% Balance from City % of Total Annual Payroll 26.60% 25.23% * The City may use up to $421,323.57 in State Contributions for determining its minimum funding requirements. The changes presented herein are in compliance with Part VII, Chapter 112, Florida Statutes and Section 14, Article X of the State Constitution. Additionally, the undersigned is familiar with the immediate and long -term aspects of pension valuations and meets the Qualification Standards of the American Academy of Actuaries necessary to render the opinions contained herein. Douglas ozen, EA, MAAA Enrolled Actuary #11 -7778 STATEMENT OF PLAN ADMINISTRATOR The prepared information presented herein reflects the estimated cost of the proposed improvement. Chairman, Board of Trustees Comparative Summary of Principal Valuation Results B. Assets Actuarial Value 29,495,559 29,495,559 Market Value 30,218,038 30,218,038 C. Liabilities Present Value of Benefits Proposed Current Active Members 10/1/201 10/1/2012 A. Participant Data 27,639,478 28,396,158 Number Included 1,525,224 1,566,872 Actives 119 119 Service Retirees 27 27 DROP Retirees 6 6 Beneficiaries 1 1 Terminated Vested 21 21 Disability Retirees 5 5 Total 179 179 Total Annual Payroll $7,714,088 $7,714,088 Payroll Under Assumed Ret. Age 7,714,088 7,714,088 Annual Rate of Payments to: 49,896,568 50,763,765 Service Retirees 949,812 949,812 DROP Retirees 361,491 361,491 Beneficiaries 12,218 12,218 Terminated Vested 180,524 180,524 Disability Retirees 132,864 132,864 B. Assets Actuarial Value 29,495,559 29,495,559 Market Value 30,218,038 30,218,038 C. Liabilities Present Value of Benefits Active Members Retirement Benefits 27,639,478 28,396,158 Disability Benefits 1,525,224 1,566,872 Death Benefits 160,717 164,977 Vested Benefits 2 2,566,348 Refund of Contributions 128,085 127,330 Service Retirees 9,959,481 9,959,481 DROP Retirees 5,182,746 5,182,746 Beneficiaries 79,591 79,591 Terminated Vested 921,472 921,472 Disability Retirees 1,544,641 1,544,641 Excess State Monies Reserve 254,149 254,149 Total 49,896,568 50,763,765 Proposed Current Valuation Date 10/1 /2012 10/1/2012 C. Liabilities - (Continued) Present Value of Future Salaries Present Value of Future Member Cont. Normal Cost (Entry Age) Retirement Benefits Disability Benefits Death Benefits Vested Benefits Refund of Contributions Total Normal Cost Present Value of Future Normal Costs Actuarial Accrued Liability Retirement Benefits Disability Benefits Death Benefits Vested Benefits Refund of Contributions Inactives plus State Reserve Total Actuarial Accrued Liability Unfunded Actuarial Accrued Liability D. Actuarial Present Value of Accrued Benefits Vested Accrued Benefits Inactives Actives Member Contributions Total Non - vested Accrued Benefits 13,152,893 !��ilr�:!1~ii] 3,731,520 857,597 110,812 7,692 199,389 41,738 1,217,228 7,481,122 22,746,742 846,069 114,874 1,587,527 45,351 17,942,080 43,282,643 13,787,084 17,687,931 17,687,931 9,196,020 9,196,020 3,927,660 3,927,660 30,811,611 30,811,611 Total Present Value Accrued Benefits Increase (Decrease) in Present Value of Accrued Benefits Attributable to: Plan Amendments Assumption Changes New Accrued Benefits Benefits Paid Interest Other 3,902,202 830,698 108,597 7,491 195,112 41,918 1 183,816 7,248,116 22,179,652 821,541 112,090 1,547,567 45,522 17,942,080 42,648,452 3,290,580 3,290,580 34,102,191 34,102,191 i i i i i 1 Total: 0 Proposed Current Valuation Date 10/1/2012 10/1/2012 Applicable to Fiscal Year Ending 9/30/2014 9/30/2014 E. Pension Cost Normal Cost (with interest) % of Total Annual Payroll 15.96 16.41 Adminstrative Expense (with interest) % of Total Annual Payroll * 1.04 1.04 Payment Required to Amortize Unfunded Actuarial Accrued Liability over 30 years as of 10/1/12 (with interest) % of Total Annual Payroll 21.69 22.21 Total Required Contribution % of Total Annual Payroll * 38.69 39.66 Expected Member Contributions % of Total Annual Payroll * 8.00 7.60 Expected City & State Contrib. % of Total Annual Payroll * 30.69 32.06 * Contributions developed as of 10/1/12 are expressed as a percentage of total annual payroll at 10/1/12 of $7,714,088 ACTUARIAL ASSUMPTIONS AND METHODS Mortality Rate Interest Rate Normal Retirement Early Retirement Disability Rat Termination Rate Sa lary Increases Payroll Growth Administrative Expenses Funding Method Actuarial Asset Method RP2000, Combined Healthy -- sex distinct. Disabled lives are set forward five years. Based on a study of over 650 public safety funds, this table reflects a 10% margin for future mortality improvements. 8% per year compounded annually, net of investment related expenses. Earlier of age 55 and 10 years of service or 25 years of service, regardless of age. Also, any Member who has reached Normal Retirement is assumed to continue employment for one additional year. Commencing with the earliest assumed early retirement date (age 45 with 5 years of service), Members are assumed to retire with an immediate subsidized benefit at the rate of 1 % per year. See table on following page (1205). It is assumed that 75% of disablements and active Member deaths are service related. See table on following page (W1305). 6.0% per year until the assumed retirement age, see table on following page. Projected salary at retirement is increased 20% to account for non- regular compensation. 3.0% per year. $77,061 annually. Entry Age Normal Actuarial Cost method. Each year, the prior Actuarial Value of Assets is brought forward utilizing the historical geometric 4 -year average Market Value returns, net of fees. It is possible that over time this technique will produce an insignificant bias above or below Market Value. Current Salary % Becoming Disabled % Terminating as a % of Salary Age D uring the Year During the Year at Age 55 20 0.14% 17.2% 13.0% 30 0.18% 15.0% 23.3% 40 0.30% 8.2% 41.7% 50 1.00% 1.7% 747% SUMMARY OF PLAN PROVISIONS (Through Ordinance No. 2010 -018) Eli ibilit Full --time employees who are classified as Police Officers or Firefighters participate as a condition of employment. Credited Service Salary Average Final Compensation Member Contributions City and State Contributions Total years and fractional parts of years of employment with the City as a Police Officer or Firefighter. W -2 Compensation, plus tax - deferred and tax - sheltered income. Average Salary for the 5 best years of the 10 years immediately preceding retirement or termination. 7.6% of Salary. Remaining amount required in order to pay current costs and amortize unfunded past service cost, if any, as provided in Part VII, Chapter 112, F.S. Normal Retirement Date Earlier of Age 55 and 10 years of Credited Service, or 25 years of Credited Service, regardless of age. Benefit Form of Benefit 3.5% of Average Final Compensation times Credited Service Ten Year Certain and Life Annuity (options available). Early Retirement Eligibility Age 45 and 5 Years of Credited Service. Benefit Accrued benefit, reduced 3% per year to age 50 and actuarially reduced from age 50 to age 45. Vestin Schedule 100% after 5 years of Credited Service. Benefit Amount Disability Eligibility Service Incurred Non - Service Incurred Member will receive the vested portion of his (her) accrued benefit payable at the otherwise Early or Normal Retirement Date. Covered from Date of Employment. 10 years of Credited Service. Exclusions Disability resulting from use of drugs, illegal participation in riots, service in military, etc. Benefit Benefit accrued to date of disability but not less than 42% of Average Final Compensation (Service Incurred). Duration Payable for life (with 120 payments guaranteed) or until recovery (as determined by the Board). Optional forms of payment are available. Death Benefits Pre - Retirement Vested Monthly accrued benefit payable to designated beneficiary for 10 years. Non- Vested Refund of accumulated contributions without interest. Post - Retirement Benefits payable to beneficiary in accordance with option selected at retirement. Board of Trustees Deferred Retirement Option Plan Eligibility Participation Rate of Return Form of Distribution a. Two Commission appointees, b. One Member from each Department elected by the Membership, and c. Fifth Member elected by other 4 and appointed by Commission. Within 12 months following satisfaction of Normal Retirement requirements. Not more than 60 months. At election of Member (may change once during DROP period) either: 1) actual net rate of investment return (total return net of brokerage commissions, transaction costs, and management fees), or 2) 6.5 %. Earnings are credited each fiscal quarter. Cash lump sum (options available) payable at termination of employment. ARTICLE 26 PENSION 26.1 All bargaining unit positions and employees in those positions, covered by this Agreement, shall be covered by the FS Chapter 175 Plan as established by the City of Ocoee provided they meet the eligibility requirements of same. All unit members shall increase their pension contribution from 7.6% to 8.0% of pension wages, effective upon effective date that the City's Ordinance is approved. 26.2 Effective October 1, 2012, the Pension Ordinance shall be amended to CAP the percentage of pension entitlement to 91.0% maximum entitlement for any unit member hired after October 1, 2012. 26.3 The City agrees to contribute no less than 12% of the unit member's payroll to the Pension Fund during the term of this Agreement. 26.4 Accrued paid time off (PTO) at separation will not count toward final average compensation for pension benefits, effective October 1, 2012. Thirty percent (30 %) of the total PTO owed the bargaining unit member shall be invested into the member's VEBA account. The remainder, seventy percent (70 %) shall be paid to the unit member on his final compensation distribution. 26.5 For purposes of pension calculation, the unit member shall receive monetary credit as part of their final average compensation for up to 300 hours of overtime as per State Statute. 26.6 Members who enter the Deferred Retirement Option Plan (DROP) after October 1, 2012 shall receive a maximum of 2% interest on their D.R.O.P, account contributions, 26.7 The City and Union agree that the pension multiplier will remain at 3.5% for the terin of this Agreement, 58 ""S C71YA ARTICLE XI: INSURANCE AND PENSION Section 11.1: Insurance During the term of this Agreement, the City shall provide the same health, medical, dental insurance, and short/long term disability under the same terms and conditions for bargaining unit employees and their dependants that it provides for the City's non - bargaining unit, non - exempt employees and their dependents. During the term of this agreement should the City decide to change premiums, co -pays, co- insurance and /or provide incentive programs, the bargaining unit employees will be required to participate as all other non - bargaining unit employees. Bargaining Unit Members that fail to show up for a scheduled appointment at the health center shall pay a scheduled $25.00 charge. Section 11.2: Pension All bargaining unit positions and employees in those positions, covered by this Agreement, shall be covered by the FS Chapter 175 Plan as established by the City of Ocoee provided they meet the eligibility requirements of same. All employees shall increase their pension contribution from 7.6% to 8.0% of pension wages. Effective October 1, 2011, the Pension Ordinance shall be amended to CAP the percentage of pension entitlement to 91.0% maximum entitlement for any employees hired after October 1, 2011. The City agrees to contribute no less than 12% of the fire unit member's payroll to the Pension Fund during the term of this agreement. Accrued paid time off at separation will not count toward final average compensation for pension benefits, effective October 1, 2012. Fire Collective Bargaining Agreement 2011 -2014 25 For purposes of Pension calculation, the employee shall receive monetary credit as part of their final average compensation for up to 300 hours of overtime as per State Statute. *Members who enter the Deferred Retirement Option Plan (D.R.O.P.) after October 1, 2011 shall receive a maximum of 2% interest on their D.R.O.P. account contributions. During the term of this agreement the City and the Union agree that any funds received under F.S. Chapter 175 (Insurance Premiums) shall be deposited into the Pension Fund to defray the increased costs of new benefits purchased prior to October 1, 2011. Section 11.3: Pension Multiplier The City and the Union agree that the pension multiplier will remain at 3.5% for the term of this agreement. Section 11.4: VEBA — Other Post - Employment Benefits The parties agree to participate in a Voluntary Employee Benefits Association — VEBA. The City will enter into an arrangement with a company to create the VEBA and the City will be the plan sponsor. Union members will contribute .5% of any annual pay increase starting October 1, 2012 to a VEBA account that will be managed by the City. The employees will have the opportunity annually in the month of September to sell back 20% of their paid time off accrual for cash, however, 5% of the 20% will be placed in the VEBA account. The remaining 15% will be paid to the employee. The employee must have a minimum of 60 hours to participate in this program. Any bargaining unit employee who terminates, Fire Collective Bargaining Agreement 2011 -2014 26 resigns, retires or otherwise leaves employment with the City, must contribute 25% of the accrued time off paid to any such employee upon leaving employment, to the employees VEBA account. In addition 12 hours of paid time will be contributed to the employees VEBA account the first payroll after October 1 of each year instead of increasing the Floating Holiday time. Fire Collective Bargaining Agreement 2011 -2014 27 Orla___ n(lQ_SentinEl -- 7 HURSDA_ y, EMQER 5 Mvertisement or AryHe A Public Hearing before the Ocoee Ciry Com- mission will be held Tuesday, Septem- ber 17, 2013, of 7;15 p. m. or as soon I hereafter as may be heard, in the Commission Chambers of City Hull at 150 North Lakeshore Drive, Ocoee, Florida, to consider the following; ORDINANCE AN ORDINANCE OF THE CITY OF OCOEE, FLORI- DA REVISING CHAPTER 54 OF THE CITY CODE; ABILITY; PROVIDINGPFORACODIFICATION SEVER- VIDING AN EFFECTIVE DATE. ORDINANE AN ORDINANCE OF THE CI OCOEE, FLORI, PAVI IING REVISING APPLICABILITY AND ABILITY; PROVIDING FOR CODIFICATION; PRO- VIDING AN EFFECTIVE DATE. AN ORDINANCE OF r THE CI1Y ?OF OCOEE, FLORI- DA RELATING TO THE CITY OF OCOEE MUNICI- PAL POLICE OFFICERS' AND FIREFIGHTERS' RE- NAN E E NUMBER 2010019, AS SUBSEQUENTLY AMENDED AMENDING SECTION 1, DEFINITIONS BY AMENDING THE DEFINITION OF "CREDITED SERVICE" AMENDING SECTION 4, FINANCES AND FUND MANAGEMENT AMENDING SEC- TION 15 MAXIMUM PENSI6N PROVIDING FOR SEVERAbILITY OF PROVISIONS; REPEALING ALL ORDINANCES IN CONFLICT HEREWITH AND PROVIDING AN EFFECTIVE DATE. If a person decides to appeal any deci- sion made by the above City Commis- sion with respect to any matter consid- ered at such hearing, they will need a such pu pose they Proceedings, and ennsurre that a verbatim record of the proceed- ings is made, which record includes the testimony and evidence upon which the appeal is to be based. All interested parties are invited to at- tend and be heard with respect to the above. In accordance with the Ameri- cans with Disabilities Act, persons needing a special accommodation or an interpreter to participate in this Proceeding should contact the City Clerk's office at 407- 905 -3105 at least two days prior to the date of hearing Beth Eikenberry City Clerk C O R 1251761 9/5/2013 Orlando Sentionel City Of Ocoee 150 N Lakeshore Drive CITY OF OCOEE OCOEE, FL 34761 -0000 Before the undersigned authority personally appeared Pam L. Davis /Tamela Vargas /Deborah M. Toney, who 'on oath says that s/he is the Legal Advertising Representative of Orlando Sentinel, a daily newspaper published in Orange County, Florida; that the attached copy of advertisement, being a Public Hearing in the matter of September 17, 2013, at 7:15 p.m. in the Orange County _, was published in said newspaper in the issue(s); of 09/05/13 Affiant further says that the said Orlando Sentinel is a newspaper published in said Orange County, Florida, and that the said newspaper has heretofore been continuously published in said Orange County, Florida, each week day and has been entered as second -class mail matter at the post office in said Orange County, Florida, for a period of one year next preceding the first publication of the attached copy of advertisement; and affiant further says that s/he has neither paid nor promised any person, firm or corporation any discount, rebate, commission or refund for the purpose of securing this advertisement for publication in the said newspaper. _?-e foregoing instrument was acknowledged before me this day of September, 2013, Pam L. Davis /Tamela Vargas /Deborah M, Toney, who is personally known to me and who did take an oath. (s DEBO�A M. TONEY NOTARY PUBLIC 7° STATE OF FLORIDA Commill DD938521 _11 Expires 11118/2013 CITY =EE­—_ FrM[fC- HEARING A Public Hearing before the Ocoee City Com- mission will be held Tuesday, Septem- ber 17, 2013, of 7:15 p.m. or as soon thereafter as may be In in the Commission Chambers of Cifv , Hall at 150 North Lakeshore Drive, Ocoee, Florida, to consider the following: AN ORDINANCE OF THE CITY OF OCOEE, FLORI- PRbVIDING REV APPLICABILITY BIITY AND EVER- ABILITY; PROVIDING FOR CODIFICATION; PRO. VIDING AN EFFECTIVE DATE. AN ORDINANCE OF THE CITYOF OCOEE, FLORI- DA, REVISING CHAPTER 108 OF THE CITY CODE; ABILITY; PROVIDING FOR ICATION VIDING AN EFFECTIVE DATE. AN ORDINANCE CF THE CITYOF OCOEE, FLORI. PAL RELA FFICERS' AND FIREFIGHTEHS TIREMENT TRUST FUND; AMENDING ORDI- NANCE NUMBER 2010 -019 AS SUBSEQUENTLY AMENDED AMENDING SECTION 1, DEFINITIONS BY AMENDING THE DEFINITION OF "CREDITED SERVICE" AMENDING SECTION 4, FINANCES AND FUFID MANAGEMENT; AMENDING SEC. TION 15 MAXIMUM PENSION PROVIDING FOR SEVERAbILITY OF PROVISIONS` REPEALING ALL ORDINANCES IN CONFLICT HEREWITH AND PROVIDING AN EFFECTIVE DATE. If a person decides to appeal any deci- sion made by the above City Commis- sion with respect to any matter consid, ered of such hearing, they will need a record of the proceedings, and for such purpose they may need to ensure that a verbatim record of the proceed- ings is made, which record Includes the testimony and evidence upon which the appeal is to be based. All interested parties are invited to at- tend and be heard with respect to the above. In accordance with the Ameri- cans with Disabilities Act, persons needing a special accommodation or an interpreter to participate in this Proceeding should contact the City Clerk's office of 407 -905 -3105 of least two days prior to the date of hearing. Beth Eikenberry City Clerk COR1251761 9/5/2013 1251761