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HomeMy WebLinkAboutItem #06 Second Reading - Approval of Amended Ordinance for Police Officers' and Firefighters' Retirement Trust Fund Reflecting Changes made by CBAlk4SO%-/� Ocoee florida AGENDA ITEM COVER SHEET Meeting Date: October 7, 2014 Item # Contact Name: Contact Number: Charles J. Brown X3022 Reviewed By: Department Director: CharlE City Manager: Rob Frank Subject: Approval of Amended Ordinance for the City of Ocoee Municipal P ice 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: Amending the BAC -DROP provision for Members who enter BAC -DROP on or after October 1, 2012 to reduce the fixed interest accrual from 6.5% to 2.0% per year compounded monthly. This amendment should have been included in the Ordinance 2013 -15 during the September 17, 2013 Commission Meeting but was unintentionally omitted at that time. 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 'V) Public Hearing For Clerk's Dept Use: Ordinance First Reading Consent Agenda X 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 4 1 N/A Reviewed by Finance Dept. N/A Reviewed by () N/A � : FOSTER & FOSTER to ACTUARIES AND CONSULTANTS September 11, 2014 VIA EMAIL AND MAIL Livia Nixon Benefits USA 3810 Inverrary Boulevard, Suite 303 Lauderhill, FL 33319 Re: City of Ocoee Municipal Police Officers' and Firefighters' Retirement Trust Fund Dear Livia: In response to Lee Dehner's letter dated September 4, 2014, we have reviewed the proposed ordinance (identified on page 2 as ksh \ocoee \pfl07- 31- 14.ord) providing for a reduction in the interest rate for members entering the BAC -DROP on or after October 1, 2012, and have determined that its adoption will have no impact on the assumptions used in determining the funding requirements to the program. Because the changes do not result in a change in the valuation results, it is our opinion that a formal Actuarial Impact Statement is not required in support of its adoption. However, since the Division of Retirement must be aware of the current provisions of all public pension programs, it is recommended that you send a copy of this letter and a copy of the fully executed Ordinance to each of the following offices: Mr. Keith Brinkman Bureau of Local Retirement Systems Division of Retirement P. O. Box 9000 Tallahassee, FL 32315 -9000 If you have any questions, please let me know. Sincerely, H. Ld eX, E1�, MAAA cc: Lee Delmer, Board Attorney Ms. Sarah Carr Municipal Police and Fire Pension Trust Funds Division of Retirement P.O. Box 3010 Tallahassee, FL 32315 -3010 13420 Parker Commons Blvd., Suite 104 Fort Myers, FL 33912 - (239) 433 -5500 - Fax (239) 481 -0634 - www.faster- foster.com .4j�e2 -L 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 27, DEFERRED RETIREMENT OPTION PLAN; PROVIDING FOR SEVERABILITY OF PROVISIONS; REPEALING ALL ORDINANCES IN CONFLICT HEREWITH AND PROVIDING AN EFFECTIVE DATE. SECTION 1 . Autho ' . 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 27, Deferred Retirement Option Plan, subsection 61 BAC -DROP, to read as follows: J. BAC -DROP. In lieu of participation in the DROP, a Member may ekct for Members who elect on or after October 1, 2012 to participate in an actuarially equivalent BAC -DROP to a date of the Member's choosing, provided that the date is not further back than the Member's nonnal retirement date. The total BAC - DROP period shall not exceed sixty (60) months and shall provide an immediate partial hum sum distribution, payable to the Member's DROP Account. The l unp sum shall be the accrued benefit, determined as if the Member had entered the DROP retroactively, as described above, accumulated with interest at the annual fixed rate of 6� 2_ %. The Member may choose an actuarially equivalent form of benefit at the tone of BAC - DROP entry, as described in Section 10, Optional Forms of Benefits. Member contributions shall be returned for the period of the BAC -DROP participation. A Member electing the BAC -DROP shall terminate employment not later than the first day of the month following his election to participate in the BAC -DROP. The Board's authority and power for administration of the BAC -DROP shall be the same as those provided for in the DROP. SECTION 3 . Repeal of Ordinances All ordinances or parts of ordinances in conflict herewith are hereby repealed. SECTION 4 . 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 5 . Effective Date This ordinance shall take effect upon second reading and adoption. -1- PASSED AND ADOPTED this day of 5 2014. ATTEST: APPROVED: CITY OF OCOEE, FLORIDA Beth Eikenberry, City Clerk (SEAL) FOR USE AND RELIANCE ONLY BY THE CITY OF OCOEE, FLORIDA APPROVED AS TO FORM AND LEGALITY THIS day of 1 2014. CHRISTIANSEN & DEHNER, P.A. Special Counsel By: ksh \ocoec \pf07- 31- 14. ord By: S. Scott Vandergrifl, Mayor ADVERTISED 1 2014 READ FIRST TIME , 2014 READ SECOND TIME AND ADOPTED . 2014 APPROVED BY THE OCOEE CITY COMMISSION AT A MEETING HELD ON --------------- - -- ,2014 UNDER AGENDA ITEM NO. !PA ORDINANCE NO. 2013-015 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 SEC'T'ION 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 emp contribution into the Voluntary Employ Benefit Account (VEBA). , plus all t&x sa y f eduetions. 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)(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 period. The limitation on compensation for an "eligible employee" shall not amount which was allowed to be taken into account hereunder as in effect "Eligible employee" is an individual who was a Member before the first Pla n after December 31, 1995. be less than the on July 1, 1993. Year beginning 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 Firefwhter Members shall make contributions in the amount of seven and s ten — Per-e��;) eight Zt 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 ining 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: x � 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 Av erage 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 I., Disability Benefits In -Line of Duty, and subsection 3., Disability Benefits Not -In -Line of Duty, to read as follows: I . 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. Disabilitv Benefits Not -In -Line of 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 quartet 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 l 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 j' day of t'!, 2013. ATTEST: APPROVED: CITY OF OCOEE, FLORIDA 4 13y: S. Scott Vandergrift, Mayor (SEAL) E0 ADVERTISED. READ FIRST TIM 13 READ SECOND TIME A D ADOPT -,D FOR USE AND RELIANCE ONLY BY THE CITY OF OCOEE, FLORIDA APPROVED AS TO FORM AND LEGALITY THIS _L:n day of 2013. CHRISTIANSEN & DEHNER, P.A. Special Counsel By: / APPROVED BY THE OCOEE CITY COMMISSION AT A MEETING HELD ON ` s-i - N)Dac 1-1 ,2013 UNDER AGENDA ITEM NO. fib. ksh \ocoec \pN7- 15- 13.ord -5- U1 )y ya u u'�;j v Date puMshed and Media Nape r f brtitndo Se nWiE[ THU RSDAY, OCTOBER 9, 2014 E3 Adverthement or Article— t CITY OF OCOEE - PUBLIC HEARING A Public Hearing before the Ocoee City Commission will be held Tuesday, October 21, 2014, 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: If a person decides to appeal any decision made by the above City Commission with revpect to any matter considered 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 proceedings Is made, which record Includes the testlmonv and evidence upon which the appeal Is to be based. All interested parties are invited to attend and be heard with respect to the obove, In accordance with the Americans with Disabilities Act, persons with a special accommodation or on 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 ORG2735286 10/0912014