28South Miami
To: The Honorable Mayor & Members of the
Via: Roger M. Carlton, Acting City Manager VY v" "VL%
From: Jeanette Enrizo, Human Resources M
Date: January 14, 2010 Agenda Item No.:
F..
Subject: General Employees Pension Plan
Request: Reduction of General Employees Pension Contribution Amounts
ISSUE: COMPENSATION AND WAGES FOR FISCAL YEARS 2009 THROUGH 2012:
During the budget hearings, the City Commission determined there would be no compensation
increases for FY 09/10 for the number of employees who are not represented by our bargaining
units.
Currently, the City of South Miami has three (3) unions which consist of the PBA Upper Unit
(Lieutenants and Captains), PBA Lower Unit (Police Officers and Sergeants) and AFSCME
Bargaining Unit (Sanitation, Maintenance and Code Enforcement Officers). Based on the
recommendations that have been brought forth regarding our three unions, the Administration
believes that equity is important to maintain a positive, motivated and fairy compensated work
force. The following is a breakdown of the cost to the City for the non collective bargaining
employees longevity, merit and cost -of- living adjustment as well as the savings for FY 09/10.
Cost
Savings
Longevity $ 3,241
$ None
Merit $ None
$ 94,842
COLA $ None
$ 43,228
ISSUE: PENSION EMPLOYEE/EMPLOYER CONTRIBUTION AMOUNTS:
Based on the information provided above, we are recommending that those employees that
participate in the pension be granted a reduction in their pension contribution amount for FY 09/10.
This will partially offset what they might have received in a COLA and merit with a reduction in their
pension contribution amount for FY 09/10. At the present time, both the City and these non collective
employees that are in the City's General Pension Plan contribute towards pension costs. This cost is
determined by a yearly actuarial valuation that is performed by the pension plan's actuary, Gabriel,
Roeder and Smith. Since the City will save approximately (2 %), by not giving non collective
employees COLA or merit increases, the Administration believes it's equitable to reduce deductions for
the non bargaining unit employees who participate in the pension plan in a similar amount for FY
09/10. The reduction to the retirement plan shall be reduced from (11.6 %) to (9.6 %). This would
only be for this year and will expire on September 30, 2010. Effective October 1, 2010, this will revert
back to current language from the City's "Personnel Rules and Regulations Manual — Section 18.0 —
Pension Plan," which states as follows: "Effective October 1, 2001, the employee contribution to the
retirement plan will be 7 %. Should the total contribution be actuarially determined to exceed 14 %,
both the City and the employees will share equally the excess amount (e.g., should the total
contribution be actuarially determined to be 16 %, the City shall contribute a total of 8% and the
employees shall contribute a total of 8 %."
It is further the intent of the Administration to continue to pursue the possibility of various
retirement alternatives utilizing direction received from the City Commission after review of the
recommendations of the AD Hoc Pension Committee.
CONCLUSION: The extraordinary economic circumstances faced by all local governments
including the City of South Miami were clearly an underpinning of the FY 09/10 budget process. As a
result, the resources available to the Administration were extremely limited. Our non bargaining unit
employees are cognizant of the budget constraints that we are facing today; however, as a means to
provide these employees with fairness and equity, the Administration seeks to decrease the employee
pension contribution of two (2) percent for FY 09/10. Essentially by eliminating the COLA and merit
increases for FY 09/10, saving $138,070 for the City of South Miami, it is fair to reduce the employees
pension contribution by a like amount. This results in an economic benefit for these employees as well
as the City since a larger COLA and merit increase has generally been granted in better economic
times.
Backup Documentation:
Cl Proposed resolution.
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RESOLUTION NO.:
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF SOUTH MIAMI, FLORIDA AUTHORIZING THE CITY
MANAGER TO IMPLEMENT A TWO PERCENT (2 %) DECREASE IN
PENSION CONTRIBUTION AMOUNTS FOR FY 09/10 FOR ALL FULL
TIME NON COLLECTIVE BARGAINING EMPLOYEES THAT
PARTICIPATE IN THE GENERAL EMPLOYEES PENSION PLAN
RETROACTIVE TO OCTOBER 1, 2009; PROVIDING FOR AN
EFFECTIVE DATE.
WHEREAS, in an effort to provide equity and fairness to its non collective employees;
WHEREAS, in lieu of COLA and merit for FY 09/10 which totaled $138,070;
WHEREAS, the City would like to implement a two (2 %) decrease in pension
contribution amounts for FY 09/10;
NOW, THEREFORE, BE IT RESOLVED, BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF SOUTH MIAMI, FLORIDA:
Section 1: That the Mayor & City Commission authorize the City Manager to implement a
two percent (2 %) decrease in pension contribution amounts for FY 09/10;
Section 2: If any section clause, sentence, or phrase of this resolution is for any reason
held invalid or unconstitutional by a court of competent jurisdiction, the holding shall not affect the
validity of the remaining portions of this resolution.
Section 3: The attached exhibit is incorporated by reference into this resolution.
PASSED AND ADOPTED this
ATTEST:
CITY CLERK
READ AND APPROVED AS TO FORM
CITY ATTORNEY
day of 2010.
APPROVED:
MAYOR
COMMISSION VOTE:
Mayor Feliu
Vice Mayor Beasley
Commissioner Palmer
Commissioner Newman
Commissioner Sellars