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Ord No 20-16-2253ORDINANCE NO.20-16-2253 An Ordinance amending the South Miami Code of Ordinances by Deleting Section 2-4.5,"Voluntary retirement of elective officers" WHEREAS,the CityofSouthMiamiand the American Federation of State,Countyand MunicipalEmployees,AFL-CIO,CityEmployees Local 3294 (hereinafter "Union"),have entered intoa new Collective Bargaining Agreement ("Agreement"),effective June 22,2016 to June 21, 2019;and WHEREAS,the City Commission has received and reviewed an actuarial impact statement related to such amendments;and WHEREAS,the City Commission wishes to repeal by deleting Sec.2-4.5 of the South MiamiCode of Ordinances in order to bringitin conformity with the amendments made to the South Miami Pension Plan that effectuate the changes called forin the Agreement;and WHEREAS,the City Commission deems it to bein the public interest to provide these changes to the Code of Ordinances; NOW,THEREFORE,BEIT HEREBY ORDAINED BYTHE MAYOR AND CITY COMMISSION OFTHECITYOF SOUTH MIAMI,FLORIDA,THAT: Section 1.That Chapter 2 Article I,Section 2-4.5,"Voluntary retirement of elective officers"of the City of South Miami Code of Ordinances is hereby repealed by deleting as follows: Voluntary retirement of elective officers. {a-)Whenever any elective officer of the City of South Miami has hold any elective office of the city or town for a period of twenty (20)years or more consecutively except for one period not exceeding six(6)months,such elective officer may voluntarily resign or retire from such elective office with the right to bo paid,and ho shall bo paid onhis own requisition,by the city during the remainder of his natural life,a sum equal to one half of the salary that the city was authorized bylaw to pay said elective officer at the time ofhis resignation or retirement;or the sumof one hundred dollars ($100.00)per month,whichever sum shall bo greater. {b}In cases whore an elective officer during his term of office entered or enters and served or servos in the armed forces of the United States during any period during which the United States was or shall bo engaged in war and thereafter was or shall bo appointed or again bo elected to the same elective office prior to discharge from such service in the armed forces,such time of service in the armed forces shall not bo construed to boa break in consecutive service and shall bo counted in determining the years of consocutivo service of such elective officer. Pg.2 of Ord.No.20-16-2253 {e)Thecityshall appropriate andprovideinitsannual budget sufficientmoneysto moot the roquiromonts of this section. Section 2.Rules of Construction.This ordinance will be construed in accordance with Florida statutory law and Florida case law. Section 3.Codification.The provisions of this ordinance shall become and be made part of the Codeof Ordinances of the Cityof South Miamias amended;that the sections ofthis ordinance maybe renumbered or re-lettered to accomplish such intention;and that the word "ordinance"maybe changed to "section"or other appropriate word. Section 4.Severability.Ifany section,clause,sentence,or phrase of this ordinance is foranyreasonheldinvalidor unconstitutional bya court of competent jurisdiction,thisholding shall not affect the validity of the remaining portions of this ordinance. Section 5.Ordinances in Conflict.All ordinances or parts of ordinances and all section and parts of sections of ordinances in direct conflict herewith are hereby repealed.However,it is not the intent of this section to repeal entire ordinances,or parts of ordinances,that give the appearance of being in conflict when the two ordinances canbe harmonized or when onlya portion of the ordinance in conflict needs to be repealed to harmonize the ordinances.If the ordinance in conflict can be harmonized by amending its terms,itis hereby amended to harmonize the two ordinances.Therefore,only that portion that needs to be repealed to harmonize the two ordinances shall be repealed. Section 6.Effective Date.This ordinance shall become effective upon enactment. PASSED AND ENACTED this 6th dayof September ,2016. ATTEST: CITY CLERK X^^^pJ2j2^ 1st Readings 8/16/16 2nd Reading-9/6/16 READ AND APPROVED AS TO FORM: langua^l^gality an[ execO^Wthereof/ APPROVED: COMMISSION VOTE: Mayor Stoddard: Vice Mayor Welsh Commissioner Edmond: Commissioner Harris: Commissioner Liebman: 3-1 absent Yea Nay Yea Yea r^ou#Miami V htr rlTV AC Dl CACAK.IT 1!\/IMr CITY OF SOUTH MIAMI r "TU «=«r c .„,v„m.OFFICE OF THE CITYMANAGERTHECITYOFPLEASANTLIVING INTER-OFFICE MEMORANDUM c To:The Honorable Mayor &Members of the City Commission From:Steven Alexander,City Manager Date:August 16,2016 Agenda Item: Request:An Ordinance amending the South Miami Code of Ordinances by Deleting Section 2-4.5,"Voluntary retirement of elective officers" EXECUTIVE SUMMARY The attached ordinance remains inlinewith the items presented within the Retirement Plan Presentation heldon Tuesday,May3,2016byFinance Director AlfredoRiverolandBradley Cassel,PensionBoardChair.As detailed in the presentation,the Ordinances are structured to meet the City's objectives of: -Retaining our City employees,the City's greatest assets.-Retention is the key to corporate stability and resident satisfaction. -Hiring the best talent -TheCityisstruggling to regainalevelof respect and desirability asan employer and to compete for the best employee talent, benefits can make the difference between securing the recruitment. -Keeping&managingemployee turnover -Employee turnover canbecostly. Various sources estimate itcan cost anywhere from30%to 200%of an employee's annual salary to replace them. FINANCIAL IMPACT TO CITY Positive TheCity conducted a pension projection studyproviding the Citywithanidea related to the cost of adopting the changes reflected in the Ordinance.Basedon the April29,2016, projection study,an estimated savingsof $47,000 and$3.6millionsavingsover30-years, accrues to the benefit of the City.Upon approval onfirst reading,the Cityis required to complete an actuarial impact study which provides the Mayor and Commissionwiththeofficial cost or savings related to the adoption of the Ordinance before second reading. Page1 of 4 BACKGROUND OnJuly12,2016 the Mayor andCommission adopted Resolution 136-16-14691 which approved the Collective Bargaining Agreement (CBA)forFiscalYears beginning June 22,2016 through June 21,2019 between the American Federation of State,County and Municipal Employees ("AFSCME"),Local 3294 and the CityofSouthMiami,and authorized the City Manager to execute the agreement.The proposed Ordinance incorporates the changes necessary to conform to the approved CBA,specificallyArticle37,Retirement Benefits. The development of the proposed Ordinances and reaching a final agreement with the AFSCME members w^s a ^ry long and tiresome process.Many hours of research,conference calls,and meetings were conducted to finally provide the items reflected in this packet. Furthermore,since the City wascompletingsuchasignificantrevisionof the City'sexisting retirement benefit,itwas recommended that we address the outdated existing section of the City'sCodewhichprovides retirement benefitsto elected officials.On September 17,1971,the Mayorand City Commission adopted an ordinance which provided the elected officerswith voluntary retirement shouldtheyholdofficefor twenty-years ormore.In Novemberof2010, the City residentsvoted that "noperson may appearonthe Ballot for Election asMayoror City Commissionerif,by the endofhis or her current term ofoffice,the person will haveserved(or, butforresignationwouldhaveserved)in office as the Mayororasa City Commissionerfora totalofnineyearsor more:"As stated,thenewterm limit requirements havemadeSection 2- 4.5 obsolete andnonconforming;hence,the proposed ordinance updates theissueof retirement benefitsfor the Mayorand City Commission. PROPOSED ORDINANCE As requiredunder the approved CBA,Section 6oftheRetirement Benefits,theproposed Ordinance provides that all employeeswhoareparticipatinginthe ICMA-RC defined contribution plan onthedatethe AFSCME 2016-2019 Agreement Is ratified,June22,2016,and all employeeshiredonorafter that date,will be given aone-time,irrevocable election (opportunity)toparticipate in oneofthe following retirementplan options: Option 1:Anewsecondtierofthe City General Employees'Pension Plan,which shall contain the following provisions: a.Full vestinguponcompletionoften (10)yearsof credited service. b.Futureservicebenefitmultiplieris1.60%. c.Final Average Compensation will bethe average ofthe highest eight (8)yearsof compensation. d.Normal RetirementDateistheearlierof(a)age65andcompletion often (10)years ofcreditedservice;or(b)completionof thirty-three (33)yearsof credited service. e.The employee contribution will be three percent (3%)of compensation. Page2 of 4 o o f.No cost-of-living adjustments willbe provided on retirement benefit. Option 2:Defined Contribution planwith the following provisions: a.Employees are required to contribute 3%of compensation. b.Citywill contribute 7%of compensation. c.Employees willbefully vested after one year of service. Employees who are participating in the ICMA-RC defined contribution (DC)planon the date the 2016 -2019 Agreement is ratified,June 22,2016,and would liketojoin the new second tier plan,must make the irrevocable election within 90-days after the adoption of the new pension ordinance creating the new second tier pension plan.The effective date of the enactment of the ordinance identified above shall be known as the "Commencement Date". The employee contribution for employees who are participating inCity General Employees' Pension Plan on the "Commencement Date"October 1,2016 will be capped at 10%of compensation,which currently provides fornocap percentage. The existing Defined Contribution Planwill not be offered to any new hiresanditwill be frozen forall persons who are presently in the planand elect tojoinanyof the options of the second tier pension plan.Therefore,itwill ultimately cease tobe of use to any employees. \~"J For all AFSCME bargaining unit members who become employed subsequent tothe "Commencement Date"ofclosing the Plan,the following will apply:The employees will be givenan opportunity to buy-back anyandall years of service up-to the number of years they haveworkedat the Cityatanytimewhile employed at the Cityina position eligiblefor participation in the Plan.Employees must pay the full actuarial cost of the service they buy backandsuch buy-back willbe at the employee's sole expense as calculated by the Retirement Plan's actuary. Moreover,as part of the revised plan,the Cityis including two new classes to the plan;the Administrative Management ServiceClass (AMSC)and the ElectedOfficersClass (EOC).The AMSC Members willbe composed of the persons whoholdonly the followingpositions: -City Manager -CityClerk -City Attorney -Assistant or Deputy City Manager -Finance and Administration Director,C.F.O. -Police Chief -Planning Director -Building Director -Public Works Director \^J -Chief Administrative Officer (currently Finance Office Manager) Page 3 of 4 -Chief Procurement Officer(currentlyPurchasingManager) -Parks and Recreation Director The EOC Membersshallbecomposedofthe Mayor,Vice Mayorandthe three (3)City Commissioners. AMSC and EOC Members shallbefully vested in the pension planupon completion of three (3)years of continuous service.Also,the required contribution for both classes of members will be 7%,with the multiplierforbothclassesbeing 3%. RECOMMENATION Approve the attached ordinance that enacts changesnecessarytobringthe City in compliance withResolution136-16-14691whichapproved the Collective Bargaining Agreement (CBA)for Fiscal Yearsbeginning June 22,2016 through June21,2019 between the American Federation of State,CountyandMunicipalEmployees ("AFSCME"),Local 3294and the City of South Miami, andto extend these samebenefitstoall eligible andapplicableemployeesandOfficers. ATTACHMENTS -Proposed Ordinances -Resolution 136-16-14691 Approving the AFSCME 2016 CBA -City Retirement Plan Presentation (May 3,2016)(J -April29,2016 GRS Projection Study Page4of4 o o RESOLUTION NO.:136-16-14691 A Resolution approving and authorizing the City Manager to execute the June22,2016 to Scptcmbor 30 June 21.2019 Agreement,between the American Federation of State,County and Municipal Employees ("AFSCME"),Local3294and the City Of South Miami. WHEREAS,the Mayor andCityCommissionoftheCityofSouth Miami seekto providethehighestlevels services forthe citizens,residents,businessesand visitors oftheCity of South Miami;and WHEREAS,a Collective Bargaining AgreementwiththeAmerican Federation ofState, Countyand Municipal Employees ("AFSCME"),Local 3294isan integral componentofthis effort; and WHEREAS,theCity Administration and AFSCME have successfully concluded negotiationsonanewcontractwhich achieves theseobjectives;and WHEREAS,AFSCME hasratifiedtheproposedcontract. NOW,THEREFORE,BE IT RESOLVED BY THE MAYOR AND C8TY COMMISSION OF THE CITY OF SOUTH MBAM8,FLORIDA THAT: Section I:The Mayor &CityCommissionapproves the Collective Bargaining Agreement for Fiscal Years beginning June22,2016 -SoptGrnbcr 30lune21,2019 between the American Federation ofState,Countyand Municipal Employees ("AFSCME"),Local 3294andthe CityofSouth Miami,andauthorizestheCity Manager to execute theagreement. Section 2;If anysection clause,sentence,orphraseofthisresolutionisforanyreason held invalid orunconstitutionalbyacourtof competent jurisdiction,the holding shall not affect thevalidityof the remainingportionsofthisresolution. Section 3;The attachedexhibitis incorporated by reference intothisresolution. Section 4:This resolution shall becomeeffectiveuponitsadoption,effective July 13, 2016. PASSED AND APPROVED this1_2ttyay of July 2016. ATTEST: Qha2,G>i APPROVED: COMMISSION VOTE: Mayor Stoddard: Vice Mayor Welsh: Commissioner Edmond: Commissioner Harris: Commissioner Liebman: 5-0 Yea Yea Yea Yea Yea h- o DC •i:...:;*>*-.''.'y\;;^-^\r-.'fv ?«'.;u wy#r;r&-*r^^^-XiVj^'t ^tfW ^4rV..-A'i-i^/i.'.VuV J'< r^-. Miami Retirement Plan History The City has offered a retirement package to employees dating back to the 1950's,In 1965 it opened its first defined benefit pension program. Management of this pension from roughly 1990 until 2008 was poor at best,making nominal investment returns to the pension (if at all Combination of previous pension mismanagement and the recession,created a huge impact on the police& general employee's required contribution,along the City's required contribution. -^s v' i *-•> &-UV *£?•' W is City of South Miami Retirement Plan History v.. Si3 5 Mi S8fII In haste to react toa tough economy,which was |l exasperated by the history of mismanagement,the City Commission closed the Defined Benefits (DB Pension) plan to all new general employees,offered existing employees the option to"optout,"and opened upaDefined Contribution plan which does NOT require the employees, nor the City,to contribute to their future. mm 9& • a $1 ft fe ll This resulted in many employees either dropping or severely reducing their pension coverage.Fromapublic policy standpoint this was shameful and needs tobe changed. Current DB Pension plan isnow attaining at least market rate of return and is operated conservatively by a Pension ^|jj|f Board that has retained professional consultants, money managers and top quality plan administration. o fi E 3:is..*S-lv.y.:< ft £ ill '/:$ hat is a Retirement Plan? A retirement plan isa retirement savings vehicle to replace employment income upon retirement. These plans may be set up by employers, insurance companies,trade unions, government,or other institutions. Two Most Common Retirement Benefits Are: •'Defined Benefit (DB Defined Contribution (DC) |-$#;|| ^j-v%$&'»? S #*%&£ &i &£!!&&& <t ^*..'A?-•Si'1) Iflll I till life I§§H 1 iS^fe&'i' & ¥ If II I & te Why is it Important for the City to have a SI Si?3 If I 1 Retirement Plan for Employees?i^1 III ft *;||££*i Our employees are one of the City's greatest assets.- Retention is the key to corporate stability and resident satisfaction. Hiring the best talents -City struggling to regain a leve respect and desirability as an employer and to compete for the best employee talent,benefits can make the difference between securing the recruitment. Keeping&managing employee's turnover -Employee turnover can be costly.Various sources estimate it can cost anywhere from 30%to 200%ofan employee's annual salary to replace them. o o %Pi 11 i mm m a 6- u §11^ 11 %% Hi %$ (:.) EFINE CONTRIB A defined contribution (DC)plan isa retirement plan in which the employer,employee or both make contributions on a regular !•Retirement income for employees is dependent on the I employees investment strategy and market returns. %DC Plan provides employees no incentive to stay |loyal to the City and therefore its residents. I®DC Plans placesthe burden of |income on the Employee,who I participating in a retirement pla A large number of SM empl of the current ICMA 7%match IS Si &%&?% I lite nil IBIS apa I $ «1} llfas n la k*-aw^ 1 Defined Benefits (DB)P DB Plans offer a guaranteed retirement income based upon the employee's earnings history, tenure of service and age. *wm %&&$ The greater number of years with the City,the ]• greater guaranteed income. DB Plan offers employees a strong incentive stay and be loyal to the City and its residents O !(2 i«.•kilft.f.t.'-i.' Defined Benefits I II i-n it: IV. Employee Pension Contribution -The amount that the Employee must contribute from their paycheck. Normal Retirement Age -The age that employees may retire without any reduction in benefit. Number of Years to Vest -The minimum years required for employees to be eligible to obtain a Pension Benefit FinalAvg.Compensation -The annual salary used to calculate the guaranteed retirement income. Multiplier -Amultiplieris the pension formula factor that determines the size of the lifetime annuity a pensioner receives. COLA on Pension Benefits -Cost of Living Adjustment on the lifetime income to maintain the value of the pension benefit relative to inflation. in •& !«ft jg is*&:-:s Ittl n ;2 $i Hi mih I I: *s;-* ti Wm.. mm I p|p; I I li11? si \*v.- tlli *s #*3 II Mm*; O O <C CD CD ^22 ^^^V^?^^.-^~'j^Cv<»*^<:r^ I "U 13 n r—tM — > b v va&M.-K'iiaz mv^.v.*.'.;>: o O < V. •*'^.-v»*\*~ V »***5.*•,r is -*—%£\iSift '.-""».*'«•, ,.,^^-^-x y^p - © O O LLJ jflUB <> H c ()3 <D <D .^Ajxr.n.-jj'-T:.-'"-;-?.;-•:>?if/;.v:!^wsv^rv^v ;*:«vV'.r.-'..;7/"^T"'r";*v:" ••*'&^v:v::-;..':^*^ti?*Z%>&Mi&M5&%$i?&?.S&tMi^'®*k®&$MiSrZ' WB^^&m^^^m^S^^^^MsM h$m •^ii=MMsiP^^m^-^^mm^Mm^. *2Z!2&Si\-;»:"{'•C^X5^1 i-Vi;?i^::ofi»-r?i^!i':--;i'.***•.:•&'^J^/w^Vt^^^^^^^^^ v>T?c^irTP;?vv.:>'5r^.\v.5\^-t^K-iv;'-:i-:;:.v'--iro3 O O o P>CD <0 0 LL CL nod < O O < 03 o O ^- <D O A.*r*7f 'O ,*-*^ C CO 0) x-.v-.«.\'.?"-:-.vr-ri',rt'-..' O 0 o CL 13 O ^0 .2 a) CO c 0 CD LJLJ J2 O LLJ 0 o 0 CO 0 CO CO 0 CO 0 CO CO 0 to 0 CO CO 0 CL o 0 CO 0 > CO c CO 0 CO 0 gKMMB 0 g "co c 0 a. c o O o o Defined Benefit Pre-201 Employee Pension Contributions (From Employee Paycheck) Normal Retirement Age Number of Years to Vest Final Avg.Compensation Multiplier COLA on Pension Benefits iCMACity Investment Plan FY 11 -13.7% 55 1 Q-years 5-years 2.75% Yes N/A General Employees gmt.Class 7%Match / 1 *•• m ?<£ *5** 13 I? I;:: 1 il it i IB ^«^a nana General E Defined Be Employee Pension Contribution (From Employee Paycheck) Normal Retirement Age Number of Years to Vest Final Avg.Compensation Multiplier COLA on Pension Benefits ICMA City Investment Plan o FY 16-7% 10-years 5-years 2.25% New&Opted-Out Generaj Employees & Igmt,Class Up-to 7% 15$ SI 3p 1 ism US &&i LH" &-a ?pg £$ E l e c t e d O f f i c i a l s R e t i r e m e n t i i . iv . ; .• ' , . » m m mi i a 5? I I si f f i ;| li s ! l i i t ! m m I S '$ ' $ £ $ > l i s 11 1 i t s i i l S e c . 2- 4 . 5 . - V o l u n t a r y r e t i r e m e n t o f e l e c t i v e o f f i c e r s . a) W h e n e v e r a n y el e c t i v e of f i c e r of t h e Ci t y of S o u t h Mi a m i h a s he l d a n y el e c t i v e of f i c e of t h e ci t y o r to w n fo r a pe r i o d of tw e n t y (2 0 ) y e a r s or mo r e co n s e c u t i v e l y e x c e p t fo r o n e pe r i o d no t ex c e e d i n g si x (6 ) m o n t h s . . . (O r d . No . 73 2 , §§ 1— 3 , 9- 1 7 - 7 1 ) i i S i t «:-v:^:^.?nwa:ns.r,ci'-. £if) £z? u-q_CD 0 CO CO 0 O 0 CO (/) a: 0 ^ o © O)LL O I— _CO 0 Q£ 0 O co CD C/) O O ') -£.::£•"•v^^y.ryay.'^ar ^i^^^f.^rg^^K.p;r>^^:j; CO O 3. 0 o CO o 0 o C/) O O •i.v:t >'^X'-rera.-*?.* Is Is I R0P0SED General Emplo' -Opening the revamping th participation ity Retirement Plai an current employees, Adopting plan benefits which are similar FRS. i &* •y&M ITEMS DEFINED Employee Pension Contribution (From Employee Paycheck) Normal Retirement Age Number of Years to Vest Final Avg.Compensation Multiplier COLA on Pension Benefits /"""N City Defined Ben.efit City Defined Benefit Pre -2011 Post -2011 FY 11 -13.7%FY 16 -7% 55 60 10-years 10-years 5-years 2.75 Yes 5-years 2.25 No New&Opted-Out General .^-*^.,rM N/AGeneral Employees .0 R/,.~,ICMA City Investment Plan ',_,_fl/_,\.Employees &Mgmt.ClassyMgmt.Class7%Match ..^__0/°Up-to7% Proposed 2015 Plan Items Defined Employee Pension Contribution (From Employee Paycheck) 3%Contribution for Employees Joining the New Proposed Plan &a Cap of 10%for employees remaining in the current pension plan Admin Mnqt.Class 7%Contribution Normal Retirement Age 65 or 33-years of Service 65 or 33-years of Service j I Number of Years toVest 10-years 3-yearsj FinalAvg.Compensation Multiplier COLA on Pension Benefits ICMACity Investment Plan 8-years 1.6% No Opted-Out General Employee 3%Employee Contribution With aCity 7%Contribution-Vesting After 1-yea-% •o • 8-years 3.0% Opted-Out Admin Mngt.Class 3%Employee Contribution with a City 7%Contribution-Vesting After 1-year C o s t B e n e f i t A n a l y s i s T h e p r o p o s e d c h a n g e s to t h e Ci t y ' s p e n s i o n p r o g r a m p r o v i d e s : • $4 7 , 0 0 0 S a v i n g s in t h e fi r s t - y e a r o v e r t h e e x i s t i n g DB P l a n * . • $3 4 7 , 0 0 0 s a v i n g s o v e r 5 - y e a r s o v e r t h e e x i s t i n g DB r §3 n « I I * $3 . 6 mi l l i o n S a v i n g s o v e r t h e 3 0 - y e a r s o v e r t h e e x i s t i n g DB Pl a n * . ii | Wh i l e en s u r i n g th a t al l of ou r e m p l o y e e s h a v e a r e s p o n s i b l e ! re t i r e m e n t pr o g r a m th a t wi l l pr o v i d e es s e n t i a l be n e f i t s to j ^ r f e m p l o y e e s af t e r th e i r s e r v i c e to t h e Ci t y . * Ga b r i e l R o e d e r Sm i t h & C o m p a n y Ac t u a r i a l Pr o j e c t i o n St u d y m m P i 11 11 1 h H I i l l U S i l i 1 H GabrielRoeder Smith &.Company One East Broward Blvd.954-.527.ldld"phone Consultants &Actuaries Suite 505 954.525.0083 fa.v Ft,Lauderdale,FL 33301-1804 wwNv.gabrielroeder.com April 29,2016 Mr.Alfred Riverol Finance Director CityHall 6130 Sunset Drive South Miami,Florida 33143 Re:South Miami Pension Plan (City DBPlan) Updated Actuarial Projection Study as of October 1,2014-Future Service Retirement Benefits Based UponNew Tier of Benefits for Current DC Employees Dear Alfred: Asrequested,wearepleasedtoencloseourupdatedActuarialProjectionStudyincludingthirty (30)yearprojectionsforthe City's proposedchangesforgeneralemployeestoprovidefuture serviceretirementbenefitsunderanewtier of benefitsasspecifiedbytheCityundertheCity DB Plan. Financial andcensusdataisreportedas of October 1,2014. Censusdatafor regularparttime staff isreported.Weunderstand regularparttime staffdoes notcurrently participate inanyCity retirement plan.Wefurther understand regularparttime wouldcontinuetonotparticipateintheproposedretirementplan. If youshouldhaveany question concerning theaboveorifwemaybe of further assistance with this matter,pleasedonot hesitate to contact us. Sincerest regards, LawrenceF.Wilson,A.S.A.KellyL.Adams,A.S.A. Senior Consultant and Actuary Consultant and Actuary Enclosures \T © I r%^Gabriel Roeder Smith 6c Company C \\vJJL\.vJ Consultants 6c Actuaries O SOUTH MIAMI PENSION PLAN UPDATED ACTUARIAL PROJECTION STUDY April29,2016 o o Gabriel Roeder Smith 8e Gorapany n u SOUTH MIAMI PENSION PLAN ACTUARIAL PROJECTION STUDY AS OF OCTOBER 1,2014 1 TABLE OF CONTENTS Page I.Executive Summary 1 II.Projection Results 8 III.OutlineofPrincipalProvisionsoftheSouthMiamiPensionPlan 15 IV.Actuarial Assumptions and Cost Methods 20 Gabriel Roeder Smith Be Company SOUTH MIAMI PENSION PLAN ACTUARIAL PROJECTION STUDY AS OF OCTOBER 1,2014 EXECUTIVE SUMMARY AttherequestoftheCity,wehave completed thirty(30)yearprojectionsillustratingthe financial impactofCityproposed changes totheSouthMiamiPensionPlan(CityDBPlan)and theCityofSouthMiamiDefined Contribution Plans(CityDCPlans). Background -TheCityDBPlancurrentlyallowsparticipationbyfull-timeGeneral Employees hiredbeforeOctober 1,2011 andrequiresparticipationofallfull-timePoliceOfficersof the City -excluding Police Chief. TheCityDBPlancurrentlyprovides: >NormalRetirementis attained ageof55and completion often (10)yearsofcredited service (attained age60andcompletion often (10)years of creditedservicefor benefits earnedafter September 30,2011)forGeneralEmployees. >Futureservicebenefitmultiplieris2.25%forGeneralEmployees. >Fullvestinguponcompletion often (10)yearsofcreditedservice. >Final Average Compensation is the l/60th of the final 60 consecutive months of basic compensation but not less than 1736th of the final 36 consecutive months of compensation asof September 30,2011 forGeneralEmployees. >GeneralEmployeescontribute7.0%ofpay.Citycontributionsgreaterthanthegeneral employee contributions aresplitevenlybetweentheCityandgeneralemployees-City pays administrative expenses. >3%cost-of-living increase(subjecttoconsumerpriceindex)toqualifyingretires(limited tobenefitsearnedpriortoOctober 15 2011 forGeneralEmployees). TheCityoffers Defined Contribution Plans(CityDCPlans)qualifiedunderIRCSection401(a) forGeneral Employees hiredonorafterOctober 1,2011andforotherselectCityEmployees witha 100%o match-up to7%of pay. Proposed Changes -WeunderstandtheCitywishestodeterminetheprojectedeffectonfuture Citycontributions if theCityDBPlanisre-openedtoGeneralEmployeeshiredonorafter October1,2011 underanewtierofbenefits.Additionallyanewdefinedbenefitpensionplan willbeestablishedforthe Administration Management ServiceClass(AMSC). GRS Gabriel Roeder Smith 6t Company o SOUTH MIAMI PENSION PLAN ACTUARIAL PROJECTION STUDY AS OF OCTOBER 1,2014 TheCityprovidedthegroupofemployeeswhomaycomprisetheAMSCasfollows: -City Manager -City Clerk -Assistant City Manager -Finance and Administration Director,C.F.O. -Police Chief -Planning Director -Building Director -Public Works Director -Chief Administrative Officer (currently Finance Office Manager) -Chief Procurement Officer (currently Purchasing Manager) -Personnel Manager Parks and Recreation Director Theproposed retirement programswillprovide: GRS General Employees electing thenewtierintheCityDBPlanwill receive the following: oFullvestingupon completion of ten (10)years of credited service. o Future service benefit multiplier is1.60%. oFinalAverageCompensationwillbetheaverage of the highest eight(8)yearsof compensation. oNormalRetirementistheearlierof(a)attainedage65andcompletion often (10) years of creditedserviceor(b)completionof thirty-three (33)yearsofcredited service. oGeneralEmployeesenteringtheCityDBPlanwillcontributethreepercent (3%>) ofcompensation(currentGeneralEmployeesintheCityDBPlannotelectingthe newtier of benefitswillhavetheir contributions cappedattenpercent(10%)of compensation). oNocost-of-livingadjustmentswillbeprovided. Genera]Employees currentlyintheCityDBplanwillhavetheoptiontofreezetheir current benefits and receive benefits under the new tier. AMSC employees will receive thefollowing benefits: oParticipantscurrentlyemployedbytheCitywillbevestedupon completion of three(3)years of serviceasofthedateofadoption. oFutureAMSCparticipantswillbevesteduponcompletionofthree(3)yearsof service. o Benefit multiplier is3.00%. oFinalAverageCompensationwillbetheaverageofthehighesteight(8)yearsof compensation. GabrielRoederSmith &Company -2- SOUTH MIAMI PENSION PLAN ACTUARIAL PROJECTION STUDYAS OF OCTOBER 1,2014 o Normal Retirement istheearlierof(a)attained age65and completion of three (3)years of credited serviceor(b)completion of thirty-three (33)yearsof credited service. o AMSC employees willbe required to contribute seven percent (7%)of compensation. o AMSC employees who will receive theabove benefits andwhoarecurrently participatingintheCityDBPlanwillhavetheirCityDBPlan benefits frozenas of thedate of adoption. AdditionallyanAlternativeDefined Contribution Plan(Alternative.DCPlan)willbe offered toallGeneral Employees withthe following provisions: oEmployeesarerequiredtocontributethreepercent(3%)of compensation. cCitywillcontributesevenpercent (7%)of compensation. oEmployeeswillbevestedafterone(1)yearofservice. Results -The following Tables shows thecurrent City /Employee contribution (cost)andthe sumoftheprojectedCity/Employee contributions (costs)overthenextfive (5),ten(10)and thirty (30)years forthe baseline (City DB Planand City DC Plans)andforthe proposed changes described aboveasadollar amount andasa percentage of projected covered payroll, respectively./^\ o ~G$5 Gabriel Roeder Smith &c Company -3 r v. GRS SOUTH MIAMI PENSION PLAN ACTUARIAL PROJECTION STUDY AS OF OCTOBER 1,2014 Next Year -Department Payroll -NetCity Cost$ -NetCity Cost % -NetEmployeeCost$ -Net Employee Cost% Next 5 Years -Department Payroll -NetCityCost$ -Net City Cost % -Net Employee Cost$ Net Employee Cost% Next 10 Years -Department Payroll -NetCityCost$ -NetCityCost% -Net Employee Cost$ -Net Employee Cost% Next 30 Years -Department Payroll -Net City Cost$ -Net CityCost% -Net Employee Cost$ -Net Employee Cost% Summary of.Costs: :(Sl,000s) General Employees Current vAmouiit^ GabrielRoederSmith&Company Proposed Amount Increase/ (Decrease) -4- SOUTH MIAMI PENSION PLAN ACTUARIAL PROJECTION STUDY AS OF OCTOBER 1,2014 Actuarial Assumptions and Methods,City DB Plan Provisions,Financial Data and Member ^ Census Data-The actuarial assumptions and methods,CityDBPlan provisions (asmodified above),financial dataandmember census data employed for purposes ofour Actuarial Projection Study arethesame actuarial assumptions and methods,CityDBPlanprovisions(as modifiedabove),financialdataandmembercensusdatautilizedfortheOctober 1,2014 ActuarialValuationwiththefollowingprojection modifications, ®Two-thirds ofcurrent employees intheCityDCplans along with two-thirds of future General Employees are assumed toenrollinthenewtier of benefits forGeneral Employees (assumptionprovidedbyCity). *The remaining one-thirdofcurrent employees in theCityDCplansalongwithone-third offutureGeneralEmployeesareassumedtoenrollintheAlternativeDCPlan (assumptionprovidedbyCity). ®AllAMSCemployeesareassumedtoenrollintheproposedCityAMSCDefinedBenefit Plan. «DemographicdatafortwelveAMSCemployeeswasreportedbytheCity. ©AllcurrentGeneralEmployees participating intheCityDBPlanareassumedtocontinue toparticipateinthecurrentCityDBPlan(assumptionprovidedbyCity). ©NofutureCity contributions areassumedtobemadetothecurrentCityDCPlansforall GeneralEmployees. «Underthe proposed structure,theCityDBPlanfuture amortization periodforthechange inunfundedliabilityistwenty-five(25)years. ®Apayrollgrowthassumptionof3.25%isusedfordeterminingtheamortizationpayments underthere-o.penedplanforGeneralEmployees. •NewAMSC defined benefit planwillusethesameactuarialmethodsandassumptionsas theCityDBPlanforGeneralEmployees. ®UnderthecurrentCitySeniorManagementDCPlan,participantsareeligiblefornormal retirementatage45.ForallothersintheCityDCPlans,participants areeligiblefor normal retirement atage60. ®Demographic assumptions of theCityDBPlanforGeneral Employees areassumedto applytotheAlternativeDCPlanincludingtheretirementage of theearlierof(a)attained 65or(b)completion of 33years of service. «Noupfront contribution tofundadditionalliabilitiesundertheproposedtier of benefitsor the proposed ASMC Planisassumed. ®Throughout theforecastperiodnewemployeesareassumedtobehiredeachyearata rate sufficient to maintain a constant active headcount -stationary population.New GabrielRoederSmith 8c Company r~ -5 SOUTH MIAMI PENSION PLAN ACTUARIAL PROJECTION STUDY AS OF OCTOBER 1,2014 employeesareassumedtohavethesameaveragedemographiccharacteristics(age, gender,salary-adjustedeachyearfor inflation)andgroup(GeneralEmployeeor AMSC)asthoseemployeeshiredoverthepastfive(5)years. •UndertheCityDBPlan,expensespaidbytheCityareassumedtobe0.3%ofthe projected marketvalueofassetsduringthe projection period. •EffectiveOctober1,2016,theratesofmortalityintheprojectionsaretheratesof mortalityusedbytheFloridaRetirementSystem(FRS)intheJuly1,2014andJuly1, 2015 FRS Actuarial Valuations. Projectionsaredeterministic-throughout theprojectionperiod experience isexpectedtomatch theassumptions-including a 7.375%annualmarketvalue investment returnforfiscalyear ended September 30,2015and thereafter. ThisActuarial Projection Studyisintendedtodescribethe estimated futurefinancialeffects of theproposedbenefitchangesandisnotintendedasa recommendation infavor of thechangenor inoppositiontothechange. Thesecalculationsarebaseduponassumptionsregardingfutureevents.However,theCityDB PlanandAMSCPlanlongtermcostswillbedeterminedby actual futureevents,whichmay differmateriallyfromthe assumptions made. Ifyouhavereasontobelievetheassumptionsusedareunreasonable,theCityDBPlan provisionsareincorrectlydescribedor referenced,importantCityDBPlanprovisionsrelevantto thisActuarialProjectionStudyarenotdescribedorthatconditionshavechangedsincethe calculationsweremade,youshouldcontactthe undersigned priortorelyingon information in thisActuarialProjectionStudy.If youhavereasontobelievethattheinformationprovidedin thisActuarialProjectionStudyis inaccurate,orisinanywayincomplete,orifyouneedfurther informationinordertomakeaninformeddecisiononthe subject matter of thisreport,please contacttheundersignedpriortomakingsuchdecision. TheUnfundedActuarialAccruedLiability(UAAL)maynotbeappropriateforassessingthe sufficiency ofPlanassetstomeetthe estimated costof settling benefit obligations but may be appropriate for assessing the need for or the amount of future contributions.The UAAL would be different if it reflected the market value of assets rather than the actuarial value of assets. Futureactuarialmeasurementsmaydiffersignificantlyfromthecurrentmeasurementspresented inthisreportduetosuch factors asthe following:CityDBPlanexperiencediffering from that anticipated by the economic or demographic assumptions;changes in economic or demographic assumptions;increases or decreases expected aspartofthe natural operation ofthe methodology usedforthesemeasurements(suchastheendofanamortizationperiodoradditionalcostor contribution requirements basedontheCityDBPlan's funded status);andchangesinCityDB Plan provisions orapplicablelaw.Duetothe limited scopeoftheactuary's assignment,the actuarydidnotperformananalysisofthepotentialrangeofsuchfuturemeasurements. GRS Gabriel Roeder Smith &Company SOUTH MIAMI PENSION PLAN ACTUARIAL PROJECTION STUDY AS OF OCTOBER 1,2014 This report shouldnotbereliedonforany purpose otherthanthepurposedescribedinthe primary communication.Determinations ofthe financial results associated withthebenefits described inthisreportinamannerotherthanthe intended purposemay produce significantly different results. Thisreporthasbeenpreparedbyactuarieswhohavesubstantialexperiencevaluingpublic employeeretirementsystems.Tothebestofourknowledgetheinformationcontainedinthis reportisaccurateandfairlypresentstheactuarialpositionoftheSouthMiamiPensionPlanasof thevaluationdate.All calculations havebeenmadein conformity withgenerally accepted actuarialprinciplesandpractices,withthe Actuarial StandardsofPracticeissuedbythe ActuarialStandardsBoardandwithapplicablestatutes. Thesigningactuariesare independent ofthePlansponsor. The undersigned are Members of theAmerican Academy of Actuaries and meet the Qualification Standards of the AmericanAcademyof Actuaries torendertheactuarialopinion contained herein. If youshouldhaveany question concerningtheaboveor if wemaybe of further assistance with thismatter,pleasedonot hesitate tocontactus. Sincerest regards, LawrenceF.Wilson,A.SA.KellyL.Adams,A.S.A. SeniorConsultant and Actuary ConsultantandActuary Enclosures GRS Gabriel Roeder Smith &Company -7 (J SOUTH MIAMI PENSION PLAN ACTUARIAL PROJECTION STUDY AS OF OCTOBER 1,2014 PROJECTION RESULTS General Employee-Re-opentheCityDBPlantoGeneralEmployeeshiredonorafterOctober 1,2011 withanewtierofbenefitsfor General Employees.Createadefinedbenefitplanfor AMSC employees.CreateanAlternativeDCplan. The following Tablesshowprojected covered payroll,comparison of projected Cityand Employee (EE)costsandUnfundedActuarialAccruedLiability(UAAL)underthebaseline forecastversusprovidingbenefitaccrualssimilartoFRS-($l,000s).UAALshownisforthe ValuationDatetwo years priortofiscalyearend. Fiscal Department Current Plans Current Department Proposed Plans (Increase)/Cumulative Year End Covered Payroll Projected City Cost Plan UAAL Covered Payroll Projected City Cost Dollar %of Pay UAAL Reduction in City Cost (Inc)/Redin Citv CostDollar%of Pay 2016 4,145 245 5.9%(175)4,249 198 4.7%176 47 47 2017 4,127 278 6.7%(762)4,273 219 5.3%(125)59 106 2018 4,263 285 6.7%(955)4,474 211 4.9%(339)74 180 2019 4,424 296 6.7%(1,347)4,663 214 4.8%(750)82 262 2020 4,590 309 6.7%(1,547)4,850 224 4.9%(956)85 347 2021 4,748 318 6.7%(1,669)5,051 245 5.2%(1,091)73 420 2022 4,932 334 6.8%(1,803)5,251 257 5.2%(1,227)77 497 2023 5,111 350 6.8%(1,945)5,466 259 5.1%(1,387)91 '588 2024 5,301 366 6.9%(2,099)5,679 289 5.5%(1,591)77 665 2025 5,490 381 6.9%(2,264)5,848 294 5.4%(1,790)87 752 2026 5,685 398 7.0%(2,442)6,062 312 5.5%(2,060)86 838 2027 5,881 415 7.1%(2,632)6,280 328 5.6%(2,354)87 925 2028 6,081 432 7.1%(2,835)6,504 334 5.5%(2,682)98 1,023 2029 6,294 449 7.1%(3,056)6,748 351 5.6%(3,061)98 1,121 2030 6,511 467 7.2%(3,293)6,991 367 5.6%(3,460)100 1,221 2031 6,735 486 7.2%(3,545)7,242 381 5.7%(3,915)105 1,326 2032 6,960 504 7.2%(3,815)•7,477 387 5.6%(4,428)117 1,443 2033 7,199 524 7.3%(4,106)7,741 403 5.6%(5,033)121 1,564 2034 7,451 543 7.3%(4,418)8,006 416 5.6%(5,718)127 1,691 2035 7,715 564 7.3%(4,752)8,294 429 5.6%(6,501)135 1,826 2036 7,986 586 7.3%(5,111)8,596 445 5.6%(7,383)141 1,967 2037 8,269 609 7.4%(5,495)8,905 462 5.6%(8,360)147 2,114 2038 8,555 632 7.4%(5,907)9,222 477 5.6%(9,444)155 2,269 2039 8,857 656 7.4%(6,351)9,551 489 55%(10,643)167 2,436 2040 9,169 680 7.4%(6,826)9,887 507 5.5%(11,973)173 2,609 2041 9,489 705 7.4%(7,336)10,226 522 5.5%(13,457)183 2,792 2042 9,819 731 7.4%(7,884)10,562 535 5.4%(15,132)196 2,988 •2043 10,154 758 7.5%(8,473)10,918 553 5.4%(16,990)205 3,193 2044 10,507 785 7.5%(9,105)11,288 570 5.4%(19,013)215 3,408 2045 10,865 812 7.5%(9,783)11,664 585 5.4%(21,218)227 3,635 5 Year Totals 21,549 1,413 6.6%(1,547)22,509 1,066 4.7%(956)347 1.9% 10 Year Totals 47,131 3,162 6.7%(2,264)49,804 2,410 4.8%(1,790)752 J.9% 30 Year Totals 207,313 14,898 7.2%(9,783)221,968 11,263 5.1%(21,218)3,635 2.1% GR^Gabriel Roeder Smith &Company SOUTH MIAMI PENSION PLAN ACTUARIAL PROJECTION STUDY AS OF OCTOBER 1,2014 ( Fiscal Projected EE Cost Department Projected EE Cost (Increase)/Cumulative v Year Department Current Plans Covered Scenario 1 Reduction in (Inc)/Redin End Payroll Dollar %of Pav Payroll Dollar %of Pav EE Cost EE Cost 2016 4,145 255 6.2%4,249 246 5.8%9 9 2017 4,127 257 6.2%4,273 240 5.6%17 26 2018 4,263 269 6.3%4,474 246 5.5%23 49 2019 4,424 282 6.4%4,663 251 5.4%31 80 2020 4,590 295 6.4%4,850 256 5.3%39 119 2021 •4,748 310 6.5%5,051 261 5.2%49 168 2022 4,932 324 6.6%5,251 267 5.1%)57 '225 2023 5,111 337 6.6%5,466 274 5.0%63 288 2024 5,301 351 6.6%5,679 280 4.9%71 359 2025 5,490 365 6.6%5,848 283 4.8%o 82 441 2026 5,685 379 6.7%6,062 290 4.8%89 530 2027 5,881 394 6.7%6,280 296 4.7%98 628 2028 6,081 410 6.7%6,504 303 4.7%107 735 2029 6,294 425 6.8%6,748 311 4.6%114 849 2030 6,511 441 6.8%6,991 319 4.6%122 971 2031 6,735 458 6.8%7,242 328 4.5%130 1,101 2032 6,960 475 6.8%7,477 336 4.5%139 1,240 2033 7,199 492 6.8%7,741 345 4.5%147 1,387 2034 7,451 511 6.9%8,006 354 4.4%157 1,544 2035 7,715 530 6.9%8,294 364 4.4%166 1,710 2036 7,986 550 .6.9%8,596 375 4.4%175 1,885 2037 8,269 570 6.9%8,905 387 4.3%)183 2,068 2038 8,555 591 6.9%9,222 399 4.3%192 2,260 2039 8,857 612 6.9%9,551 411 4.3%201 2,461 2040 9,169 635 6.9%9,887 424 4.3%211 2,672 2041 9,489 658 '6.9%10,226 437 4.3%221 2,893 2042 9,819 681 6.9%10,562 450 4.3%>231 3,124 2043 10,154 706 7.0%10,918 463 4.2%243 3,367 2044 10,507 731 7.0%11,288 478 4.2%253 •3,620 2045 10,865 757 7.0%11,664 493 4.2%264 3,884 5 Year Totals 21,549 1,358 6.3%22,509 1,239 5.5%119 0.8% 10 Year Totals 47,131 3,045 6.5%49,804 2,604 5.2%441 1.3% 30 Year Totals 207,313 14,051 6.8%221,968 10,167 4.6%3,884 2.2% o GabrielRoederSmith &c Company 9- b o n d o n o o C L O o 3 / ^ \ Ge n e r a l E m p l o y e e s - Pr o j e c t e d Ci t y C o s t ($ 1 , 0 0 0 5 ) 1 , 2 5 0 1 , 0 0 0 7 5 0 5 0 0 2 5 0 - ^ - - C u r r e n t P l a n s - I n c l u d e s N e w E n t r a n t s i n t o DC Pl a n Sc e n a r i o 1 - Re - o p e n Pl a n t o Ge n e r a l Em p l o y e e s . Ad d ne w AM S C pl a n . >>r 3 «> o 2 O w H s ? H d ©CO O o o o w w O '" 9 w CO O en o cr o rp Pu ft CO O o a Projected General Employee Cost ($l,000s) 1,200 1,000 800 600 400 200 rsf ^r^^^^rp ^^^^^^^j3>^^^^^^<&'V'V'V V V V V V Current Plans -Includes New Entrants Into DC Plan Scenario 1-Re-open Planto General Employees.Add new AMSC plan. /^. fSy a > O S 3 3 3§ •<CO co a ©^ >3ej o "TJ o ^ o w w O SOUTH MIAMI PENSION PLAN ACTUARIAL PROJECTION STUDY AS OF OCTOBER 1,2014 > TO Q. c (U E TO a ai a •*- o TO o u > u Oi u CD > ,2 Q. E c O d :< Gabriel Roeder Smith &Company % \ ^ ^A \ <fe e ^ •So <5<$>>^ c Q. U cit>*~ £ <D C •a -a c < CT2 Q-to CD u 05 Q O o Q_ c fc to UJ •*-> r ro 03 4_ (D 4-)r c n> LU sD S o (U 4-» 2 c CO OJ cu Q_ Ti D O n_c o 1 <D to DC 'o> u& wt>CL 0> A 'a^ <v->. $'dO^J2 c °-o c e ^ d, ci ^ 3>^e <fe OS O d Co °4°e </0 3 u c: u to -12 o 3 d e n o 8- CO O o B Pr o j e c t e d Ge n e r a l Em p l o y e e Co s t a s a % o f De p a r t m e n t Pa y 1 0 . 0 % 4 ^ 4 - m ^ " ^ ' ^- • • ^ — • • ^ • - ' ^ 5 . 0 % y y x x x x x x )( x 0 . 0 % -♦ - C u r r e n t Pl a n s - In c l u d e s Ne w En t r a n t s in t o DC P l a n -* - S c e n a r i o 1 - R e - o p e n P l a n t o G e n e r a ! E m p l o y e e s . A d d n e w AM S C pl a n . P o >o H d r *3 e j o * s O > o ^ ©w w 5S o SOUTH MIAMI PENSION PLAN ACTUARIAL PROJECTION STUDY AS OF OCTOBER 1,2014 ThefollowingtableshowsasummaryofthereductioninCityandEmployeeCosts. Fiscal Year End 2016 2017 2018 2019 2020 2021 2022 2023 '2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 5 Year Savings ($) 5 Yr Average 30 Year Savings (S) 30 Yr Average Summary of Reduction /(Increase)in Costs • ($l,000s) City Employee Gabriel Roeder Smith &c Company 14- SOUTH MIAMI PENSION PLAN ACTUARIAL PROJECTION STUDY AS OF OCTOBER 1,2014 OUTLINE OF PRINCIPAL PROVISIONS OF THE RETIREMENT PLAN PRIOR TO I ANY PROPOSED CHANGES INCLUDEDIN THIS STUDY A.Effective Date: October1,1965.Most recently amended by Ordinance 06-14-2184 adopted April 15,2014. B.EligibilityRequirements: 1.General Employees Any regular full-time*employee hired before October 15 2011 is eligible to enter the plan following the completion ofsix months of Credited Service and attainment ofage20. 2.Police Officers Any regular full-time Police Officer is eligible to enter theplanasof date of employment. C.Credited Service: 1.General Employees Continuous employment.Credited service shall exclude continuous employment priorto plan participation as follows:(1)If employed priortoOctober1,1973,credited service shallexcludethefirsttwoyearsof continuous employment andany additional yearof continuous employment priorto attainment ofage25.(2)If employed onorafter October 1,1973,credited service shall exclude the first six (6)months of continuous employment andcontinuousemploymentpriortoage20. 2.Police Officers Continuous employment.For Police Officers who did not participate when first eligible for the plan,credited service shall exclude continuous employment prior to plan participation as follows:(1)If employed priorto October 1,1973,credited service shall exclude the first twoyearsof continuous employment andany additional year of continuous employment prior to attainment of age 25.(2)If employed onor after October 1,1973,credited service shall exclude thefirstsix(6)months of continuous employment andcontinuousemploymentpriortoage20. o o GRS Gabriel RoederSmith Sc Company -15- SOUTH MIAMI PENSION PLAN ACTUARIAL PROJECTION STUDY AS OF OCTOBER 1,2014 D.FinalMonthly Compensation (FMQ: Final Monthly Compensation is l/36th of the final 36 consecutive months of compensation. For Police Officers,not less than l/5th of the highest five (5)years out of the last (10)ten yearsofcompensation.Compensationshallmeanregularwagesandsalaries,excluding bonuses,vacation,sickleaveandotheradditionalcompensation. Effective October 1,2011,Final Average Compensation for General Employees is 1/60th of thefinal60consecutivemonthsofbasiccompensation,provideditisnotlessthantheFinal Average Compensation as of September30,2011 basedonthe definition above,Basic compensationshallmeanbasewagesandsalaries,excludingcommissions,overtimepay, bonusesandanyotherforms of additionalcompensationearnedoutside of basewages. EffectiveOctober1,2011,FinalAverageCompensationformemberscoveredunderthe PoliceOfficersand Sergeants collectivebargaining agreement isthebestfive(5)years of basiccompensation,provideditisnotlessthantheFinalAverage Compensation as of September 30,2011 based onthe definition above.Basic compensation shall mean base wagesand salaries,including upto300hours of overtime inafiscal year and excluding paymentsforaccruedunusedsickorannualleave,extradutyorspecialdetailwork,shift differential,assignment pay,bonusesandanyotherformsof additional compensation earned outside of basewages. ^"\E.Normal Retirement: 1.Eligibility: a.General Employees:Attainment of age55and completion of ten(10)years of credited servicefor benefits accrued as of September 30, 2011. Attainmentofage60and completion of ten(10)years of credited service for benefits accrued after September 30, 2011,includingincreasesintheaccruedbenefitas of September30,2011 dueto increases intheFinalAverage Compensation. b.PoliceOfficers:Attainment of age60and completion of ten(10)years of creditedserviceofcompletion of twenty-five(25)yearsof creditedserviceregardless of age. 2.Benefit: The monthly plan benefit isthe product of: a.FMC, b.Creditedserviceduringtheappropriateperiodand c.The appropriate benefit percentage Gabriel Roeder Smith &c Company -16 - SOUTH MIAMI PENSION PLAN ACTUARIAL PROJECTION STUDY AS OF OCTOBER 1,2014 E.Normal Retirement (cont'dV. Theappropriatebenefitpercentagesare: a.General Employees ForCreditedService Percentage Through September 30,1999 2.50% October 1,1999through September 30,2011 2.75% October 1,2011 and thereafter 2.25% b.Police Officers For Credited Service Percentage 2.00% 2.25% 2.50% 2.75% 2.80% 2.90% 3.00% F.Supplemental Benefit: Through September 30,1995 October1,1995through September 30,1996 October 1,1996 through September 30,1997 October 1,1997 through September 30,2001 October1,2001 through September 30,2002 October1,2002through September 30,2003 October 1,2003 and thereafter A cost-of-living supplemental benefit based uponthe consumer price index is provided upon retirement.The annual increase is limited to 3%. For General Employeesthe cost-of-living supplemental benefitisonlyprovidedonthe accruedbenefitasofSeptember30,2011 anddoesnotapplytoincreasesinthis accrued benefit duetoincreasesintheFinal Average Compensation. G.Early Retirement: 1.Eligibility: 2.Benefit: H.Delayed Retirement: 1.Eligibility: 2.Benefit: Attainmentofage50andcompletion of 15years of creditedservice for Police Officers. AccruedbenefitbaseduponFMCandcreditedserviceasofearly retirementdate,reduced3%forPoliceOfficersforeachyearthatthe benefitcommencementsdateprecedesNormalRetirement. Retirement subsequent tonormal retirement date. AccruedbenefitbaseduponFMCandcreditedserviceasof delayed retirement date. vxRS GabrielRoederSmith&Company o o -17 SOUTH MIAMI PENSION PLAN ACTUARIAL PROJECTION STUDY AS OF OCTOBER 1,2014 I.Disability Retirement: 1.Eligibility:Totallyandpermanentlydisabledforasixmonthperiodwhile actively employed. 2.Benefit:AccruedbenefitbaseduponFMCandcreditedserviceasofdate of disability,actuariallyreducedasforearly retirement forearly commencement. J.Pre-Retirement Death Benefit: The beneficiary shallreceivethe member's accumulated employee contributions. K.Benefit Upon Termination of Service: 1.Benefit payable atnormalretirementequaltothegreaterof: a.Accrued benefitbaseduponFMCandcredited service asofdateoftermination times the vesting percentage shown below,or b.Benefitwhichcanbesupportedbytheaccumulatedmembercontributionswith interest to normal retirement date. NoSupplementalbenefitshallbepayabletovestedterminees. 2.Vesting Schedule: Years of Credited Service Vesting Percentage Less than 10 0% 10 or more years 100% 3.Refund Options: A terminated membermayelecttoreceivearefundof accumulated contributions without interest inlieu of receiving anyotherplanbenefits. L.Member Contributions: Members contribute 7.0%(7.5%for Police Officers)of member's basicannual compensation.ShouldtheCitycontributionforGeneral Employees be actuarially determined toexceed7.0%,not including expenses,boththeCityandtheGeneral Employees willshare equally inthe amount in excess of 7.0%>. Gabriel Roeder Smith &Company -18 - SOUTH MIAMI PENSION PLAN ACTUARIAL PROJECTION STUDY AS OF OCTOBER 1,2014 Should the City contribution for Police Officers be actuarially determined to exceed 7.5%,V^) notincludingexpenses,boththeCityandthePoliceOfficerswillshare equally inthe amount in excess of 7.5%. M.Normal Form of Retirement Income: Thenormalformofpaymentshallbealifeannuitywithaguaranteeofarefund of accumulated employee contributions. o Gabriel Roeder Smith &Company -19- ( SOUTH MIAMI PENSION PLAN ACTUARIAL PROJECTION STUDY AS OF OCTOBER 1,2014 ACTUARIAL ASSUMPTIONS AND METHODS A.Mortality ForOctober1,2014and2015thefollowingrates of mortalitywereutilized: For healthy General Employee participants,RP-2000 Mortality Tables,separate rates for malesandfemalesandfor annuitants and non-annuitants,withfully generational mortalityimprovementsprojectedtoeachfuturedecrementdatewithScaleAA. ForhealthyPoliceOfficerparticipants,RP-2000CombinedHealthyParticipantMortality Tables,separate ratesformalesandfemales,with Blue Collar Adjustment and fully generationalmortality improvements projectedtoeachfuturedecrementdatewithScale AA. Fordisabledparticipants,RP-2000DisabledMortalityTables,separateratesformales andfemales,withfully generational mortalityimprovementsprojectedtoeachfuture decrement date with Scale AA. ForOctober1,2016andthereafterthefollowingrates of mortalitywereutilized: ForhealthyGeneralEmployeemaleparticipants,50%)oftheRP-2000Annuitant MortalityTablewithWhiteCollarAdjustment-50%of theRP-2000AnnuitantMortality TablewithBlueCollarAdjustment,withfullygenerationalmortalityimprovements projected toeachfuture decrement datewithScaleBB. ForhealthyPoliceOfficermale participants,10%oftheRP-2000AnnuitantMortality TablewithWhiteCollarAdjustment-90%oftheRP-2000AnnuitantMortalityTable withBlueCollar Adjustment,withfullygenerationalmortalityimprovements projected to each future decrement date with Scale BB. Forhealthy General Employee andPolice Officer female participants,100%oftheRP- 2000 Annuitant MortalityTablewithWhiteCollarAdjustment,withfullygenerational mortalityimprovementsprojectedtoeachfuturedecrementdatewithScaleBB. FordisabledGeneralEmployeeparticipants,100%)oftheRP-2000DisabledMortality Tablewithseparateratesformalessetbackfour(4)yearsandfemalessetforwardtwo (2)years,andno future mortality improvement.. FordisabledPoliceOfficerparticipants,60%oftheRP-2000 Disabled MortalityTable withseparateratesformalessetbackfour(4)yearsandfemalessetforwardtwo(2)years -40%of theRP-2000AnnuitantMortalityTablewithWhiteCollarAdjustment,andno future mortality improvement. Thesearetherates of mortality usedintheJuly1,2014 FRS Actuarial Valuation. Gabriel Roeder Smith Sc Company -20- SOUTH MIAMI PENSION PLAN ACTUARIAL PROJECTION STUDY AS OF OCTOBER 1,2014 B.Investment Return to be Earned by Fund 7.375%,compounded annually. C.Allowancesfor Expenses orContingencies Actualexpensespaidinpreviousyear. D.Employee Withdrawal Rates Withdrawal ratesformalesandfor females wereusedinaccordancewiththefollowing illustrativeexamplebaseduponnumberofyears of service: Withdrawal Rates Per 100 Employees Service Police General 1-2 12.00 20.00 3-6 8.00 9.25 7-10 8.00 5.00 .11 &Over 3.50 5.00 E.Disability Rates 1985 DisabilityStudy,Class1withseparateratesfor females wasused. F.Martial Assumptions 100%)ofactivemembersareassumedtobemarried.Whereapplicable,femalesare assumed tobethreeyearsyoungerthantheirmale spouses. G.Salary Increase Factors Current salary is assumed to increase in accordance withthe following table based upon number ofyears of service. Service Police General 0-9 5.25%5.25% 10-14 3.75%4.75% 15-19 3.75%4.25% 20 &over 3.75%3.75% GabrielRoederSmith &Company o e -21 r SOUTH MIAMI PENSION PLAN ACTUARIAL PROJECTION STUDY AS OF OCTOBER 1,2014 H.Increase in Covered Payroll 4.0%)peryear,limited to average annualincreaseovermost recent ten years (0.9%>)but not lessthan 0.0%o forPoliceOfficers.Noincreaseincoveredpayrollisassumedfor General Employees -PlanwasclosedtonewlyhiredGeneralEmployeesOctober1,2011. I.Retirement Rates Rates of earlyretirementforPoliceOfficerswereusedinaccordancewiththefollowing table. Years Preceding Normal Retirement Police 1-6 5% 7-10 10%o Rates of normal retirement wereusedin accordance withthe following tables. Age Police General 55-59 N/A 10% 60-61 25%)10% 62-64 40%25% 65-66 100%25% 67 &above 100%100%) Date of Hire Service Police Prior to October 1,2014 25 Years 100% On or after October 1 ,2014 30 Years 100% GeneralEmployeeswhoretirepriortoagesixty(60)butafterattainmentoften (10)yearsof service (55&10)are assumed toreceivean actuarially reduced benefit payable immediately upon retirement. I.Cost of Living Increases Futurecost of livingincreasesareassumedtobe 3.0%perannum. J.Valuation of Assets Themethodusedfordeterminingtheactuarialvalueofassetsphasesinthedeviation betweentheexpectedandactualreturnonassetsattherate of 20%>peryear.Theactuarial value of assetswillbefurtheradjustedtotheextent necessary tofall within thecorridor whoselowerlimitis80%ofthefairmarketvalueofplanassetsandwhoseupperlimitis 120%>of thefair market value of planassets. Gabriel Roeder Smith &c Company 22- SOUTH MIAMI PENSION PLAN ACTUARIAL PROJECTION STUDY AS OF OCTOBER 1,2014 K.Cost Methods (_) Normal Retirement,Termination,Disability and Pre-Retirement Death Benefit: Entry-Age-Actuarial Cost Method Underthismethodthenormalcostforeachactiveemployeeistheamountwhichis calculatedtobealevelpercentageofpaythatwouldberequiredannuallyfromhisdateof hiretohisretirementagetofundhisestimated benefits,assumingthePlanhadalwaysbeen in effect.The normal cost for the Plan is the sum of theindividual normal costs for all active participants.The actuarial accrued liability asofanyvaluationdateforeachactiveemployee or inactive employeewhoiseligibletoreceive benefits undertheplanistheexcessofthe actuarial presentvalueofestimated future benefits overthe actuarial presentvalueofcurrent andfuturenormalcosts.Theunfundedactuarialaccruedliabilityasofanyvaluationdateis theexcessoftheactuarialaccrued liability overtheactuarialvalueofassetsoftheplan. © Gabriel Roeder Smith &Company -23 MIAMI DAILY BUSINESS REVIEW Published Daily except Saturday.Sunday and LegalHolidays Miami,Miami-Dade County,Florida STATE OF FLORIDA COUNTY OF MIAMI-DADE: Before the undersigned authority personally appeared MARIA MESA,whoonoath says thatheorsheisthe LEGAL CLERK,Legal Notices oftheMiamiDaily Business Review f/k/a'Miami Review,adaily(exceptSaturday,Sundayand LegalHolidays)newspaper,publishedatMiamiinMiami-Dade County,Florida;thattheattachedcopyof advertisement, beingaLegalAdvertisementofNoticeinthematterof NOTICE OF PUBLIC HEARING CITY OF SOUTH MIAMI-SEP.6,2016 in the XXXX Court, was published insaid newspaper inthe issues of 08/26/2016 Affiant further says that the said MiamiDaily Business Reviewisa newspaper publishedatMiami,insaid Miami-DadeCounty,Floridaandthatthesaid newspaper has heretofore been continuously publishedin said.Miami-Dade County,Florida.eachday(exceptSaturday,Sundayand LegalHolidays)andhasbeenenteredas second classmail matter atthe post office in Miamiin said Miami-Dade County, Florida,fora period of one year .next preceding thefirst publicationofthe attached copyof advertisement;andaffiant further says thatheor she hasneitherpaidnorpromisedany person,firmorcorporationanydiscount,rebate,commission or refund foj>^hJ^wptJs%^pK securing this advertisement for publica^kJhin^ftesaid newspaper^/ MARIA MESApersonallyknowntome ^£% (SEAL) <5>e<® <»l*x fiFF 034747 ^•^ v ;^s^!;$e^ty>f3ei^ :;^by:alipwi^£ -!X5?^W^oiPp6f6iM; 6SE NEIGHBORS SUNDAY AUGUST282016 MIAMIHERALD.COM CITY OF SOUTH MIAMI COURTESY NOTICE NOTICE IS HEREBY giventhattheCity Commission oftheCityofSouth Miami,Florida willconductPublicHearing(s)atitsregularCity Commissionmeeting scheduled for Tuesday:September 6,2016,beginning ai 7:00p.m.,intheCityCommissionChambers,6J30 Sunset Drive, to consider the following item(s): AResolution authorizing theCity Manager to enter intoamulti-yearcontractwith Commercial Energy Specialists,Inc.torPool Chemicals and Bulk Liquid Chlorine. AResolutionauthorizingtheCityManagertoenterintoanInterlocalAgreementwithMiami-DadeCountyOfficeofFilmandEntertainmentto issue permits tofilmandstill photography production companiesallowingthemtoutilizeCityfacilitiesandservicesas authorized bytheCity. AResolutionauthorizingtheCityManagertoenterintoavehiclerentalagreementwithRoyalRent-A-Carforrentalvehiclesusedinundercover policeoperationsbythePolice Department. AResolutionauthorizing the CityManagertore-newa live (5)year maintenanceagreementwithSunGardPublicSectorforservicing the Police Departmentsmobilefieldreportingandrecordsmanagementsystem. AnOrdinance amending theSouthMiamiPensionPlanto implement the Collective Bargaining Agreement betweentheCityofSouthMiamiand AFSCME Local 3294andcreatinganew Administration Management Service Class (AMSC)of employees inthe South Miami Pension Plan fortheCityofSouthMiamiandsettingforththetermsofthePlanasrelatedtotheAMSC;by Amending Chapter 16,Article II,Section 16-12, "Definitions"by Adding Definitions forSecondTier Member and AMSC and amending the definition of final average compensation,asit applies tothe AMSC;by amending Section 16-13."Eligibility"toreopenthePlanfor certain General Employees andforthe AMSC;by amending Section 16-14."Pension benefits and retirement date5*tosetoutthe benefits for those persons whowilljoin the Second Tierandfor those persons in the AMSC;by amending Section 16-17 'Termination Benefits"to provide a vesting schedule forthe AMSC;by amending Sec.16-19,"Contributions" toplacealimitonthetotal contributions madeinany fiscal yearby General Employees andtosetthe contribution raleforthe AMSC;by amending Section 16-21,"Purchase ofCreditedService"by allowing certain employees andelected officers tobuycredited service. /An Ordinance amending the South Miami Code of Ordinances by Deleting Section 2-4.5,"Voluntary retirement of elective officers".) An Ordinance oftheMayorandCity Commission oftheCityofSouth Miami amending theLand Development Code,Article 111,"Zoning Regulations,"Section 20-3.5,''Dimensional Requirements/'to amend andclarifythesetback requirements forsidestreetfirstand second storyfacadesofstructuresoncornerlots,andforsideinteriorsetbacksforadditionstostructureswithafivefootsetback,inthe RS-1,RS-2, RS-3,RS-4 andRS-5zoningdistricts;andSection20-3.6,"SupplementalRegulations,"subsection (F)(4),tocorrectthetitleofthedirector responsiblefordeterminingwhichstreetsarefrontageandsidestreets. ALL interested parties areinvitedtoattendandwillbeheard. Forfurtherinformation,pleasecontacttheCityClerk's Office at:305-663-6340. Maria M.Mcncndcz,CMC City Clerk Pursuant to Florida Statutes 2X6.0J05,theCity hereby advises thepublic that ifa person decides to appeal any decision made by this Board.Agency or Commission with respect toany matter considered at its meeting or hearing.,heorshewillneed a record of iheproceedings,and that for suchpurpose,affected person may need to ensure that a verbatim record ofthe proceedings is made which record includes the testimony and evidence upon which the appeal is 10 be based.