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Ord No 23-19-2336ORDINANCE NO. 23-19-2336 An Ordinance amending the South Miami Pension Plan to implement the Collective Bargaining Agreements between the City of South Miami and the American Federation of State, County and Municipal Employees, AFL-CIO, City Employees Local 3294, the Florida State Lodge, Fraternal Order of Police, Inc., and the Dade County Police Benevolent Association, Inc. as well as Implement Changes for Members who are not covered under a Collective Bargaining Agreement; by amending Section 16-12, "Definitions"; by amending Section 16-13, "Eligibility"; by amending Section 16-14, "Pension benefits and retirement dates"; by amending Section 16-17, "Termination"; and by amending Section 16-19, Contributions". WHEREAS, the City of South Miami and the American Federation of State, County and Municipal Employees, AFL-CIO, City Employees Local 3294, the Florida State Lodge, Fraternal Order of Police, Inc., and the Dade County Police Benevolent Association, Inc. (hereinafter "Unions"), have entered into Collective Bargaining Agreements ("Agreements"); and WHEREAS, there are some members who are not covered under the Agreements, but the City of South Miami is desirous of amending the pension plan provisions for those members in accordance herewith; and WHEREAS, some of the purposes and intentions of this ordinance are to provide for adding additional positions to the AMSC class, adding an open enrollment period for joining the South Miami Pension Plan, capping contribution percentages for police officers and sergeants and changing normal retirement age and vesting for AMSC members; and WHEREAS, Florida law requires that if any provision of a collective bargaining agreement is in conflict with any ordinance over which the chief executive officer has no amendatory power, the chief executive officer shall submit to the appropriate governmental body having amendatory power a proposed amendment to such ordinance; and WHEREAS, the City Commission has received and reviewed actuarial impact statements related to the amendments to the South Miami Pension Plan that are set forth in this ordinance; and WHEREAS, the City Commission wishes to change the terms of the South Miami Pension Plan to effectuate the changes called for in the Agreements and to include those individuals who not members of the Unions and not covered by the Agreements; and WHEREAS, the City Commission deems it to be in the public, interest to provide these changes to the South Miami Pension Plan in order to continue to meet the City's objectives of retaining City employees, hiring the best talent and managing employee turnover. Ordinance No. 23-19-2336 NOW, THEREFORE, BE IT HEREBY ORDAINED BY THE MAYOR AND CITY COMMISSION OF THE CITY OF SOUTH MIAMI, FLORIDA, THAT: Section 1: Chapter 16, Article II, Sec. 16-12, "Definitions" of the City of South Miami Code of Ordinances is hereby amended by amending and shall read as follows: AMSC member shall mean the administration management service class. It will be composed of employees who hold only the following positions: City manager City attorney City clerk Assistant/deputy city manager Finance director/chief financial officer Chief of police Planning and zoning director Building director Director of public works Chief administrative officer (currently finance office manager) Chief procurement officer (currently purchasing manager) Parks and recreation director Community Redevelopment Agency Director Personnel Manager Project Manager Special Assistant to the Manager Superintendent of Maintenance Assistant Director of Parks and Recreation Second tier member shall mean general employees who are hired on or after October 1, 2016 who elect to join the city pension plan, and general employees who were hired prior to October 1, 2016 and not participating in the city pension plan as of October 1, 2016 who elect to join the city pension plan: and employees who previously participated in the City of South Miami Defined Contribution Plan and subsequently opted -out during the annual open enrollment period and joined the South Miami Pension Plan. Section 2: That Chapter 16, Article II, of the City of South Miami Code of Ordinances is hereby amended by amending Sec. 16-13, "Eligibility" as follows: Notwithstanding anything in this Section to the contrary, the City shall hold an annual open enrollment period during which time any employee who previously entered into the City of South Miami Defined Contribution Plan and is currently in the City of South Miami Defined Contribution Plan, may opt -out, and elect to join the South Miami Pension Plan, as a Second tier member or as their respective classification at the time they elect to join the South Miami Pension Plan. 2 Ordinance No. 23-19-2336 (i)0) Notwithstanding sections (a) through (h)Qi above, all persons who join the eCity pension plan on or after the -effee ' date of the eMinanee &efn whieh this Beet'^" der-i3vedSeptember 20, 2016 will not be required to have completed six (6) months of service prior to joining and are required to participate immediately upon hire or upon election to join for members who were hired prior to the effeetive gate of this erdinanee fi;e ,., ..,hie dais seetio ;s derived erive September 20, 2016. Section 3: That Chapter 16, Article II, of the City of South Miami Code of Ordinances is hereby amended by amending Sec. 16-14(a)(3), "Pension benefits and retirement date" as follows: (a) Retirement date. The normal retirement date with full unreduced pension benefits for a participant, shall be as follows: (3) AMSC members. The earlier of (a) age sixty -fie (60-5) and completion of *r-ee five (53) years of eCredited service; or (b) completion of thirty-three (33) years of eCredited service. Section 4: That Chapter 16, Article II, of the City of South Miami Code of Ordinances is hereby amended by amending Sec. 16-17(b), "Termination" as follows: (b) Any such participant shall be entitled to elect Option 1 or Option 2, as described below, except that Option 2 shall be automatically considered as having been elected by the Participant unless Option 1 is elected before the participant's normal retirement date. Option 1: A cash payment of an amount equal to the aggregate of the contributions made by the participant prior to termination of employment. Provided that police officer participants eligible to withdraw their contributions from this pension plan may only withdraw their contributions without interest. Option 2: Pension benefits commencing on what otherwise would have been the normal retirement date of the participant in an amount equal to the greater of that which can be provided by the aggregate of the contributions made by the participant prior to the termination of employment, with credited interest compounded annually at the rate of three (3) percent perannum from the end of the year of payment to the date on which pension benefits commence; or an amount determined by multiplying the amount of pension to which the participant is entitled in accordance with section subsection 16-14(a) or 16-14(b), whichever is applicable by a percentage determined in accordance with the following schedule on the basis of the length of credited service. 3 Ordinance No. 23-19-2336 All general employees shall be one hundred (100) percent vested in the pension plan upon completion of ten (10) years of continuous credited service. All second tier members shall be one hundred (100) percent vested in the pension plan upon completion of ten (10) years of continuous service. AMSC members shall be one hundred (100) percent vested in the pension plan upon completion of five dwee (53) years of continuous Credited service. AMSC members who have completed three (3) years of continuous Credited service as of the Effective Date of this Ordinance shall be 100% vested. General employees and AMSC members who opt to join the defined contribution plan of the city shall vest after one (1) year of service. Accordingly, effective October 1, 1995, all general employees who are in this plan as of October 1, 1995, and have ten (10) years or more of continuous service will be one hundred (100) percent vested. Section 5: That Chapter 16, Article II, of the City of South Miami Code of Ordinances is hereby amended by amending Sec. 16-19(a)(2), "Contributions" as follows: (a) Each participant, except as otherwise provided herein, shall contribute in each calendar year towards the cost of the participant's pension an amount equal to three (3) percent of the participant's earnings. Except as otherwise provided herein, no participant shall make any contributions toward the cost of any past service pension to which the participant is entitled under this plan. The employer shall contribute the balance of the cost, actuarially determined, of providing the benefits of the plan. The employer's contributions shall be deposited into the pension plan on at least a quarterly basis. Effective October 1, 1995, the pension contribution for all general employee participants, including those general employees that are now members of the retirement system, shall be increased from three (3) percent to five (5) percent of earnings. Effective October 1, 2001, the pension contribution for all general employee participants, including those general employees that are now members of the plan, shall be increased from five (5) percent to seven (7) percent of earnings. Police officer participant including bargaining unit employees, that are now members of the plan and any police officers who join the plan in the future shall, effective October 1, 1993, have their contribution increased from three (3) percent to five (5) percent of earnings. Effective October 1, 2001, police officer participants shall contribute seven and one-half (7.5) percent of earnings. (2) Police officer participants. Effective October 1, 2004, if the total police officer participants contributions and employer's contribution exceeds fifteen (15) percent of covered police payroll for any fiscal year, the excess over fifteen (15) percent shall be shared equally by the employer and police officer participants, provided however, that effective October 1, 2016, police lieutenants and police captains shall have their contributions capped at twelve (12) percent of earnings.- and effective October 1, 2018, police officers and sergeants shall have their contributions capped at twelve (12) percent of earnings. Police officer participant contributions shall be deposited in the plan immediately after each pay period. Effective October 1, 2001 an amount actuarially determined, to provide for certain minimum benefits required by chapter 185, F.S. shall be paid from the South Miami Police Officers Retirement Trust Fund to the plan each year, regardless of the growth or diminution in future chapter 185, F.S. funds. 4 Ord. No. 23-19-2336 Section 6. Codification. The provisions of this Ordinance shall become and be made part of the Future Land Use Map of the City of South Miami's Comprehensive Plan, as amended. Section 7. Severability. If any section, clause, sentence, or phrase of this Ordinance is for any reason held invalid or unconstitutional by a court of competent jurisdiction, this holding shall not affect the validity of the remaining portions of this Ordinance or the Guidelines adopted hereunder. Section 8. 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. Section 9. Effective Date. This ordinance shall become effective upon enactment. PASSED AND ENACTED this 18th day of June, 2019. ATTEST: APPROVED: I a � A CITY CLERK �MA OR I` Reading: 6/4/19 2"d Reading: 6/18/19 READ AND OVED 4S TO FORM: COMMISSION VOTE: 5-0 LANGU GALIT D Mayor Stoddard: Yea EXE THE Vice Mayor Harris: Yea Commissioner Gil: Yea Commissioner Welsh: Yea CITY TTORNEY Commissioner Liebman: Yea 5 Agenda item No:14. City Commission Agenda Item Report Meeting Date: June 18, 2019 Submitted by: Alfredo Riverol Submitting Department: Finance Department Item Type: Ordinance Agenda Section: Subject: An Ordinance amending the South Miami Pension Plan to implement the Collective Bargaining Agreements between the City of South Miami and the American Federation of State, County and Municipal Employees, AFL-CIO, City Employees Local 3294, the Florida State Lodge, Fraternal Order of Police, Inc., and the Dade County Police Benevolent Association, Inc. as well as Implement Changes for Members who are not covered under a Collective Bargaining Agreement; by amending Section 16-12, "Definitions"; by amending Section 16-13, "Eligibility"; by amending Section 16-14, "Pension benefits and retirement dates"; by amending Section 16-17, "Termination"; and by amending Section 16-19, Contributions". 3/5 (City Manager -Finance Department) Suggested Action: Attachments: ARMemo Ordinances - Pension Revision (June 2019) CAP -Open -More Members FINAL.pdf Ord Amending 16-12, 13, 14,17 & 19.docx Res. No 184-18-15217 - Agreement with the FOP (Officers Sergeants).pdf Actuarial Projection Study (Open Enroll - More Management).pdf Actuarial Study - AMSC.pdf MDBR Ad.pdf Miami Herald Ad.pdf Memo Pension Impact Statement (6-18-19) FINAL.pdf Actuarial Impact Statement Open-AMSC-Cap.pdf Res No 146-01-11294- GRS and Support.pdf CITY OF SOUTH MIAMI SouthMiami OFFICE OF THE CITY MANAGER INTER OFFICE MEMORANDUM THE CITY OF PLEASANT LIVING To: The Honorable Mayor & Members of the City Commission From: Steven Alexander, City Manager Date: June 4, 2019 Request: An Ordinance amending the South Miami Pension Plan to implement the Collective Bargaining Agreements between the City of South Miami and the American Federation of State, County and Municipal Employees, AFL-CIO, City Employees Local 3294, the Florida State Lodge, Fraternal Order of Police, Inc., and the Dade County Police Benevolent Association, Inc. as well as Implement Changes for Members who are not covered under a Collective Bargaining Agreement; by amending Section 16-12, "Definitions"; by amending Section 16-13, "Eligibility"; by amending Section 16-14, "Pension benefits and retirement dates"; by amending Section 16-17, "Termination"; and by amending Section 16-19, Contributions". BACKGROUND On September 20, 2018 the Mayor and Commission adopted Resolution 184-18-15217 which approved the Florida State Lodge Fraternal Order of Police, Inc. three-year Collective Bargaining Agreement (CBA) for police officers and sergeants beginning September 18, 2018 through September 17, 2021, authorizing the City Manager to execute the agreement. The proposed Ordinance incorporates the changes necessary to conform to the approved CBA, specifically Article 37, Retirement Benefits ensuring police officers and sergeants pension contributions will be capped at no more than 12% of earnings. In addition, the City is proposing additional changes for all of our employees in an effort continue 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. — Keeping & managing employee turnover - Employee turnover can be costly. Various sources estimate it can cost anywhere from 30% to 200% of an employee's annual salary to replace them. PROPOSED ORDINANCE Effective October 1, 2018 police officers and sergeants pension contributions will be capped at no more than 12% of earnings, as agreed upon in the most recently agreed three-year Collective Bargaining Agreement (CBA) for police officers and sergeants. Moreover, as part of the proposed ordinance, the City is requesting to include six additional positions within the Administrative Management Service Class (AMSC). The new proposed AMSC Members will be composed of the persons who hold only the following positions: 2 Page 1 of 2 — Community Redevelopment Agency Director — Personnel Manager/Human Resources Director — Project Manager — Special Assistant to the Manager (vacant and not funded in FY 2019) — Superintendent of Maintenance — Assistant Director of Parks and Recreation AMSC Members shall be fully vested in the pension plan upon completion of five (5) years of credited service and a normal retirement age of sixty (60). Lastly, the City is proposing an annual open enrollment period for members who previously elected to participate in the City's defined contribution plan to join as second tier members or their respective plan of classification. This proposed revision provides everyone an opportunity to join the City's South Miami Pension Defined Benefit Plan. The proposed changes listed above, provide an overall savings to the City. RECOMMENATION Approve the attached ordinance that enacts changes necessary to bring the City in compliance with Resolution 184-18-15217 which approved the Collective Bargaining Agreement (CBA) beginning September 18,2018 through September 17, 2021 between the Florida State Lodge Fraternal Order of Police, Inc. and the City of South Miami and provides additional revisions with the intent to continue meeting the City's personnel objectives. ATTACHMENTS — Proposed Ordinances — Resolution 184-18-15217 Approving the Florida State Lodge Fraternal Order of Police, Inc. CBA — GRS Projection Studies 3 Page 2 of 2 RESOLUTION NO. 184-18-15217 I i A Resolution ratifying the three-year Collective Bargaining Agreement for police , . I officers and sergeants between the Florida State Lodge Fratemal Order of Police, Inc. I and the City of South Miami and authorizing its execution by the City Manager. ! _ - - -WHEREAS;-the-Mayor and -City-Commission of -the City of South -Miami-seek-to-proyide _ _ the highest levels of law enforcement protection and services for the citizens, residents, - businesses and visitors of the City of South Miami; and WHEREAS, a Collective Bargaining Agreement with the Florida State Lodge Fraternal Order of Police Inc. (FOP), the union representing the police officers and sergeants of the South Miami Police Department, is an integral component of this effort; and WHEREAS, ' the City Administration and the FOP have successfully concluded negotiations for a new three-year contract that achieves these objectives; and WHEREAS, the police officers and sergeants have ratified the attached agreement. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COMMISSION OF THE CITY OF SOUTH MIAMI, FLORIDA, that: Section 1: The three-year Collective Bargaining Agreement between the Florida State Lodge Fraternal Order of Police Inc. and the City of South Miami is hereby ratified and the City Manager is authorized to execute the Agreement. A copy of the Agreement is attached hereto and made a part hereof by reference. Section 2. Severability. 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. Effective Date. This resolution shall become effective immediately upon adoption. PASSED AND ADOPTED this 201 day of September, 2018. ATTEST: CITY CLER READ AND APPR VED AS TO FORM LANGUAGE y E TION AND LEGALITY:/ e RNEY Approved: a al4o&A MAyoli Commission Vote: 5-0 Mayor Stoddard: Yea Vice Mayor Harris: Yea Commissioner Gil: Yea Commissioner Liebman: Yea Commissioner Welsh: Yea AGREEMENT BETWEEN FOP AND CSM RATIFIED BY FOP SEPTEMBER 7, 2018 PREAMBLE ' - ---- _ - ThirAgreermentiss-entered-into-byth-e-Cityvf-Sogth-Miami;'Flari the "Employer" or the "City" and the Florida State lodge, Fraternal Order of Police Inc., hereinafter referred to as the "FOP" or "Union", for the purpose of promoting harmonious relations between the Employer and the FOP, to establish an orderly and prompt procedure } for the resolution of grievances, to insure continuation of normal activities and Departmental operations, to settle differences which might arise and to set forth the basic and full Agreement between the parties concerning rates of pay, wages, hours of work and all other conditions of employment. Definitions: "11:59 p.m." means 23:59:59.99 hours in a 24 hour clock. "12:00 a.m." means 00:00:00.99 hours in a 24 hour clock. "12:00 p.m." means 12:01:59.99 hours in a 24 hour clock "Bi-weekiy" mean every two weeks. "Department" means the South Miami Police Department. "Officers" or "Police Officers" whether plural or singular, as used in this Agreement means the rank of Police Officer, and Police Sergeant, including probationary employees, but excluding the Chief of Police, Assistant Chief, Majors, Police Captain, Police lieutenants, any bargaining unit member during his assignment to "Internal Affairs" and all other employees of the City of South Miami. "Parties" mean the City and the FOP. "Workweek" means a 7 day period ("week") commencing at 00:00:00 hours (or 12:00 a.m.) on Monday and ending at 23:59:59.99 hours ("11:59: p.m.") midnight on Sunday of each week. ARTICLE 1. RECOGNITION The Employer hereby recognizes the FOP, as the collective bargaining agent for all permanent full-time. and probationary sworn police personnel in the classifications of police officer and police sergeant. However, the FOP is not the collective bargaining agent for sergeants while assigned to internal affairs. 10 AGREEMENT BETWEEN FOP AND CSM RATIFIED BY FOP SEPTEMBER 7, 2018 _. __ _.. ... ...ARTICLE 2. NON-DISCRIMINATION_.. _ There shall be no discrimination, interference, restraint, or coercion by the Employer or the FOP against any employee because of FOP membership or non -membership, or because of race, creed, color, age, sex, religion, marital status, sexual orientation, disability and national origin. All references to employees in this Agreement shall apply to both sexes and wherever the male gender is used, it shall be construed to include male and female employees and vice versa. ARTICLE 3. DUES CHECK -OFF 1 Any member of the FOP, who has submitted a properly executed dues authorization card or written statement to the City Manager, or the Manager's designee, in accordance with a format prescribed orapproved by the City, may, by request in writing, have their membership dues in the FOP deducted from their wages. Dues shall be deducted each bi- weekly pay period, and shall, thereafter, be transmitted to the FOP. However, the City shall have no responsibility or any liability for any monies once sent to the FOP, nor shall the City have any responsibility or any liability for the improper deduction of dues. Furthermore, the FOP shall hold the City harmless for non4ntentional errors in the administration of the dues deduction system. The City shall send all dues to: Fraternal Order of Police- Florida State Lodge 242 Office Plaza Tallahassee, FI.32301 2 it shall be the responsibility of the FOP to notify the City Manager, or the Manager's designee, of any change in the amount of dues to be deducted at least thirty (30) working days in advance of said change. Under no circumstances shall the City be required to deduct FOP fines, penalties, or assessments from the wages of any member. 3 Any member of the FOP may, on thirty (30) calendar day's written notice to the City and the FOP, request that the City cease deducting dues from his wages. ARTICLE 4. FOP BOARD OF DIRECTORS REPRESENTATIVES 1. The FOP shall notify the Chief of Police of the names of all members of the FOP Board of 11 2 AGREEMENT BETWEEN FOP AND CSM RATIFIED BY FOP SEPTEMBER 7, 2018 Directors, the commencement date and length of their term of office, any changes made to j the membership of the FOP Board of Directors and any change to a director's term of office, within 3 working days of the election or appointment to the FOP Board of Directors or any -o er�c is ��iha �e=infornaatiora��equired=to=be-given-toat. e-C-hie€ of -Rol (iev-Twe=membeFsi=—-- =� of the FOP, while on duty, shall be allowed to attend collective bargaining sessions between the City and the FOP, as FOP representatives. FOP representatives who attend a collective I bargaining session shall be paid for such attendance unless they are off duty during a bargaining session and in such case they shall not be entitled to any compensation for their attendance at said bargaining session. All bargaining sessions shall be set by mutual agreement between the parties. The FOP shall notify the City prior to negotiation of the names of the members attending as FOP representatives, provided however this attendance must be approved by the Chief of Police or the Chiefs designee. 2. FOP Directors, while on duty, shall be allowed to attend the City of South Miami FOP lodge #179 Board of Directors meeting once per quarter without loss of pay or leave time for the duration of the meeting, unless the staffing needs of the Department prevent such attendance. All attendance of a Director while on duty shall require the prior approval of the Chief of Police or the Chief s designee. The FOP shall provide dates and times on a quarterly basis and at least 30 working days prior to the board meeting to help facilitate staff scheduling. Board Directors will not be allowed to attend meetings outside City limits while on -duty. If a Director is on duty, his attendance shall not exceed 2 hours total. ARTICLE 5. SERVICES TO THE FOP 1. The City will furnish the FOP with a copy of the Police Department's Rules and Regulations at or before the execution of this Agreement and within 48 hours of their modification. 2. The City will provide a mailbox for each employee for use by the City and the FOP to distribute mail and other communication. The aforesaid mailboxes shall only be used by the FOP for the purpose of transmitting material relative to issues concerning this Agreement. The mailboxes shall not be used to disseminate anything relating to any kind of political issue or for the purpose of communicating material that tends to disparage any elected or appointed official, and/or any employee of the City, whether directly or indirectly. 3. Upon written request from the FOP to the City Manager, the City will provide, on a semi- annual basis, a complete roster of the bargaining unit, including name, rank, and current pay scale of each member of the bargaining unit. 4. All bargaining unit employees, including representatives and members of the FOP shall not engage in Union business while on -duty, or while on any City property, or while operating or being in any City vehicle or any other City property unless otherwise specifically permitted by this Agreement, including paragraph two of this article. 12 3 AGREEMENT BETWEEN FOP AND CSM RATIFIED BY FOP SEPTEMBER 7, 2018 5. Any action taken by the City Manager or Manager's designee concerning the solicitation of City employees for membership in a collective bargaining unit including, signing up of �. .-....�.�m®�tbe�s,�solleetion-afsinitia�ion-��es--clues�or assessr�en#�s�riraeetii�g�s�dis#ribt��ivn=�f-- -- ----� f bargaining unit or affiliated bargaining unit literature or any other business activity of the bargaining unit on City time and during the working hours of City employees, or on any City ' property, or in City vehicles or any other City property shall not be a grieveable offense. ARTICLE 6. PERSONNEL RECORDS 1. Employees covered by this Agreement shall have the right to inspect their official personnel file and/or their closed Internal Affairs file upon written request through their chain of command both of which shall occur during normal business hours under the supervision of the respective records custodian or the custodian's designee. Employees shall not be compensated should said inspection occur outside employee's regular duty hours. The employee shall have the right to have duplicate copies of any items in their official files created for them, upon payment of the usual charge thereof. 2. Employees covered by this Agreement shall receive copies of any item that is placed in the employee's official personnel file. Employees covered by this Agreement shall also have the right to add written responses to any such item that is placed in the employee's official personnel file. All written responses to such items shall be sent to the Chief of Police via chain of command not more than ten (10) working days following the day of receipt of such items by the employee. Written responses shall strictly parallel the item(s) of concern. Any refusal to sign any document shall be documented on all copies by the issuing officer (i.e. "Employee Refused to Sign"); however, no retaliatory or disciplinary action shall be taken against any employee who refuses to sign such a document. 3. To the .extent permitted by law, all personnel records of the employees shall be kept confidential and shall not be released to any person except; authorized officials of the City, or in response to a subpoena from a court of competent jurisdiction, or upon written authorization from the employee. In this regard, the FOP recognizes the City's obligation to comply with Chapter 119, Florida Statutes. 4. At no time shall the news media be directly furnished with the home address or home telephone number of any employee or his relatives without the express written consent of the employee. 5. The City shall purge, upon written request from the employee covered by this Agreement, all records of counseling/coaching and oral warnings from the employees' personnel files after one (1) full year of service during which the employee does not receive further counseling or 13 4 AGREEMENT BETWEEN FOP AND CSM RATIFIED BY FOP SEPTEMBER 7, 2018 I I oral warnings of a similar nature. The City may also purge such records as authorized by Florida State Statute, Title X, Chapter 119 and Title XVIII, Chapter 257.36. Such documents shall be kept in a separate file until they are purged. E ARTICLE 7. INTERNAL AFFAIRS INVESTIGATION AND OBLIGATION TO THE PUBLIC L The parties recognize that the security of the City and its citizens depends to a great extent upon the manner in which the employees covered by this Agreement perform their various duties. Furthermore, the parties recognize that the performance of such duties requires the Involvement of those employees in all manner of contacts and relationships with the public and out of such contacts and relationships, questions may arise or complaints may be made ! concerning the actions of employees covered by this Agreement. Investigation of such questions and complaints must necessarily be conducted by, or under the direction of, departmental supervisory officials whose primary concern must be the security of the City t and the preservation of the public interest and trust. '. I In order to maintain the security of the City and protect the interests and trust of its citizens, the parties agree that the City must have the unrestricted right to conduct investigations of citizens' complaints and matters of internal security; provided, however, that any i investigative interrogation of an employee covered by this Agreement relative to a citizen's complaint and/or matter of internal security shall be conducted utilizing FS 112.532. 3. An employee, who is criminally charged in any jurisdiction with a felony or a serious misdemeanor including but not limited to, DUI, lewd and lascivious conduct, indecent exposure or perjury may, upon review of the circumstances by the Chief of Police, be relieved of duty without pay and benefits. If exonerated, employee shall be compensated for back pay and benefits retroactive to the date the employee was relieved from duty without pay. Any employee placed on leave without pay shall remain on the City's Employee Census but shall be responsible for the full cost of health insurance premiums, during the relief from duty period. 4 Should disciplinary action result from an internal investigation, an employee may, at the option of the Chief of Police, be allowed to use vacation leave to satisfy a suspension which is for five (5) days or less. ARTICLE S. SHIFTS I Seniority shall consist of continuous accumulated paid service in a police classification. Seniority shall be computed from the date of appointment to the police classification and shall accumulate during paid absences because of illness, injury, vacation, military or other 14 E AGREEMENT BETWEEN FOP AND CSM RATIFIED BY FOP SEPTEMBER 7, 2018 authorized compensated leave. In the event bargaining unit employees have the same seniority by classification, seniority shall then be determined as set forth in paragraph 4. c. below. Z Non -probationary patrol officers and sergeants shall bid (semi-annually) for their choice of shift assignments and days off. Days off shall not be bid until shift assignments are set, including the Chiefs mandatory assignments, if any.The determining factor in said bid process shall be each employee's seniority as defined in paragraph 4. c. below. In order to meet Department operational needs, the Chief may, at his discretion, make no more than two specific assignments to each shift (during the semi-annual bid process) The Chief's assignment of six officers in total is without regard to seniority and appealable only to the City Manager. 3. A seniority list by shift and work assignment shall be established and shall be utilized when the Department calls in, or holds over, personnel, except in emergency or unusual situations. 4. The parties understand and agree that Seniority for the purposes of this Agreement, unless otherwise stated shall be determined within each rank for employees covered by this Agreement. Additionally, notwithstanding the above, the following shall be adhered to for purposes of determining seniority as follows: a. Seniority within Sergeant's Rank shall be determined by date of promotion to that rank. In case of ties, the same procedure outlined in paragraph c. shall be utilized. b. Seniority within a Specialized Unit shall be determined by length of assignment within that specific specialized unit (CID, Motors, K-9) and solely within that specialized unit, and such specialized unit seniority has preference and precedence over departmental seniority. In case of ties, the same procedure outlined in paragraph 4.c. shall be utilized. c. Departmental Seniority shall consist of continuous accumulated service within the City of South Miami Police Department. Departmental Seniority shall be computed from the date of taking the Police Officer's Oath with the City of South Miami. Where two or more officers take the oath on same date, the drawing of lots shall determine which officer is senior to the other. S. Vacancies in specialized units shall be filled by permanent employees in all cases unless no permanent employee can demonstrate the experience or the best potential to properly function in such assignment. Should no permanent employee demonstrate said capacity, probationary employees may be considered. Assignment determinations shall be made by the. chief of police based on the recommendations of a selection panel appointed by the chief and such assignment determinations are not grievable. 6. In the event of a layoff for any reason, employees shall be laid off in the inverse order of their seniority in their classification. Any employee to be laid off who has advanced to his present 15 31 AGREEMENT BETWEEN FOP AND CSM RATIFIED BY FOP SEPTEMBER 7, 2018 classification from a lower classification in which he held a permanent appointment, shall, to the extent approved bythe Chief of Police and upon the employee's written request, be given a position in a lower classification in the same Department. Such employee's seniority in the ldWwu_c�lassi# afioiskialla a stab]islaed-aEEordmggt hesdate=©f the--em— yeegsepe�naanent�-=-- - -= appointment to that classification. Employees shall be called back from layoffs according to the seniority in the classification from which the employee was laid off. No new employee shall be hired in any classification until all applicable employees on lay-off status in that classification for which they are qualified, have had an opportunity to return to work. Written notice of recall shall be sent by certified mail to the employee's last known address, as long as the employee is still qualified to be an Officer. Recalled employees shall notify the Employer if they desire to return to work within ten (10) calendar days of receipt of recall notice, and must return to work within twenty-one (21) calendar days from receipt of recall notice. An employee will be kept on the callback list for two (2) years. 7. Upon application to the Chief of Police, or the Chiefs designee, and his approval, employees may exchange shifts, provided that: a. The shift exchange is between employees of like rank and experience. b. The shift exchange is requested in writing at least ten (10) working days in advance by both employees involved in the exchange. & When a vacancy occurs on a patrol shift, the entire shift shall re -bid days off no later than two weeks after the vacancy has been filled. This provision shall apply only to the shift on which the vacancy occurs and not to any other shifts. This re -bidding provision also does not apply should the Chief of Police approve an exchange of shifts as provided for in paragraph 5 of this Article and shall not apply if the vacancy Is filled within one (1) month of the next shift/days off picked. 9. The Department shall not modify, after, adjust or otherwise change an employee's shift in order to avoid the payment of overtime for the purpose of staffing the following pre -planned City special events: e Santa's Elves Parade e Fourth of July e Martin Luther King Parade e Safe Streets Halloween 10. The chief retains the right to transfer employees from shift to shift to meet arising operational needs. After a transfer between shifts, days off will be re -bid if the new assignee is junior to others on that shift. The rebidding of the shift will-eRly shall only be applicable during the first 16 7 AGREEMENT BETWEEN FOP AND CSM RATIFIED BY FOP SEPTEMBER 7, 2018 thirty days of each semiannual shift change. Shift transfers are appealable via the chain of command to the chief of police. Denial of a shift transfer appeal shall be given in writing with the specific departmental needs identified. BaFgaiRiRg uRk empleyees may exeF' __... _. - _ r uchtr�nsfers- •- are not grievable to the city manager. ARTICLE 9. VEHICLES AND SAFETY EQUIPMENT 1. The City will make a good -faith and energetic effort to maintain Police vehicles and safety equipment in proper working order. Police vehicles operated by the City shall comply with the standards and requirements of applicable Florida State Statutes governing motor vehicle safety equipment. Employees will, as soon as possible, report any broken and/or malfunctioning equipment to their Supervisor, but no later than the end of their shift. Employees shall keep the vehicles cleaned and fully fueled at the start of their shift. It is the responsibility of officers with assigned take-home vehicles to promptly deliver their vehicle to the Motor Pool or dealership as appropriate, when repairs are necessary or for scheduled preventative maintenance. 2 The City shall, insofar as possible, equip its marked patrol vehicles with the appropriate lights, siren, first -aid kit, emergency road flares, yellow crime scene tape and fire extinguishers. 3. The City shall furnish riot gear (torso, shoulder, leg and knee, forearm, and gloves) and helmets, riot shields (if applicable) and gas masks individually to all uniformed Officers and Sergeants as necessary. The City shall furnish one flashlight and firearm (of the design approved by the Chief of Police) along with the appropriate amount of ammunition for the authorized and issued firearm to each sworn Law Enforcement Officer covered under this Agreement. 4. Employees agree to be bound by and abide by the Take Home/Assigned Vehicle Policy, as may be revised by the Chief of Police from time to time. The City shall provide the FOP with two (2) weeks advance notice of any modifications to the aforesaid Take -Home Vehicle Policy which become effective after the ratification of this Agreement. 5. Upon ratification of this Agreement, sworn Law Enforcement Officers covered under this Agreement shall be responsible for the timely changing of motor oil and vehicle filters which shall be done at the City of South Miami Motor Pool Public Works Department. Failure to do so on a timely basis will be a violation of this Agreement and the subject of potential disciplinary action. Employees having a take home vehicle shall pay the City twenty five dollars for each scheduled oil change. Employees will not be compensated for any time incurred with a scheduled oil changes and/or maintenance conducted while the employee is off -duty. 17 8 AGREEMENT BETWEEN FOP AND CSM RATIFIED BY FOP SEPTEMBER 7, 2018 6► The bargaining unit member must submit a copy of the receipt detailing the vehicle license plate number, the make and model of the police vehicle, the name of the driver, and the date of the motor oil change, and the name, address of the establishment performing the work. - E-ach•bar-gaining-unit-member-mu,st-r-etain,a-copyrof=the-r-eceipt-for period-of-three•years-an-d, --Y must make it available upon request by the Chief of Police or the Chiefs designee. ARTICLE 10. PROMOTIONS 1. Employees shall be eligible to take a promotional examination after three continuous years of service as a Police Officer in the South Miami Police Department. 2. Promotional examinations shall be in accordance with validation standards and techniques as established by the Chief of Police. Criteria to be used by the Chief of Police for promotions shall be promulgated and distributed to the bargaining unit at least forty-five (45) Calendar days prior to any examination. 3. The City will list the areas which the examinations will cover and the sources from which the examination is drawn. At the conclusion of the examination, the names of all those employees who passed the examination shall be put onto a promotional eligibility list. 4. Whenever a budgeted promotional vacancy exists in a Police Sergeant classification, the City shall fill such vacancy within thirty (30) working days from an existing eligibility list, to the extent practicable, if a valid eligibility list is in existence. A promotional eligibility list will expire two (2) years from the date of the examination, which led to its creation. 5. The probationary period of employees promoted to Sergeant shall be one (1) year. An employee promoted to Sergeant and then demoted within the probationary period shall have no right of review or appeal, concerning such demotion. 6. The Chief of Police will have authority to promote any of the three (3) top ranked candidates on the eligibility list. ARTICLE 11. TRAINING 1. The City will provide midnight shift law enforcement officers covered by this Agreement, administrative leave for the last four(4) hours of their regular duty for weapons training if the training is approved by the Chief of Police and the training is within four (4) hours of the end of their tour of duty for that workweek. 18 9 AGREEMENT BETWEEN FOP AND CSM RATIFIED BY FOP SEPTEMBER 7, 2018 2 The City will provide each employee a copy of training bulletins. Additionally, the City will promptly post in a prominent place and/or disseminate via email, City training bulletins as well as approved training advertisements. __.......... 3. The City agrees to pay for certain courses. The City agrees to provide at least forty (40) hours of training every four years to meet Florida statutory certification requirements. The City may provide additional training at its discretion. 4. The City shall have the right to change or alter work when scheduling training. To the extent ` practicable, the City shall give forty-eight (48) hour -notice to employees of such off duty training. S. The City shall provide weapons training for all employees at least once annually. This training is in addition to the training provided under paragraph 3. Upon qualification and a demonstration of proficiency, employees shall be permitted to carry, on duty, semiautomatic weapons which have been approved by the Department in accordance with Article 30. The Department will make every reasonable effort to facilitate the attendance at the firearm range during an employee's normal working hours. In the event the Department is unable to schedule the employee to attend. the firing range during his normal working hours, the employee may be required to attend the firing range during his off -duty hours. The City agrees to provide ammunition for firearms training. ARTICLE 12. GRIEVANCE AND ARBITRATION PROCEDURE 1 In a mutual effort to provide a harmonious working relationship between the parties to this Agreement, it is agreed and understood that there shall be a procedure for the resolution of grievances between the parties. For the purpose of this Article, a grievance is defined as, any dispute, difference or controversy involving the interpretation and application of this Agreement. 2 Calendar Days is defined as any day of the week including Saturday and Sunday and holidays. 3 Working Days is defined as any business day Monday through Friday and excludes Saturday and Sundays and holidays. 4. Every effort will be made by the parties to settle any grievance as expeditiously as possible. Should the grieving party fail to observe the time limits as set out in the steps of the applicable Article, the grievance shall be considered conclusively abandoned. Any grievance not timely responded to by management within the prescribed time limits shall automatically advance to the next higher step. S. Grievances shall be presented in the following manner: 19 10 AGREEMENT BETWEEN FOP AND CSM RATIFIED BY FOP SEPTEMBER 7, 2018 STEP 1: The grieving employee shall first take up the grievance with the employee's immediate supervisor within seven (7) calendar days of the occurrence of the event(s) -� ..li�ch=gave=nse�to-the �ie�rance, or-�fMt e- rnpfoyee4s-on=authorizer -leave=during=that-- --- — time, then within seven (7) calendar days after the employee's return to work from authorized leave, as the case may be, and the seventh day shall hereinafter be referred to as the "Step 1 Deadline Date". This first step (between the employee and the Immediate supervisor) shall be on an informal and verbal basis and shall not involve the FOP or any other representative of the employee. The immediate supervisor shall complete a grievance transmittal form ("first grievance transmittal form") within five (5) days of the meeting and it shall note nature of the grievance and the date and time of the i discussion. If the grievance is not general in nature and does not fall under the duties and responsibilities of the immediate supervisor, then the immediate supervisor shall, within seven (7) working days of receiving the verbal grievance, forward the completed grievance transmittal form to the appropriate supervisor. Such supervisor shall: (a) meet with the employee and give a verbal response to the employee within 7 working days of receipt of the first grievance transmittal form; and (b) shall complete a second grievance transmittal form within five (5) days of the meeting noting the nature of the grievance and the date and time of the meeting. STEP 2: Any grievance which cannot be satisfactorily settled in Step 1 shall be put in writing and delivered to the supervisor immediately above the appropriate supervisor in Step 1 within seven (7) working days of the meeting with the appropriate supervisor in Step 1. The Step 2 supervisor shall, within ten (10) working days after receipt of the written grievance (or such longer period of time as is mutually agreed upon), render a written decision on the grievance. STEP 3: Any grievance which cannot be satisfactorily settled with the appropriate supervisor in Step 2 shall next be taken up with the Chief of Police, or the Chiefs designee, either by the employee himself, or through a representative of the FOP, at the employee's option. The grievance as specified in writing in Step 2 shall be discussed by and between the employee (or the representative of the FOP and the employee) and the Chief of Police or the Chiefs designee, within seven (7) working days after the completion of Step 2. The Chief of Police, or the Chiefs designee, shall within ten (10) working days after the discussion (or such longer period of time as is mutually agreed upon), render a decision in writing and deliver a copy to the FOP and the grievant; STEP 4: In the event the employee is not satisfied with the disposition of the grievance in Step 3, he shall have the right to appeal the decision of the Chief of Police, or the Chiefs designee, to the City Manager, or the Manager's designee, within seven (7) working days of the date of issuance of the decision of the Chief of Police or the Chief's designee. Such appeal must be made by delivering a copy of the original written grievance, to the City Manager with a copy to the Chief of Police, together with a letter, signed by the employee, or the representative of the FOP, requesting that the decision of the Chief of Police, or 20 11 AGREEMENT BETWEEN FOP AND CSM RATIFIED BY FOP SEPTEMBER 7, 2018 the Chiefs designee, be reversed or modified ("Notice of Appeal"). The City Manager, or the Manager's designee, shall meet with the employee and/or the FOP representative g within seven (7) working days of receipt of the Notice of Appeal. The City Manager, or the M� da of=the=recel t-ofathe:f\lotice-of�==-- Appeal (or such longer period of time as is mutually agreed upon) render a decision in ` writing and deliver a copy to the FOP and the grievant. 6. Where a grievance is general in nature, in that it applies to a number of employees rather ' than a single employee ("Class Grievance"), or if the grievance is directly between the FOP and the Department or the City ("FOP Grievance"), such grievance shall be presented in writing directly to the Chief of Police within ten (10) working days of the occurrence of the event(s) that gave rise to the grievance. The Class Grievance shall be signed by the aggrieved employees and the Representative of the FOP. Thereafter, the grievance shall be processed in accordance with the procedures set forth in Step 3 and Step 4. 7. If the grievance involves discharge, suspension or demotion of the employee, such grievance shall be filed at Step 4 within ten (10) calendar days from the date that the employee receives the "Final Discipline Notice". The Final Discipline Notice is the disciplinary report or memorandum signed by the Chief of Police or the Chiefs designee, containing his recommendation for disciplinary action against the employee. 8► Coaching and counseling shall be filed at the appropriate initiation level and shall only be grieveable up to Step 3 of the Grievance Procedure. Written reprimands shall be filed at the appropriate.initiation level and shall only be greivable to Step 4 of the Grievance Procedure. Therefore, such action shall not be the subject of arbitration. Satisfactory evaluations are not grieveable and, therefore, they shall not be the subject of arbitration; however, the employee may forward his or her comments regarding such evaluation through the chain of command prior to the Reviewer's finalization of the evaluation. In addition, matters relating to the assignment, hiring, promotion, or demotion of probationary employees, as well as any decision by the City Manager on any matter not involving loss of pay shall be final and binding and not be the subject of any arbitration. 9. In the event that a grievance that has advanced to Step 4 has not been resolved, the grievant may demand arbitration of the grievance, if it is arbitral. The demand for arbitration shall be delivered to the City Manager within fifteen (15) working days after the City Manager, or the Manager's designee, renders a written decision on the grievance. All other matters not deemed grievable or arbitral or other matters that have been deemed by this Agreement to not be the subject of arbitration, including those relating to the assignment, hiring, promotion, or demotion of probationary employees, as well as any decision by the City Manager on any matter of discipline not involving loss of pay shall be final and binding and not be the subject of any arbitration The parties shall attempt to mutually select an impartial arbitrator within seven (7) calendar days after a demand for arbitration has been made pursuant to this Article. The arbitrator shall be any impartial person mutually agreed upon by and between the parties. However, in the event the parties are unable to agree upon said 21 12 AGREEMENT BETWEEN FOP AND CSM RATIFIED BY FOP SEPTEMBER 7, 2018 impartial arbitrator within fifteen (15) days of the demand for arbitration, the grievant must file his grievance with the Federal Mediation and Conciliation Service (FMCS) within twenty j (20) days of the delivery of the demand for arbitration and shall request a panel of five (5) -..namsaT, of tile=imprbit rat6"y-41ter-nately-rank _t ordering the panel of arbitrators (i.e. 1-7 with 1 being the most acceptable and 7 being the least acceptable) within seven (7) calendar days after receipt of the panel from FMCS. The parties may, by written mutual agreement, extend the time frame for rank ordering the panel of arbitrators. Copies of the arbitrator's award made in accordance with the jurisdiction and ' authority under this Agreement shall be furnished to both parties within thirty (30) calendar j days of the close of the arbitration hearing. The arbitrator's award shall be final and binding on the parties. Either party may reject up to two (2) arbitration panels in any given case. 10. The City and employee, or the FOP with the written consent of the aggrieved employee shall mutually agree in writing as to the statement of the grievance to be arbitrated prior to the arbitration hearing, and the arbitrator, thereafter, shall confine his decision to the particular grievance thus specified. In the event the parties fail to agree on the statement of the grievance to be submitted to the arbitrator, the arbitrator will confine his consideration and determination to the written statement of the grievance presented in Step 2 of the grievance procedure. The arbitrator shall have no authority to change, amend, add to, subtract from, or otherwise alter or supplement this Agreement or any part thereof or amendment thereto. The arbitrator shall have no authority to consider or rule upon any matter which is stated in this Agreement not to be subject to arbitration or which is not a grievance as defined in this Agreement; nor shall this collective bargaining Agreement be construed by the arbitrator to supersede applicable laws in existence at the time of signing of this Agreement, except to the extent as specifically provided herein. The arbitrator shall not have the power or authority to interpret the dnambiguous provisions of this Agreement. 11 Each party shall bear -the expense of its own witnesses and of its own representatives for purposes of the arbitration hearing. The impartial arbitrator's fee and related expenses and expenses of obtaining a hearing room, if any, shall be equally divided between the parties. Any party desiring a transcript of the hearing shall bear the cost of such transcript unless both parties mutually agree to share the said cost. ARTICLE 13. HOLIDAYS 1. The following paid holidays shall be granted under the following conditions: L January 1 New Year's Day ii. 3rd Monday of January Martin Luther King's Birthday 13 22 AGREEMENT BETWEEN FOP AND CSM RATIFIED BY FOP SEPTEMBER 7, 2018 ' iii. 3rd Monday of February President's Day i iv. 4th Monday of May Memorial Day v. July 4 Independence Day vi. 1st Monday of September Labor Day vii. Columbus Day viii. November 9 Veteran's Day ix. Last Thursday in November Thanksgiving Day x. Friday after Thanksgiving A. December 24 Christmas Eve xii. December 25 Christmas Day 2. When a holiday falls on the regularly assigned day off for an employee, such employee shall receive, at the employee's option, an additional day's pay at their straight -time rate of pay, or compensatory time at their straight -time rate of pay. 3. Birthday and two floating holidays will be credited to the employee after 1 year of continuous service and shall only be taken as leave time. 4. Upon ratification of this Agreement, holidays will be observed on the actual day it falls on. ARTICLE 3.4. SICK LEAVE 1. Sick leave shall be granted to employees for absence for the following conditions: (a) Personal illness or physical disability resulting in the incapacity of the employee to perform the regular duties of his position and not arising from a service -connected injury or accident. (b) Medical, dental or optical treatments and examinations. (c) Personal illness or physical disability resulting in the incapacity of the employee to perform the usual duties of his position and arising from a service- 23 14 AGREEMENT BETWEEN FOP AND CSM ' i RATIFIED BY FOP SEPTEMBER 7, 2018 connected injury or accident but only after all available disability benefits offered J ry Y tY under Workmen's Compensation are exhausted, provided further that use of sick leave in this manner shall be at the employee's request and is not mandatory. (d) Illness or injury to a member of a bargaining unit member's immediate family t that requires the employee to care for that immediate family member. j 2. Employees shall be credited with one (1) day of sick leave at the end of each month active duty during the year. 3. Sick leave may be taken only to the extent that it is accumulated. No advance sick leave shall be granted except in an emergency and upon approval of the City Manager. 4. Employees hired before October 1,1995 will be eligible to receive the sick leave payout, with the existing cap of 600 hours, for the term of this Agreement. Employees who are hired on or after October 1,1995, will not be eligible to receive any sick leave payout 5. Effective October 1,1995, employees will be allowed to accrue sick leave in excess of the 600 hours cap. Nevertheless, the sick leave payout will be governed by section 4 of this Article. 6. All current employees as of October 1, 1995, will retain current payout provision upon termination of employment, and will have no cap on sick leave accrual. All employees hired after October 1, 199% shall receive no sick leave payout upon termination, but will have a "no- cap" maximum on sick leave accrual. Employees who have not personally utilized more than thirty-two (32) hours of sick leave within a consecutive twelve (12) month period and now have a sick leave balance greater than 30 days (240 hours) shall be eligible to convert up to 5 days (40 hours) of sick leave to annual leave, provided that the employee retains sick leave minimum balance of 200 hours. The catastrophic illness bank will be abolished and accrued hours will return to employees who have accrued this leave. 7. An employee whose service with the City is terminated and who has taken sick leave that is unearned at the date of termination, shall reimburse the City for all salary paid in connection with such unearned leave, unless employment is terminated by the death of an employee, or the employee is unable to return to duty because of his disability, the evidence of which shall be supported by an acceptable medical certificate. 8. in all cases of absence on sick leave in excess of three (3) working days and in cases of absence on sick leave for any period less than three (3) working days when the Personnel Manager or Chief of Police, or the Chiefs designee, ("Department Head") shall so direct, the written request for sick leave shall be accompanied by a certificate signed by the physician or other licensed medical practitioner treating the employee, certifying as to the incapacity of the employee during such period to perform the usual duties of the employee's position. Such directives of the Personnel Manager or Department Head shall be valid and in force for a period not to exceed twelve weeks. The Personnel Manager or the Department Head may 24 15 AGREEMENT BETWEEN FOP AND CSM RATIFIED BY FOP SEPTEMBER 7, 2018 issue additional directives not to exceed twelve weeks in duration, in their discretion with the approval of the City Manager. The issuance of all such directives may be appealed to the City Manager. Failure to furnish such a medical certificate for absences in excess of three (3) �---wodcdays�-or or--an.�:absenee- hen-so-direeted-byfih&Bepartment=Head-orPersonn-et-Office -- - shall result in the absence being charged to the employee's vacation leave. 9. The parties agree that the City may take any steps it deems appropriate to strictly administer and enforce the City sick leave policy in such a manner as to eliminate abuse of sick leave privilege. 10. In the event an employee is killed in the line of duty, or by natural causes, his heirs shall receive one -hundred percent (100%) of his accumulated sick leave time. 11. It is further understood and agreed that all issues pertaining to sick leave usage shall be governed by City of South Miami Sick Leave Policy ARTICLE 15. BEREAVEMENT LEAVE 1. Employees covered by this Agreement after providing adequate notice concerning the death of an immediate family member shall be entitled to bereavement leave with pay up to a maximum of four (4) workdays in the event of such death. 2. Two -additional days of leave may be granted if travel in excess of 250 miles one way- is necessary. 3. The phrase "immediate family" shall be defined as the employee's spouse, grandparents, parents, stepparents, children, stepchildren, grandchildren, brothers, stepbrothers, sisters, stepsisters, father-in-law, mother-in-law, brother-in-law, sister-in-law, and domestic partner. 4. Proof of death in the immediate family in the form of death certificate or public obituary must be provided to the City Manager, or the Manager's designee, before compensation is approved. 5. Bereavement leave shall not be charged to sick leave or annual leave. 6. Should an employee require more bereavement leave in excess of the allotted time, he may request additional time not to exceed ten (10) days. Such requests must be submitted at least five (5) days prior to the start of the requested leave and be pre -approved by the Chief of Police, or the Chiefs designee. Moreover, the employee requesting such additional leave must have at least ten (10) days in either his vacation or compensatory leave banks, from which the requested time will be deducted. 25 16 a AGREEMENT BETWEEN FOP AND CSM RATIFIED BY FOP SEPTEMBER 7, 2018 ARTICLE 16. LEAVE OF ABSENCE 1. Leave without pay and without benefits may be granted by the City Manager for a period not j to exceed six (6) calendar months to enable the employee to receive professional or technical training which will improve their work upon their return to service, or because of the employee's extended illness or non -job -related disability,.or bereavement. Leave without pay may be granted by the City Manager to an employee for a period not to exceed one (1) calendar month for any other purpose. I 2 Leave without pay granted to any employee shall not to be charged against vacation leave, but entry thereof shall be made upon the leave records of such employee, 3. Any employee granted leave without pay for six (6) months or more, shall not be entitled to return to his original position if it is not available but shall be entitled to be placed in another job position for which he qualifies and only if a job position is available. It is clearly understood that if the job position last held has been filled or eliminated, the Department will make every effort to place the employee in another job position for which said employee qualifies. If placed in another job position, said employee shall be entitled only to the wage scale for such new position. If no job position is available, the Department will give priority to said employee as soon as a new job position for which the employee qualifies, is available. ARTICLE 17. VACATION LEAVE 1. The term "Vacation Leave" shall be used to designate leave with pay granted to an employee on the following prorated basis: Years of Uninterrupted Service Amount of Vacation a) 1 to 5 years inclusive. 8 hours per month b) 6 to 14 years inclusive.10 hours per month c) 15 to 19 years inclusive.12 hours per month d) 20 years and over.14 hours per month (i) Vacation shall require approval of the Chief of Police or the Chiefs designee, and at no time shall an employee be allowed more vacation leave than has been accumulated. (ii) Earned vacation leave is principally intended for use during the year in which it is earned. Under exceptional circumstances and upon written request 26 17 AGREEMENT BETWEEN FOP AND CSM i RATIFIED. BY FOP SEPTEMBER 7, 2018 within the year in which the vacation leave is earned, such time may be used up to 30 calendar days past the employee's anniversary date with the written approval of the City Manager. (iii) Vacation leave may be taken to the extent that it is earned by the employee, subject to the prior approval of the Chief of Police, upon written application by the employee in advance, and at the convenience of the City. (iv) Any earned and credited vacation leave to the credit of an employee in good standing when he terminates, his employment with the City will be paid prorated at the employee's current rate of pay with the last paycheck received. ARTICLE 18. EXT -DUTY POLICE EMPLOYMENT Employees agree to be bound by and abide by the Extra -Duty Police Employment policy as developed by the Chief of Police. The City shall provide the FOP with two (2) weeks advance notice of any modifications to the aforesaid Extra -Duty Police Employment policy which becomes effective after the ratification of this Agreement. ARTICLE 19. INSURANCE BENEFITS The City agrees to pay for HMO health insurance for all employees covered by this Agreement. Employees wanting the optional POS or PPO health insurance will pay the difference between the HMO plan and the optional plan chosen. The City will attempt to continue the current levels of coverage for dental, life and disability insurance. The employee agrees to pay for 100% of dependent coverage for health and dental insurance. ARTICLE 20. HOURS OF WORK AND OVERTIME 1. Forty (40) hours shall constitute a normal workweek for an employee covered by this Agreement. Nothing herein shall guarantee any employee payment for a forty (40) hour workweek unless the employee actually works forty (40) hours. Actual hours worked shall not include hours when work is not done such as during time off for sick leave, birthday, holiday, floating holiday, or vacation leave, whether or not any of this time is pre -approved. 27 18 AGREEMENT BETWEEN FOP AND CSM RATIFIED BY FOP SEPTEMBER 7, 2018 Compensatory leave will be considered as time actually worked. Employees whose hours of actual work exceed forty (40) hours in a workweek shall be compensated at the rate of time and one-half of the employee's regular straight -time rate for all time worked in excess of 40 �taou�s.in-a;.workweek.rA -- --- order of seniority unless the existence of emergency or exigent circumstance do not allow a reasonable amount of time to contact employees on a seniority basis or unless the work involves 'crime prevention details' burglary details, traffic, 'wolf -pack' details, etc. 2 if an employee covered by this Agreement is called to work at a time outside his scheduled working hours after he has actually worked a forty (40) hour workweek, he shall receive a minimum of four (4) hours' pay at the rate of time and one-half his regular -straight time for such work occurring outside his scheduled working hours. However, if the employee is called to work during a holiday, the employee shall be paid in accordance with Article 13 and not this Article. i 3. Employees who are required to attend an off -duty deposition or court appearance after having actually worked a forty (40) hour workweek and when the appearance is as a subpoenaed witness in the federal or state courts or as a deponent in pending criminal, civil or traffic cases involving or arising out of the discharge of the employee's duties in the course of his employment with the City, he will receive a minimum of four (4) hours pay at the rate of time and one half of their regular straight -time rate. Employees shall be allowed to retain witness and travel fees received for court and deposition appearances. 4► Employees, who participate in authorized special events for the City, shall be entitled to be paid at the rate of time and one-half of the employee's regular straight time rate regardless of actual hours worked during that pay period. S If the officer is required to hold over for any reason within one hour of the normal tour of duty after having actually worked a forty (40) hour workweek, it will be considered an extension of the shift, entitling the officer to overtime pay. fi Insofar as possible, employees covered by this Agreement shall be given forty-eight (48) hours' notice of any changes in their regular hours of work. Further, insofar as possible, the Department will avoid scheduling an employee to work on continuous shifts. Should an employee be scheduled to work continuous shifts, their days off may be adjusted within the same pay period by the Department. Employees shall be given two (2) weeks' notice of normal shift,change. 7. No supervisor or official shall take action to cause the non-payment of overtime in circumstances wherein an employee covered by this Agreement has performed work, which entitles him to payment of overtime as provided herein, provided that nothing herein shall restrict the City or the Department from altering work schedules or taking any other action 28 19 AGREEMENT BETWEEN FOP AND CSM RATIFIED BY FOP SEPTEMBER 7, 2018 to reduce the number of overtime, court time, or call -out hours worked by the employee covered by this Agreement. -.&_.T_h:PdLepartment.reserues.the.right-to,.institute-any.pr-ocedure-orsystem.it-deems.apprbpriate to measure, record and/or verify attendance at and duration off -duty court appearances. Strict compliance with any procedure or system so instituted by the Department shall be a condition precedent to obtaining compensation for an off -duty court appearance under Paragraph 3 above. 9. Employees, who participate in authorized special events for the City, shall be entitled to be paid at the rate of time and one-half of the employee's regular straight time rates regardless of actual hours worked during that pay period. M Compensatory time shall be administered in accordance with the following guidelines: (a) Compensatory leave may be accrued to a maximum of two hundred forty (240) hours. Certain current employees, who have an accrual in excess of the current cap, will be "grandfethered" to allow them to retain their accrued balance. However, such employees shall not be eligible for accrual of any additional compensatory leave until their balance falls below the 240 hour cap and at that time their accrual cap becomes 240 hours. (b) Compensatory leave may be taken in unlimited blocks of time, provided operational needs have been met, as determined and approved by the Chief of Police. (c) Compensatory leave shall be requested in writing at least one (1) week prior to the effective date of requested leave or the one (1) week time frame is agreed to and waived by the Chief of Police or the Chiefs designee. Approval or disapproval shall be made within 3 business days after the request is submitted. Under exceptional circumstances and as approved by the Chief of Police, the time limits for request of compensatory leave may be waived. (d) Once approved, compensatory leave will not be canceled by the Department unless warranted by an emergency situation, as determined by the Chief of Police, exists. 11. The Chief of Police will conduct a straw poll of all Sergeants and Officers to proceed in adopting a 30 and/or 12 hour shift. If the majority of Sergeants and Officers who participated in the poll agree to adopt a 10 and/or 12 hour shift, the Chief of Police or designee will prepare and present a Memorandum of Understanding (MOU) within 30 days of said polling affirming such approval. The Chief of Police reserves the right to adopt 8, 10 and 12 hour shifts for different Divisions and/or assignments. ARTICLE 21. MANAGEMENT RIGHTS 20 29 AGREEMENT BETWEEN FOP AND CSM RATIFIED BY FOP SEPTEMBER 7, 2018 1 The FOP and its members recognize that the City has the exclusive right to manage and direct all of its operations and when these rights are exercised they shall not be the subject of any ---gnavande.�Aceordinglyk-tie -City-specifically; brit nod -by -way -of -limitation, --reserves the exclusive right without redress by the employees or the FOP to: a. Decide the scope of service to be performed and the method of service; b. Hire and/or otherwise determine the qualifications of employees and the criteria and standards for employment; c. Fire, demote, suspend or otherwise discipline employees for proper cause including a violation of the criteria and standards for employment d. Promote and determine the qualifications of employees; e. Layoff and/or relieve employees from duty due to lack of work; f. Transfer employees from location to location and from time to time; g. Rehire employees; h. Determine the starting and quitting time and the numbers of hours and shifts to be worked subject to Article 20; i. Determine the allocation and content of job classifications; j. Formulate and/or amend job descriptions; k. Merge, consolidate, expand, curtail or discontinue temporarily or permanently, in whole or in part, operations whenever in the sole discretion of the City good business judgment makes such action advisable; I. Contract and/or subcontract any existing or future work; m. Expand, reduce, alter, combine, assign, or cease any job; n. Determine whether and to what extent the work required in its operation shall be performed by employees covered by this Agreement; o. Control the use of equipment and property of the City; Determine the number, location, and operation of headquarters, annexes, substations and divisions thereof; 21 30 AGREEMENT BETWEEN FOP AND CSM RATIFIED BY FOP SEPTEMBER 7, 2018 p. Schedule and assign the work to the employees and to determine the size and composition of the work force; .. ,_. __-q,_Ditermine-theLser-vices--to--be--provided to-- the -=public and —the --maintenance; procedures, materials, facilities, and equipment to be used, and to introduce new or improved services, maintenance procedures, materials, facilities and equipment; r. Take whatever action may be necessary to carry out the mission and responsibilities of the City in emergency situations; s. Formulate, amend, revise and implement policy, programs, rules and regulations; t. Have complete authority to exercise those rights and powers that are incidental to the rights and powers enumerated above, including the right to make unilateral changes, 2. The above rights of the City are not meant to be all-inclusive, but are meant as illustrations, which indicate the type of matters, or rights, which belong to and are inherent in the City as the employer. Any of the rights, powers, and authority the City had prior to entering their collective bargaining Agreement are retained by the City, except as specifically abridged, delegated, granted or modified by this Agreement. 3. If the City fails to exercise any one or more of the above functions from time to time, this will not be deemed a waiver of the City's right to exercise any or all of such functions. ARTICLE 22. WORK STOPPAGES 1. The FOP agrees that, under no circumstances, shall there be any work stoppage, strike, improper political activity, sympathy strike, safety strike, jurisdictional dispute, walkout, sit- down, stay -in, sick-out or any other concerted failure or refusal to perform assigned work for any reason whatsoever, or picketing in the furtherance of any of the above -prohibited activities, nor shall any bargaining unit personnel refuse to cross any picket line at any location, whether the picketing is being done by the FOP or any other employee organization or union. 2. The FOP agrees that the City shall retain the right to discharge or otherwise discipline one, some, or all of the employees participating in or promoting any of the activities enumerated in paragraph 1 above, the exercise of such rights by the City will not be subject to recourse under the grievance/arbitration process. 3. It is recognized by the parties that the improper activities enumerated in paragraphs I and 2 31 22 AGREEMENT BETWEEN FOP AND CSM RATIFIED BY FOP SEPTEMBER 7, 2018 above, are contrary to the ideals of professionalism and to the City's community responsibility. Accordingly, it is understood and agreed that in the event of any violation of this Article, the City shall be entitled to seek and obtain legal and/or equitable relief in any •.--cour�of-competent-jur-indiction,---__.��..____._ _�._,_ _-...__� ..------:-----.- .- ---- -- 4. For the purpose of this Article, it is agreed that the FOP shall be responsible for any act committed by its officers, agent, and/or representatives which act constitutes a violation of state law or the provision herein. In addition to all other rights and remedies available to the City under State law, in the event of a breach of the provisions herein, the City shall have the right to. unilaterally and without further notice terminate this collective bargaining Agreement, withdraw recognition from the FOP, and cease dues deductions. ARTICLE 23. AWARDS The City and Employees agree to be bound by and abide by the Awards policy as developed by the Chief of Police. ARTICLE 24. MILITARY LEAVE Any employee covered by this Agreement shall provide a minimum of two weeks advance notice of their official orders requiring their attendance for training or other active duty as a member of the United States Armed Forces or the State of Florida National Guard and shall be entitled to military leave pursuant to Chapter 115.07, Florida Statutes. ARTICLE 25 AUTHORIZED USE OF PRIVATE AUTOMOBILE An employee authorized to use their private automobile by the Chief of Police or the Chiefs designee in the performance of their City duties will be compensated at the mileage rate prescribed by Florida Statutes. Such mileage shall be computed based on the distance between the employee's regular duty station and the place of assignment or the employee's residence and the place of assignment, whichever is shorter. Mileage shall not be paid for commuting to and from the regular duty station or for court appearances or case -related conferences and depositions. ARTICLE 26. BULLETIN BOARDS 23 32 AGREEMENT BETWEEN FOP AND CSM RATIFIED BY FOP SEPTEMBER 7, 2018 The City shall permit the FOP to post notices of an informational- nature and names and addresses of officers, directors, and representatives of the Employee Organization on a bulletin board in roll call room of the Police Station, or other location as may be necessary as ..deterrntned-by_the-Chief-of=Qolfce.-A-cbpy-of-each-notice-to-be�posted-shall-be-approved by the Chief of Police or the Chiefs designee prior to posting. Under no circumstances shall the FOP tender for posting, any notice or material tending to, directly or indirectly, disparage any elected or appointed official or employee of the City. An Officer of the FOP shall sign each notice to be posted. ARTICLE 27. SEVERABIUTY CLAUSE Should any provision of this Agreement or any part thereof, be rendered or declared invalid by reason of any existing or subsequently enacted State or federal legislation, or by any decree of a court of competent jurisdiction, all other articles and sections of this Agreement shall remain in full force and effect for the duration of this Agreement. Furthermore, should any provision of this Agreement become invalid, as described above, the parties may meet within thirty (30) calendar days of such decision or legislation to discuss substitute provisions or ramifications of such action of this Agreement. ARTICLE 28. COMPENSATION I Bargaining unit employees who serve as Field Training Officers (FTO) pursuant to the criteria below will receive a base hourly rate supplement of seven percent (7%) during the time that the employee performs FTO duties. In order to receive the FTO supplement, the employee must: (1) possess an FTO certificate from the State of Florida, and (2) be assigned to and actually perform FTO duties. Thus, employees will receive FTO pay only during those days in which the employee is at work, Is assigned to FTO duties and performs FTO duties. The seven percent (7%) FTO supplement will be added to the employee's base pay for the days during which the employee receives such supplement. The assignment pay shall be tied to the base salary for overtime and pension calculation. 2 Bargaining unit employees covered by this Agreement who are temporarily assigned to a higher rank shall receive seven percent (7%) of his/her base hourly rate as a supplement for each full day worked in the higher rank. The assignment pay shall be tied to the base salary for overtime and pension calculation. 3. Longevity pay shall be calculated based on the hourly rate of each bargaining unit employee. 4. Employees covered by this contract will continue to receive $50 hazardous duty pay bi- weekly. This hazardous duty pay will not be used for pension calculation. 33 24 AGREEMENT BETWEEN FOP AND CSM RATIFIED BY FOP SEPTEMBER 7, 2018 5. Police officers assigned to uniform patrol who are covered under this Agreement and are assigned to afternoon or midnight shifts shall receive a shift differential pay of$0.35 _ —(afternoon_shifx)_or-$0.50_(midnight_shift).-Sergeants-assigned--to-.uniform-patrol who are . covered under this agreement and are assigned to afternoon or midnight shifts shall receive a shift differential pay of $0.45 (afternoon shift) or $0.60 (midnight shift). The shift differential, for overtime and pension calculation, is not tied to the base. Hours must be actually worked in order to receive the differential pay. 6. Upon ratification Police Officers and Sergeants covered under this Agreement who are assigned to the following specialized units shall be eligible for an assignment pay of $80 per pay period. The assignment pay is not tied to the base for overtime and pension calculation. Employees eligible for specialized unit pay will only be eligible for one such $80 increase regardless of how many specialized units they participate in. a) Motors/Traffic Unit b) G.I.U. 0 S.I.U. d) Community Patrol/PAL e) K-9 f) SWAT 7. Upon ratification bargaining unit members shall receive an 8% cost of living adjustments based on the Consumer Price Index for the last 5 years - All Urban Consumers 12-Month Percent Change for the Miami -Ft. Lauderdale FL area (CPI), (computed as the aggregate, of the last 5-years of COLA years of the COLA shall, 12-month average change percentage). Payments shall not be retroactive and the last five (5) years of the COLA shall only be used for calculating this onetime increase. 8. For the purposes of this agreement the Consumer Price Index shall be calculated as follows - All Urban Consumers 12-Month Percent Change for the Miami -Ft. Lauderdale FL area (CPI) which shall have the effect of increasing the pay for each employee, unless the CPI is zero or is negative, which shall then have no decreasing effect on the employee's pay. The cap on the CPI increase shall be at 3.0%. 9 Effective October 1, 2018, the merit step pay program shall be implemented and begin as follows for all Officers and Sergeants: A merit pay increase will be available to be awarded at the end of the month upon completion of an anniversary year within the employee's classification provided he meets the provisions contained in this Article. Step 1: 3.5% Step 2: CPI 25 34 AGREEMENT BETWEEN FOP AND CSM RATIFIED BY FOP SEPTEMBER 7, 2018 Step 3: 3.5% Step 4: CPI Step 5: 3.5% _ . .—__ ----Step 6:�CP1—�_ --._-- --------�-------------�--------_.__— __ _. _. Step 7: 3.5% Step 8: CPI Step 9: 3.5% Step 10: CPI Step 11(Year 15): 5% Step 12 (Year 20): 5% M Within the twelve (12) month period immediately preceding the effective date of the merit increase Employee must not have any of the following (these rules do not apply for the CPI increase): i. Received ascorebelow3.0 on theannual performance review ii. A sustained or upheld Suspension i If an employee has been suspended, then once the suspension has ended and it has been j resolved and finalized in the employee's records, then the employee can request to be i reviewed again for merit pay increase. An employee that has a suspension or annual performance review overturned through the appropriate appellate process may be entitled to the applicable merit pay increase he would have otherwise received at the time. 11. An Employee must be an employee of the City on the date the merit pay increase is scheduled to be awarded. 12 An employee promoted to Sergeant will receive a one (1) time 10% increase regardless of which step he has attained in the merit based step system. The employee will continue to receive eligible steps based on the merit based step system. ARTICLE 29. PROHIBITION AGAINST RE -OPENING OF NEGOTIATIONS . Except as specifically provided herein, neither party hereto shall be permitted to re -open this Agreement or any part of this Agreement. This Agreement contains the entire Agreement of the parties on all matters relative to wages, hours, working conditions, and all other matters which have been, or could have been negotiated by and between the parties prior to the execution of this Agreement. 35 26 AGREEMENT BETWEEN FOP AND CSM RATIFIED BY FOP SEPTEMBER 7,201.8 ARTICLE 30. UNIFORMS AND EQUIPMENT i 1. Employees covered by this Agreement shall receive from the City upon appointment, at no cost to the employee, a new uniform, which shall consist of the following: (a) One (1) long sleeve shirt; (b) Five (5) short sleeve shirts; (c) Five (5) pairs of trousers; (d) One (1) hat; (e) Badge and name tag; (f) Duty belt *and accessories to include: but not be limited to: handcuffs i case cartridge case, holster and hand held radio holder; (g) The appropriate quantity of ammunition; (h) One (1) jacket with zip -out lining; (i) One (1) pairs police low quarter corfam shoes and one (1) pair alternative footwear (IE Boots, sneakers Etc.); (j) Raingear 2. The above items shall be replaced as needed, by the City, within a reasonable amount of time after the employee has submitted a written request. Such requests shall include the reason for replacement and is contingent upon approval of the Chief of Police or the Chief s designee, via the chain of command. 3. Commencing with the ratification of this Agreement, employees who are required to wear non -issued clothing will receive a clothing allotment of $700 dollars annually. One-half (1/2) of said allotment will be paid on the pay day nearest the 15th of December of each year and the other one-half (1/2) will be paid on the pay day nearest the 15th of June of each year provided that the employee is employed on said day. 4. Commencing with the ratification of this agreement, uniformed employees covered under this Agreement will receive a clothing allowance of $400 dollars annually. One-half (1/2) of said allotment will be paid on the pay day nearest the 15th of December of each year and the other one-half (1/2) will be paid on the pay day nearest the 15th of June of each year provided that the employee is employed on said day. Any employee who receives a clothing/uniform allowance in advance who terminates employment, except for retirement, will have a prorated portion of that allowance deducted from the final paycheck. No final paycheck will be given the terminated employee until all city -owned property such as uniforms and equipment, ID, etc. has been returned to the City. S. Commencing with the ratification of this Agreement each bargaining unit employee covered 36 27 AGREEMENT BETWEEN FOP AND CSM RATIFIED BY FOP SEPTEMBER 7, 2018 by this Agreement shall be provided with a Level III A bullet resistant vest. The wearing of the vest will be in compliance with Department policy. --.-6._Each-.Officer_(upon-.request)-w.ill=bi�-issued'-surgical-gloves-and-.a-plastic-pocket resuscitation mask for use in administering first aid. Such items shall be replaced as needed. 7. Employees shall be issued hand held batons (ASP) with holsters and shall receive appropriate training for use of such ASP prior to issuance. 8. Uniformed personnel shall be permitted to wear, as part of their uniform, a standard knife (The blade of which shall not exceed three inches in length) and case, the finish of which matches the duty belt accessories issued by the City. The uniformed personnel shall not cant' any knife on their person other than that which is contained in said case. ARTICLE 32. PHYSICAL EXAMINATION AND WORKERS' COMPENSATION BENEFITS I Employees will receive an electrocardiogram, eye exam, and physical examination to include alcohol and drug screen testing at least once a year (12 months) performed by a physician or agency selected by the City or when requested by the City. Scheduling of the above will be at the discretion of the City, and the results will become part of the employee's permanent record. The City will undertake the cost of the examination and will furnish the employee with a copy of the examination report. 2 In the event of an on-the-job injury to an employee, not as a result of negligence by the employee, such employee will be carried at full pay and benefits for a period not to exceed 180 calendar days from the first day of injury. The Chief of Police may determine that a prior sustained injury reported on a subsequent date is acceptable and the 180-benefit period can be initiated at that time at the Chiefs discretion. 3 Any employee injured on the job, and not as a result of his negligence, shall be paid the regular full wage for the day of the accident if their treating physician advises that he should not return to work that day. 4. Employees covered by this Agreement further agree that, in the interest of public confidence, there needs to exist a management right to submit employees at random and without notification for testing such as for Drug and Alcohol use. Said tests shall be in addition to the annual physical and may occur not more than one time per employee each calendar year. 5. Personnel requesting light duty status based on non -work related injuries shall file request for such duty with supporting medical documentation to the Chief of Police. If light duty status is available and is approved by the Chief at his discretion as per the Personnel Manual, the employee will be assigned duties and shift as per Departmental needs at the Chiefs 37 28 AGREEMENT BETWEEN FOP AND CSM RATIFIED BY FOP SEPTEMBER 7, 2018 discretion. 1. Each employee who retires based on receiving full retirement benefits without penalty or medical disability shall receive an honorary one -grade promotion and shall be issued a badge and identification card clearly marked "retired". The honorary one -grade promotion shall not affect salary, benefits or the calculations of pension and/or distributions. 2. The following changes in retirement benefits are hereby agreed and are incorporated hereto as historical data: a. Effective October 1, 1995, the benefit accrual rate (multiplier) shall be increased from 1.9 % to 2.25% for services performed in the 1995-1996 fiscal year; b. Effective October 1, 1996, the benefit accrual rate (multiplier) shall be increased from 2.25% to 2.50% for services performed in the 1996-1997 fiscal year; c. Effective October 1, 1997, the benefit accrual rate (multiplier) shall be increased from 2.50% to 2.75% for services performed in the 1997-2001 fiscal years. d. Effective October 1, 2001, the benefit accrual rate (multiplier) shall be increased from 2.75 to 2.80 percent for services performed in the 20012002 fiscal year. Effective October 1, 2002, the pension benefit accrual rate (multiplier) for sworn police personnel shall be increased from 2.80 percent to 2.90 for services performed in the 2002-2003 fiscal year. e. Effective October 1, 2003 and thereafter the pension benefit accrual rate (multiplier) for sworn police personnel shall be increased from 2.90 to 3.00 percent. The multiplier factor for all years of service prior to October 1,1993, the multiplier shall be 1.6%. For services rendered during fiscal year 1993-94 (October 1,1993 through September 30,1994), the multiplier shall be 1.8%. f. For services rendered during October 1, 1994 through September 29, 1995, the multiplier shall be 1.9% to be applied at the time of retirement of each bargaining unit employee covered by this Agreement. 3. Bargaining unit employees shall be 100% vested in the retirement plan when completion of 38 29 AGREEMENT BETWEEN FOP AND CSM RATIFIED BY FOP SEPTEMBER 7, 2018 ten (10) years credited full time service in the retirement plan is completed. 4. Effective October 1, 2001, the employee contribution to the retirement plan will be 7.5%. -_Should the..total-.contribution-be-.actuarially deter•mined-t�o-exceed- -51 %;--both--the-City.and the employees will share equally the excess amount (should the total contribution be actuarially determined to be 17% the City shall contribute a total of 8.5% and the employees shall contribute a total of 8.5%). Employee contribution will not exceed 12%. 5. The sum of $12,498 will be paid from the Chapter 185 Police Retirement funds to the South Miami Police Pension Plan each year, regardless of the growth or diminution in future Chapter 185 funds in partial exchange for the 25 years of service and out benefit and providing the pension benefit accrual rate (multiplier) for sworn police personnel shall not be less than two percent (2.0%) for all years of service improvement to the South Miami Police Pension Plan. In addition, the sum of $25,282 will be paid from the Chapter 185 Police Retirement funds to the South Miami Police Pension Plan each year up to and including the payment for fiscal year ending September 30, 2026, regardless of the growth or. diminution in future Chapter 185 funds in partial exchange for providing for credited service from date of employment for sworn police personnel who entered the South Miami Police Pension Plan when first eligible. The amount determined by the pension board actuary for future benefit improvements for sworn police personnel, if any, will be paid from the Chapter 185 Police Retirement funds to the South Miami Police Pension Plan each year, regardless of the growth or diminution in future Chapter 185 funds. 6. The retirement plan is mandatory for all employees, covered under this Agreement, hired after October 1,1995. 7. Final average compensation shall mean the participant's annual compensation, as determined by the employer, acting in a uniform and nondiscriminatory manner' averaged over the best five (5) year period of the participant's career with the City of South Miami ending on the participant's retirement date, date of disability, date of termination of employment, or date of termination of the plan, whichever is applicable. For the purposes of this Agreement the best five (5) years is defined as best five -26 consecutive pay periods within a participant's career and such consecutive year periods shall not overlap one another. 8. The normal retirement date (the earliest date a bargaining unit employee may retire with full unreduced pension benefits) for a participant shall be on the date that the participant has completed 25 years of credited police service, regardless of age, or attainment of age sixty 60 and completion of ten 10 years of credited police service 9. Employees covered by this Agreement shall be allowed to apply for permission to purchase credit for active duty in the U. S. military service, up to a maximum of four (4) years in the South Miami Retirement System, pursuant to procedures to be promulgated by the City in consultation with the FOP. 39 30 AGREEMENT BETWEEN FOP AND CSM RATIFIED BY FOP SEPTEMBER 7, 2018 10. Employees covered by this Agreement shall be allowed to apply for permission to purchase credit for immediate past City service as a member of the bargaining unit up to a maximum of five (5) years in the South Miami Retirement System pursuant to procedures to be ._.._.promulgated-by_the.City_in..consultation,with-the.FOPrThe_actuarial_and.-technical-language is. to be prepared by actuarial company, approved by the City and the FOP, and adopted by the Pension Board. Any condition or impairment of health of any police officer caused by tuberculosis, hypertension, heart disease, or hardening of the arteries, resulting in total disability or death, shall be presumed to be accidental and suffered in the line of duty unless the contrary be shown by competent evidence. 11. Effective July 1, 2011, the maximum amount of overtime hours for pension calculations for any one fiscal year shall not exceed 300 hours. The day following the ratification of this Agreement, any accumulated time which is eligible for payout upon separation from employment with the City shall remain eligible for pension calculations and subject to pension contributions upon payout. Any accumulated time that is eligible for payout after the ratification of this Agreement will be considered new accumulated time. Any and all new accumulated time, eligible for payout upon separation from employment with the City, shall not be eligible for pension calculation or subject to pension contributions. 12. Effective upon the ratification of this Agreement employees hired on or after October 1, 2011 covered by this Agreement shall enter the pension plan immediately upon being hired as a sworn law enforcement officer. 13. Attached hereto and incorporated by reference herein, is Ordinance 16-08-1951 adopted May 20, 2008, entitled "Pension Plan," as amended. 14. Upon ratification, the City of South Miami will begin the process for a 5 year Deferred Retirement Option Program referred to as the DROP. The full implementation of the DROP will commence upon updating the City of South Miami Retirement Ordinance. Officers and Sergeants who are eligible to retire with full benefits (as stated in the CSM Retirement Ordinance) without penalty will be allowed to enter the DROP. The member's DROP account shall be credited with interest in an amount equal to fifty (50) percent of the net (gross return minus investment expense) yearly interest earned by the retirement system for the preceding fiscal year, up to a maximum of five (5) percent. If the net yearly interest earned by the retirement system is zero (0) percent or less, the member's DROP account will not be credited with interest, nor will it be debited with any investment losses. The City agrees to implement the DROP program within one (1) year after ratificat4on of this agreement. ARTICLE 33. EDUCATIONAL INCENTIVE 1. The City agrees to bear the cost of tuition for specifically applicable specialized education courses to better equip the Officers for the performance of the particular job and/or position 40 31 AGREEMENT BETWEEN FOP AND CSM RATIFIED BY FOP SEPTEMBER 7, 2018 in which they are employed, as determined by and approved in writing by the Chief of Police. 2. Every application for educational assistance shall be subject to the approval of the Chief of ___._..Qolice._and_the_City Manager...Such_appr_oval_must_be_obtained__atJeast_thirty.(30)..calendar -- days prior to the beginning of any course. 3. If any application is approved, guidelines for reimbursement areas follows: a) 75% reimbursement of the course cost for a grade of "B" or better for undergraduate courses; b) 75% reimbursement of the course cost for a grade of "B" or better for graduate courses; c) 50% reimbursement of the course cost for a grade of "C" for graduate courses; d) Any such reimbursement shall be made only upon submission of proof of the grades as provided In sub -sections a, b, & c above; e) The credit hour cost of any courses approved shall be capped at the rate used by local publicly funded universities and/or community colleges. f) There shall be no reimbursement for grades "D" or less or "unsatisfactory". 4. Employees utilizing educational assistance must remain with the City for a period of at least two years following completion of any reimbursed course, or said reimbursement must be repaid to the City (amount may be deducted from final pay). ARTICLE 34. EMPLOYEE PREGNANCYLMATERNITY LEAVE 1. An employee who becomes pregnant must notify the Chief of Police as soon as she receives a medical confirmation that she is pregnant. A pregnant employee is required to furnish a letter from her physician who will state the anticipated delivery date, the amount of time the employee may continue to work until the delivery and the types and limitations of duty to be performed. The pregnant employee may, in the discretion of the City, be placed on light duty status with the approval of the Chief of Police or the Chiefs designee and the City Manager. In the event that a light duty position is not available at the Police Station, the pregnant employee may be utilized in other City of South Miami offices at the discretion of the City Manager. The employee's rate of pay will remain the same. 2 Pregnant employees may be granted FMLA leave on the same terms and conditions as granted for other non -pregnancy -related disabilities or illness. Any employee who 41 32 AGREEMENT BETWEEN FOP AND CSM RATIFIED BY FOP SEPTEMBER 7, 2018 becomes pregnant shall be entitled to unpaid maternity leave. Such unpaid maternity leave shall be granted for a period of up to six (6) months. In the event that the pregnant employee has any accrued annual leave, sick leave or comp time, she may use all or any .-.._.__ ___part..off the_accrued.leave_at.her_request.in..lieu_of_unpaid-leave.._...____._._ __- -.._.. _—....... _... ARTICLE 35. EMPLOYEE ASSISTANCE PROGRAM The City and the FOP concur that an Employee Assistance Program (EAP) exists within the City Personnel Manual and can be of great value in supporting the operations of the Police Department and to bolstering the welfare of the Department's law enforcement personnel. ARTICLE 36. ABOLISHMENT OR MERGER Whenever the abolishment or merger of the Police Department is contemplated, the FOP shall be informed of such plans in advance. Additionally, the FOP shall be given an opportunity to be apprised concerning the impact of such abolishment or merger proposal upon this Agreement. ARTICLE 37. AMERICANS WITH DISABILITIES ACT (ADA) Notwithstanding any other provision of this Agreement, the FOP agrees that the City may take whatever actions may be necessary to comply with the Americans with Disabilities Act or the Florida Civil Rights Act to provide reasonable accommodation to individuals with disabilities as required under those laws. To accomplish this, the City shall notify the FOP of the action it intends to take to comply with the ADA or the Florida Civil Rights Act. However, any contention or claim that the City violated any provision of the Americans with Disabilities Act or the Florida Civil Rights Act shall be exclusively resolved through available administrative or judicial remedies, and shall not be subject to the grievance procedure herein. ARTICLE 38. TERM OF AGREEMENT Except as provided herein, all provisions of this Agreement shall be effective September 18, 2018 and shall remain in force for three (3) years until September 17, 2021. 42 33 AGREEMENT BETWEEN FOP AND CSM RATIFIED BY FOP SEPTEMBER 7, 2018 34 43 AGREEMENT BETWEEN FOP AND CSM RATIFIED BY FOP SEPTEMBER 7, 2018 City of South Mia ' y: Date: ;6� t le der, ' y Manager f Date: 1 o2 Z- 2 01 � Re Landa, Chief of Police egality: BY: ho s Pepe, Esq., City Jorney Fraternal Order of Police: SC'-r . `9aaflY 1.Jagn,er , Go4 Date: v 2Z 2v�8 Date: `0 L 1 Z Date: I ca d Z � p /O/Z lq_ //F 35 Retirement R Consulting March 25, 2019 Mr. Alfred Riverol Finance Director City Hall, V Floor 6130 Sunset Drive South Miami, Florida 33143 Re: Actuarial Projection Study South Miami Pension Plan Dear Alfred: P:954.527.1616 i F:954.525.0083 www.grsconsulting.com As requested, we are pleased to enclose our Actuarial Projection Study including thirty (30) year projections beginning October 1, 2017 for the South Miami Pension Plan illustrating the financial impact of the current and proposed provisions. Census data and financial information is reported as of October 1, 2017. If you should have any question concerning the above or if we may be of further assistance with this matter, please do not hesitate to contact us. Sincerest regards, �..Lt� Lawrence F. Wilson, A.S.A., E.A., M.A.A.A., F.C.A. Senior Consultant and Actuary Enclosures Jennifer M. Borregard, E.A., M.A.A.A., F.C.A. Consultant and Actuary 45 South Miami Pension Plan Actuarial Projection Study as of October 1, 2017 Prepared: March 25, 2019 .GRS EVA wRetirement Consulting TABLE OF CONTENTS Page I. Executive Summary ..........................................................................................................1 II. Projection Results.............................................................................................................5 III. Outline of Principal Provisions of the Retirement Plan...................................................7 IV. Actuarial Assumptions and Cost Methods.....................................................................13 V. Glossary ..........................................................................................................................18 !I7 Gp Retirement I� �i Consulting EXECUTIVE SUMMARY As requested, we have completed thirty year projections illustrating the financial impact of proposed changes to the benefit provisions of the South Miami Pension Plan (Plan). Background Currently, the Plan provides administrative management service class (AMSC) membership for the following positions: tt City Manager n City Attorney tt City Clerk tt Assistant / Deputy City Manager tt Finance Director/ Chief Financial Officer tt Chief of Police tt Planning and Zoning Director tt Building Director rx Director of Public Works t[ Chief Administrative Officer (currently Finance Office Manager) tt Chief Procurement Officer (currently Purchasing Manager) tt Parks and Recreation Director Additionally, general employees who were not participating in the Plan as of October 1, 2016 and general employees hired on or after October 1, 2016 shall be given a one-time irrevocable election (to be made within 90 days from the later of the effective date of the Ordinance to re -open the Plan to general employees or date of hire) to either become a second tier member of the Plan or join a defined contribution plan. Proposed Chanaes We understand the City is interested in an analysis of providing an annual open enrollment period for members who previously elected to participate in the City's defined contribution plan to join as second tier members. In addition the City is considering adding the following positions to AMSC membership: tt Community Redevelopment Agency Director tt Personnel Manager tt Project Manager tt Special Assistant to the Manager (vacant and not funded in FY 2019) u Superintendent of Maintenance tt Assistant Director of Parks and Recreation tL01 4GRSRetirement South Miami Pension Plan 1 Consulting Results The following table shows the current City cost over the next five, ten and thirty years for the baseline and for the proposed benefit changes described above both as a dollar amount and as a percentage of projected covered payroll, respectively. Summary of Costs Total Curren[ Scenario 1-Open Enrollment Impacted DC Scenario 2-Open Enrollment Impacted DC and AMSC postitions and AMSC Increase / Increase / Amount Amount (Decrease) Amount Amount (Decrease) Next Year - Impacted Payroll $380 $380 $0 $2,496 $2,496 $0 - city Cost$ $27 $15 ($12) $174 $182 $8 - City Cost% 7.0% 3.9% (3.1%) 7.0% 7.3% 0.3% Next 5 Years - Impacted Payroll $3,409 $3,409 $0 $14,746 $14,746 $0 - Crty cost$ $239 $125 ($113) $945 $906 ($39) - City Cost% 7.0% 3.7% (3.3%) 6.4% 6.1% (0.3%) Next 30 Years - Impacted Payroll $8,650 $8,650 $0 $33,587 $33,587 $0 - City Cost$ $606 $348 ($257) $2,120 $2,017 ($103) - City Cost% 7.0% 4.0% (3.0%) 6.3% 6.0% (0.3%) Next 30 Years - Impacted Payroll $44,038 $44,038 $0 $148,566 $149,566 $0 -City Cost$ $3,083 $2,141 ($942) $8,917 $8,429 ($488) - City Cost % 7.0% 4.9% (2.1%) 6.0% 5.7% (0.3%) Actuarial Assumptions and Methods Fund Provisions Financial Data and Member Census Data The City DC Plan participants and new entrant information for ASMC was provided by the City. The actuarial assumptions and methods, City DB Plan provisions (as modified above), financial data and member census data employed for purposes of our Actuarial Projection Study are the same actuarial assumptions and methods, City DB Plan provisions (as modified above), financial data and member census data utilized for the October 1, 2017 Actuarial Valuation with the following projection modifications. • Each year, one-half of current employees in the City DC Plans are assumed to enroll in Tier 2 benefits for General Employees until there are no City DC Plan participants (which takes place over approximately 10 years). • All current General Tier 2 Employees participating in the City DB Plan are assumed to continue to participate in the current City DB Plan. 50 WRetirement South Miami Pension Plan 2 Consulting • All current General Tier 2 Employees are assumed to be hired each year at a rate sufficient to maintain a constant active headcount — stationary population. New employees are assumed to have the same average demographic characteristics (age, gender, salary — adjusted each year for inflation) as those employees hired for General Tier 2 Employees over the past five years. • All newly added AMSC employees are assumed to enroll in the City DB Plan. • For City DC participants, the City Cost per participant is assumed to be 7% of salary. • Demographic data for eight AMSC employees was reported by the City. It is assumed in both the Current and Proposed Plan Projections four additional AMSC employees (to fill vacant positions for a total of twelve AMSC employees) are added to the City DB Plan. The additional six AMSC positions are added only to the Proposed Plan Projections (resulting in a total of 18 AMSC City DB Plan participants). For AMSC projections, once added as described above, new employees are assumed to be hired each year at a rate sufficient to maintain a constant active headcount — stationary population. New employees are assumed to have the same average demographic characteristics (age, gender, salary — adjusted each year for inflation) as those employees hired for AMSC positions over the past five years. • Under the City DB Plan, expenses paid by the City are assumed to be 0.4% of the projected market value of assets during the projection period. Projections are deterministic — throughout the projection period experience is expected to match the assumptions — including a 7.375% annual market value investment return for fiscal year ended September 30, 2018 and thereafter. Other Considerations Under Governmental Accounting Standards Board (GASB) Statement Number 68, we understand the cost of benefit changes must be recognized immediately in pension expense (accounting not funding). Therefore, pension expense is expected to increase the first year and then is expected to return to lower levels in fiscal years following initial recognition of the benefit change. Some current DC plan participants have already been asked to join the City DB plan and have declined. Generally, a participant who makes a one-time election (in the DB / DC plan) remains under that election. Different results would be produced if the election was allowed to occur only once. This Actuarial Projection Study is intended to describe the estimated future financial effects of the proposed benefit changes on the Plan and is not intended as a recommendation in favor of the change nor in opposition to the change. These calculations are based upon assumptions regarding future events. However, the Plan's long term costs will be determined by actual future events, which may differ materially from the assumptions made. 51 G R S Retirement South Miami Pension Plan ConsuRing If you have reason to believe the assumptions used are unreasonable, the Plan provisions are incorrectly described or referenced, important Plan provisions relevant to this Actuarial Projection Study are not described or that conditions have changed since the calculations were made, you should contact the undersigned prior to relying on information in this Actuarial Projection Study. If you have reason to believe that the information provided in this Actuarial Projection Study is inaccurate, or is in any way incomplete, or if you need further information in order to make an informed decision on the subject matter of this report, please contact the undersigned prior to making such decision. If all actuarial assumptions are met and if all future minimum required contributions are paid, Plan assets will be sufficient to pay all Plan benefits, future contributions are expected to remain relatively stable as a percent of payroll and the funded status is expected to improve. Future actuarial measurements may differ significantly from the current measurements presented in this report due to such factors as the following: Plan experience differing from that anticipated by the economic or demographic assumptions; changes in economic or demographic assumptions; increases or decreases expected as part of the natural operation of the methodology used for these measurements (such as the end of an amortization period or additional cost or contribution requirements based on the Plan's funded status); and changes in Plan provisions or applicable law. Due to the limited scope of the actuary's assignment, the actuary did not perform an analysis of the potential range of such future measurements. This report should not be relied on for any purpose other than the purpose described in the primary communication. Determinations of the financial results associated with the benefits described in this report in a manner other than the intended purpose may produce significantly different results. This report has been prepared by actuaries who have substantial experience valuing public employee retirement systems. To the best of our knowledge the information contained in this report is accurate and fairly presents the actuarial position of the Fund as of the valuation date. All calculations have been made in conformity with generally accepted actuarial principles and practices, with the Actuarial Standards of Practice issued by the Actuarial Standards Board and with applicable statutes. The signing actuaries are independent of the Plan sponsor. The undersigned are Members of the American Academy of Actuaries and meet the Qualification Standards of the American Academy of Actuaries to render the actuarial opinion contained herein. If you should have any question concerning the above or if we may be of further assistance with this matter, please do not hesitate to contact us. Sincerest regards, Lawrence F. Wilson, A.S.A., M.A.A.A., E.A., F.C.A. Senior Consultant and Actuary tv Retirement Consulting Jennifer M. Borregard, E.A., M.A.A.A., F.C.A. Consultant and Actuary South Miami Pension Plan 4 52 PROJECTION RESULTS Scenario 1- Open Enrollment Provides an annual open enrollment period for members who previously elected to participate in the City's DC Plan The following Table shows projected covered payroll and comparison of projected City cost under the baseline forecast versus Scenario 1- ($1,000s). Fiscal Baseline Scenario #1 Open Enrollment Increase Increase Year Impacted Projected City DC Cost Projected city DB Cost (Decrease) (Decrease) End Payroll Dollar %of Pay Dollar %of Pay Dollar Cumulative 2019 380 27 7.0% 15 3.9% (12) (12) 2020 597 42 7.0% 22 3.7% (20) (31) 2021 728 51 7.0% 27 3.7% (24) (56) 2022 818 57 7.0% 29 3.6% (28) (83) 2023 886 62 7.0% 32 3.6% (30) (113) 2024 943 66 7.0% 37 3.9% (29) (143) 2025 996 70 7.0% 41 4.1% (29) (172) 2026 1,048 73 7.0% 44 4.2% (29) (201) 2027 1,101 77 7.0% 48 4.4% (29) (229) 2028 1,154 81 7.0% 53 4.6% (28) (257) 2029 1,208 85 7.0% 57 4.7% (28) (285) 2030 1,260 88 7.0% 62 4.9% (26) (311) 2031 1,312 92 7.0% 66 5.0% (26) (338) 2032 1,366 96 7.0% 70 5.1% (26) (364) 2033 1,423 100 7.0% 73 5.1% (27) (391) 2034 1,481 104 7.0% 77 5.2% (27) (417) 2035 1,541 108 7.0% 80 5.2% (28) (445) 2036 1,602 112 7.0% 83 5.2% (29) (474) 2037 2,665 117 7.0% 87 5.2% (30) (504) 2038 1,729 121 7.0% 90 5.2% (31) (535) 2039 1,789 125 7.0% 93 5.2% (32) (567) 2040 1,850 130 7.0% 94 5.1% (35) (602) 2041 1,908 134 7.0% 99 5.2% (34) (637) 2042 1,971 138 7.0% 99 5.0% (39) (676) 2043 2,036 142 7.0% 104 5.1% (39) (715) 2044 2,104 147 7.0% 105 5.0% (42) (757) 2045 2,175 152 7.0% 109 5.0% (44) (800) 2046 2,246 157 7.0% 112 5.0% (45) (845) 2047 2,321 162 7.0% 116 5.0% (46) (892) 2048 2,401 - 168 7.0% 118 4.9% (50) (942) 5 Year Totals 3,409 239 7.0% 125 3.7% (113) 10 Year Totals 8,650 606 7.0% 348 4.0% (257) 30 Year Totals 44,038 3,083 7.0% 2,141 4.9% (942) V Retirement Consulting South Miami Pension Plan 5 53 Scenario 2 - Open Enrollment and Additional AMSC positions Provides an annual open enrollment period for members who previously elected to participate in the City's DC Plan and provides for an additional six AMSC positions The following Table shows projected covered payroll and comparison of projected City cost under the baseline forecast versus Scenario 2 - ($1,000s). Fiscal Total Baseline - Total Scenario#2 Combined Increase Increase Year Impacted Projected City DC / DB Cost Projected City DB Cost (Decrease) (Decrease) End Payroll Dollar % of Pay Dollar % of Pa v Dollar Cumulative 2019 2,496 174 7.0% 182 7.3% 8 8 2020 2,792 167 6.0% 156 5.6% (11) (2) 2021 2,963 185 6.2% 173 5.8% (12) (14) 2022 3,164 204 6.5% 192 6.1% (12) (26) 2023 3,330 215 6.5% 202 6.1% (13) (39) 2024 3,489 227 6.5% 216 6.2% (10) (49) 2025 3,632 234 6.4% 224 6.2% (10) (59) 2026 3,782 245 6.5% 236 6.2% (9) (68) 2027 3,914 238 6.1% 224 5.7% (15) (83) 2028 4,025 231 5.7% 211 5.2% (20) (103) 2029 4,112 247 6.0% 232 5.6% (16) (119) 2030 4,251 252 5.9% 236 5.5% (16) (135) 2031 4,391 262 6.0% 248 5.6% (14) (148) 2032 4,544 269 5.9% 255 5.6% (14) (162) 2033 4,701 280 6.0% 266 5.7% (14) (176) 2034 4,872 290 6.0% 278 5.7% (13) (189) 2035 5,043 300 6.0% 287 5.7% (13) (202) 2036 5,222 311 6.0% 297 5.7% (14) (216) 2037 5,404 322 6.0% 307 5.7°% (15) (231) 2038 5,583 332 6.0% 317 5.7% (15) (246) 2039 5,763 346 6.0% 331 5.7% (15) (261) 2040 5,951 357 6.0% 340 5.7% (17) (278) 2041 6,142 368 6.0% 352 5.7% (16) (294) 2042 6,341 362 5.7% 333 5.3% (29) (323) 2043 6,543 380 5.8% 355 5.4% (25) (348) 2044 6,761 392 5.8% 364 5.4% (28) (376) 2045 6,987 409 5.9% 381 5.5% (27) (403) 2046 7,217 422 5.9% 394 5.5% (28) (431) 2047 7,453 440 5.9% 412 5.5% (28) (459) 2048 7,699 458 5.9% 428 5.6% (29) (488) 5 Year Totals 14,746 945 6.4% 906 6.1% (39) 10 Year Totals 33,587 2,120 6.3% 2,017 6.0% (103) 30 Year Totals 148,566 8,917 6.0% 8,429 5.7% (488) 54 QwConsume°: South Miami Pension Plan 6 c°ti,ein.g OUTLINE OF PRINCIPAL PROVISIONS OF THE RETIREMENT PLAN PRIOR TO ANY PROPOSED CHANGES INCLUDED IN THIS STUDY A. Effective Date: October 1, 1965. Most recently amended by Ordinance 1-17-2271 adopted January 17, 2017. B. Eligibility Requirements: 1. General Employees Tier 1: Regular full-time employee hired before October 1, 2011 is eligible to enter the Plan following the completion of six months of Credited Service and attainment of age 20. Tier 2• Regular full-time employee hired on or after October 1, 2011 and not participating in the Plan as of October 1, 2016 who elects to join or fails to make any election within ninety (90) days from effective date of Ordinance is eligible to enter the Plan as a Tier 2 employee as of the effective date of Ordinance. Regular full-time employee hired on or after October 1, 2016 who elects to join or fails to make any election within ninety (90) days from date of hire is eligible to enter the Plan as a Tier 2 employee as of their date of hire. 2. Police Officers Regular full-time Police Officer is eligible to enter the Plan as of date of employment. 3. Administration Management Service Class (AMSC) Employees of the City with the following positions who do not elect to participate in a defined contribution Plan of the City: City Manager City Attorney City Clerk Assistant / Deputy City Manager Finance Director/ Chief Financial Officer Chief of Police Planning and Zoning Director Building Director Director of Public Works Chief Administrative Officer (currently Finance Office Manager) Chief Procurement Officer (currently Purchasing Manager) Parks and Recreation Director 55 GRSRer;remnM South Miami Pension Plan 7 Consulting C. Credited Service: 1. General Employees and AMSC Continuous employment. Credited service shall exclude continuous employment prior to Plan participation as follows: (1) If employed prior to October 1, 1973, credited service shall exclude the first two years of continuous employment and any additional year of continuous employment prior to attainment of age 25. (2) If employed on or after October 1, 1973, credited service shall exclude the first six (6) months of continuous employment and continuous employment prior to age 20. Credited service for Tier 2 employees and AMSC will be continuous employment from the date of hire for all purposes except for benefit accruals which will be from the later of October 1, 2016 or date of hire. 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 prior to October 1, 1973, Credited Service shall exclude the first two years of continuous employment and any additional year of continuous employment prior to attainment of age 25. (2) If employed on or after October 1, 1973, Credited Service shall exclude the first six (6) months of continuous employment and continuous employment prior to age 20. D. Final Monthly Compensation (FMC): Final Average Compensation is 1/36th of the final 36 consecutive months of compensation. For Police Officers, not less than 1/5th of the highest five (5) years out of the last (10) ten years of compensation. Compensation shall mean regular wages and salaries, excluding bonuses, vacation, sick leave and other additional compensation. Effective October 1, 2011, Final Average Compensation for General Employees is 1/60th of the final 60 consecutive months of basic compensation, provided it is not less than the Final Average Compensation as of September 30, 2011 based on the definition above. Basic compensation shall mean base wages and salaries, excluding commissions, overtime pay, bonuses and any other forms of additional compensation earned outside of base wages. Effective October 1, 2011, Final Average Compensation for members covered under the Police Officers and Sergeants collective bargaining agreement is the best five (5) years of basic compensation, provided it is not less than the Final Average Compensation as of September 30, 2011 based on the definition above. Basic compensation shall mean base wages and salaries, including up to 300 hours of overtime in a fiscal year and excluding payments for accrued unused sick or annual leave, extra duty or special detail work, shift differential, assignment pay, bonuses and any other forms of additional compensation earned outside of base wages. WRetirement South Miami Pension Plan 8 Consulting 56 D. Final Monthly Compensation (FMC) (cont'd): Effective October 1, 2016, Final Average Compensation for members covered under the Miami -Dade County Police Benevolent Association Upper -Collective Bargainning Union (Lieutenants & Captains) collective bargaining agreement is the best five (5) years of basic compensation, provided it is not less than the Final Average Compensation as of September 30, 2016 based on the definition above. Basic compensation shall mean base wages and salaries, including up to 300 hours of overtime in a fiscal year and excluding payments for accrued unused sick or annual leave, extra duty or special detail work, shift differential, assignment pay, bonuses and any other forms of additional compensation earned outside of base wages. Final Average Compenation for Tier 2 General Employees and AMSC shall be the average of the highest eight (8) years of credit service. E. Normal Retirement: 1. Eligibility: a. General Employees: Attainment of age 55 and completion of ten (10) years of Credited Service for benefits accrued as of September 30, 2011. Attainment of age 60 and completion of ten (10) years of Credited Service for benefits accrued after September 30, 2011, including increases in the accrued benefit as of September 30, 2011 due to increases in the Final Average Compensation. Attainment of age 65 and completion of ten (10) years of Credited Service or completion of thirty-three (33) years of Credited Service regardless of age for Tier 2 General Employees. b. Police Officers: Attainment of age 60 and completion of ten (10) years of Credited Service or completion of twenty-five (25) years of Credited Service regardless of age. c. AMSC: Attainment of age 65 and completion of three (3) years of Credited Service or completion of thirty-three (33) years of Credited Service regardless of age. 2. Benefit: The monthly Plan benefit is the product of: a. FMC, b. Credited Service during the appropriate period and c. The appropriate benefit percentage The appropriate benefit percentages are: a. General Employees For Credited Service Through September 30, 1999 October 1, 1999 through September 30, 2011 October 1, 2011 and thereafter Percentage 2.50% 2.75% 2.25% 57 G RS Retirement South Miami Pension Plan 9 4Consulting E. Normal Retirement (cont'd): 2. Benefit: b. Police Officers c. General Employees (Tier 2) d. AMSC F. Supplemental Benefit: For Credited Service Percentage Through September 30, 1995 2.00% October 1, 1995 through September 30, 1996 2.25% October 1, 1996 through September 30, 1997 2.50% October 1, 1997 through September 30, 2001 2.75% October 1, 2001 through September 30, 2002 2.80% October 1, 2002 through September 30, 2003 2.90% October 1, 2003 and thereafter 3.00% For Credited Service Percentage October 1, 2016 and thereafter 1.60% For Credited Service Percentage October 1, 2016 and thereafter 3.00% A cost -of -living supplemental benefit based upon the consumer price index is provided upon retirement. The annual increase is limited to 3%. For General Employees the cost -of -living supplemental benefit is only provided on the accrued benefit as of September 30, 2011 and does not apply to increases in this accrued benefit due to increases in the Final Average Compensation. No cost -of -living supplemental benefit is provided for Tier 2 General Employees. No cost -of -living supplemental benefit is provided for AMSC for benefit accruals on or after October 1, 2011. G. Early Retirement: 1. Eligibility: a. Police Officers: Attainment of age 50 and completion of 15 years of Credited Service. b. AMSC: Attainment of age 55 and completion of 10 years of Credited Service. 2. Benefit: a. Police Officers: Accrued benefit based upon FMC and Credited Service as of Early Retirement Date, reduced 3% for each year that the benefit commencement date precedes Normal Retirement. V Retirement South Miami Pension Plan 30 58 4Consulting G. Early Retirement (cont'd): 2. Benefit: b. AMSC: Accrued benefit based upon FMC and Credited Service as of Early Retirement Date, reduced 1/15 for each of the first five years and 1/30 for the next five years that the benefit commencement date precedes Normal Retirement. H. Delayed Retirement: 1. Eligibility: Retirement subsequent to Normal Retirement Date. 2. Benefit: Accrued benefit based upon FMC and Credited Service as of Delayed Retirement Date. I. Disability Retirement: 1. Eligibility: Totally and permanently disabled for a six month period while actively employed. 2. Benefit: Accrued benefit based upon FMC and Credited Service as of date of disability, actuarially reduced as for Early Retirement for early commencement. J. Pre -Retirement Death Benefit: The beneficiary shall receive the member's accumulated Employee Contributions. K. Benefit Upon Termination of Service: 1. Benefit payable at Normal Retirement equal to the greater of: a. Accrued benefit based upon FMC and Credited Service as of date of termination times the vesting percentage shown below, or b. Benefit which can be supported by the accumulated Member Contributions with interest to Normal Retirement Date. No supplemental benefit shall be payable to vested terminees. 59 QwRetir ..nc South Miami Pension Plan 11 comuming K. Benefit Upon Termination of Service (cont'd): 2. Vesting Schedule: All employees except AMSC: Years of Vesting Credited Service Percentage Less than 10 0% 10 or more years 100% AMSC: Years of Vesting Credited Service Percentage Less than 3 0% 3 or more years 100% 3. Refund Option: A terminated member may elect to receive a refund of Accumulated Contributions without interest in lieu of receiving any other Plan benefits. L. Member Contributions: Members contribute 7.0% (3.0% for Tier 2 General Employees and 7.5% for Police Officers) of member's basic annual compensation. Should the City contribution for General Employees be actuarially determined to exceed 7.0%, not including expenses, both the City and the General Employees (other than Tier 2 General Employees and AMSC) will share equally in the amount in excess of 7.0%. General Employees (other than Tier 2 General Employees and AMSC) Contributions are capped at 10% of basic annual compensation as of October 1, 2016. Should the City contribution for Police Officers be actuarially determined to exceed 7.5%, not including expenses, both the City and the Police Officers will share equally in the amount in excess of 7.5% but not more than 12.0%for Police Lieutenants and Police Captains. M. Normal Form of Retirement Income: The normal form of payment shall be a life annuity with a guarantee of a refund of accumulated Employee Contributions. N. Changes Since Previous Actuarial Valuation: Proposed changes related to this Study. eo GRSRetirement South Miami Pension Plan 12 Camulting ACTUARIAL ASSUMPTIONS AND METHODS A. Mortality General Employees including AMSC Mortality Assumptions: For healthy male participants during employment, RP 2000 Combined Male Healthy Participant Mortality Table, with 50% White Collar / 50% Blue Collar Adjustment and fully generational mortality improvements projected to each future decrement date with Scale BB. For healthy female participants during employment, RP 2000 Combined Female Healthy Participant Mortality Table, with White Collar Adjustment and fully generational mortality improvements projected to each future decrement date with Scale BB. For healthy male participants post employment, RP 2000 Annuitant Male Mortality Table, with 50% White Collar / 50% Blue Collar Adjustment and fully generational mortality improvements projected to each future decrement date with Scale BB. For healthy female participants post employment, RP 2000 Annuitant Female Mortality Table, with White Collar Adjustment and fully generational mortality improvements projected to each future decrement date with Scale BB. For disabled male participants, RP 2000 Disabled Male Mortality Table, setback four years, without projected mortality improvements. For disabled female participants, RP 2000 Disabled Female Mortality Table, set forward two years, without projected mortality improvements. Sample Ages (2017) 55 60 62 Sample Ages (2037) 55 60 62 tvRetirement Reti im.g Pre -retirement Future Life Expectancy (Years) Male Female 30.42 33.47 25.49 28.45 23.58 26.49 Pre -retirement Future Life Expectancy (Years) Male Female Post -retirement Future Life Expectancy (Years) Male Female 29.99 33.25 25.32 28.35 23.48 26.43 Post -retirement Future Life Expectancy (Years) Male Female 32.57 35.32 32.16 35.12 27.67 30.29 27.52 30.21 25.76 28.32 25.68 28.26 South Miami Pension Plan 13 61 A. Mortality (cont'd) Police Officer Mortality Assumptions: For healthy participants during employment, RP-2000 Combined Healthy Participant Mortality Tables, separate rates for males and females, with 90% Blue Collar Adjustment / 10% White Collar Adjustment and fully generational mortality improvements projected to each future decrement date with Scale BB. For healthy participants post employment, RP-2000 Annuitant Mortality Tables, separate rates for males and females, with 90% Blue Collar Adjustment / 10% White Collar Adjustment and fully generational mortality improvements projected to each future decrement date with Scale BB. For disabled male participants, 60% RP 2000 Disabled Male Mortality Table setback four years / 40% RP 2000 Annuitant Male Mortality Table, with White Collar Adjustment and no setback, without projected mortality improvements. For disabled female participants, 60% RP 2000 Disabled Female Mortality Table set forward two years / 40% RP 2000 Annuitant Female Mortality Table, with White Collar Adjustment, without projected mortality improvements. Pre -retirement Post -retirement Sample Future Life Future Life Ages Expectancy (Years) Expectancy (Years) (2017) Male Female Male Female 55 29.73 32.50 29.21 32.30 60 24.84 27.46 24.64 27.31 62 22.97 25.50 22.85 25.39 Pre -retirement Post -retirement Sample Future Life Future Life Ages Expectancy (Years) Expectancy (Years) (2037) Male Female Male Female 55 31.96 34.44 31.46 34.27 60 27.11 29.40 26.92 29.27 62 25.23 27.41 25.12 27.33 B. Investment Return to be Earned by Fund 7.375% (net of investment expenses), compounded annually - includes inflation at 2.75%. C. Allowances for Expenses or Contingencies Actual expenses paid in previous year. uRetirement South Miami Pension Plan 14 Consulting 62 D. Employee Withdrawal Rates Withdrawal rates for males and for females were used in accordance with the following illustrative example based upon number of years of service: Withdrawal Rates Per 100 Employees Service Police General/AMSC 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 Disability Study, Class 1 with separate rates for females was used. F. Marital Assumptions 100% of active members are assumed to be married. Where applicable, females are assumed to be three years youngerthan their male spouses. G. Salary Increase Factors Current salary is assumed to increase in accordance with the following table based upon number of years of service - includes wage inflation of 3.25%. Service Police General / AMSC 0-9 5.25% 5.25% 10 -14 3.75% 4.75% 15 -19 3.75% 4.25% 20 & over 3.75% 3.75% H. Increase in Covered Payroll 4.0% per year, limited to average annual increase over most recent ten years (-0.7%) but not less than 0.0% for Police Officers. No increase in covered payroll is assumed for General Employees including AMSC. 63 V Retirement South Miami Pension Plan 15 4Consulting I. Retirement Rates Rates of Early Retirement for Police Officers were used in accordance with the following table. Years Preceding Normal Retirement Police 1-6 5% 7-10 10% Rates of Normal Retirement were used in accordance with the following tables. Age Police General & AMSC* 55 - 59 N/A 10% 60 - 61 25% 10% 62 - 64 40% 25% 65 - 66 100% 25% 67 & above 100% 100% Service Police 25 years 100% * Includes Early Retirement for AMSC Employees. Rates are 25% for Tier 2 and AMSC members for each year upon meeting 33 years of service until 100% at age 67. General Employees who retire prior to age sixty (60) but after attainment of ten (10) years of Credited Service (55 & 10) are assumed to receive an actuarially reduced benefit payable immediately upon retirement. J. Cost of Living Increases Future cost of living increases for General Employees (other than Tier 2 General Employees) and Police Officers are assumed to be 3.0% per annum. K. Valuation of Assets The method used for determining the actuarial value of assets phases in the deviation between the expected and actual return on assets at the rate of 20% per year. The actuarial value of assets will be further adjusted to the extent necessary to fall within the corridor whose lower limit is 80% of the fair market value of Plan assets and whose upper limit is 120% of the fair market value of Plan assets. Retirement South Miami Pension Plan 16 QV Consulting m L. Cost Methods Normal Retirement, Termination, Disability and Pre -Retirement Death Benefit: Entry -Age -Actuarial Cost Method Under this method the normal cost for each active employee is the amount which is calculated to be a level percentage of pay that would be required annually from his date of hire to his retirement age to fund his estimated benefits, assuming the Plan had always been in effect. The normal cost for the Plan is the sum of the individual normal costs for all active employees. The actuarial accrued liability as of any valuation date for each active employee or inactive employee who is eligible to receive benefits under the Plan is the excess of the actuarial present value of estimated future benefits over the actuarial present value of current and future normal costs. The unfunded actuarial accrued liability as of any valuation date is the excess of the actuarial accrued liability over the actuarial value of assets of the Plan. M. Changes Since Previous Actuarial Valuation None, except as noted above related to the Study. 65 Retirement South Miami Pension Plan 17 G R S Consulting GLOSSARY Actuarial Accrued Liability. The difference between the Actuarial Present Value of Future Benefits, and the Actuarial Present Value of Future Normal Costs. Actuarial Assumptions. Assumptions about future plan experience that affect costs or liabilities, such as: mortality, withdrawal, disablement, and retirement; future increases in salary; future rates of investment earnings; future investment and administrative expenses; characteristics of members not specified in the data, such as marital status; characteristics of future members; future elections made by members and other items. Actuarial Cost Method. Actuarial Cost Method A procedure for allocating the Actuarial Present Value of Future Benefits between the Actuarial Present Value of Future Normal Costs and the Actuarial Accrued Liability. Actuarial Equivalent. Of equal Actuarial Present Value, determined as of a given date and based on a given set of Actuarial Assumptions. Actuarial Present Value of Future Benefits. The Actuarial Present Value of amounts which are expected to be paid at various future times to active members, retired members, beneficiaries receiving benefits and inactive, non -retired members entitled to either a refund or a future retirement benefit. Expressed another way, it is the value that would have to be invested on the valuation date so that the amount invested plus investment earnings would provide sufficient assets to pay all projected benefits and expenses when due. Actuarial Valuation. The determination, as of a valuation date, of the Normal Cost, Actuarial Accrued Liability, Actuarial Value of Assets, and related Actuarial Present Values for a plan. An Actuarial Valuation for a governmental retirement system typically also includes calculations of items needed for compliance with GASB No. 67. Actuarial Value of Assets. The value of the assets as of a given date, used by the actuary for valuation purposes. This may be the market or fair value of plan assets or a smoothed value in order to reduce the year-to-year volatility of calculated results, such as the funded ratio and the actuarially required contribution. Amortization Method. A method for determining the Amortization Payment. The most common methods used are level dollar and level percentage of payroll. Under the Level Dollar method, the Amortization Payment is one of a stream of payments, all equal, whose Actuarial Present Value is equal to the UAAL. Under the Level Percentage of Pay method, the Amortization Payment is one of a stream of increasing payments, whose Actuarial Present Value is equal to the UAAL. Under the Level Percentage of Pay method, the stream of payments increases at the rate at which total covered payroll of all active members is assumed to increase. Retirement South Miami Pension Plan 18 G R S con,.ieng Amortization Payment. That portion of the plan contribution which is designed to pay interest on and to amortize the Unfunded Actuarial Accrued Liability. Amortization Period. The period used in calculating the Amortization Payment. Annual Required Contribution. The employer's periodic required contributions, expressed as a dollar amount or a percentage of covered plan compensation. The annual required contribution consists of the Employer Normal Cost and Amortization Payment plus interest adjustment. Closed Amortization Period. A specific number of years that is reduced by one each year, and declines to zero with the passage of time. For example if the amortization period is initially set at 30 years, it is 29 years at the end of one year, 28 years at the end of two years, etc. Employer Normal Cost. The portion of the Normal Cost to be paid by the employer. This is equal to the Normal Cost less expected member contributions. Equivalent Single Amortization Period. For plans that do not establish separate amortization bases (separate components of the UAAL), this is the same as the Amortization Period. For plans that do establish separate amortization bases, this is the period over which the UAAL would be amortized if all amortization bases were combined upon the current UAAL payment. Experience Gain/Loss. A measure of the difference between actual experience and that expected based upon a set of Actuarial Assumptions, during the period between two actuarial valuations. To the extent that actual experience differs from that assumed, Unfunded Actuarial Accrued Liabilities emerge which may be larger or smaller than projected. Gains are due to favorable experience, e.g., the assets earn more than projected, salaries do not increase as fast as assumed, members retire later than assumed, etc. Favorable experience means actual results produce actuarial liabilities not as large as projected by the actuarial assumptions. Losses are the result of unfavorable experience, i.e., actual results that produce Unfunded Actuarial Accrued Liabilities which are larger than projected. Funded Ratio. The ratio of the Actuarial Value of Assets to the Actuarial Accrued Liability. GASH. Governmental Accounting Standards Board. GASH No. 67 and GASH No. 68. These are the governmental accounting standards that set the accounting rules for public retirement plans and the employers that sponsor or contribute to them. Statement No. 67 sets the accounting rules for the plans themselves, while Statement No. 68 sets the accounting rules for the employers that sponsor or contribute to public retirement plans. Normal Cost. The annual cost assigned, under the Actuarial Cost Method, to the current plan year. 67 G RS Retirement South Miami Pension Plan 19 Consulting Open Amortization Period. An open amortization period is one which is used to determine the Amortization Payment but which does not change over time. In other words, if the initial period is set as 30 years, the same 30-year period is used in determining the Amortization Period each year. In theory, if an Open Amortization Period is used to amortize the Unfunded Actuarial Accrued Liability, the UAAL will never completely disappear, but will become smaller each year, either as a dollar amount or in relation to covered payroll. Unfunded Actuarial Accrued Liability. The difference between the Actuarial Accrued Liability and Actuarial Value of Assets. Valuation Date. The date as of which the Actuarial Present Value of Future Benefits are determined. The benefits expected to be paid in the future are discounted to this date. QwRetirement South Miami Pension Plan 20 Coeuuking m Retirement 4R Consulting May 23, 2019 Mr. Alfred Riverol Finance Director City Hall, 1n Floor 6130 Sunset Drive South Miami, Florida 33143 Re: Actuarial Study as of October 1, 2018 South Miami Pension Plan Dear Alfred: P:954.527.1616 1 F:954.525.0083 1 www.gmconsulting.com As requested, we have performed an Actuarial Study as of October 1, 2018 to determine the minimum required annual contribution of amending the normal retirement eligibility and vesting provisions for the Administration Management Service Class (AMSC) under the South Miami Pension Plan (Plan). Background — Currently the Plan provides AMSC members the following normal retirement eligibility and vesting provisions: ➢ Normal Retirement eligibility upon the earlier of: (a) Attainment of age sixty-five (65) and completion of three (3) years of Credited Service (b) Completion of thirty-three (33) years of Credited Service regardless of age ➢ Vesting —100% vesting upon completion of three (3) years of Credited Service Proposed Ordinance— We understand the City is interested in an analysis of amending the normal retirement eligibility and vesting provisions as follows: Scenario 1 ➢ Normal Retirement eligibility upon the earlier of: (a) Attainment of age sixty-two (62) and completion of five (5) years of Credited Service (b) Completion of thirty-three (33) years of Credited Service regardless of age ➢ Vesting —100% vesting upon completion of five (5) years of Credited Service Scenario 2 ➢ Normal Retirement eligibility upon the earlier of: (a) Attainment of age sixty (60) and completion of five (5) years of Credited Service GRS Mr. Alfred Riverol May 23, 2019 Page Two (b) Completion of thirty-three (33) years of Credited Service regardless of age ➢ Vesting— 100% vesting upon completion of five (5) years of Credited Service Results —The attached Exhibit sets out the key financial results of our Actuarial Study for each Scenario for the AMSC Group. The following sets out the projected annual increase in minimum required annual contribution as a dollar amount and as a percentage of expected AMSC covered payroll ($1,004,692). Increase in Item Annual Required Contribution Scenario 1— Normal retirement eligibility upon the earlier of age 62 and completion of 5 years of Credited Service or completion of 33 years of $ 5,306 Credited Service. 100% vesting upon completion (0.5%) of 5 years of Credited Service Scenario 1— Normal retirement eligibility upon the earlier of age 60 and completion of 5 years of Credited Service or completion of 33 years of $ 14,056 Credited Service. 100% vesting upon completion (1.4%) of 5 years of Credited Service Actuarial assumptions and methods. Plan provisions and member census data — The actuarial assumptions and methods, financial data and employee census data employed for purposes of our Actuarial Study are the same actuarial assumptions and methods, financial data and member census data utilized for the October 1, 2018 Actuarial Valuation with the following exception: AMSC — Normal and Early Retirement Rates Age Current Scenario 1 Scenario 2 Less than 33 years of service 55-59 10% 10% 10% 60-61 10% 10% 25% 62 - 64 25% 35% 35% 65 - 66 25% 35% 35% 67 & above 100% 100% 100% With 33 or more years of service Under62 25% 25% 25% 62-66 25% 35% 35% 67 100% 100% 100% Retirement Consulting 70 Mr. Alfred Riverol May 23, 2019 Page Three The Plan provisions employed for purposes of our Actuarial Study are the same Plan provisions utilized in the October 1, 2018 Actuarial Valuation with the exception of the proposed changes described above. Other Considerations— Under Governmental Accounting Standards Board (GASB) Statement Number 68, we understand the full cost of benefit changes must be recognized immediately in pension expense (accounting not funding). This Actuarial Study is intended to describe the estimated future financial effects of the proposed benefit changes on the Plan and is not intended as a recommendation in favor of the benefit changes nor in opposition to the benefit changes. L RS If all actuarial assumptions are met and if all current and future minimum required contributions are paid, Plan assets will be sufficient to pay all Plan benefits, future contributions are expected to remain relatively stable as a percent of payroll and the funded status is expected to improve. Plan minimum required contributions are determined in compliance with the requirements of the Florida Protection of Public Employee Retirement Benefits Act with normal cost determined as a level percent of covered payroll and a level dollar amortization payment using an initial amortization period of 25 years. The Unfunded Actuarial Accrued Liability (UAAL) may not be appropriate for assessing the sufficiency of Plan assets to meet the estimated cost of settling benefit obligations but may be appropriate for assessing the need for or the amount of future contributions. These calculations are based upon assumptions regarding future events. However, the Plan's long term costs will be determined by actual future events, which may differ materially from the assumptions made.. These calculations are also based upon present and proposed Plan provisions that are outlined or referenced in this Actuarial Study. If you have reason to believe the assumptions used are unreasonable, the Plan provisions are incorrectly described or referenced, important Plan provisions relevant to this Actuarial Study are not described or that conditions have changed since the calculations were made, you should contact the undersigned prior to relying on information in this Actuarial Study. If you have reason to believe that the information provided in this Actuarial Study is inaccurate, or is in any way incomplete, or if you need further information in order to make an informed decision on the subject matter of this report, please contact the undersigned prior to making such decision. Future actuarial measurements may differ significantly from the current measurements presented in this report due to such factors as the following: Plan experience differing from Retirement Consulting 71 GRS Mr. Alfred Riverol May 23, 2019 Page Four that anticipated by the economic or demographic assumptions; changes in economic or demographic assumptions; increases or decreases expected as part of the natural operation of the methodology used for these measurements (such as the end of an amortization period) and changes in Plan provisions or applicable law. Due to the limited scope of our assignment, we did not perform an analysis of the potential range of such future measurements. This Actuarial Study should not be relied on for any purpose other than the purpose described in the primary communication. Determinations of the financial results associated with the benefits described in this report in a manner other than the intended purpose may produce significantly different results. This Actuarial Study has been prepared by actuaries who have substantial experience valuing public employee retirement systems. To the best of our knowledge the information contained in this report is accurate and fairly presents the actuarial position of the Plan as of the valuation date. All calculations have been made in conformity with generally accepted actuarial principles and practices, with the Actuarial Standards of Practice issued by the Actuarial Standards Board and with applicable statutes. This Actuarial Study may be provided to parties other than the City only in its entirety and only with the permission of an approved representative of the City. The signing actuaries are independent of the Plan sponsor. The undersigned are Members of the American Academy of Actuaries and meet the Qualification Standards of the American Academy of Actuaries to render the actuarial opinion contained herein. If you should have any question concerning the above or if we may be of further assistance with this matter, please do not hesitate to contact us. Sincerest regards, �.�. Lawrence F. Wilson, A.S.A., E.A. Senior Consultant and Actuary Enclosure �aAd- Jennifer M. Borregard, E.A. Consultant and Actuary Retirement Consulting 72 A. Participants 1. Active employees 2. Terminated vested 3. Receiving benefits 4. Annual payroll of active employees B. Present Value of Future Benefits C. Total Normal Costs D. Total Actuarial Accrued Liability E. Smoothed Value of Assets F. Unfunded Actuarial Accrued Liability G. Member Cost H. City Cost (includes expenses) I. Increase / (Decrease) in City Cost South Miami Pension Plan Actuarial Studies as of October 1, 2018 - AMSC Group Scenario 1 Scenario 2 Normal Retirement eligibility - the earlier of Normal Retirement eligibility - the earlier of Age 62 with 5 years of Credited Service or Age 60 with 5 years of Credited Service or 33 years of Credited Service regardless of age 33 years of Credited Service regardless of age 100% vested upon 5 years of Credited Service 100% vested upon 5 years of Credited Service Cost % of Annual Cost % of Annual Cost % of Annual Data Compensation Data Compensation Data Compensation 8 N/A 8 N/A 8 N/A 0 N/A 0 N/A 0 N/A 2 N/A 2 N/A 2 N/A $ 1,004,692 100.0% $ 1,004,692 100.0% $ 1,004,692 100.0% $ 2,533,146 252.1% $ 2,617,530 260.5% $ 2,669,588 265.7% $ 128,124 12.8% $ 125,999 12.5% $ 130,346 13.0% $ 1,959,405 195.0% $ 2,047,121 203.8% $ 2,096,772 208.7% $ 1,284,535 127.9% $ 1,284,535 127.9% $ 1,284,535 127.9% $ 674,870 67.2% $ 762,586 75.9% $ 812,237 80.8% $ 70,328 7.0% $ 70,328 7.0% $ 70,328 7.0% $ 120,619 12.0% $ 125,925 12.5% $ 134,675 13.4% N/A N/A $ 5,306 0.5% $ 14,056 1.4% 73 GRS Prepared: May 23, 2019 Page 1 MIAMI DAILY BUSINESS REVIEW Published Daly except Saturday. Sunday and Legal Holidays Miami, Ma mlmDade County, Florida STATE OF FLORIDA COUNTY OF MIAMI-DADE: Before the undersigned authority personally appeared GUILLERMO GARCIA, who on oath says that he or she is the DIRECTOR OF OPERATIONS, Legal Notices of the Miami Daily Business Review We Miami Review, a daily (except Saturday, Sunday and Legal Holidays) newspaper, published at Miami in Miamt-Dade County, Florida, that the attached copy of advertisement, being a Legal Advertisement of Notice in the Maher of NOTICE OF PUBLIC HEARINGS- CITY OF SOUTH MIAMI - JUN. 18. 2019 in the XXXX Court, was published in said newspaper in the issues of 06/07/2019 Af iant further says that the said Miami Daily Business Review is a newspaper published at Miami, in said Miami -Dade County, Florida and that the said newspaper has heretofore been continuously published in said Miami -Dade County. Florida each day (except Saturday, Sunday and Legal Holidays) and has been entered as second class mail Matter at the post office in Miami in said Miami -Dade County, Florida, for a period of one year next preceding the first publication of the attached copy of advertisement; and af6ant further says that he or she has neither paid not promised any person. firm or corporation any cladount. rebate, commission or refund for the purpose of securing this advertisement for publication in the said GUILLERMO GARCIA personally known to me - BARBARA THOMAS cttw, '- Com:.lission A GG 121171 ;'." €xpires November2. 2021 rant .. ... FUMed TNuTrcY Fein Insurance eaJJssruls CITY OF SOUTH MIAMI NOTICE OF PUBLIC HEARINGS NOTICE IS HEREBY given that the City Commission of the City of South Miami, Florida will conduct Public Hearings at Its regular City Commission meeting scheduled for Tuesday, June 18, 2019, beginning at 7:00 p.m., in the City Commission Chambers, 6130 Sunset Drive, to consider the following hems: An Ordinance amending the South Miami Pension Plan to implement the Collective Bargaining Agreements between the City of South Miami and the American Federation of State, County and Municipal Employees, AFL-CIO, City Employees Local 3294. the Florida State Lodge, Fraternal Order of Police, Inc., and the Dade County Police Benevolent Association, Inc. by creating Section 16-28 - Defamed Retirement Option Plan ('DROP') and amending Section 16-12 to define DROP members. An Ordinance amending the South Miami Pension Plan to implement the Collective Bargaining Agreements between the City of South Miami and the American Federation of State, County and Municipal Employees, AFL-CIO, City Employees Loral 3294, the Florida State Lodge, Fraternal Order of Police, Inc., and the Dade County Police_ Benevolent Association, Inc. as well as Implement Changes for Members who are not covered under a Collective Bargaining Agreement: by amending Section 16-12, 'Definitions'; by amending Section 16-13. 'Bigibilily'; by amending Section 16-14,'Pension benefits and refirement dates'; by amending Section 16-17, 'Termination'; and by amending Section 16-19, Contributions'. ALL interested parties are invited to attend and will be heard. For further infomnation, please contact the City Clerk's Office at 305-663-6340. NkengaA. Payne, CMC City Clerk Pursuant to Florida Stahnes 286.0105, the City hereby advises the public that h a person decides to appeal any decision made by this Board, Agency or Commission with respect to any matter considered at its meeting or hearing, he or she will need a record of the proceedings, and that for such purpose, affected person may need to erasure that a verbatim record of the proceedings is made which record includes the testimony and evidenP;- upon which the appeal is to be based. 617 19-12610000405588M 74 coo 00 Y�I Z Jt- N n L W r V Nby I p � pp L a ..h. ry- 4 AV�Cb0 OTi�O Q9G 6C_ A.V qG _ O g F> 22c�A�E�E Y u �; II ., O .- b A a ,� c 'A A c p m a a u Po'p �yFa i°>a.�o umicu am e.�7 o n yc o ..q y o org`A'p oomCa ecE.Lcac £a��wfv€q'-`�a�z- p' OE 'n v°^oum U a$y . i m O^ O G II V V VI O N v D Y T f 6S L'O E CLA.EA3.,u0 AaVEp05y-TyL u=0 3n�-�eo� � � °' ° �cE�o.�m�n6n% f� c uq. ya oo a m3 � `y"°-v of o'4,4 iyv:.°°.'�3c:nc t a0000�°y?�.y E'Sye .''r.`_'Tt � E O o��'a >zp�A�c�Tb-.40d o -aZod / V 4 E Z. A m L E N .r. r-- U V �i N' ] 4 u"i 6'ROM's p0 C 3 O Iw U T V C v 9 0 E O W p N C ^- C _ del N_1 /�� ♦ � w pt°..0 v.3N urt`A °'O fZ. rNb E' c ev Aoc c E�F's `6 c �c 6u'H c .5pucZ'2 A�A"Fco,u Nu'Aq� [ LLa �I �a `�OyNC^E uDF ?pyA 6Li N i Q N Vl F i� 9 N U 22 °vu?= E _ _ =�!�,N M s a. F c z c o 5 z� E c c = _ •7 c= � .�^- � _ :r c = __ _ ✓.,v .cn=:J-U� w.E �'U�ce w.^E Occ_-F E _ =5 _= "' U 2 CITY OF SOUTH MIAMI South Miami OFFICE OF THE CITY MANAGER INTER -OFFICE MEMORANDUM THE CITY OF PLEASANT LIVING To: The Honorable Mayor & Members of the City Commission From: Steven Alexander, City Manager Date: June 18, 2019 Subject: Ordinance amending the South Miami Pension Plan Approved on First Reading, June 4, 2019 - Actuarial Impact Statement SUMMARY The savings provided by adopting the recommended Ordinance amending the City's Pension Plan is an annual estimated total savings amount of $15,434. BACKGROUND On June 4, 2018, the City Commission approved, with amendments, on first reading, an Ordinance amending the South Miami Pension Plan. Before any amendment can be adopted, a statement of actuarial impact is required by Section 112.63(3), F.S. An Actuarial Impact Statement means a statement setting forth the actuarial liabilities and contribution requirements of a proposed change in the provisions of a local retirement system certified by an enrolled actuary. On June 14, 2019, GRS issued their Actuarial Impact Statement which may be found attached. The Actuarial Impact Statement was prepared reflecting the impact to all classes Police Lower and Upper Units, the General Employees and Administrative Management Service Class (AMSC). The Florida Administrative Code (60T-1.004(3)(a)) states that an Actuarial Impact Statement must be certificated and signed and dated by the Plan Administrator and contain the following information: a. A description of the proposed amendment and a statement that the actuary was provided the information necessary to evaluate the proposed amendment; b. An estimate of the cost of implementing the amendment, signed and dated by an enrolled actuary, which discloses, at a minimum, sufficient information on both the before and after amendment basis, so that another actuary, unfamiliar with the situation, would be able to appraise the estimate. If any actuarial assumptions, techniques or methods are also changed, additional information disclosing the effect of such actuarial changes must be provided; c. A statement indicating whether the proposed change is in compliance with Part VII, 76 Page 1 of 2 Chapter 112, F.S. and Section 14, Article X of the State Constitution. No unit of local government shall agree to a proposed change in the retirement benefits or liabilities of a local system, unless the administrator of the system, prior to adoption of the change by the governing body, has issued a statement of actuarial impact of the proposed change upon the local retirement system prior to the last public hearing. Based directly on information from the City's Pension Plan Actuary, (GRS), and their Actuarial Impact Statement, the City can responcibly make the following statement. The savings provided by adopting the Ordinance amending the City's Pension Plan is; an annual total savings amount of $15,434.42. Below is a table which reflects the information based on GRS' Actuarial Impact Statement. PENSION IMPACT STATEMENT SUMMARY INFORMATION Description City Annual Required Contribution for Proposed Change Expected Payroll of Active Employees Before Change Expected Payroll of Active Employees After Change Difference Amount No Longer Contributing to the DC Defined Contribution (DC) Plan City % City's Savings Amount no longer needing to be Contributing Total Annual Estimated Savings ATTACHMENTS — Proposed Ordinance — June 14, 2019, GRS Actuarial Impact Statement — Res. No 146-01-11294 - GRS Annual Aggregate Salaries $36,793 $6,721,049 $7,467,155 $746,106 7% $52,227.42 $15,434.42 77 Page 2 of 2 Retirement G S Consulting June 14, 2019 Ms. Edemir K. Estrada Pension Administrator Gabriel, Roeder, Smith & Company One East Broward Blvd. Suite 505 Fort Lauderdale, Florida 33301-1804 Re: South Miami Pension Plan Actuarial Impact Statement Dear Edemir: P:954.527.1616 F:954.525.0083 www.grsconsulting.com As requested, we are pleased to enclose twelve (12) copies of our Actuarial Impact Statement as of October 1, 2018 for the proposed Ordinance under the South Miami Pension Plan (Plan) with the State of Florida (copy enclosed) prior to second reading. Background Currently General Employees hired on or after October 1, 2016 have ninety (90) days from date of hire to elect to participate in the Plan as a Tier 2 member (or as their respective Administration Management Service Class (ASMC) classification) or join the City's Defined Contribution (DC) Plan. General Employees hired prior to October 1, 2016 who were participating in the DC Plan as of October 1, 2016 had ninety (90) days from September 20, 2016 to elect to participate in the Plan as a Tier 2 member (or as their respective AMSC classification) or remain in the City's DC Plan. Currently ASMC membership is composed of employees who hold the following positions: u City manager 9 City attorney Tc City clerk u Assistant / deputy city manager it Finance director / chief financial officer tt Chief administrative officer (currently finance officer manager) tr Planning and zoning director tt Building director tt Director of public works tt Chief of police is Parks and recreation director tt Chief procurement officer (currently purchasing manager) Currently the Plan provides AMSC members the following normal retirement eligibility and vesting provisions: Ms. Edemir K. Estrada June 14, 2019 Page Two `GRS ➢ Normal Retirement eligibility upon the earlier of: (a) Attainment of age sixty-five (65) and completion of three (3) years of Credited Service (b) Completion of thirty-three (33) years of Credited Service regardless of age ➢ Vesting —100% vesting upon completion of three (3) years of Credited Service In addition, currently police lieutenants and police captains member contributions are capped at twelve percent (12%) of earnings. Police officers and sergeants member contributions are not capped. Proposed Ordinance —The proposed Ordinance: ➢ The City will shall hold an annual open enrollment period during which time employees who previously elected to enter the DC Plan may opt -out of the DC Plan and elect to participate in the Plan as a Tier 2 member (or as their respective AMSC. classification). ➢ The following positions are added to the AMSC classification: • Community redevelopment agency director • Personnel manager • Project manager • Special assistant to the manager tt Superintendent of maintenance n Assistant director of parks and recreation ➢ AMSC Normal Retirement eligibility upon the earlier of: (a) Attainment of age sixty (60) and completion of five (5) years of Credited Service (b) Completion of thirty-three (33) years of Credited Service regardless of age ➢ AMSC Vesting —100% vesting upon completion of five (5) years of Credited Service. AMSC members who have completed three (3) years of Credited Service as of the effective date of the Ordinance shall be 100% vested. ➢ Police officers and sergeants member contributions are capped at twelve percent (12%) of earnings as of October 1, 2018. Cost —The total impact of the proposed Ordinance results in an expected increase in the first year Net City Annual Required Contribution of $36,793 and results in an expected Retirement Consulting 79 GRS Ms. Edemir K. Estrada June 14, 2019 Page Three increase in the first year expected Member Annual Required Contribution of $40,892. Filing Requirements — We have prepared the Actuarial Impact Statement for filing with the State of Florida. Please note that this Statement must be signed and dated on behalf of the Board of Trustees. Copies of the Ordinance upon passage at first reading along with the signed and dated Actuarial Impact Statement are generally required to be filed with the State at the following address: Mr. Douglas E. Beckendorf, A.S.A. Bureau of Local Retirement Services Division of Retirement Building 8 Post Office Box 9000 Tallahassee, Florida 32315-9000 We understand the State requires funding any increases in costs no later than the fiscal year next following the effective date of the Ordinance. Please forward a copy of the Ordinance upon passage at second reading to update our files. Actuarial assumptions and methods, Plan Provisions, financial data and member census data —The actuarial assumptions and methods, financial data and member census data employed for purposes of our Actuarial Impact Statement are the same actuarial assumptions and methods, financial data and member census data utilized for the October 1, 2018 Actuarial Valuation unless otherwise specified herein: AMSC — Normal and Early Retirement Rates Proposed Valuation OrdinanceAge Less than 33 years of Credited Service 55 - 59 10% 10% 60 - 61 10% 25% 62-66 25% 35% 67 & above 100% 100% With 33 years or more years of Credited Service Under62 25% 25% 62-66 25% 35% 67 & above 100% 100% Based upon prior discussions with the City and prior Plan experience along with prior Actuarial Projection Studies, we have assumed 50% of current employees in the DC Plan and Retirement Consulting 80 Ms. Edemir K. Estrada June 14, 2019 Page Four all eligible AMSC employees will elect to join the Plan. However, we assume the Chief of Police will elect to continue to participate in the DC Plan. Demographic data for employees in the DC Plan and AMSC members was reported by the City. We understand the City attorney position is currently filled by outside counsel and not by a City employee. The Plan provisions employed for purposes of our Actuarial Impact Statement are the same Plan provisions utilized in the October 1, 2018 Actuarial Valuation with the exception of the proposed changes described above. Other Considerations— Under Governmental Accounting Standards Board (GASB) Statement Number 68, we understand the full cost of benefit changes must be recognized immediately in pension expense (accounting not funding). This Actuarial Impact Statement is intended to describe the estimated future financial effects of the proposed benefit changes on the Plan and is not intended as a recommendation in favor of the benefit changes nor in opposition to the benefit changes. If all actuarial assumptions are met and if all current and future minimum required contributions are paid, Plan assets will be sufficient to pay all Plan benefits, future contributions are expected to remain relatively stable as a percent of payroll and the funded status is expected to improve. Plan minimum required contributions are determined in compliance with the requirements of the Florida Protection of Public Employee Retirement Benefits Act and Police Officers Retirement Chapter 185 with normal cost determined as a level percent of covered payroll and a level percent amortization payment using an initial amortization period of 25 years. The Unfunded Actuarial Accrued Liability (UAAL) may not be appropriate for assessing the sufficiency of Plan assets to meet the estimated cost of 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 smoothed value of assets. GRS These calculations are based upon assumptions regarding future events. However, the Plan's long term costs will be determined by actual future events, which may differ materially from the assumptions made. These calculations are also based upon present and proposed Plan provisions that are outlined or referenced in this Actuarial Impact Statement. If you have reason to believe the assumptions used are unreasonable, the Plan provisions are incorrectly described or referenced, important Plan provisions relevant to this Actuarial Retirement Consulting 81 GRS Ms. Edemir K. Estrada June 14, 2019 Page Five Impact Statement are not described or that conditions have changed since the calculations were made, you should contact the undersigned prior to relying on information in this Actuarial Impact Statement. If you have reason to believe that the information provided in this Actuarial Impact Statement is inaccurate, or is in any way incomplete, or if you need further information in order to make an informed decision on the subject matter of this report, please contact the undersigned prior to making such decision. Future actuarial measurements may differ significantly from the current measurements presented in this report due to such factors as the following: Plan experience differing from that anticipated by the economic or demographic assumptions; changes in economic or demographic assumptions; increases or decreases expected as part of the natural operation of the methodology used for these measurements (such as the end of an amortization period) and changes in Plan provisions or applicable law. Due to the limited scope of our assignment, we did not perform an analysis of the potential range of such future measurements. This Actuarial Impact Statement should not be relied upon for any purpose other than the purpose described in the primary communication. Determinations of the financial results associated with the benefits described in this report in a manner other than the intended purpose may produce significantly different results. This Actuarial Impact Statement has been prepared by actuaries who have substantial experience valuing public employee retirement systems. To the best of our knowledge the information contained in this report is accurate and fairly presents the actuarial position of the Plan as of the valuation date. All calculations have been made in conformity with generally accepted actuarial principles and practices, with the Actuarial Standards of Practice issued by the Actuarial Standards Board and with applicable statutes. This Actuarial Impact Statement may be provided to parties other than the Board only in its entirety and only with the permission of an approved representative of the Board. The signing actuaries are independent of the Plan sponsor. The undersigned are Members of the American Academy of Actuaries and meet the Qualification Standards of the American Academy of Actuaries to render the actuarial opinion contained herein. Retirement Conwlting 82 Ms. Edemir K. Estrada June 14, 2019 Page Six If you should have any question concerning the above or if we may be of further assistance with this matter, please do not hesitate to contact us. Sincerest regards, �.. L"� Lawrence F. Wilson, ASA, EA, MAAA, FCA Senior Consultant and Actuary Enclosures cc: Mr. Alfred Riverol &R S �aA& Jennifer M. Borregard, EA, MAAA, FCA Consultant and Actuary 83 1 ORDINANCE NO. 2 An Ordinance amending the South Miami Pension Plan to implement the Collective 3 Bargaining Agreements between the City of South Miami and the American Federation of 4 State, County and Municipal Employees, AFL-CIO, City Employees Local 3294, the 5 Florida State Lodge, Fraternal Order of Police, Inc., and the Dade County Police 6 Benevolent Association, Inc. as well as Implement Changes for Members who are not 7 covered under a Collective Bargaining Agreement; by amending Section 16-12, 8 "Definitions"; by amending Section 16-13, "Eligibility"; by amending Section 16-14, 9 "Pension benefits and retirement dates"; by amending Section 16-17, "Termination"; and 10 by amending Section 16-19, Contributions". 11 12 WHEREAS, the City of South Miami and the American Federation of State, County and 13 Municipal Employees, AFL-CIO, City Employees Local 3294, the Florida State Lodge, Fraternal Order 14 of Police, Inc., and the Dade County Police Benevolent Association, Inc. (hereinafter "Unions"), have 15 entered into Collective Bargaining Agreements ("Agreements"); and 16 17 WHEREAS, there are some members who are not covered under the Agreements, but the City 18 of South Miami is desirous of amending the pension plan provisions for those members in accordance 19 herewith; and 20 21 WHEREAS, some of the purposes and intentions of this ordinance are to provide for adding 22 additional positions to the AMSC class, adding an open enrollment period for joining the South Miami 23 Pension Plan, capping contribution percentages for police officers and sergeants and changing normal 24 retirement age and vesting for AMSC members; and 25 26 WHEREAS, Florida law requires that if any provision of a collective bargaining agreement is 27 in conflict with any ordinance over which the chief executive officer has no amendatory power, the chief 28 executive officer shall submit to the appropriate governmental body having amendatory power a 29 proposed amendment to such ordinance; and 30 31 WHEREAS, the City Commission has received and reviewed actuarial impact statements related 32 to the amendments to the South Miami Pension Plan that are set forth in this ordinance; and 33 34 WHEREAS, the City Commission wishes to change the terms of the South Miami Pension Plan 35 to effectuate the changes called for in the Agreements and to include those individuals who not members 36 of the Unions and not covered by the Agreements; and 37 38 WHEREAS, the City Commission deems it to be in the public interest to provide these changes 39 to the South Miami Pension Plan in order to continue to meet the City's objectives of retaining City 40 employees, hiring the best talent and managing employee turnover. 41 42 NOW, THEREFORE, BE IT HEREBY ORDAINED BY THE MAYOR AND CITY 43 COMMISSION OF THE CITY OF SOUTH MIAMI, FLORIDA, THAT: 84 1 2 Section 1: Chapter 16, Article II, Sec. 16-12, "Definitions" of the City of South Miami Code 3 of Ordinances is hereby amended and shall read as follows: 4 5 *** 6 AMSC member shall mean the administration management service class. It will be composed of 7 employees who hold only the following positions: 8 City manager 9 City attorney 10 City clerk 11 Assistant/deputy city manager 12 Finance director/chief financial officer 13 Chief of police 14 Planning and zoning director 15 Building director 16 Director of public works 17 Chief administrative officer (currently finance office manager) 18 Chief procurement officer (currently purchasing manager) 19 Parks and recreation director 20 Community Redevelopment Agency Director 21 Personnel Manager 22 Project Manager 23 Special Assistant to the Manager 24 Superintendent of Maintenance 25 Assistant Director of Parks and Recreation 26 Second tier member shall mean general employees who are hired on or after October 1, 2016 27 who elect to join the city pension plan, aad general employees who were hired prior to October 1, 2016 28 and not participating in the city pension plan as of October 1, 2016 who elect to join the city pension 29 plan.. and employees who previously participated in the City of South Miami Defined Contribution Plan 30 and subsequently opted -out during the annual open enrollment period and joined the South Miami 31 Pension Plan. 32 *** 33 Section 2: That Chapter 16, Article II, of the City of South Miami Code of Ordinances is 34 hereby amended by amending Sec. 16-13, "Eligibility" as follows: 35 *** 36 Notwithstanding anything in this Section to the contrary, the City shall hold an annual 37 open enrollment period during which time any employee who previously entered into the 38 City of South Miami Defined Contribution Plan and is currently in the City of South 39 Miami Defined Contribution Plan, may opt -out, and elect to join the South Miami Pension 40 Plan, as a Second tier member or as their respective classification at the time they elect 41 to join the South Miami Pension Plan. 42 { (j) Notwithstanding sections (a) through 0:1)Q above, all persons who join the eCity pension 43 plan on or after tie-- ;� '' ^�+a„a:-'a-'ce-e- .ia;.�'h-�e�*;� KA 85 1 derivedSeptember 20, 2016 will not be required to have completed six (6) months of 2 service prior to joining and are required to participate immediately upon hire or upon 3 election to join for members who were hired prior to the effee five da4e e f this erdin nee 4 &em , hie-h this seefie„ is derived -September 20, 2016. 5 6 7 Section 3: That Chapter 16, Article Il, of the City of South Miami Code of Ordinances is 8 hereby amended by amending Sec. 16-14(a)(3), "Pension benefits and retirement date" as follows: 9 10 (a) Retirement date. The normal retirement date with full unreduced pension benefits for a 11 participant, shall be as follows: 12 *** 13 (3) AMSC members. The earlier of (a) age sixty -fie (�0-5) and completion of wee 14 five (5-3) years of eCredited service; or (b) completion of thirty-three (33) years of eCredited 15 service. 16 *** 17 Section 4: That Chapter 16, Article II, of the City of South Miami Code of Ordinances is 18 hereby amended by amending Sec. 16-17(b), "Termination" as follows: 19 *** 20 (b) Any such participant shall be entitled to elect Option 1 or Option 2, as described below, except 21 that Option 2 shall be automatically considered as having been elected by the Participant unless 22 Option 1 is elected before the participant's normal retirement date. 23 Option 1: A cash payment of an amount equal to the aggregate of the contributions 24 made by the participant prior to termination of employment. Provided that police 25 officer participants eligible to withdraw their contributions from this pension plan 26 may only withdraw their contributions without interest. 27 Option 2: Pension benefits commencing on what otherwise would have been the 28 normal retirement date of the participant in an amount equal to the greater of that 29 which can be provided by the aggregate of the contributions made by the participant 30 prior to the termination of employment, with credited interest compounded annually 31 at the rate of three (3) percent per annum from the end of the year of payment to the 32 date on which pension benefits commence; or an amount determined by multiplying 33 the amount of pension to which the participant is entitled in accordance with section 34 subsection 16-14(a) or 16-14(b), whichever is applicable by a percentage 35 determined in accordance with the following schedule on the basis of the length of 36 credited service. 37 38 *** 39 All general employees shall be one hundred (100) percent vested in the pension plan upon 40 completion of ten (10) years of continuous credited service. All second tier members shall be one 41 hundred (100) percent vested in the pension plan upon completion of ten (10) years of continuous 3 1 service. AMSC members shall be one hundred (100) percent vested in the pension plan upon completion 2 of five twee `5-3) years of continuous Credited service. AMSC members who have completed three (3) 3 years of continuous Credited service as of the Effective Date of this Ordinance shall be 100% vested. 4 General employees and AMSC members who opt to join the defined contribution plan of the city shall 5 vest after one (1) year of service. Accordingly, effective October 1, 1995, all general employees who are 6 in this plan as of October 1, 1995, and have ten (10) years or more of continuous service will be one 7 hundred (100) percent vested. 8 *** 9 Section 5: That Chapter 16, Article II, of the City of South Miami Code of Ordinances is 10 hereby amended by amending Sec. 16-19(a)(2), "Contributions" as follows: 11 12 (a) Each participant, except as otherwise provided herein, shall contribute in each calendar 13 year towards the cost of the participant's pension an amount equal to three (3) percent of the participant's 14 earnings. Except as otherwise provided herein, no participant shall make any contributions toward the 15 cost of any past service pension to which the participant is entitled under this plan. The employer shall 16 contribute the balance of the cost, actuarially determined, of providing the benefits of the plan. The 17 employer's contributions shall be deposited into the pension plan on at least a quarterly basis. Effective 18 October 11 1995, the pension contribution for all general employee participants, including those general 19 employees that are now members of the retirement system, shall be increased from three (3) percent to 20 five (5) percent of earnings. Effective October 1, 2001, the pension contribution for all general employee 21 participants, including those general employees that are now members of the plan, shall be increased 22 from five (5) percent to seven (7) percent of earnings. Police officer participant including bargaining 23 unit employees, that are now members of the plan and any police officers who join the plan in the future 24 shall, effective October 1, 1993, have their contribution increased from three (3) percent to five (5) 25 percent of earnings. Effective October 1, 2001, police officer participants shall contribute seven and one- 26 half (7.5) percent of earnings. 27 *** 28 (2) Police officer participants. Effective October 1, 2004, if the total police officer 29 participants contributions and employer's contribution exceeds fifteen (15) percent of covered 30 police payroll for any fiscal year, the excess over fifteen (15) percent shall be shared equally by 31 the employer and police officer participants, provided however, that effective October 1, 2016, 32 police lieutenants and police captains shall have their contributions capped at twelve (12) percent 33 of earnings. and effective October 1, 2018, police officers and sergeants shall have their 34 contributions capped at twelve (12) percent of earnings. Police officer participant contributions 35 shall be deposited in the plan immediately after each pay period. Effective October 1, 2001 an 36 amount actuarially determined, to provide for certain minimum benefits required by chapter 185, 37 F.S. shall be paid from the South Miami Police Officers Retirement Trust Fund to the plan each 38 year, regardless of the growth or diminution in future chapter 185, F.S. funds. 39 *** 40 41 Section 6. Codification. The provisions of this Ordinance shall become and be made part of 42 the Future Land Use Map of the City of South Miami's Comprehensive Plan, as amended. 43 4 87 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Section 7. Severability. If any section, clause, sentence, or phrase of this Ordinance is for any reason held invalid or unconstitutional by a court of competent jurisdiction, this holding shall not affect the validity of the remaining portions of this Ordinance or the Guidelines adopted hereunder. Section 8. 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. Section 9. Effective Date. This ordinance shall become effective upon enactment. PASSED AND ENACTED this ATTEST: CITY CLERK 1 St Reading 2°d Reading day of 12019. READ AND APPROVED AS TO FORM: LANGUAGE, LEGALITY AND EXECUTION THEREOF CITY ATTORNEY k" APPROVED: MAYOR COMMISSION VOTE: Mayor Stoddard: Vice Mayor Harris: Commissioner Gil: Commissioner Welsh: Commissioner Liebman: Actuarial Impact Statement as of October 1, 2018 A. Description of Proposed Amendment Eligibility Hold an annual open enrollment period for the Plan during which time employees who previously entered into the City Defined Contribution (DC) Plan may opt -out and elect to join the Plan. Depending on job classification, new members will participate in Tier 2 or the Administration Management Service Class (AMSC). Administration Management Service Class (AMSC) Employees who hold the following positions will belong to the AMSC: City Manager City Attorney City Clerk Assistant / Deputy City Manager Finance Director / Chief Financial Officer Chief of Police Planning and Zoning Director Building Director Director of Public Works Chief Administrative Officer (currently Finance Office Manager) Chief Procurement Officer (currently Purchasing Manager) Parks and Recreation Director Added AMSC positions Assistant Director of Parks and Recreation Community Redevelopment Agency Director Personnel Manager Project Manager Special Assistant to the Manager Superintendent of Maintenance Full vesting upon completion of five (5) years of Credited Service. Members who have completed three (3) years of Credited Service as of the effective date of this Ordinance are 100% vested. Normal retirement is the earlier of (a) attainment of age sixty (60) and completion of five (5) years of Credited Service or (b) completion of thirty-three (33) years of Credited Service. Police Officers Effective October 1, 2018, police officers and sergeants member contributions are capped at twelve percent (12%) of earnings. B. An estimate of the cost implementing this amendment (see attachment) C. In my opinion, the proposed changes are in compliance with Part VII, Chapter 112, Florida Statutes and Section 14, Article X of the Statement Constitution. Chairman, Pension Board Date Es1'1 Actuarial Impact Statement as of October 1, 2018 (All Participants) A. Participant Data 1. Active participants 2. Retired participants and beneficiaries receiving benefits 3. Disabled participants receiving benefits 4. Terminated vested participants 5. Annual payroll of active participants 6. Expected payroll of active employees for the following year 7. Annual benefits payable to those currently receiving benefits B. Assets 1. Market Value of Assets 2. Smoothed Value of Assets C. Liabilities 1. Actuarial present value of future expected benefit payments for active members a. Retirement benefits b. Vesting benefits c. Death benefits d. Disability benefits e. Refunds f. Total 2. Actuarial present value of future expected benefit payments for terminated vested members 3. Actuarial present value of future expected benefit payments for members currently receiving benefits a. Service retired b. Disability retired c. Beneficiaries d. Miscellaneous e. Total Ret.o ,I C*"%Jt" Iftw Valuation 10/01/2018 Actuarial Impact Statement 10/01/2018 107 119 48 48 0 0 9 9 $ 6,675,196 $ 7,421,302 $ 6,721,049 $ 7,467,155 $ 1,530,667 $ 1,530,667 $ 43,219,378 $ 43,219,378 $ 41,264,634 $ 41,264,634 $ 21,342,077 $ 21,716,062 1,461,043 1,686,264 109,769 111,228 718,464 741,694 283,544 280,107 $ 23,914,897 $ 24,535,355 $ 1,266,989 $ 1,266,989 $ 19,210,022 $ 19,210,022 0 0 176,438 176,438 149,378 149,378 $ 19,535,838 $ 19,535,838 90 South Miami Pension Plan 1 Actuarial Impact Statement as of October 1.2018 (All Participants) 4. Total actuarial present value of future expected benefit payments 5. Actuarial accrued liabilities 6. Unfunded actuarial accrued liabilities D. Statement of Accumulated Plan Benefits 1. Actuarial present value of accumulated vested benefits a. Participants currently receiving benefits b. Other participants c. Total 2. Actuarial present value of accumulated non - vested Plan benefits 3. Total actuarial present value of accumulated Plan benefits E. Pension Cost 1. Total normal cost (including expenses) 2. Payment required to amortize unfunded liability 3. Interest adjustment 4. Total preliminary required contribution 5. Total required contribution 6. Item 5 as a percentage of payroll 7. Estimated member contributions 8. Item 7 as a percentage of payroll 9. Estimated State contributions 10. Item 9 as a percentage of payroll 11. Net amount payable by City 12. Item it as a percentage of payroll Valuation 10/01/2018 Actuarial Impact Statement 10/01/2018 $ 44,717,724 $ 45,338,182 $ 39,169,604 $ 39,390,620 $ (2,095,030) $ (1,874,014) $ 19,386,460 12,223,902 $ 31,610,362 $ 19,386,460 12,223,902 $ 31,610,362 3,134,126 3,134,126 $ 34,744,488 $ 981,888 (193,875) 28,696 $ 816,709 $ 1,066,311 16.0% $ 439,175 6.5% ' $ 37,780 0.6% 1 $ 597,995 8.9% 1 ' Percent of expected 2019-2020 covered payroll ($6,721,049) 2 Percent of expected 2019-2020 covered payroll ($7,467,155) $ 34,744,488 $ 1,038,501 (175,611) 31,358 $ 894,248 $ 1,143,996 15.4% $ 480,067 6.4% ` $ 37,780 0.5% z $ 634,788 8.5% z 91 South Miami Pension Plan 2 Actuarial Impact Statement as of October 1, 2018 (All Participants) F. Disclosure of Following Items: 1. Actuarial present value of future salaries - attained age $ 2. Actuarial present value of future employee contributions - attained age $ 3. Actuarial present value of future contributions from other sources 4. Amount of active members' accumulated contributions $ 5. Actuarial present value of future salaries and future benefits at entry age 6. Actuarial present value of future employee contributions at entry age Valuation 10/01/2018 Actuarial Impact Statement 10/01/2018 45,957,035 $ 51,272,977 2,896,466 $ 3,164,343 N/A N/A 5,431,831 $ 5,431,830 N/A N/A N/A N/A 'A G R S C*.Ot" Iftw South Miami Pension Plan 3 Actuarial Impact Statement as of October 1, 2018 Unfunded Actuarial Accrued Liabilities 10/01/2015 Combined Bases * 10/01/2016 Actuarial Loss / (Gain) 10/01/2016 Assumption Change 10/01/2017 Actuarial Loss / (Gain) 10/01/2018 Actuarial Loss / (Gain) 10/01/2018 Plan Amendment TOTAL 10/01/2017 Initial Base 10/01/2018 Actuarial Loss / (Gain) 10/01/2018 Plan Amendment TOTAL 10/01/2017 Combined Bases * 10/01/2018 Actuarial Loss / (Gain) 10/01/2018 Plan Amendment TOTAL Current Unfunded Amortization Remaining Funding Liabilities Payment Period General Emnlovees Tier 1 $ (1,166,604) $ (117,886) 16 years (413,545) (35,269) 23 years 426,727 36,393 23 years (280,976) (23,571) 24 years (1,290,160) (106,612) 25 years 0 0 25 years $ (2,724,558) $ (246,945) General Emolovees Tier 2 $ 61,121 $ 5,213 23 years 19,733 1,631 25 years 0 0 25 years $ 80,854 $ 6,844 AMSC $ 187,758 $ 16,013 23 years 4871112 40,252 25 years 221,016 18,264 25 years $ 895,886 $ 74,529 Police Officers 10/01/2018 Combined Bases * $ (126,196) $ (10,039) 21 years 10/01/2018 Actuarial Loss / (Gain) 0 0 25 years TOTAL $ (126,196) $ (10,039) * Combined per Internal Revenue Code Regulation 1.412(b)-1 This actuarial valuation and/or cost determination was prepared and completed by me or under my direct supervision, and I acknowledge responsibility for the results. To the best of my knowledge, the results are complete and accurate, and in my opinion, the techniques and assumptions used are reasonable and meet the requirements and intent of Part VII, Chapter 112, Florida Statutes. Based upon our understanding of the Plan, there is no benefit or expense to be provided by the Plan and/or paid from the Plan's assets for which liabilities or current costs have not been established or other wise provided for in the valuation. All known events or trends which may require material increase in Plan costs or required contribution rates have been taken into account in the valuation. J.' Enrollment Number: 17 02802 \J. Dated: June 14, 2019 Lawrence F. Wilson, A.S.A. 93 G R S �' Iftw South Miami Pension Plan 4 Outline of Principal Provisions of the Retirement Plan A. Effective Date: October 1, 1965. Most recently amended by Ordinance 1-17-2271 adopted January 17, 2017. B. Eligibility Reauirements: 1. General Employees Tier 1: Regular full-time employee hired before October 1, 2011 is eligible to enter the Plan following the completion of six months of Credited Service and attainment of age 20. Tier 2: Regular full-time employee hired on or after October 1, 2011 and not participating in the Plan as of October 1, 2016 who elects to join or fails to make any election within ninety (90) days from September 20, 2016 is eligible to enter the Plan as a Tier 2 employee as of October 1, 2016. Regular full-time employee hired on or after October 1, 2016 who elects to join or fails to make any election within ninety (90) days from date of hire is eligible to enter the Plan as a Tier 2 employee as of their date of hire. Any regular full-time employee who previously entered into the Defined Contribution (DC) Plan may opt -out of the DC Plan and elect to join the Plan as a Tier 2 member or as their respective classification at the time they elect to join the Plan during an annual open enrollment period. 2. Police Officers Regular full-time Police Officer is eligible to enter the Plan as of date of employment. 3. Administration Management Service Class (AMSC) Employees of the City with the following positions who do not elect to participate in a defined contribution Plan of the City: City Manager City Attorney City Clerk Assistant / Deputy City Manager Finance Director / Chief Financial Officer Chief of Police Planning and Zoning Director Building Director Director of Public Works Chief Administrative Officer (currently Finance Office Manager) Chief Procurement Officer (currently Purchasing Manager) Parks and Recreation Director Assistant Director of Parks and Recreation Community Redevelopment Agency Director Personnel Manager Project Manager Special Assistant to the Manager Superintendent of Maintenance 94 G R S � ' South Miami Pension Plan 5 Outline of Principal Provisions of the Retirement Plan C. Credited Service: 1. General Employees and AMSC Continuous employment. Credited service shall exclude continuous employment prior to Plan participation as follows: (1) If employed prior to October 1, 1973, credited service shall exclude the first two years of continuous employment and any additional year of continuous employment prior to attainment of age 25. (2) If employed on or after October 1, 1973, credited service shall exclude the first six (6) months of continuous employment and continuous employment prior to age 20. Credited service for Tier 2 employees and AMSC will be continuous employment from the date of hire for all purposes except for benefit accruals which will be from the later of date of Plan entry election date or date of hire. 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 prior to October 1, 1973, Credited Service shall exclude the first two years of continuous employment and any additional year of continuous employment prior to attainment of age 25. (2) If employed on or after October 1, 1973, Credited Service shall exclude the first six (6) months of continuous employment and continuous employment prior to age 20. D. Final Monthly Compensation (FMC): Final Average Compensation is 1/36th of the final 36 consecutive months of compensation. For Police Officers, not less than 1/5th of the highest five (5) years out of the last (10) ten years of compensation. Compensation shall mean regular wages and salaries, excluding bonuses, vacation, sick leave and other additional compensation. Effective October 1, 2011, Final Average Compensation for General Employees is 1/60th of the final 60 consecutive months of basic compensation, provided it is not less than the Final Average Compensation as of September 30, 2011 based on the definition above. Basic compensation shall mean base wages and salaries, excluding commissions, overtime pay, bonuses and any other forms of additional compensation earned outside of base wages. Effective October 1, 2011, Final Average Compensation for members covered under the Police Officers and Sergeants collective bargaining agreement is the best five (5) years of basic compensation, provided it is not less than the Final Average Compensation as of September 30, 2011 based on the definition above. Basic compensation shall mean base wages and salaries, including up to 300 hours of overtime in a fiscal year and excluding payments for accrued unused sick or annual leave, extra duty or special detail work, shift differential, assignment pay, bonuses and any other forms of additional compensation earned outside of base wages. 95 GRS M South Miami Pension Plan 6 Outline of Principal Provisions of the Retirement Plan D. Final Monthly Compensation (FMC) (cont'd): Effective October 1, 2016, Final Average Compensation for members covered under the Miami -Dade County Police Benevolent Association Upper -Collective Bargainning Union (Lieutenants & Captains) collective bargaining agreement is the best five (5) years of basic compensation, provided it is not less than the Final Average Compensation as of September 30, 2016 based on the definition above. Basic compensation shall mean base wages and salaries, including up to 300 hours of overtime in a fiscal year and excluding payments for accrued unused sick or annual leave, extra duty or special detail work, shift differential, assignment pay, bonuses and any other forms of additional compensation earned outside of base wages. Final Average Compenation for Tier 2 General Employees and AMSC shall be the average of the highest eight (8) years of credit service. E. Normal Retirement: 1. Eligibility: a. General Employees: b. Police Officers: c. AMSC: 2. Benefit: Attainment of age 55 and completion of ten (10) years of Credited Service for benefits accrued as of September 30, 2011. Attainment of age 60 and completion of ten (10) years of Credited Service for benefits accrued after September 30, 2011, including increases in the accrued benefit as of September 30, 2011 due to increases in the Final Average Compensation. Attainment of age 65 and completion of ten (10) years of Credited Service or completion of thirty-three (33) years of Credited Service regardless of age for Tier 2 General Employees. Attainment of age 60 and completion of ten (10) years of Credited Service or completion of twenty-five (25) years of Credited Service regardless of age. Attainment of age 60 and completion of five (5) years of Credited Service or completion of thirty-three (33) years of Credited Service regardless of age. The monthly Plan benefit is the product of: a. FMC, b. Credited Service during the appropriate period and c. The appropriate benefit percentage The appropriate benefit percentages are: a. General Employees For Credited Service Through September 30, 1999 October 1, 1999 through September 30, 2011 October 1, 2011 and thereafter Percentage 2.50% 2.75% 2.25% South Miami Pension Plan 7 Outline of Principal Provisions of the Retirement Plan E. Normal Retirement (cont'd): 2. Benefit: b. Police Officers c. General Employees (Tier 2) d. AMSC F. Supplemental Benefit: For Credited Service Percentage Through September 30, 1995 2.00% October 1,1995 through September 30, 1996 2.25% October 1,1996 through September 30, 1997 2.50% October 1,1997 through September 30, 2001 2.75% October 1, 2001 through September 30, 2002 2.80% October 1, 2002 through September 30, 2003 2.90% October 1, 2003 and thereafter 3.00% For Credited Service Percentage October 1, 2016 and thereafter 1.60% For Credited Service October 1, 2016 and thereafter Percentage 3.00% A cost -of -living supplemental benefit based upon the consumer price index is provided upon retirement. The annual increase is limited to 3%. For General Employees the cost -of -living supplemental benefit is only provided on the accrued benefit as of September 30, 2011 and does not apply to increases in this accrued benefit due to increases in the Final Average Compensation. No cost -of -living supplemental benefit is provided for Tier 2 General Employees. No cost -of -living supplemental benefit is provided for AMSC for benefit accruals on or after October 1, 2011. G. Early Retirement: 1. Eligibility: a. Police Officers: b. AMSC: 2. Benefit: a. Police Officers: Attainment of age 50 and completion of 15 years of Credited Service. Attainment of age 55 and completion of 10 years of Credited Service. Accrued benefit based upon FMC and Credited Service as of Early Retirement Date, reduced 3% for each year that the benefit commencement date precedes Normal Retirement. 97 G R S rj South Miami Pension Plan 8 Outline of Principal Provisions of the Retirement Plan G. Early Retirement (cont'd): 2. Benefit: b. AMSC: Accrued benefit based upon FMC and Credited Service as of Early Retirement Date, reduced 1/15 for each of the first five years and 1/30 for the next five years that the benefit commencement date precedes Normal Retirement. H. Delayed Retirement: 1. Eligibility: Retirement subsequent to Normal Retirement Date. 2. Benefit: Accrued benefit based upon FMC and Credited Service as of Delayed Retirement Date. I. Disability Retirement: 1. Eligibility: Totally and permanently disabled for a six month period while actively employed. 2. Benefit: Accrued benefit based upon FMC and Credited Service as of date of disability, actuarially reduced as for Early Retirement for early commencement. J. Pre -Retirement Death Benefit: The beneficiary shall receive the member's accumulated Employee Contributions. K. Benefit Upon Termination of Service: 1. Benefit payable at Normal Retirement equal to the greater of: a. Accrued benefit based upon FMC and Credited Service as of date of termination times the vesting percentage shown below, or b. Benefit which can be supported by the accumulated Member Contributions with interest to Normal Retirement Date. No supplemental benefit shall be payable to vested terminees. 2. Vesting Schedule: All employees except AMSC: Years of Vesting Credited Service Percentage Less than 10 0% 10 or more years 100% M. Rn..+..on South Miami Pension Plan 9 Outline of Principal Provisions of the Retirement Plan K. Benefit Upon Termination of Service (cont'd): AMSC: Years of Vesting Credited Service Percentage Less than 5 0% 5 or more years 100% AMSC members who have completed three (3) years of continuous Credited Service as of the effective date of this Ordinance date are 100%vested. 3. Refund Option: A terminated member may elect to receive a refund of Accumulated Contributions without interest in lieu of receiving any other Plan benefits. L. Member Contributions: Members contribute 7.0% (3.0% for Tier 2 General Employees and 7.5% for Police Officers) of member's basic annual compensation. Should the City contribution for General Employees be actuarially determined to exceed 7.0%, not including expenses, both the City and the General Employees (other than Tier 2 General Employees and AMSC) will share equally in the amount in excess of 7.0%. General Employees (other than Tier 2 General Employees and AMSC) Contributions are capped at 10% of basic annual compensation as of October 1, 2016. Should the City contribution for Police Officers be actuarially determined to exceed 7.5%, not including expenses, both the City and the Police Officers will share equally in the amount in excess of 7.5% but not more than 12.0%. M. Normal Form of Retirement Income: The normal form of payment shall be a life annuity with a guarantee of a refund of accumulated Employee Contributions. South Miami Pension Plan 10 Outline of Principal Provisions of the Retirement Plan N. Changes Since Previous Actuarial Valuation: I. Eligibility Requirements were: Tier 2: Regular full-time employee hired on or after October 1, 2011 and not participating in the Plan as of October 1, 2016 who elects to join or fails to make any election within ninety (90) days from effective date of Ordinance is eligible to enter the Plan as a Tier 2 employee as of the effective date of Ordinance. Regular full-time employee hired on or after October 1, 2016 who elects to join or fails to make any election within ninety (90) days from date of hire is eligible to enter the Plan as a Tier 2 employee as of their date of hire. Administration Management Service Class (AMSC) Employees of the City with the following positions who do not elect to participate in a Defined Contribution Plan of the City: City Manager City Attorney City Clerk Assistant / Deputy City Manager Finance Director / Chief Financial Officer Chief of Police Planning and Zoning Director Building Director Director of Public Works Chief Administrative Officer (currently Finance Office Manager) Chief Procurement Officer (currently Purchasing Manager) Parks and Recreation Director 2. AMSC Normal Retirement eligibility was: Attainment of age 65 and completion of three (3) years of Credited Service or completion of thirty- three (33) years of Credited Service regardless of age. 3. AMSC Vesting Schedule was: Years of Vesting Credited Service Pementaee, Less than 3 0% 3 or more years 100% 4. Police Officers Contributions were: Should the City contribution for Police Officers be actuarially determined to exceed 7.5%, not including expenses, both the City and the Police Officers will share equally in the amount in excess of 7.5% but not more than 12.0% for Police Lieutenants and Police Captains. 100 G R S cc4ft.► South Miami Pension Plan 11 Actuarial Assumptions and Methods Used in the Valuation A. Mortality General Emplovees including AMSC Mortality Assumptions: For healthy male participants during employment, RP 2000 Combined Male Healthy Participant Mortality Table, with 50% White Collar / 50% Blue Collar Adjustment and fully generational mortality improvements projected to each future decrement date with Scale BB. For healthy female participants during employment, RP 2000 Combined Female Healthy Participant Mortality Table, with White Collar Adjustment and fully generational mortality improvements projected to each future decrement date with Scale BB. For healthy male participants post employment, RP 2000 Annuitant Male Mortality Table, with 50% White Collar / 50% Blue Collar Adjustment and fully generational mortality improvements projected to each future decrement date with Scale BB. For healthy female participants post employment, RP 2000 Annuitant Female Mortality Table, with White Collar Adjustment and fully generational mortality improvements projected to each future decrement date with Scale BB. For disabled male participants, RP 2000 Disabled Male Mortality Table, setback four years, without projected mortality improvements. For disabled female participants, RP 2000 Disabled Female Mortality Table, set forward two years, without projected mortality improvements. Sample Ages 120181 55 60 62 Sample Ages (2038) Pre -retirement Future Life Expectancy (Years) Male Female 30.53 33.57 25.60 28.54 23.70 26.58 Pre -retirement Future Life Expectancy (Years) Male Female Post -retirement Future Life Expectancy (Years) Male Female 30.10 33.34 25.44 28.44 23.60 26.52 Post -retirement Future Life Expectancy (Years) Male Female 55 32.67 35.41 32.26 35.21 60 27.78 30.38 27.63 30.30 62 25.87 28.40 25.78 28.35 101 AK GRS �° �' Iftw South Miami Pension Plan 12 Actuarial Assumptions and Methods Used in the Valuation A. Mortality (cont'd) Police Officer Mortality Assumptions: For healthy participants during employment, RP-2000 Combined Healthy Participant Mortality Tables, separate rates for males and females, with 90% Blue Collar Adjustment / 10% White Collar Adjustment and fully generational mortality improvements projected to each future decrement date with Scale BB. For healthy participants post employment, RP-2000 Annuitant Mortality Tables, separate rates for males and females, with 90% Blue Collar Adjustment / 10% White Collar Adjustment and fully generational mortality improvements projected to each future decrement date with Scale BB. For disabled male participants, 60% RP 2000 Disabled Male Mortality Table setback four years / 40% RP 2000 Annuitant Male Mortality Table, with White Collar Adjustment and no setback, without projected mortality improvements. For disabled female particpants, 60% RP 2000 Disabled Female Mortality Table set forward two years / 40% RP 2000 Annuitant Female Mortality Table, with White Collar Adjustment, without projected mortality improvements. Sample Ages (2018) 55 60 62 Sample Ages (2038) 55 60 62 Pre -retirement Future Life Expectancy (Years) Male Female 29.84 32.60 24.96 27.56 23.09 25.59 Pre -retirement Future Life Expectancy (Years) Male Female Post -retirement Future Life Expectancy (Years) Male Female 29.33 32.40 24.76 27.41 22.97 25.49 Post -retirement Future Life Expectancy (Years) Male Female 32.06 34.54 31.57 34.36 27.21 29.49 27.03 29.36 25.34 27.51 25.23 27.42 102 South Miami Pension Plan 13 Actuarial Assumptions and Methods Used in the Valuation B. Investment Return to be Earned by Fund 7.375% (net of investment expenses), compounded annually - includes inflation at 2.75%. C. Allowances for Expenses or Contingencies Actual expenses paid in previous year. D. Employee Withdrawal Rates Withdrawal rates for males and for females were used in accordance with the following illustrative example based upon number of years of service: Withdrawal Rates Per 100 Employees Service Police General / AMSC 1-2 12.00 20.00 3-6 8.00 9.25 7-10 8.00 5.00 it & Over 3.50 5.00 E. Disability Rates 1985 Disability Study, Class 1 with separate rates for females. F. Marital Assumptions 100% of active members are assumed to be married. Where applicable, females are assumed to be three years younger than their male spouses. G. Salary Increase Factors Current salary is assumed to increase in accordance with the following table based upon number of years of service- includes wage inflation of 3.25%. Service Police General / AMSC 0-9 5.25% 5.25% 10-14 3.75% 4.75% 15 -19 3.75% 4.25% 20 & over 3.75% 3.75% 103 South Miami Pension Plan 14 Actuarial Assumptions and Methods Used in the Valuation H. Increase in Covered Payroll 4.0% per year, limited to average annual increase over most recent ten years (1.4%) but not less than 0.0% for Police Officers. No increase in covered payroll is assumed for General Employees including AMSC. I. Retirement Rates Rates of Early Retirement for Police Officers were used in accordance with the following table. Years Preceding Normal Retirement Police 1-6 5% 7-10 10% Rates of Normal Retirement were used in accordance with the following tables. Age Police General * AMSC ** 55-59 N/A 10% 10% 60-61 25% 10% 25% 62-64 40% 25% 35% 65-66 100% 25% 35% 67 & above 100% 100% 100% Service Police 25 years 100% * Rates are 25% for Tier 2 members for each year upon meeting 33 years of service until 100% at age 67. ** Includes Early Retirement. Rates are 25% below the age of 62 and 35% between the ages of 62 and 66 upon meeting 33 years of service until 100% at age 67. General Employees who retire prior to age sixty (60) but after attainment of ten (10) years of Credited Service (55 & 10) are assumed to receive an actuarially reduced benefit payable immediately upon retirement. J. Cost of Living Increases Future cost of living increases for General Employees (other than Tier 2 General Employees) and Police Officers are assumed to be 3.0% per annum. K. Valuation of Assets The method used for determining the smoothed value of assets phases in the deviation between the expected and actual return on assets at the rate of 20% per year. The smoothed value of assets will be further adjusted to the extent necessary to fall within the corridor whose lower limit is 80% of the fair market value of Plan assets and whose upper limit is 120% of the fair market value of Plan assets. 104 South Miami Pension Plan 15 Actuarial Assumptions and Methods Used in the Valuation L. Cost Methods Normal Retirement, Termination. Disability and Pre -Retirement Death Benefit: Entry -Age -Actuarial Cost Method Under this method the normal cost for each active employee is the amount which is calculated to be a level percentage of pay that would be required annually from his date of hire to his retirement age to fund his estimated benefits, assuming the Plan had always been in effect. The normal cost for the Plan is the sum of the individual normal costs for all active employees. The actuarial accrued liability as of any valuation date for each active employee or inactive employee who is eligible to receive benefits under the Plan is the excess of the actuarial present value of estimated future benefits over the actuarial present value of current and future normal costs. The unfunded actuarial accrued liability as of any valuation date is the excess of the actuarial accrued liability over the smoothed value of assets of the Plan. M. Changes Since Previous Actuarial Valuation AMSC Retirement Rates were: Age AMSC 55 - 59 10% 60-61 10% 62 - 64 25% 65 - 66 25% 67 & above 100% * Includes Early Retirement for AMSC Employees. Rates are 25% for Tier 2 and AMSC members for each year upon meeting 33 years of service until 100% at age 67. 105 South Miami Pension Plan 16 RESOLUTION NO. 14 6 - 01-112 9 4 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF SOUTH MIAMI, FLORIDA, RELATING TO PENSION ACTUARIAL CONSULTING SERVICES, AUTHORIZING THE CITY MANAGER TO SIGN A THREE-YEAR CONTRACT WITH GABRIEL, ROEDER, SMITH & COMPANY(GRS), WITH THE OPTION FOR RENEWAL FOR ADDITIONAL YEARS. WHEREAS, the City of South Miami employee Pension Fund currently utilizes WATSON WYATT as the actuarial consulting firm; and WHEREAS, Watson Wyatt (actuaries) has advised the City that effective August 31, 20011 it reached an alliance with Gabriel, Roeder & Company (GRS); and WHEREAS, the City sought to conduct a formal search for actuarial services from different companies and received proposals from four of them; and WHEREAS, the pension board reviewed the proposals submitted and interviewed representatives of the four companies that responded; and WHEREAS, the pension board has recommended that the service contract be awarded to Gabriel, Roeder & Company, and the pension attorney concurred that the company is premier in the industry. NOW THEREFORE BE IT RESOLVED BY THE MAYOR AND CITY COMMISSION OF SOUTH MIAMI, FLORIDA, THAT: Section 1 Effective immediately, Gabriel, Roeder & Company (GRS) will serve as the actuarial consulting firm in accordance with the terms and conditions of the City pension plan. Section 2 The City Manager is authorized to sign a three-year contract with the option for renewals for additional years with the company for pension actuarial services. Section 3 This resolution shall take effect immediately upon approval PASSED AND ADOPTED this 2nd day of October 2001. ATTEST: /.- C11Y CLERK READ AND APPROVED AS TO FORM: CITY ATTORNEY APPRO VE,,,E;�..-�-~� JUL19 ' ' OR COMMISSION VOTE: 4-4 Mayor*Robaina: Yea Vice Mayor Feliu: Yea Commissioner Bethel: Yea Commissioner Wiscombe: not preer. Commissioner Russell: Yea 106 TO: Mayor and City Commission FROM! Charles D. Scurr r City Manager�% The Request DATE: September 26, 2001 Re: AGENDA ITEM # Transfer of Actuarial Consulting Services from Watson Wyatt to Gabriel, Roeder, Smith & Company A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF SOUTH MIAMI, FLORIDA, RELATING TO PENSION ACTUARIAL CONSULTING SERVICES, AUTHORIZING THE CITY MANAGER TO SIGN A THREE YEAR CONTRACT WITH GABRIEL, ROEDER, SMITH & COMPANY (HEREINAFTER GRS) WITH RENEWAL OPTION FOR ADDITIONAL YEARS. Background and Analysis Recently, the City pension board made a business decision to solicit bids for actuarial services from different companies with the intention of reducing the total cost of administering the pension plan. Four companies submitted proposals in response to the solicitation. These four companies are as follows: Gabriel, Roeder, Smith & Company (Watson Wyatt) Buck Consultants AON Consulting Services Segal Company The four proposals were reviewed by the pension board members, and the representatives of each company were given the opportunity to respond to questions posed by the board members with regards to the proposals submitted. After careful deliberations, the pension board unanimously agreed to award the service contract to Gabriel, Roeder, Smith & Company (GRS). The company recently formed an alliance with Watson Wyatt. It is a private corporation that has been in business since 1938. It provides benefit consulting services to over 500 public and private sector clients nationwide with an emphasis on the public sector retirement system. Just for your information, the pension attorney concurred that GRS is a premier company in the industry. Attached with the resolution is the schedule of services that will be provided and fee to be charged by the company for the next three years. The payment of the fee will be charged directly 107 against the pension fund bank account. RECOAIWND.A►TI®N I recommend approval. 108 SCOPE OF SERVICES AND FEE PROPOSAL I. FIXED FEE SERVICES Based upon our experience with similar Plans and based upon our discussions, we propose a comprehensive fixed -fee services that the Boards can be expected to require. We have then determined our fees based upon our analysis of these comprehensive regular recurring services. The advantages of this fixed fee approach to the Boards include knowing in advance the annual cost for all anticipated recurring services and the ability to budget and to prevent any surprises after the work has been performed. Further, we will guarantee this fixed fee amount for two years. The fixed fee amount will be increased only by inflation as measured by the Consumer Price Index for the third and subsequent years. The fixed fee services may be summarized as follows: + Preparation and delivery of the annual Actuarial Valuation Report including attendance at a Pension Board meeting to present the results of our valuation and respond to any questions. Our report will include the following requested services: ✓ Collection and reconciliation of Member census data, ✓ Recommendation of actuarial assumptions and methods, ✓ Calculation and reconciliation of actuarial value of assets, ✓ Determination of liabilities in accordance with State, actuarial and Government Accounting Standards Board (GASB) requirements, ✓ Determination of required contributions, ✓ GASB expense and disclosure exhibits (GASB #25 and #27) and ✓ Compliance with Chapters 112 and 185, Florida Statutes. Preparation and delivery of Individual Employee Benefit Statements. We recommend that we prepare one copy to be distributed to active members and a second copy to be retained in the Plan records. o Preparation and delivery of actuarial studies to determine financial effect of plan changes or changes in actuarial assumptions or methods (up to 2 per annum), o Preparation and delivery of Actuarial Impact Statements to be filed with the State after passage of amending City Ordinances after passage at first reading but prior to passage at second reading. (up to 2 per annum), • Attendance at up to two additional Committee Meeting. • Response to any inquiries from the State relating to our Actuarial Valuation Report. s Response to auditor's confirmation request and coordination with other service providers. • Biennial preparation of SPD financial addendum. • Triennial review of actuarial equivalence definition for determining optional forms of payment including preparation of revised option factor tables upon any update. a Review of plan experience in comparison to actuarial assumptions. • Preparation of benefit calculations for retiring or terminating employees (up to 6 per annum). a Calculation of buy-back amounts (up to 6 per annum) a Telephone conversations on pending or anticipated issues that may affect our Actuarial Valuation Report that do not result in a work assignment o Review legislation that may impact plan in coordination with Plan Attorney. Review compliance with State and Federal regulations in coordination with Plan Attorney Our fixed fee for these comprehensive services will be $15,600 annually. We will bill for our 109 fixed fee services quarterly at the rate of $3,900 per quarter. GABRIEL, ROEDER, SMITH & COMPANY SCOPE OF SERVICES AND FEE PROPOSAL, (CONTINUED) 2. OTHER SERVICES While the breadth of fixed fee services is quite comprehensive, additional services of a non- recurring nature will be based upon our hourly rates. These rates would apply to any actuarial studies or impact statements in excess of the two per annum included under the fixed fee arrangement. . Our hourly rates are determined based upon the experience and abilities of our employees. The following are our current hourly rates reflecting the South Miami Team members. • Senior Consultant and Actuary: $285 • Consultant and Actuary $150 • Analyst $125 • Administrative Assistant $ 85 Our hourly rates are quite competitive in the industry. Further, we will not increased these hourly rates for two years. In the third and subsequent years our hourly rates will be increased only by inflation as measured by the Consumer Price Index for the third and subsequent years Unlike some other firms, our hourly rates include our overhead. We do not load our fees for technical and administrative services. 3. BENEFIT CALCULATIONS AND BUY BACK CALCUIJTIONS (IfY EXCESS OF SIX EACH PER AM Mll While we do not anticipate a volume of calculations in excess of the six each covered under the fixed fee arrangement, our fees for excess benefit calculations and buy —backs will be determined based upon hourly rates and we will agree to a not -to -exceed basis. That is, to the extent that our costs based upon our hourly rates are lower than the not -to -exceed amounts, we will bill our costs. To the extent that our costs based upon our hourly rates equals or exceeds the not -to - exceed amount, we will bill the not -to -exceed amount. We anticipate that our costs may be less than the not -to -exceed amount when verifications, calculations or buy -backs are batched (requested in groups). The following are our not -to -exceed amounts: • Benefit verifications: $150 per verification • Benefit calculations: $250 per calculation • Buy-back calculations: $275 per calculation. Our hourly rates are shown above. 110 GABRIEL, ROEDER, SMITH & COMPANY GABRIEI, riOEDE& SMITH & COMpANY Comuttants k Actuarias September 26, 2001 301 EaSt las 01t3 Blvd, - 8,A0 200 1 R. Laucefdale. K 33301.959.527-1,61 d *FAX e54-525-00e3 Ms. Jeanette Enrizo-Navarro Pension Administrator General and Police Pension Funds City of south Miami 6130 Sunset Drive South Miami, Florida 33143-5093 Dear Jeanette; As discussed, we are coefimting our oral advice agreeing to an expansion of the services covered under our fixed -fee proposal. As you are aware, our initial fixed -fee proposal provided for up to two (2) actuarial cost studies plus up to two (2) actuarial impact statements per annum. We had previously agreed to expand these services to include a total of eight (9) actuarial cost studies or actuarial impact statements in any combination during each period of two (2) years. We now confirm that we will expand our fixed - fee senices to include a total of nine (9) actuarial cost studies or actuarial impact statements in any combination during each period of two (2) years That is to say, for the period from date ofinreprion (i.e. October 1 7(!')i) to X- 9te6iid anniversary of the date of inception (i.e. October 17 2003), we wi per -.-am up to a total of nine (9) actuarial studies or actuarial impact statements. During the subsequent two-year period (i.e. October 1, 2003 — October 1, 2005), the fixed -fee wowed cover nine (9) actuarial cost studies or actuarial impact statements in any combination. For example, during the two year period, the Board could request six (6) actuarial cost studies and three (3) actuarial impact statements, or some other combination totaling nine (9), without incurring additional fees. We trust that the Pension Boards and City will find our clarification worthwhile. We remain excited about the opportunity to work with you. Sincerest regards, ((�� Lawrence F. Wilson, A.S.A. Senior Consultant and Actuary ill