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2009-26997 ResoRESOLUTION NO. 2009-26997 A RESOLUTION RATIFYING A MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF MIAMI BEACH AND THE COMMUNICATIONS WORKERS OF AMERICA, LOCAL 3178 (CWA) TO ADD A DEFERRED RETIREMENT OPTION PLAN (DROP) TO THE MIAMI BEACH EMPLOYEES' RETIREMENT PLAN (MBERP). WHEREAS, discussions were held regarding a proposed ordinance that would add a Deferred Retirement Option Plan (DROP) to the Miami Beach Employees' Retirement Plan at both the September 16, 2008 and May 29, 2008 Finance & Citywide Projects Committee meetings; and WHEREAS, Ordinance No. 2006-3504 was adopted on March 8, 2006, which merged the former retirement system for general employees of the City with the former retirement system for unclassified employees of the City and created the Miami Beach Employees' Retirement Plan, which is the City's current pension plan; and WHEREAS, the City Administration, through the City Manager, and the Communication Workers of America, Local 3178 (CWA), through its President, have entered into a Memorandum of Understanding (MOU) to implement a DROP, subject to enactment by the Mayor and City Commission of an amendment to Ordinance No. 2006-3504; and WHEREAS, the Mayor and City Commission approved the amendment to Ordinance No. 2006-3504 on first reading on December 10, 2008; and WHEREAS, the CWA held a ratification vote of its members on the MOU on January 16, 2009; and WHEREAS, of the 133 members who participated, 97.7% voted in favor of ratification of the MOU; and WHEREAS, the proposed amendment to the ordinance has been set for second reading, public hearing at this January 28, 2009 City Commission meeting. ~oo~ - a ~ 99~ NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND THE CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA that the attached Memorandum of Understanding between the City of Miami Beach and the Communications Workers of America, Local 3178 is hereby ratified. Adopted this 28th day of January , 2009 tti Herr a Bower Ifl~ayor APPROVED AS TO FORM & LANGUAGE & FOR EXECUTiON Attest: ~ ~~~~ Robert Parcher City Clerk ~ z6~ City Attorn ~ p~ T:WGENDA~2009Wanuary 28\Regular\CWA DROP RATIFICATION RESO - revised.doc COMMISSION ITEM SUMMARY Condensed Title: A Resolution Ratifying A Memorandum of Understanding Befinreen the City of Miami Beach And The Communications Workers of America, Local 3178 (CWA) To Add A Deferred Retirement Option Plan (DROP) To The Miami Beach Employees' Retirement Plan (MBERP). Ke intenaea uutcome su oRea: Attract and Maintain a Qualit Workforce. Supporting Data (Surveys, Environmental Scan, etc.): 2000-2008 Environmental Scan: (1) Retention and turnover rates for City employees were 11.20% in 2004 versus 13.86% in 2007; and (2) Average employee tenure for City employees was 9.48 ears in 2004 and 8.95 ears in 2007. Issue: Shall the Mayor and City Commission ratify a Memorandum of Understanding Between the City the CWA Union to add a Deferred Retirement Option Plan (DROP) to the Miami Beach Employees' Retirement Plan (MBERP)? Item 5ummary/Recommenaation: The issue of amending the current Miami Beach Employees' Retirement Plan ordinance to add a Deferred Retirement Option Plan (DROP) was discussed on First Reading at the December 10, 2008 City Commission Meeting. The proposed ordinance has been set for second reading, public hearing at this January 28, 2009 City Commission meeting. The City Administration, through the City Manager, and the Communication Workers of America, Local 3178 (CWA), through its President, have entered into a Memorandum of Understanding (MOU) to implement a DROP, subject to enactment by the Mayor and City Commission of an amendment to Ordinance No. 2006-3504. This type of change requires the Collective Bargaining Unit to hold a ratification vote among their members. With the anticipation of the proposed ordinance passing, on January 16, 2009, the CWA held a ratification vote amongst its members. A total of one hundred thirty three (133) members participated in the ratification vote. Of the one hundred thirty three (133) members voting, 97.7% voted in favor of adding the DROP. The Administration recommends that the Mayor and City Commission hereby ratify the Memorandum of Understanding befinreen the City of Miami Beach and the Communication Workers of America, Local 3178 (CWA) to add a Deferred Retirement Option Plan to the Miami Beach Employees' Retirement Plan (MBERP). Adviso Board Recommendation: N!A Financial Information: Source of ' Amount Account ''Approved ' Funds: ~ ` 2 3` 4 OBPI ' Tota4 Financial Impact Summary: It is difficult to estimate the actual savings and/or costs to adding a DROP since it depends on the actual number of eligible employees who enter the DROP. According to the analysis conducted by the City's Actuary, the first year savings to the City could be as much as $985,227 if 100% of the eligible employees enter the DROP to an actual cost to the City of $32,352 if none of the eli ible em lo ees enter the DROP. C~Clerk's Office Legislative Tracking: Ramiro Inquanzo, Human Resources Director S I, Department Director ,,~ Assistant City Manager I' Ci~ Manager ~ T:44GENDA~2009Wanuary 28\RegularlCWA DROP Ratification Vote Summary - revised.doc ~ ~~ ~ ,~~~I~ ~ ~ ~~~`+ ~ ~-GE~IDA ITEM __R7 ~. aa~~ I ZX-o5 ~ MIAMIBEACH City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov COMMISSION MEMORANDUM TO: Mayor Matti Herrera Bower and Members of the City Commission FROM: Jorge M. Gonzalez, City Manager DATE: January 28, 2009 SUBJECT: A RESOLUTION RATIFYING A MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF MIAMI BEACH AND THE COMMUNICATIONS ~ WORKERS OF AMERICA, LOCAL 3178 (CWA) TO ADD A DEFERRED RETIREMENT OPTION PLAN (DROP) TO THE MIAMI BEACH EMPLOYEES' RETIREMENT PLAN (MBERP). ADMINISTRATION RECOMMENDATION Adopt the proposed resolution. BACKGROUND The issue of amending the current Miami Beach Employees' Retirement Plan ordinance to add a Deferred Retirement Option Plan was presented at the December 10, 2008 City Commission meeting. The existing ordinance, Ordinance No. 2006-3504, was last amended on March 8, 2006. The ordinance merged the former retirement system for general employees of the City with the former retirement system for unclassified employees of the City and created the Miami Beach Employees' Retirement Plan (MBERP), which is the City's current pension plan. The proposed amendment to Ordinance No. 2006-3504 would implement a Deferred Retirement Option Plan (DROP) for members of the Miami Beach Employees' Retirement Plan and would create new sections of the ordinance which defines, establishes, and sets forth the features of the DROP. The Mayor and City Commission approved the amendment to Ordinance No. 2006-3504 on first reading on December 10, 2008. The proposed amendment to the ordinance has been set for second reading, public hearing at this January 28, 2009 City Commission meeting. Should the City Commission pass the proposed ordinance, the DROP will take effect ten (10) days following. The City Administration, through the City Manager, and the Communication Workers of America, Local 3178 (CWA), through its President, have entered into a Memorandum of Understanding (MOU) to implement a DROP, subject to enactment by the Mayor and City Commission of an amendment to Ordinance No. 2006-3504. This type of change requires the Collective Bargaining Unit to hold a ratification vote among their members. With the anticipation of the proposed ordinance passing, on January 16, 2009, the CWA held a ratification vote amongst its members. A total of one hundred thirty three (133) members participated in the ratification vote. Of the one hundred thirty three (133) members voting, 97.7% voted in favor of adding the DROP. CWA DROP Ratification Vote January 28, 2009 City Commission Meeting Page 2 of 2 CONCLUSION The Administration recommends that the Mayor and City Commission hereby ratify the Memorandum of Understanding between the City of Miami Beach and the Communication Workers of America, Local 3178 (CWA) to add a Deferred Retirement Option Plan to the Miami Beach Employees' Retirement Plan (MBERP). JMG/ri T:WGENDA~2009Wanuary 28\Regular\CWA DROP Ratification Vote Memo - revised.doc MEMORANDUM OF UNDERSTANDING This Memorandum of Understanding (MOU) is entered into this ~ day of December, 2008, between the City of Miami Beach (City) and the Communications Workers of America (CWA) to add a Deferred Retirement Option Plan (DROP) for all employees in CWA. In accordance with the applicable provisions of the Miami Beach Employee's Retirement Plan, members must satisfy certain criteria prior to entering into the Deferred Retirement Option Plan (DROP). In order to be eligible to participate in the DROP, the employee must attain their normal retirement age, as defined in Section 5.01, which also requires the completion of five (5) or more years of creditable service. In addition, all parties hereby agree that members who elect to participate in the DROP shall not be eligible for any post-retirement improvement factor, as provided for in Section 5.10 (b), throughout the duration of their DROP participation period. The implementation of this Deferred Retirement Option Plan is completely contingent on the Miami Beach City Commission amending the Miami Beach Employees' Retirement Plan (created by ordinance 2006-3504) to include the DROP provision. If the City Commission does not amend the ordinance, this MOU is null and void. It is proposed that the Miami Beach Employees' Retirement Plan be amended as follows to include the DROP: Section 1. A new Section 2.26 of the Miami Beach Employees' Retirement Plan created by Ordinance 2006-3504, as subsequently amended, is created to read: 2.26 Deferred Retirement Option Plan (DROP) - A program under which a Member who has reached the normal retirement date mav elect to retire for purposes of the Plan but continue emplovment with the Citv for up to thirtv-six !36) months, and have his/her monthl_y retirement benefit paid into a DROP account durinq the DROP period, in accordance with Section 5.13. Section 2. A new Section 5.13 of the Miami Beach Employees' Retirement Plan created by Ordinance 2006-3504, as subsequently amended, is created to read: 5.13 A deferred retirement option plan ("DROP") is herebv established for eligible Members, as follows: ~~ Eligibility and participation: 1. A Member who attains the normal retirement date shall be eliqible to participate in the DROP. 2. A Member's election to participate in the DROP shall be irrevocable. A Member mav participate in the DROP onlv once. ~ ,~ ~ ! ,~ . o ~oos~ 3. An eligible Member mav participate in the DROP for a maximum of thirty-six (36) months. 4. An eliqible Member who elects to participate in the DROP must provide at least thirty (30) davs' advance written notice to the City of his or her election to participate in the DROP. A Member who elects to participate in the DROP mav elect to terminate DROP participation and City employment sooner than the maximum DROP period, with thirtv (30) davs' advance written notice to the Citv. (b) DROP qlan features: 1. An eliqible Member who elects to participate in the DROP will be considered to have retired for purposes of the Plan upon entry into the DROP, except that such Member shall be eliqible to vote for and serve as an Employee member of the Board of Trustees during the DROP particiqation period. The Member's monthlv retirement benefit, determined in accordance with the Plan based on vears of creditable service and final averaqe monthlv earninqs at the time the Member enters the DROP, will be paid into the Member's DROP account everv month durinq the DROP period. 2. No Member contributions shall be required after a Member enters the DROP, and the Member will not accrue anv additional creditable service or anv additional benefits under the Plan after entering the DROP. No Citv normal cost contributions shall be required after a Member enters the DROP, and DROP qarticipants shall be excluded from the covered qavroll for the Plan. 3. A Member who elects to qarticipate in the DROP shall not be eliqible for disabilitv or preretirement death benefits under the Plan~ nor shall a Member be eliqible for anv post retirement adiustment provided in Section 5.10 during the DROP participation qeriod. 4. A Member who elects to particiqate in the DROP shall retain the earned balance of annual and sick leave as of the date of entrv into the DROP, and shall continue to earn annual and sick leave durinq the DROP period in accordance with applicable Citv ordinances Afternativelv, at the time of entrv into the DROP a Member mav request full or partial pavment of the earned balance of ,~ ~~G ~ ~ . n _ rt ~ ..c, n'1 annual and sick leave as of the date of entry into the DROP, up to the maximum allowed bv applicable Citv ordinances for emplovees who terminate Citv emplovment, but reduced bv the amount of annual and sick leave used for the purchase of additional credited service under section 4.03, if any, at the Member's rate of compensation upon enterinq the DROP; provided that the Member must retain at least 120 hours of accrued sick leave after anv such pavment. Upon termination of City emplovment, a Member who has participated in the DROP shall be eliqible to receive pavment for the earned balance of annual and sick leave as of the date of termination, up to the maximum allowed bv applicable City ordinances for emplovees who terminate Citv emplovment, but reduced bv the amount of annual and sick leave for which pavment was received upon entry into the DROP, if anv; and further reduced bv the amount of annual and sick leave used for the purchase of additional credited service under section 4.03, if anv. In no event shall pavments for accrued annual or sick leave be included in a member's Earninqs for purposes of the Plan. 5. As a condition of participating in the DROP, the Member must aqree to terminate Citv employment at the conclusion of the DROP period. and to submit an irrevocable letter of resignation statinq this prior to enterinq the DROP. A Member who elects to participate in the DROP must also submit an irrevocable written DROP election prior to enterinq the DROP on a form provided bv the Board. 6. At the conclusion of the DROP period and upon termination of Citv emplovment, the Member's monthlv retirement benefit shall be paid to the Member in accordance with the Plan. In the event of the Member's death durinq or at the conclusion of the DROP period, a benefit mav be pavable in accordance with Section 5.07 8. Participation in the DROP is not a quarantee of City emplovment, and DROP qarticipants will be subiect to the same terms and conditions of emplovment that are applicable to employees who are not DROP participants. 9. Durinq participation in the DROP, the Member's monthlv retirement benefit will be paid into the DROP account, and shall be Q/n C/ . . n . ~ ~ .. credited/debited with earninqs/losses as provided herein. The Member mav direct that their DROP account be invested in anv of the investment options approved by the Board, on forms provided bv the Board. Any qains on the Member's DROP account investments shall be credited to the Member's DROP account; and anv losses incurred bv the Member shall be deducted from the Member's DROP account balance, and shall not be made uq bv the Citv or the Retirement Plan. A Member's DROP account shall onlv be credited or debited with earnings/losses while the Member is a participant in the DROP. 10. A DROP participant mav desiqnate a beneficiarv or beneficiaries for his/her DROP account on a form provided bv the Board. 11. Within thirtv (30) davs following a DROP participant's termination of Citv emplovment or death, whichever occurs first, the Member, or in the event of the Member's death the Member's desiqnated beneficiarv, mav submit a written election on a form approved bv the Board, to receive the Member's entire DROP account balance which shall be distributed to the Member (or in the event of the Member's death, to the Member's desiqnated beneficiarv or estate in accordance with paragraph (b)9., below) in a cash lump sum unless the Member elects to have all or anv portion of an eliqible rollover distribution paid directlv to an IRA or eliqible retirement plan specified by the Member in a direct rollover. Anv such direct rollover shall be processed in accordance with Article 12 of the Plan. In the event a Member or desiqnated beneficiarv does not submit a written election to receive a distribution of the Member's DROP account balance within thirtv (30) davs followinq the Member's termination of Citv emplovment or death, the Member's DROP account shall be maintained bv the Plan but shall not be credited with earnings/losses after thirtv (30) davs followinq the Member's termination of Citv emplovment or death. 12.If a DROP participant dies before his or her DROP account is distributed, the participant's desiqnated beneficiarv shall have the same riahts as the participant with respect to the distribution of the ; ~L ,r' 'l ~ w /1 4 .., ,.. A DROP account. If the participant has not desiqnated a beneficiarv, the DROP account balance shall be paid to the Member's estate. 13.The Board of Trustees shall make such administrative rules as are necessarv for the efficient operation of DROP, but shall not adopt anv rule that is inconsistent with this Ordinance or the Plan. 14.The DROP shall be administered so that the Plan remains Qualified under the Internal Revenue Service Code and in compliance with applicable laws and regulations. Section 3. Conflicts and Severability. (a) All Ordinances, and parts of ordinances, in conflict herewith shall be and the same, are hereby repealed. (b) In the event any article, section, paragraph, sentence, clause, or phrase of this Ordinance shall be adjudicated invalid or unconstitutional, such adjudication shall in no manner affect the other articles, sections, paragraphs, sentences, clauses or phrases of this Ordinance, which shall be and remain in full force and effect as fully as if the item so adjudged invalid or unconstitutional was not originally a part hereof. Section 4. Effective Date. This Ordinance shall take effect the _ day of , 2009. EXECUTED by the parties hereto on the date written below: Communications Workers of America City of Miami Beach ~ BY: d BY: Richard McKinnon J M. Go zale President, CWA City Manager DATE: l,2 •~. c~~O~T DATE: ~~-` t~ l'~O~ ~ n a ~ .n.,~i