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2010-27352 Reso RESOLUTION NO. .2010 27352 J A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, AUTHORIZING THE ADMINISTRATION TO CREATE AN ' AGENCY ACCOUNT FOR THE PURPOSE OF RETAINING THE ADDITIONAL TWO PERCENT (2 %) EMPLOYEE PENSION CONTRIBUTION FOR THOSE EMPLOYEES INCLUDED IN -THE AMERICAN.-FEDERATION OF STATE, COUNTY AND MUNICIPAL EMPLOYEES / LOCAL 1554 (AFSCME) AND GOVERNMENT SUPERVISORS ASSOCIATION OF FLORIDA INTERNATIONAL UNION, LOCAL 100 (GSAF) BARGAINING UNITS WHO PARTICIPATE IN THE MIAMI BEACH EMPLOYEES' RETIREMENT PLAN (MBERP), EFFECTIVE JULY 14, 2010,AND CONTINUING TO A DATE NOT LATER THAN'SEPTEMBER 30, 2010. WHEREAS, on July 14, 2010, the City Commission ratified. a three (3) year Labor agreement with the American Federation of State, County and Municipal Employees /Local 1554 (AFSCME), covering the time period of May 1, 2010 through April 30, 2013; and WHEREAS, on July 14, 2010, the City Commission ratified an amended three (3) year labor agreement with the Government Supervisors Association of Florida, International Union, Local 100 (GSAF) bargaining unit, covering the time period of October 1, 2009 through September 30, 2012; and r WHEREAS, effective on July 14, 2010, all employees covered by the AFSCME and GSA bargaining units who participate in the Miami Beach Employees' Retirement Plan (MBERP) began contributing an additional two - percent (2 %) of earnings toward their employee k pension contribution, which additional employee contribution will correspondingly reduce the City's annual required contribution to the MBERP; and WHEREAS, the Administration has been authorized by the Mayor and City Commission to create an agency Account (where the City acts' on behalf of the employee in ,collecting the funds and transmitting those funds to the appropriate entity); and WHEREAS, the additional employee contributions will be maintained in the Agency Account until a date not later than September 30, 2010; and WHEREAS, the. additional employee contributions will be deposited into the MBERP fund on or before September 30, 2010. NOW, WHEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND THE CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA hereby approve this resolution authorizing the Administration to create an Agency Account for the purpose of retaining the additional two percent (2 %) employee pension contribution for those employees included in the bargaining units represented by AFSCME and GSAF, who participate in the Miami Beach Employees' Retirement Plan (MBERP), retroactive to July 14, 2010, and continuing to a date not later than September 30, 2010, and the additional employee contributions will be deposited into the MBERP fund on or before September 30, 2010, and hereby authorize the Mayor and the City Clerk to execute this Resolution. PASSED AND ADOPTED this 14 day of July, 2010. APPROVED ��'� U TO * ATTEST: FOR E UTION CITY CLERK M n► ate f . COMMISSION ITEM SUMMARY Condensed Title: Creation Of An Agency Account For Additional two percent (2 %) Employee Contribution 1. A Resolution Of The Mayor And City Commission Of The City Of Miami Beach, Florida, Authorizing The Administration To Create An Agency Account For The Purpose Of Retaining The Additional Two Percent (2 %) Employee Pension Contribution For Employees In The Bargaining Unit Represented By The Government Supervisors Association Of Florida /OPEIU Local 100, Who Participate. In The Miami Beach Employees' Retirement Plan ( MBERP), Retroactive To The Pay Period Beginning On January 18, 2010, And Continuing for Twelve (12) Months From That Date. 2. A Resolution Of The Mayor And City Commission Of The City Of Miami Beach, Florida, Authorizing The Administration To Create An Agency Account For The Purpose Of Retaining The Additional Two Percent (2 %) Employee Pension Contribution For All Employees Not Included In A Bargaining Unit And Known As The Groups "Unclassifieds" And "Others ", Who Participate In The Miami Beach Employees' Retirement Plan ( MBERP), Retroactive To The Pay Period Beginning On January 18, 201.0, And Continuing For Twelve (12) Months from That Date. Key Intended Outcome Supported: Control costs of payroll including salary and fringes/ minimize taxes/ ensure expenditure trends are sustainable over the lon term. Supporting Data (Surveys, Environmental Scan, etc.): N/A Issue: Shall the City Commission authorize the Administration to create an Agency account for the purpose of retaining the additional two percent (2 %) employee pension contribution for those employees in GSA, Others and Unclassified salary groups? Item Summa /Recommendation: At the January 13, 2010 City Commission meeting, the City Commission passed a resolution ratifying the 2009- 2012 Collective Bargaining Agreement between the City and the GSA. The City Commission also passed a resolution authorizing an additional deduction of two percent (2 %) of earnings for the employee pension contribution for all active GSA members who participate in the Miami Beach Employees' Retirement Plan ( MBERP). In addition, the City Commission authorized the Administration to effectuate the two percent (2 %) increase in employee. pension contributions for those employees in the Unclassified and "Others" salary groups simultaneously with the GSA salary group. This increase became effective with the pay period that began on January 18, 2010 for the GSA, Others and Unclassified salary groups who participate in MBERP and shall continue for a twelve (12) month period. As part of the terms and conditions of the Agreement with the GSA, the additional two percent (2 %) pension contribution was to be placed in an Agency Account until such time as the employee contribution for all members of the Miami Beach Employees' Retirement Plan is finalized. In the event that the two percent (2 %) increase in employee pension contributions is not implemented for the remaining general employee salary groups. (the CWA and AFSCME bargaining units), the additional two percent (2 %) contributions made by the members of the GSA, Others and Unclassified salary groups shall be returned to the. respective employees without interest. Advisory Board Recommendation: N/A Financial Information: i Source of MA mount /account Funds: 2 3 OBPI Total Financial Impact Summary:' City Clerk's Office Legislative Tracking: [ Ramiro Inguanzo S! gn Offs "Department Director As 's ant, City Mana er ' "; City Manager T:\AGENDA\20101hrch 10 \Regular \Creati of Agency Acc u t for Increase Empl a Pension Contribution' um / / ary.d c V A AGENDA ITEM L' 7/" - 19 DATE / MIAMI BEACH 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: March 10, 2010 SUBJECT: A RESOLUTION OF THE. MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, AUTHORIZING THE ADMINISTRATION TO CREATE AN AGENCY ACCOUNT FOR THE PURPOSE OF RETAINING THE ADDITIONAL TWO PERCENT (2 %) EMPLOYEE PENSION CONTRIBUTION FOR EMPLOYEES IN THE BARGAINING UNIT REPRESENTED BY THE GOVERNMENT SUPERVISORS ASSOCIATION OF FLORIDA/OPEIU LOCAL 100, WHO PARTICIPATE IN THE MIAMI BEACH EMPLOYEES' RETIREMENT PLAN (MBERP), RETROACTIVE TO THE PAY PERIOD BEGINNING ON JANUARY 18, 2 AND CONTINUING FOR TWELVE (12) MONTHS FROM THAT DATE. A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, AUTHORIZING THE ADMINISTRATION TO CREATE AN AGENCY ACCOUNT FOR THE PURPOSE OF RETAINING THE ADDITIONAL TWO PERCENT (2 %) EMPLOYEE PENSION CONTRIBUTION FOR ALL EMPLOYEES NOT INCLUDED IN ANY BARGAINING UNIT AND KNOWN AS THE GROUPS "UNCLASSIFIEDS" AND "OTHERS ", WHO PARTICIPATE IN THE MIAMI BEACH EMPLOYEES' RETIREMENT PLAN (MBERP), RETROACTIVE TO THE PAY PERIOD BEGINNING ON JANUARY 18, 2010, AND CONTINUING FOR TWELVE (12) MONTHS FROM THAT DATE.. ADMINISTRATIVE RECOMMENDATION Adopt both Resolutions. BACKGROUND/ANALYSIS During the July 2009 Finance and Citywide Projects Committee budget preparation meetings, the Finance and Citywide Projects Committee requested that all City of Miami Beach employees make certain financial concessions to help address the challenges being faced. during the upcoming budget cycle. The Finance and Citywide Projects Committee directed the Administration to budget for specific employee concessions for Fiscal Year 2009 -2010, which would in turn effectuate a cost savings of approximately $3.5 million dollars to the General Fund. The employee concession initiatives that were directed by the Finance and Citywide Projects Committee included the following: (1) a freeze on merit increases and steps for all City employees; (2) a two' percent (2 %) increase to the City Commission Memorandum. March 10, 2010 Employee Increase to MBERP Contribution Page 2 of 3 employees' contribution to the pension system; and (3) implementation of revised Condrey and Associates recommendations from the Classification and Compensation Study that was performed for the City. These concessions Were in addition to no cost of Living adjustment (COLA). In August 2009, the City began contract negotiations with the four (4) unions whose contracts would expire on September 30, 2009. The City proposed all of the concessions referenced above in the negotiations for successor collective bargaining agreements with each of those unions. In addition, the City has already begun negotiations with American Federation of State, County and Municipal Employees (AFSCME), whose current contract expires on April 30, 2010, and has also included these provisions as part of the negotiations for a successor collective bargaining agreement. On October 29,2009, the City and the GSA successfully concluded negotiations fora three (3) year successor Agreement. The term of the Agreement is from October 1, 2009 through September 30, 2012. At the January 13, 2010 City Commission meeting, the City Commission passed a resolution ratifying the 2009 -2012 Collective Bargaining Agreement between the City and the GSA. To implement the terms and conditions of the 2009 -2012. GSA Agreement, the City Commission passed a resolution at the January 13, 2010 City Commission meeting authorizing an additional deduction of two percent (2 %) of earnings for the employee pension contribution for all active GSA members who participate in the Miami Beach Employees' Retirement Plan ( MBERP), the City's pension plan for general employees. This means an increase from ten percent (10 %) to twelve percent (12 %) of earnings for "Tier A" employees (hired prior to August 1, 1993), and an increase from eight percent (8 %) to ten percent (10 %) of earnings for "Tier B" employees (hired on or after August 1, 1993). This increase became effective with the pay period that began on January 18, 2010 and shall continue for a twelve (12) month period. In keeping with the spirit of treating similar groups of employees the same, the City Commission authorized the Administration to effectuate the two pe.rcent (2 %) increase in employee pension contributions for those employees in the Unclassified and "Others" salary groups simultaneously with the GSA salary group. This increase became effective with the pay period that began on January 18, 2010 for Unclassified and "Others" employees who participate in MBERP and shall continue for a twelve (12) month period. For Unclassified employees, this means an increase from ten percent (10 %) to twelve percent (12 %) of earnings for "Tier A" employees (hired prior to October 18, 1992), and an increase from eight percent (8 %) to ten percent (10 %) of earnings for "Tier B" employees (hired on or after October 18, 1992). For employees in the "Others" salary group, this means an increase from ten percent (10 %) to twelve percent (12 %) of earnings for "Tier A" employees (hired prior to August 1, 1993), and an increase from eight percent (8 %) to ten percent (10 %) of earnings for "Tier B" employees (hired on or after August 1, 1993). This increase became effective with the pay period that began on January 18, 2010 and shall continue for a twelve (12) month period. As part of the terms and conditions of the Agreement with the GSA, the additional two percent (2 %) pension contribution was to be placed in an Agency Account (where the. City acts on behalf of the employee in collecting the funds and transmitting those funds to" the appropriate agency) until such time as the employee contribution for all members of the Miami Beach Employees' Retirement Plan is finalized. In the event that the two percent .(2 %) increase in employee pension contributions is not implemented for the remaining general employee salary groups (the CWA and AFSCME bargaining units), the additional City Commission Memorandum March 10, 2010 Employee Increase to MBERP Contribution Page 3 of 3 two percent (2 %) contributions made by the members of the GSA bargaining unit and by employees in the Unclassified and "Others" salary groups shall be returned to the respective employees without interest. Given that the City makes its employer annual required contribution (ARC) to the pension fund on October 1 s of each year, the timing of negotiations has resulted in the City already making its required contributions for Fiscal Year 2009 -2010 in full an October 1, 2009. Should the additional two percent (2 %) contribution also be collected from the employees in the CWA and AFSCME bargaining units, then the entire amount that is held in the Agency Account through September 30, 2010 shall be contributed to the MBERP effective October 1, 2010, thus reducing the use of other City funding sources to fund the City's ARC payable on October 1, 2010 by the amount in the Agency Account. Effective October 1 2010, the additional two percent (2 %) paid by the employees in the AFSCME, . CWA, GSA, Unclassified and "Others" employee groups shall be made directly to- the MBERP for the remainder of the twelve (12) month period for each of those respective employee groups. In this event, the actuary for the MBERP will need to revise the actuarial valuation report or provide an actuarial impact statement prior to' October 1, 2010 to reflect the additional employee contributions, and correspondingly reducing the City's ARC. CONCLUSION The- Administration recommends adopting the two Resolutions which would authorize the Administration to create an Agency Account for the purposes of retaining the additional two percent (2 %) employee contribution currently being collected from the GSA, Unclassified and "Others" salary groups, retroactive to January 18, 2010. T:\AGENDA \2010 \March 10 \Regular \Creation of Agency Account for Increase Employee Pension Contribution.doc