LTC 398-2013 Supplemental Info Re Financial Impacts of Reorg of Fire Dept ,n. �, _
MIAMI BEACH 2913 OC T 3 I
PM 4. 52
OFFICE OF THE CITY MANAGER C I I Y C L D K'S 0 F f I C F
NO. LTC # 39S• . LETTER TO COMMISSION
TO: Mayor Matti Herrera Bower and M tubers of th City Commission
j FROM: Jimmy L. Morales City Manager
DATE: October 31, 2013
SUBJECT: Supplemental Information Regardi g the of
Impacts of the Reorganization of
the Fire Department
The purpose of this Letter to the Commission (LTC) is to provide the Mayor and City
Commission with supplemental information regarding the financial impacts associated with the
reorganization of the Fire Department that was negotiated in the 2009-2012 collective
bargaining agreement between the City and the International Association of Fire Fighters, Local
1510 (IAFF). On October 23, 2013, the City Commission was provided with an analysis from
Actuarial Concepts, Inc., the City's pension actuary, (LTC #328-2017), that represented the
financial impacts to the Fire and Police Pension Plan as a result of the reorganization of the Fire
Department. Based on the analysis provided on October 23, 2013, the reorganization of the Fire
Department represents a first-year increase in contribution requirements to the pension plan of
$407,000, payable annually over the next thirty years.
The Fire reorganization was negotiated as art of the three year labor agreement covering the
9 9 P Y g 9
period of October 1, 2009 through September 30, 2012. Employee concessions contained in
the collective bargaining agreement yielded a net savings of approximately $3.66 million during
the three year contract period. In addition, based on the negotiated changes to the Fire and
Police Pension plan, pension savings were estimated at $32.8 million Net Present Value (NPV)
over thirty years.
At the time that the 2009-2012 labor agreement was ratified, the salary impact associated with
the Fire reorganization was estimated at approximately $725,000 for the successor three (3)
year contract period of October 1, 2012 through September 30, 2015. To offset those salary
costs, the IAFF agreed to a reduction in the number of holiday hours earned by shift personnel
from twelve to nine hours. This concession will result in an estimated savings of $825,000 for
the three-year contract period ending in FY 2014/15. This represents a net salary savings of
$100,000 during same period. In addition, the reduction in the hours of holiday pay will result in
recurring savings. Furthermore, because holiday pay is pensionable, there will also be future
savings to the City's annual required contribution toward pension.
Please feel free to contact me if you have any questions or need any additional information.
JML/KGB/SC-T/CMG
f:\cmgr\$all\ltc 2013\ltc-follow up regarding impact of fire reorganization 10-30-13.docx