Ordinance 94-2904 ORDINANCE NO. 94-2904
AN ORDINANCE OF THE CITY OF MIAMI BEACH,
FLORIDA, AMENDING ORDINANCE NO. 1901 WHICH
ESTABLISHED THE GENERAL EMPLOYEES PENSION
SYSTEM, ESTABLISHING A BENEFIT LEVEL FOR
EMPLOYEES WITHIN THE CLASSIFICATIONS COVERED
BY THE "MBEBA" BARGAINING UNIT AND
ENTERING THE SYSTEM ON OR AFTER FEBRUARY
21, 1994; PROVIDING AN IRREVOCABLE OPTION
FOR SAID EMPLOYEES ENTERING THE SYSTEM ON
OR AFTER FEBRUARY 21, 1994 TO ELECT TO
REJECT MEMBERSHIP IN THIS SYSTEM AND ELECT
TO JOIN THE DEFINED CONTRIBUTION RETIREMENT
SYSTEM; PROVIDING FOR A CONTRIBUTION RATE
OF TEN PERCENT FOR SAID EMPLOYEES;
PROVIDING FOR AN EARLY RETIREMENT ALLOWANCE
FOR QUALIFYING EMPLOYEES; PROVIDING THAT
ADMINISTRATIVE EXPENSES OF THE PLAN BE
PAID FROM THE PLAN; PROVIDING FOR A REPEALER,
SEVERABILITY AND AN EFFECTIVE DATE.
Whereas, the City of Miami Beach, Florida has established
the General Employees Retirement System (the "System") with the
passage of Ordinance 1901 which has been amended from time to time;
and,
Whereas, the City Commission of said City desires to
amend this System to establish a level of benefits for persons
entering the System on or after February 21, 1994 ; and,
Whereas, the City Commission also desires to grant an
early retirement allowance to qualifying employees.
NOW, THEREFORE, BE IT ORDAINED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA:
SECTION 1 - Article 2 . 09 of Ordinance 1901 is amended to read as
follows:
2 . 09 "Final Average Monthly Earnings" means, in the case of a
person who became a Member of the System on or after November
1, 1976, one-twelfth of the average annual earnings of the
Member during the three highest paid years of his creditable
service; in the case of a person who became a Member prior to
November 1, 1976 or who retires after October 1, 1990, this
term means one-twelfth of his average annual earnings during
the two highest paid years of his creditable service.
Notwithstanding the foregoing, for any person who is in a
classification within the AFSCME bargaining unit who entered
service with the City
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on or after April 30, 1993 , or for any person who is in the
"Other" classification who entered service with the City on or
after August 1, 1993 , and for any person who is within the
MBEBA bargaining unit who entered service on or after February
21, 1994 , this term means one-twelfth of the average annual
earnings of the Member during the three highest paid years of
service as an Employee.
SECTION 2 Section 2 . 20 of Ordinance 1901 be amended to read as
follows:
2 . 20 Persons in classifications covered by the American
Federation of State, County and Municipal Employees
("AFSCME") , in classifications covered by the Miami Beach
Employees Benevolent Association ("MBEBA") , and in
classifications in the "Other" group shall have the same
meanings as in Ordinance 789, the Classified Employees Salary
Ordinance including any successor or assignee to such groups.
SECTION 3 - Section 3 . 04 of Ordinance 1901 is amended to read as
follows:
3. 04 All individuals holding the position of either City
Manager or City Attorney, shall have the option to reject
membership in the plan provided herein and to be a member in
a retirement program with any public trust fund named by the
aforesaid individuals and approved by the City Commission. Any
employee within the classifications within the AFSCME
bargaining unit entering service with the City on or after
April 30, 1993 , or any employee within the classification of
"Other" who entered service with the City on or after August
1, 1993 , or any employee in the MBEBA bargaining unit who
enters service on or after February 21, 1994 , and would
otherwise become a Member of this retirement system, shall
have an irrevocable option to reject membership in the plan
provided herein, and select the Defined Contribution
Retirement System.
SECTION 4 - Article 5 . 01 of Ordinance 1901 is amended by adding
Subsection (f) to read as follows:
5. 01 (f) Notwithstanding the above subsections, a person who
entered service with the City on or after April 30, 1993 , and
is within the classifications of the AFSCME bargaining unit or
a person who entered service with the City on or after August
1, 1993 and who is in the classification of "Other" , or any
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person who entered service with the City on or after February
21, 1994 , and is within the classifications of the MBEBA
bargaining unit, shall be eligible to retire with full
benefits upon the completion of more than ten (10) years of
creditable service and the attainment of the sixtieth
anniversary of his birth. For persons eligible to retire under
this paragraph, the retirement allowance shall be computed as
follows: final average monthly earnings multiplied by three
percent (3%) per year of creditable service to a maximum of
eighty percent (80%) of such final average monthly earnings.
Persons with ten (10) or less years of creditable service may
retire with a reduced benefit. For persons with less than ten
(10) years of creditable service, the retirement allowance
shall be computed as follows: Final average monthly earnings
multiplied by three percent (3%) per year of creditable
service multiplied by ten percent (10%) multiplied by years of
creditable service to a maximum of ten.
SECTION 5 - That Section 5. 02B of Ordinance 1901 be amended to read
as follows:
B. Commencing on the effective date of this Ordinance and
for sixty (60) days thereafter (the "Election Period") , an
Employee who is a Member ("Employee Member") of this System
and is in the classifications within the AFSCME MBEBA
bargaining unit and who meets one of the criteria set forth
below will have an irrevocable option to elect one and only
one of the following options.of this Ordinance and for sixty (60) days thereafter, an
Employee who i3 a Member of the System and i3 in a
(1) If an Employee Member within the Election Period,
has attained the normal retirement age and has completed five
(5) years of creditable service, said Employee Member shall
have an irrevocable option to retire during the Election
Period, and receive, as an inducement, credit for two years of
additional creditable service in addition to any creditable
service the Employee Member may have earned; or,
(2) If an Employee Member, within the Election Period,
shall have completed five (5) years of creditable service and
is within two (2) years of the normal retirement date, said
Employee Member shall have an irrevocable option to retire
within the Election Period, and receive, as an inducement,
credit for up to two (2) years of additional age in addition
to the age previously attained by the Employee Member.
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SECTION 6 - Article 5. 03 of Ordinance 1901 is amended by adding
Subsection (c) to read as follows:
5. 03 (c) Notwithstanding the above subsections, any Member who
entered service with the City on or after April 30, 1993 , who
is in the classifications within the AFSCME bargaining unit or
any Member who entered service with the City on or after
August 1, 1993 and who is in the classification of "Other" or
any Member who entered service on or after February 21, 1994
and who is in the MBEBA bargaining unit and whose service with
the City is terminated voluntarily or involuntarily, prior to
the attainment of his sixtieth anniversary of his birth but
after the completion of ten (10) or more years of creditable
service shall be entitled, in lieu of a refund of his
accumulated employee contributions, to apply for a vested
retirement allowance. The vested retirement allowance shall be
a deferred allowance commencing on the first day of the
calendar month coincident with or next following the sixtieth
anniversary of his birth and shall be computed in accordance
with the provisions of Article 5. 01 (f) above.
SECTION 7 - Article 5 . 04 (d) of Ordinance 1901 is amended to read as
follows:
5.04 (d) The allowance payable to a disability Retirant prior
to his normal retirement date shall not be less than thirty-
five percent (35%) of his final average monthly earnings as
defined in Section 2 . 09 as of the date of his disability if an
ordinary disability retirement allowance is payable, and not
less than seventy-five percent (75%) of such final average
monthly earnings of a service connected disability retirement
is payable. For any Member who is in the classifications
within the AFSCME bargaining unit and who entered service with
the City on or after April 30, 1993 , or any Member who is in
the classification of "Other" and who entered service with the
City on or after August 1, 1993 , or any Member who is in the
classifications within the MBEBA bargaining unit and who
entered service with the City on or after February 21, 1994,
the allowance payable on a service connected disability
retirement shall not be less than sixty percent (60%) of his
final average monthly earnings. The allowance payable to a
disability Retirant after his normal retirement date shall be
an amount computed as a normal service retirement on the basis
of the final average monthly earnings and number of years of
creditable service he would have had if he had continued in
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service without interruption until his normal retirement date
at the maximum rate of pay in effect at the time of his
retirement for the classification at which he retired provided
that such allowance shall not exceed the amount payable to him
as a disability retirement allowance prior to his retirement
date or not less than his normal retirement benefit at his
normal retirement date. "Normal Retirement Date" as used in
this Section 5. 04 means the date determined in accordance with
Section 5 . 01 (a) on the assumption that the disability
retirement is deemed to be active service as an Employee for
this purpose.
SECTION 8 - Section 6. 02 is amended by adding subsection (d) to
read as follows:
6.02 (d) Notwithstanding subsections (a) , (b) and (c) above,
after April 1, 1993 , all persons in service with the City and
who are in the classifications within the AFSCME bargaining
unit and after August 1, 1993 , all persons in service with the
City and who are in the classification of "Other" , and after
February 21, 1994 , all persons in service with the City and
who are in the classifications within the MBEBA bargaining
unit shall contribute to the System ten percent (10%) of their
covered earnings throughout their service as an Employee.
SECTION 9 - That Section 6. 03 of Ordinance 1901 be amended to read
as follows:
6. 03 Contributions by City
(a) It is the intent of this Ordinance that the City
contribute to the System each year the amounts actuarially
determined to be required, in addition to contributions by
Members, to cover the cost of the benefits provided by the
System. In addition Provided, however, administrative expenses
shall be paid by the GIty System.
(b) An Actuarial investigation of the System shall be made at
lest oncc every thrcc (3) years annually to determine the
contribution payable by the City. On the basis of regular
interest and of such mortality and service as shall be adopted
by the Board of Trustees, the actuary shall determine,
immediately after making each valuation, the percentage of the
compensation of all Members required, in addition to
contributions payable by such Members, as contributions
payable by the City to provide the benefits of the System
currently accruing to such Members: the rate per centum so
determined shall be known as the "Normal Contribution Rate"
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and the contributions based on this rate shall be known as
"Normal Contributions" . In addition, the actuary shall
determine the part of the liabilities for benefits under the
System not covered by assets in hand, future contributions of
Members and the future Normal Contributions of the City and
this amount shall be known as the "Unfunded Accrued
Liability" ; the percentage of compensation of Members
determined to be payable on account of such liability shall be
known as the "Accrued Liability Contributions Rate" . Also, the
actuary shall determine the percentage of compensation
necessary to provide for payment of the administrative
expenses of the System ad this rate shall be known as the
"Administrative Cost Rate" . The actuary shall recommend on the
basis of each valuation a Normal Contribution Rate, and an
Accrued Liability Contribution Rate and an Administrative Cost
Contribution Rate.
(c) It is the intention of this Ordinance that contributions
be sat at such levels, as recommended by the actuary
designated by the Board, as to provide for a systematic
amortization of any unfunded accrued liability over a period
of forty (40) years from the date as of which such liability
is incurred.
SECTION 10 - REPEALER All Ordinances or parts of Ordinances in
conflict herewith be and the same are hereby repealed.
SECTION 11 - SEVERABILITY If any section, subsection, sentence,
clause or phrase of this Ordinance is held to be invalid or
unconstitutional by any court of competent
jurisdiction, then said holding shall in no way affect the validity
of the remaining portions of this ordinance.
SECTION 12 - EFFECTIVE DATE This Ordinance shall become
effective for the pay period beg' ing February 21, 1994 .
Passed and adopted this 6th day of Fe.ruary , 1994 .
I( op 0,09
Attest:
Ma•or
City Clerk
Approved as to Form:
L.�fitfi?2Z� 62a,
City Attorney
1st reading 2/2/94
2nd reading 2/16/94
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•
CITY OF MIAMI BEACH
C,TY -A'LL '700 CONVEN- ON CENTEMBEACH DA 33'39
OFFICE OF THE CITY MANAGER TELEPHONE: (305) 673-7010
FAX: (305) 673-7782
COMMISSION MEMORANDUM NO.
February 16, 1994
To: Mayor Seymour Gelber and
Members of the City Commission
From: Roger M. C.
City Manager V
Subject: Amendments to the Salary Plan and the General Employees Pension System
Ordinance
Administrative Recommendation:
The Administration recommends that the City Commission adopt two
ordinances implementing the recommendations of the special master affecting the
members of the Miami Beach Employees Benevolent Association by amending the
General Employees Retirement System and the Classified Employees Salary Ordinance
after a public hearing on second reading.
Background:
These two Ordinances are prepared in accordance with the
recommendations of the special master and the anticipated savings to be achieved in the
FY 93/94 Adopted Budget. The ordinance relating to pay levels amends the Classified
Employees Salary Plan in order to establish a revised pay plan which increases pay levels
two percent (2%) and establishes a second tier of salaries will average fifteen percent
(15%) lower at both the bottom and top of the pay scale for new employees. The
retirement related ordinance implements the recommendations of the Pension Systems
Review Committee, the "Green Report", and the recommendations of the special master
and institutes a bifurcated pension system with a reduced benefit level for new members
of the system covered in classifications within the Miami Beach Employees Benevolent
Association. Additionally, the ordinance increases the contribution levels from the
employees from eight percent (8%) to ten percent (10%) of covered salary. This
ordinance also provides an early retirement window with an incentive to encourage eligible
employees to retire.
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AGENDA
ITEM - 3 - EL
DATE 2-/ ,-°,11
These two ordinances, which implement the recommendations of the special
master for the MBEBAbargaining unit, will accomplish two necessary goals. First, the
retirement incentive should effectuate two years of anticipated employee turnover (30
employees) immediately. The resultant savings from replacing all of the early retired
employees (estimated at 30 employees) at the lower salary and benefit levels willprovide
the expense reductions anticipated within the FY 93/94 Adopted Budget. Second, the
same two years of turnover will allow the Administration to accomplish AffirmativeAction
Goals for Classified Employees within budget limitations and much sooner than would
otherwise be possible without an early retirement program.
Analysis:
The financial effect of the amended salary structure for new hires in the
Classified service within the MBEBAbargaining unit will be an approximate forty percent
(40%) reduction in salary cost for new employees. This is accomplished because the
existing salary plan has a twenty-five percent (25%)range from minimum to maximum and
the employees leaving are typically at the maximum salary for the position. With the
reduction of fifteen percent (15%) in the salary plan, new hires at the entry level pay for
the position will typically be at a salary forty percent (40%)lower than the employees that
they are replacing. Additionally, the changes in the pension system affecting new
members of the system will save approximately seven percent (7%) of the employees
salary as a contribution to the system (5% from benefit changes and 2% additional
contribution).
Members of the City Commission should also be aware that the retirement
incentive will produce a cost for the one-time payout amount of the employee's
accumulated leave balances which willbe more than offset by the savings produced from
salary and benefit reductions. The payout amounts have been considered in the net
savings projected in the FY93/94 Adopted Budget to be achieved through the retirement
incentive program.
There are sixty-six (66) Classified employees who would be eligible for the
retirement incentive. The retirement incentive option would be available to the eligible
employees for a sixty day period (the "Election Period") from the effective date of the
ordinance and would provide credit for two years of creditable service for all employees
over normal retirement age or credit for two years of age if the employee is within two
years of the normal retirement age within the period. Fifty-two (52) of these employees
are over age fifty(50) and would be eligible for additional service credits and twelve (12)
employees will be within two years of retirement during the Election Period in the
Ordinance and would be eligible for additional age credit.
� T5
These sixty-six employees have combined salaries of$1,856,718 annually and the
current leave balances for these employees total$289,636. It is anticipated that forty-five
percent (45% or 30) of those employees eligible for the incentive will accept the benefit
and retire.The retiring employees would have salaries of approximately $ 836,000 and it
is anticipated that approximately all of the positions (or 30) willbe refilled.With the new
salary structure and anticipating hiring at the entry level for the positions, the salaries for
the new hires willtotal$501,000 annually saving the City$335,000 in salary cost. The new
level of benefits in the pension system willproduce savings of$55,000 in reduced funding
cost. The total of $390,000 in savings will be offset in the first year by the leave
settlements of approximately $130,000 (45% of the leave balances) producing a net
savings for the first year of $260,000. The second year, without leave settlements, the
savings would be $365,000 based on expected performance salary reviews and the
amount would continue to grow as additional employee turnover occurred. The effect of
these two ordinances working together during the first year is to produce a savings to the
City which is six times greater than only implementing the bifurcated plan recommended
by the Pension Systems Review Committee.
Conclusion:
The implementation of the special master's recommendations along with
saving of$260,000 the first year and $365,000 the second year with the additional benefit
of the ability to more quickly achieve the affirmative action commitment of the City
Commission and the Administration provides the justification for approval of the
amendments to the General Employees Salary Plan and the amendments to the General
Employees Pension System on second reading.
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