92-2809 Ordinance
ORDINANCE NO.
92-2809
AN ORDINANCE OF THE CITY OF MIAMI BEACH,
FLORIDA, AMENDING ORDINANCE NO. 88-2603, WHICH
CREATED THE RETIREMENT SYSTEM FOR UNCLASSIFIED
EMPLOYEES AND ELECTED OFFICIALS, BY ESTABLISHING
A DIFFERENT BENEFIT LEVEL FOR EMPLOYEES ENTERING
THE SYSTEM ON OR AFTER OCTOBER 18, 1992,
PROVIDING FOR A REPEALER, SEVERABILITY AND AN
EFFECTIVE DATE.
WHEREAS, the City of Miami Beach, Florida, has
established the Retirement System for Unclassified Employees and
Elected Officials (the "System") with the passage of Ordinance No.
88-2603, and,
WHEREAS, the City desires to amend this System to
establish a different level of benefits for all persons entering
the System on or after October 18, 1992, and,
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF
THE CITY OF MIAMI BEACH, FLORIDA:
SECTION 1.
That Section 2.10 of Ordinance 88-2603
"Definitions" be amended to read as follows:
2.10 For any Member who became a Member on or before October
17. 1992, "Final Average Monthly Earnings" means, one-twelfth
of the annual earnings of the Member during the last year of
his creditable service. For any Member who became a Member on
or after October 18. 1992. "Final Averaqe Monthly Earnings"
means. the averaqe of the hiqhest three years of annual
earninqs durinq his years of creditable service divided by
thirty-six (36l.
SECTION 2.
That Section 5.01 of Ordinance 88-2603 be amended
to read as follows:
5.01 Normal Service Retirement Allowance
(a) The normal retirement date of a person who
became a Member on or before October 17. 1992,
shall be the first day of the calendar month
coincident with or next following the fiftieth
anniversary of his birth and the date as of which
he completes five years of creditable service as an
Employee, or five years of creditable service as an
Elected Official. The normal retirement date of a
person who became a Member on or after October 18.
1992. shall be the first day of the calendar month
coincident with or next followinq the sixtieth
anniversary of his birth and the date as of which
he completes ten years of creditable service.
(b) The normal service retirement allowance
payable upon the retirement on or after his normal
retirement date of a Member who became a Member on
or before October 17. 1992, who did not serve both
as an Employee and as an Elected Official shall be
as follows: four per centum (4%) of his final
average monthly earnings multiplied by the number
of his years of creditable service, provided that
such allowance shall not exceed ninety percent
(90%) of his final average monthly earnings. The
normal retirement allowance payable upon the
retirement of a Member who became a Member on or
after October 18. 1992. on or after his normal
retirement date shall be as follows: three per
centum (3%l of his final averaqe monthlY earninqs
multiplied by the number of his years of creditable
service. provided that such allowance shall not
exceed eiqhty percent (80%) of his final averaqe
monthly earninqs.
(c) The normal service retirement allowance
payable upon the retirement on or after his normal
retirement date of a Member who served both as an
Employee and as an Elected Official shall be as
follows:
(1) four per centum (4%) of his final average
monthly earnings as an Elected Official
multiplied by the number of his years of
creditable service as an Elected Official for
service on or before October 17. 1992. and
three per centum (3%) of his final averaqe
monthly earninqs as an Elected Official
multiplied bY the number of his years of
creditable service as an Elected Official for
service on and after October 18. 1992. plus,
(2) four per centum (4%) of his final average
monthly earnings as an Employee multiplied by
the number of his years of creditable service
as an Employee for creditable service on or
before October 17. 1992. and three per centum
(3%l of his final averaqe monthly earninqs as
an Employee multiplied by the number of his
2
years of creditable service as an Emplovee for
creditable service on and after October 18.
1992; provided, however, that the total normal
service retirement allowance provided under
this subsection (c) shall not exceed ninety
percent (90%) of the higher of his final
average monthly earnings as an Elected
Official or as an Employee for any Member who
was a Member on or before October 17. 1992.
and the normal service retirement allowance
provided under this subsection (cl shall not
exceed eiqhty percent (80%l of the hiqher of
his final averaqe monthly earninqs as an
Elected Official or as an Employee for any
Member who becomes a Member on or after
October 18. 1992.
SECTION 3. That section 5.02 of Ordinance 88-2603 "Vested
Retirement Allowance" be amended to read as follows:
(a) Any Member who became a Member on or before
October 17. 1992 with less than five (5) years of
service whose service with the city is terminated
voluntarily or involuntarily shall be eligible for
a refund of his accumulated employee contributions
plus the amount in section 5.07(a). Anv Member who
became a Member on or after October 18. 1992 with
less than ten (10) years of service and whose
service is terminated voluntarilY or involuntarilY
shall be eligible for a refund of his accumulated
contributions plus the amount in section 5.07(a).
(b) Any Member who became a Member on or before
October 17. 1992 with five (5) or more years of
service and whose service with the City is
terminated prior to the date of which he would
first become eligible for retirement on a normal
service retirement allowance shall be eligible for
a refund of his accumulated employee contributions
plus the amount in Section 5.07(a); or, the Member
may elect to not get the refund but instead allow
all of his contributions to remain in the
Unclassified System as a vested retirement
allowance. Any Member who became a Member on or
after October 18. 1992 with ten (10l or more years
service and whose service with the city is
terminated prior to the date of which he would
3
first become eliqible for retirement on a normal
service retirement allowance shall be eligible for
a refund of his employee contributions plus the
amount in section 5.07(al: or. the Member may elect
not to get the refund but instead allow all of his
contributions to remain in the Unclassified System
as a vested retirement allowance.
The vested retirement allowance shall be a deferred
allowance commencing on the earliest date as of
which a Member with his years of creditable service
would first be eligible for retirement on a normal
service retirement allowance and shall be equal to
the amount computed in accordance with this Article
5 as a normal service retirement allowance on the
basis of the Member's final average monthly
earnings and creditable service at the time of his
termination and his age as of the date on which
paYment of the allowance commences.
SECTION 4. That section 5.03 (d) (1) "Disability Retirement
Allowance" be amended to read as follows:
(d) (1) For any Member who became a Member on or before
October 17. 1992, ~the allowance payable to a disability
Retirant prior to his normal retirement date shall not be
less than twenty-five per centum (25%) of his final
average monthly earnings as defined in section 2.10 as of
the date of his disability if an ordinary disability
retirement allowance is payable, and not less than fifty
percent (50%) of such final average monthly earnings if
a service connected disability retirement allowance is
payable. For any Member who became a Member on or after
October 18. 1992. the amount payable to a disability
Retirant prior to his normal retirement date shall not be
less than thirtY-five percent (35%l of his final averaqe
monthlY earninqs as defined in section 2.10 as of the
date of his disability if an ordinary disability
retirement allowance is payable. and not less than sixty
percent (60%l of such final averaqe monthly earnings if
a service connected disability retirement allowance is
payable. Under this Section, the period of disability
retirement is deemed to be active service and when the
normal retirement date occurs, the disability Retirant
after his normal retirement date is based on what the
Retirant would have received if disability had not
occurred. The allowance payable to a disability Retirant
after his normal retirement date shall be an amount
4
computed as a normal service retirement allowance 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 service without the disability interruption.
SECTION 5. That section 5.08(b) "Post Retirement
Adjustments" of Ordinance 88-2603 be amended as follows:
(b) "Improvement Factor" for the purpose of this section 5.08
means an increase of one and one half per centum (1 1/2%) per
annum in retirement allowances or pensions for each year
commencing on October 18 following the completion of one full
year after the commencement date of the retirement allowance
or, if applicable to pensions payable as the result of the
death of a Member prior to his retirement, one full year after
the commencement date of the pension. For any Member who
became a Member on or before October l7. 1992, ~~he
Improvement Factor shall be compounded, and shall be applied
to the retirement allowance or pension payable as the result
of the retirement, termination or death of a such Member,
whichever is applicable. For any Member who became a Member on
or after October 18. 1992. the Improvement Factor shall not be
compounded. and shall be applied to the retirement allowance
or pension payable as of the retirement. termination or death
of such Member. whichever is apPlicable.
SECTION 5.
REPEALER
All ordinances or parts of ordinances in conflict herewith be
and the same are hereby repealed.
SECTION 6.
SEVERABILITY
If any section, 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.
5
SECTION 7.
EFFECTIVE DATE
This ordinance shall become effective 10 days after adoption.
PASSED AND ADOPTED this 8th
October
1992
ATTEST:
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CITY CLERK l..Jta/fit...
1st reading 9/16/92
2nd reading 10/8/92
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6
CITY OF
MIAMI BEACH
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH FLORIDA 33139
COMMISSION MEMORANDUM
TELEPHONE: (305) 673-7010
,FAX: ~305) 61)7782
NO. :51t,,-qzJ~~
OFFICE OF THE CITY MANAGER
TO:
Mayor Seymour Gelber and
Members of the City Commission
DATE: September 16, 1992
FROM:
Roger M, Ca--in J J / Ii k-
City Manage~ -
SUBJECT:
Amendments to the Salary Plan and the Pension System for Unclassified
Employees
Administrative Recommendation:
The Administration recommends that the City Commission adopt two ordinances
amending the Retirement System for Unclassified Employees and Elected Officials on first
reading and schedule a Public Hearing and second re:ading for the two o:'dinances during
the October 7, 1992, City Commission meeting.
Back~round:
These two Ordinances are prepared in accordance with the anticipated savings to
be achieved in the FY 92/93 Proposed Budget. The ordinance relating to pay levels, which
is on this agenda for second reading, amends the Unclassified Employees Salary Plan in
order to establish a revised pay plan for new employees which will average fifteen percent
(15%) lower at both the bottom and top of the pay scale. The two ordinances related to
this memorandum amend the Retirement System for Unclassified Employees and Elected
Officials on this first reading. The first retirement related ordinance implements the
recommendations of the Pension Systems Review Committee, the "Green Report", and
institutes a bifurcated pension system with a reduced benefit level for new members of the
system. The second retirement related ordinance provides an early retirement window with
an incentive to encourage eligible employees to retire.
These three ordinances, which should be considered as a package, will accomplish
two necessary goals. First, the retirement incentive should effectuate two and a half years
61
AGE NDA
ITEM
R-3-I
DATE_J 0- ~- q2.
of anticipated employee turnover (22 employees) immediately. The resultant savings from
replacing a limited number of the early retired employees (estimated at 17 employees) at
the lower salary and benefit levels will provide the expense reductions anticipated within
the FY 92/93 Proposed Budget. Second, the same two and a half years of turnover will
allow the Administration to accomplish Affirmative Action Goals for Unclassified
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 Unclassified
service 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 i>e 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 ten
percent (10%) of the employees salary.as a contribution to the system.
Members of the City Commission should also be aware that the retirement incentive
will p~oduce a cost for the one-time payout amount of the employee's accumulated leave
balances which will be 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
FY 92/93 _Proposed Budget to be achieved through the retirement incentive program.
There are thirty-two (32) unclassified 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. Twenty-four of these employees are
over age fifty (50) and would be eligible for additional service credits and eight (8)
employees will be within two years of retirement during the Election Period in the
Ordinance and would be eligible for additional age credit. The thirty-two employees are
listed below:
Name
Diane Alexander
Barbara Bargeman
Department
Eco. & Comm. Dev.
Mayor & Comm.
Name
Bill Harrison
Jane Hines
Department
City Manager
City Manager
C:J
Eloy Bauleth Computers Bruce Lemle Computers
Phylis Berger Legal Jamie Mitrani Building
Jim Beauchamp Risk Mangt. Gary Ortega Building
Fred Braeseker Computers Estrella Pena Purchasing
Pat Brown Legal Teresita Roche Police
Prospero Cabrera Planning & Zoning Domingo Rodriguez Public Works
Diane Camber Bass Museum Mike Saclarides Code Enforcement
Arlene Clapper OMB Sandra Schneider Legal
Walter Coolidge Computers Octavio Serna Computers
Eddie Cox City Manager Roberta Sloane City Manager
Charlene Craig OMB Edward Stein Building
Edward Davis Purchasing Robert Taylor Computers
Grecia Ferro Building Randy Wilkinson Parks & Rec.
Paul Gioia Building Sylvia W ohl Finance
These thirty-three employees have combined salaries of $1,585,901 annually and the
current leave balances for these employees total $465,373. It is anticipated that seventy
percent (70%) (or 22) of those employees eligible for the incentive will accept the benefit
and retire. The retiring employees would have salaries of approximately $1,110,000 and it
is anticipated that approximately seventy-five percent (75%) of the positions (or 17) will
be refilled. With the new salary structure and anticipating hiring at the entry level for the
positions, the salaries for the new hires will total $500,000 annually saving the City $610,000
in salary cost. The new level of benefits in the pension system will produce savings of
$110,000 in reduced funding cost. The total of $720,000 in savings will be offset in the first
year by the leave settlements of approximately $325,000 (70% of the leave balances)
producing a net savings for--the first year of $395,000 which is forty percent (40%) of the
projected savings from changes in the pension plans projected in the FY 92/93 Proposed
Budget. The second year, without leave settlements, the savings would be $750,000 based
on expected performance salary reviews and the amount would continue to grow as
additional employee turnover occurred. The effect of these three ordinances working
together during the first year is to produce a savings to the City which is nine times greater
than only implementing the bifurcated plan recommended by the Pension Systems Review
Committee.
Conclusion:
The saving of $395,000 the first year and $750,000 the second Yt~ar 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
these two ordinances on first reading and the amendments to the Unclassified Salary Plan
on second reading.
C'j