2009-26996 ResoRESOLUTION NO. 2009-26996
A RESOLUTION RATIFYING A MEMORANDUM OF
UNDERSTANDING BETWEEN THE CITY OF MIAMI BEACH AND
THE AMERICAN FEDERATION OF STATE, COUNTY AND
MUNICIPAL EMPLOYEES, LOCAL 1554 (AFSCME) 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 American
Federation of State, County and Municipal Employees, Local 1554 (AFSCME), 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, AFSCME held a ratification vote of its members on the MOU on December
10, 2008; and
WHEREAS, of the 64 members who participated, 100% 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.
~009-,2 ~~iy~
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 American Federation of State, County
and Municipal Employees, Local 1554 is hereby ratified.
Adopted this 28th
Attest:
~" ~~~~
Robert Parcher
City Clerk
day of January, 2009
atti Herre a Bower
~Aayor
APPROVED AS TO
FORM & lANGUAGE
& FOR EXECUTfON
~~~P9
City Attar y Date
T:~AGENDA~2009~,lanuary 28\RegularWFSCME DROP RATIFICATION RESOLUTION - revised.doc
COMMISSION ITEM SUMMARY
Condensed Title:
A Resolution Ratifying A Memorandum of Understanding Between the City of Miami Beach And The
American Federation of State, County and Municipal Employees, Local 1554 (AFSCME) To Add A
Deferred Retirement Option Plan (DROP) To The Miami Beach Employees' Retirement Plan
MBERP .
Ke Intendecf outcome 5u orted:
Attract and Maintain a Quali 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 AFSCME Union to add a DROP to the Miami Beach Employees' Retirement Plan (MBERP)?
item 5ummary~Kecommendation:
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 American Federation of State, County and Municipal Employees, Local 1554
(AFSCME), 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
December 10, 2008, AFSCME held a ratification vote amongst its members. A total of sixty-four (64)
members participated in the ratification vote. Of the sixty-four (64) members voting, 100% voted in
favor of adding the DROP. The Administration recommends that the Mayor and City Commission
hereby ratify the Memorandum of Understanding between the City of Miami Beach and AFSCME to
add a DROP to the Miami Beach Employees' Retirement Plan (MBERP).
Board Recommendation:
Financial Information:
Source of Amount ' Account Approved
Funds: q
2''
3<
4' '
OBPI Total
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 yea~ 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
L Department Director I''Assistant City Manager f `~ty Manager ,,,....~
- /'~-+~
T:WGENDA~2009Uanuary 28\RegularlAFSCME DROP Ratification Vote Summary - revised.doc
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m 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
SUB~ECT: A RESOLUTION RATIFYING A MEMORANDUM OF UNDERSTANDING
BETWEEN THE CITY OF MIAMI BEACH AND THE AMERICAN FEDERATION
OF STATE, COUNTY AND MUNICIPAL EMPLOYEES, LOCAL 1554 (AFSCME)
TO ADD A DEFERRED RETIREMENT OPTION PLAN (DROP) TO THE MIAMI
BEACH EMPLOYEES' RETIREMENT PLAN (MBERP).
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 American Federation of State, County
and Municipal Employees, Local 1554 (AFSCME), 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 December 10, 2008, AFSCME held a ratification vote
amongst its members. A total of sixty-four (64) members participated in the ratification vote. Of the
sixty-four (64) members voting, 100% voted in favor of adding the DROP.
CONCLUSION
The Administration recommends that the Mayor and City Commission hereby ratify the
Memorandum of Understanding befinreen the City of Miami Beach and the American Federation of
State, County and Municipal Employees, Local 1554 (AFSCME) to add a Deferred Retirement
Option Plan to the Miami Beach Employees' Retirement Plan (MBERP).
J MG/ri
T:IAGENDA12009Uanuary 28\RegularlAFSCME DROP Ratification Vote Memo - revised.doc
MEMORANDUM OF UNDERSTANDING
This Memorandum of Understanding (MOU) is entered into this ~ day of December.
2008, befinreen the City of Miami Beach (City) and the American Federation of State,
County and Municipal Employees (AFSCME), Locai 1554 to add a Deferred Retirement
Option Plan (DROP) for all employees in AFSCME.
ln accordance with the applicable provisions of the Miami Beach Employee's Retirement
Plan, members inust 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.
lt is proposed that the Miami Beach Employees' Retirement Plan be amended as follows
to inc(ude the DROP:
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.
lt is proposed that the Miami Beach Empfoyees' 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 proQram 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
~ rnonthlv 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
i
' Plan created by Ordinance 2006-3504, as subsequently amended, is created to read:
; 5.13 A deferred retirement o~tion plan ("DROP") is herebv established for el9ible
Members. as follows:
.
~
(a) Eliqibilitv and particiqation:
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.
3. An eliaible Member mav participate in the DROP for a maximum of
thirtv-six (36) months.
4. An eliqibfe Member who elects to participate in the DROP must
provide at least thirtv (30) davs' advance.written notice to the Citv of
his or her eiection to participate in the DROP. A Member who elects to
participate in the DROP mav elect to terminate DROP participation
and Citv emplovment sooner #han the maximum DROP period with
thirtv (30) davs' advance written notice to the Citv
(b) DROP plan features:
1. An eliqible Member who elects to participate in the DROP will be
considered to have retired for pumoses of the Plan uqon entrv into the
DROP, exceot that such Member shall be eliqible to vote for and
serve as an Emqlovee member of the Board of Trustees durinq the
DROP qarticipation period. The Member's monthlv retirement benefit
deterrnined in accordance with the Pfan based on vears of creditable
service and final averaqe rnanthlv eaminqs at the time the Member
enters the DROP, will be paid into the Member's DROP account everv
month during 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 enterina the
DROP. No Citv normal cost contributions shall be reauired after a
Member enters the DROP and DROP participants shall be excluded
from the covered pavroll for the Plan.
3. A Member who elects to participate in the DROP shall not be eligible
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 durinq the DROP participation period
4. A Member who efects to qarticipate in the DROP shail retain the
earned balance of annual_and sick leave as of the date of entrv into
the DROP and shafl continue to earn annual and sick leave durin
the DROP period in accordance with applicable City ordinances
Alternativelv, at the time of entrv into the DROP a
Member mav request full or partial pavment of the eamed balance of
annual and sick leave as of the date of entrv into the DROP up to the
maximum allowed bv applicable Cifir ordinances for emplovees who
terminate Citv emplovment but reduced bv the amount of annual and
sick leave used for the qurchase of additional credited service under
section _ 4.03, if anv at the Member's rate of compensation upon
enterina the DROP• provided that the Member must retain at least 120
hours of accrued sick leave after anv such pavment Upon
termination of Citv emplovment a Member who has participated in the
DROP shall be eliqible to receive paYment for the eamed balance of
annual and sick leave as of the date of termination u to the
maximum aliowed bv applicable Citv ordinances for emplovees who
terminate Citv emplovment but reduced bv the amount of annual and
sick leave for which oavment was received upon entrv into the DROP
if any; and further reduced bv the amount of annual and sick Isave
used for the purchase of additional credited service under section
4.03, if anv. (n no event shall pavments for accrued annual or sick
leave be included in a membe-'s Eaminas for purposes of the Plan
5. As a condition of participatinq in the DROP the Member must aaree
to terminate Citv emplovment at the conclusion of the DROP period
and to submit an irrevocable letter of resi nation statin this rior to
enterinq the DROP A Member who elects to participate in the DROP
must also submit an irrevocable written DROP election rior to
enterina the DROP on a form qrovided bv the Board
6. At the conclusion of the DROP qeriod and upon termination of Citv
employment 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 ~avable in accordance with Section 5 07
~ f ~
~
8. Participation in the DROP is not a quarantee of Citv emplovment and
DROP participants will be subiect to the same terms and conditions of
emqlovment that are applicable to emplovees who are not DROP
participants.
9. During participation in the DROP the Member's monthlv retirement
benefit will be paid into the DROP account and shall be
creditedldebited with earninqs/losses as provided herein The
Member mav direc# that their DROP account be invested in anv of the
investment options approved bv the Board on forms provided bv the
Board. Anv qains on the Members DROP accaunt investments shall
be credited to the Member's DROP account• and anv losses incurred
bv the Member shal~ be deducted from the Member's DROP account
balance, and shall not be made up bv the Citv or the Retirement Plan
A Member's DROP account shaH onlv be credited or debited with
eaminqs/losses while the Member is a partici~ant in the DROP
10. A DROP artici ant ma desi nate a beneficia or beneficiaries for
his/her DROP account on a form qrovided bv the Board
19. Within thirtv (30) davs followinp a DROP partiapanYs termination of
Citv emolovment or death whichever occurs first the Member or in
the event of the Member's death the Member's desi nated
beneficiarv, mav submit a written election on a form aqproved 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 paraqraph (b)9 below) in a cash lump sum unless
the Member elects to have all or anv portion of an eliaible rollover
distribution ~aid directlv to an IRA or eligible retirement plan specified
by the Member in a direct rollover Anv such direct rollover shall be
processed in accordance with Article 12 of the Pfan ln 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 fallowinq 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 earninps/losses
I
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 desipnated beneficiaN shall have the
same riqhts as #he participant with respect to the distribution of the
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 e~cient operation of DROP but shatl not adopt anv
rufe that is inconsistent with this Ordinance or the Pian.
14.The DROP shall be administered so that the Plan remains ualified
under the Intemal Revenue Service Code and in com liance with
a licable laws and re ulations.
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:
American Federation of State, County and
Municipal Employees (AFSCME), Local 1554
BY:
Perman Terry
President, AFSCME
DATE:
City of Miami Beach
BY:
Jorc~ M. Gon
City Manager
DATE: /Z ~ $ ?~~~g'
:• <~~