2009-3664 OrdinanceORDINANC
AN ORDINANCE OF
COMMISSION OF THE
FLORIDA, AMENDING
EMPLOYEES' RETIREM
ORDINANCE 2006-3504;
ENTITLED "INVESTM
DIVESTMENT OF ALL
COMPANIES DOING
COUNTRIES OF SUDAN
ORDINANCES IN COQ
PROVIDING FOR SEVER
AN EFFECTIVE DATE.
No. 2009-3664
THE MAYOR AND CITY
CITY OF MIAMI BEACH,
THE MIAMI BEACH
:NT PLAN CREATED BY
AMENDING ARTICLE 9,
:NTS," TO REQUIRE
ASSETS INVESTED IN
BUSINESS WITH THE
AND IRAN; REPEALING ALL
FLICT THEREWITH; AND
BILITY, CODIFICATION, AND
WHEREAS, the Mayor and City Commission established the Miami Beach Employees'
Retirement Plan ("Plan") by Ordinance 2006-3504 for the benefit of certain Miami Beach
employees and their beneficiaries, and has subsequently amended the Retirement Plan; and
WHEREAS, the Mayor and City Con
and members of the Employees' Retiremei
consistent with the State of Florida requirer
plans by requiring divestiture of holdings in ~
contracts with or provision of supplies, milli
Sudan or Iran, as well as companies that are
Fission find it to be in the best interest of the City
Plan to invest Plan assets in a manner that is
ants governing the City's police and ire pension
~mpanies having business operations that involve
ry equipment or services to the governments of
omplicit in the Darfur genocide; and
WHEREAS, the City Commission finds that the Board of Trustees for the Plan shall not
have breached its fiduciary duty in any action taken to dispose of any such holdings; and
WHEREAS, the City Commission finds that the Board of Trustees for the Plan will have
satisfactorily discharged its fiduciary duties ofd loyalty, prudence, and sole and exclusive benefit
to the participants of the Plan and their beneficiaries by divesting of holdings in such companies.
NOW THEREFORE, BE IT ORDAIN
MIAMI BEACH, FLORIDA:
BY THE CITY COMMISSION OF THE CITY OF
SECTION 1. Anew section 9.05 of Article
created by Ordinance 2006-3504 is created
ARTICLE 9. Investments
of the Miami Beach Employees' Retirement Plan
read:
d
2
Notice of the provisions of this section shall be given to investment managers for
the Retirement System.
The Board and its named officers or investment advisors may not be deemed to
section 215.473. Florida_Statutes and the manner of the disnositinn_ if any ~~
Scrutinized Companies List.
SECTION 2. Repealer.
All ordinances or parts of ordinan
hereby repealed.
in conflict herewith shall be and the same are
SECTION 3. Severability.
If any section, subsection, clause or provision 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 ortlinance.
SECTION 5. Codification.
It is the intention of the Mayor and City
hereby ordained that the provisions of this of
Code of the City of Miami Beach, Florida. ThE
re-lettered to accomplish such intention, and t
"article," or other appropriate word.
Commission of the City of Miami Beach, and it is
finance shall become and be made a part of the
sections of this ordinance may be renumbered or
~e word "ordinance" may be changed to "section,"
SECTION 3. EFFECTIVE DATE
This Ordinance shall take effect the
PASSED and ADOPTED this 9th d
ATTEST:
Gt~,(,~iu.~
ROBERT PARCHER, CITY CLERK
F:\atto\TURN\ORDINANC\Employees Retirement -Divestiture i Sudan and Iran.doc
i
i
'3
9thday of December 2009.
of December , 2009.
I ERA BO R
MAYOR
/4~4?Pi~i~ /~
F~RP~A ,$~ EA$~1~:~Ir~G'~
~c ~}~ ~~~.~~~~
z/~/o
C`~y ata
September 30 of any year following identification of Retirement System assets
m M!AMIBEAC
OFFICE OF THE CITY ATTORNEY
JOSE SMITH, CITY ATTORNEY
COMMISSION MEMORANDUM
TO: MAYOR MATTI HERRERA E
MEMBERS OF THE CITY C~
CITY MANAGER JORGE M.
FROM: CITY ATTORNEY JOSE
SECOND READING/
PUBLIC HEARING
DATE: DECEMBER 9, 2009
SUBJECT: An Ordinance Amending Tle Miami Beach Employees' Retirement Plan
Created By Ordinance 2006-3604; Amending Article 9, Entitled "Investments,"
To Require Divestment Of Al1~Assets Invested In Companies Doing Business
With The Countries Of Sudari And Iran; Repealing All Ordinances In Conflict
Therewith; Providing For Severability; And Providing An Effective Date.
On October 14, 2009, the first reading was held on a proposed ordinance that would amend
the City's pension plan to require divestment of retirement plan assets that are invested in
companies doing business with Sudan or Iran. At the meeting, inquiries were raised by the
Commission as to whether the divestiture requirement could be expanded to include companies
doing business with North Korea and Cuba. The attached opinion from pension counsel addresses
this issue and recommends against such expa ~ sion of the proposed ordinance for various reasons
that are set forth therein.
i
Based upon the attached Opinion from pension counsel, the above-referenced Ordinance is
submitted for Second Reading/Public Hearingwithout further amendment.
F:\atto\TURN\COMMMEMO\Divestiture Ordinance 12-09.doc
Agenda Item ~ SA
Date t 2 -~j -o S
~; ~; -
~~~~L
LEWIS, LONGMAN & WALT<ER, I?A.
n i i u r ~~ i r ~, i i n yr
REPLY TO: TALLAHASSEE
MEMORANDUM
TO: Jose Smith, City Attorney
City of Miami Beach
FROM: Jim Linn and Glenn E. Thomas
DATE: October 29, 2009
RE: Miami Beach Employees' Retirement Plan -Divestiture Ordinance
This responds to your request for our comments on a proposed amendment to an ordinance
amending the Miami Beach Employees' Retirement Plan. The ordinance, which we understand
passed on first reading on October 14, 2009, would require divestment of Retirement Plan assets
invested in certain companies doing business in Sudan or Iran, as well as companies complicit in
the Darfur genocide. The ordinance, which is modeled on state legislation concerning the
Florida Retirement System and local police and firefighter pension plans, would specifically
require divestment of Retirement Plan holdings in "scrutinized companies" identified by the
State Board of Administration pursuant to section 215.473, Florida Statutes.
"Scrutinized companies" are defined in section 215.473 as companies with business operations
in Sudan with revenues or assets linked to oil-related or power-production activities, or
companies that supply military equipment within Sudan; or companies that are complicit in the
Darfur genocide; as well as companies with business operations that involve the Government of
Iran or that have revenues or assets linked to Iran and involve oil-related or mineral-extraction
activities in Iran.
The ordinance incorporates the definition of "scrutinized company" in section 215.473. In
addition, the ordinance contains language from 2009 Senate Bill 538 (Ch. 2009-97, laws of
Florida), which requires police and firefighter pension plans to divest holdings in scrutinized
companies by September 30, 2010. SB 538 also provides that police and firefighter pension
boards that divest pension fund assets in accordance with state law "may not be deemed to have
breached their fiduciary duty" and "shall have satisfactorily discharged the fiduciary duties of
loyalty, prudence, and sole and exclusive benefit to the participants of the pension fund and their
beneficiaries," if the actions taken are consistent with the duties imposed by section 215.473,
Helping Shape Florida's Future®
BRADENTON JACKSONVILLE TALLAHASSEE WEST PALM BEACH
1001 3`" Avenue West 245 Riverside Avenue 2600 Centennial Place 1700 Palm Beach Lakes Blvd.
Suite 670 Suite 150 Suite 100 Suite 1000
Bradenton, FL 34205 Jacksonville, FL 32202 Tallahassee, FL 32308-0572 West Palm Beach, FL 33401
(941) 708-4040 (904) 353-6410 (850) 222-5702 (561) 640-0820
Fax: (941)708-4024 Fax: (904)353-7619 Fax: (850)224-9242 Fax: (56])640-8202
www.llw-]aw.cotn
October 29,2009
Page 2
Florida Statutes. Similar language concerning the fiduciary duties of Miami Beach Employee
Retirement Plan pension board members is included in the ordinance.
It is our understanding that on first reading, a question was raised as to whether the ordinance
could be amended to also require divestiture of Retirement Plan holdings in companies doing
business with North Korea and Cuba. Although the City Commission may have a legitimate
basis for such an amendment, in our opinion the amendment would be ill-advised for several
important reasons:
1. The amendment requiring divestiture of Retirement Plan holdings in companies doing
business with North Korea and Cuba goes beyond the definition of "scrutinized
company" in state statute. As a result; the City pension board would be required to
identify companies doing business with North Korea or Cuba, which could be an
expensive and time-consuming process. ;
2. The Florida State Board of Administration (the agency that is responsible for managing
the investment of Florida Retirement System assets) has spent significant time and
resources to develop a process for identifying "scrutinized companies" that have
prohibited business dealings in Iran, Sudan and Darfur. The SBA's list of "scrutinized
companies" is updated quarterly. By relying on the SBA's list of "scrutinized
companies," the City pension board (as well as police and firefighter pension boards
throughout Florida) have an authoritative source on which to base their divestment
decisions. If a company believes it has been wrongly indentified as a "scrutinized
company" under state law, there is a procedure for resolving the issue with the SBA that
does not require the City's pension board to expend time or money. Under the proposed
amendment, the City pension board would be required to make its own determination as
to whether particular companies were engaged in business with North Korea or Cuba,
and then would be required to defend its decisions, if challenged.
3. Finally, the ordinance contains language similar to that in SB 538 that makes it clear that
the pension board, its officers and investment advisors may not be deemed to have
breached their fiduciary duty in any action taken to dispose of any investment in a
scrutinized company "if the actions it fakes are consistent with the duties imposed by
section 215.473, Florida Statutes..." The proposed amendment, by expanding the
definition of "scrutinized company" to include countries that are not included in section
215.473, could expose the City pension board and its investment advisors to potential
liability for divestment decisions that are not contemplated by state law.
For the foregoing reasons, we recommend against adopting an amendment to the ordinance
which would require divestiture of Retirement Plan holdings in companies doing business with
North Korea and Cuba.
Please feel free to contact us if you have any questions.
- ";- ~evx`• w_ " '~:.7I~URSDA'.1(,°I~IDN~MBBFt~19,;2009 1 ~".9'f~(B
__ _...._ CITY OF MIA~NII BEACH ~ •, .E .~ ~ -.
NOTICE OF PUBWC HEARINGS
~;; ~ he Mayor~d
NOTICE IS HEREBY given that second readinFlo da Pn the Comm-s9ion~ ambexs; 3rd floor City
City=Commission, of the: C'itY of Miami Beach, .peceniber 09, 2009.
`Ha11,1700 Con3er>tion Center Drive,'Miami'Beach, Florida, on Weuldesday,-
to consider the following y
10'15~m.. -:. ~ '~-~ 'lo ees' ~ietireme~t Pian Created lay Ordinance 2006-
Or¢inance Amending The?Miami'Beach.Grrip Y wire D~estment pf~lkll"Assets Invested In
3504'-Amending~Article 9,'Entitled Investments>" TD Aeq ealin " .AII-Ardinances In ..
.Companies Doing`Business.~fV'dh The Countries Of Sudan And Iran; Rep. 9 -
Conflict Therewith. ' ~ ~~ ~
Inquiriestt!aybe'directedto the.Legal Departrnent~at (305) 673 7470•. '.
r '. - er 82, "Public-,
10:35.a m.__:__ Amending Chapt .
A,Fj•Ariima~r?ce ~ridmgThe-Code Of T`I~City ~ ~amDv~sion 6~"Prohibltec(S-9ns~'((lver Public
Prpp~r".}UticJa IV _: uses In-public Flight~Of aYm And Flagpoles; And `Amending-Chapter
jProperty," Section 82=411 To~Add An.ExemptionFor Flags
" Artici§=f11, "Prohi6Red Signs," Section 138-72 "Pennants, Banners, Streamers,'FThat
~1~38, "Signs, FI s And. Flagpoles And To Clarify
'Auf~FlagPol~°.To.Create A:Procedure For Temporary a9 bills Of-Cultural
The "section ~!RPlies To, Flags Of Nationally. Or Intemattonally Recognized SYm . , n _ _
s3 . ^ f
;Diversity ..: - ,. ,._ ,., •,t ~. -°`
'lnquines'm~y`be direStsd°to the Planning Department at'(305) 673-?550_-
40~Q a m , . ~- .. 4 G `: 1 w-,x ` ~ '+ ,; _ " B~ V,/kri-ending.
'+An~Ortlmance Amending C4~aPter 8~=Of The,C!tY Co~1e,;En~~led :Publ~c`RropartY :'. y .
Of Public Facilities And T Pbrovide That The Port on Of The City Owned
Article VI, Entded "Naming . To::
By Amending Section 82-501, Entitled "Generally, t From The-,Prau~sions.Af Said.;
ithin'ARos Del. Mar Fark;,(LOcated On-Collins Avenue Between 76~9nd;77 Streets)
P,igperty ,y~I
Be.Known As The "Altos. CeI .Mar SculPfune Park;":Shall Be sine '
Awned •Proper`tq Continues To'Be.Operated By-Aftos:Aei.;
Artii;le V,, -i=or So "long As `Said Cry-_ oration,' As A Sculpture Park- Which Is Free And
iJlar Sculpture Park, Inc., •A Not For Profit'Corp
`~OpenToTtie Gen~i`al`P~blic, And~The Co~~~MSP Datedluae.3~?A09 ~n~~That.Certain
~`Managernent-A9~mecrt'Between rtY~
,..Inquiries may be'diracted to the"Tcs°rism and C~iltural Development Department-8t (305) 6 ~ .7577
~10;30am}` ~+• -- , ~ Coda~Errtdled-'"Miscellaneous$
'Art Ordinance Amending `Chapter 70 Of ~tte'Mtarhi;'Be~end Fl9 ~~~s~n~ Entitled"";Generally"
QfEenses~°~BY Amending Article•111,-Eritftled~"~raftni° f3Y To Remove Graffiti ~:
By~Arnertding Section 70-:1-26;.Entitled "Respon~s'~ing er'?R P n ~)`~ Fropecty:Owciers
_;Graffiti.F(ernoval And Notice;:Enforcen-ent ~Y:;
..With. Re9a~ To The Abatement ~ p~ ~partmentnat (305) 673-7555. F ~~
~Inqumes may be dire6ted to;the _ _ .
°~. . ~ •-- ~ Amending,Art~cle
11.00~.m: Code ~ntdled •Human+~elahons;, .
Q~~rrce.Amending Chapter 62 Qf:The Cih! ~ utther
=ll,:Sectwur62-32 Ti-ersm ~~ RonnaNy~Name ~dM~DHBeacF Human Rights' Qrdmanc~SrF ~~
;Article;(And Sections TJ~ereto),.As~'The Adw" ° ?o Amenrmg:'[he Swsting `Provisions And',
',~Ameiiding:Article II, Sections F2'31'Through lit-G6,_
`Where`Noted, Creating: New Pro aintaSHe~iringYProcedures, And Pre~nae s And P dvtdri9 Fu~hegr-
~bomi3laints, Mediatiori>t3f Dornp. ._ _ _ . _ .._.- _ - . " _
for Codif'rcationr , - - - _-
artment;at.(305).fi7.3~470 :~ _ =t
=Mgdmes'i'nay bslcfirected~`to the.Lega4E3ep . - resented by:an.agen~,~~
~~~TEpE.STED pAR~AI?S= ors-invdeii 'to ~qpe~ ¢ { thesCit~c Camm~ssior~,~c~~e Ciiy' Clerk, :1 ADO..
' or`tQ-express their mews =in writing add~sssed Glei9c",s '
="Converitron GQrder Unws, .1st Floor, GitY'~;-Fia11,.;Miami Beach, Florida 3>3`4~.~~CDp~as =of lhese~
'=oidinarices are?~±iaii'abte.for.p~blic inspection :during r~o4iiaa4busmess hovers=~ theTity
170.0 Cuny.~tion !Center Drive 1si:F~iooty City Mail„ Mranai =Beach; +Ftonda 33139 l?ns
;meet~o may be'corrtirar~ed ~ncl finder ~rck~ ~i~stances-add~ior~al Iegat nc~EuCe ~ouid no4'be
;;provider .. ` ` ' . _." i -Robert E: ~Paroher, City Clerk ':
• - City of Irn Beach ".
. ~ ~ . ' n degides"
' Pursuarrtto Section 286:01.05 .Fla. Slat„ !he•Gity hereby advises the public that: if a perso
;to aRpeal,any dernsion~xrade by-tha L`dy t~,cirnr^tssiaasi with+-~spect to any~-mattler'aorasi~~ ^~~ ~,
on must erasure-'that ~'beisbatim,stecOOa: of, the p,
n5eeting or` its he~arir~i; such pe-'s vrtijoh 3he•aFtPe~.is fA'be.Esased:
-trade, which record aticludes~the-teatinYOrtiy andseyidence'"upon o{ othervuise'
fins taotice:does not oonstitOte" consenf'b~! the'C~ity"forthe introCtuofCoc~•or ad~lisStvn _
~irtadmi§sible o~:irreievart evidence t-~ou,does at authoaa~-chaUeriga~s•~~apFeals ri+ca .othervyisa
~allew~eck_t~y~lawt . :: ,- - _ .,~•ig~~ragdage~irtte-~preEers* n:~~~ °n,a~esslDr
To~raqu~tthis~natenal ih ac~sssibte'fom~t, ,~xtmaent<c3r~pa`rtlcipata'IFl•sny-
persons,,wdh'd~sabil~ies~'and~D~~-aCDDFnI'rlDdatiOfl'tO~eVi9W "~1y "fi'~8~~'~
,cry sP,onsored p~eding, °please~orrtact (305) 604-2489.Ma~); ~'05)l`~'"l?1:83f ~
in a~dJanae to initiafe;your request TTY.;users may.also call„711 (Florida Relay. Service). _
`Ad #581