C7E-Execute 1 Month Extension Agreement For Voluntary Employee Loan Program - BMCOMMISSION ITEM SUMMARY
Condensed Title:
A Resolution that the Mayor and City Commission hereby authorize the City Manager to execute a one
month extension, from December 31, 2012 to January 31, 2013, to the agreement for a voluntary
employee loan program through the BMG Money loans-At-Work Program to make available loans to
interested active employees of the City of Miami Beach, further referring renewal of the agreement versus
issuance of a new RFP, to the Finance and Citywide Projects Committee for their recommendation of the
aforstated matter.
Key Intended Outcome Supported:
Attract and maintain a quality workforce.
Supporting Data (Surveys, Environmental Scan, etc.):
N/A
Item Summary/Recommendation:
The BMG Money Loans-At-Work program provides a voluntary payroll deduction loan program to
employees through a non-traditional, unsecured loan to cover unexpected financial emergencies, with
repayment provided through payroll deduction. This program is currently provided to employees on a one-
year trial basis that will end on December 31, 2012. The program has proved to be an option for
employees who have no credit and are unable to secure emergency funds through traditional financial
outlets. The City does not bear any responsibility or liability through this program.
During the one-year trial period, one hundred twenty four (124) City employees have utilized the BMG loan
service. BMG has issued two hundred two (202) loans totaling $469,909. Of this total loan number, one
hundred sixty (160) were new loans and forty-two (42) were loans that employees have refinanced,
requesting an increase in the amount of their initial loan request. Of those loans refinanced, thirty two (32)
requested an increase in the amount of their initial loan and ten (1 0) requested an increase in the
repayment period, in order to spread their repayment out over a longer period. One (1) loan has been paid
off to date.
Based on the current employee utilization, the Administration recommends the BMG Loans-At-Work
program be extended for one month, from December 31, 2012 to January 31, 2013. However, the
Administration further recommends that the item be referred to the Finance and Citywide Projects
Committee for their recommendation to either continue the current program or to issue a Request for
Proposal, exploring what loan options may be available at lower interest rates.
Board Recommendation:
Financial Information:
Source of Amount Account
Funds: 1 N/A
D 2
3
OBPI Total
Financial Impact Summary: There is no financial impact to the City.
Clerk's Office Le islative Trackin :
Sue Radig, HR Administrator I, Employee Benefits
Si n-Offs:
Department Director Assistant City Manager anager
Rafael E. Granado, C
IBE CH 182
C?E-AGENnA llEM __,_~L--'-~-
DATE /21}.,-/Z,
City of Miami Beach, 1700 Convention Center Drive, Miami Beach, florida 33139, www.miamibeachfl.gov
COMMISION MEMORAMDUM
TO: Mayor Matti Herrera Bower and Members of the City Commission
FROM: Kathie Brooks, Interim City Manager
DATE: December 12, 2012
SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA, AUTHORIZING THE CITY
MANAGER TO EXECUTE A ONE MONTH EXTENSION, FROM
DECEMBER 31, 2012 TO JANUARY 31, 2013, TO THE AGREEMENT
FOR A VOLUNTARY EMPLOYEE LOAN PROGRAM THROUGH THE
BMG MONEY LOANS-AT-WORK PROGRAM TO MAKE AVAILABLE
LOANS TO INTERESTED ACTIVE EMPLOYEES OF THE CITY OF
MIAMI BEACH, FURTHER REFERRING RENEWAL OF THE
AGREEMENT VERSUS ISSUANCE OF A NEW RFP, TO THE FINANCE
AND CITYWIDE PROJECTS COMMITTEE FOR THEIR
RECOMMENDATION OF THE AFORSTATED MATTER.
BACKGROUND
This item was originally referred to and discussed at the June 23, 2011 Finance and
Citywide Projects Committee (FCWPC) meeting. At that time, the FCWPC opted not to
move forward with offering this payroll deduction loan program to City employees.
Subsequently, the FCWPC Chair asked that this item be placed on the October 27, 2011
FCWPC agenda for further discussion.
BMG Money offers all active full-time employees voluntary employee emergency loans
through a program called Loans-At-Work. This program provides employees the opportunity
to obtain the credit they may need to cover unexpected or emergency expenses. The BMG
Money Loans-At-Work program provides employees who have little or no credit the ability to
receive small, unsecured loans for emergencies, such as medical bills, home and vehicle
repair, or any other emergency. These loans are based on the employee's take home pay
and their ability to repay. If the employee meets the loan qualifications, the funds are
distributed directly to the employee and the employer is notified of the new loan and the
need to begin payroll deductions for repayment of the loan. Should BMG Money Loans-At-
Work deny the loan, the employee is provided credit counseling to determine their actual
loan needs, if any, and to educate them on the proper use of credit. Should the employee
default on the loan as they had either cancelled their payroll contribution or left the
employment of the City, BMG Money would be responsible to collect any outstanding loan
balance directly from the employee. The City would not have any responsibility at all in
collecting any delinquent loan balances or held liable in any way.
The City has one option for City employees who may need an emergency loan that can then
be paid off through payroll deductions. This option however is only available for those
employees who have a voluntary deferred compensation account through either ICMA-RC or
Nationwide (the City's vendors who provide voluntary supplemental retirement accounts to
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BMG Money Loans-at-Work Program
December 12, 2012
Page 2 of 3
our employees). In addition, City employees who are members of the Dade County Federal
Credit Union are able to apply for loans that are then paid off through payroll deductions
(although these loans tend not to be emergency loans but, rather, auto loans, home equity
loans, mortgages, etc.).
The Loans-At-Work program is a direct-to-consumer loan, designed for employees who do
not have access to traditional credit options, such as banks, credit unions, credit cards,
deferred compensation and/or retirement accounts. These loans are unsecured and based
on the following: ( 1) employee's employment; (2) employee's bi-weekly net take-home pay;
and (3) the ability for the employee to repay the loan. Although the program does not verify
the employee's credit, it does however provide the opportunity to build good credit, as the
loans are reported to the credit reporting agencies when paid off. If the employee separates
from City employment, that employee is fully responsible for the full repayment of the loan
with the City bearing no responsibility or liability at all for the repayment or collection of the
outstanding loan.
During the October 27, 2011 FCWPC meeting, the members questioned if the City provided
the program to its employees, was there an option to negotiate the rates to something lower
than the 23.75% to 29.75% rate currently charged. BMG Money indicated that the rates
charged were already lower than those charged for short-term loans by other providers, and
they would not be able to provide the service at a lower rate. The Administration did verify
that this type of loan program is not available in the commercial loan market or through
payday loan locations.
Through the BMG Money Loans-At-Work program, an employee:
• May borrow up to 20% of their net take-home pay (minimum of $500 to a maximum of
$5,000) with interest computed daily and based on the amount of the loan (interest
ranges from 23.75% to 29.75%);
• Loans are based solely on the employee's take home pay and ability to repay and are
not subject to a credit worthiness;
• Pays a $25 loan application fee (per loan);
• Selects their repayment period, at either 6, 12, 18 or 24 months; and
• Can pre-pay the outstanding loan amount at any time without penalty.
The only responsibility of the City is for the Human Resources Department to provide BMG a
data file of active City employees, including the name, address and salary of the employees;
create the appropriate payroll deduction code in EDEN (the City's payroll system) for any
approved loans; and collect and wire the bi-weekly payroll loan payments to BMG Money. At
present, the City incurs the current SunTrust Bank wire fee of $5 for each wire sent. BMG
Money has agreed to pay the cost of the wire transfer.
The BMG Loans-At-Work program is currently offered to the following public employers:
• City of Doral
• City of Hialeah
• City of Hialeah Gardens
• Jacksonville Transportation Authority
• Leon County Schools
• Palm Beach County Clerk & Comptroller
• Palm Beach County Tax Collector
• Town of Surfside
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BMG Money Loans-at-Work Program
December 12, 2012
Page 3 of 3
• City of Sweetwater
For the period beginning January 1, 2012 and ending November 30 2012, the City's trial
period for the BMG Loans-At-Work program, one hundred twenty four (124) City employees
utilized the emergency loan services. BMG has issued two hundred two (202) loans totaling
$469,909. Of this total loan number, one hundred sixty (160) were new loans and forty-two
(42) were loans that employees have refinanced, requesting an increase in the amount of
their initial loan request. For new loans, five (5) loans were financed for a period of six (6)
months, three (3) were financed for a period of twelve ( 12) months, ten ( 1 0) were financed
for a period of eighteen (18) months, and one hundred six (1 06) were financed for twenty-
four (24) months. Of the forty-two ( 42) refinanced loans, thirty-two (32) were for increases in
the loan amount and ten (1 0) were to increase the repayment period in order to spread the
repayment out over a longer period. One (1) loan has been paid off to date.
CONCLUSION
The BMG Money Loans-At-Work program provides a voluntary payroll deduction loan
program to employees through a non-traditional, unsecured loan to cover unexpected
financial emergencies, with repayment provided through payroll deduction. This program has
proved to be an option for employees who have no credit and are unable to secure
emergency funds through traditional financial outlets. The City does not bear any
responsibility or liability through this program. Based on the current employee utilization, the
Administration recommends the BMG Loans-At-Work program be extended for one month,
from December 31, 2012 to January 31, 2013. However, the Administration further
recommends that the item be referred to the Finance and Citywide Projects Committee for
their recommendation either to continue the current program or to issue a Request for
Proposal, exploring what loan options may be available at lower interest rates.
KGB/ reg
T:\AGENDA\2012\12-12-12\BMG Commission Memo 12-11-2012.doc
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RESOLUTION NO. _________ _
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, AUTHORIZING THE CITY MANAGER TO
EXECUTE A ONE MONTH EXTENSION, FROM DECEMBER 31, 2012 TO
JANUARY 31, 2013, TO THE AGREEMENT FOR A VOLUNTARY
EMPLOYEE LOAN PROGRAM THROUGH THE BMG MONEY LOANS-AT-
WORK PROGRAM TO MAKE AVAILABLE LOANS TO INTERESTED
ACTIVE EMPLOYEES OF THE CITY OF MIAMI BEACH, FURTHER
REFERRING RENEWAL OF THE AGREEMENT VERSUS ISSUANCE OF A
NEW RFP, TO THE FINANCE AND CITYWIDE PROJECTS COMMITTEE
FOR THEIR RECOMMENDATION OF THE AFORSTATED MATTER.
WHEREAS, BMG Money offers all active full-time employees an emergency loan
options through a program called Loans-At-Work;
WHEREAS, the BMG Money Loans-At-Work program provides a voluntary payroll
deduction loan program to employees through a non-traditional, unsecured loan to cover
unexpected financial emergencies, with repayment provided through payroll deduction; and
WHEREAS, this program has proved to be an option for employees who have no credit
and are unable to secure emergency funds through traditional financial outlets; and
WHEREAS, the City does not bear any responsibility or liability this program.
WHEREAS, based on the current employee utilization, the Administration believes the
BMG Loans-At-Work program should be extended for one month, from December 31, 2012 to
January 31, 2013.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH FLORIDA that the Mayor and City
Commission hereby authorize the City Manager to execute a one month extension, from
December 31, 2012 to January 31, 2013, to the agreement for a voluntary employee loan
program through the BMG Money Loans-At-Work Program to make available loans to interested
active employees of the City of Miami Beach, further referring renewal of the agreement versus
issuance of a new RFP, to the Finance and Citywide Projects Committee for their
recommendation of the aforstated matter
PASSED and ADOPTED this 121h day of December 2012.
ATTESTED BY:
Rafael E. Granado,
CITY CLERK
186
Mattie Herrera Bower,
MAYOR
APPROVED AS TO
FORM & LANGUAGE
& FOR EXECUTION :1: ~ () .1~" -•-I"' ~~L~f" ( ~..-? •
City Attorn Date
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