92-2810 OrdinanceORDINANCE NO.
92-2810
AN ORDINANCE OF THE CITY OF MIAmi BEACH,
FLORIDA AMENDING ORDINANCE NO. 88-2603, WHICH
CREATED A RETIRENENT SYSTEM FOR UNC~SSIF~ED
E~P~YEE8 ~D ELECTED OFF~C~AL8~ BY PROViDiNG
FOR A PER~OD DURING ~CH A ~T~NT
INCENTIVE ~ILL BE OFFEND TO ~UALIFY~NG
E~PLOYEE8~ PROVIDING FOR REPEALER~
SEVE~BILITY ~D ~ EFFECTIVE DATE.
WHEREAS, the City of Miami Beach, Florida, created a
retirement system known as the Retirement System for Unclassified
and Elected Officials of the City of Miami Beach with the passage
of Ordinance No. 88-2603 and as the same has been amended; and
WHEREAS, the City desires to reduce the number of employees
who qualify for membership in the retirement system; and
WHEREAS, such a reduction in employees may be accomplished on
a voluntary basis through the offer of an incentive to the current
employees to retire as provided below.
NOW, THEREFORE, BE IT DULY ORDAINED BY THE CITY CONMISSION OF
THE CITY OF MIl%MI BEACH, FLORIDA:
SECTION 1. That Ordinance No. 88-2603 be amended by adding
Section 5.10 which will read as follows:
5.10 Retirement Incentive
Commencinq 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 who meets one of the
criteria set forth below will have an irrevocable option to elect
one of the following:
(a) If an Employee Member, within the Election Period,
has attained the normal retirement date and completed
five (5) years of the creditable service (as defined in
Section 5.01 of the Ordinance as amended), said Employee
Member shall have the irrevocable option to retire during
the Election Period, and receive, as an inducement,
credit for two (2) years of additional creditable service
(at a normal service retirement allowance of four percent
(4%) per Tear), in addition to any creditable service the
Employee Member may have previously earned; or
(b) 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 two (2) years of additional
aqe in addition to the age previously attained by the
Employee Member.
SECTION 2.
REPEALER
Ail Ordinances or parts of Ordinances in conflict herewith be
an the same are hereby repealed.
SECTION
SEVERABILITY
If any section, subsection, clause or provision of this
Ordinance is held invalid, the remainder shall not be effected by
such invalidity.
SECTION 4.
EFFECTIVE DATE
This Ordinance shall take effect on the 18th day of
October , 1992.
PASSED and ADOPTED this 8th
1992.
ATTEST:
CITY CLERK
1st reading 9/16/92
2nd reading 10/8/92
JCD/cnm
m~sc4.a:unclemp[ .ord
FORM APPROVED
LEGAL DEPT.
CITY OFMIAMI BEACH
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH FLORIDA 33139
OFFICE OF THE CITY MANAGER
COMMISSION
MEMORANDUM
TELEPHONE: (305) 673-7010
TO: Mayor Seymour Gelber and DATE: September 16, 1992
Members of the City Commission
FROM:
City Manager (~ V"1,-l~V'~'--""---
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 reading for the two ordinances during
the October 7, 1992, City Commission meeting.
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 ear.ty 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
AGENDA
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 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 approxi/nately ten
percent (10%) of the employees salary.as a cont. ribution to the system.
Members of the City Commission should also be aware that the retirement in~entive
will pr. oduce a cost for the one-time payout am°',.nt of the'employee's acea~r.~.:e~
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:
Narn~
Diane Alexander
Barbara Bargeman
Department Name Department
Eco. & Comm. Dev. Bill Harrison City Manager
Mayor & Comm. Jane Hines City Manager
Eloy Bauleth
Phylis Berger
Jim Beauchamp
Fred Braeseker
Pat Brown
Prospero Cabrera
Diane Camber
'Arlene Clapper
Walter Coolidge
Eddie Cox
Charlene Craig
Edward Davis
Grecia Ferro
Paul Gioia
Computers
Legal
Risk Mangt.
Computers
Legal
Planning & Zoning
Bass Museum
OMB
Computers
City Manager
OMB
Purchasing
Building
Building
Bruce Lernle Computers
Jamie Mitrani Building
Gary Ortega Building
Estrella Pena Purchasing
Teresita Roche Police
Domingo Rodriguez Public Works
Mike Saclarides
Sandra Schneider
Octavio Serna
Roberta Sloane
Edward Stein
Robert Taylor
Randy Wilkinson
Sylvia Wohl
Code Enforcement
Legal
Computers
City Manager
Building
Computers
Parks & Rec.
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 ihe 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 s~laries for the new hires ~!!
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 ~he 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 year with ~'o
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.