99-23429 RESO
RESOLUTION NO.
99-23429
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA TO RATIFY REVISIONS OF THE
CURRENT LABOR AGREEMENT BETWEEN THE CITY OF MIAMI
BEACH AND THE INTERNATIONAL ASSOCIATION OF FIRE
FIGHTERS, LOCAL 1510 (IAFF), CONCERNING A SECOND WINDOW
PERIOD FROM JANUARY 1, 2000 THROUGH MARCH 31, 2000 FOR
ELIGIBLE EMPLOYEES TO BUY BACK PREVIOUS CITY CREDITABLE
PENSION SERVICE TIME FOR PROVISIONAL OR PROBATIONARY
TIME AND FOR ELIGIBLE CURRENT EMPLOYEES TO BEGIN THEIR
PARTICIPATION IN THE DEFERRED RETIREMENT OPTION
PROGRAM (DROP) AT ANY POINT BETWEEN OCTOBER 1, 1998 AND
MARCH 31, 2000 AND AUTHORIZE THE MAYOR AND CITY CLERK TO
EXECUTE THE AGREEMENT.
WHEREAS, the City Manager has submitted to the Mayor and City Commission a revision to the
current Labor Agreement between the City of Miami Beach, Florida and the International Association of
Firefighters, Local 1510 (IAFF), the bargaining agent certified by the Public Employees Relations
Commission (PERC) for the employees covered by said agreement; and
WHEREAS, the current Labor Agreement was ratified on September 23, 1998; and
WHEREAS, some changes to the Deferred Retirement Option Plan (DROP) provisions and buy back
of creditable service time have been negotiated; and
WHEREAS, the International Association of Fire Fighters, Local 1510 (IAFF) bargaining unit
ratified the attached revisions and the City Manager recommends that the City Commission ratify and
authorize the execution of the Agreement between the City and the International Association of Fire Fighters,
Local 1510 (IAFF); and
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND THE CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the attached revisions of the Labor
Agreement between the City of Miami Beach and the International Association of Fire Fighters, Local 1510
(IAFF), for the period from October 1, 1997 through September 30, 2000, are hereby ratified and that the
Mayor and City Clerk are hereby authorized to execute the Agreement.
ADOPTED this 15th day of
December
,1999
If
Neisen Kasdin, Mayor
ATTEST:
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Robert Parcher, City Clerk
APPROVED AS TO FORM &
LANGUAGE & FOR EXECUTION
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City Attorney Date
REVISION OF THE CURRENT AGREEMENT BETWEEN THE INTERNATIONAL
ASSOCIATION OF FIRE FIGHTERS, LOCAL 1510 (IAFF) AND THE CITY OF
MIAMI BEACH, FLORIDA
The International Association of Fire Fighters, Local 1510 (IAFF) and the City of Miami Beach,
Florida (City), agree to the following revisions of Article 7, Section 7.21 Pension, and 7.21c)
Deferred Retirement Option Plan (DROP):
7.21 Pension.
b) Effective on September 30, 2000, the Tier B Pension Plan shall be eliminated and
those sworn personnel covered under the Tier B Pension Plan shall be eligible for
benefits as set forth in the pre-May 19, 1993, Supplemental Plan. Current employees
covered under the Tier B Pension Plan shall be allowed to purchase their
probationary time during the period of June 30, 2000 through September 30, 2000.
A second window period shall occur from January 1. 2000 through March 31. 2000.
and the current employees not in the Tier B Pension Plan shall have the option of
buying back previous City service. Current employees not in the Tier B Pension Plan.
but who are members of the System may elect. by written notice served on the Board
of Trustees. before the expiration of the window period, to receive creditable pension
service time for all past service in any department of the City of Miami Beach,
whether the same was provisional or probationary service time. Any member so
electing shall have included in his creditable pension service time under the System
that portion of such time for which the member pays into the Fund the amount such
member would have contributed had he been a member during the period of service
for which credit is being purchased. plus three percent (3%) interest per year,
excluding interest for the first six (6) months of being a member of the Pension Plan.
The member shall have the period of January 1. 2000 through March 31. 2000 within
which to pay for the additional creditable pension service time to which he may be
entitled as herein provided. The member shall be allowed creditable pension service
time for only that portion of said service time for which he has actually paid his
share of the cost into the fund within the time permitted.
c) DEFERRED RETIREMENT OPTION PLAN (DROP)
II. Eligibility Exceptions
a) A one-time "window period" shall occur for 45 days from the effective date
of the DROP.
b) During the window and subject to the other eligible conditions expressed
herein, employees with more than 315 months (350 months for employees
who were Plan members prior to July I, 1976) of creditable service may elect
to enter the DROP for a term not to exceed 36 months.
REVISION OF IAFF/CITY AGREEMENT
page 2
c) Members with more than 315 months (350 months for employees who were
Plan members prior to July 1, 1976) of creditable service as of the effective
date of DROP who choose not to participate in DROP during this one-time
window period shall forfeit the right to exceed the total service limits set
forth in paragraph 2 (Conditions of Eligibility) above.
ill A second window period shall occur from January 1. 2000 through March
31. 2000. Paragraphs b) and c) above shall be in effect during this additional
window period. Current eligible employees not in the Tier B Pension Plan
(including employees who have previously elected to participate in the
DROP) shall have the option to begin their participation in the DROP at any
point between October 1. 1998 and March 31. 2000. All other eligibility and
participation conditions shall apply to any member choosing to begin
retroactively his participation in the DROP. as of the beginning date of the
employee's participation in the DROP.
Approved:
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F or, he IAFF
(Jack Richardson, Jr., IAFF President)
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For the City 0 MIamI Beach
(Mary Greenwood, Executive
Ass'stant to the City Manager/
Labor Relations)
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,
Date
Dat
ATTEST:
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Robert Parcher, City Clerk
APPROVED AS TO FORM & LANGUAGE
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City Attorney Date
Btt'b\'SULTANTS
200 Galleria Parkway, N.w. Suite 1200
Atlanta. Georgia 30339-5945
August 26, 1999
Firefighter Jack Richardson
President, Firefighters of Miami Beach Local 1510
8000 NW 21st Street, Suite 205
Miami, FL 33122-1620
Dear Firefighter Richardson:
We are writing to comment on the cost of permitting retroactive election of the Deferred
Retirement Option Plan (DROP) provision in the pension systems. We understand there is
a proposal to allow DROP entry any time between October 1, 1998, the date when the Rule
of 70 was implemented, and the DROP implementation date under the System. The
affected members would be refunded their own contributions with interest for the "Back-
DROP" period, and the pension benefits would be calculated based on pay and service as
of the beginning of that period. Interest would be charged on any military buyback service
purchased retroactively as well. Presumably the "retiring" member would receive a lump
sum payment of the amount of missed payments based on the earlier retirement date.
The regular DROP provision was assumed to be cost-neutral since it was adopted in
conjunction with the Rule of70, which cost was separately identified. The Back-DROP
would also be expected to be a "no cost" item, particularly since the pay and service and,
thus, benefit would presumably be slightly lower, and appropriate adjustments for interest
on both paid and refunded contributions would be made. The small adjustment for
mortality, based on retroactive payment that otherwise would have been contingent on
survival if retirement had really been at the assumed date, is insignificant for the short
period, particularly since the spouse would have received 100010 and then 75% of the
member's retirement benefit.
We hope this information is helpful. Please let us know if you need anything further.
Very truly yours,
~~~
Zanese B. Duncan
Consulting Actuary
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Copy to: Mrs. Celia B. Locke
Buck Consultants, Inc.
7701955-2488 Fax 7701933-8336
CITY OF MIAMI BEACH
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139
http:\\ci.miami-beach.fl.us
TO:
FROM:
SUBJECT:
COMMISSION MEMORANDUM NO.
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Mayor Neisen O. Kasdin and
Members of the City C mission
DATE: December 15, 1999
Sergio Rodriguez
City Manager
A RESOL I OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA TO RATIFY REVISIONS OF THE
CURRENT LABOR AGREEMENT BETWEEN THE CITY OF MIAMI
BEACH AND THE INTERNATIONAL ASSOCIATION OF FIRE
FIGHTERS, LOCAL 1510 (IAFF), CONCERNING A SECOND WINDOW
PERIOD FROM JANUARY 1, 2000 THROUGH MARCH 31, 2000 FOR
ELIGIBLE EMPLOYEES TO BUY BACK PREVIOUS CITY CREDITABLE
PENSION SERVICE TIME FOR PROVISIONAL OR PROBATIONARY
TIME AND FOR ELIGIBLE CURRENT EMPLOYEES TO BEGIN THEIR
PARTICIPATION IN THE DEFERRED RETIREMENT OPTION
PROGRAM (DROP) AT ANY POINT BETWEEN OCTOBER 1, 1998 AND
MARCH 31, 2000 AND AUTHORIZE THE MAYOR AND CITY CLERK TO
EXECUTE THE AGREEMENT.
ADMINISTRA TIONRECOMMENDA TION
Adopt the Resolution.
ANALYSIS
The City of Miami Beach and the International Association of Fire Fighters, Local 1510 (IAFF),
have negotiated two (2) revisions concerning the Fire and Police Pension Plan. One revision
concerns retroactivity in the Deferred Retirement Option Plan (DROP), and the other involves
employecs' buying back provisional and probationary time.
Revision I: Retroactivity
The current DROP allows eligible employees to enter the DROP on or after October 1, 1999, and
they must make the election by December 17, 1999. The revision to the Collective Bargaining
Agreement will allow eligible employees to enter the DROP on or after October 1, 1998, and they
may do so during the second window period between January 1,2000 and March 31, 2000. This
revision would apply to current employees not in the Tier B Pension Plan, including employees who
have previously elected to participate in the DROP. An actuarial impact study was prepared, and
this "backdrop" would be expected to be a "no cost item." The employees who participate in the
DROP retroactively would have their pension benefits calculated as of the date of participation and
would receive a reimbursemcnt for pension deductions from their paychecks after the effective date.
The City would have received its share of contributions too, except that the City was not required
to make any contributions for this pcriod. IJ
AGENDAITEM~
DATE J ~...l s- '1~
Commission Memorandum
December 15, 1999
Ratification of Revisions of the DROP
Page 2
ANALYSIS, continued
Revision 2: Buybacks
This revision of the Collective Bargaining Agreement allows employees in the Fire and Police
Pension Fund to receive creditable service time for past service for provisional or probationary time.
Currently, an employee would not receive credit for provisional time and would have to pay back
for probationary time within six (6) months of becoming a member. The revision allows a one-time
window from January I, 2000 to March 31, 2000 during which an employee may buy back this time,
including interest of three percent (3%) per year, excluding the first six (6) months, since there is a
grace period. The IAFF wanted to be able to buy back creditable service time at any time, but the
City only agreed to a one-time window at this point, as recommended by the City's pension attorney,
James Linn.
According to the actuarial impact study for the IAFF, the annual cost is estimated at .3 % of the total
firefighter payroll, or about $35,000. Even though the employee pays interest of three percent (3%)
each year, the actual cost is higher. The Administration is recommending these buybacks at this
time partly because of the more than $3.7 million saved in the retirement plan as a result of merging
the Base and Supplemental Plans.
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Enclosures
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200 Galleria Parkway, NW. Suite 1200
Allanla, Georgia 30339.5945
April 29, 1999
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Firefighter Jack Richardson
President, Firefighters of Miami Beach Local 1510
8000 NW 21st Street, Suite 205
Miami, FL 33122-1620
Dear Firefighter Richardson:
)
As requested, we are writing to provide an estimate of the City's annual cost if members of
the Base.and Supplemental plans are permitted to purchase probationary time with the City
in any capacity, including as a firefighter, at any time prior to retirement or termination of
employment, rather than, as currently, in the six months immediately after the time is
completed. Our calculations are based on the data submitted for the October I, 1998
actuarial valuation of the plans and certain other information about member hire and entry
dates contained in the 1998 annual report to the State of Florida. We have used the
assumptions used for the recent valuations, assuming the plans are still separate. We have
not included the cost of buy backs for Tier B members (post-May 19, 1993) since that
benefit was a part of a prior bargaining agreement. The potential members affected include
about 25 firefighters with approximately 8 months' probationary time on average.
In our calculations we have assumed that the contribution made by the member will be
based on the salary at the end of the probationary period and will be made at the Base Plan
member rate (6% or 8%) unless he is a member ofthe Supplemental plan only (with a 10%
rate). and charged 3% interest from date previously due to date of payment. Except for
those not members of the Base plan, the deposit will be made to the Base plan, although
the service will count for benefits in both plans. We understand there are several different
types of buy backs possible, including buyback of probationary time as a firefighter,
purchase of probationary time as a general employee who later transferred to fire status,
service of a former City employee of any kind who was refunded contributions but has
.since been rehired, and service as a former temporary or part time employee of the City
who became full time at some later date. We assume that, since in the current buyback
setup some members have purchased time that was not actually needed because they
eventually "maxed out" by the time they retired, members will delay purchase until
immediately prior to retirement, and purchase service only ifit is needed for them to
become eligible for the Rule of70 and/or to increase the benefit. Thus, although these
calculations include only the current 25 affected members by assuming all other active
members have already purchased this service, all future new members would be expected
to delay the buyback until determined to be needed, so that the ongoing cost may be
slightly, but not materially, different from our estimates We also have assumed that the
purchase of this service will not affect the current utilization of the military buyback
provision, although presumably the proposed buyback would be less expensive for the
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April 29, 1999
Page 2
member, particularly if the purchased service is at the 4% accrual rate rather than at the 3%
rate for military time.
Based on the assumptions and other information provided to us, we estimate that the
annual cost, if all affected members who at date of retirement need service for either
eligibility or a higher benefit actually purchase that service, would be about .3% of the
total firefighter payroll, or about $35,000. However, since much of the cost would go to the
Base plan, which is already "overfunded". the actual annual contribution increase would be
about $15,000 to the Supplemental plan. If the plans are merged, there would be no net.
increase in cost due, again, to extra accumulated funding in the combined plan.
Please let us know if you wish to discuss any issues further.
Very truly yours,
~;8~
Zanese B. Duncan
Consulting Actuary
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Copy to: Mrs. Celia B. Locke
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