8-22-11 Workshop MINUTES OF THE WORKSHOP OF ATLANTIC BEACH CITY COMMISSION
HELD IN THE COMMISSION CHAMBER ON AUGUST 22, 2011 AT 4:00 PM
City Commission Members present:
Mike Borno, Mayor
John L. Fletcher, Mayor Pro Tem
Jonathan Daugherty, Commissioner
Paul B. Parsons, Commissioner
Carolyn Woods, Commissioner
Staff present:
Jim Hanson, City Manager
David Thompson, Assistant City Manager
George Foster, Human Resource Manager
Nelson Van Liere, Finance Director
Donna L. Bartle, City Clerk
Nancy Bailey, Recording Secretary
Prior to the meeting Assistant City Manager David Thompson gave an update on Hurricane
Irene.
The meeting, which was held for the purpose of reviewing the Defined Benefit Study by Foster
& Foster, was called to order at 4:04 p.m. by Mayor Borno.
Brad Heinrichs of Foster and Foster explained the differences between defined benefit plans
(benefits are defined by an ordinance, contribution is determined by an actuary in these plans and
investment risk is entirely on the Plan's sponsor) and defined contribution plans (contributions
are defined and investment risk is entirely on the member). He also explained the C +I =B +E
(contributions plus investment earnings must equal benefits plus expenses) formula used for
defined benefit pension plans.
He explained the differences between the terms Close, Freeze and Terminate as they relate to
pension plans (Close — nothing changes for current members of plan; but let no one else in;
Freeze — not only will not let anybody else in, but benefits accrued up to this point will stop
accruing; and Terminate — get completely out of pension business and give lump sum value of
benefits accrued to this point to those in plan; this option was not a part of this study).
Mr. Heinrichs pointed out that if they change the Police Pension Plan in nearly any way they will
lose the 4.83% of payroll in State monies. He stated for the most part what they are seeing
around the State for Police and Fire Plans is a do nothing approach. He stated he believes the
cities were hoping for bigger reductions than what they got from legislation from Senate Bill
1128. He stated they have seen the use of the Stop/Restart technique which allows cities to
utilize more of the State monies than what they currently can receive to offset their funding
requirements and doesn't require any change in benefits. He further explained this mechanism.
Mr. Heinrichs summarized Foster and Foster's study of potential options for both pension plans,
He illustrated the results of the various options (close, freeze and hybrid plans) through several
charts shown on the projector. He answered questions from the Commission.
Minutes — City Commission Workshop August 22, 2011
Page 2
At the request of City Manager Jim Hanson, Mr. Heinrichs summarized the City's current plans.
He further explained where the Atlantic Beach pension plans fall in comparison to other Foster
& Foster clients. Mr. Hanson pointed out that our plans do not have a cost of living increase and
the City is covered under Social Security.
There being no further discussion by the City Commission, Mayor Borno declared the meeting
adjourned at 6:00 p.m.
4. i &,,te,
Donna L. Bartle, CMC
City Clerk