Agenda Item 9AAGENDA ITEM # 9A
MARCH I4, 20I I
March 7, 2011
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TO: The Honorable Mayor
and Members of the Commission
FROM: Jim Hans
Ci
SUBJECT: City Manag 's Report
Proposed Pension Ordinances The City's two Pension Boards have recommended that the City
Commission consider adoption of new ordinances for both the Police and General Employees Pension
Plans. These recommendations come as a result of the Pension Board's hiring a new pension attorney,
Scott Christianson of Christianson & Delmer, PA of Sarasota, Florida.
The ordinance to rewrite the General Employees Pension Plan is 56 pages in length and the ordinance for
the Police Pension Plan is 68 pages. Essentially, these are complete strikethroughs and rewrites of both
ordinances. Per their Attorney, these updated ordinances would meet current and state and federal
regulations. At this time, we do not have details to point out specific inconsistencies with those
regulations in the current ordinances. Another reason to request that the ordinances be replaced is so that
the wording will be consistent with those of other cities who are served by this same pension attorney.
For both of the proposed ordinances, the Pension Board's actuary company (Gabriel, Roeder & Smith)
have provided statements that "the plan provisions in the [draft] ordinance would have no significant cost
effect to the plan benefits." One of the proposed changes in the draft ordinance would not increase the
cost of plan benefits, but has the potential of reducing the unfunded liability and overall cost of the plan if
it were to be implemented differently than what is proposed by the Pension Board attorney. There are
some other changes that might be considered significant although staff has not had the time to find all the
changes that may be significant.
The State Legislature is currently considering several changes that would result in requirements to change
the City's pension plans and the City Commission has expressed a desire to consider other pension plan
changes that would reduce future costs. Pension plan changes were recently identified by the Commission
as one of the strategic priorities for the upcoming year.
At this point, I am not aware of any changes in the city's current plans that are urgently needed so the
Commission has a variety of options available on how to deal with the proposed ordinances. One would
be to prepare a detailed review of the currently proposed draft ordinances and for the Commission to adopt
the new ordinances within the next couple of months. Another option would be to wait until the State
Legislature has determined what changes will be made this year and have those changes incorporated into
the draft ordinance prior to consideration. A third option would be to wait even longer until the State
Legislature's changes are known, the City has a actuarial study done on possible plan savings, the
Commission provides instructions to staff for union negotiations, and, finally those negotiations are
completed and changes are ready to be incorporated.
City staff plans to learn more about the inconsistencies in the city's present ordinances with state and
federal regulations and be in a better position to advise the Commission on whether or not there is any
urgency in changing the pension plans at this time.