Item 7F«~
CITY OF ATLANTIC BEACH
CITY COMMISSION MEETING
STAFF REPORT
AGENDA ITEM #7F
APRIL 10, 2006
AGENDA ITEM: ORDINANCE NO. 58-06-31 AN ORDINANCE OF
THE CITY OF ATLANTIC BEACH, FLORIDA,
AMENDING CHAPTER 2, ADMINISTRATION,
ARTICLE VI, DIVISION 3, GENERAL EMPLOYEE
RETIREMENT SYSTEM, TO INCREASES THE
EMPLOYEE CONTRIBUTION RATE; PROVIDING
FOR SEVERABILITY AND PROVIDING FOR AN
EFFECTIVE DATE.
SUBMITTED BY: Nelson Van Liere, Finance Director
DATE: March 24, 2006
BACKGROUND: The City has successfully negotiated an agreement with the White
and Blue Collar bargaining units. In exchange for additional
wages the union agreed to have its member contributions increase
from 3.0% to 5.0% by September 24, 2006.
This change has been reviewed by the City's pension attorney and
is ready to implement upon adoption of the ordinance.
BUDGET: Certified impact statements have been prepared by the City's
actuary indicating the savings for the contribution rate change to
the annual budget of $8,597 for the next year and $52,572 per year
when totally implemented in fiscal year 2007.
RECOMMENDATION: Approve ordinance 58-06-31
ATTACHMENTS: Ordinance 58-06-31
~"" Actuarial Impact Statement
~"" REVIEWED BY CITY MANAGER
~.
,~.
ORDINANCE NO. 58-06-31
AN ORDINANCE OF THE CITY OF ATLANTIC BEACH,
FLORIDA, AMENDING CHAPTER 2, ADMINISTRATION,
ARTICLE VI, DIVISION 3, GENERAL EMPLOYEE
RETIREMENT SYSTEM, TO INCREASES THE
EMPLOYEE CONTRIBUTION RATE; PROVIDING FOR
SEVERABILITY AND PROVIDING FOR AN EFFECTIVE
DATE.
WHEREAS, the City of Atlantic Beach, Florida has an interest in the future
,~, retirement of its employees and wishes to improve the retirement systems whenever
feasible; and
AGENDA ITEM #7F
APRIL 10, 2006
WHEREAS, the City desires to remain competitive in the local area with respect
to salary and benefits offered to its employees.
WHEREAS, the City and certain employee representation groups have agreed to
specific provisions through the collective bargaining process; and
WHEREAS, the City Commission has received and reviewed an actuarial impact
statement related to this change; and
NOW THEREFORE, BE IT ENACTED BY THE CITY CONIlVIISSION ON
BEHALF OF THE PEOPLE OF THE CITY OF ATLANTIC BEACH, FLORIDA, That;
SECTION 1. Chapter 2, Administration; Article VI, Employee BeneSts; Division 3,
General Employee Retirement System be amended as follows:
DIVISION 3. GENERAL EMPLOYEE RETIREMENT SYSTEM
Sec. 2-298. Member contributions.
~. (a) Member contributions for benefit group general shall be tree-{-~} four 4
percent of salary. Effective Se~temher 24, 2~~f, member c~ntrihutions for
benefit group general shall be five (5) percent of salary and said contribution
shall be deducted from the member's pay and paid over into the retirement
system at least monthly.
SECTION 2. Severability
~.
AGENDA ITEM #7F
APRIL 10, 2006
~..
If any section, sentence, clause or phrase of this ordinance is held to be invalid
'~ or unconstitutional by any court of competent jurisdiction, then said holding
shall in no way affect the validity of the remaining portions of this ordinance.
SECTION 3. Effective Date
This ordinance shall take effect immediately upon its passage and as soon as
the related payroll deduction items can be implemented.
PASSED by the City Commission on first reading on the day of
«~.
2006.
PASSED by the City Commission at Public Hearing and final reading this
day of .2006.
Donald M. Wolfson
Mayor /Presiding Officer
~„ ATTEST:
+~.
Donna L. Bussey
City Clerk
Approved as to form and correctness:
~*
Alan Jensen
City Attorney
~„ LEGEND: Underlining is new lanauage
"~ AGENDA ITEM #7F
APRIL 10, 2006
CITY OF ATLANTIC BEACH GENERAL EMPLOYEE RETIREMENT SYSTEM
ACTUARIAL IMPACT STATEMENT, FEBRUARY 8, 2006
"' Description of Amendment
• Increase the employee contributions based on the following schedule:
~.
Increase from 3% to 4% March 1, 2006 (estimated implementation date)
Increase from 4% to 5% September 1, 2006
Funding Implications of the Amendment
An actuarial cost estimate for the amendment is attached.
Certification ofAdministrator
The actuary has been furnished with a description of the amendment.
I believe the amendment to be in compliance with Part VII, Chapter 112, Florida Statutes and Section 14,
Article X, of the Constitution of the State of Florida.
~/ccZ~/ ~~~' ,Administrator
City of Atlantic Beach
General Employee Retirement System
'"~' AGENDA ITEM #7F
APRIL 10, 2006
~. CITY OF ATLANTIC BEACH GENERAL EMPLOYEE RETIREMENT SYSTEM
ACTUARIAL COST ESTIMATE, FEBRUARY 8, 2006
Data and Actuarial Assumptions
The data and actuarial assumptions used for the cost estimate were the same as used for the September
30, 2004 actuarial valuation.
Description of Proposed Amendment
• Increase the employee contributions based on the following schedule:
Increase from 3% to 4% March 1, 2006 (estimated implementation date)
Increase from 4% to 5% September 1, 2006
Contribution Implications of the Amendment
Percents of Payroll
General
FY 05/06 Dollars
General
~* Regular valuation
Normal Cost 11.82%
Unfd Act. Accr. Liab. 5.36
"" FS 112.64(5) Compliance 0.33
Administrative Exp. 0.58
Total 18.09% $598,160
After 3% Member Contributions
Normal Cost 12.09%
~„ Unfd Act. Accr. Liab. 5.29
FS 112.64(5) Compliance 0.33
Administrative Exp. 0.58
~,. Total 18.29% $604,773
After Amendment
Normal Cost 12.65%
Unfd Act. Accr. Liab. 5.16
FS 112.64(5) Compliance 0.31
Administrative Exp. 0.58
Total 18.70% $618,329
Change from Amendment
Normal Cost 0.56%
Unfd Act. Accr. Liab. (0.13)
FS 112.64(5) Compliance (0.02)
Administrative Exp. 0.00
Total 0.41 % $13,556
AGENDA ITEM #7F
APRIL 10, 2006
CITY OF ATLANTIC BEACH GENERAL EMPLOYEE RETIREMENT SYSTEM
ACTUARIAL COST ESTIMATE, FEBRUARY S, 2006
Allocations of Contribution Increase*
Percents of Payroll
FY 05/06 Dollars
To Member 0.67% $ 22,153
To City (0.26)% (8,597)
*This is the first year only. The allocation of costs to members will change an additional 1.33% of
payroll by FY 06/07. The comparable dollar savings to the city will increase to $52, 572 by FY 06/07.
Actuarial Present Values (thousands of dollars)
+*~ Before Amendment After3%MemberCont. AfterAmendment
General General General
~"' Present Value of Prospective Benefits
Retired Members & Beneficiaries $2,524 $2,524 $2,524
Vested Terminated Members 585 585 585
'~ Active Members
Service pensions 7,429 7,429 7,429
Vested term pensions 300 301 301
Disab>tity pensions 262 262 262
Survivor pensions/pre-retirement 333 333 333
Termination refunds 65 81 109
Total-Active Members 8,389 8,406 8,434
Total APV of Prospective Benefits $11,498 $11,515 $11,543
Actuarial accrued liability $9,005 $8,958 $8,864
„„~ Unf d actuarial accrued liability $2,732 $2,685 $2,591
Active member fulure salaries $21,952 $21,952 $21,952
,,,,,, Active member future contributions $439 $659 $1,078
COMMENT: The increase in unfunded actuarial accrued liability was financed as a level percent of
payroll over 30 years.
~~~/~~~
Brad Lee Armstrong, A A, MAAA, EA [OS-5614]