Exh 7AAGENDA ITEM #7A
MAY 23, 2005
' CITY OF ATLANTIC BEACH
CITY COMMISSION MEETING
STAFF REPORT
AGENDA ITEM: Ordinance 58-OS-31 amending Chapter 2, Article VI, Division IV,
section 310.27 of the City's code of ordinances to increase the
police employee pension contribution rate from 1% to 2% to the
Police Pension Fund
SUBMITTED BY: Nelson Van Liere
Finance Director, Plan Administrator
DATE: May 12, 2005
BACKGROUND: Approval of the attached ordinance is necessary in order to affect
the desired cost reductions discussed earlier with the City
Commission during budget workshops and union negotiations. The
proposed ordinance will increase the percentage of member
• contributions from 1% to 2% for most police employees. The
change is expected to save the city $8,197 per year based on
• actuarial estimates.
The City has received a ratified police employee union contract
with this provision agreed to. Implementation of the new rates will
be completed as soon as it is administratively feasible after final
approval from the State of Florida and the City Commission.
• BUDGET: The actuary impact statement estimates an annual savings of
$8,197 per year, however this will have no effect on the current
• year's budget.
RECOMMENDATION: Approve Ordinance 58-OS-31
ATTACHMENTS: Gabriel, Roeder, Smith & Company Actuarial Impact Statement
• REVIEWED BY CITY MA ~ R _
1
AGIrNDA ITl:l~t #7A
NIAY 23, 2005
Ordinance 58-05-31
. _. AN ORDINANCE AMENDING CHAPTER 2
ADMINISTRATION, ARTICLE VI, EMPLOYEE
BENEFITS, AMENDING DIVISION TV, POLICE
OFFICER'S .RETIREMENT SYSTEM, SECTION 2-
310.27. NLEMBER CONTRIBUTIONS TO PROVIDE
FOR SEVERABILITY; TO PROVIDE FOR AN
EFFECTIVE DATE.
WHEREAS, the City is in the process of repackaging the mix of salary and benefits
provided by having approved an above market sal
ary rate adjustment to partially be off-
set by an increase in the deduction for pension contributions, and
WHEREAS, it is the City's intent to achieve competitiveness in the local azea with
respect to salary and benefits offered to police employees, and
:'WHEREAS, the City and the police employee bargaining unit have ratified a contract
:including terms consistent with this amendment, and
NOW, THEREFORE, BE IT ENACTED BY THE CITY COMAHSSION 4N
BEHALF OF THE PEOPLE OF THE CITY OF ATLANTIC BEACH, FLORIDA,
that;
SECTION 1. Amending Chapter 2 Administration, Article VI Employee Benefits,
Division IV Police Officers Retirement System as follows:
Sec. 2-310,27, Member contributions.
(a) Member contributions for benefit group police bargaining unit members covered
by the current collective bargaining unit collective bargaining agreement shall be eoe-~~-}
two 2 percent of salary and for other benefit group police members shall be four and
eight~Iiundred fifteen thousandths'(4,g15)peycent of sal
be deducted from the member's pay and paid over into the retirement syst m each payer
period.
SECTION 2. Severability
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,
AGENDA ITEM #7A
NIAY 23, 2005
SECTION 3. Effective Date
This Ordinance shall take effect upon its final passage and adoption.
Passed by the City Commission on first reading this Day of May, 2005
Passed by the City Commission on second reading this Day of June,2005
John S. Meserve
Mayor /Presiding Officer
Approved as to form and correctness:
Alan C. Jensen, Esquire
City'Attorney
ATTEST:
Donna Bussey
City Clerk
AGENDA ITEM #7A
NIAY 23, 2005
GASRlEL, ROEDER, SMITH & CO~hSPAt~Y
Consultants & Actuaries
One'fowne Square • Suite 800 • Southfield, Michigan 48076 • 248-799-9000. 800-521-0498 • tax 248-799-9020
March 7, 2005
Mr. Nelson Van Liere, Director of Finance
City of Atlantic Beach Police
Officers' Retirement System
800 Seminole Road
Atlantic Beach, Florida 32233
Re:.Police Officers' Retirement System .
Dear Nelson:
Enclosed are 5 copies of the Impact Statement and the Actuarial Cost Estimate for the proposed
char ;e to the Ordinance.
The proposed Ordinance change increases member~contributions for bargained police members from
1 °!o of salary to 2% of salary.
The Impact Statement should be transferred to Atlantic Beach letterhead and signed. A copy of the
Impact Statement and Actuarial Cost Estimate should be sent prior to the second reading together
with a copy of the proposed Ordinance to:
Division of Retirement
Department of Management Services
Bureau of Program Services
2639-C North Monroe Street
Tallahassee, Florida 32399-1560
Respectfully submitted,
Brad Lee Armstrong, A.S.A., E.A.
BLA:dks
Enclosures
ACI/NDA ITEitiI #7A
I~tAY 23, 2005
CITY OF ATLANTIC BEACH POLICE OFFICERS' RETIREMENT SYSTEM
. - ACTUARIAL IMPACT STATEMENT, MARCH 7, 2005
Description of Proposed Amendment
• Increase member contributions for bargained police members from 1 °lo of salary to 2% of salary.
.Funding Inzplicatiorts of the Amendment
An actuarial cost estimate for the amendment is attached.
Certification of Administrator
The actuary has been furnished with a description of the amendment.
1 believe the amendment to be in compliance with Part VII, Chapter 112, Florida Statues and Section 14,
Article X, of the Constitution of the State of Florida.
/` • C'~~ ~~y~-t-' ,Administrator
City of Atlantic Beach
Police Officers' Retirement System
AGCNDf1 I1'I;i~I #7r1
NIAY 23, 2UU5
CITY OF ATLANTIC BEACH POLICE OFFICERS' RETIREMENT SI'STEM
ACTUARIAL IMPACT STATEMENT,IV~ARCH 7, 2005
Data atzd Actuarial Assumptions
The data and actuarial assumptions used for the cost estimate were the same as used fpr the September 30,
2003 actuarial valuation.
Description ofAmendnaent
• Increase member contributions for bargained police members from 1% of salary to 2% of salary.
Contribution Implications of the Amendment
Percents of Payroll FY 04/05 Dollars
Police Police
Before Amendment
Normal Cost
Unf d Act. Accr. Liab.
FS 112.64(5) Compliance
Administrative Exp.
Total
After Amendment
Normal Cost
Unf d Act. Accr. Liab.
FS 112.64(5) Compliance
Administrative Exp.
Total
Change from Amendment
Normal Cost
Unf d Act. Accr. Liab.
FS 112.64(5) Compliance
Administrative Exp.
Total
17.64%
6.56
0.93
1.20
26.33%
17.74%
6.53
0.92
1.20
26.39%
0.10%
(0.03)
(0.01)
0.00
0.06%
$ 322,134
$ 322,868
$734
AG~IYDA ITEM tt`7A
. ~IAY 23, 2005
CITY OF ATLANTIC BEACH POLICE O FFICERS' RETIRE iV1ENT SYSTEM
ACTUARIAL IMPACT STATEMENT, MARCH 7, 200
Allocations of Contribactio~i Iiacrease
' Percents of Payroll FI' 03/04 Dollars
• To Member* 0.73% $ $,931
.. To City (0.67 (8,197)
*Weighted Average
Actuarial Present Values (thousands of dollars)
' ' Before Amendment After Amendment
Police Police
Present Value of Prospective Benefits
Retired Members & Beneficiaries $2,421 $2,421
Vested Terminated Members 83 83
• ' Active Members
Service pensions 5,053 5,053 .
Vested term pensions •, 132 132
Disability pensions 110 110
Survivor pensionsJpre-retirement 116 116
Termination refunds 10 1 S
Total-Active Members ~ 5,421 5,426
Total APV of Prospective Benefits $7,925 $7,931
' Actuarial accrued liability ~ $5,986 $5,977
Unf d actuarial accrued liability $1,614 $1,605
' Active member future salaries $11,063 $11,063
Active member future contributions $163 $260
COMMENT: The increase in unfunded actuarial accrued liability was financed as a level percent of payroll
over 30 years.
c~
Brad~bee Armstrong, ASA, MAAA, EA [02-5614