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Agenda Item:
Date: 11- d $ - 9q
CITY OF ATLANTIC BEACH
CITY COMMISSION MEETING
STAFF REPORT
AGENDA ITEM: First reading of Ordinance to terminate the firefighter provisions of
the City's Pension Plan.
SUBMITTED BY: George Foster, Human Resource Manager
DATE: November 2, 1999
BACKGROUND: On October 11, 1999, the City Commission completed the first
reading of Ordinance 58-99-26 changing the City's Pension Plan to
delete references to Fire employees and establishing separate
General employee and Police employee pension plans. The public
hearing and final reading for this ordinance is pending an actuarial
cost impact statement and State of Florida, Division of Retirement,
review and approval.
The attached ordinance has been prepared by the Pension Board
law firm of Sugarman and Susskind and, once finalized, will allow
the Pension Board to transfer appropriate funds in accordance with
Florida Statute 175.361 (attached) to the City of Jacksonville
Police & Fire Pension Fund.
The City of Atlantic Beach entered into an agreement to contract
Fire Services from the City of Jacksonville effective June 1, 1999.
This agreement stated that all assets and liabilities of the Atlantic
Beach Fire Department pension Plan existing as of the date of the
merger, (approximately 1.5 million dollars) shall be transferred on
the date of the merger to the Jacksonville Police & Fire Pension
Fund.
BUDGET: The current assets within the Atlantic Beach Fire Pension Fund are
invested within equities and/or bonds; therefore, the market value
of the Atlantic Beach Fire Pension Fund varies on a day to day
basis.
The Atlantic Beach Pension Board is required to disperse funds in
accordance the specific guidelines of FS175.361 with any "surplus"
assets being returned to the City of Atlantic Beach, less return to
the state of the state's contributions, i.e., FS 175 funds. Therefore,
the Pension Board may not be able to provide the City of
Jacksonville with all assets of the Fire Pension Fund.
Since FS177.361 does not allow surplus funds to be sent to the City
of Jacksonville, the City of Atlantic Beach may have a legal
obligation to pay to the City of Jacksonville the difference between
what is allowed by FS177.361 and "all funds." Although this
amount fluctuates based upon market conditions, it maybe
approximately $150,000.00 to $250,000.00.
RECOMMENDATION: That the City Commission:
1. Conduct a first reading of the attached ordinance.
2. Establish November 22, 1999 as the date for a final reading.
ATTACHMENTS: 1. Proposed Ordinance
2. FS175.361
REVIEWED BY CITY MANAGER:
ORDINANCE NO. 58-99-27
AN ORDINANCE OF THE CITY OF ATLANTIC BEACH,
FLORIDA, AMENDING CHAPTER 2, ADMINISTRATION,
ARTICLE VI, EMPLOYEE BENEFITS, DIVISION 3,
RETIREMENT SYSTEM, PROVIDING FOR THE
TERMINATION OF FIIZEFIGHTERRELATED PROVISIONS,
PROCEDURES AND BENEFITS; PROVIDING THAT SUCH
TERMINATION SHALL COMPLY WITH CHAPTER 175,
FLORIDA STATUTES; PROVIDING FOR A SAVINGS
CLAUSE; PROVIDING FOR SEVERABILITY AND
PROVIDING FOR AN EFFECTIVE DATE.
WHEREAS, the City of Atlantic Beach, Florida has entered into an agreement to contract
for Fire Services from the City ofJacksonville, Florida effective June 1, 1999; and
WHEREAS, the City of Atlantic Beach, Florida has agreed to transfer all active, retired and
vested Firefighters and necessary retirement system assets, liabilities and obligations to the City of
Jacksonville, Florida; and
WHEREAS, the City ofJacksonville, Florida has accepted City ofAtlantic Beach Firefighters
as members of the City of Jacksonville Police & Fire Pension Fund with full rights and benefits in
accordance with Chapter 121 City ofJacksonville Ordinance code by enactment of Ordinance 1999-
472-E and in accordance with Resolutions 95-944-256 and 98-1006; and
WHEREAS, the City of Jacksonville, Florida has agreed to establish asub-account for all
retired and vested City of Atlantic Beach Firefighters to ensure that their rights in effect on the date
of the merger are protected in accordance with the terms of the prior Atlantic Beach Pension Plan;
and
WHEREAS, the City of Atlantic Beach, Florida must comply with Chapter 175 ofthe Florida
Statutes in executing said agreement:
NOW THEREFORE, BE IT ENACTED BY THE CITY COMMISSION ON BEHALF
OF THE PEOPLE OF THE CITY OF ATLANTIC BEACH FLORIDA, AS FOLLOWS
Section 1. All Firefighter related benefits provided in the City of Atlantic Beach Code of
Ordinances, Chapter 2, Administration, Article VI, Division 3, Employer Benefits, Retirement System
shall terminate and no longer be of any force or effect effective 1 June 1999. The firefighter provision
of the pension plan shall terminate in accordance with Florida Statutes § 175.361 as applicable.
Section 2. The provisions adopted herein shall prevail over any existing sections of the
Atlantic Beach Code to the extent said existing sections re contrary or inconsistent herewith.
Section 3. If any section, sentence, clause, word, or phase, of this ordinance is held
unconstitutional or invalid by a court of competent jurisdiction, then said holding in no way affects
the invalidity of any remaining portions of this Ordinance.
Section 4. This Ordinance shall take effect immediately upon its final passage and
adoption.
PASSED by the City Commission on first reading this day of
PASSED by the City Commission on second and final reading this
1999.
ATTEST:
City Clerk
Approved as to form and correctness:
day of
1999.
Mayor
City Attorney
Florida House of Representatives - 1999
688-101-99
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CS/HB 261 I Florida House of Representatives - 1999 CS/HB 261
68B-101-99
175.361 Termination of plan and distribution of
fund.--For anV municipality, special fire control district,
chaptee plan, local law municipality, local law special fire
control district, or local law plan under this chapter, the
plats maV be terminated by the municipality or special Eire
control district. Upon termination of the plan by the
municipality or special fire control district for any reason
;or because of a transfer, merger, or consolidation of
55
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1 governmental units, services, or functions as provided in
2 chapter 121, or upon written notice by the municipality or
3 special fire control district to the board of trustees that
4 contributions under the plan are being permanently
5 discontinued, the rights of all employees to benefits accrued
6 to the date of such termination and the amounts credited to
7 the employees' accounts are nonforfeitable.The fund shall be
8 apportioned and distributed in accordance with the following
9 procedures:
10 (1) The board of trustees shall determine the data of
11 distribution and the asset value to be distributed, after
12 taking into account the expenses of such .distribution.
13 (2) The board of trustees shall determine the method
14 of distribution of the asset value, that is, whether
15 distribution shall be by payment in cash, by the maintenance
16 of another or substituted trust fund, by the purchase of
17 insured annuities, or otherwise, for each firefighter entitled
18 to benefits under the plan as specified in subsection (3).
19 (3) The board of trustees shall apportion the asset
20 value as of the date of termination in the manner set forth in
21 this subsection, on the basis that the amount required to
22 provide any given retirement income shall mean the actuarially
23 computed single-sum value of such retirement income, except
24 that if the method of distribution determined under subsection
25 (2) involves the purchase of an insured annuity, the amount
26 required to provide the given retirement income shall mean Cho
27 single premium payable for such annuity.
28 (a) Apportionment shall first be made in respect of
29 each retired firefighter receiving a retirement income
JO hereunder on such date, each person receiving a retirement
31 income on such date on account of a retired (but since
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Florida }louse of Representatives - 1999 CS/HB 261 Florida Nouse of Representatives - 1999 CS/HB 261
686-101-99 688-101-99
deceased) firefighter, and each firefighter who has, by such
data, becorne eligible Car normal retirement but has not yet
ratlred, in the amount required to provide such•retirement
in•=rime, provided that, if such asset value is less than the
a•3grr~~ata ref suc}~ amounts, such amounts shall be
pr~~pr~rti~~uately reduced sa Chat the aggragate.of such reduced
arnounls trill ba e•aual tc such asset value.
(L•) IC there is .any asset value remaining after the
app•srtionm.:nt under paragraph (a), apportionment shall next be
mad6 In respect o[ each [ire[ighter in the service oC the
~ municipality or special [ice control district on such date who
i~as completed at least 10 years of credited service, in why
ha3-contrrbntcd-to t)ie firelighters' pension trust [und for at
least 18 years, and who is not entitled to an apportionment
under paragraph (a), in the amount required to provide the
actuarial equivalent of the accrued normal retirement income,
based on the firefighter's credited service and earnings to
such data, and each forme} participant Chen entitled to a
benefit under the provisions of s. 175.211 who has not by such
data reached his or liar normal retirement date, in the amount
required to provide the actuarial equivalent of the accrued
normal retirement income to which he or she is entitled under
s. 175.211; provided that, if such remaining asset value is
less Chan the aggregate of the amounts apportioned hereunder,
such latter amounts shall be proportionately reduced so that
the aggregate of such reduced amounts will be equal to such
remaining asset value.
(c) If there is any asset value alter the
apportionments under paragraphs (a) and (b); apportionment
shall lastly be made in respect of each firefighter in the
service of tl~e municipality or special fire control district
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1 on such date who is not entitled to an apportionment under
2 paragraphs (a) and (b) In the amount equal to the
3 firefighter's total contributions to the plan to date of
4 termination; provided ChaC, if such remaining asset value is
5 less than the aggregate of the amounts apportioned hereunder,
6 such latter amounts shall be proportionately reduced so that
7 the aggregate of such reduced amounts will be equal to such
8 remaining asset value.
9 (d) In the event that there is asset value remaining
10 'after the full apportionment specified in paragraphs (a), (b),
11 and (c}, such excess shall be returned to the municipality or
12 spacial fire control district, less return to the state of the
13 state's contributions, provided that, if the excess is less
14 than the .total contributions made by the municipality or
15 special fire control district and the state to date of
16 termination of the plan, such excess shall be divided
17 proportionately to the total contributions made by the
18 municipality or special fire control district and the state.
19 (4) The board of trustees shall distribute, in
20 accordance with the manner of distribution determined under
21 subsection (2), the amounts apportioned under subsection (3).
22
23 If, after a period of 29 months after the date on which the
24 plan terminated or the date on which the board received
25 written notice that the contributions thereunder were being
26 permanently discontinued, the municipality or special fire
27 control district or the board of •trustees of the firefighters'
20 pension trust fund affected has not complied with all the
29 provisions in this section, the division shall effect the
30 termination of the fund in accordance with this section.
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