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03-26-1999 - Joint Mtg w/PAC
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Lr .?. ? .r .t e;•r s ; T . ,.. . .A%r - I.Y. r.t..tai? iYT?.l4•kIiG S.1S ?::Si2 ?' S,h Ft Y..;.:e' e :1','?'f ?. • 1 ,:???' ?.5• I '? ?h .t ') iw??., F , AGENDA'PACK FOR JOINT MEETING ' PENSION ADVISORY COMMITTEE & PENSION TRUSTEES i ` Friday - March 26, 1999 - 10:00 A.M. - Chambers minutes are named: 'm'a0399 1 z• .. .. .. .•. J.,r..r4.u.rEe,,.rc'ss.w;. :...., .,?Co.-., ,..., .. ..... ........:. ... ..? .. ?:. q."?a. :,E:?! il, ?,-, - .. r. i'S •dl?.a w.., r. i, .. .. ....,a .<... ... I r FINANCE DEPARTMENT 'CITY OF ?GLE'ARVATER Posr OFFICE Box 4748, CI.FARILATEN, FLORIDA 33758-4748 Mu`iam SERVICES BI:iwmc, 100 SOUTH h1VI F AVENUE, CI.F.ARVIAITH, FLORIDA 33756 TELFmICiNE (727) 562-4530 VAX (727) 5624535 March 8, 1999 TO: Pension Trustees and Members of the Pension Advisory Committee FROM:, Margaret Simmons, Financial Services Administrator Ljrojx? CC: Pam Akin, City Attorney Cyndie Goudeau, City Clerk Re: Pension Attorney Selection' On November 17, 1998, a Request for Proposal (RFP 910-99) was released (advertised) for Pension Attorney Services. Three responses were received,'they are: Christiansen & Uehner, P.A. Sarasota, FL Cypen & Cypen Miami Beach, FL Kalish & Ward Tampa, FL Each firm has been contacted by Pam Akin and is scheduled to make a presentation to you on March 26, 1999. Copies of each RFP response are provided for your review. If you have any, questions, please feel free to contact me at 562.4538. O,I= Qw. OsE Furmr:, "1:+7[lAi. ?lPIA)RlIi1'F Axn AFFIFWAUVE AC 11()N H-%1Pj,0YI;k" r I, ':Ir 'f. ..J ?Ir' ,. .1 l<I ?,'•: ?` . F , . .. , ? ... .e ? . li` . ' 1 r 1•', :` ?Fi }' .Ifr 'i. s i 1 r 1 tt ' ?{ li s ? " !r t -; , I r,-t,?f;]I •.y ?'a}A. :'ftf? a,?s lE.••l',;':f :1?: (?=;` a4 r? tlx:, i. r ? ? f V =' ? ` • ? f • ??'' r ? f tl. Itihe?l.• i€?i?'.}M4iNiiFlr'.•?..?._ ... ... ....+?.w-.-. .I. ..•.-I?'.?Ma}??3?.? 1.5. .al` 1. .. .. .f ?. ?'' l.?'?, .. ,. '?'? ? .. ... 4.s..<. . .. ? .. r. .... ...Mr ? ? .... .< RESPONSE TO RFP FOR r ; CITY. OF CLEARVVATER PENSION ATTORNEY SERVICES' = I • CEMSTYANSEN & DEENM P.A. 63 SARASOTA CENTER BOULEVARD SUITE 107 SARASOTA, FLORIDA 34239 (940 377-2200 REPLY TO REQUEST. FOR PROPOSALS FOR PENSION, ATTORNEY SERVICES CMUSTMNSEN & DEE NER, P.A. QUA:LMCATIONS AND OTHER FACTUAL INFORMATION TABLE OF CONTE'NT'S 1. SEM FIRM QUALIFICATIONS PAGE. 1 A. SIZE OF FIRM I ORGANIZATIONAL STRUCTURE I LOCATION OF OFFICES I LOCATION OF RELEVANT ATTORNEYS AND STAFF I TRAVEL TIME I FLORIDA BAR ADMISSIONS 1 B. FIRM'S EXPERIENCE IN PUBLIC PENSION LAW 1 C. TECHNICAL RESOURCES AVAILABLE TO THE FIRM I D. MOST RECENT FLORIDA CLIENTS 2 E. INDEMNIFICATION AND INSURANCE 3 F. LITIGATION IN WHICH THE FIRM WAS A PARTY WITHIN THE LAST THREE YEARS 4 2. FAMILIARI'T'Y WITH GASB STATEMENT REQUIREMEN'T'S 4 3. QUALIFICATIONS OF PERSONNEL TO BE ASSIGNED 4 H. LEE DDINER 4 ' SCOTT CHRISTIANSEN 5 FIRM'S GOVERNMENTAL CLIENTS 5 4. COSTS TO PROVIDE THE VARIOUS SERVICES 7 (1) Firm Qualifications A. Size of Firm - Two attorneys and four support staff. Organizational structure - Christiansen and Dehner, P.A. is a professional association organized under the laws of the State of Florida with W. Dehner and Mr. Christiansen being equal shareholders of all issued and outstanding stock. Mr. Dehner is President and Mr. Christiansen is Vice President and Secretary. Location of office - 63 Sarasota Center Boulevard, Suite 107, Sarasota, Florida 34240. Location of relevant attorneys and staff - 63 Sarasota Center Boulevard, Suite 107, Sarasota, Florida 34240. Travel time - 3 hours round trip. Florida BarA&nUslons - Mr. Dehner was admitted to the Florida Bar on May 31, 1977 and Mr. Christiansen was admitted on October 16, 1973. The firm is authorized to operate a law office in Sarasota County pursuant to an occupational license issued by the county. B. Firm's experience in public pension law - The firm has represented local government pension funds in the State of Florida since 1979 and primarily limits its practice to such representation. Over 130 funds are represented in 76 cities and districts. Advice and representation is provided in all areas of law applicable to public retirement funds including, but not limited to, fiduciary responsibilities, liabilities, administrative hearings and procedures, tax issues, disabilities, forfeitures, benefits, plan design, filing requirements, drafting of all plan documents (including ordinances and all documents required for legal and prudent plan administration and compliance with all applicable state and federal laws). C. Technical resources available to the fine - The firm is fully computerized to handle all internal functions. Word processing, accounting and billing are all accomplished utilizing software designed for these functions. The office staff are all provided with workstations connected through an internal network. All personnel have access to the Internet and all have e-mail capability. Legal research is conducted through resources provided by West Group and we have full access to %rMLAW to provide current legal information and updating. Access to the Internet provides additional legal resources including the monitoring of federal and state legislation. Additional resources include various subscription services and organizations in which we are active members such as the National Association of Public Pension Attorneys. -1- I F . D. Most recent Florida Oents {recent retentions, recent services, various geographical locations}, aff OF APOPKA MUNICIPAL POLICE OFFICERS', FIREFIGHTERS' AND GENERAL EMPLOYEES' RETIREMENT TRUST FUNDS Ms. Connie Major, City Clerk City of Apopka 120 East Main Street Apopka; Florida 32703 CITY OF CLEARWATER FIREFIGHTERS' SUPPLEMENTAL TRUST FUND Mr. Robert Lockwood, Chairman City of Clearwater Firelighters' Supplemental Trust Fund. 610 Franklin Street Clearwater, Florida 33756 CITY OF CLEARWATER POLICE OFFICERS' PENSION FUND Mr. William Sedrick, Chairman City of Clearwater Police Officers' Pension Fund 645 Pierce Street Clearwater, Florida 33756 CITY OF DAYTONA BEACH POLICE AND FIRE DEPARTMENT PENSION FUND Mr. Dwayne Taylor, Chairman City of Daytona Beach Police and Fire Department Pension Fund 301 South Ridgewood Avenue Daytona Beach, Florida 32114 CITY OF FORT MYERS MUNICIPAL FIREFIGHTERS' PENSION TRUST FUND Chief Richard Chappelle City of Fort Myers Municipal Firefighters' Pension Trust Fund 2402 Dr. Martin Luther King Jr. Boulevard Fort Myers, Florida 33901 CITY OF KISSIMMEE MUNICIPAL FIREFIGHTERS' RETIREMENT PLAN Mr. Robert Jeck; Chairman City of Kissimmee Municipal Firefighters' Retirement Plan , 101 North Church Street Kissimmee, Florida 34741 CITY OF NEPTUNE BEACH POLICE OFFICERS' AND FIREFIGHTERS' RETIREMENT SYSTEM Officer Larry Dean, Chairman City of Neptune Beach Police Officers' and Firefighters' Retirement System 200 Lemon Street Neptune Beach, Florida 32266-6100 L". r CITY OF OCALA EMPLOYEES' PENSION SYSTEM Dr. Oel Wingo, Assistant City Manager City of Ocala Post Office Box 1270 Ocala, Florida 34478 TOWN OF ORANGE PARK FIREFIGHTERS' RETIREMENT PLAN Mr. Larry Dumas, Chairman Town of Orange Park Firefighters' Retirement Plan 331 Stowe Avenue Orange Paris, Florida 32703 CITY OF SARASOTA POLICE OFFICERS' AND GENERAL EMPLOYEES' PENSION PLANS Ms. Benita Saldutd, Pension Administrator City of Sarasota Post Office Box 1058 Sarasota, Florida 34230 CITY OF ST. PETE BEACH GENERAL EMPLOYEES' RETIREMENT SYSTEM Ms. Colette Graston, Secretary City of St. Pete Beach General Employees' Retirement System 7701 Boca Ciega Drive St. Pete Beach, Florida 33706 CITY OF TALLAHASSEE PENSION PLAN Mr. Steve Chase, Retirement Administrator City of Tallahassee 300 South Adams Street Tallahassee, Florida 32301 CITY OF VENICE GENERAL EMPLOYEES' RETIREMENT PLAN Mr. Mike McPhail, Finance Director City of Venice 401 West Venice Avenue Venice, Florida 34285 CITY OF WINTER HAVEN, FLORIDA EMPLOYEES' RETIREMENT PLAN Mr. Calvin Bowen, Finance Director City of Winter Haven Post Office Box 2277 Winter Haven, Florida 33883-2277 Services performed for all of our clients are comprehensive and include those listed in the response to (1) B. above and in Section B of the RFP. E. Indemntfication and insurance - The firm has the capability to hold harmless, indemnify and defend the City from liability claims resulting from negligence or malpractice of the firm, its officers, employees and subcontractors. The Legal ?3- M, . Professional Liability Insurance carried has limits of 1,004,004 per claim with a 3,000,000 annual aggregate and a $5,000.00 deductible. The firm has never had a claim filed against it. F. Litigation in which the, firm was a party within the last 3 years - The firm has never been a party to any litigation. (2) Familiarity with GASB Statement Requirements We are familiar with the primary requirements of the Governmental Accounting Standards Board applicable to public pension plans. They require the disclosure of actuarial and financial data pertaining to the plan. Paragraph 37 of Statement No. 25 requires a schedule disclosing funding progress. Unless the. Aggregate Actuarial Cost Method is used for funding, Paragraph 38 of Statement No. 25 requires a schedule disclosing contributions from, the employer and other entities (i.e. State of Florida). Statement No. 27 requires disclosure of annual pension costs and information' related thereto, three year trend information on annual pension cost, percentage of annual pension cost contributed and the net pension obligation. We review the valuation reports prepared by our clients' actuaries for compliance. (3) Qualifications of Personnel to be Assigned - Lee Dehner was admitted to the Florida Bar in 1977 and has represented municipal pension plans in Florida since 1979. His practice is comprehensive in the representation of local government employee retirement plans in Florida. He provides advice and representation in all areas. Mr. Dehner has been a regular speaker at pension conferences and trustee schools sponsored by the State of Florida, Division of Retirement and Florida State University and the Florida Public Pension Trustees' Association for 15 years. He has been active in legislative matters concerning Florida municipal pension plans though committee membership, drafting of proposed statutory amendments and testifying before state agencies and committees of the State House of Representatives and Senate. His knowledge of state and federal regulatory requirements is thorough and comprehensive. His consultation and advice is frequently sought by state agencies and representatives of municipal pension plans. Mr. Dehner is a member of the National Association of Public Pension Attorneys, the Florida Public Pension Trustees Association and the International Foundation of Employee Benefit Plans. He is an elected member of Who's Who in Practicing Attorneys. He is also a member of the American Bar Association, die Sarasota County Bar Association, the Florida Bar Association and the Labor and Employment Law, Local Government Law, Tax Law and Administrative Law Sections. -4- x? Scott Christiansen graduated from the University of South Florida with a Bachelor of Arts Degree in 1974 and from the University of Florida College of Law with a Juris Doctorate Degree in 1973. He was admitted to the Florida Bar in 1973, the U.S. Court of Military Appeals in i 9?4, the U.S. District Court for the Middle District of Florida in 1978 and the U.S. Supreme Court in 1989. Mr. Christiansen served in the Judge Advocate Generals Corps of the United States Army from 1973 until 1978. Mr. Christiansen served as Town Attorney for the Town of Longboat Key, Florida from 1981 through 1990. He served as, a member of the Florida Bar Grievance Committee for the Twelfth Judicial Circuit from 1988 to 1991. He is currently a member of the Sarasota County Bar Association, the Florida Bar Association and its Local Government Law, Administrative Law and Labor and Employment Law Sections. Mr. Christiansen is also a member of the National Association of Public Pension Attorneys and the Florida Public Pension Trustees' Association. Currently, Mr. Christiansen's practice is primarily in the area of municipal employee pension benefit plans and is comprehensive in the representation of local government employee retirement plans in Florida. He provides advice and representation in all areas. Both Mr. Dehner and Mr. Christiansen will be available and responsible for the complete representation of the fund in providing prompt and comprehensive legal services. The Firm's governmental clients are the following: ANNA MARIA L'LANS Fire Pension Fund APOPKA Fire, General Employees & Police Pension Funds AUBURNDALE Fire, General Employees & Police Pension Funds AVON PARK Fire & Police Pension Funds BARTOW Fire & Police Pension Funds BELLEAIR Police & Fire Pension Fund BELLIAIR BLUFFS Fire Pension Fund BELLEVIEW Police Pension Fund BONITA SPRINGS Fire Pension Fund B1ADENTON Police & Fire Pension Funds BROOKSVILLE Fire Pension Fund BUNNELL Fire Pension Fund CAPE CORAL Fire, Police & General Employees Pension Funds CASSELBERRY General Employees, Police & Fire Pension Funds CEDAR HAMMOCK Firefighters' Pension Fund CLEARWATER Fire & Police Pension Funds COCOA BEACH Police & Fire Pension Funds COCOA General Employees Pension Fund CRESTVIEW General Employees, Police & Fire Pension Funds DAYTONA BEACH Police & Fire Pension Fund DESTIN Fire Pension Fund DUNEDIN Fire Pension Fund -5- C ',, `. 4',. . . , . I 'a u ENGL.EWOOD Water District Employees & Fire Pension Funds FERNANDINA BEACH General Employees, Fire & Police Pension Funds FORT MYERS Fire, General Employees & Police Pension Funds FORT WALTON BEACH Fire & Police Pension Funds FROSTPROOF Police Pension Fund GULFPORT Fire & Police Pension Funds HAINES CITY Fire & Police Pension Funds HOLMES BEACH Police Pension Fund KISSIMMEE General Employees, Police & Fire Pension Funds KISSIMMEE Utility Authority Pension Fund LAKE ALFRED Police & General Employees Pension Funds LARGO Police & Fire Pension Fund LEESBURG Police Pension Fund LONGBOAT Employees' Pension Fund LYNN HAVEN Fire, General Employees & Police Pension Funds MELBOURNE Fire, General Employees & Police Pension Funds MILTON Fire Pension Fund NEPTUNE BEACH Fire & Police Pension Funds NEW PORT RICHEY Fire & Police Pension Funds NEW SMYRNA BEACH Fire Pension Fund' NORTH BAY Fire Pension Fund NORTH PORT Fire & Police Pension Funds OCALA General Employees & Police Pension Funds OCOEE General Employees, Police & Fire Pension Funds OKALOOSA Fire Pension Fund OKEECHOBEE Fire, General Employees & Police Pension Funds ORANGE PARK Fire Pension Fund ORMOND BEACH Fire, General Employees & Police Pension Funds OVIEDO Police Pension Fund PALM BEACH GARDENS Fire & General Employees Pension Funds PALM HARBOR Fire Pension Fund PALMETTO General Employees Pension Fund PANAMA CITY Fire & Police Pension Funds PANAMA CITY BEACH Fire & Police Pension Funds PLANT CITY Police & Fire Pension Funds PORT ORANGE Fire Pension Fund PUNTA GORDA Fire Pension Fund SANFORD Fire & Police Pension Funds SARASOTA General Employees & Police Pension Funds SEBRING Fire & Police Pension Funds SEMINOLE Fire Pension Fund SOUTH MANATEE Fire Pension Fund SOUTH PASADENA Fire Pension Fund SOUTH TRAIL. Fire Pension Fund ST. AUGUSTINE Fire Pension Fund ST. CLOUD Police & Fire Pension Funds ST. PETE BEACH General Employees, Fire & Police Pension Funds SUNRISE Police Pension Fund TALLAHASSEE ' Employees Pension Fund TARPON SPRINGS Fire Pension Fund TITUSVILLE General Employees, Police & Fire Pension Funds VENICE Fire, General Employees & Police Pension Funds WINTER GARDEN General Employees, Police & Fire Pension Funds WINTER HAVEN Fire, Police & General Employees Pension Funds WINTER PARK Fire & Police Pension Funds -6- i?? 1.41 :/ la lMri ?Ji{v' +.4 .f". ,5. •3? ' " .. '? ? • . , ? L•l''s: j`r5f; ?; ,?a? ?}t ?St`?!? :ail T`' ?+ ? _. i,' ?'!?. ? ? ! + ? t t? +'' .ts :?/_ ?e ?i'[ ii .. - J'•f.. ,?? 11 .. k'.. ti'• +: „ ,' ` 1. ' ? ? 1 ? ? J. .. .r` .' ? it ' ?' •I' .Y 1 11' r{!i'? LJ .. ''i'.f .'J ?•i ??ir; ??i'.•; '!' 'ii. 'r ,i;a. ? ! ;.i! r,t il,Y ,d,'7 ,c "?._ ?! tr' Y• I? ,S !!, h''. [? .?. ..t J: + 'A?i ?°{'• ,?.• ,rr .so t;. ;;4•:7.1: i'. .1; .. .l+ _ - '? , i .'A :•p', ! u: "i, r c. ,f ! V?yj: ra•• t1,in fl L.:x d: JA ...f.. .4:` .:ir .d?.h+Y n+S?A ?i'`'?M. .. .i? 1?.i•.4 r.::J .. .1 ''AYti,krt:r ! (4} Costs to Provide Various SeMc6s ' The.,E m'will perform the required services identified in Section B. on a time basis at. ` . the rate. of $180.00 an hour for.iegal services and one-half that rate for travel tirrze, plus reimbursement.. for out-'of-pocket' expenses incurred ' in = connection with the representation and travel, r r -- Wn jAX RAJUSU, ALTow G. WAsm Rooss J. ROYNX.L R. REID 11ANxT GaA.nxa D H. GAM"A RULIMY A. HO6aaZ3=• R. Dsmw X TWXXD. Wuazux D. SwxKDLx** J. OARY WAlZRIL BitzT EL&[Lne LAman L. Pvms scTT sravar $ L sTomzwnxv KALISH & WARD rmorKSSIONAL ASSOCIATION ATTONN[YS AT LAw 4100 13A1WM PLAZA 101 BAST EMNN$DY BOWZVAM TAMPA. FLORIDA DD002-6162 FIRM RES TELEPHONE- (g10) 222-13700 PAOSn4MEt (01D) 2211-8701 PuuAsu Rzply To- P.O. BOX 71 . TAMPA. PLO33IDA 00001.0071 •S6&XV aNATWMD TAX =.Ow"M January 12, 1999 KALISH & WARD was founded in September 1990 by eight attorneys who were formerly with one of the largest law firms in Florida. The farm was recently listed in the Martindale Hubbell Bar Register of Preeminent La,vyers which lists those selected lawyers and law firms who have received the highest rating in the legal profession and who have been chosen by their colleagues as preeminent in their fields. PRACTICE AREAS The legal practice at KAuSH & WARD is divided into the general areas of business and tax planning, employee benefits and ERISA,, health care and real estate. Our business and tax planning capabilities include all types of business and contract transactions; federal, international, and state law tax matters, including planning, tax controversies and litigation; organization and formation of corporations, charities and other business entities; capital raising transactions from private placements to public offerings; partnership law; corporate and securities laws matters; lending and financing work; professional associations; banking and financial institutions regulation; estate planning, probate administration and probate litigation; elder law matters; consumer law; automobile dealership law; computer law; and intellectual property and technology law. Our employee benefits and ERISA capabilities include all areas of employee benefits; employment and deferred compensation arrangements; stock option, restricted stock and phantom stock plans; qualified pension, profit sharing, employee stock ownership, and 401(k) plans; welfare and flexible benefit plans; and federal and state securities registration of employee benefit plans. In dealing with the requirements of ERISA, we counsel clients on fiduciary responsibility, advise them on prohibited transactions, termination and exemption issues and represent them before the Internal Revenue Service, the U.S. Department of Labor and the Pension Benefit Guaranty Corporation. The capabilities of our health care group include a full range of services in the operational, regulatory, reimbursement and transactional aspects of health care. These include managed care, organization and structure of provider groups, networks, ancillary services centers and integrated delivery systems, mergers, acquisitions, reorganizations and affiliations, fraud and abuse, antitrust planning, exempt organizations, medical staff and credentialing, physician contracting, Medicare, Medicaid and third-party reimbursement issues, certificate of need, licensure and certification matters, professional regulation and other administrative law matters, and patient rights. f ' Kalish & Ward Firm R6sum6 Page 2 Our real estate capabilities include all phases of real estate lending, refinancing and workout transactions; acquisition, development, construction, and sale of residential and commercial improved and unimproved real estate; tax free like-kind exchanges; condominium and owner's association creation and operation; zoning, land use, permitting, and environmental regulation; residential and commercial leasing transactions, real estate litigation, including landlord tenant, mortgage foreclosures, contract, construction, boundary and title litigation. The firm is also an authorized agent for Lawyers Title Insurance Corporation, Chicago Title Insurance Company; First American Title Insurance Company and Attorneys` Title Insurance Fund. A'T'TORNEYS The following is a list of the attorneys at KALISH & WARD with brief biographical information about each of them: WILLIAAt KALISH, born Elizabeth, New Jersey, June 4, 1946; admitted to bar, 1970, District of Columbia; 1976, Florida. Education: University of Pittsburgh (B.A., 1967); George Washington University (J.D., with honors, 1970); Phi Delta Phi. Trial and Appellate Attorney, Attorney General's Program for Honor Law Graduates, Tax Division, U.S. Department of Justice, Washington, D.C., 1970.1976. Chairman: Accumulated Earnings Tax and Personal Holdings Companies Subcommittee, Closely Held Corporations, 1979-1981; Chairman, Collection, Taxpayer Services, Service Center Operations Subcommittee, Administrative Practice, 1981-1987; Administrative Practice, Vice Chairman, 1987-1990, Chairman, 1990-1992; Membership and Marketing Committee, Vice Chairman, 1993-1995, Chairman, Membership and Marketing Committee, 1995--, Section of Taxation, American Bar Association. Chairman, Grievance Committee, Hillsborough County, The Florida Bar, 1984-1986; Florida Board of Bar Examiners, 1989-1994, 1995-1996, Chairman, Florida Board of Bar Examiners, 1993-1994, Emeritus Member, 1996--. Master, Justice William Glenn Terrell American Inn of Court, 1991--; Treasurer, 1994--. Chairman, Professional Courtesy Committee, Hillsborough County Bar Association, 1995--, Professional Courtesy Committee, Hillsborough County Bar Association, Vice Chairman, 1994. Member: The District of Columbia Bar. Board Certified Tax Lawyer, Florida Bar Board of Legal Specialization and Education. Practice Areas: Corporate Planning; Mergers and Acquisitions; Estate Planning; Taxation Law; Tax Controversies. ALTON C. WARD, born La Grange, Georgia, December 6, 1948; admitted to bar, 1983, Florida. Education: University of Georgia (B.B.A., 1970); University of Tampa; Stetson University (J.D.; 1982); Phi Delta Phi. Contributing Editor: The Tax Times, 1986-1988. Co-Author: A Physician's Guide to Professional Corporations, American Medical Association, 1989; An ESOP Can Be An Effective Anti- Takeover Device, The National Law Jourtwl 25, 1986, Author: The Personal Service Corporation After TEFRA: To Be or Not to Be? 12 Stetson Law Review 404, 1983. Member: Stetson Law Review, 1981- 1982. Board of Trustees and Legal Counsel, 1990 -, The Florida Bar Employees' Pension Plan. Southern Employee Benefits Conference, 1989 -; Chairman, Tampa Bay Pension Council, 1992 --; Florida West Coast Employee Benefits Council (Board of Directors, 1983-1989; Secretary, 1984-1985; Vice President, 1985-1986; President-Elect, 1986-1987; President, 1987-1988), The Florida Bar (Executive Council and Vice Chairman, Employee Benefits Committee, Tax Section, 1984-1992); KALISH & 'WARD Kalish & Ward. . Firm Rdsumd ' Page 3 American Bar Association (Member, Sections on: Employee Benefits Committee, Tax Section, 1984 --; Corporation, Banking and Business Law, 1986 --). Practice Areas: Employee Benefits Law; ERISA; Pension and Profit Sharing Law; Qualified Retirement Plans; Deferred Compensation. ROGER J. RovELL, born Orlando, Florida, February 7, 1954; admitted to bar, 1980, Florida; 1983, Georgia. Education: University of South Florida (B.A., 1977); Stetson University (J.D., 1980); University of Florida (LL.M. in Taxation, 1982). Co Author: Executive Compensation Plans, Chapter 23, Florida Corporations-Law and Practice, Matthew Bender. Member: Tax Section, Health Law Section and Employee Benefits Committee, The Florida Bar; Tax Section, American Bar Association; Florida West Coast Employee Benefits. Council (Board of Directors, Past-President); National Health Lawyers Association; State Bar of Georgia. Practice Areas: Employee Benefit Law; ERISA; Pension and Profit Sharing Law; Qualified Retirement Plans; Deferred Compensation; Employee Leasing. R. RE11) HANN'EY, born Somerset, Kentucky, December 17, 1960; admitted to bar, 1987, Florida. Education: Murray State University (B.S., cum laude, 1983); University of Kentucky (J.D., 1987); Pi Sigma Alpha; Phi Delta Phi; Carr Scholar; Associate Editor, Kentucky Law. Journal, 1986-1987. Member: Business Law Section and Health Law Section, American Bar Association; Corporations and Securities Law Committee, Business Law Section, Healthcare Law Section, Florida Bar; American Health Lawyers Association; Florida Hospital Association; Special Children's Council, Hillsborough County Bar Association. Practice Areas: Corporations and other business entities, Securities; Healthcare; and Franchising. CHARLES H. CARVER, born Hattiesburg, Mississippi, April 11, 1963; admitted to bar, 1989, Florida. Education: University of Florida (B.A., Public Relations, 1985; J.D., 1988); Florida Blue Key, President; Omicron Delta Kappa and Savant UF. Member: 1993-94 National Chair, Real Property Law Committee, American Bar Association, Young Lawyers Division; 1992-93 National Vice Chair, Real Property Law Committee, American Bar Association, Young Lawyers Division; American Bar Association Real Property, Probate & Trust Law Section and Natural Resources, Energy & Environmental Law Section; 1997-98 Executive Council, Vice-Chair, Model & Uniform Acts Committee, The Florida Bar Real Property, Probate & Trust Law Section; Hillsborough County Bar Association. Co-Author: The Americans with Disabilities Act and Real Property 01wiership, Operation and Financing, May/June 1992 issue of actionline published by The Florida Bar Real Property, Probate & Trust Law Section; Author: Real Property Law Desk Top Reference Guide, publication pending by the American Bar Association, Young Lawyers Division. Member. National Association of Industrial and Office Properties Tampa Bay Chapter Board of Directors; Attorneys' Title Insurance Fund. Practice Areas: All aspects of real estate, including acquisition, sale, development, financing, leasing and title insurance; Probate and administration of estates. KELLEY A. BOSECKER, born Cincinnati, Ohio, August 28, 1958; admitted to bar, 1983, Ohio, 1984, Florida. Education: Bowling Green. State University (B.S.B.A., Accounting and Legal Studies, 1980); The University of Toledo College of Law (J.D., 1983); University of Florida (LL.M. in Taxation, 1984); Alpha Lambda Delta; Omicron Delta Kappa; Mortar Board. Board Certified Tax Lawyer, Florida Bar Board of Certification (1989). Member: Tax Section, The Florida Bar; Tax KALISH & WARD Kalish & Ward Firm ROsumd Page 4 Section, American Bar Association; Florida West Coast Employee Benefits Council (Board of Directors, 1995- ); Hillsborough County Bar Association (Co-Chair Tax Section, 1998-1999); Hillsborough County Association of Women Lawyers; Leadership Broward Alumni; - Florida Public Pension Trustees Association; Tampa Bay Estate Planning Council. Practice Areas: Employee Benefit Law; ERISA Qualified Retirement Plans; Deferred Compensation; Tax Law; Estate Planning. R. DENNis TWEED, born Phoenix, Arizona, January 24, 1951; admitted to bar, 1983, Florida; 1955, U.S. Tax Court and U.S. District Court, Middle District of Florida. Education: University of Florida (B.A., with high honors, 1973; J.D., with honors, 1982; LL.M. Taxation, 1984). Phi Beta Kappa; Phi Delta Phi. Member: Tax Section, The Florida Bar; Tax Section, American Bar Association; Florida West Coast Employee Benefits Council; Hillsborough County Bar Association. Practice Areas. Employee Benefit Law; ERiSA; Pension and Profit Sharing Law; Qualified Retirement Plans; Deferred Compensation. WrLLLot R. SWINDLE, born Clifton, New Jersey, October 2, 1959; admitted to bar, 1985, Florida; 1986, U.S. Tax Court. Education: Florida Southern College (B.S., in Accounting, magna cum laude, 1981); University of Florida (J.D., with honors, 1984; LL.M. in Taxation, 1985); Phi Kappa Phi; Order of the Coif; Chief Tax Editor, University of Florida Law Review, 1983-1984. Certified Public Accountant, Florida, 1985. Author: The Federal Tax Classification of Florida Limited Liability Companies, The Florida Bar Journal, October, 1994; Allocation of Consideration in Asset Acquisitions in Tax Aspects of the Sale of a Business, Florida Bar CLE Practice Manual, 1989; The Impact of Recent Legislation 'on the Dual Banking System, The Adelphia Law Journal, 1984, Chapter 2; The Defendant's Right of Corgi'rontation, Are the Exceptions Swallowing the General Rule, The American Journal of Trial Advocacy, 421-431, 1983; Member: Hillsborough County Bar Association (Chairman, Real Property, Probate and Trust Law Section, 1989-1990 and Chairman, Circuit Court Probate Rules, Education and Liaison Committee, 1990-1991); The Florida Bar; The Tampa Bay Estate Planning Council; The Tax Council of Tampa Bay; Board of Directors of the Suncoast Ronald McDonald House (1995-1997); and Planned Giving Committee of Hospice of Hillsborough Foundation. Board Certified in Wills, Trusts, and Estates by the Florida Bar Board of Legal Specialization and Education. Board Certified in Taxation by the Florida Bar Board of Legal Spccialization and Education. Practice Areas: Tax Law; Estate Planning; Probate Administration; Partnerships; Corporations. GARY WALKER, born Cleveland, Mississippi, July 28, 1951; admitted to bar, 1978, Florida. Education: Delta State University (B.A., high honors, 1972); Florida State University (M.S. with honors, 1975; J.D. with honors, 1978); Omicron Delta Kappa, Moot Court, Phi Delta Phi. General Counsel, Florida Health Care Cost Containment Board, 1985-1989; Senior Health Policy Analyst, The Florida Senate Committee on Health, 1981-1984. Member: Health Law and Corporate Law Sections, The Florida Bar; Florida Academy of Health Care Attorneys; Hillsborough County Bar Association, Health Care Law Section, Chair, 1997-1988. Co Author: Legislative vs. Judicial Regulation of Hospital Charges, April 1992 issue of The Florida Bar Journal; Freestanding Ambulatory Surgery: Cost Containment Winner?, July 1993 issue of Healthcare Financial Management; Managed Competition: Has Its Time Come in Florida?, February 1993 issue of Hospital News. Practice Areas: Health Care; Corporate Law. KALISH &WARD ' Kalish & Ward Firm Rtsum6 Page 5 : BREr ffirIImIN, born Canton, Ohio, April 24, 1963; admitted to bar, 1991, Ohio; 1995, Florida. Education: University of Almon (B.S., Accounting, 1985); University of Akron School of Law (J.D.,- 1991); Certified Retirement Plan Specialist. Member: Tax Section, American Bar Association; The Florida Bar; Ohio Bar Association; Hillsborough County Bar Association; Florida West Coast Employee Benefits. Council and Tampa Bay- Pension Council, Practice Areas: Employee Benefits Law; ERISA; Pension and Profit Sharing Law; Qualified Retirement Plans; Deferred Compensation. LAuRm L. PueKm, born Green Bay, Wisconsin, January 7, 1966; admitted to bar, 1994, Florida; 1995, U.S. District Court, Middle District of Florida; 1996, Eleventh Circuit Court of Appeal. Education: University of Hawaii (B.A., with honors,-, 1989); Stetson University (J.D., 1993). Member. American Bar Association, Labor Section, Tax Section and Young Lawyers Division; Hillsborough County Association of Women Lawyers; Tampa Bay Pension Council; Florida West Coast Employee Benefits Council; Practice Areas: Employee Benefit Law; ERISA; Pension and Profit Sharing Law; Qualified Retirement Plans; Deferred Compensation. STEVEN R. LASTOMIRSKY, born Bellefonte, Pennsylvania, February 17, 1967; admitted to bar, 1993, Massachusetts and Florida; 1995, Oregon. Education: Dartmouth College (B.A., cum laude, 1989); Washington College of Law of American University (J.D., 1992); University of Florida (LL.M., Taxation, 1994). Member: Florida Bar; Oregon State Bar (Sections of Taxation, Business Law and Estate Planning); Hillsborough County Bar Association; Tampa Bay Estate Planning Council; American Bar Association (Member, Section of Taxation). Practice Areas: Tax Law; Business Law; Estate Planning; Real Estate Law. In addition to their Bar and professional activities, all of the attorneys at KALISH & WARD are involved in local chamber of commerce, business, service, and charitable clubs and organizations, KALISH & YARD KALISH & WARD. P.A. EMPLOYEE BENEFITS . REPRESENTATIVE CLIENTS City of Clearwater City of Lakeland, Pension Boards for General, Fire and Police Pension Plans City of St. Petersburg City of Gulfport City of Dunedin City of Wauchula City of Belleview City of Belleair Bluffs City of Cocoa City of Tarpon Springs Hillsborough County Lee County Hillsborough County School District ' Hernando County School Board . Southern Manatee Fire and Rescue District Florida Health Sciences Center, Inc. - (dlbla Tampa General Healthcare) ' . BayCare Health System All Children's Hospital Munroe Regional Health System Eckerd Corporation Celotex Corporation Walter Industries Havatampa, Inc. National Beverage Corporation Electric Fuels Corp. (a Florida Progress Company) Raymond James Financial, Inc. Salem Trust Company Refiectone, Inc. Florida Employers Insurance Service Corporation Aerosonic Corporation Lincare, Inc. US Agri-Chemicals Corp. Pueblo International Tech Data Corporation Danka Industries The Florida Bar Paradyne Corporation Hydro-Agri, Noah America, Inc. KALISH & Ti'1TAnD KALISH & WARD EMPLOYEE BENEFITS PRACTICE RESUME ALTON C. WARD Mr. Ward is a senior partner and head of the employee benefits practice. He received his B.A. from the University of Georgia and his J.D. from Stetson University College of Law. Mr. Ward is the Chairman of the Tampa Bay Pension Council and was a founding board member and past president of the Florida West Coast Employee Benefits Council. He is an active member of the Employee Benefits Committees of The Florida Bar and the American Bar Association. He is a member of the Board of Trustees of The Florida Bar Employees' Pension Plan and Trust and serves as its legal counsel. He is a member of the Southern Employee Benefits Conference and currently serves on the Membership Committee. Mr. Ward is a former member of the faculty on the Law of Pensions for the American Law Institute -- American Bar Association Committee on Continuing Professional Education. Mr. Ward is named one of the best lawyers in the country in the specialty of Employee Benefits Law in The,Best Lawyers in America (Woodward/White, Inc., 1992- 1998). He was recently selected as a Leading Florida Attorney and serves on the' Leading Florida Attomeys Business Advisory Board. His areas of practice include employee benefits, executive compensation, deferred compensation, trusts and taxation. Prior to entering the practice of law, he was an actuarial and employee benefits consultant for over eight years. Mr. Ward has written and lectured extensively on the subject of employee benefits and deferred compensation. ROGER J. ROVELL Mr. Rovell is a founding partner of the law firm and has been practicing in the employee benefits area for over fourteen years. He received his Master of Laws (LL.M.) in Taxation from the University of Florida School of Law and his J.D. from Stetson University College of Law. He received his B.S. from the University of South Florida. Mr. Rovell is a member of the Florida West Coast Employee Benefits Council and past president of that organization. He is also a member of the Employee Benefits Committees and Health Law Sections of The Florida Bar and American Bar Association and a member of the National Health Lawyers Association. Mr. Rovell has lectured extensively on employee benefits and related topics. He has co-authored "Executive Compensation Plans," Chapter 23, Florida Corporate Law and Practice, Matthew Bender. He has served as a faculty member for Florida Bar continuing legal education seminars and has prepared continuing legal education course materials for the Florida Bar and the American Bar Association. Mr. Rovell practices primarily in the area of employee benefits, deferred compensation and health care law. 1ULISH & WARD • L KELLEY A. BOSECKER Ms. Bosecker has been practicing In the employee benefits area for over fourteen years and is a FFlorida Bar Board Certified Tax Lawyer. She is also admitted to practice in Ohio. She received her Master of Laws (LL.M.) in Taxation from The University of Florida College of Law and her J.D. from The University of Toledo College of Law. She received her B.S.B.A. in Accounting from Bowling Green State University. Ms. Bosecker is on the Board of Directors of the Florida West Coast Employee Benefits Council, is the Co-Chair of the Hillsborough County Bar Association Tax Section and is a member of the Tampa Bay Pension Council and the Tampa Bay Estate Planning Council. She is also a member of the Florida Public Pension Trustees Association, the Tax Sections of The Florida Bar and the American Bar Association, the Hillsborough County Bar Association, the Hillsborough County Association of - Women Lawyers, B.E.A.M. r Be Enthusiastic About MOSI" (Museum of Science & Industry)], and Leadership Broward Alumni. Ms. Bosecker is a frequent lecturer on employee benefits. . Ms. Bosecker's primary areas of practice are employee benefits, deferred compensation, taxation and estate planning. R. DENNIS TWEED Mr. Tweed has been practicing in the employee benefits area for over fourteen years. He received his Master of Laws (LL.M.) in Taxation from the University of Florida College of Law in 1984. He has also received his J.D. and his B.A. from the University of Florida. Mr. Tweed is a member of the Florida West Coast Employee Benefits Council and the Tax Sections of the Florida Bar and the American Bar Association. He has written materials for the Florida Bar and the ABA regarding, and has lectured on, employee benefits. Mr. Tweed's areas of practice include employee benefits and deferred compensation, ERISA compliance, VEBAs and other welfare benefit plans, pension and profit sharing law and general state and federal tax matters. BRET HAMLIN Mr. Hamlin has over ten years of experience in the employee benefits area. He is admitted to practice in Florida and Ohio. He received his J.D. from the University. of Akron School of Law. He received his B.S. in Accounting from the University of Akron. He also has the designation of a Certified Retirement Plan Specialist. Mr. Hamlin is a member of the Florida West Coast Employee Benefits Council and the Tampa Bay Pension Council. He is also a member of the Tax Section of the American Bar Association, The Florida Bar and the Hillsborough County Bar Association. Mr. Hamlin has also lectured on employee benefits. Mr. Hamlin practices primarily in the area of employee benefits, deferred compensation and trusts. Prior to entering the practice of law, he specialized in employee benefit trust and plan administration, most recently with SunTrust Banks of Florida. KALISH & WARD I, LAURIE L. PUCKETT Ms. Puckett received her. J. D. from Stetson University,in 1993 and is admitted to practice in Florida, and before.the United States District Court, Middle District of Florida and the Eleventh. Circuit Court of Appeal. Ms, Duckett is a member of the Labor Section, Tax Section and Young Lawyers Division of the American Bar Association; the Hillsborough County Association of Women Lawyers; Tampa Bay Pension Council and the Florida West Coast Employee Benefits Council. ?Ms.' Puckett practices primarily in the area of employee benefits' law, ERISA, pension and profit sharing law, qualified retirement plans, and deferred compensation. LAURA D, FRASER . Ms. Fraser is the Employee Benefits Practice legal assistant.; She received her B.A. from Indiana University and has over 13 years of experience in the employee benefits field. She is a member of the Tampa Bay Pension Council and is currently pursuing her Certified Employee Benefit Specialist designation through the International Foundation.of Employee Benefit Plans and the Wharton School of Business. K.ALISH & WARD i r Arson 0. WAa1LD Roama J. nOriLL E. Rstn H,ilrzT GKAZLa H. CA.lersa KzLLzT A. DoOnOzz=' B. Damns TwxXD WELWA t R SWMZLn*O J. GART WAIAMM BXZT HAX=K Lavarz L Pu=zTT STavuN E. Lurommusrr "Nu" Oawnytan >%Lx t.Orraa . *]BOA" O:arrnrti'WZaA. TXVeM i 7t?rwrsR LWMM VM_HAND DELIVERY K&MXSH & WARD FROF[aS10NAL A660CIATION ATTORNRTl1 AT LAW 4100luunf IPLAZA 101 EA MENNEDYAOQLEVAHD TAMPA. FW13MA 00002.5152 January 12, 1999 TELEPHONE: (818) I22 2.8700 PAC;SDnr.E: (810) 222.0701 P1- a EmrsT Tor P.O. Box 71 TAMPA, FWWA 00001-0071 WRI'TER'S DIRECT LINE: (813) 222-8722 City of Clearwater Purchasing Manager 100 South Myrtle Avenue, V Floor Clearwater; FL 33756 Re: Legal Counsel for the City of Clearwater Employees' Pension Plan Thank you for the opportunity to submit a proposal for the provision of legal and related services to the Board of Trustees and Pension Advisory Committee of the City of Clearwater Employees' Pension Plan (the "Plan"). Our firm has been providing legal services for the Plan through the City of Clearwater City Attorney's office since 1991. This letter and enclosures will provide you with information about the background of our firm, our experience and expertise in the employee benefits area and information regarding our fees. FIRM QUALIFICATIONS Since its inception in 1990, our firm has, by design, concentrated an providing clients with the highest level of professional service on a timely basis. We pride ourselves on being able to provide our clients with genuine expertise throughout the full spectrum of employee benefits matters. Enclosed is a copy of our firm's resume which provides information about our firm, our attorneys and their areas of expertise. . We are proud of the academic and professional achievements of our attorneys. We believe they are the essential foundation for our commitment to excellence and the quality of services provided to our clients. All of our attorneys are in good standing with the Florida Bar. Our office is located in downtown Tampa. The firm is listed in the Martindale Hubbell Bar Register of Preeminent Ca which lists those select lawyers and law firms who have received the highest rating in the legal profession and who have been chosen by their colleagues as preeminent in their fields. City of Clearwater Purchasing Department January 12, 1999 Page 2 EMPLOYEE BENEFITS PRACTICE Our firm has the largest employee benefits practice in the State of Florida, with six attorneys and a legal assistant who are involved with employee benefit matters on a full-time basis. We have recently hired a seventh employee benefits attorney who will be joining the firm on February 15, 1999. Our clients are involved in a full range of activities, from agricultural to industrial as well as many governmental entities, public companies, and not-for-profit organizations located throughout the State of Florida. We currently represent the City of Clearwater, the City of St. Petersburg, the City of Lakeland, the City of Dunedin, the City of Belleair Bluffs, the City of Tarpon Springs, the City of Cocoa, the City of Wauchula and the City of Gulfport with respect to their general employee and/or Florida Statutes Chapter 175 and/or 185 pensions plans. We work with these clients as to all aspects of their pension plans including state and federal legal requirements and tax qualification requirements. We also currently represent numerous municipalities, counties, school and special districts with respect to their deferred compensation plans, severance plans, health plans, flexible benefit plans and other types of welfare benefit plans. This representation includes ongoing advice with regard to plan operation, administration and tax and legal compliance. We are substantially involved in benefit plan design, drafting of plan documents and ordinances to adopt and amend pension and welfare benefit plans, and in providing advice to cities, counties, pension boards and school and special districts regarding all types of employee benefits issues. We have enclosed additional information regarding the attorneys in our employee benefits practice in the enclosure entitled "Kalish & Ward Employee Benefits Practice". PROFESSIONAL FEES In most cases, legal fees are billed at straight hourly rates multiplied by the amount of time spent by attorneys and legal assistants on a particular matter. I would be primarily responsible for the legal representation for the City of Clearwater and my current hourly rate is $190.00 per hour. The billing rates of the other attorneys in our employee benefits department range between $130.00 and $260.00 per hour. The hourly rate for our employee benefits paralegal is $85.00 per hour. We are sensitive to the high cost of legal fees and will do our best to utilize the most qualified people to achieve the best results in a cost effective manner. Charges for attendance at Board of Trustee and Pension Advisory Committee meetings, legal research, assistance with disability determinations, plan design and compliance advice will generally be billed on an hourly basis. However, we will be happy to consider a discount of our hourly rates based on the amount of work to be performed. We can also quote flat fees for the preparation of plan documents and amendments, and other similar projects. IKALXSH & WARD City of Clearwater Purchasing Department January 12, 1999 Page 3 Charges for legal services include, but are not necessarily limited to, all conference time with the Board and Pension Advisory Committee and other parties, time spent In legal research and In preparing legal memoranda, letters, legal documents and other written materials, time spent on the telephone regarding your legal matters and conference time between attomeys in the office as we may deem necessary.. Further, we will bill you for all out of pocket expenses such as long distance telephone charges, telephone facsimiles (faxes) at the rate of $2.00 per page, messenger services, federal express, photocopying at the rate of .25 cents per page, travel expenses (including mileage charges, airfare and/or hotel expenses if applicable), and filing fees which may be incurred. INSURANCE AND RELATED ISSUES We have attached a copy of the Declarations for our Lawyers Professional Liability Policy. Our Policy meets the minimum requirements set forth in the Request for Proposal: If we are selected to serve as Pension Counsel for the City of Clearwater, we will provide the City with a certified copy of the insurance policy. The firm will agree to indemnify and defend the City for losses, costs and expenses arising from liability claims resulting from an act of omission of the firm in providing legal services with respect to the Plan. Our firm has not been a party to any litigation during the past three years. REPRESENTATIVE CLIENTS AND CONTACT PERSONS We have attached a list of employee benefits representative clients for which our firm is currently serving or has performed services as employee benefits counsel. The following is a list of contact persons for four of these clients: Pamela Akin, City Attorney City of Clearwater P.O. Box 4748 Clearwater, FL 34618-4748 Gary E. Clark, Director Pension Board for the City of Lakeland Department of Civil Service & Retirement 500 North Lake Parker Avenue Lakeland, FL 33801-2097 Maureen Freaney, Director of Administration City of Dunedin P.O. Box 1348 Dunedin, FL 34697-1348 Mark Schuetzler, Director of Employee Relations Lincare Inc. 19337 U.S. 19 North Suite 500 Clearwater, FL 34624 If you would like additional references, please let me know and we will be happy to provide additional contact names. KA.LISS SC WA$D I City of Clearwater Purchasing Department January 12, 1999 Page 4 AQUITIONAL 1 FOR ATION If our firm is chosen as counsel for the Board, the Board will benefit from our wide range of experience and depth In the employee benefits area. The Board will also benefit from our knowledge and experience with respect to the Plan based on our representation of the Plan over the past several years. Due to the large number of attomeys in our employee benefits department, there is always a backup individual that is available to deal with a matter if the primary attorney is unavailable. As Indicated, the firm has a great deal of experience in providing similar legal services to a variety of governmental entities, and the Board will benefit from this expertise in that.many issues raised would likely have already been addressed in, some fashion with respect to another client. The Board will also benefit from the firm's substantial experience in the federal and state tax arenas. These tax laws are play an important role with respect to pension plans. Our firm is familiar with the GASB requirements goveming the reporting of benefit liabilities on govemmental financial statements. Although GASB requirements are generally dealt with by actuaries and accountants, we have been requested to assist with issues arising under the GASB rules. For example, we have recently addressed issues with respect to the proper disclosure of unfunded accrued sick pay under the GASB disclosure requirements. Our firm has a networked computer system with full e-mail and Internet capabilities. We have several research libraries on CD-ROM and a complete legal library in our office. We subscribe to the on-line Lexis-Nexis research service and have numerous other research services available to us via the Internet. We hope the enclosed information is sufficient to assist you in your decision regarding legal representation for the Board and the Pension Advisory Committee. If you. need any additional information or have any questions, please feel free to call me. Thank you for your consideration. KABIIh Enclosures 94205 , ncerely, Iley Bosecker KALXSH & WAan aCORD- CERTIFICATE OF INSURANCE DATE "'?°""' 1207/98 PRODUCER THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION Suncoast Insurance Associates ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE P.O. HOX 22668 HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. Tampa, FL 33622-2668 COMPANIES AFFORDING COVERAGE COMPANY ASt. Paul Fire & Marine INSURSD Kalish & Ward, P.A. ; jC e lorida Retail Federation P O ' Box 71 Tampa, FL 33601 COMPANY I cSecurity Ins of Hartford-LPLS COMPANY D COVERAGES THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BE LOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD ` INDICATED, NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. TYPE OF INSURANCE POLICY NUMBER . LT R POLICY IDEONYIE I DATE E XP LIMITS A GENERAL LuBIUTY RP 0 6 6 4 5 6 5 8 11/19/98 1 11119199 GENERAL AGGREGATE s2,000'000 GOMMERCLILL GENERAL LIABILITY f PRODUCTS.COMPIOP AGG S2 000,000 J CLAIMS IAADE i X: OCCUR PERSONAL s AOV INJURY 31 000,000 OWNER'S a CONTRACTORS PROT i I EACH OCCURRENCE Sl 000,000 I I FIRE DAMAGE (Arty om Mv) $1 000,000 I ME D EXP (Arty orw pmon) SS 000--- A ' AUTOMOBILEUABIUTY RP06645658 11/19/98 ,11/19/99 ANY AUTO COMBINED SINGLE LIMIT 31 , 0 O 0 , 000 ..-- u? ALL OWNED AUTOS BODILY INJURY 3 SCHEDULED AUTOS (Par peru nl X HIRED AUTOS BODILY INJURY X NON-OWNED AUTOS (PN oct+du+ll 1 I I PROPERTY DAMAGE 13 GARAGE LIABILITY AUTO ONLY-EA ACCIDENT 13 ANY AUTO I OTHER THAN AUTO ONLY 1 EACH ACCIDENT 13 AGGREGATE IS EXCE35 LIABILITY I EACH OCCURRENCE I3 UMBRELLA FORM ;AGGREGATE 3 OTHER THAN UMBRELLA FORM I3 B WORKERS COMPENSATION AND 5-520-15077 0000 !01/01/99 :01/01/00 I STATUTORY LIMITS EMPLOYERS' LIABILITY W I F-ACH ACCIDENT S5 0 0 THE PROPRIL•TORI INCL DISEASE-POLICY LIMIT I35 0 0 PARTNERSIEXECUTIVE I OFFICERSARE- X E EXCL DISEAI SE. EACH EMPLOYEE 1350 0 C IOTHER SLP934178 112/05/98'x.2/05/99 $5,000,000 Ea Claim ,!Professional $5,000,000 Ann Agg Liability i DESCRIPTION OF OPERAnONSILOCAIIONSNEHICL.ESMPECIAL ITEMS Professional Liability is written on a claims made basis. CERTIFICATE HOLDER CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE For Information Purposes Only EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL 3Q_ DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLLER NAMED TO THE LEFT. BUT FAILURE TO MAIL SUCH NOTICE $HALL IMP03E NO OBLIGATION OR UABILTTY OF ANY KIND UPON THE COMPANY ITS AGENTS OR REPRESENTATIVES. ROED REPRESENTATIVE A8A44-4+ ACORD 2b•S (3153) of 7 O ACORD CORPORATION 1993 m RESPONSE TO REQUEST FOR PROPOSAL FOR, PENSION ATTORNEY SERVICES FOR THE CITY -OF CLEARWATER, FLORIDA'.. RF? 10-99 TO BE OPENED AT 4:00 PM, EDT, JANUARY 12, 1999 SUBMITTED BY CYPEN & CYPEN 825 AR'T'HUR GODFREY ROAD MIAMI BEACH, FLORIDA 33140 www.cypen.com TELEPHONE: 305,532.3200 TELEPHONE (TOLL FREE): 800.332.3200 TELECO PI ER: 3 05.535.0050 E-MML: cypen@compuser+e.com DATED JANUARY 7,.1999 CYPEN S CYPEN P. O. BOX 402099 MIAMI BEACH. FLORIDA 33140-0099 A. INTRODUCTION/BACKGROUND We have read this section of the RFP to.understand the scope of the proposed pension attorney services. We have obtained off the Internet a copy of the City of Clearwater Employees' Pension Fund (§§2391, et seq., as amended by Ord. No. 6217-97,1214197). We have read the Plan In order to obtain a threshold knowledge of its contents. B. REQUIRED SERVICES AND PERFORMANCE STANDARDS We are able to provide a full scope of legal services and can demonstrate experience in providing legal advice, document and ordinance preparation, and litigation in the area of public pension law. We are able to provide all such services, including but not limited to, those listed under this section of the RFP. C. QUALIFICATIONS AND OTHER FACTUAL INFORMATION (1) Firm Qualifications A. The firm is a sole proprietorship, composed of four attorneys, located at 825 Arthur Godfrey Road, Miami Beach, Florida 33140. The foregoing is the firm's only office, where all attorneys and support staff are located. All attorneys are members of the Florida Bar and have appropriate occupational licensing in Miami/Dade County, Florida. We assume (without knowing) that attendance at a meeting in Clearwater would necessitate an entire working day's time. Presumably, the attorney would fly to Tampa early in the morning, drive to Clearwater, attend the meeting and return late the same day. B. The firm was established in 1946 and has been representing public pension plans since that time. The firm currently serves as general counsel to approximately thirty local government pension plans. Since 1976, Stephen H. Cypen has served as attorney for the Town of Surfside, drafting hundreds of ordinances covering pensions and otherwise. In addition, lie has drafted numerous pension and related ordinances for public pension clients. For the last forty years, the firm has been involved in litigation concerning some of the most important public pension issues in the State of Florida. Under Tab 1 of the accompanying Appendix, copies of some of those cases can be found. C. The firm has computer capacity and access to specialized and other legal research data bases. The firm maintains an Internet website at http://www.cypen.coni. The firm's e-mail address, cypen@compuserve.com, is available as a convenience to clients. Also for the convenience of clients, the firm maintains a toll free telephone number, 800.332.3200. Finally, the firm publishes a Newsletterdealing with public pension law and related areas CYPEN 6 CYPEN P. O. BOX 402099 MIAMI DEACN, FLORIDA 33140.0009 11 11 (also available on our website, including a search engine for archival research). Under Tab 2 of the accompanying Appendix, we have included copies of the last four issues of our Newsletter and two prior special issues of particular interest to public pension clients. D. We are not sure who would be considered our "most recent" clients within the State of Florida. Therefore, under Tab 3 of the accompanying Appendix, we have listed all of our Florida public pension clients, including when representation commenced. The list includes names, addresses and phone numbers of contact persons. We perform all legal services for these clients, including the services sought by this RFP. F. We are able to hold harmless, indemnify and defend the City of Clearwater for losses, costs and expenses arising from liability claims resulting from alleged negligence or malpractice of our firm, its members and employees. As we understand the law of malpractice, an attorney committing malpractice is in fact so liable for the foregoing items. The firm carries $5,000,000.00 Professional Liability Insurance through Florida Lawyers Mutual Insurance Company. Please note that said policy contains a $2,500.00 deductible, the lowest offered by the carrier. F. We assume this part calls for our firm's involvement as a defendant in litigation during the past three years. In over fifty years of practice, the firm has been involved in one such matter, involving a commercial transaction in 1995. That litigation, which involves a counterclaim for attorneys' fees, is pending. We believe said action was filed primarily to avoid payment of the balance of our fees. (2) Familiarity with GASB Statement Requirements Requirements of the Governmental Accounting Standards Board are usually the responsibility of the auditors. However, we do have a general familiarity with GASB Statement 3 (Note Disclosure Requirements for Deposits with Financial Institutions, Investments and Reverse Repurchase Agreements), GASB Statement 25 (Financial ReportingforDefined Benefit Pension Plans and Note Disclosure forDefined Contribution Plans), GASB Statement 26 (Financial Reportingfor Postemployment Healthcare Plans Administered by Defined Benefit Pension Plans), GASB Statement 27 (Accounting for Pensions by State and Local Government Employers) and GASB Statement 31 (Accounting and Financial Reportingfor Certain Investments and for External Investment Pools). We are also familiar with GASB Technical Bulletin No. 98-1, dealing with Disclosures About Year 2000 Issues. The TB is quite controversial and has caused a rift between GASB and the AICPA. In addition, many auditors have already mistaken the effective date of the TB. 2 CYPEN 6 CYPEN P. O. BOX 402002 MIAMI BEACm. FLORIDA 33t40.0029 it' . I (3) Qualifycations of Personnel to be Assigned Stephen H. Cypen will be primarily responsible to represent the Board-or Trustees. To the extent necessary, he will be assisted and backed up by Myles G. Cypen. Other attorneys in the office are available, as needed, when the situation dictates. Stephen H. Cypen has been representing Florida Municipal Pension Plans since 1968. From inception of the program, he was "designated" in Administrative and Governmental.Law under The Florida Bar Designation Plan. He is one of less than one hundred lawyers in the State of Florida "Board Certified" as specialists in City, County & Local Government Law. Moreover, he is a member of the State Standing Committee on City County & Local Government Certification (responsible for writing and grading all exams). He is actively involved in the following pension sector professional activities: Florida Public Pension Trustees Association (FPPTA) National Association of Public Pension Attorneys (NAPPA) The International Foundation of Employee Benefit Plans Government Finance Officers Association (GFOA) Local Government Law Section of The Florida Bar Administrative Law Section of The Florida Bar State and Local Government Law Section of The American Bar Association Close involvement with the legislative process concerning Chapters 175 and 18S, Florida Statutes, and Chapter 112, Florida Statutes, Part VII, "Actuarial Soundness of Retirement Systems." Participation in the Annual Police Officers' and Firefighters' Pension Administrators' Conference sponsored by the Division of Retirement from its inception Participation in the Annual Trustees' School sponsored by the Division of Retirement and Florida State University from its inception 3 CYPEN 6 CYPEN P. O. FOX 402099 MIAMI BEACH, FLORIDA 33140.0092 Participation In the Florida Public Pension Trustees Association (FPPTA) Annual Conference from its inception Participation in the Florida Public Pension Trustees Association (FPPTA) Annual Trustees' School from its inception (4) Myles G. Cypen has been representing Florida Municipal Pension Plans since he was admitted to the Bar. He is a member of Phi Beta Kappa National Honor Society. Myles Cypen has backed up Stephen Cypen in various municipal pension plan matters for the last twenty years. He has handled most of our pension-related litigation for over fifteen years. Irving Cypen has been representing Florida Municipal Pension Plans since 1946. He was instrumental in drafting and obtaining passage of one of the first Municipal Pension Plans In the State of Florida. He was also instrumental in regular amendments thereof by the Florida Legislature prior to implementation of Home Rule in the State of Florida. Irving Cypen is a former Circuit Court Judge in Dade County, Florida. Wayne A. Cypen served as a senior law clerk to a United States District Judge in the Southern District of Florida. Among other memberships, he is a member of Phi Beta Kappa. A. Most of this information has been provided in the above resumes and in Item C (1)(B). In addition, Stephen H. Cypen has written numerous articles for various publications dealing with the area of public pension law. He has been privileged to have West Publishing, the world's largest publishing company, on a recurring basis reprint items from the firm's Newsletter. Some of those reprints can be found under Tab 4 of the accompanying Appendix. Also Included is a reprint from Lite prestigious "Local Government Law Weekly," published by the American Bar Association. Two members of the staff are certified legal assistants. In addition, Stephen H. Cypen, Myles G. Cypen and Wayne A. Cypen have all served as President of the Miami Beach Bar Association. B. Stephen I1. Cypen or Myles G. Cypen will be available as required. Costs to Provide the Various Services A. We did not receive the RFP in time to make any inquiries or requests concerning clarification or additional information pertaining to the RFP. Therefore, our response to this section will necessarily be general in nature. We cannot propose a fee on a project basis or state the total cost because we 4 CYPEN 6 CYPEN P. O. BOX 402009 MIAMI BEACH. FLORIDA 33140.0095) have no idea how much time will be required. However, we can propose a fee based upon an hourly rate, which can be converted to another basis after the amount of time required has been determined. Our standard hourly rates. vary from $250.00 to $400.00. 'We would propose a single hourly rate of $200.00. We keep detailed time records, broken down into tenths of hours. We do bill 'for actual out-of-pocket expenses such as travel fares, long. distance telephone calls, photocopies, couriers and facsimile transmissions. E. INDEMNIFICATION AND INSURANCE REQUIREMENTS As indicated above in response to C(1)E, we arewilling to comply with this section. Please note that our professional liability insurance has a deductible of $2,500.00, the lowest available. F. through T. We have read and understand these sections. U. SELECTION CRITERIA We believe that no other firm in Florida can offer the same competence, including technical education and training, and experience in public sector pension law. Most other firms have entered this arena rather recently, and generally, have come from the labor or workers' compensation areas of law. As stated above, our firm has been involved in many of the important appellate decisions in Florida involving public pensions. We believe our professional capacity and experience are unmatched in Florida. Our firm is rated "AV" by the prestigious Martindale-Hubbell. In addition, every lawyer is individually rated "AV," a rather unusual situation. Inasmuch as Martindale- -Hubbell is a national law directory which bases its ratings upon the confidential reporting of judges and other attorneys, we believe it is an important tool in assessing the capacity and experience of any attorney. Finally, very few four-person firms can offer over 125 years of legal experience. Respectfully submitted, CYPEN & CYPEN 5 M CYPEN 6 CYPEN P. O, BOx 40x^.099 MIAMI BEACH. FLORIDA 33140.0099 STATE OF. FLORIDA ) )SS: COUNTY OF MIAMI-DADS j I. HEREBY CERTIFY that on this day, before me, an .officer duly authorized to administer oaths and take acknowledgements, personally appeat':d STEPHEN H. CYPEN, a member of the law firm of CYPEN & CYPEN, personally known to me to be the person described in and who executed the foregoing instnsment, who acknowledged before me that he executed the same on behalf of the law firm of CYPEN & CYPEN. WXTNESS my hand and official seal in the County and State last aforesaid, this 7th day of January, 1999. 1 t N., M, W ,• Notary Public r_ . ?J v!> Printed Notary Signature o c OT JUDISTARK NOTARY KjBuc STATE OF RDRIDA COMMMON NO. CCSW/2Z MYCOMMISMON EXP.OCT.16 5 CYPEN S CYPEN P. 0. DOX 402009 MIAMI Mr-ACH, F'l.ORIDA 33140.0092 SUBMITTED BY CYPEN & CYPEN 825 ARTHUR GODFREY ROAD MIAMI BEACH, FLORIDA 33140 www.cypen.com TELEPHONE: 305.532.3200 TELEPHONE (TOLL FREE): 800.332.3200 TELECOPIER: 305.535.0050 ' E-MAIL: cypen@compuserve.com i DATED JANUARY 7, 1999 CYPEN & CYPEN P, 0. BOX 402069 MIAMI VICACH• FLORIDA 33140-0066 y ROBYN CHRISTOPHERS, Petitioner, vs. POLICE AN... Page 1 of3 4 Fla. L. Weekly Supp. 207a Municipal corporations--Public employees-Police officers-In-line-of-duty disability retirement--Competent substantial evidence supported denial of benefits on ground that police offcer.was not totally and permanently disabled--Disability provision of retirement system ordinance did not provide for partial disability-Medical evidence established that, although police officer had sustained a permanent work-related injury, officer was capable of performing light-duty, anon-combat police work which was within her job description-City has affirmative duty to provide light duty, non-combat work suitable to petitioner's limitations in view of its denial of disability benefits ROBYN CEWSTOPBERS, Petitioner, vs. POLICE AND FIRE RETIREMENT SYSTEM OF TBE CITY OF FORT LAUDERDALE, Respondent. 17th Judicial Circuit in and for Broward County, Appellate Division. Case No. 94-12621 (02). July 17, 1996. Leonard L. Stafford, Judge. Counsel: Barry R. Lerner, for Petitioner. Myles G. Cypen, for Respondent. ORDER DENYING PETITION FOR WRIT OF CERTIORARI AFTER REMAND THIS CAUSE, having come before the Court on a Petition For Writ of Certiorari After Remand from a decision of the Board of Trustees of the City Pension Fund for Firefighters and Police Officers of the City of Fort Lauderdale (Board), denying the request of the petitioner (Robyn Christophers) for line of duty disability pension benefits. The Court having heard argument of counsel on May 28, 1996, having reviewed the files, considered the applicable case law, and being otherwise fully advised on the premises, hereby finds: This Court has jurisdiction pursuant to the Florida Rule of Appellate Procedure 9.03 0(c)(l )(c). The Court denies the Writ of Certiorari on the basis the Board's decision is supported by substantial evidence and meets all requirements of procedural due process and law. Petitioner, Robyn Christophers, is a police officer for the City of Fort Lauderdale, and a member of the pension fund. During November, 1993 she applied for a service-connected disability retirement alleging she is suffering from a service-connected injury which has resulted in a permanent impairment preventing her from performing her full and active duties as a police officer. Christophers alleges she was injured during an altercation with a "Baker Act" subject, On April 13, 1994, the Board denied the pension application. On July 13, 1994, a formal appeal hearing was held. The Board met again on August 10, 1994 to discuss petitioner's application. On September 23, 1994, a formal notice of denial was prepared by the pension administrator which, in its entirety, read as follows: "Please be advised that at the regular pension board meeting held on Wednesday, September 14, 1994, at which you were present, the Board of Trustees duly adopted the following motion: the application by Robyn Christophers for disability status was denied on the basis that this disability is not total and is not permanent, and among other reasons there is no evidence that applicant is physically or mentally precluded from regular and continuous duty as a firefighter or police officer, and any other duty or duties available through the fire and police departments respectively, and which duty or duties can be duly performed Monday, January 04, 1999 6:03 PM ROBYN CHR.ISTOPHERS, Petitioner, vs. POLICE AN... Page 2 of 3 by the applicant." The Petitioner then filed with this Court for a Writ of Certiorari. Oral argument was held before this Court on June 14, 1995. On August 24, 1995, this Court filed its opinion which quashed the Board's order, and remanded the cause to the Board to state the findings of fact which the decision was based on. The Board met on February 14, 1996 to discuss petitioner's application. On February 20, 1996, a formal notice of denial was prepared by the pension administrator which, in its entirety, read as follows: "This letter is to advise you of the action taken by the Board of Trustees of the City of FortLauderdale Police & Firefighters Retirement System at its regular meeting of February 14, 1996 with reference to Robyn Christopher's request for total, permanent and service-incurred disability. The following motion was made, seconded and after lengthy discussion, passed by a majority of the Board of Trustees to deny Robyn Christophers' request for total, permanent and service incurred disability: That the request be denied based on the report of Dr. Schiuma dated December 15, 1993, the report of Dr. Haimes dated December 23, 1993, and the report of Dr. Barton dated January 31, 1994; all stating the disability is not total." Petitioner then filed a Petition for Writ of Certiorari After Remand. Oral argument was held before this Court on May 31, 1996. When reviewing the decisions by an administrative agency the Court's scope of review is limited to: (1) whether the Board afforded the petitioner procedural due process; (2) whether the decision by the Board was supported by competent, substantial evidence; and (3) whether the Board observed the essential requirements of law. See, DeGroot v Shefed, 95 So.2d 912 (Fla. 1957). The Court must determine whether the Board of Trustees determination to deny petitioner's request for disability retirement was supported by competent, substantial evidence to find that the petitioner was not eligible for disability retirement because she was not totally or permanently incapacitated from "...other duty or duties available through the fire or police departments respectively and which duty or duties can be performed by such firefighter or police officer..." See, City of Fort Lauderdale Code s20-129(c)(1). In this Court's view, the Board of Trustees decision is clearly supported by a substantial amount of evidence. The disability provision of the ordinance of the retirement system involved did not provide for partial disability. At the hearings, the Board of Trustees had before them several detailed medical and psychiatric reports and opinions that specifically supported the decision that the petitioner was not totally disabled from performing all the duties of a police officer and therefore not eligible for disability retirement. These physician reports and opinions stated that while the petitioner had sustained a permanent work related injury, nonetheless, the petitioner was capable of performing some duties within her job description, "light-duty", non-combat police work. The Board of Trustees conclusion that the petitioner is not totally disabled and therefore, is not eligible for disability retirement, can be sufficiently founded by the evidence set before them. The Court finds that the petitioner's procedural due process rights were adequately protected, and the Board observed the essential requirements of the law. Monday, January 04, 1999 6:03 PM .C?FS:,,n.n, .... ° ... . ? .. _... a '^f •l;iit ;', t1 . .1: .t .. 5.,?;:'.'`' ,. . 'f ' . :'' + ., .. - h i ROBYN CMSTOPEM,' Petitioner, vs. POLICE AN.., Page 3 of 3 In Nuce v Board of Trustees, 246 So.2d 610 (Fla. 3d DCA 1971), the Court held that as long as an employee of the City is able to do some of the duties required to be done in his job classification; the employing authority is willing to permit the employee to perform limited duty with no reduction in j pay; the employee not being totally disabled to do all of the functions provided for in his classification, i he is not entitled to retirement. See also, City of Opa-Lockar v Woodard, 252 So.2d 852 (Fla. 3d DCA 1971); Pompano Beach Police and Firemen's Pension Fund v Frw=, 405 So.2d 446 (Fla. 4th DCA 1981); Shepard u Department of Administration, Division of Retirement, 361 So.2d 248 (Fla. 1 st DCA 1978). In the-instant case, it would be an inconsistent position for the City not to continue to employ the Petitioner. The City has an affirmative duty to provide "light duty" non-combat work suitable with petitioner's limitations. Accordingly: it is hereby: ORDERER AND ADJUDGED the Order by the Board of Trustees.is • I Monday, January 04, 1999 6:43 PM EMMA NETSCH, the widow of HERBERT NETSCH, Pla... Pagel of 2 3 Fla. L. Weekly Supp. 400a Public employes--Pension--Where retiree designated his spouse as the beneficiary of monthly retirement allowance payable upon retiree's death, but spouse predeceased retiree and retiree remarried, widow of retiree was not entitled to pension benefits--Under terms of pension plait, change in beneficiary alter retirement could only be effected if both retiree and beneficlary were in good health at time change was to be made EMMA NETSCIL the widow of HERBERT NETSCH, Plaintiff v. CITY OF MIAMI FIRE FIGHTERS & POLICE OFFICERS' RETIREMENT TRUST, Defendant. 11th Judicial Circuit in and for Dade County, Civil Division. Case No. 95-02580 CA (11). August 2, 1995. W. Thomas Spencer, Judge. Counsel: Irving Whitman, Whitman & Gordon, for Plaintiff. Stephen H. Cypen, Cypen & Cypen, for Defendant. MAL_DECLARATORYEMQGM THIS CAUSE came on for hearing before the Court on July 27, 1995 upon Amended Petition for Declaratory Judgment, Answer to Amended Petition for Declaratory Judgment and Response in Answer to Amended Petition. The parties stipulated that the Court could dispose of this matter by summary judgment without the necessity of either party's having to file a written motion. The Court having considered the foregoing pleadings, the deposition of Defendant's Administrator and being otherwise duly advised in the premises, makes the following findings of fact and conclusions of law: 1. The Court has jurisdiction over the subject matter hereof and the parties hereto. 2. Defendant administers a "local law" pension plan as contemplated by Section 185, Florida Statutes. 3. On January 13, 1994, Herbert Netsch retired from the pension plan administered by Defendant and elected to receive retirement benefits under Option 6(c) of &,e plan then in effect. 4. Option 6(c) read then, as it does now: Any member upon service, early service or rule of 70 retirement may elect to receive benefits in one (1) of the following three (3) forms, in lieu of the retirement allowance otherwise payable to the member: (c) Such member may direct the payment of a benefit of forty (40) percent of the member's monthly retirement allowance to be paid at the member's death to his or her spouse nominated and designated by him or her at the time of retirement, such benefit to be payable during the lifetime of such spouse. 5. At retirement, Herbert Netsch was married to Raquel Netsch and designated her under Option 6(c). 6. Raquel Netsch died and Herbert Netsch married Plaintiff on October 6, 1980. 7. Herbert Netsch received his monthly pension benefits under Option 6(c) from the time of his retirement until his death on December 7, 1994. During that period of time, Herbert Netsch's monthly pension increased, due to cost of living increases, from $1,078.84 per month to $1,400.00 per month. Herbert Netsch contributed a total of $21,282.61 to the plan administered by Defendant, Monday, January 04, 1999 5:55 PM EMMA NETSCH, the widow of HERBERT NETSCH, Pla... Page 2 of 2 8. Section 40-212(M) is the only provision of the plan which allows a change in beneficiary after retirement. Said section reads: (III CharWs in beneficiary after retirement. Any member of the retirement system who retires from service and thereafter desires to change a designated beneficiary may do so subject to the following qualifications: (1) At the time the change in beneficiary is to be made, evidence of good health must be supplied for both the member and the to-be-deleted beneficiary. (2) To the extent the to-be-substituted beneficiary is younger (older) than the to-be-deleted beneficiary, an actuarial adjustment shall be applied to reflect the respected longer (shorter) life expectancy of the to-be-substituted beneficiary. 9. Prior to the death of Raquel Netsch, the spouse designated by Herbert Netsch at time of his retirement, no request for change of beneficiary was made. (In fact, no request for change of beneficiary was made until after the death of Herbert Netsch.) 10. Section 40-212(M) is clear in its requirement that evidence of good health must be supplied for both the member and the to-be-deleted beneficiary. Therefore, even if Herbert Netsch had made a request for change in beneficiary after the death of Raquel Netsch and upon his remarriage to Plaintiff, no change in beneficiary could have been accomplished for the rather obvious reason that evidence of the good health of the late Raquel Netsch could not be supplied. 11. Logically, no benefits are payable after the death ofa retiree if his spouse designated under Option 6(C) predeceases him. 12. There is no genuine issue as to any material fact and Defendant is entitled to a judgment as a matter of law. It is thereupon, ORDERED AND ADJUDGED as follows: A. Final Declaratory Judgment is hereby entered in favor of Defendant and against Plaintiff. B. The pension plan administered by Defendant is construed as set forth above. C. Plaintiffs action is hereby dismissed with prejudice and Defendant shat! go hence without day. Defendant's costs shall be taxed upon motion and subsequent hearing, for which sole purpose the Court retains jurisdiction. 11 Monday, January 04, 1999 5:55 PM GLEN RIDDICK, Plaintiff, v. CITY OF PEMBROKE... Pagel of 3 2 Fla. L. Weekly Supp. 209a Municipal corporations--Public employea--Pension benefits--Ordinance providing for offset of pensioi9 benefits by social security benefits is not vague, indefinite or discriminatory--Offset provision not in conflict with spendthrift provision preventing third parties from reaching retiree's pension benefits--Information provided to retiree was not misleading and did not estop city from enforcing offset provision of ordinance-City cannot be estopped through misstatement of law--Retiree failed to show either that he relied on any alleged misstatement in making decision to retire or changed his position to his detriment GLEN RIDDICK, Plaintiff v. CITY OF PEMBROKE PINES, etc., et al., Defendants. 17th Judicial Circuit in and for Broward County. Case No. 92-27382 (04). March 7, 1994. Patricia W. Cocalis, Judge. Wolfson & Konigsburg, P.A., for Plaintiff. Josias & Goren, P.A., for Defendant City of Pembroke Pines. Cypen & Cypen, for Defendant City Pension Fund for Police and Firemen in the City of Pembroke Pines. FINAL JUDGMENT FOR DEFENDANTS THIS CAUSE came on for trial before the Court on January 3, 1994, upon Plaintiffs Second Amended Complaint and the Answers thereto filed by the only remaining Defendants, CITY PENSION FUND FOR POLICE AND FIREMEN IN THE CITY OF PEMBROKE PINES ("BOARD") and CITY OF PEMBROKE PINES ("CITY"). The Court has considered testimony, exhibits in evidence, arguments of counsel and being otherwise duly advised in the premises, makes the following FINDINGS OF FACT AND CONCLUSIONS OF LAW: A. The Court has jurisdiction over the subject matter hereof and the parties hereto. B. Section 34.46(D) of the City of Pembroke Pines Code ("Pension Ordinance"), entitled "Benefit Offsets," provides in pertinent part: The service-incurred and nonservice-incurred disability benefits described in divisions (A) and (B) above shall be reduced or offset by the regular monthly amounts to which the disabled member is entitled under Worker's Compensation and under the primary, (that is, non family) benefit provision of social security to the extent permitled by lain. ... [emphasis supplied] C. Section 34.46(D) of the Pension Ordinance is not, as asserted in Count II of the Second Amended Complaint, vague, indefinite or discriminatory. Furthermore, Plaintiff has presented no evidence that Section 34.46(D) of the Pension Ordinance is invalid for any of the other reasons alleged in Count II of the Second Amended Complaint. D. Section 34.55 of the Pension Ordinance, entitled "Pension, Not Assignable, Subject to Garnishment, Or The Like," provides in pertinent part: No pension provided for in this subchapter shall be assignable or subject to garnishment for debt or to other legal process, and no pension provided for in this subchapter shall be subject to any deductions or assessments by the city, nor shall any benefits hereunder be altered or modified in any respect due to the fact that any member may be the recipient of any benefits from any other pension plan.... Monday, January 04, 1999 5:53 PM GLEN RIDDICK, Plaintiff, v. CITY OF PEMBROKE ... Page 2 of 3 E. Section 34.55 of the Pension Ordinance is not, as asserted in Count I of the Second Amended Complaint, in conflict with Section 34.46(D) of the Pension Ordinance. Section 34.55 of the Pension Ordinance is clearly a "spendthrift" provision, preventing third parties from reaching a retiree's pension benefits. Section 34.55 of the pension Ordinance, on its face, does not apply to the BOARD, particularly in light of the provisions of Section 34.46(D) of the Pension Ordinance which make reductions or offsets of Social Security mandatory. F. Plaintiff asserts, in Count I of the Second Amended Complaint, that the BOARD made a representation 'to him which was inconsistent with the Pension Ordinance and upon which he justifiably relied to his detriment. Thus Plaintiff claims that the BOARD is estopped to enforce the mandatory reduction or offset'provisi.ons of Section 34.46(D) of the Pension Ordinance. G. Plaintiff relies most heavily upon the BOARD's letter to him dated December 28, 1989, and the actuarys certified calculation enclosed with said letter. Said actuary's certification, which on its face states that it "is based on... the provisions of the City Pension Fund for Firefighters and Police Officers in the City of Pembroke Pines," contains the sentence an which Plaintiff has virtually based his entire case: Mr. Riddick's monthly disability retirement benefit is subject to a reduction for any amounts he may receive under a disability Primary Social Security benefit, plus amounts received under Worker's Compensation which when combined with this Plan benefit exceeds $2,970.98. [emphasis supplied] H. Based upon a plain reading of the foregoing language (consistent with the expert testimony of Dr. Steven Alford), it says exactly what Section 34.46(D) of the Pension Ordinance says: there is no limit on the Social Security reduction but the Worker's Compensation reduction--riot an issue in this rase--is limited. This language cannot be read to mean that the Social Security reduction or offset is subject to the same limit as for Worker's Compensation. 1. The other bases asserted for estoppel similarly do not contain any misstatements and are likewise unavailing to Plaintiff. J. Even though the Court has hereinabove determined that no misleading information was given to Plaintiff by the BOARD, Plaintiffs estoppel argument must fail for other reasons. (1) First and foremost, if the BOARD did make any misstatements to Plaintiff, they were misstatements of law (that is, the BOARD stated that the Pension Ordinance provided for something other than it actually did provide). As the Supreme Court very recently held in Branca v. City of Miramar, 19 Fla. L. Weekly S28 (Fla., January 13, 1994), "a governmental entity may not be estopped through mistaken statements of the law." (2) The BOARD's letter to Plaintiff dated December 28, 1989, was received after Plaintiff had already retired on December 15, 1989. Thus Plaintiff certainly could not have relied upon the letter in making a decision to retire. (Any other "decision" made by Plaintiff after retirement is irrelevant in that after retirement Plaintiffs rights were faxed and certainly could not be unilaterally changed by any action of either Plaintiff, or the BOARD.) (3) Plaintiff did not carry the burden of showing that he changed his position to his detriment. In fact, the evidence shows that Plaintiff had more "cash flow" after he Monday, January 04, 1999 5:53 PM GLEN RIDDICK; PlainK v. CITY OF PEMBROKE .,. Page 3' of 3 purchased the new house (allegedly in reliance on the BOARD's misinformation) than he had before. K., Plaintiff produced no evidence that the CITY played any role in the alleged misrepresentations. L. There is no statute or agreement providing for the award of attorneys' fees at bar. IT IS THEREUPON ORDERED AND ADJUDGED as follows: 1. That Section 34.46(D) of the Pension Ordinance is valid and binding upon the parties. 2. ,That there is nothing to prevent the BOARD from implementing the mandatory provisions of Section 34.46(D) of the Pension Ordinance to reduce 'or offset Plaintiffs pension for past or future. primary Social Security benefits received or to be received by him. 3. That in accordance with the BOARD's Motion to Strike Demand for Attorneys' Fees served June. 24, 1993, Plaintiffs demand for attorneys' fees is hereby stricken. 4. That the Order granting temporary injunction dated December 21, 1993 is hereby vacated and set aside, and the temporary injunction is hereby dissolved. 5. That Plaintiffs Second Amended Complaint and this action are hereby dismissed with prejudice, at the cost of Plaintiff, and Final Judgment is hereby entered against Plaintiff and in favor of Defendants, CITY PENSION FUND FOR POLICE AND FIREMEN IN THE CITY OF PEMBROKE PINES and CITY OF PEMBROKE PINES. 6: That the Court hereby reserves jurisdiction (including over International Fidelity Insurance Company, surety on the injunction bond) to award Defendants their costs and any damages occasioned by entry of the temporary injunction, Monday, January 04, 1999 5:53 PM ?' . (Cite as: 624 So.2d 869) Frank VITALE, Pettltloner, TOWN OF SURFSIDB PENSION FUND, . .'RespdndeaL No. 92458. District Court of Appeal of Florida, Third District. Oct. 12, 1993. .. On Petition for Writ of Certiorari to the Circuit Court for Dade County;, Martin D. Kahn, Henry G. Ferro and Ursula Ungaro-Benagees, Judges. Klaumcr & Cohan . and Robert D. Mausner (Hollywood), for petitioner. Cypen &'C}?= and Myles G. Cypen and Stephen R Cypeen, Miami Beach. for respoudmt. ,i Copr. 0 West 1999 No Claim to Orig. U.S. Govt. Works Beforc HUBBART, FERGUSON and COPE, M. PER CURIAM. Certiorari denied; ' HUBBART and FERGUSON, JJ., concur. COPE, Judge (concurring). I do not think this petition for writ of certiorari is procedurally barred. On the merits, I think it would be desirable if the definition - of "disability retirement" contained in section 185.18, Florida Stahites (1991), applied to local law plans. However, paragraph 185.35(t)(I) allows a local law plan to incotporate disability benefits "as the municipality ravishes." As I sec it, this phraseology allows the Town of Surfside to adopt its own definidon of • "disability" which is at variance from the definition used in section 185.18. Accordingly, I join in the denial of certior'ari.. Ern Or DOCUIvI>rrTl' SHERYL K. HOUSLEY, Petitioner, vs. CITY PENSI... Page 1 of 2 Fla. L. Weekly Supp. 509b Administrative law--Public employees-Decision to deny police officer's application for disability retirement benefits, made by board of trustees of city's firemen's and policemen's pension fund on ground that applicant tailed to prove she was totally disabled from performing duties of police officer, was supported by substantial evidence and met requirements of procedural due process and the law SHERYL K. HOUSLEY, Petitioner, vs. CITY PENSION FUND FOR FIREMEN AND POLICEMEN IN THE CITY OF MIAMI BEACH AND SUPPLEMENTAL PENSION FUND FOR FIREMEN AND POLICEMEN IN THE CITY OF M14M BEACH, BOARD OF TRUSTEES, Respondent. 11th Judicial Circuit in and for Dade County, Appellate Division. Case No. 93-045-AP. Opinion filed Aug 13, 1993. A Petition for Writ of Certiorari from an Administrative Order by the City Pension Fund For Firemen and Policemen in the City of Miami Beach and the City Supplemental Pension Fund. Aaron R. Sobel, Attorney for petitioner. Stephen H. Cypen, Attorney for respondent. (BEFORE DONNER, RAM1RF.,Z, and SHAPIRO, JJ.) (PER CURIAM.) Petitioner, Sheryl K. Housley, filed a Petition for Writ of Certiorari against the City Pension Fund for Firemen and Policemen in City of Miami Beach and City Supplemental Pension Fund for Firemen and Policemen in the City ofMaami Beach. Petitioner challenges the Pension Fund's decision dated January 21, 1993, where in a formal review, the Fund's Board of Trustees denied her Application for Disability Benefits. This court has jurisdiction pursuant to Section 322.3 1, F.S. and Florida Rule of Appellate Procedure 9.030(c)(1)(c). We hereby, deny the Writ of Certiorari to review the Board of Trustees decision in that the Board's decision is supported by substantial evidence and meets all requirements of procedural due process and the law. Petitioner, a police officer of the City of Miami Beach, has applied for service-connected disability retirement alleging that she is suffering from a service-connected injury which totally and permanently disables her from performing her duties as a police officer. The Board of Trustees for the City Pension Fund and the City Supplemental Pension Fund for Firemen and Policemen in the City of Miami Beach held an informal hearing limited to evidence in the form of written material and statements. The informal hearing committee members unanimously denied the petitioner's application for disability retirement finding that petitioner failed to meet her burden of demonstrating that "the disability is a total, permanent, and service-incurred disability". The petitioner requested a formal hearing from the Board of Trustees which was held on January 21, 1993. At this formal hearing, the Petitioner had the opportunity to present any type of evidence to meet her burden of proof. Again, the petitioner was unanimously denied disability retirement on the grounds that "the disability was not total". At the hearings, the Board of Trustees had before them numerous detailed medical, psychiatric, and worker's compensation reports and opinions along with the Board of Trustees' own medical board's findings that specifically supported the decision that the petitioner was not totally disabled from performing all the duties of a police officer and therefore not eligible for disability retirement. These physician reports and opinions stated that the petitioner was capable of performing some duties within her job description and provided a list of the particular duties the petitioner could complete without physical discomfort or further injury. Many of these reports stated that the patient, i.e., petitioner, had self-diagnosed herself as disabled and was not making a substantial effort to improve her situation. Furthermore, a worker's compensation hearing record, which included a surveillance investigation, specifically found that petitioner was currently Monday, January 04, 1999 5:51 PM 9 f. .a ..,... 1. ' i 7• , SHERYI. K. HOUSLEY, Petitioner, vs. CITY PENS1... Page 2 of 2 engaging in substantial physics! activity without apparent limitation or restriction. These physical activities that were secretly video taped were similar to the activities that the petitioner testifies she is unable to perform. The Board of Trustees conclusion that the petitioner is not totally disabled and therefore, is, not eligible for disability retirement; can be sufficiently founded by the evidence set before them. The sole issue before this Court is to decide whether the Board of Trustees determination to deny petitioner's request for disability retirement was supported by substantial evidence to find that the petitioner is not totally disabled and therefore not eligible for disability retirement, and if the petitioner's procedural due process rights were protected during the Board of Trustees' Hearings. City of Deerfield Beach v ' Vaillant, 419 So.2d 624 (Fla. 1982), This Court finds that the Board of Trustees decision was clearly supported by a substantial amount of evidence.-was neither arbitrary nor capricious, and all petitioner's procedural due process rights were adequately protected. It would be, however, an inconsistent position for the City to refuse to rehire the Petitioner.' The arguments and briefs on this appeal have created an affirmative duty to rehire her. For the foregoing reasons, the Order by the Board of Trustees is hereby AFFIRMED. (Donner, Ramirez, and Shapiro, JJ., concur.) Monday, January 04, 1999 5;51 PM 592 So.2d 749 17 Fla. L. Weekly D25.4 (Cite ass 592 So.2d 749) CUY OF MTAMi, Appellant, V. Leonard L GATES, etc., at al., Appelfezs. No. 9Z-72. District Court of Appeal of Florida, Third District Jan. 14, 1992. City appealed from an order of the Circuit Covet, Dade County, Joseph Farina, J., denying its motion to enforce final judgment in class action settlement and to hold class members in contempt. The District Court of Appeal, held that scttlemcnt of class action dealing with diversion of ad valorem tax revenues which had been specifically authorized for pension system did not bar class members fmm litigating issue of city's offsetting workers' compensation benefits for death or disability against pension payments. Affirmed COMPROMISE AND SETTLEMENT C=I6(2) 89kl6(2) Settlement of class action dealing with diversion of ad valorem tax revenues which had been specifically authorized for pension system did not bar class members from litigating issue of city's offsetting wmkcrs' compensation benefits for death or disability against pension payments; at time of settlement, issue of validity of offsetting payments could not have been discovered.. *750 Jorge L. Fernandez, City Attorney, Ramon Irizwn , and Kathtya S. Pecko, Asst. City Attys., and Jay M. Levy, Miami, for appellant. Williams & Bentz and Mark Lentz, Miami, Atldnsan Jenne Diner Stone Cohen & Klausner, Hollywood, Richard A. Sicking, Joseph C. Segor, Robert H. Crary, Miami, Cypen & Cypen and Stephen It Cypen, Miami Beach, for appellees. Before BARKDULL, HUBBART and COPE, JJ. PER CURIAM The City of Miami appeals an order of the circuit court denying the City's motion to enforce a final judgment and to hold appellees in contempt of court The question presented is whether a 1985 class action settlement bars class members from making claims for Page 1 reimbursement of benefits in reliance on Barragan v. City of Miami, 545 So.2d 252 (F1a.1989). We conclude that it does not and arum the ruling of the trial court. In 1977 the appellee plaintiff's [FNI] brought a class action against the City of lviiatni. alleging that Elul. Lcoaard L. Gates. Frank K Palmer, James W. Rogers, James C. Williams, John B. Cisco, John M. Dowda. Charles A. Salerno, and Gernld F. Beatty. the city had improperly diverted ad valorem tax revenues which had been specifically authorized and assessed for the pension system. Count III involved the claim that, between 1958 and 1967, the city had used such funds for the payment of the judgments against it which were affirmed in City of Miami v. Carter, 105 So.2d 5 (Fla.1958) and City of Miami v. Hall, 105 So.2d 499 (Fla. 3d DCA 1958). Count IV contended that, within the preceding three years, the city had used these revenues to meet its statutory obligations to pay workmen's compensation benefits. City of Miami v. Gates, 393 So.2d 586, 587 (Fla. 3d DCA) (footnote omittod), review denied, 402 So.2d 608 (Fla.1981). This court affirmed a partiEd summary judgment in plaintifTs' favor. In 1985 the class action was settled The settlement ended the objected-to funding practices. It called for a multi ycar program for the City to fund its unfunded pension liabilities. It also made a number of changes in the administration of the City's pension systems. After notice to the class of City of Miami employees, [FN2] the circuit court approved the settlement. FN2. During the litigation, the class was expanded. For purposes of the settlement, the class was defined as all Contributing members and beneficiaries of the Miami City Employees' Retirement System and the Miami City General Employees Retirement Plan. The present controversy arises primarily out of paragraph 8(13) of the final judgment, which bars certain litigation by class members. Paragraph 8 provides: 8. All members of the class, ... except those persons who have chosen to opt out of the class, are hereby severally barred and permanently enjoined from prosecuting .... B. Any class wide claim relating to employee pensions including claims arising from the application or interpretation of past or. presently Copr. 0 West 1999 No Claim to orig. U.S. Govt. Works 592 So.2d 749 (Cite as: 592 So.2d 749, "750) existing pcnssion ordinances, where the facts giving rise to such claims are known to the member of the class socking to make the claim as of the date of entry of this Final Judgment or, if that member of the class had exercised due diligence, would have been discovered as of such date-,.... (Emphasis added ) At the time of the settlement a City ordinance had for many years provided that workers' compensation benefits payable •751 on account of disability or death would be offset against, and payable in lieu of, any benefits payable by the City retirement system an accowa of the same disability or death. § 40- 212(N). hfiiami City Code. This ordinance was mandated by a provision in the workers' compcxtsadon law, see § 440.09(4), Fla.Stat. (1971), beginning with its enactment in 1935. Ch. 17481, § 9, Laws of Fla. In 1973 subsection 440.09(4), Fla.Stat. (1971), was repealed. CIL 73-127, § 2, Laws of Fla. The Miami City Code provision was retained intact and the City continued to make the pension offsets called for thereby. After 1973, the offset provision of the City ordinance was challenged on several occasions. This court concluded that the repeal of subsection 440.09(4) did not invalidate the City's offset ordinance, and that the offset ordinance should be deemed to be within the scope of the City's home rule powers. Hol1kins v. City of Miami, 339 So.2d 1145, 1146 (Fla. 3d DCA 1976), overruled sub norn. Barragan v. City bf Miami, 545 So.2d 252 (Fla. 1989). From that time through the date of the settlement, all published decisions of the appellate courts reached that same result. Sec Thorpe v. City of Miami, 356 So.2d 913 (Fla. 3d DCA), cat. denied, 361 So.2d 836 (Fda.1978); West v. City of Miami, 341 So.2d 999 (Fla. 3d DCA 1976), cert. denied, 355 So.2d 518 (Fla. 1978). In 1985 the instant class action was settled. In 1987, the First District upheld the offset ordinance but certified the question of its validity to the Florida Supreme Court. City of Miami v. Barragan, 517 So.2d 99 (Fla. 1 st DCA 1987), rcv'd, 545 So.2d 252 (F1a.1989); sec also Giordano v. City of Miami, 526 So.2d 737, 739 (Fla. I st DCA 1988) (certifying question), read, 545 So.2d 252 (Fla. 1989). In 1989 the Florida Supreme Court held that the City's offset ordinance was invalid. Batragan v. City of Miami, 545 So.2d 252 (F1a.1989). The court Page 2 disapproved this court's decision to the contrary in Hoflldns, as well as the First District's leading case on the point, City of Miami v. Knight, 510 So.2d 1069 (Fla. 1st DCA), review denied, 518 So.2d 1276 (F1a.1987), overruled sub nom. Barragan v. City of Miami, 545 So. 2d 252 (Fla. 1989). On August 1, 1989, as a result of Barragan, the City ceased making the pension offsets. The City declined, however, to reimbursc pension recipients for offsets taken between 1973 and 1989. Approximately 60 claims have been submitted to the workers' compensation tribunal, for reimbursement of pension offsets taken after the 1973 repeal of subsection 440.09(4). [FN3] FN3. Barragan holds, in this contact, that •a [workers' compensation] deputy commissioner may pmpcr1y lactase the amount of workets' compensation to offset illegal deductions made on the account of the payment of workers' compeasatioo benefits" 545 Sold at 253 (citations omitted). The City estimates that the pending claims arc 60 of a potential universe of 100. In these proceedings the City has asserted that the reimbursement claims arc barred by paragraph 8(B) of the 1985 class action settlement. Those claims are now pending in various stages of the workers' compensation proceedings. Meanwhile, the City contends that it has a right to enjoin class members from proceeding with their reimbursement claims in the workers' compensation tribunal. It will be recalled that paragraph 8(B) "barred and permanently enjoined" class members from prosecuting the claims described in that paragraph. Because the City believes that the reimbursement claims arc covered by paragraph 8(B), it asserts that it is entitled to enjoin the class members from proc*-ding with their workers' compensation claims. Ac=dingly, the City filed in the circuit court a Motion to Enforce Final Judgment and Hold Plaintiffs in Contempt of Court. The trial court denied relief, holding in part: (1) This court has jurisdiction to interpret and apply the decision of this court in Gates v. City of Miami. (2) The decision in Gates v. City of Miami concerned the funding of the City of Miami's pension plan. "752 (3) Pension offsets for workers' compensation benefits were neither discussed nor released by Gates' class members. Order, at I-2. Copr. ® West 1999 No Claim to Orig. U.S. Govt. Works .X I r 592 So.2d 749 (Cke ast 592 So.2d 749, "752) We agree with the trial oourt.' The central issues in the class action were the finding and administration of the pension system. Paragraph 8(B) of the Final Judgment barred clan membem from bringing "Any classwide claim relating to employee pensiou including claims arising from the application or interpretation of past or presently existing pension ordinances, where the facts giving rise to such claims are known to the member of the claws seeking to make the claim as of the date of entry of this. Final Judgment or, if that member had cx a+ciscd date diligence, would have been discoverer) as of such date...." (Emphasis added J); By 1985 (when the settlement was approved) there was an unbroken line of authority, beginning with Hoftidns, which su=stained the validity of the City's pension offset In the notice of settlement sent to class members, class counsel stated that "they are unaware of any other clasw de claims aside from those involved in this lawsuit or - its settle rant." The City did not contradict that statement cad nowhere suggested that pension offsets were in may way involved in the litigation. We see no basis on which to say, that the class knew, 'cc should have discovered, the Barragan t Page 3 issue as of 1985, or that the. Batragan issue was involved in the class litigation. [FN4] FN4, We leave aside the questioa whether individual workers' compensation claims would in any way be doomed to' be a "claaswide claim" referred to in paragraph RM) of the Final Judgment. Affumed. [FN5] FN5. The City also relics on pAnW"h S(C) of the Final Judgment, which bars claims "as to how average final wmpa=don has been calculated ... for purposes of paying employee Mansions...." sa of certain dates. The Notice of Proposed Settlement discloses that certain insertions had bast made "coocenting the calculation of average final compensation," Notice at 15. including compensation for work performed an City holidays. The Notice indicated that the class setdetnent would tar some, but not ail, claims "challcaging the items excluded from average fmal compeautioa...." Id. As we view the record, the issue described in paragraph $(C) is ono of computation of final average compensation, a matter which is uwelated to the Barragao offset issue. END OF DOCUMENT Copr. 0 West 1999 No Claim to Orig. U.S. Govt Works 581 SO-2d 229 16 Fie. L. Weekly 131548 (Cite as: 581 eSo.2d 229) MIAMI BEACH POLICE & FIREMEN FOR FULL PENSION BENEFITS, INC., Appellant, The BOARD OF TRUSTEES OF the C1TY PENSION FUND FOR FIREMEN AND POLICEMEN OF the CITY OF MIAMI BEACH, Appellee. No. 9Q-2555. District Court of Appeal of Florida, Third District it= 11, 1991. Association of police and firemen appealed from an order of the Circuit Court for Dade County, Herbert M Kdc4 J., which rendered judgment in pension dispute. The District Court of Appeal held that accumulated vacation, sick leave and other benefit payments were not to be included as salary and wages for purpose of calculating pension benefits owed to retir+ces. }firmed. [1] PENSIONS X131 296k131 Accumulated vacation, sick leave and other benefit payments were not to be included as salary and wages for purpose of calculating pension benefits owed to retirees. [21 PENSIONS X23 296123 Pension acts arc construed to avoid inequitable result or result favoring one member over another. "229 DeFabio & Fenn and Leonard Fenn, Card Gables, for appellant. Cypeu Lek Cypen and Stephen Cypen, Miami Beach, for appellee. Page 1. Before BARKDUL.L„ BASKIN and LEVY, JJ. PER CURIAM. [1) The Miami Beach Police and Firemen For Full Pension Benefits, inc., (K4BPF) appeals a declaratory judgment. MBPF instituted an action against the Board of Trustees of the City Pension Fund For Firemen and Policemen of the City of Miami Beach requesting the court to declare that accumulated vacation, sick leave, and other benefit payments be included as salary and wages for the purpose of calculating pension benefits due to actin=. The trial court„ on the authority of City of Miami Beach v. Cleary, 75 So,2d 792 (F1a,1954), determined that the accumulated benefits should not be included as salary or wages for pension benefit purposes. We meta the decclamtory judgment. The trial court correctly relied on the statement by the Florida Supreme Court in Cleary that "[t]hc [trial] court having held, and we think correctly, that accumulated leave is not to be considered as 'creditable service' in. computing benefits, there is no justification or reason to hold that a deduction be made therefrom for the benefit of the system." Cleary, 75 So.2d at 795. Although the supreme court did not directly address the issue before: us, it approved the *230 trial court's reasoning. The fast district court of appeal has reached a similar conclusion in Gilmore v. Burks, 325 So.2d 455 (Fla. 1 st DCA 1976). [2] The approach urged by MBPF would lead to inequality among pension plan, members, some of whom are unable to accumulate benefits. Pension acts are construed to avoid 'an inequitable result or result in favoring one member over another," Cleary, 75 So.2d at 795. The declaratoryjudgment is therefm affirmed.' Affirmed. END OF DOCUMENT Copr. 0 West 1999 No Claim to Orig. US, Govt. Works 528 So.2d 143 13 FIa. L Weekly 1617 (Cite au 528 So.2d 103). Sharon ILkhWrON, Appellant, V* MIAMI CITY EMPLOYEES RETIREMENT SYSTEM, AppeUee. Na 87-1193. District Court of Appeal of Florida, Third District. July 12,1988. 'Appeal was taken fmm judgment of the Circuit Court ' Dade County. Milton A. Friedman, J., determining that police officer was not entitled to disability pension. The District Court of Appeal held that: (1) police officer's discharge by city did not estop city from denying disability pension, and (2) police officer waived right to challenge denial of ? application for disability retirement pension by not appealing from dsxrial.' Affirmed. 111 ESTOPPEL X62.4 156k62.4 Police officer's discharge by city did not estop city from denying officer's 'entitlement to disability pension, where discharge was based solely on officer's own asserted inability to perform duties of police officer, 121 MUMCMAL CORPORATIONS X187(10) 268k187(10) Police officer waived right to challenge denial of application for disability retirement pension by not appealing from denial, * 104 Robert D. Mausner. Hollywood, for appellant. Cypen & Cypen and Stephen Cypcn, Miami Beach, for Page 1 appellee. Before BARKDULL and HUBBART and DANIEL S. PEARSON,11. PER CURJAM [1][2] We affum the final declaratory d=,ee under review upon a holding that (1) substantial, competent evidence was adduced below upon which the trial court could have concluded that the • appellant Sharon L. Hampton, a former Miami police officer, was not permanently and totally disabled and therefore was not entitled to a disability retirement pension, Pompano Beach Police & Firemen's Pension Fund v. Franza, 405 So,2d 446, 447. (Fla. 1st DCA 1981); Shepard v. Dept. of Admin., Div. of Retirement, 361 So.2d 208, 209 (Fla. 1st DCA 1978); Nuce v, Board of TnLstew for the City Pension Fund for Firemen & Policemen in Miami Beach, 246 So.2d 610, 611 .(Fla. 3d DCA 1971); City of Opa-1,ocka v Woodard, 252 So.2d 852 (Fla. 3d DCA 1971), (2) inasmuch as the appellant was discharged by the City of Miami Police Department solely on the appellant's own asserted inability to perform the duties of a police officer.' no estoppel entitlement to such a disability pension arises under Police Pension Board v. Gaines, 389 So.2d 677 (Fla. 4th DCA 1980), and (3) the appellant has, in any event, waived her right to challenge the denial of her. application for a disability retirement pension by not appealing from said denial, see Hammond v. City of Miami, 396 So.2d 237 (Fla. 3d DCA 1981); Franchi v. Florida Dept. of Commerce, Div. of Employment Sec., Bd. of Review, 375 So.2d 1154 (Fla. 4th DCA 1979). Afizrma END OF DOCUMENT Copr. 0 West 1999 No Claim to Orig. U.S. Govt. Works 405 So.2d 446 (Cite as: 405 So.2d 446) POWANO BEACH POLICE AND FIREMEN'S PENSION FUND, Petitioner, Y. Orestes J.-FRANZA, Respondent. Nos. 79-2511,79-2514. District Court of Appeal of Florida, Fourth District. Oct. 14. 1981. Rehearing Denied Nov. 23, 1981. A police and firemen's pension fund's denial of an application for disability retirement was reversed by the Circuit Court, Broward County, W. Clayton Johnson, J.. and the find filed petition for writ of certiorari and notice of appeal. The cases were consolidated, and the District Court of Appeal held that: (1) in view of testimony of three medical expects that employee was not able to perform duties of job classification, one of which experts believed that anybody could perform most of the duties but was particularly concerned over claimant's ability to ]candle responsibility factors, there was failure to prove that employee was totally disabled to perform duties involved and thus, there being no provision for partial disability, employee was not entitled to retirement for service connected cardiac disease, and (2) even if medical evidence from three doctors was to be regarded as having demonstrated service- connected total disability, testimony of fourth doctor that employee was able to perform duties of office involved permitted board of trustees to decide that employee was not totally disabled and was thus not eligible. Petition for certiorari granted; order of Circuit Court quashed, and matter remanded with directions. Hurley, J., dissented and filed opinion. [1] OFFICERS AND PUBLIC EIHPLOYEES(&= 1015(2) 293klol.5(2) Formerly 283k94 In view of testimony of three medical experts that employee was not able to perform duties of job classification, one of which experts believed that anybody could perform most of the duties but was particularly concerned over claimant's ability to handle responsibility factors, there was failure to prove that employee was totally disabled to perform duties involved and thus, there being no provision for partial disability, employee was not entitled to retirement for service connected cardiac disease. Page 1 ]2] OFFICERS AND PUBLIC EMPLOYEES 101.5(2) 283k l01.5(2) Formerly 283X94 Even if medical evidence from three doctors was to be regarded as having demonstrated service-connected total disability, testimony of fourth doctor that employee was able to perform duties of office involved permitted board of trustees to decide that employee was not totally disabled and was thus not entitled to retirement for service-connected cardiac disease. . . *446 Stephen H. Cypen of Cypeo 8t Nevins, Miami Beach, for petitioner. Robert J. O'Toole, Fort Lauderdale, for r+esimdent. *447 PER CURIAM. We have for review an order of the circuit court, sitting in its appellate capacity, which reversed the Pompano Beach Police and Fireme n!s Pension Fund's denial of Orestes J. Franza's application for disability retirement and directed the Fund to pay and process the disability application. In an abundance of caution the Fund filed both a petition for writ of certiorari (Case No. 79-2511) and a notice of appeal (Case No. 79-2514) to review the order of the circuit court. Thereafter the Fund sought to consolidate the cases. By order we granted the motion to consolidate both of said cases and directed that they proceed in accordance with Florida Appellate Rule 9.110(a)(1). However, since the matter was appealed to the circuit court and can only be reviewed here by ec tiorari, as successive appeals are not available, we treat the matter as a petition for writ of certiorari. We quash the order of the circuit court Franza had been a member of the Pension Fund for almost five years when he filed an application with the Fund's Board of Trustees for disability retirement from the position of Police Chief of the City of Pompano Beach on the basis of a back injury and heart condition incurred in the line of duty. Following a hearing, the Board denied Franza's application. On review by the circuit court, the findings of the Board regarding Franzn's heart condition were reverse] and the court ordered the Board to process Franza's disability application. When its motion for rehearing was denied, the Fund instituted these proceedings to challenge the appellate decision of the circuit court. Our review of this case has convinced us that the circuit court's Copr. 0 West 1999 No Claim to Orig. U.S. Govt. Works 405 So.2d 446 (Cite gut 405 Sold 446, *447) reversal was not justified by the record before it. [1] At a hearing before the Board of Trustees of the Pension Fund three doctors tested and the Board had the benefit of a report of ,a fourth doctor. Three of the medical experts opined that Fn mza was not able to perform the duties of the job classification. One of those three experts believed Franza could perform most of the duties, but was particularly concerned over his ability to handle the responsibility factor. Thus, even the testimony of these three doctors fails to prove that Franza is totally disabled to perform. the duties involved. As the court held in Nuce v. Board of Trustees, 246 So.2d 610 (Fla. 3rd DCA 1971), the disability provision of the retirement system involved does not provide for partial disability and, thus, the appellant was not entitled to retirement for the service connected cardiac disease. [2] However, even if the medical evidence from the throe doctors referred to demonstrated a service connected total disability, the fourth doctor, Dr. Marengoni, testified that Franza was able to perform the duties of the office involved. This doctor is 6 Fellow of the American College of Cardiologists and American College of Physicians; he is board certified and appears to have excellent medical credentials. His testimony, though in conflict with the other doctors in varying degrees, is neither inherently incredible nor improbable and thus it alone constitutes substantial competent evidence upon which the Board of Trustees could rest their decision. As the court stated in Metropolitan Dade County v. Mingo, 339 So.2d 302 (Fla. 3rd DCA 1976): The question of the weight and credibility of the evidence is for the administrative agency and not the reviewing court, even though the court may have reached a different conclusion on the same testimony. (Citations omitted) The court should not substitute its judgment for that of the administrative fact finder who heard the testimony and was in a position to evaluate the credibility of witnesses. (Citation omitted) ... Neither the circuit court in its appellate capacity, nor this court should reweigh the conflicting evidence. (Citations omitted)-339 So.2d at 304. Sec also Campbell v. Vetter, 392 So.2d 6 (Fla. 4th DCA 1981). Since we find the record contains substmrtial competent evidence supporting the agency decision, it was error for the circuit court in its appellate capacity to overtum that decision. *448 Accordingly, the petition for writ of certiorari is Page 2 granted; the order of the circuit court is quashed; and the matter is remanded to the circuit court with directions to reinstate the decision of the Board of Trustees. DOWNEY, J., and SHARP, a. KENDALL, Associate Judge, concur. HURLEY, J., dissents, with opinion. HURLEY, Judge, dissenting. I respectfully dissent. In my view the lower court was justified in disregarding the testimony of Dr. Marangoni on the basis that it was inherently incredible.' It is simply unrealistic to suggest that the position of police chief in a growing metropolitan community is not stressful. This is the underlying premise of Dr. Marangods testimony which, in my view, is so patently untenable as to render it unworthy of belief. Prior to making its detennination concerning the heart disability, the Board received reports from four doctors and heard three of them testified. With the exception of Dr. Marangoni, these sources were consistent in concluding that Franza's heart condition rendered him totally disabled as the police chief of Pompano Beach. The difference between Dr. Marangoni's conclusions and those of the other doctors stems from his perception of the functions performed by a police chief. While Dr. Marangoni's written report reflects an initial finding that Franza was "totally disabled" and recommends retirement, his subsequent reading of the job code for the police chief caused him to reconsider. Based on the outline of duties provided therein, Dr. Marangoni testified that he did not believe it portrayed a stressfuil occupation, but rather, one that was "all sedentary." Consequently, be concluded that Franza could function as the Chief of Police of Pompano Beach despite his heart condition. This, I submit, defies common sense. When reviewing a .decision of a lower tribunal, the circuit court's scope of review is limited to determining whether the decision was supported by competent substantial evidence and was in accord with the essential requirements of law. DeGroot v. Sheffield, 95 So.2d 912 (Fla. 1957); McCray v. County of Volusia, 400 So.2d 511 (Fla. 5th DCA 1981); Campbell v. Vetter, 392 So.2d 6 (Fla. 4th DCA 1980). Since the Board apparently relied on Dr. Marangoni's testimony as opposed to the other medical evidence presented, the concern herein is whether his testimony constituted Copr. C West 1999 No Claim to Orig. U.S. Govt. Works i 405 So.2d 446 (Cite as: 405 Sa.2d 446. "448) "substantial competent evidence" sufficient to support the Hoard's action. The following excerpt from Dearoot v. Sheffield, supra, offers soine guidance: We have used the term competent. substantial evidence" advisedly. Substantial evidence has been described as such evidence as will establish a substantial basis of fact from which the fact at issue can be reasonably inferred. We have stated it to be such relevant evidence as a reasonable: mind would accept as . adequate to support a conclusion.... In employing the adjective "competent' to modify the word 'sub'stantial," we arc aware of the familiar rule that in administrative proceedings the formalities in the introduction of testimony common to the courts of justice arc not strictly employed. We are of the view, however, that the evidence relied upon to sustain the ultimate finding. should be sufficiently relevant and material that a reasonable mind would accept it as adequate to support the conclusion-reached. To this extent the "substantial" evide i= should also be "competent.' 95 So.2d at 916 (citations omitted). Sex also, Duval Utility Co. v. Florida Public Service Comm'n, 380 So.2d 1028 (Fla. 1980); 1 FI&Jur.2d Administrative Law 'ss 172-75 (1977). Absent such substantial supporting evidence, an appellate court will reverse the findings of a lower tribunal. Miami Transit Co. v. Dalton, 156 Fla. 485, 23 So,2d 572 (1945). While, according to the job description, the police chiefs firriations are largely directory, the responsibility Page 3 factor involved is also emphasized. In fact, it is dealt with separately in the job code under the topic "Distinguishing Features of the Position." It is this ultimate responsibility, present in *449 all the "sedentary" and' supervisory functions regardless of delegation, which caused the other doctors to find that Franza was totally disabled. in contrast, Dr. Marangoni's approach is to view the various ministerial and supervisory functions of the police chief as separate and distinct from the responsibility therefor. This perception of the individual duties as existing in the abstract is so strained as to be unacceptable. Clearly, occupying the position of Police Chief of the City of Pompano Beach, a growing city with a population of approximately 55,000 at the time Franza sought disability retirement, is stressful. While it is not the function of an appellate court to reweigh and reevaluate evidence, the court does have the right to reject "inherently incredible and improbable testimony or evidence." Shaw v. Shaw, 334 So,2d 13, 16 (Fla. 1976). Consequently, I believe that the Circuit Court, sitting in its appellate capacity, was entitled to disregard Marangoni's testimony, and to hind that "the only legally competent evidence herein shows (Franza) to be permanently incapacitated 'ream regular and continuous duty' as Police Chief due to heart disease." END OF DOCUMENT -M Copr. 0 West 1999 No Claim to Orig. U.S. Govt. Works 372 So.2d 438 (Cite ass 372 So.2d 438) Billie E. CALDWELL, Petitioner, v. DIVISION OF RETIREMENT, FLORIDA DEPARTMENT OF ADNMMTRATION, Respondent. Na 51807. Supreme Court of Florida. June 14, 1979. Rehearing Denied July 24, 1979. Fireman, who suffbred heart attack, was denied "disabil.ity in line of duty" benefits, costs, and attorney fees by State Retirement Cmmission. The District Court of Appeal, First District, 344 So.2d 923, held that Commission applied correct causation standard and fireman was not entitled to in line of duty disability as a matter of taw, and certiorari was granted The Supreme Court, Adkins, J., held that: (1) statutory presurnption,'providing that any impairment of health of fireman caused by heart disease resulting in total disability was suffered in line of duty unless contrary is shown by competent evidence, can be rebutted by showing other specific hazard or nonoccupational factor was cause ofdrsease; (2) statutory presumption relieved fireman from necessity of proving occupational causation of heart disease and cast on employer burden of persuading trier of fact that disease was caused by nonoccupationally related agent, and (3) where evidence of causation of disease is conflicting, quantum of proof is balanced and presumption should prevail. Quashed in part, approved in part, and remanded with instruction. Boyd, J., dissented. [1] MUNICIPAL CORPORATIONS (&=200(9) 268k200(9) Statutory presumption that any impairment of health of fireman caused by heart disease resulting in total disability was suffered in line of duty unless contrary was shown by competent evidence affects burden of persuasion, and presumption does not automatically disappear when evidence rebutting presumption is introduced. West's F.S.A. § 112.18(1). [2] MUNICIPAL, CORPORATIONS C°=200(9) 268k2OO(9) Page 1 Statutory presumption that any impairment of health of fireman caused by heart disease resulting in total disability was suffered in line of duty unless contrary is shown by competent evidence could be rebutted by showing some other specific hazard or nonoccupational factor was cause of disease. Wcsfs F.S.A. § 112. 1 8(l). [3] MUNICIPAL CORPORATIONS e=200(9) 268k200(9) Statutory presumption that any impairment of health of fireman caused by heart disease resulting in total disability was suffered in line of duty unless contrary is shown by competent evidence relieved claimant from necessity of proving occupational causation of his hears disease and cast on employer burden of persuading trier of fact that disease was caused by nonoccupationally related agent. West's F.S.A. § 112. 1 8(l). [4] MUNICIPAL CORPORATIONS e=200(9) 268k2OO(9) Statutory presumption that any impairment of health of fireman caused by heart disease resulting in total disability was suffered in line of duty unless contrary is shown by competent evidence prevails where evidence is conflicting and quantum of proof is thus balanced; however, if there is evidence supporting presumption, employer can overcome presumption only by clear and convincing evidence. West's F.S.A. § 112.18(1). *439 M, Stephen Turner, of Thompson, Wadsworth, Messer, Turner & Rhodes, Tallahassee, for petitioner. E. Douglas Spangler, Jr., Asst. Division Atty., Division of Retirement, Tallahassee, for respondent. Richard A. Sicking and Joseph C. Segor, of Kaplan, Dorsey, Sicking & Hessen, Miami, for the International Association of Firefighters, AFL-CIO, amicus curiae. Stephen K Cypen, of Cypen & Nevins, Miami Beach, for Board of Trustees of The City of Boca Raton Police and Firefighters Retirement System, Board of Trustees of The Hollywood Firemen's Pension Fund, Board of Trusters of The City of Hollywood Police Officers Retirement System, Board of Trustees of The City Pension Fund for Firemen and Policemen in The City of Miami Beach and Board of Trustees of The Pompano Beach Police and Firefighters' Retirement System, amicus curiae. ADKINS, Justice. By petition for certiorari, we have for review a decision of the First District Court of Appeal, Caldwell v. Division of Retirement, Department of Copr. 0 West 1999 No Claim to Orig. U.S. Govt. Works 372 So.2d 438 (Cfte as: 372 So.2d 438, *439) AdministratiM 344 So.2d 923 (Fla, lst DCA 1977), which allegedly conflicts with a decision of the Third District Court of Appeal in City of Coral Gables v. Brasher, 132 So.2d 442 (Fla. 3d DCA 1961), on the same point of law. Art. V, s 3(b)(3), Fla.Const. The State Rcfirnment Commission (Commission) denial Caldwell's claim for 'disability in line of duty' benefits, costs, and attorney's fee. Caldwell, a fireman, suffered a heart attack. The district court of appeal held that the Commission erred in refusing to apply section 112.18(1), Florida Statutes (1975), which provided that any impairment of health of a fireman caused by heart disease resulting in total disability is preamied to have been suffered in the line of duty unless the contrary is shown by competent evidence. By statute, "disability in line of duty" means an injury or illness arising out of and in the actual performance of duty required by a member's employment during his regularly scheduled working hours or irregular working hours as acquired by the employer. s 121.021(13), Fla.StaL (1975). The district court of appeal in its opinion correctly held that section 112.18(I ), Florida Statutes (1975), was applicable. The court then found that there was a conflict in the testimony, saying: There was evidence that it was caused by arteriosclerosis unrelated to his employment, and there was evidence that recent employment stress or employment stress over a period of time caused the attack in whole or in part. The medical testimony crucial to this case was conflicting, The Commission found that the heart attack suffered by Caldwell resulted from arteriosclerosis which was unrelated to his duties as a fireman There was competent substantial evidence in the record to support this finding. The causation standard applied by the Commission to the facts of this case was correct and Caldwell is not entitled to in line of duty disability as a matter of law. The Commission says that its determination was supported by substantial and competent evidence, and this was sufficient even though the testimony was conflicting. Caldwell says that the presumption is one that affects the burden of persuasion and can be overcome only by clear and convincing evidence. If the evidence is conflicting, he says, the presumption prevails. In City of Coral Gables v. Brasher, supra, the City appealed from a judgment which held that Brashces heart disease arose from and out of the discharge of his Page 2 duties as a police captain. Section 185.34, Florida Statutes (1961), provided that any impairment of health of police officers caused by heart disease is presumed to have been suffered in line of duty unless the contrary be shown *440 by competent evidence. The expert for the City (appellant) rejected the concept that strain of employment could be the cause of plaintiffs heart trouble. Relying upon the presumption, the court held that the officer was entitled to a pension for disability suffered in line of duty, saying: For us to accept the appellant's view that following its expert's testimony, the presumption vanished and the burden of proof shifted to the plaintiff to "positively' prove the disability was service-connected (notwithstanding the testimony of plaintiffs expert) would be contrary to Florida law and would also have the effect of negating the presumption granted by section 185.34, supra. Permitting the testimony of the defendanes expert to have the effect of rebutting the presumption created by the statute in view of the contradictory and conflicting testimony of plaintiff's expert, would be contrary to the rule expressed by the Supreme Court of Florida in Kuchmsted v. Tumwall, 115 Fla. 692, 155 So. 847, wherein it was stated that where testimony of two medical experts is hopelessly conflicting, the evidence will be considered balanced as if it has not been offered 132 So.2d at 444.445. In the case Sub judice, the district court of appeal found that the heart attack sufi'ered by Caldwell "resulted from arteriosclerosis ...." This finding required the application of the statutory presumption that the arteriosclerosis (heart disease) was suffered in the line of duty. The district court failed to apply the presumption when it finther found that the arteriosclerosis was "unrelated to his duties as a fireman" The presumption supplies the element of service-connection, and the failure to apply the presumption constitutes conflict with City of Coral Gables v. Brasher, supra. We have jurisdiction A presumption has been defined as an inference required by a rule of law to be drawn as to the existence of one fact from the existence of some other established basic fact or combination of facts. 3 B. Jones, Jones on Evidence s 3.1 (6th ed. 1972). The Florida courts recognize one type of rebuttable presumption as a "bursting bubble" presumption or vanishing presumption. The Court in Nationwide Mutual Insurance Co. v. Gri#1•ur, 222 So.2d 754, 756 (Fla. 4th DCA 1969), discussed the vanishing presumption as follows: A presumption is a rule of law which attaches to certain evidentiary facts and is productive of certain Copr. 0 West 1999 No Claim to Orig. U.S. Govt. Works f 1 372 So.2d 438 (Cite as: 372 So.2d 435, *440) procedural consequences. The presumption is not itself evidence and has no probative value. Florida follows generally (albeit not always) what is sometimes called the Thaycrian rule to the effect that when credible evidence comes into the case contradicting the basic fact or facts giviag rise to the presumption, the presumption vanishes and the iasuc is determined on the evidence just as though no presumption has ever Basted. Conversely, if the basic facts are sufficiently proven so as to give rise to the presumption and not, thcrcaflcr contradicted by credible evidence, the party in whose favor the presumption exists becomes entitled to a directed verdict. Thus, in either event, the presumption is productive of these prooeduual consequences but is not a matter for the jury to consider. Another type of rebuttable presumption is one which affects the burden of proof. These are expressions of social policy. Sex 5 C. Ehrhardt, West's Florida Practice, Florida Evidence s 303.1 (1977); 1 K Hughes, Florida Evidence Manual s 57 (1975). When. evidence rebutting such a presumption is introduced, the presumption sloes not automatically disappear. It is not overcome until the trier of -fact believes that the presumed fact has been overcome by whatever degree of persuasion is required by the substantive law of the case. This may be by a preponderance of the evidence or by clear and convincing evidence, as the case may be. [11 The presumption contained in section 112.18(l), Florida Statutes (1975), affects the burden of persuasion. It embodies the social policy of the state which recognizes *441 that fw=cxn are subjected during their career to the hazards of smoke, heat, and nauseous fumes from all kinds of toxic chemicals as well as extreme anxiety derived from the necessity of being constantly faced with the possibility of extreme danger. The legislature recognized that this exposure could cause a fireman to became the victim of tuberculosis, hypertension, or heart disease. [2][3] The legislature disposed of the need to introduce proof that the enumerated diseases were occupational hazards of the particular fireman involved by assuming that they are hazards faced by all firemen. This statutory presumption can be rebutted by showing some other specific hazard or non-occupational factor was the cause of the disease. Just as this Court developed a general formula for dealing with the difficult problem of proving the occupational causation of heart attacks in workmen's compensation cases Page 3 (Victor Wine 8t Liquor, Inc., v. Beasley, 141 So.2d 581 (Fla.1971)), so did the legislature establish a general rule for firemen in section 112.18, Florida Statutes (1975). The statutory presumption relieved Caldwell from the necessity of proving an occupational causation of heart disease. The statute cast on the employer the burden of persuading the trier of fact that the disease was caused by a non-occupationally related agent. The presumption would be meaningless if the only evidence necessary to overcome it is evidence that there has bear no specific occupationally related event that caused the disease. To rebut the statutory presumption, it is necessary that the Commission show that the disease causing disability or death was caused by a specific, non-work related event or expomm. [4] The statutory presumption is the expression of a strong public policy which does not vanish when the opposing party submits evidence. Where the evidence is conflicting, the quantum of proof is balanoed and the presumption should prevail. This does not foreclose the employer from overcoming the presumption. However, if there is evidence supporting the presumption the employer can overcome the presumption only by clear and convincing evidence. In the absence of cogent proof to the contrary the public policy in favor of job relatedness must be given effect. The holding of the First District Court of Appeal in the case Sub judice that the presumption was overcome where there was conflicting evidence of causation is in error and should be quashed. The portion of the opinion of the district court of appeal holding that section 112.18(l), Florida Statutes (1975), should be applied in these proceedings and the holding that Caldwell is not entitled to attorneys fee and costs are approved. The decision to deny the petition for review is quashed. This cause is remanded to the district court of appeal with instruction to quash the order of the Commission and further remand the cause to the Commission for the purpose of allowing Caldwell in line of duty disability benefits. It is so ordered. *442 ENGLAND, C. J., and OVERTON, SUNDBERG, HATCHETT and ALDERMAN, JJ., concur. BOYD. J., dissents. END OF DOCUMENT Copr. 0 West 1999 No Claim to Orig. U.S. Govt. Works 246 So.2d 610 (Cite as: 246 So-2d 610) Gordon NUCE and Milton R. Singer, Appellants, v. BOARD OF TRUSTEES FOR the CITY PENSION FUND FOR FIREMEN AND POLICEMEN IN the CITY OF MIAMI BEACH, Florida, Appellee. No. 70-859. Page 1 fund and if it found an employee to be totally and permanently disabled its action entitled him to receive benefits from the fund, there was no necessity for city to be party to proceeding on petition for certiorari seeking to review actions of board in denying petitioners' request for disability pension. Sp.Acts 1945, c. 23414. *611 Bolles, Goodwin, Ryskamp & Warn, Miami, for appellants. District Court of Appeal of Florida, Third District. Cypen & Nevins, Miami Beach, for appellee. April 13,1971. Petition for certiorari seeking to review certain actions of board of trustees of pension fund for firemen in denying request for disability pension. The Circuit Court for Dade County, John J. K,ehoe, J., denied petition, and appeal was taken.. The District Court of Appeal, Barkdull, J., held that where there were no provisions in special act and supplements creating pension fiord for firemen which provided for retirement for partial disability and petitioners could do and had bean doing for period in excess of ten years, certain designated functions required of class to which they belonged, Fireman I, petitioners' request for disability pension was properly denied Affirmed. Before CHARLES CARROLL, BARKDULL and HENDRY, JJ. BARKDULL, Judge. Involved in this case is the validity of a final order of the circuit court, denying a petition for certiorari seeking to review certain actions of the appellee in denying appellants' request for a disability pension. The point, as framed by the appellants, is as follows: 'Whether the lower court properly denied the petition for writ of certiorari to the Pension Board when all the medical evidence indicated that the petitioners were totally and permanently disabled from doing the usual and ordinary work of a fireman but the Pension Board refused the disability pensions on the ground that the petitioners were capable of doing some work.' [11 MUNICIPAL CORPORATIONS e=220(9) 268k220(9) As long as employee of city is able to do some of duties required to be done in his job classification, employing authority is willing to permit employee to perform limited duty with no reduction in pay and employee is not totally disabled to do all of functions provided for in his classification, he is not entitled to retirement. 121 MUNICIPAL CORPORATIONS <5?=200(5) 2681c200(5) Where there were no provisions in special act and supplements creating pension fund for firemen which provided for retirement for partial disability and petitioners could do and had been doing for period in excess of 10 years certain designated functions required of class to which they belonged, Fireman I, petitioners' request for disability pension was properly denied Sp.Acts 1945, c. 23414. [1][2] There were no provisions in the Special Act[FNI] and supplements thereto creating the pension fund involved 'in this case, which provided for retirement for partial disability. The evidence before the Board was in conflict, but it was apparent that the appellants could do (and had be= doing for a period in excess of ten years) certain designated functions required of the class to which they belonged (Fireman I). Until such time as the statute is changed, as long as an employee of the city is able to do some of the duties required to be done in his job classification; the employing authority is willing to permit the employee to perform limited duty with no reduction in pay (Personnel Board of City of Miami Beach v. Majewski, Fla. App, 1968, 212 So.2d 888); the employee not being totally disabled to do all of the functions provided for in his classification, he is not entitled to retirement. Hubbard v. Pueblo Firemen's Pension Fund, 150 Colo. 495, 374 P.2d 492; 62 C.J.S. Municipal Corporations s 614(2), p. 1275. [31 MUNICIPAL CORPORATIONS G=200(10) FN 1. 1945 Laws of Florida, Special Acts, Cb. 23414. 268k200(10) Where special act gave board of trustees for pension [3] The appellee has cross-appealed and assigned as fund for firemen the responsibility for administration of error the failure of the trial court to dismiss the Copr. C West 1999 No Claim to Orig. U.S. Govt. Works ,• , • }=' 1 ` I ! 3, i - ,? .. ? l? ., :) 4 ' ' ., a ,. .--f ??i ` + ! e + fv f .,, , • •I " 1 .. .`5 SSs i'?J -4? r ' 4 ? [•• "J' ? ?' L 1 ? ` f ? is -. ?, Z: • , ,t t 1 rJ', ^ ' ' . , it ,? , , ? .. 4 ,'t , .{ }: - ;:]'• _:( ? ? Mrs. ? ? . .. ,. ? ;,'2 ,E! tl,?,.. 'I• f'% r ? '? • • ` ??:, 'v ? ? !?•' .5 . rk' f I 'ii f ? i "f : , e y r , :la .J . .. 1 TM,w• e:J? l . li << Rs... .,. n.+:?:3r1. ,?5: i .? r ? 4? :i': P•??•w"i ''',C'' 1.. S.f?:.+,?•:,v ,.:}l°.ir .tr 5.; ,'.+f .:^.i. ' tJ,. .. , f? r.. ..x:'•Y t: ?. r.....p : ?'? •. , ? i 1 ..r .. . , . . . ,,.? , ..J r. , , .. . , . , . . -..-. E 246 So.2d 610 Page 2 (Cite aar 246 So.2d 610, *611) „ r certiorari proceed ogs because the City of Miami Heach ' was not made-a party=respondent thereto; 6anteading it was a necessary or..iadi hie party.: We find this position not to be well token, because the pr6visi6as of . the Special Act gives the appellee the responsibility for ; the. administration • of the' find, and. if it finds an ' employee' to be totally and permanently disabled its" action in this regard entitles him to receive b=Gts ' " fR1[11 the Aind.[FN2] There was no necessity for the City to be a party. .. . . Copr. 0 West 1999 No Claim to Orig. U.S, Govt. Works ' 207 30.2d 471 Page 1 ' (Cke at 207 So.2d 471).. Wllllam THODE, Patrick Clark and Larry ' Bornstein, Appellants,. Before BARKDULL and SWANN, JJ., and POPPER, ' w DAVID, Associate Judge. . MY OF MUM BEACH, a mwaidpal corporation et aL, Appellees. PER CURIAM. Nm 67--634. By this appeal. plaintiffs in the trial court (members of the Beach Patrol) seek review of an order dismissing District Court of Appeal of Florida, Third District, their amended complaint, The amended complaint '. sought to have them declared to be within the pension ' Feb. 20, 1968. retirement provisions of Ch. 185, Fla.Stat., F.S.A., as police officers of the City of Miami Beach. Appeal ` from Circuit Court, Dade County, Jaynes ' Lawrence King. Judge. We affirm, without prejudice to the appellants aealang such administrative action as they &cm appropriate in Ira J. D=kmam, Miami, for appellants. an attempt to cause the officials. of the City of Miami . Beach to include the Beach Patrol within the classified Joseph A.. Wrnick,' City Atty., and Ira M. Elegant, service relating to police officers. AssL City' Atty., Irving Cypen, Miami Beach, for . appellees. END OF DOCUMENT Copr. © West 19,99 No Claim to Orig. U.S. Govt. Works 105 So.2d 5 (Cite as: 105 So.2d 5) ne CITY OF MIAMI. x Florida munlctpol corporation, Appellant, V. G. IL CARTER et aL, Appellees. Supreme Court of Florida. July 23, 1958. Rehearing Denied Oct. 1. 1958. Action brought by firemen for an accounting by municipality of proceeds of exsisc tax levied on fire insurers. The Circuit Court for Dade County, J. Fritz Gonlon. J.. granted the relief sought, and defendant appealed. The Supreme Court, O'Connell, J., held that notwithstanding statutory provision that municipalities should be independent of each anther in enforcement and interpretntion of statute's provisions, prior decision, that City of Miami Beach must use proceeds of excise tax exclusively , for benefit of firemen, and their dependents, was binding on City of Miami when same basic question was raised ? in this subsequent suit against that city. Affirmed. [1] INSURANCE «1127 217k1127 Formerly 2170 City cannot use proceeds of excise tax on fire insurers for benefit of all of members of city relief or pension fund but must use such proceeds exclusively for benefit of firemen members and their dependents; and while it is permissible for proceeds to be paid into general pension or retirement fund of city, proceeds must, within that fund, be held in special fund and administered for sole benefit of firemen members and their dependents. F.S.A. § 175.01 et seq. [1] MUNICIPAL CORPORATIONS X200(1) 268k200(1) City cannot use proceeds of excise tax on fire insurers for benefit of all of members of city relief or pension fund but must use such proceeds exclusively for benefit of firemen members and their dependents; and while it is permissible for proceeds to be paid into general pension or retirement fund of city, proceeds must, within that fund, be held in special fund and administered for sole benefit of firemen members and their dependents. F.S.A. § 175.01 et seq, 121 COURTS X89 106k89 Page 1 Notwithstanding statutory provision that municipalities should be independent of each other in enforcement and interpretation of statute's provisions, prior decision, that City of Miami Beach must use proceeds of excise tax on fire ft n x-rs exclusively for benefit of firemen and their dependents, was binding on City of Miami when same basic question was raised in subsequent suit against that city. F.S.A. § 175.01 et seq. 131 INSURANCE 01127 217k1127 Formerly 2170 In action brought by firemen for an accounting by municipality as to proceeds of excise tax on fire insurers evidence would not sustain city's contention that, even though no separate special fund had been utilized, tax monies had in fact been used exclusively for benefit of firemen and their dependents. F.S.A. § 175.01 ct seq. [4) INSURANCE e=1127 217k1127 Formerly 2170 Statute authorizing excise tax on fire insurers for firemen's relief and pension funds manifested no intent that firemen should not receive benefit of such two monies in addition to benefits received from any other pension fund; and, in suit brought by firemen to compel municipality to account for proceeds of such tat, city could not place upon firemen obligation of proving that statute's intent was that they derive benefit of tax in addition to benefits derived from other pension or retirement systems or funds. F.S.A. § 175.01 et seq. 141 MUNICIPAL CORPORATIONS X200(8.1) 268k200(8.1) Formerly 2681:200(8) Statute authorizing excise tax on fire irm=rs for firemen's relief and pension funds manifested no intent that firemen should not receive benefit of such tax monies in addition to benefits received from any other pension fund; and, in suit brought by firemen to compel municipality to account for proceeds of such tax, city could not place upon firemen obligation of proving that statute's intent was that they derive benefit of tax in addition to benefits derived from other pension or retircment systems or funds. F.S.A. § 175.01 ct seq. 151 CONSTITUTIONAL LAW e=70.3(14) 92k70.3(14) Formerly 92k70(3) If, when considered along with city's retirement system, statute giving firemen and their dependents sole benefit Copr. © West 1999 No Claim to Orig. U.S, Govt. Works r 105 So.2d 5 (C1te as: 105 So-2d 5) of excise tax on fire innum rendered provisions of retirement ayatem overly liberal, too expensive, or discriminatory as to other city employees, city would be at liberty to mock remedy through amendment to its retirement system, but it would not be a matter to be settled by judicial decree. [61 JUDGMENT X735 228k735 Even though same parties were involved in both suits, decision adverse to firemen in their prior class suit to restrain city ' from paying proceeds of excise tax on fire insurers' into retirement system was not conclusive against Bremen in their subsequent suit to compel city to account for proceeds of tax, where crucial issue, as to whether promeds were to be used exclusively for benefit of, firemen and their dependents, had not been litigated in prior suit. 171 JUDGMENT G=731 228k731 Even though court, holding that mandamus was not proper remedy, opined that even if it were firemen would be barred by Inches with respect to their claim for an accounting, determination was not conclusive against subsequent suit by firemen to require municipality to account for proceeds of excise, tax levied on fire insurers. F.S.A. § 175.01 ct sect. [81 EQUITY X84 150k84 Lathes is primarily a question of fact to be determined from circumstances of each cast. 19] ACTION G=63 13k63 Delay in bringing action on claim, if satisfactorily explained, will not preclude granting of relief where no injury, embarrassment or disadvantage has resulted to person against whom relief is sought. [10] INSURANCE 01127 217k1127 Formerly 2170 Fact that city would now have to pay in lump sum money which it could have more easily paid in annual installrucnts was not sufficient injury, embarrassment or disadvantage to warrant invocation of doctrine of Inches in suit brought by firemen to require municipality to account for proceeds of excise tax levied on fire insurers. 1111 MUNICIPAL CORPORATIONS X1002 Page 2 268k1002 A municipality is liable for payment of interest upon its obligations, particularly when it acts in other than a governmental capacity. 1121 ACCOUNT «22 9122 In suit in equity for an accounting, chancellor is, of necessity, allowed some discretion in balancing equities between parties. 1131 DAMAGES X67 Il5k67 Where interest is sought by way of damages for delay, courts. of equity exercise a certain discretion as to its allowance. 1141 MUNICIPAL CORPORATIONS X1002 268kI002 On record presented, in firemen's suit for an accounting by municipality of proceeds of excise tax levied on fire insurers, chancellor did not abuse his discretion in refusing to allow interest F.S.A.- § 175.01 et seq, *7 George S. Okell, Sr., and Robert M. Haverfreld, Miami, for appellant. Cypen, Salmon & Cypen, Miami Beach, and Ben Shepard, Miami, for appellees. O'CONNELI., Justice. The City of Miami, appellant, hereinafter referred to as the City, was defendant in an action brought by the plaintiffs, employees of the Miami Fire Department, hereinafter referred to as the firemen. The complaint sought an accounting of funds received by the City, during the period extending from December 6, 1939 to June 5, 1952, from the proceeds of a one (10/*) per cent tax on gross receipts of all premiums collected on fire and tornado insurance policies covering property within the City's municipal limits, pursuant to are ordinance of the City enacted under the authority of Chap. 19112, Laws ofFla. 1939. The complaint alleged that in 1939 the legislature enacted Chapter 19112, supra, which is now and is hereinafter rcfern:d to as Chapter 175, Florida Statutes, F.S.A.; said chapter provided for the creation of a Municipal frrtmeds pension fund' in the State Treasury and authorized certain cities, ' including Miami, to assess and impose on insurers insuring against loss by fire or tornado a tax amounting to 1% of the gross amount of receipts of premiums on such policies covering property within their corporate limits; said Copr. 0 West 1999 No Claim to Orig. U.S. Govt. Works 105 So.2d 5 (Cite as: 105 So.2d 5, "7} chapter required insurers to pay said tax to the State Treasurer who was unuired to pay such into a special Municipal firemen's pension fund' and annually pay over to each city the net amount to which such city was entitled; said chapter provided that the sums thus received by a city were to be paid into a firemen's relief and pension fund or into its pension fund for firemen and policemen, where such latter fund existed, the Supreme Court, in Jackson v. McGrath, 1945, 155 Fla. 565, 20 So.2d 907, held that funds so received must be held and administered for the sole use and benefit of firemen members and their dependents; the City of Miami passed its Ordinance No. 2231 oa December 6, 1939 assessing and imposing the 1% tax as provided, the City had continuously since that date received said tax, said funds being paid over to it in trust for its *8 firemen; prior to December 6, 1939 there existed in the City a pension system known as 'the Pension and/or Retirement Fund for members of the Police and Fire Departments of the City of Miami'; on December 6, 1939, by Ordinance No. 2230 the City created "The Miami City Employees' Retirement System'; the former pension fiord. 'The Pension and/or Retirement Fund for Members of the Police and Fire Departments', ceased to exist upon the creation of the new retirement system and its assets were transferred to the new fund; the City had failed and refused to hold and administer, for the sole use and benefit of firemen members and their dependents, funds received by it under the provisions of Chapter 175 during the years 1940 through 1952, but, on the contrary, had paid all such funds into 'The Miami City Employees' Retirement System' and in so doing deprived the plaintiffs of their property without due process of low, and that in a suit brought by certain firemen against the City the trial court had rendered its judgment adjudicating the disposition of all such monies receiver by the City since June 5, 1952, such judgment being affirmed by the Supreme Court in a per euriam decision without opinion, State ex rel. Sharpe v. City of Miami, Fla. 1955. 77 So.2d 806. The complaint concluded with a prayer that an accounting be taken of the monies received commencing on the 6th day of December, 1939 and ending on the 4th day of June, 1952. Plaintiffs prayed that the City be decreed to pay the amount determined, together with interest thereon, into the `Miami City Employees' Retirement System', there to be held in a special fund and administered for the sole benefit of firemen members and their dependents, such benefits to be in addition to the benefits already provided for them under said retirement system. The City's motion to dismiss was denied and it then Page 3 answered. In the answer the City alleged that the pleader's interpretations of Jackson v. McGrath, supra, were mere conclusions of the pleader and denied that the subject funds had been paid over to the City in trust for its firemen; the liabilities of the old pension and/or retirement fund for members of the police and fire departments of the City exceeded its assets and said liabilities were assumed by the new retirement system; the firemen had received special benefits not received by general employees participating in the City's retirement system; the present retirement system replaced the old, defunct system of firemen and policemen; the method by which the tax monies were administered was approved by the Supreme Court in Voorhees v. City of Miami, 1940, 145 Fla. 402, 199 So. 313; since passage of Ordinance No. 2230 in 1939 and through 1951 the amount received by the retirement system from the 1% tax was 5434,946 and the City had paid for the benefit of firemen that amount plus $1,119,075; the benefits the firemen had received and occepted under the retirement system included the 1% tax, said tax being an integral part of the firemen's benefits; and that the case referred to, State ex rcl. Sharpe v. City of Miami, supra, was a class suit including the class that the firemen represent, and the issues raised in that case were identical to issues raised herein. The City's answer stated that the firemen were not diligent in pursuing their remedies and were estoppod from securing the relief sought. The City prayed that the complaint be dismissed. The City's motion for summary judgment was denied and at the conclusion of the testimony the chancellor catered his decree for the firemen. The chancellor decreed that under the provisions of Chapter 19112, Laws of Florida, Acts of 1939, as interpreted by this Court in Jackson v. McGrath, supra, it was the duty of the City to pay the tax money into a separate fund within the Miami City Employees' Retirement System, there to be held and administered for the sole use and benefit of firemen members and their dependents. He found that the City had used said nuns to reduce the contribution +9 to the retirement system which it was required to make and that, contrary to the City's contention, the firemen had never received any benefits over and above what they were entitled to receive under the retirement system created by Ordinance No, 2230, The chancellor specifically recited that the preponderance of the evidence showed that the firemen were not guilty of laches. He also rejected the contention that the matters at issue were res judicata, stating that his examination of the Voorhees and Copr. 0 West 1999 No Claim to Orig. U.S. Govt. Works 105 So.2d 5 (Cite am: 105 So.2d 5, 49 ) Sharpe cases convinced him the issues involved in the instant suit were not determined therein. He ordered the City to pay over the total proceeds from the tax, which he found to be 5136,920.68, in lieu of the figure alleged in the City's answer, into a special fund within the Miami City Employees' Retirement System, there to be held and administered for the sole use and benefit of the firemen members who were members at any time during the period from December 6, 1939 to June 5, 1952, and their dependents. - Fie decreed that the firemen were to receive the benefits of said special fund in addition to the benefits already provided for fimmea members and their dependents under the retirement system. He also decreed that ho interest is allowed (on the 5436,920.68) as the City of Miami honestly felt that they were handling the funds properly.' From this final decree the City appeals and the firemen file as a cross- assignment of error the chancellor's refusal to award interest. The City raises four points on appeal. First, it contends that it has properly used the funds in question for the use and benefit of firemen and their dependants; second, it says that the decisions in the cases of Voorhees v. City of Miami, supra, and State ex rel. Sharpe v. City of Miami, supra, arc res judicata on the issues of the instant case; third, that the plaintiffs were guilty of laches; and fourth, that the provisions of Sec. 175.25, F.S.A. provide that the municipalities shall be independent of each other in the enforcement and interpretation of the provision of Chapter 175, F.S.A. and therefore the decision of Jackson v. McGrath, supra, is not binding on the City of Miami. We will consider the first and fourth points together. While it is true that the Jackson v. McGrath case involved the City of Miami Beach and not the City of Miami, nevertheless, it is clear that the same basic question was involved in that case as in this, i. c. whether a city can use the proceeds of the tax authorized under Chapter 175, F.S.A. for the benefit of all the members of the city relief or pension fund, or must the funds be used exclusively for the benefit of firemen members and their dependents. In the Jackson case (155 Fla. 565, 20 So.2d 909), the trial court held that such monies should be paid into the 'General Employee Pension, Annuity and Retirement Fund of the City of Miami Beach' and used for the benefit of all the members thereof. In reversing that holding this Court expressly Page 4 interpreted and construed the terms of Chapter 175, F.S.A., saying, in 20 So.2d at page 909 et seq: 'It appears to us from a study of the applicable statutes that the monies received from the state comptroller may be lawfully placed and kept in the General Employee Pension, Annuity and Retirement Fund of the City of Miami Beacb, but that they must be there held and administered for the sole use and . benefit of firemen members and their dependents and not for all employees in the service of the city. '* * * Nowhere in the controlling statute. is it provided, or even remotely suggested or inferred, that employees other than firemen are to participate in these proceeds. Throughout the act it is manifestly- clear that the purpose of the act is to provide a system of relief • 10 for firemen and their dependants, and for no other class of employees.' [1] The above statements, as well as others in the Jackson case, leave no doubt that the funds derived from the tax authorized under Chapter 175, F.S.A., must be held, administer-ed and used for the sole use and benefit of firemen and their dependents. It is permissible.to pay the funds into the general pension or retirement fund of the City but within that fund they must be held in a `firemen's relief and pension fund', a 'city pension fund for firemen and policemen' or in a similar special fund In addition, this Court by affirming the Sharpe case, has reaffirmed the holding in Jackson v. McGrath. In the Sharpe case, the trial court wrote an 'opinion and order' followed later by a final judgment. The record in that case was introduced in evidence in the trial of the case now before us and the appendix attached to appellant's brief contains both the 'opinion and ordee and the final judgment rendered by the trial court therein. In said opinion and order the trial court commented on the City's argument that no provision in Chapter 175, F.S.A., required the proceeds of the tax to be used exclusively for firemen and their dependents, saying: 't'his argument is not Mthout merit; however, it must yield to the construction of the Supreme Court of Florida, in Jackson v. McGrath, 155 Fla. 565, 20 So.2d 907. In that case the Supreme Court held that the proceeds of the tax authorized by Sections 175.01 ct seq., Florida Statutes, F.S.A., could only be used by the City of Miami Beach for the exclusive use and benefit of firemen and their dependents. In the case at bar the City of Miami stands in the stone position with respect to Section 175.01 et seq., Florida Statutes, Copr. © West 1999 No Clairn to Orig. U.S. Govt. Works 105 So.2d 5 (Cite as. 105 So.2d 5, *10) F.S.A., as does the City of Miami Beach. There is, therefore; no doubt in the mind of the Court of the applicability of the doctrine of Jackson v. McGrath, supra, to the instant controversy.' (Emphasis ours.) In the final judgment, the trial court ordered that there be issued a peremptory writ of mandamus commanding the City to administer the funds collected under the provisions of the act solely and only for the benefit of the firemen and their dependents. As above stated, this Court affirmed said final judgment by per curiam decision and thereby approved the trial court's construction and application of the holding in Jackson v. McGrath, supra. [2] The City's contention that Sec. 175.25. F.S.A, which provides that in the enforcement , and interpretation of that act each municipality shall be independent of the other, makes inapplicable to it the holding of this Court in Jackson v. McGrath, supra, is untenable. Whatever said section may mean, it can not be construed to mean that each city may determine for itself whether it will or will not use the proceeds of the tax for the exclusive benefit of firemen and their dependents. All cities which levy the tax authorized therein must use it for the exclusive use of firemen and their dependents. A different ruling would authorize a city by ordinance to change the provisions of the statute. Consequently, we must and do conclude that the enancellor was correct in determining that the City should have paid the proceeds of the tax into a separate fund within 'The Miami City Employees' Retirement System' there to be held, administered and used for the exclusive benefit of firemen members and their dependents, and that the City did not do so during the period of time involved in this proceeding. [31 In support of its position that it has properly used the funds in question the City argues that, even though no separate, special fund was utilized., the tax monies have been used for the benefit of the firemen and *11 their dependents. It claims that the plaintiff's are receiving benefits in excess of those which could be provided by the proceeds of the 1% tax and point out that during the period involved the City has paid into the retirement system for the f rcmcn's use over one million dollars in excess of the 5436,920.68 collected from the tax, In view of this, says the City, it would be inequitable to require it to pay over to the firemen the sum of 5436,920.68. Page 5 As summarized by the firemen in their brief, the special benefits which the City claims to be given the firemen, are: (1) assumption of the obligations of a defunct pension system for firemen and policemen which cxisted prior to enactment of the present system; (2) a lower retirement age for a special group of policemen and firemen; (3) a lower rate of contribution to the r ctircmcot system by policemen and firemen and a greater contribution by the City for firemen and policemen than made by it for other employees in the system The firemen deny that they receive special benefits under the system. They argue, and the record so shows, that they do not receive a greater pension than any other employee with equal service and pay scale. As to the assumption of the liabilities of the old pension fund they point out that this was of benefit only to policemen and firemen not entitled to any benefits from the tax monies involved herein, i. e. only to those who were already on the rolls of the old system. As to the lower retirement age for firemen they point out that this right is given only to a special small group of policemen and firemen who waived any rights to a return of their contributions to the system in event of termination of employment by the City before becoming eligible for retirement benefits. All other employees are entitled to a return of their contributions under such circumstances. We agree with the firemen that the lower retirement age for this special group of firemen and policemen is not a special benefit attributable to the use of the tax monies involved but is one purchased by the employees involved through waiver of the right to a return of their contributions. As to the City's argument that the firemen enjoy a special benefit in that they contribute at a lesser rate than other employees, it is first to be noted that the record shows that firemen and policemen are treated in the same manner under the system. Secondly, the testimony of the City's consulting actuary explained that the lower rate for firemen (and policemen) was not because of use of the tax monies involved here, but because of the fact that firemen (and policemen) as a class have a shorter fife expectancy than general employees and it is therefore unnecessary to build up as large a fund for their retirement benefits. He further explained that firmnen (and policemen) cost the City more in contributions because there is less turnover in such personnel than in general employees. The result is that among general employee classifications with greater frequency of termination of employment before Copr. Cr West 1999 No Clain to Orig. U.S. Govt. Works 105 So.2d 5 (Cite as: 105 So.2d 5, *11) becoming entitled to retirement benefits, the contributions made by the City remain in the system, but the persons for whom the contributions were made do not, requiring lesser contributions by the City for the members who do remain and ultimately draw benefits. In addition to the foregoing, the manner in which the City determined the amount of its contributions to the system indicates clearly that the tax monies involved here were not devoted to the exclusive benefit of the firemen as this Court held they must be in Jackson v. McGrath, supra. The City's actuarial consultant testified that be advised the City each year how much it must contribute to the system for all employees and that this amount was determined by ascertaining the gross amount needed and then subtracting the assets on bend or anticipated including the tax monies involved herein. *12 Reasoned another way, it seems clear that should the proceeds of the tax monies involved here cease to be collected the benefit to the firemen, under the retirement system, would not be decreased nor would they be required to contribute any greater sum. However, the City would be affected in that it would have to make a greater contribution. This same reasoning applies to the period between 1940 and June 1952 and indicates conclusively that the proceeds of the tax monies were not used for the exclusive benefit of the firemen. We arc, then, of the opinion the record amply supports the final decree of the chancellor in the court below when he stated: . '* * * but the defendant did not pay said sums into a separate fiord within said system to be held for the sole use and benefit of firemen members of the system and their dependents but, on the contrary, said sums were co-mingled and were used to reduce the contribution to said system which the defendant was requinA to make. 'The defendant contends that, notwithstanding such use of said funds, the firemen members of the system and their dependents derived the benefit of all of this money. A preponderance of the evidence, however, refutes this contention and shows that the firemen have never received any benefits over and above what they were entitled to receive under the provisions of defendant's Ordinance No. 2230 (defendant's retirement system).' [4] The City argues that no provision appears in Chapter 175, F.S.A., to the effect that the firemen should get the sole benefit of the insurance tax in addition to benefits they receive under its retirement Page 6 system. This argument is of no avail as the Act does not make the firemen's right to the benefit of the tax contingent in any way upon the provisions of any other pension or retirement fund that may possibly include them in its operation Section 8 of Chapter 19112, now Chapter 175, F.S.A., provided that all funds received by a city under the provisions of the Act should be paid into its Firemrea's Relief and Pension Fund or into its Pension Fund for Firemen and Policemen, where such latter fund existed. Section 26 provided that Section 8, and certain other sections, should be applicable in relation to all cities and towns having, or which might thereafter establish, a Firemen's Relief and Pension Fund, or a Pension Fund for Firemen and Policemen, 'regardless of whether said city or town shall fall within the classification of Section 1 of this Act and have its Firemen's Relief and Pension Fund established under the provisions hereof or whether said City or Town's said pension fund shall exist under other general or special laws of the State.' Section 28 of the Act provided that nothing in the Act should be construed to repeal or amend any general or special laws theretofore passed pertaining to pension funds in certain cities, Miami included, unless specifically provided for within the Act. We cannot interpret these provisions to mean that the firemen shall not receive the benefit of the tax monies in addition to benefits received from any other pension fund. The City cannot place upon the firemen the obligation to prove that the Act's intent was that they derive the benefit of the tax in addition to benefits derived from other pension or retirement systems or funds. [5) it may be that the effect of the conclusion that the firemen are entitled to the sole use and benefit of the tax monies, when considered along with the benefits derived by them under the City's retirement system, is to render the provisions of the retirement system overly liberal, too expensive to the City or discriminatory as to other City employees. If such is the effect ¦ 13 the City is of course at liberty to seek remedy through amendment to its retirement system, but it is not a matter to be settled by judicial decree. We therefore must and do conclude that the tax monies involved herein were not used for the exclusive benefit of the firemen. The City next contends that the issues involved in the Copr. C West 1999 No Claim to Orig. U.S. Govt. Works 105 So.2d 5 (Cite axe 105 So.2d 5, * 13) cox now. befom us were previously litigated and decided in the cases of Voorhees v. City of Miami, supra, &M State ex rel. Sharpe v. City of Miami, supra, which cases involved the same parties as in this case, and therefore the parties are barred by the doctrines of res judicata or estoppel by judgment In the Voorhees case, decided by this Court in 1940, a fireman, in a class suit, sought to restrain the City of Miami from paying the procccds of the tax monies involved herein into the retirement system created pursuant to Chapter 175, F.S.A, and from requiring an election by firemen and policemen as to the retirement classification to be taken by them. He also sought to have an accounting of the proceeds of certain tax levies made for benefit of the old system for the years 1937, 1938, and 1939 and to have the proceeds paid into the old system. He contended that the ordinance establishing the new system, the,one now in effect, was invalid, and that the old system was still in existence. This Court held the ordinance creating the present system to be valid, held the old system to be repealed, and therefore concluded that the question of paying the proceeds of the tax monies into a nonexistent fund or system was without merit. [6] Nowhere in that case do we find presented or decided the matter of how the proceeds of the tax monies involved herein should be held, used or administered within the present system Consequently, the Voorhees case is not a bar to this case. In the Sharpe case, discussed in part above, it was held that the City should hold, administer and use the tax monies involved herein for the exclusive benefit of the firemen. Certainly as to this point the City cannot argue that the Sharpe decision is against the position of the firemen in this suit. Rather it is in aid thescof: However, the City argues that the trial court in the 'opinion and ord a entered in the Sharpe case decided that the firemen wore guilty of laches and therefore were not entitled to an accounting for the tax monies for the period 1940 to June of 1952, when that suit was instituted In the'opinion and orde' the trial court said: 'The Court, therefore, states that if it were of the opinion that relators (the frremm) were otherwise entitled to the relief here being discussed (all of the funds received by the City from the tax in question from 1940 to the commencement of this action), it would be of the further opinion, that relators are Page 7 barred by ]aches with respect to this claim. Sac McNulty v. Blackburn, Fla., 42 So.2d 445; Pippin v. Stale ex rel. Town of Blountstown, supra (73 Fla. 363, 74 So. 653); Tampa Water Works Company v, State cx rel. City of Tampa, 77 Fla. 705, 82 So. 230. **W In the final judgment in the Sharpe case the trial judge stated that aside from the defense of lachos, which he considered to have merit, he did not deem mandamus the proper remedy for an accounting of the complex nature which he felt would be involvad. [7][8] It seems clear to us that the trial court did not decide that the firemen were barred from having an accounting of the proceeds of the tax monies for the years previous to 1952, but rather only expressed such as being his view if it were proper to decide the issue in a mandamus proceeding. It appears to us that he declined *14 to consider the matter of accounting for the previous yeah because he did not consider mandamus to be the proper cause of action in which to have an accounting. That he did not decide the issue of ]aches is buttressed by the fact that no testimony was taken by the trial court on that issue in the Sharpe case. Laches is primarily a question of fact to be determined from circumstances and conditions in each case. Consequently, we conclude that the instant case is not barred by the Sharpe case. [9][10] The last question presented by the City involves the defense of laches. As above stated the chancellor in his final decree specifically found that the preponderance of the evidence showed that the firemen were not guilty of laches. We have read all of the record and find sufficient evidence to support the chancellor on this point on the theory that delay in bringing action on a claim, if satisfactorily explained, will not preclude granting of relief, Conc v. Benjamin, 1946, 157 Fla. 800, 27 So.2d 90, where no injury, embarrassment or disadvantage has resulted to the person against whom relief is sought. Bethea v. Langford, Fla. 1950, 45 So.2d 496; Stephenson v. Stephenson, F1a.1951, 52 So.2d 684; Dacus v. Blackwell, Fla.1956, 90 So.2d 324. The fact that the City will now have to pay, in lump sum, monies which it could have easier paid in annual installments is not sufficient injury, embarrassment or disadvantage to warrant invocation of the doctrine of ]aches. See Jumper Creek Drainage Dist, v. State ex Copr. 0 West 1999 No Claim to Orig. U.S. Govt. Works ' r 105 So.2d 5 (Cite ma: 145 Said 5, *14) rel. Davis, 1945, 155 Fla. 669, 21 So.2d 459; Smith v. City of Winter Haven, 1944,154 Fla 439, 18 so.2d 4. We, therefore conclude that the firemen are not barred in this action by lathes. Finally, we are presented with the question by the firamea whether the lower court should have decreed that the City pay into the spoeW fmad for the fireman interest on the $436,920.68. The chancellor declined to do this, saying as reason therefor that the City had honestly felt they were handling the sans properly. We note that when this cause was here before on appeal of the Sharpe case, the appellants, who were the firemen, argued that they were not guilty of Inches. They asserted that one of the essential elements of that defense is that the person asserting it have been injured or psejudicW by the delay. The appellants, relators in that cause, stated in their brief: '* * * The relators do not .demand interest on the money thus wrongfully used and withheld, so actually the respondent City has been greatly beufitrd by having the free use of said insurance tax money.' Apparently the firemen on afterthought changed their minds. for in the instant case they do seek such interest, as they demanded such in their bill of complaint. They now contend that intert.•st is not a penalty to be allowed or disallowed, based on the motives of the defcadan4 but is an award to compensate a person for the loss of use or detention of his money. This purported rule constitutes the firemen's sole argument on this question. The City did not choose to treat the question im its briefs. The liability of municipalities for interest on claims against them is discussed in 38 Am.Jur., Municipal Corporations, Sec. 672; 17 McQuillin, Mun.Corps. Page 8 Sec. 48.09 (3rd. ed. 1950); Annotation, 1950, 24 AL.-.2d 928, Also ' see Broward County Port Authority v. Arundel Corp., 5 Cir., 1953, 206 F.2d 220, and Board of Trust= of Police Pension-Fund of Glen Ellyn v. Village of Glen Ellyn, 1949, 337 M.App. 183, 85 N.E.2d 473. [1 I] The above authorities are divided on the question, but the weight of authority seems to be that a municipality is liable for payment of interest upon its obligation. This scans to be particularly so when the *15 municipality is acting in other than a governmental capacity. [12)[13] However, the case before us was in equity for an accounting. In such cases in balancing the equities between the parties the cha=Uor is of necessity allowed some discretion. As was said by the Supreme Court of the United States in City of New Orleans v. Fisher, 2901, 180 U.S. 185,198.21 S.CL.347, 353, 45 L.Ed. 485, 'where interest is sought by way of damages for delay, courts of equity exercise a certain discretion as to its allowance! [14] In this case no attempt has been made to show that the chancellor abused his discretion in refusing to allow interest on the sums of tax monies collected during the period involved and we do not, in our independent study of the record and applicable law, find that he did so. In accordance with the views expressed above the decree appealed from is Affirmed. TERRELL, C. J., and HOBSON, ROBERTS and DREW, JJ., concur. END OF DOCUMENT Copr. 0 West 1999 No Claire to Orig. U.S. Govt Works 75 So.2d 792 (Cite as: 75 So.2d 792) CITY OF MIAMI BEACH, a Municipal Corporation, Appellant, ' v. D. J. CLEARY, William Johnson, Ed Hancock., Frank Fitzpatrick, James Wages, Thomas Minn, Virgil Miller, Jack Farrell, and Peter Stewart, as the Board ofI'rustees for the City Pension Fund for Firemen and Policemen In the City ofMiaml Beach,Florida, Appellees. Supreme Court of Florida, Special Division B. Nov. 16,1954. Action, by a city seeking a judicial determination concerning sections of the pmTonnel rules governing a pensions plan for the Police and Firemen of the city. From an adverse decree of Circuit Court for Dade County, Pat Cannon, J., the city appeals. The Supreme Court, Drew J., held that under the pension plans of the city of Miami Beach for Police and Firemen, accumulated leave of members is not subject to payroll deductions for the benefit of the system. Decree affirmed [1] MUNICIPAL CORPORATIONS e;=220(9) 268k220(9) In construing acts relating to pension systems for municipal employees, a construction should be adopted that will avoid an inequitable result or result favoring one member over another. [21 MUNICIPAL CORPORATIONS X187(4) 268k 187(4) Under the pension plans of the city of Miami Beach for police and firemen, accumulated leave of members was not subject to payroll deductions for the benefit of the system, where it had no relation either to the right to retire, or the amount to be received in the event of retirement. Sp.Acts 1945, e. 23414, as amended. 121 MUNICIPAL CORPORATIONS 200(4) 268k200(4) Under the pension plans of the city of Miami Beach for police and firemen, accumulated leave of members was not subject to payroll deductions for the benefit of the system, where it had no relation either to the right to retire, or the amount to be received in the event of retirement. Sp.Acts 1945, c. 23414, as amended. "793 Ben Shepard, Miami, and Joseph A. Wanick, Miami Beach, for appellant. Page I Irving Cypcn and Michael IL Salmon, Miami Beach, for appellees. DREW, Justice. The City of Miami Beach filed a complaint seeldng a judicial determination concerning certain sections of the personnel rules adopted pursuant to the Civil Service Act governing City of Miami Beach and certain provisions contained in the Pension Plan for Police and Firemen of said City of Miami Beach. Chapter 23414, Spl,aws of Florida, Acts of 1945 and acts amendatory thereof and supplemental thereto. The personnel rules of the City of Miami Beach, Florida, provide; 'Annual Leave: Annual Leave shall be granted to all employees who have Regular status in any classification whatsoever at the rate of twenty (20) days with pay for each full year of service, but shall not be granted to employees serving under Provisional appointmmit nor to employees serving their original Probationary Period. Annual Leave shall be used for absences because of siclmess or injury, not service connected, or because of the death or serious, illness of a member of the employees immediate family, for religious holidays, and for yearly vacation absences. Annual Leave with pay shall in no case exceed the yearly allowance plus any accumulation. of the employee, except in such cases as the City Manager shall recommend and the City Council shall approve. '3. Any portion of the Annual Leave of a Regular employee, not otherwise used shall be accumulated, and after the earned balance of Annual Leave to the credit of such Regular employee at the end of the calendar year shall be such that longer than normal vacations can be granted without the resulting time charged for such vacation reducing the earned balance below sixty (60) days, such Regular employee may be granted a vacation not to exceed twenty (20) work days. Any earned balance of Annual Leave, including credits provided for in Paragraph (a) 4 of this Section, of a Regular Employee who dies in the service of the City, or who retires under the terms of any City Pension Plan, shall be paid to the beneficiary or employee respectively at the rate of compensation received by such Regular employee at the time of his death in service or retirement. Any earned balance of Annual Leave, deducting therefrom any credit granted under the provisions of Paragraph (a) 4 of this Section, of a Regular Employee who resigns in good standing shall Copr. 0 West 1999 No Claim to Orig. U.S. Govt. Works 75 So.2d 792 (CHe as: 75 3o.2d 792, *793) be paid to such Regular Employee at the rate of compensation received by such Regular Employee at the time of his resignation in good standing, provided that such payment shall not be made until such time as the resigned Regular Employee shall forfeit his right to re- employment either by time limitation or by written forfeiture of all Civil Service rights. Such payment for balance of Annual Leave payable to a retired Regular Employee, a beneficiary of a deceased Regular Employee or to a resigned Regular Employee shall in no case exceed an amount equal to one year's compensation at the rate of pay received by such Regular Employee at the time of his retirarnent, death or resignation.' *794 The pension plan aforesaid contains a provision that, in order to be entitled to the benefits thereof, the members of the plan shall contribute to the fund dated to finance the system a percentage of the salary and wages of such members in the form of payroll deductions. The plan provides that, upon application, a member of the plan, who has completed twenty years of 'creditable service' or who has attained age 55 with ten years or more of 'creditable service or who has become permanently or totally disabled other than in the line of duty after five years of 'creditable service', may retire and, in the event thereof, shall receive certain benefits, such benefits, being primarily based upon the years of 'creditable service of such members. It is also provided in the pension plan that in computing service allowance, 'creditable service shall include all periods of time of actual work for which wages or salaries were received by members of the system, including time served in the unclassified service of the city. The complaint alleges, and it is admitted, that certain members of the system who are presently qualified to retire have accumulated leave to their credit. The complaint alleges that there is a conflict under the terms of the pension plan as to the basis upon which a member makes his contribution to the system. One portion of the plan provides that each member shall contribute by payroll deductions a percentage of his salary or wages while another section provides for a contract between the city and the member whereby the member agrees to contribute by payroll deduction a percentage of his salary, wages or compensation. The complaint !lather alleges that the city is in doubt as to the following matters: (1) whether annual leave which has been accumulated by a member of the system under the provisions of the personnel act as aforesaid shall be computed as 'creditable service' in determining requirements for retirement or (2) for the purpose of Page 2 determining the amounts of benefits by a member of the plan who elects to retire and (3) whether a member of the plan is required to contribute by payroll deduction a percentage of the sum received by such member for accumulated annual leave and, if such be not the case, whether all such sums which have been heretofore deducted should be returned to the members. The lower court entered a decree in which it determined, and we quote directly from .the decretal portion thereof, as follows: '(1) That unused vacation and sickleave time, referred to in Rule X11 of the Personnel Rules as'Accumulated Leave,' and for which policemen and firemen of the City of Miami Beach are paid, upon retirement or death, may not be deemed to be, or computed as 'periods of time of actual work' in determining periods of 'creditable service' for retirement purposes within the meaning of Section 18, Chapter 23414, Laws Florida, 1945, as amended through 1953; nor may sums received by members of the policemen's and firemen's Pension Fund for 'accumulated leave be included in the determination and computation of benefits payable upon the death or retir:nent of members of the Policemen's and Firemen's Pension Fund of the City of Miami Beach under said statutory provisions. '(2) That the City of Miami Beach is not authorized or permitted to deduct from amounts payable for such 'accumulated leave to members of the Policemen's and Firemen's Pension Fund of the city of Miami Beach, any sum or sums whatsoever as a required contribution of said members to said Pension Fund, the Court finding and declaring that such 'contributions' are violative of the provisions of Sections 2(b) and 18 of Chapter 23414, Laws of Florida 1945, as amended through 1953. '(3) That any deductions heictofore made by the City of Miami Beach from amounts payable for 'accumulated leave' as 'contributions' to said *795 Pension Fund payable by the members thereof were, and are, unauthorized, and must be repaid by the City of Miami Beach to the persons entitled thereto.' On appeal the city does not question the correctness of the holding of the lower court with respect to paragraph (1) in the quoted portion of the degree but assigns as error the holding of the lower court set forth in paragraphs (2) and (3) above. [ 1) [2] The city having conredeci the correctness of the holding of the lower court that the accumulated annual leave on the records to the credit of a member of the system may not be computed as a period of time of Copr. C West 1999 No Claim to Orig. U.S. Govt. Works 75 So.2d 792 Page 3 (Cite as: 75 So.2d 792, •795) actual work in determining either creditable service for employ of the city for such period of time. In retirernent. purposes or benefrts payable, is hardly in a construing acts of this kind, it is an elemental principle ' pcWtion to question the correctness of the findings that and plain common sense to place a construction on it such accrnnulated leave is not subject to payroll that would avoid an inequitable result or result in deductions for the benefit of the system. It is perfectly favoring one member over another. The example obvious that if this accumulated leave has no relation to drawn by appellees to illustrate that the contention of either the right to retire or the amount to be received in the appellant could and probably would result in the event of retirernert, it should not be burdened for inequality between members of the system is, we think, the purpose of supporting the retirement system. It is accurate and appropriate. They say. and we quote: perfectly plain that if the member elects to take his 20 'For example, the case of two men both having twenty day vacation and work for a third person during such years of service, one having accumulated leave and period, the amount so received in such employment one not, would result in the following inequity. The would not be burdened in any manner for the support of member who accumulated one year's annual leave the system, There is no logical reason why if he elects would contribute twenty-one (21) years of deductions to work for the city during the same period of time, the and would receive only twenty (20) years benefits, city should have ' any right whatever to take out a On the other hand, the member who has no portion'of the wages, compensation or salary earned to accumulated leave payment will pay twenty (20) support the retirement system. It is a part of the years contributions and receive twenty (20) years of philosophy of most all pension systems and an benefits. -The extra money contributed from elemental principle of economics that benefits received accumulated leave by the first man would be used by under them are ordinarily directly related to the amount i the City to lessen the amount it would have, to of contr bution of the members. Such is certainly true contribute to the Fund as required by the Act.' of the- purchase of a retirement policy and there is no difference in principle. The court having held, and we think correctly, that accumulated leave is not to be Having reached the conclusion that we have with considered as 'creditable service' in computing benefits, refercnec to the matter, it naturally follows that the, . there is no justification or reason to hold that a sums which have been heretofore deducted from such deduction be made themfraom for the benefit of the accumulated leave should be refunded. system. To illustrate the relationship of contributions to benefits in this pension system, there is a provision The decree appealed from is in all respects affirmed. in the ect, supra, that a member who enters the armed forces may have the time spent therein considered as ROBERTS, C. J., and TERRELL and THOMAS, JJ., 'creditable service' for computing benefits but only on concur. condition that he pay into the fund what his contributions would have been had he remained in the END OF DOCUMENT i? Copr. C West' 1999 No Claim to Orig. U.S. GovL Works Vol. IV, No. I' CYPEN & CYPEN NEWSLETTER for JANUARY, 1999 Copyright, 1996-1999, all rights reserved Stephen It. Cypen, Esq., Editor I. EBJ PUBLISHES SPECIAL SECTION ON INVESTMENT OF PLAN ASSETS: The December 1998 issue of the International Foundation's Employee BeneflU Journal contains a special section on investment of plan assets. The articies'are entitled "Some Common Sense Tips to the Pension Trustee for Avoiding the 'Bad News;" "The Fiduciary Responsibilities of Investment Managers;" "Active and Passive Management -- Together at Last;" "The Case for International Diversification;" and "Fourteen Things to Expect From Your Investment Consultant"" The last piece debunks the notion that consultants' functions are limited to reporting on performance, reviewing managers and conducting an occasional search. Trustees should expect their investment consultant to do at least the following. (1) accept fiduciary liability, (2) help define/recommend changes in strategy, policy and asset allocation; (3) write account guideline statements; (4) deal with assets; (5) oversee managers; (6) produce information and advice tailored to trustees' particular needs; (7) shield trustees from importunate investment managers; (8) inform trustees about investment opportunities, techniques and risks; (9) help with decisions on a rational basis; (10) provide trustee education; (11) conduct all searches and negotiate contracts and fees, (12) monitor compliance with "best practice" standards and regulatory requirements; (13) work collaboratively with other service providers; and (14) give unbiased advice, even if unpopular. 2. MACKELL AUTHORS PAPER ON NATIONAL RETIREMENT POLICY: Dr. Thomas J. Mackell, Jr., who is a member of the Advisory Council on Employee Welfare and Pension Benefits Plans, has authored a paper entitled "National Retirement Policy; Fact or Fiction?" The introduction and conclusion say it all. Achieving financial security for retirement is a complex process that is not getting easier. The need to educate American workers and employers on the importance of planning and saving for a secure, comfortable and dignified retirement is critical. The private voluntary retirement system came into being in the last century and was enhanced following the adoption of legislation of substantive tax incentives after establishment of the Tax Code in 1913. The growth and development of the organized trade union movement as a powerful advocate of social and economic policy for working Americans in the early 20th Century fostered the need of 1 CYPEN 6 CYPEN P. O. BOX 402099 MIAMI BEACH, FLORIDA 331400096 Vol. IV, No. 1 increasing worker security. Two main tenets and perspectives of pension policy early on were working people's security and preventing tax abuse. In the private sector, ERISA reinforces these principles and in the public sector, it is a patchwork quilt of state, county and municipal systems.... We all have a role to play in the effort to create a national retirement policy and improve working Americans' retirement goals. Improving the opportunity for a secure retirement for all will do much to impact the economic well being of the United States. Government, labor leaders, trustees, administrators, corporate leaders, investment managers, consultants and other professionals, and employers and employees alike may play different roles in the retirement equation but we should all be bound together for one sole purpose: to enable working women and men to retire with a modicum of financial well-being and dignity. Good job, Tom! 3. MIAMI F & P BOARD WINS ADA CASE: Little served as a city of Miami police officer from 1973 to 1976, when he retired on a disability pension. He had an orthopedic injury and also suffered from schizophrenia with paranoid features. When, in 1993, the Board of Trustees of the City of Miami Fire Fighters' and Police Officers' Retirement Trust and City of Miami refused to "reinstate" him to his former position as a City of Miami police officer, Little charged defendants with violating the Americans With Disabilities Act (ADA). In granting summary judgment for the Board and the City, United States District Judge Joan Lenard determined that Little does not have a "disability" recognized by ADA and is not a "qualified individual." On the first point, the Court found that Little's mental impairment does not substantially limit a major life activity, such as walking, seeing, hearing, speaking, breathing, learning and working, an impairment does not substantially limit the ability to work merely because it prevents a person from performing either a particular specialized job or a narrow range of jobs. On the second point, a qualified individual is one who has a disability and who, with or without reasonable accommodation, can perform the essential functions of the employment position that such individual holds or desires; the Court specifically found that Little is not qualified to carry -- and potentially to fire -- a gun. For both reasons, Little had not established a prima facie case of employment discrimination prohibited by ADA. We are pleased to have played a role in defending the Board in this case. Little v. City of Miami, Case No. 941276-CIV-LENARD (S.D. Fla., December 21, 1998). "Reality is an interesting concept." 4. CITY COMMISSIONER MAY ATTEND MEETING OF BOARD WHICH IS CONSIDERING RECOMMENDATION TO CITY COMMISSION ON PROPOSED ORDINANCE: A City Commissioner may attend a meeting of the Community Development Board (to which the City Commission has referred a proposed ordinance for recommendation to the City Commission) and express his or her views on the proposed ordinance even though other City Commissioners may be in attendance. However, the City 2 CYPEN 6 CYPEN P 0, BOX 402009 MIAMI BEACH, FLORIDA 33140.00.99 Vol. IV, No. 1 Commissioners in attendance may not engage in discussion or debate among themselves, because adoption of the ordinance Is a responsibility resting with the City Commission, and the City Commission's discussions and dellberations on the proposed ordinance must occur in a duly noticed City Commission Meeting. AGO 98-79 (December 17, 1998). The Attorney General adds the following sound suggestion: if the Community Development Board has been advised of the City Commissioners' intention to speak on the proposed ordinance, it may be advisable for the Board, In noticing its meeting, to include notice of the possible attendance and participation of City Commissioners. 5. GFOA PUBLISHES ARTICLE ON DROPS: in Its November/December1998 Issue of Pension & Benefi=ts Update, Government Finance Officers Association has published a special feature entitled "DROPs: Can They Work for You?" The article sets out the potential benefits to employees, potential disadvantages for employees, potential benefits to employers and potential disadvantages for employers. The conclusion? -- DROP plans can work well for some types of retirement systems; however, they can be complex to administer and difficult to maintain on a cost-neutral basis. Retirement systems considering adopting a DROP should pay close attention to design and cost considerations and should seek the assistance and counsel of a qualified actuary at the outset to help them with those important questions and decisions. 6. EMPLOYER BREACHED DEFERRED COMP AGREEMENT BY OFFSETTING PENSION BENEFITS: In 1981 an employer established a deferred compensation plan for three executives, including the senior vice-president, who entered into a deferred compensation plan agreement with the employer. The agreement provided that "nothing contained herein shall in any way affect or interfere with the right of the employee to share or participate in any retirement plan of the corporation or any profit-sharing, bonus or similar plan in which he may be entitled to participate as an ofjficer or employee of the corporation." In 1989 the employer adopted a pension plan, which was silent as to the interplay between its provisions and the existing deferred compensation agreement. However, the employer's annual proxy statements disclosed that pension benefits paid under the pension plan would be credited toward amounts payable under the deferred compensation agreement. After the employer reduced the employee's deferred compensation payments by the amount of his pension payments, lie filed suit for breach of the deferred compensation agreement. In reversing the trial court finding in favor of the employer and directing that judgment be entered in favor of the employee, the Third District Court of Appeal held that the deferred compensation agreement clearly and unambiguously stated that the employee's participation therein would not in any way affect or interfere with his right to share or participate in any retirement plan of the employer. Regardless of whether the employee had either actual or constructive knowledge of the disclaimer contained in the annual proxy statements, the terms of the deferred compensation agreement could not be unilaterally modified by the employer. Levinson v. Carnival Corporation, 23 Fla. L Weekly D2597 (Fla. 3d DCA November 25, 1998). 3 CYPEN S CYPEN P. O. BOX 402099 MIAMI BEACH. FLORIDA 33140.0000 Vol. IV, No. 1 7, SPECIFIC PERFORMANCE NOT APPROPRIATE REMEDY FOR BREACH OF EMPLOYMENT CONTRACT: A police officer sued a city for breach of contract, seeking retroactive promotion to the rank of sergeant and compensation for said retroactive promotion. The trial court found for the employee and assessed damages which included retroactive pay as if the employee had been earlier promoted to sergeant. The court also ordered the city retroactively to promote the employee to the rank of Sergeant. On appeal, the District Court of Appeal reversed that portion of the final judgment which directed the city retroactively to promote the employee to the rank of sergeant and remanded to the trial court to recalculate damages without application of retroactive promotion pay: "ordinarily the equitable remedy of specific performance is not available to enforce an employment contract." The rationale for this rule Is that such agreements lack the mutuality of remedy and obligation which would make specific performance an appropriate form of relief. The appropriate remedy in such cases is an action for damages for breach of contract. City of Riviera Beach v. Barber, 23 Fla. L. Weekly D2679 (Fla. 4th DCA December 9, 1998). 8. INTERNATIONAL FOUNDATION SURVEYS BENEFIT PRIORITIES: The International Foundation of Employee Benefit Plans, together with Deloitte & Touche, has released a survey entitled "Top Five Benefit Priorities for 1999." The 400-plus survey participants, all of whom were certified employee benefit specialists, were asked to identify their top five benefit priorities for next year. Four of the five primary concerns related to retirement and investing: (1) evaluating current investment options and evaluating adequacy of current levels of retirement savings • 73%; (2) identifying additional ways to save for retirement - 60%; (3) giving consideration to estate planning - 491yo; and (4) learning more about health risks and how to control them - 48%. The last concern, cited by 47% of the respondents, was evaluating, implementing or expanding use of Internet/Intranet applications. 9. UNIQUE CHARTER PROVISION PRECLUDES INCLUSION OF OVERTIME IN PENSION CALCULATION: The Oakland City Charter fixes a retiree's pension at a set percentage of "compensation attached to the average rank held" at time of retirement. Compensation is defined as monthly remuneration for members of the police or fire departments, but "excluding remuneration paid for overtime and for special details or assignments." On appeal, the California Court of Appeal affirmed the trial court ruling that under Oakland's "fluctuating" pension system, overtime was so variable it could not be considered compensation "attached to lite rank" held by firefighters at time of retirement. (Unlike longevity and merit pay which attach to the rank, overtime pay only attaches to the individual within the rank.) According to BNA, because of the very specific charter provision in question, other contrary California holdings are not in direct conflict. Ereefl v. City of Oakland, Case No. A079920 (Cal. App. 1st, November 30, 1998). "Common sense is the least common of all tsense&" 4 CYPEN 6 CYPEN P 0 00K 402090 MIAMI DrACH, PL 01i1DA 33140.0090 Vol. IV, No. 1 10. HOUSTON POLICE TO GET IMPROVED PENSIONS: A report from BNA advises that Houston's 5,400 police officers will receive improved pension benefits (in addition to an average 18% pay hike). The City must now make a minimum pension contribution equal to 15.5% of payroll, where previously there had been no floor. In addition, prior to the change pensions were based on 50% of total compensation; now compensation will include payments for longevity, hazardous duty and college degrees. Police officers are eligible to receive pension after 20 years of service. Because Houston firefighters have parity, they will be treated alike, except that their pensions are based on total compensation including overtime. 11. WISCONSIN FUND SETTLES SHAREHOLDER LAWSUIT: Undera 1995 federal law that gives institutional investors the right to take charge of securities-fraud cases, the State of Wisconsin Pension Board was appointed lead plaintiff in a class-action suit against CellStar. When the stock in the distributor of wireless phone equipment plunged from $30.00 to $6.00 in a matter of six months, the $55 Billion fund lost over $10 Million. Without admitting or denying liability, CellStar has agreed to pay $14.5 Million in settlement of the suit. The 1995 legislation was an effort to crack down on frivolous securities suits by presuming that institutional investors with large stakes would have an interest in strictly controlling expenses and ensuring maximum relief. And apparently it's working, because the settlement is equal to more than 40% of estimated losses, compared to the average recovery of 14%. The Wall Street Journal reported the settlement. "Anything is possible, but nothing is easy." 12. NSHADE MEETING" MUST STRICTLY COMPLY WITH STATUTE: In 1993 an exemption from the Florida Sunshine Law was created, enabling a governmental entity to meet privately with its attorney, provided certain conditions are met,. Section 286.011(8), Florida Statutes. Such meetings are sometimes referred to as "shade meetings," and may, be held in private to discuss pending litigation to which the entity is a party. The statute limits attendance to members of the entity, its chief administrative or executive officer and its attorney (which may include special counsel). Attendance by any others -- including staff members and consultants -- violates the Sunshine Law. Further, the meeting must be confined to settlement negotiations or strategy sessions relating to litigation expenditures; thus a decision or vote is not within the exception and must be he held at a public meeting. (For a trial court ruling to the same effect, see C&C Newsletter for June, 1997, page 7.) And, significantly, a subsequent public meeting which ratifies the action taken outside of the sunshine does not cure the violation -- only a full, open hearing will cure detects arising from a Sunshine Law violation. Zore v. City of Riviera Beach, Florida, 23 Fla. L. Weekly D2622 (Fla. 4th DCA, December 2, 1998). 5 CYPEN 6 CYPEN P. 0. 190X 402099 MIAMI BEACH. FLORIDA 33140.0090 Vol.' 1V, No. 1 13. VOLUNTEER MAY BE ELIGIBLE FOR WORKERS' COMP BENEFITS: Claimant was injured while acting as a volunteer for Harbour City Volunteer Ambulance Squad, inc., which had an exclusive franchise to provide ambulance services in part of Brevard County. The Judge of Compensation Claims dismissed the claim for benefits based on a lack of subject matter jurisdiction because Section 440.02(13)(d), Florida Statutes, provides that an "employee" for workers' compensation purposes does not include a volunteer, except a volunteer worker for the state or a county, municipality or other governmental entity. On appeal, the District Court reversed and remanded for a determination of whether HCVAS should be deemed an "other governmental entity." HCVAS is clearly a "quasi-public corporation;" that is, a private corporation that has accepted from the state grant of a franchise or contract involving performance of public duties. The appellate court found that the legislature intended to include within the definition of employee a volunteer worker of a quasi-public corporation which by its purpose, function and control is an "other governmental entity." One caveat: the District Court of Appeal indulged in the common law presumption that where' a workers' compensation statute is susceptible of disparate interpretations, courts will adopt a construction most favorable to claimant. Effective January 1, 1994, Chapter 93415, Laws of Florida, overrules that presumption, specifically, providing "the laws pertaining to workers' compensation are to be construed in accordance with the basic principles of statutory construction and not liberally in favor of either employee or employer," McClung-Gagne v. Ilarbour City Volunteer Ambulance Squad, Inc., 23 Fla. L. Weekly D2735 (Fla, 1st DCA, December 11, 1998). "The government denies any Imowledge of your accomplishments." Telephone/Miami-Dade: 305.532.3200 Telepho nelBrowa rd: 954.522.3200 Telephone/Toll Free: 800.332.3200 Telecopier. 305.535.0050 www.cypen.com cypen@compuserve.com Items In this Newsletter maybe exoerpts or summaries of migi aid or secondary aouree material (such" DNA Pension & Benefits Reporter), and may haw been reorganized for clarity and brevity. This Newsletteris tteaeral In nature and Is not Intended to provide specific legal or other advice. 6 CYPEN 6 CYPrN P. 01 BOX 402009 MIAMt REACH, FLORIDA 33t40.0099 . e r Vol. III, No. 12 OPEN & C'PEN NEWSLETTER for : DECEMBER, 1998 Copyright, 1996-19980 all rights reserved Stephen H. Cypen, Esq., Editor 1. A PRIMER ON AMERICAN DEPOSITARY RECEIPTS: First developed in' 1927, an American Depositary Receipt (ADR) is a negotiable certificate representing ownership of shares in a non-U.S. company. The certificate is quoted and traded in U.S. Dollars and includes a ratio which correlates receipts to the amount of underlying shares, which are logically called American Depositary Shares. There are three levels of Depositary Receipts. A Level-1 ADR is a rather simple and efficient means of raising capital with minimal regulatory and reporting requirements. These ADRs are traded over-the-counter ("Pink Sheets") and on some exchanges outside the U.S. (See C&C Newsletter for September, 1996,- Page 8 for a piece on Russia's ADR activities.) A Level-2 ADR is traded on an exchange, in compliance with the registration and reporting requirements of the Securities Exchange Act of 1934. However, the issuer did not rile a registration statement at the time of listing. Companies issuing Level-2 ADRs must reconcile according to U.S. generally accepted accounting principles and meet listing requirements of the U.S. exchange on which the ADRs are listed. Unlike a Level-2 ADR, a Level-3 ADR is offered to the public at the time of listing. Therefore, in addition to meeting requirements of the Securities Exchange Act of 1934 and exchange's listing requirements, these companies must comply with the Securities Act of 1933 (meaning there will be even greater disclosure). Our readers know that for purposes of Chapters 175 and 185, Florida Statutes, ADRs are considered "foreign securities." Now that Chapter 98-134 (S.B.1462) has amended Sections 175.071 and 185.06, Florida Statutes (1998), to allow trustees to invest up to 10% of plan assets in foreign securities (see Special Supplement to C&C Newsletter dated May 28, 1998, Pages 5-0, trustees should learn about ADRs. "A shortcut is the longest distance between two points." 2. CLARIFICATION ON MICHIGAN DC/013 SITUATION: we previously reported that a Michigan defined contribution plan for public school employees was de-authorized late 1 CYPEN 6 CYPEN ice. 4, BOX 402084' MIAMI BEACH. FLORIDA 33140.0099 v l vol. III, No. 12 last year see C&C Newsletter for anus 1998, Page 10 . While that report was accurate, we failed to clarify that the new defined contribution plan -is in place for other state employees (who represent only about one-quarter of all state retirement system assets). The new plan Is mandatory for non-public school employees hired on or after March 31, 1997 and optional for such employees hired before that date. Few states are likely to follow Michigan's lead because only 6% of employees so eligible switched, including less than 4% who were non-vested (and almost always benefit from a defined contribution plan, which is front-end loaded). And the ultimate irony: the Republican Governor (who pushed through the legislation weeks before Democrats were scheduled to take over the legislature), the State Treasurer (who is sole trustee of state pension funds) and a powerful state representative (who shepherded the bill through the legislature) all opted to keep their sizeable defined benefit pensions! 3. POLICE OFFICERS MAY BE DISCHARGED FOR REASONS UNRELATED TO PROTECTED ACTIVITY: Two police officers supported a police benevolent association- sponsored survey concerning a municipality's police department. When they were later discharged, they filed an unfair labor practices charge alleging they were discharged for protected activities under Sections 447.501(1)(a) and (b), Florida Statutes. Those statutes generally prohibit public employers from discouraging membership in any employee organization. The Public Employees Relations Commission found against the officers, and they appealed to the Third District Court of Appeal. In affirming PERC's order, the appellate court found that the officers were discharged for reasons unrelated to the alleged protected activity: the discharged officers had coerced and intimidated other officers; improperly interfered with the internal investigation of them; and given untruthful statements to investigators. Once plaintiff establishes a prima facie retaliation case, a defendant may rebut the presumption by producing legitimate, non-retaliatory reasons for the adverse employment action. Dade County Police Benevolent Association Y. Torun of Surfside, 23 Fla. L. Weekly D2454 (Fla. 3d DCA, November 4, 1998). "I know I'm paranoid. But am I paranoid enough?" 4. CLINTON PENSION COULD BE WORTH OVER SIX MILLION DOLLARS: [Unless he is Impeached by the House of Representatives and convicted by a two-thirds vote of the Senate, President Clinton is eligible to receive an annual pension of almost $152,000.00 after he leaves office. Presidential retirement compensation is not based on credited service or compensation. Instead, former Presidents receive an annual allowance based on cabinet salary levels, payable immediately upon termination of office regardless of age. Plan Sponsor reports that the present value of President Clinton's pension is over $6 Million. Remember that, at 52, President Clinton has a life expectancy of about 30 years. A former 2 CrYPEN G GYPEN P. O. BOX 402009 MIAMI BEACH, FLORIDA 33140-0099 Vol. 111, No. 12 President's pension does not Include office/staff allowances, mailing privileges and Secret Service protection (which can run as high as $650,000.00 per year). 5. SAN FRANCISCO ENDS TWO-TIER POLICE PENSION SYSTEM: A City Charter change adopted by referendum in Novemberwill end San Francisco's two-tier police officer retirement system In effect since 1977. Before the change, disability retirement benefits for police officers hired in 1977 and after were limited to 50016. New disability benefits, based on degree of disability '(a concept foreign to Florida funds), can range as high as 9001o. A separate change to the Charter permits police officers hired in 1977 and after to receive 75% of final salary rather than 70%, according to BNA. 6. CHANGE IN ILLINOIS LAW MAY HAVE COME AT DAD TIME: Pensions & Investments reports that after years of lobbying the Illinois legislature, local funds finally won it change in the state law that allowed them to boost their investments In equities from 10% to 45% as of January 1, 1998. And just when many local pension funds as-much-as quadrupled their equity commitment, the market began its third-quarter dive. . From January to mid-July the Dow Jones Industrial Average rose about 15%. But from then until the end of September the DJIA declined 16%. Fortunately, most funds kept a majority of their money in government securities, which, with the flight to quality, boomed, generally offsetting equity losses. 7. FLORIDA COUNTY SETTLES AFFIRMATIVE ACTION CASK: We learned from an article in Local Government Law Weekly that Orange County, Florida agreed to pay $500,000.00 in damages and $1,000,000.40 in attorneys' fees and costs to settle a class action brought by 32 white male firefighters. The firefighters claimed that the County had an unwritten affirmative action policy that discriminated against them on the basis of race and gender. Apparently Orange County saw the handwriting on the wall: several recent cases have questioned affirmative action plans, including even ones actually developed under court authority. 8. DUCK SURVEY SHOWS DROP IN MUTUAL FUND EXECUTIVE COMPENSATION: A Buck Survey of the mutual fund industry reveals that the total compensation of mutual fiend executives declined aver 10% in 1998. But don't cry for me Argentina until you hear the specifics. Mutual fund chief executive officers declined 10.6% -- from $1,027,000.00 to $918,000.00. Total compensation for fixed income chiefs dropped 13.4% (to $565,500.00), while those In charge of equities suffered a decline of 11% (to $423,200.00). Is America a great country, or what? 'Money is the root of all evil, and man needs roots." 3 CYPEN 6 CYPEN P. O. BOX 402099 MIAMI nEACH, FL.Ot410A 33140.OOPO Vol. III, No. 12 9. ARIZONA MEASURE WILL PROTECT PUBLIC PENSION SYSTEMS; Last month Arizona voters approved an amendment to the state constitution that will protect the state's four public retirement systems. The measure makes retirement systems' assets off limits to other uses, including as collateral for state borrowing. The systems cover virtually all state employees. As reported by BNA, the measure also requires funds to be subject to generally accepted accounting principles (a current practice) and prohibits benefits from being "impaired or reduced" -- meaning that while retirees' benefits can be increased they cannot be cut. We believe its time to resurrect a similar measure that was proposed in Florida a few years back. 10. SUPREME COURT 'OF FLORIDA WILL DECIDE "GORT ACT" CONSTITUTIONALITY: we previously reported that the Florida Second District Court of Appeal held unconstitutional the "Officer Evelyn Gort And All Fallen Officers Career Criminal Act of .1995" see C&C Newsletter for April, 1998, Pa es 1-2 . At the time we noted that the Second District's decision was in conflict with a decision of the Third District Court of Appeal. (The Second District covers the West Coast of Florida; the Third District covers Miami-Dade and Monroe Counties.) On May 25, 1998 the Supreme Court of Florida agreed to review the Second District's decision. Now, in another case, the Third District has followed its prior decision upholding constitutionality of the Gort Act and certified conflict with the Second District decision. Spann v. The State of Florida, 23 Fla. L. Weekly D2439 (Fla. 3d DCA, November 4, 1998). 11. STATE SENATOR DODGES "SUNSHINE AMENDMENT" BULLET: Acting on a question certifiers to it by Third District Court of Appeal (see C&C Newsletter for August, 1997, Page 10), the Supreme Court of Florida has held that the "Sunshine Amendment" is not self-executing. The Sunshine Amendment provides that a public office is a public trust and any public officer or employee who breaches the public trust for private gain shall be liable to the state for all financial benefits obtained by such actions. The amendment also provides that "the manner of recovery and additional damages may be provided by law." Because the Florida Legislature did not implement the amendment by legislative enactment, the Florida Supreme Court was obligated to affirm dismissal of the complaint against State Senator Alberto Gutman, who allegedly misused his position by receiving an inappropriate $500,000.00 fee. St. John Aledical Plans, Inc. v. Gutman, 23 Fla. L. Weekly 5595 (Fla., November 19, 1998). "Kickbacks must always exceed bribes." 4 CYPEN & CYPEN P O. BOX 402098 MIAMI BEACH. FLORIDA 33140.0099 ow Vol. III, No. 12 12. DEPUTY COURT CLERK NOT "PUBLIC EMPLOYEEu: We have advised our readers that a deputy sheriff is not a public employee (see C&C Newsletter for June, 1997, Page 5). This conclusion stems from the statutory provision that sheriffs appoint rather than employ their deputies and that deputies have the same power as sheriffs. Similarly, the clerk of court Is authorized by statute to appoint rather than employ deputy clerks, who have the powers of the clerk. Thus, a Florida District Court of Appeal affirmed dismissal of a deputy court clerk's claim that she was unlawfully terminated. However, because of the obvious distinctions between deputy sheriffs and deputy court clerks -- not the least of which involve the former's exercise of independent discretion in life or death situations -- the court certified to the Supreme Court of Florida the following question as one of great public Importance: Are deputy court clerks, unlike deputy sheriffs, public employees within the contemplation of Section 447.203(3), Florida Statutes? Service Employees International Union v. Public Employees Relations Commission, 23 Fla. L. Weekly D2464 (Fla. Sth DCA, November 6, 1998). 13. WHISTLE-BLOWER MUST EXHAUST ADMINISTRATIVE REMEDIES: The City of Miami appealed a final judgment finding it liable to a police officer under Sections 112.3187-11231895, Florida Statutes (the "Whistle-blower's Act"). Section 1123187(8)(b), Florida Statutes, requires that any local public employee protected by the Act may file a complaint with the appropriate local governmental authority if that authority has established by ordinance an administrative procedure for handling such complaints. The City had established a Civil Service Board meeting those requirements. However, because the employee abandoned his petition filed with the Civil Service Board, the appellate court found his action for judicial relief was premature, reversed the judgment and remanded the cause for further proceedings. City of Miami v. Del Rio, 23 Fla. L, Weekly D2412 (Fla. 3d DCA, October 28, 1998). "They say ignorance is bliss, but it's really not." Telephone/Miami-Dade: 305.532.3200 Telephone/Broward: 954.522.3200 Telephone/Toll Free: 800.3323200 Telecopier. 305.535.0050 www.cypen.com cypen@compuserve.com Items In this Newsletter mar be excerpts or summaries of original or secondarysource waterial (such as BNA Pension A Benefits Reporter), and may have been reorganised for ciuitr and breriy. This Nexsletterls general In nature and is not Intended to proAde spedtlc legal or other advice. I CYPEN 6 CYPEN P. 0. BOX 402009 MIAMI BEACH. FLORIDA 33140.0099 ?I Vol. III, No. 11 CWEN & CYPEN NEWSLETTER for NOVEMBER, 1998 Copyright, 1996-1998, all rights reserved Stephen H. Cypen, Esq., Editor 1. GASB ISSUES TECHNICAL BULLETIN ON YEAR 2000 DISCLOSURES:' on October 22, 1998 the Governmental Accounting Standards Board issued Technical Bulletin 98-1, entitled "Disclosures about' Year 2000 Issues." The TB is effective for financial statements on which the auditor's report is dated after October 31, 1998. It terminates for financial statements for periods ending after December 31, 1999 unless systems and other equipment are not Year 2000-compliant as of the balance sheet date. The TB requires, among other things, that state and local governments disclose a general description of the Year 2000 issue as it relates to their organizations, including a description of the stages of work in process or completed to make computer systems and other electronic equipment critical to conducting operations Y2K compliant. Readers can obtain a copy of the TB on GASB's website, www;gasb.q . The American Institute of Certified Public Accountants immediately expressed concerns about the nature of the new required disclosures. The MCPA is advising auditors to be cautious about being associated with disclosures required by the TB. Because of the unprecedented nature of the Y2K issue, its effects and the success of related remediation efforts will probably not be fully determinable until the year 2000. 'Therefore, AICPA warns, auditors may need to consider modifying their audit opinions with respect to such disclosures. 2. INVESTORS BENEFIT FROM TAX LAW CHANGES: KPMG Peat Marwick has analyzed the Internal Revenue Service Restructuring and Reform Act of 1998. According to the accounting giant, short-term gains on assets held one year or less will be taxed at ordinary rates, up to 39.6%. Long-term gains, now defined as assets held more than twelve months, are taxed at a maximum rate of 20%. (The Tax Reform Act of 1997 had originally set the long-term holding period at eighteen months.) In addition, there are now four different methods of determining a gain from the sale of mutual fund shares. The first in- first out (FITO) method treats shares as being sold in the order in which they were acquired; unless another method is selected, IRS presumes the use of FIFO. The average cost method computes gain using the average cost of all owned shares. The average cost double category method allocates its shares to long-term and short-term holding periods according to the ratio of such holdings. The specific share method allows the investor to CYPEN 6 CYPEN P. O. BOX 402099 MIAMI BEACH, FLORIDA 33140.0099 Vol. III, No. 11 Choose among all shares and select for sale those that produce the best results; the investor must have cost records for every share owned and must notify the fund to Identify the shares being sold. Once a method is used for a particular fund, an investor cannot change without IRS approval. "Government expands to absorb revenue, and then some 3. SENATE BILL WOULD PROTECT PENSIONS IN BANKRUPTCY: The United States Senate has passed the Consumer Bankruptcy Reform Act of 1995, which includes an amendment protecting retirement savings during bankruptcy proceedings. Offered by Senator Hatch and co-sponsored by Senator Graham, the amendment is designed to insure that retirement benefits of elderly Americans would not be at risk during bankruptcy proceedings. BNA reports that, among other things, the amendment would prevent loans from pension plans from being discharged in bankruptcy; provide a uniform exemption from a participant's bankruptcy estate for all types of tax-favored qualified pension plan assets; and protect retirement assets that are in the process of being rolled over into a new qualified plan. Earlier this year the House of Representatives passed a version of bankruptcy reform, but the administration opposes that bill's inflexibility. Hopefully a House/Senate Conference Committee will be able to work out a compromise bill acceptable to Congress and the White House. 4. TO PROTECT ITS INVESTMENTS, CALPERS WILL ASK Y2K QUESTIONS: A brief report in Pensions & Investments says that California Public Employees' Retirement System will survey the almost-2500 public companies in which it invests, In order to determine their Y2K readiness. The $140 Million behemoth hopes the information will help it protect its investments. 5. NEARLY ALL STATE PENSION PLANS ALLOW FOR SERVICE-CREDIT PURCHASE: A survey of over 100 state pension plans conducted by Public Retirement Institute found that 92% of all state public pension plans allow employees to purchase service credits. All general employees' plans are portable, while 98%v of teachers' plans and 81% of public safety employees' plans allow purchase of service credits. The most common types of service purchase are service with state governments, local governments, out-of--state governments, the federal government and the military. Actuarial cost is the most common method for determining how much an employee will pay. We thank Pensions & Investments for reporting the survey results. 6. FRS DEBATES INDEXING VERSUS ACTIVE (MANAGEMENT: The Florida State Board of Administration, responsible for investing assets of the Florida Retirement System, and the State Office of Program Policy Analysis and Government Accountability are arguing overwhether the Fund's entire $51 Billion domestic equity portfolio should be indexed. As 2 CYVEN 6 CYPEN A. O. BOX 402090 MIAMI BEACH. FLORIDA 33140.0099 Vol. III, No. 11 part of Its annual performance audit, OPPAGA reported that FRS could have earned an additional $612 Million for the fiscal year ended June 30, 1997 and could have saved $49 Million In investment fees if it had used passive portfolios. Currently, active managers have about 40% of the domestic equities, which are managed both internally and externally. In a letter to members of the SBA, reported in Pensions & Investments, its Executive Director defended the current position: "We do not believe that 100% passive equity investing is appropriate, realistic or -safe!" SBA's Chief of Equities, also so quoted, said the report "smacks of hindsight, and that's always an easy thing to do in the equity market." 'There's always a solution that's neat, plausible and wrong." 7. UNCHANGED 1999 IRS LIMITS OFFICIAL: As predicted (see C&C Newsletter for October, 1998, Item 5), IRS pension limits officially will not change for 1999. For those of you who want to know all the details, the following are the unrounded limits, which did not reach the next $5,000 or $10,000 threshold: Section 415 Defined Benefit Plan dollar limitation, $133,164; Section 415 Defined Contribution limit, $33,630; and Section 401(a)(17) annual compensation limit, $168,150. 8. SOCIAL SECURITY INCREASES WILL RE LOWEST IN TWELVE YEARS: Low inflation also has an effect upon the annual cost-of-living increase to be received next year by the 44 million Americans on Social Security. Beginning in January, Social Security checks will increase by 1.3%, the lowest since the same increase was set in 1987. The maximum earnings subject to Social Security taxes will rise to $72,600 from $68,400. The payroll tax, payable equally by employers and employees, will remain at 6.2%. Maximum after-retirement earnings that will not trigger benefit reductions rise to $15,500 a year (from $14,500) for individuals from 65 through 69 and to $9,600 (from $9,17.0) for those under 65. Individuals over 69 continue to be exempt from the earnings test. Almost simultaneously, new Medicare figures for 1999 were announced: the Medicare Part A premium will remain at $309 per month, with an annual deductible of $768 (from $764); the Medicare Part B monthly premium will be $45.50 (from $43.80), but the $100 annual deductible will not change. 9. STANDARD OF PROOF IN EMPLOYMENT TERMINATION IS PREPONDERANCE OF EVIDENCE: A Florida District Court of Appeal has affirmed an order of the Public Employees Relations Commission upholding a Correctional Officer Lieutenant's dismissal by the Department of Corrections. The officer argued that the standard of proof siiould be that of clear and convincing evidence. However, the court determined that the hearing officer and the commission correctly applied the preponderance of evidence standard, "which is consistently applied in cases involving the termination of employment." Dalem v. Department of Corrections, 23 Fla. L. Weekly D2265 (Fla. 4th DCA, October 7, 1998). 3 CYPEN 6 CYPEN P. 0. Box 402099 MIAMI BEACH. FLORIDA 33140-0099 Vol. III, No. 11 10. DIVISION HAS FIRST RIGHT TO SOCIAL SECURITY OFFSET: A recent Florida appellate case involved the question of whether the employer/carrier or the Division of Workers' Compensation is entitled to the Social Security offset In a case where the employer/carrier is required to pay permanent total disability benefits and the Division Is required to pay supplemental benefits. Here, the employer/carrierreduced claimant's 1?'Y'D In accordance with the statutory Social Security offset and the Division also reduced the supplemental benefits by the Social Security offset. The court affirmed an order of the Judge.of Compensation Claims determining that the Division shall have first priority in taking any available Social Security offset on dates of accidents prior to July 1, 1984. Highlands County School Board v. Carrasqulllo, 23 Fla. L. Weekly D2280 (Fla. 1st DCA, October 7, 1998). 11. BULLS VERSUS BEARS: In the last 72 years, since 1926, there have been 23 bull markets and 22 bear markets, but that's where the similarities end. The typical bull market lasts about 29 months and results in an average gain of 110%. In contrast, a bear market typically lasts 9 months and averages a decline of 25%. "Economists have predicted eight of the last three recessions." 12. GOD HELP US?: Southern Methodist University recently conducted a survey to determine if there is any correlation between a person's religious beliefs and his or her investment performance. Those surveyed were over 500 randomly-selected residents of Dallas's most affluent neighborhoods. Respondents were asked to rate their belief in God on a scale of 1 (atheist) to 7 (very strong belief) and list their investment returns. A comparison of the most religious 25% with the least religious 25% showed that for a one year period the believers gained an average of 31.2% compared with 18.4% for nonbelievers. The conclusion: "the more strongly you believe in God, the more willing you are to take risks, and risk taking was rewarded in the 1990's bull market." One other warning according to Money Magazine, which reported the study. surveyors had unquestioned faith in respondents' numbers because there was no verification made: Keep the faith, Baby. 13. CUSTODIANS SURVEYED: Global Custodian, a sister publication of Plan Sponsor-, has released its eighth survey of worldwide custody services. Ranked by total assets, the top ten are Chase Manhattan, State Street, Bank of New York, Bankers Trust, Citibank, Deutsche Bank, Credit Suisse, Mellon Trust, Northern Trust and Royal Trust. The survey also ranks custodians based on client reporting, client service, securities lending and performance measurement. You can obtain a free copy of the full 60-page survey by calling 203.629.5014 or read the summary in the October 1998 issue of Plan Sponsor. [Plan Sponsor, October 1998, page 37] 4 CYPCN & CYPEN P. O, BOX 402000 MIAMI BEACH, FLORIDA 33140.0099 Vol. III, No. 11 14. GAO REPORTS ON MANDATORY SOCIAL SECURITY COVERAGE OF PUBLIC EMPLOYEES: The United States General Accounting Office has issued a report entitled Social Security. Implications of Extending Mandatory. Coverage to State and Local Employees (GAO/HEHS-98-196). The Social Security Administration estimates that 5 million state and local government workers, with annual salaries totalling $132.5 Million, are currently not covered by Social Security. The report examines the implications of extending mandatory coverage to all newly-hired state and local employees. GAO also discusses the effect of mandatory coverage on the Social Security program, public employers, public employees and pension plans. Specifically, GAO noted that (1) extension of mandatory Social Security coverage to all new state and local government hires would reduce the program's long-term actuarial deficit by 10% and would extend the trust funds' solvency by about two years; (2) mandatory coverage would broaden participation in an important national program and simplify program administration; (3) the impact would depend on how state and local governments with noncovered employees respond to the additional cost and benefits associated with Social Security coverage; (4) Social Security retirement benefits are fully protected from inflation and are weighted in favor of families and low-income employees, while many public pension plans permit employees to retire earlierand provide a higher retirement income benefit than Social Security; (5) those states and localities that decide to maintain benefit levels for new employees would experience increased costs; (6) several groups have stated that mandating Social Security coverage would raise constitutional issues and would be challenged in court; (7) mandatory coverage would also present administrative issues for implementing state and local governments; and (8) up to four years could be required for states and localities to develop, legislate and implement pension plans that are coordinated with Social Security. To read the entire 27- page letter report, visit GAO's Worldwide Web Home Page at http: Iwww.eao.aov. and select "Income Security" in the August 1998 Month in Review. 15. EDUCATORS GET ADEA EXEMPTION: As we previously reported (see C&C Newsletter for May. 1998, Pages 2-3), tenured college faculty members were pushing for an Age Discrimination in Employment Act exemption then available only to state and local police and firefighters. Well, under terms of a bill passed by Congress and signed by President Clinton on October 7, 1998, educators have succeeded in having the ADEA amended. The measure will allow colleges and universities to offer tenured faculty supplemental benefits upon voluntary retirement that are reduced or eliminated on the basis of age, provided said benefits are in addition to any retirement or severance benefits generally offered to employees with similar contracts. BNA reported on the Higher Education Amendments of 1998, for which we still see no logical justification. Apparently AARP dropped its opposition and took no position on the legislation, which obviously facilitated its passage. "It's better to retire too soon than too late." 5 CYPEN & CYPEN P. O BOX 402099 MIAMI BEACH. FLORIDA 33140.0099 A Vol. III, No. 11 16. CALIFORNIA GOVERNOR APPROVES SOME BENEFITS LAWS AND VETOES OTHERS: Governor Pete Wilson has signed two bills that will improve retirement benefits for California teachers. One law increases the rate at which retirement benefits are calculated for teachers with more than thirty years of service and increases cost-of-living adjustments. The other increases the maximum retirement allowance for California State Teachers Retirement System members from 2%n at age 60 to 2.4% at age 64. However, BNA reports that the Governor vetoed ten other benefits bills, one of which would have required health care plans that provide insurance benefits to employers to offer coverage for domestic partners of employees. 17. TUCSON RETIREES TO DIVEST TOBACCO STOCKS: The Tucson, Arizona City Council has voted to divest itself of employees' retirement funds invested in tobacco company stocks. The decision to ban investments in tobacco stocks was strictly a "moral" one, resulting in a $4 Million divestiture (about 1% of the $400 Million fund). One thing that the report In BNA did not explain: , why is the City even involved in investing the employees' retirement monies? 18, -FRS AND CALPERS WILL GET U.S. SUPREME COURT REVIEW: The Florida Retirement System (through the Florida State Board of Administration) and California Public Employees' Retirement System objected to settlementofa shareholderaction against Archer Daniels Midland Co. Although the funds were substantial shareholders, they never formally intervened in the litigation. The U.S. Court of Appeals for the Seventh Circuit held that nonparty shareholders must intervene in order to object to or appeal any settlement. (The funds were slightly miffed that a case seeking almost $200 Million was settled for $8 Million, much of which went to lawyers for the plaintiffs/shareholders.) The United States Supreme Court granted review, most likely because lower federal courts are irreconcilably split over whether nonparty shareholders must intervene as parties in order to appeal adverse judgments, according to BNA. 19. SMALL PUBLIC ENTITIES EXEMPT FROM ADEA: State agencies and instrumentalities with fewer than 20 employees are not covered by the Age Discrimination in Employment Act, BNA reports. A ruling from the U.S. Court of Appeals for the Eighth Circuit held that Congress intended to treat public and private employers alike, thus extending to public employers the 20-person minimum applicable to private employers. A key element of the ruling: in calculating the number of employees for purposes of ADEA, the instrumentality's employees should not be lumped together with employees of the state or political subdivision of the state, because to do so would almost-always circumvent the minimum-employee requirement. 20. CONGRESS ',PASSES Y2K LEGISLATION: on October 1, 1998 Congress passed the Year 2000 Information and Readiness Disclosure Act. The Act makes Y2K readiness 6 CYPEN & CYPEN P. O. BOX 402099 MIAMI BEACH, FLORIDA 33140.0099 vy, Vol. III, No. 11 disclosures generally inadmissible in court, so that companies can communicate among themselves and consumers without fear of being sued because their assessments or projections turned out to be less titan accurate. The Act preempts state law to the extent that one would otherwise be liable for an inaccurate or misleading Y2K statement (except for fraud). The Act even protects one if one wrongfully accuses a company 'of having products that are not Y2K compliant, by making the aggrieved party prove by clear and convincing evidence that the statement was made with knowledge of its falsity or with reckless disregard as to its truth or falsity. Another provision says that Y2K statements may not be interpreted or construed as an amendment to or alteration of a contract or warranty. And finally, the Act exempts from anti-trust scrutiny conduct, including the making and implementation of agreements, engaged in for the sole purpose of facilitating responses to correct or avoid a Y2K problem through July 14, 2001. By the time you read this item, President Clinton probably will have already signed the measure into law. "Discover all unpredictable errors before they occur." 21. U.S. SUPREME COURT DECLINES TO REVIEW ADA CASES: The United States Supreme Court has refused to review two Americans With Disabilities Act cases previously reported here. In Palm Beach County Soil and Water Conservation District v. Bledsoe, the Court let stand a court of appeals ruling that a public employer can be sued for employment discrimination under Title II of the AFDA, which bans bias in the provision of public services (see C&C Newsletter for March, 1998, Pam 5 . A suit under Title I of ADA would not lie, because the employer did not meet the 15-employee minimum. In Castellano v. New York, the high court let stand a court of appeals ruling that an employer is not required to provide disabled employees the supplemental benefits available to service retirees in addition to freely chosen disability benefits (see C&C Newsletter for March, 1998, page a). In its order list dated October 5, 1998, the Supreme Court denied review in over 75 other labor and employment law cases. 22. BUCK SURVEYS FORTUNE 1000 COMPANIES' COMPENSATION BUDGETS: Buck Consultants has released its ninth annual survey of data on the 1998 and 1999 compensation budgets of over 400 Fortune 1000 companies which responded. The overwhelming majority base salaries on merit; Average actual merit budget increases in 1998 were 4.4% for executives, 4.1% for exempt employees and 4.0% for non-exempt employees. Average merit budget increases projected for 1999 are 4.3% for executives and no change for exempt employees and non-exempt employees. Actual promotion budget increases in 1998 averaged 2.4% for executives, 2.1% for exempt employees and 2.0% for non-exempt employees. For 1999, the average promotion increases for the same categories are projected to be 23%, 2.0% and 1.90/c, respectively. "Happiness can't buy you money." 7 CYPEN G CYPEN P. O 13OX 402099 MIAMI BEACH. FLORIDA 33140.0099 Ire Vol. "III, No. 11 23. IN WORKERS' COMP, P.T.D. AND P.I. ARE MUTUALLY EXCLUSIVE: A Judge of Compensation Claims may not award concurrent permanent total disability (PTD) benefits and permanent impairment (PI) benefits. In such case, an award PI benefits will be reversed. In addition, under 19.44 amendments to Section 440.09(1), Florida Statutes, a claimant is now required to establish his or her injuries, as well as the occupational cause thereof, within a reasonable degree of medical certainty, not medical probability. Finally, if the injury claimed is mental or psychiatric, claimant then has the added burden of proving the causal relationship by clear and convincing evidence, rather than preponderance of the evidence. Claims Management, Inc. Y. Drewno, 23 Fla. L. Weekly D2351 (Fla. 1st DCA, October 12, 1998). 24. FLORIDA CIVIL RIGHTS ACTION DISMISSED AS PREMATURE: A former employee sued his employer for age discrimination under the Florida Civil Rights Act, Sections 760.01-760.11, Florida Statutes. Previously, on March 14, 1996, the employee tiled a claim with the Equal Employment Opportunity Commission, a federal agency. However, the complaint was not "riled" under Florida law until EEOC, acting under its work-sharing agreement with the Florida Commission on Human Relations, forwarded the complaint to the Florida agency on April 9, 1996. On September 16, 1996, less than 180 days after the state filing, the employee brought suit. A Florida District Court of Appeal atrrmed summary judgement in favor of the employerbecause Section 760.11(4)(a), Florida Statutes; provides that an aggrieved person may not bring a civil action unless (1) the commission has made an affirmative determination of reasonable cause to believe that a discriminatory practice has occurred or (2) under 760.11(8), Florida Statutes, the commission has failed to act on the complaint for 180 days. On appeal, the employee logically argued for an abatement rather than a dismissal. However, the appellate court held that the premature complaint prevented the existence of either condition precedent to, and thus the very accrual of, the cause of action the employee sought to assert. Filing of the complaint before 180 days rendered It burdened by far more than a mere prematurity that was curable simply by passage of time. Sweeney v. Florida Power and Light Company, Inc., 23 Fla. L. Weekly D2377 (Fla. 3d DCA, October 21, 1998). Apparently many plaintiffs (and their lawyers) have difficulty in sustaining an action under the FCHR (see C&C Newsletter for December, 1997. Page 1 and C&C Newsletter for August, 1997. Page 7). 25. COLLECTIVE BARGAINING ISSUES TO BE DECIDED PURSUANT TO AGREEMENT RATHER THAN STATUTE: In the absence of any contrary language or countervailing public policy, parties must pursue procedures established by collective bargaining agreement rather than by Chapter 120, Florida Statutes (the Florida Administrative Procedure Act), when only rights created by the collective bargaining agreement are at issue. Slckon Y. The School Board of Alachua County, Florida, 23 Fla. L. Weekly D2404 (Fla. 1st DCA, October 21, 1998). 8 CYPEN 6 CYPEN P. O. BOX 402099 MIAMI BEACH. FLORIDA 33140.0099 Vol. III, No. 11 26, . ELEVENTH AMENDMENT IMMUNIZES STATE FROM ADEA BUT NOT FROM ADA SUITS: A report from RNA indicates how laws having seemingly-similar objectives can suffer different fates at the hands of the same court The U.S. Court of Appeals for the Eighth Circuit hears appeals from U.S. District Courts sitting in Minnesota, North Dakota, South Dakota, Nebraska, Iowa, Missouri and Arkansas. A divided (2-1) panel recently ruled that the Eleventh Amendment bars suits against state employers under the Age Discrimination in Employment Act. (Most other appellate decisions on the subject have gone the other way.) In another decision last month, the full U.S. Court of Appeals, by dividing evenly on a 6-6 vote, let stand a Minnesota District Court decision that the Eleventh Amendment does not bar Americans With Disabilities Act claims against state employers. Issues involving the Eleventh Amendment to the United States Constitution are decided in accordance with the United States Supreme Court's decision in Seminole 7Wbe of Florida v. Florida, a 1996 case which established a two-part test for determining whether Congress has abrogated State Sovereign Immunity: (1) courts must first decide whether Congress "unequivocally" expressed its intent to abrogate state immunity and (2) whether Congress acted pursuant to a valid exercise of power. Remember that the Family and Medical Leave Act recently failed to pass Eleventh Amendment muster (see C&C Newsletter for October 1998, page 10). 27. P&F CONFERENCE ROUSING SUCCESS: As with the previous 29, the 30th Annual Police Officers' and Firefighters' Pension Trustees' Conference held on October 12 and 13, at the Radisson Plaza Hotel in Orlando was fantastic. Once again we must congratulate and thank Andy McMullian, David Jones, Trish Shoemaker, Keith Brinkman, Betty Allen and Melody Mitchell. You guys and gals are terrific. Telephone/Miami-Dade: 305.532.3200 Telephone/Broward: 954.522.3200 Telephone/Toll Free: 800.332.3200 Te leco pier: 305.535.0050 www.cypen.com cypen@compuserve.com Items In this Newaletieraaay be excerpts or summaries at original or secondary source material (such as BNA Pension & Benefits Reporter), and may kart been reartanized rot clarity and brevity: This Newaletterls general In nature and Is not Intendr4 to providr specine legal or other adrim 9 iC:YPEN 6 GYPEN P, 0 130% 40205143 MIAMI BEACH. FLORIDA 33140.0089 CYPEN & CYPEN NEWS Vol. III,- No. 10 LETTER for OCTOBER, 1998 Copyright, 1996-1998, all rights reserved Stephen H. Cypen, Esq., Editor 1. FLORIDA ATTORNEY GENERAL VINDICATES OUR OPINION: Lastyearthe Public Employees Relations Commission issued a declaratory statement finding that a collective bargaining agreement in conflict with an existing part of a municipal charter overrode the charter even though the negotiated changes were not approved by referendum of the municipality's electors (see C&C Newsletter for Ausust?1997, page 11)- We disagreed with PERC because Section 447309(3), Florida Statutes, clearly provides that a collective bargaining agreement in conflict with any law is not effective until an amendment of said law becomes effective. Well, we are pleased to report that the Attorney General agrees with us: the lack of requirement for referendum approval in Chapter 447, Florida Statutes, does not alter the mandate for such approval under Section 166.021, Florida Statutes, when changes to a city's charter affect employee rights. AGO 98-56 (September 16, 1998). "Everyone is entitled to my opinion." 2. BARCLAYS COMMISSIONS A REPORT ON INDEXING: Barclays Global Investors, which claims to have created through its predecessor the first index fund in 1973, asked PricewaterhouseCoopers to present an objective assessment of the cost and benefits of indexing'ln fund management. Despite its growing popularity (indexed assets of domestic pension plans now top $1 Trillion), the debate continues: some claim that certain active managers have superior stock-picking or market-timing skills, thus offering enhanced performance; others argue that indexers achieve better performance than most active fiend managers'and offer lower costs. Some claim that active managers waste resources on research and "gut feeling" projections; others argue that indexers get a free ride from active managers and create market instability in the process. In any event, the study aims to deal evenhandedly with arguments both for and against indexing, with a view to inspiring more debate in the investment management industry on what is a critical decision for most Investors. 1 CYPEN G CYPEN P. O, BOX 402099 MIAMI BEACH, FLORIDA 33140.0099 Vol. III, No. 10 3. AMERICANS EARNING MORE BUT SPENDING LESS: Americans kept more of their rising Incomes In July, making analysts wonder if the spending spree that has kept the United States economy strong in the face of floundering foreign economies is finally coming to an end. Personal incomes rose .5% in the month, to a seasonally adjusted annual rate of $7.14 Billion, slightly ahead of June's .3% gain. However consumer spending, which accounts for two-thirds of our economy, fell .2% -- the first drop in two years -- to $5.8 Billion. June spending had been up .6%. Commerce Department officials had an explanation: the decline is temporary because July purchases of motor vehicles were down although purchases of other goods and services 'modestly increased. 4. ANALYST SEES CONTINUING PROBLEMS IN ASIA: If you somehow believed that the crisis in Asia has passed, you may want to think again, at least according to a Merrill Lynch analyst. Private-sector debt in the region exceeds 200% of Gross Domestic Product, including both local currency debt and dollar-denominated debt. The annual cost of servicing that debt exceeds 25% of GDP -- an enormous interest rate burden. Nonperforming bank loans will probably exceed 35% to 50% of the region's GDP. Furthermore, nonperforming loans probably exceed capital by a factor of as much as 5 to 1. And the likely solution is not very good: governments may have to take on private-sector liabilities, including those of the banking system, shifting the burden of financing from the private sector to the government sector (read: "higher taxes"). The inevitable result would be a greater flight of capital, putting even more downward pressure on Asian currencies. Ultimately, debt will either have to be rescheduled or forgiven in order to avoid outright defaults. "We make money the old fashioned way -- we borrow IV 5. IRS PENSION LIMITS WILL NOT CHANGE FOR 1999: Using the July 1998 Consumer Price Index, Buck Consultants, Inc. estimates that IRS pension limits for 1999 will not change from 1998. The Section 41.5 Defined Benefit Plan dollar limitation (rounded in $5,000 increments) will remain at $130,000. The Section 415 Defined Contribution limit (also rounded in $5,000 increments) will remain, as it did last year, at $30,000. The Section 401(a) (17) annual compensation limit (rounded in $10,000 increments) will not change from $160,000. And although there was no prediction on the Section 457 Deferred Compensation Limit (rounded in $500 increments and rising for the first time last year to $8,000), it will probably not change. Obviously the figures are not official at this early date. However, inflation would have to increase by nearly 2% just over the next two months before any of the limits would reach the next highest threshold for adjustment. 2 CYPEN & CYPEN P. 0. BOX 402009 MIAMI BEACH, FLORIDA 33140-0099 Vol. III, No. 10 6. SOME DERIVATIVE DEFINITIONS: The following are some basic derivative definitions, which trustees should be familiar with, If only to know what they might want to avoid. Option -- the right to buy or sell an underlying asset (such as a security) at a specified time for a specified price. A call option is the right to purchase the.underlying asset. A put option is the right to sell it. Forward. Contract -- obligates a party and its counterparty to trade an underlying asset (such as foreign currency) at a specified price at a specified date in the future. Future -- similar to a forward contract, but is standardized and traded on a futures exchange. Unlike a forward contract, the counterparty to a futures contract is the clearinghouse for the appropriate exchange. Swap -- an over-the-counter transaction involving two parties exchanging a series of cash flows at specified intervals. In the case of an interest rate swap, the parties exchange interest payments based on an agreed-upon principal amount ("notional principal amount"). Structured Note -- an over-the-counter debt instrument where the interest rate, principal or both are indexed to an unrelated indicator (like the price of oil). Mortgage-backed security -- encompasses a broad array of instruments with differing characteristics. One example is a stripped mortgage-backed security, representing interest in a pool of mortgages, the cash flow of which has been separated into interest and principal components. Interest-only securities (101s) receive the interest portion of the cash flow and principal only securities (PO's) receive the principal portion. 7. MINNEAPOLIS FUNDS MAKE QUESTIONABLE INVESTMENTS: A state audit of the Minneapolis Police Relief Association reveals that the pension fund has risked millions of dollars by a continuing investment in a local countertop manufacturer that has yet to produce the first product. (Apparently the Minneapolis Firefighters Relief Association has made a similar investment, but those audit results have not been released.) According to a previous audit, the Association had invested $1.5 Million in the company, which the auditor advised be divested. Nonetheless, the Association increased its holdings to $9.1 Million by the end of last year and may have invested another $400,000 this year. In a separate investment, the police fund invested $5 Million in a limited partnership operated by its mon6y manager, which resulted in the fund's owning almost 30% of the venture. BNA 3 CYPEN S CYPEN P. O. Box 402009 MIAMI BEACH, FLORIDA 33140.0009 Vol. III, No. 10 reports that both funds have filed suit against that same money manager, alleging fraud and breach of fiduciary duty. Where's always free cheese in a mouse trap." 8. STATE CAN SUE OVER OWBPAJADEA VIOLATION: The State of Massachusetts has sued a company In federal court, alleging that it illegally forced older workers to waive their rights to file, discrimination claims in order to receive severance pay. The Equal Employment Opportunity Commission filed a similar separate suit. In moving to dismiss the complaint, the company argued, among other things, that the State's suit was precluded by EEOC's suit.' BNA reports that a United States District Judge has refused to dismiss the suit, holding that states have an interest in preventing discrimination against protected or disadvantaged groups, in ensuring the health and well-being of residents and in protecting their full participation in a federal scheme. Here, the waivers were particularly punitive in nature and were actually designed to restrict the flow of information to the Massachusetts Attorney General's investigation into the company's employment practices. 9. SEC PRESENTS FINANCIAL FACTS TOOL KIT: The Securities and Exchange Commission has created an on-line Financial Facts Tool Kit. Sponsored by Partners in the Facts on Saving and Investing Campaign, the kit contains a vast array of information to help plan for a secure financial future. More than half of all Americans have no idea how much they need to save each year for retirement. An estimated GS million U.S. households will probably fail to realize one or more of their major financial goals because they have not developed a comprehensive financial plan. As the home page says: "Use the tools to avoid becoming one of these statistics." If you wish, you can access the kit at bttp://www.sec.govLconsumer/toolkiLhtm. 10. FLORIDA LEGISLATURE AUTHORIZES LONG-TERM-CARE PLAN FOR PUBLIC EMPLOYEES. Finding that state expenditures for long-term-cage services continue to increase at a rapid rate causing the state to face increasing pressure in its effort to meet the long-term-care needs of the public, the Florida Legislature has ordered the Department of Elderly Affairs and the Division of State Group Insurance jointly to design a plan to provide long-term-rare coverage for public employees and family members of public employees. Eligible plan participants must include active and retired officers and employees of all branches and agencies of state and local government and their spouses, children, stepchildren, parents and parents-in-law; active and retired federal employees residing in the state and their spouses, children, stepchildren, parents and parents-in-law residing in the state; and the surviving spouses, children, stepchildren, parents and parents-in-law of such deceased officers and employees, whether active or retired at the time of death. Aptly entitled "Florida Employee Long-Term-Care Plan," it will be self-funded or bully insured and will be voluntary. The Department and the Division shall consult with 4 CYPEN 4 CYPEN P. O. BOx 402009 MIAMI REACH. FLORIDA 33440.0022 Vol. 111, No. 10 the Department of Management Services and the Department of Insurance, and shall contract for actuarial, professional-administrator and other necessary services. Finally, the Division shall explore innovations in long-term-care financing and service delivery with regard to the plan, including. managed long-term-care and plans that set aside assets with regard to eligibility for Medicaid-funded long-term-care services in the same proportion that private long-term-care insurance benefits are used to pay for long-term-care. Chapter 98- 400 took effect July 1, 1998. 'he human body, with proper care, will last a lifetime." 11. WARDERS' COMP INVESTIGATORY RECORDS MADE CONFIDENTIAL: section 440.107, Florida Statutes, empowers the Division of Workers' Compensation of the Departmentof Labor and Employment Security to determine if an employerwho is required to secure payment to his or her employees of workers' compensation lias failed to do so. Chapter 9SA07 makes records of the Division received pursuant to Section 440.107, Florida Statutes, and any records necessary to complete an investigation confidential and exempt from provisions of Chapter 119, Florida Statutes, the Public Records Act. An investigation is considered "active" while it is being conducted with a reasonable, good-faith belief that it may lead to the filing of an administrative, civil or criminal proceeding. An investigation does not cease to be active if the Division is proceeding with reasonable dispatch and there is a good-faith belief that action may be initiated by the Division or other administrative or law enforcement agency, Even after an investigation is completed or ceases to be active, records remain confidential if disclosure would (a) jeopardize the integrity of another active investigation; (b) reveal a trade secrete (c) reveal business or personal financial information (wouldn't this almost always be the case?); (d) reveal the identity of a confidential source; (e) defame or cause unwarranted damage to the good name or reputation of an individual or jeopardize the safety of an individual; or (f) reveal investigative techniques or procedures. Almost as an afterthought, the Legislature has also made confidential the first notice of it jury pursuant to Section 440.185, Florida Statutes, if it would identify an ill or iroured employee. (Question to the Legislature: Give us an example of how the form will not identify an ill or iWumd employee.) Well, folks, this amendment is just another example of how important it is for, boards to require disability applicants to waive the confidentiality of all documents relevant to the application. 5 CYPEN b CYPEN P. O. BOX 402009 MIAMI BEACH. FLORIDA 33140.0099 Vol. III, No. 10, 12. LARGEST DOW POINT GAINS RECENT; LARGEST PERCENTAGE GAINS ANCIENT: Whe n the Dow Jones Industrial Average soared over' 380 points on September 8, 1998, it was th e largest point gain in the Dow's 102 year history. In fact, except for a rebound after the October 19, 1987 debacle, the following chart shows that all of the ton highest point gains (as of September 8, 1998) occurred within the last two ciilendar years: DATE CLOSE RISE PERCENTAGE 09/08/98 82020.78 380.53 4.98 10/28/97 71498.32 337.17 4.71 09/01/98 7,827.43 288.36 3.82- 09/02/97 79879.78 257.36 3.38 11!03197. 7,674.70 232.32 3.12 02102198 8,107.78 201.28 2.55 IV01197 81013.11 189.98 2.43 .10/21/87 2,027.85 186.84 10.15 04129/97 61962.03 179.01 2.64 09116/97 71895.92- 174.78 2.26 The largest percentage gains, however, except for that same day in 1987, all came'in the early years, when the Dow was a fraction of what it is today: DATE CLOSE RISE PERCENTAGE 03/15/33 62.10 8.26 15.34 10106131 9934 12.86 14.87 10/30129 258.47 28.40 12.34 09/21/32 75.16 7.67 11.36 10/21/87 29027.85 186.84 10.15 08/03/32 58.22 5.06 9.52 02/11/32 78.60 6.80 9.47 11114129 217.28 18.59 9.36 12/18/31 80.69 6.90 9.35 02/13/32 85.82 7.22 9.19 "We have not yet begun to ...... procrastinate." 13. FEDERAL GOVERNMENT FAILS Y2K PROGRESS TEST: If you think your pension fund has a Y2K problem, consider the United States Government with more than 7,000 mission critical systems and 60,000 secondary systems. As of May 1998, only 40% of mission critical systems were Y2K compliant, up from 35% in February. The House Subcommittee on Government Management, Information and Technology grades various 6 CYPEN 6 CYPEN P. O. BOX 402006 MIAMI BENCH, FLORIDA 33140.0066 iww t Vol. III, No. 10 government departments and agencies, based on Y2K preparedness., As of May, the government's overall grade was an "F" (down from a "D-," reflecting a slowdown in the pace of progress toward compliance). Hmv would you feel if your kid came home with the 'following report card?: Agency Grade Social Security Administration . (thank heavens) A+ Department of the Treasury C Department of Labor C Department of the Interior. C- ; Department of Agriculture D Department of Defense D Department of Education D EPA F Department of State F Department of Health and Human Services F Department of Energy. F Department or Transportation F Uncle Sam, get yourself down to the principal's officel 14. PENSION LIABILITIES EXCEED ASSETS: On August 27, 1998, for the first time in about four years, pension liabilities surpassed assets. On that date, pension funds had 10.9% more in liabilities than they did in assets, accord ing to Pensions & Investments. In fact, liabilities have grown by almost 13% this year, including about 67o in August alone. Meanwhile, assets have only grown 1.9% ror the year. Investors' biggest fear is when stocks go one way and bonds go the other. The recent stock market drop lowered returns and 7 CYPEN 6 CYPEN 9 P. O. BOX 402099 MIAMI BEACH. FLORIDA 33140-0009 Vol. III, No. 10 boosted liabilities. In addition, the recent drop in 30-year Treasury yields, the benchmark for liability discount rates, has also forced liabilities to increase. "Chicken Little only has to be right once." 15. HAS THE ROLE OF FIXED-INCOME PORTFOLIOS CHANGED?: Pension fund managers continued their greater commitment to higher risk investments such as equities rather than to historically more stable assets like bonds. Equities are the best way to participate in a growing, dynamic global economy, while bonds generally serve as a hedge against economic setbacks. Thus it makes sense not to invest too heavily just to protect against the unlikely scenario of a sustained economic contraction. But a report from Watson Wyatt indicates evidence of a less visible trend: fixed-income managers are making riskier investments to offset today's lower interest rates: Consequently, fixed-income portfolios may not deliver the protection investors have traditionally expected in the form of capital preservation and stable interest income. Of course, if the shift is intentional, it's okay; if the board of trustees is not aware of the change, it's not,. While exposure to domestic and international equities has increased (from 50% to 629/6), domestic bond allocations have fallen (from 33% to 24%). At the same time, however, fixed-Income portfolios have shifted in a similar direction, thereby increasing total fund risk rather than reducing it, This shift may be the result of attempts by active bond managers to sustain high returns, but which introduce other risks such as varying degrees of liquidity, potentially unstable or unpredictable volatility in adverse interest environments, skewed potential returns due to various option features and benchmark tracking error risks. Watson Wyatt suggests that concerned trustees consider the following actions: o Review fixed-income investment portfolio guidelines for congruence with the plan's investment policy and risk tolerance. Guidelines should explicitly define allowable and excluded investments, and control the level of overall risk and liquidity appropriate for each portfolio, taking into consideration investment objectives, investment time horizons and risk tolerance. o Conduct an integrated asset/liability study to examine the effect of different investment outcomes on key pension financial measures: funded status (surplus/deficit), cash contributions and pension expenses. o Work with bond managers to stress-test current bond portfolios by simulating the performance impact of various changes in interest rates, increases in interest rate volatility, credit spread widening and a weakened U.S. dollar. 8 cYPEN & CYPEN P. 0. BOX 402099 MIAMI REACH, FLORIDA 33140.0098 Vol. III, No. 10 16. ADDRESSING SEXUAL HARASSMENT AFTER LANDMARK U.S. SUPREME COURT CASE: The United States Supreme Court recently held that an employer is vicariously liable under Title VII of the Civil Rights Act of 1964, 42 U.S.C. §2000 et seq., for the acts of a supervisory employee whose sexual harassment of subordinates has created a hostile work environment amounting to employment discrimination, subject to an affirmative defense looking to the reasonableness of the employer's conduct as well as that of the plaintiff/victim. raragher v. City of Boca Raton, 11 Fla. L. Weekly Fed. S699 (U.S., June 25, 1998). In light of this decision and two others, BNA recommends the following actions as an employer's initial approach: (1) create a "zero tolerance policy," distribute it and discuss it at staff meetings; (2) conduct training that is informative, interactive and meaningful by allowing a sufficient amount of time for participants to ask questions and receive answers that clarify definitions, legal terms and appropriate workplace behavior, (3) provide an outlet for employees' concerns, through the human resources directoror even via an anonymous toll-free phone number, (4) offer 6ngoing training for supervisors to clarify responsibilities and roles if they witness or receive a complaint; (5) conduct partial and thorough investigations, establishing a follow-up procedure that is swift and meaningful; and (6) continue to communicate the policy on sexual harassment through regular orientation and training sessions. "An ounce of image is worth a pound of performance,." 17. STATE AND LOCAL GOVERNMENT EMPLOYERS NOT MOVING §457 ASSETS INTO TRUSTS: BNA reports that the Internal Revenue Service is concerned by the small number of state and local government employers that have moved their plan assets of eligible §457(b) plans into trusts. Our readers know that Section 1448 of the Small Business Job Protection Act of 1996 requires that as of January 1, 1999 assets in a §457 plan maintained by a public employer and then in existence must be held in trust see C&C Newsletter Special Edition, August 21,1996,pages 1-2). Despite tons of guidance from IRS, -- - -------- including model amendments (see C&C Newsletter for September, 1998, item 2), IRS thinks that many governmental employers have overlooked the deadline. "If you don't know who to blame, you are." 18. NEW MEXICO PENSION CONTRIBUTIONS SUBJECT TO FICA TAX: The Internal Revenue Code was amended in 1974 to add Section 414(h), allowing contributions, otherwise designated as employee contributions, to state and local government pension plans to be treated as employer contributions if the employer "picks up" those contributions. As a result, picked-up contributions would not be included within FICA wages or within gross income for tax purposes. However, in 1983 Section 414(h) was amended to provide that picked-up contributions would thereafter be subject to FICA taxes. Another amendment, in 1984, provides that FICA wages include any amounts picked up pursuant 9 CYPEN 6 CYPEN P. O, pox 402000 MIAMI UEACH, FLORIDA 33140-0099 Vol. III, No. 10 to a salary reduction agreement, whether evidenced by written instrument or otherwise. In a case reported by BNA, New Mexico unsuccessfully argued that picked-up contributions it made to state pension plans were not made pursuant to an "agreement" but rather were mandated by New Mexico law. The Tenth Circuit U.S. Court of Appeals affirmed the Social Security Administration's determination that all contributions picked up after the 1984 amendmentwere subject to FICA taxes. Public Employees'RetirementBoard P. Shalala, Case No. 96-2180 (10th Cir., September 2, 1998). 19. ELEVENTH AMENDMENT IMMUNIZES STATE FROM FMLA CLAIMS: The Eleventh Amendment to the United States Constitution, ratified February 7, 1795, provides that "the Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State." A federal judge has held, according to BNA, that the Eleventh Amendment immunizes states from Family and Medical Leave Act suits by state employees. Although Congress clearly intended to extend FMLA liability to states, it improperly exercised its authority under the Fourteenth Amendment. (Section 5 of the Fourteenth Amendment gives Congress the power to enforce that amendment by appropriate legislation, but Congress failed to do so In this case.) McGregor v. Goord, Case No. 97-CV-0816 (N.D.N.Y., August 17, 1998). Note that this decision could presage a similar result for suits under the Uniformed Services Employment and Reemployment Rights Act of 1994 (see C&C Newsletter for March, 1998, pages 5-6}. 20. EX SPOUSE CANNOT GET MORE THAN 50% OF MILITARY PENSION -- DIRECTLY OR INDIRECTLY: The Uniformed Services Former Spouses' Protection Act specifically prohibits the Defense Finance and Accounting Service Centers from sending directly to a former spouse more than 50% of the member's disposable retired pay. A state court has held that such provision does not merely limit direct payments by the government but actually limits the total award. Recognizing that other jurisdictions have held to the contrary, the Missouri Court of Appeals reasoned that it was not logical that a former spouse could receive more than 50% of the member's pension but that the government would only remit 50% to that spouse: why would the government care if it dispenses 50% or more unless the 50% was a limit that can be received through any means of disbursement? In re Bowman, Case No. 21904 (Mo. App., July 22, 1998), was reviewed by BNA. 21. MOST PUBLIC FUNDS OWN TOBACCO STOCKS AND DO NOT HAVE TOBACCO INVESTMENT POLICY: The Investor Responsibility Research Center, which apparently is a tobacco industry association, recently surveyed 182 public funds to determine their tobacco investment policies. Of the 73 respondents, 64% had no formal policy or restriction on tobacco investments. . And although 11% of respondents had no tobacco equity 10 CYPEN & CYPEN P O. BOX 402000 IMAM1 BEACH, FL.ONIOA 33140-0009 Vol. III, No. 10 Investments, 66% owned stock in at least one tobacco company (with 49% holding stock In three or more). "Never ask a barber whether you need a haircut." 22. WORKERS' COMP OFFSET SHOULD NOT DE RECALCULATED TO INCLUDE SUPPLEMENTAL BENEFIT INCREASES: Last year the Florida Supreme Court ruled that an injured employee may not receive benefits from his employer and other collateral sources which, when totaled, exceed 100% of his average weekly wage (see C&C Newsletter for June, 1997, page 2). Here, the offset was initially calculated by adding together all benefits paid, Including the permanent total supplemental benefits. However, the city annually recalculated the offset, adding the 5% yearly increase in supplemental benefits. In reversing the Judge of Compensation Claims, the District Court of Appeal found that supplemental benefits are intended as an incentive to continue periodic payments and avoid the potential for inflation to diminish the value of such payments; thus recalculating the offset every year to include the increase in supplemental benefits frustrates the intended purpose of supplemental benefits. And, because the Supreme Court's decision tacitly approved such recalculation (although the precise issue was not addressed), the court' certified the question to the Supreme Court of Florida. Acker Y. City of Clearwater, 23 Fla. L. Weekly D1970 (Fla. 1st DCA, August 17, 1998). Note: in three separate cases last month the some District Court of Appeal certified identical questions. 23. NEVER MIND ... DRAFT OF AUDIT REPORT NOT A PUBLIC RECORD: Reversing a County Court decision which we criticized (see C&C Newsletter for Octobers 1997, page 2), the District Court of Appeal held that a draft audit report was not subject to disclosure under the Florida Public Records Law because it had not yet been presented to a unit of local government and thus was not final. In so ruling, the court answered in the negative the following certified question: Does delivery, by an internal auditor, of an audit report draft prepared for or on behalf of a unit of local government, to a County Administrator, who has no management responsibilities for the audited department, soliciting a management comment and review, constitute delivery of a "final" audit to the "unit of local government" as contemplated by Florida Statute 119.07(3)(y) thus rendering the audit report draft a public record not exempt under the provision of Florida Statutes [sic] 119.07(3)(y)2 Nicolai v. Baldwin, 23 Fla. L. Weekly D2012 (Fla. Sth DCA, August 28, 1998). 11 CYPEN & CYPEN P. O. BOX 402099 MIAMI BEACH, FLORIDA 33140.0099 i . Vol. III, No. 10 24. ADEA COVERS PENSION UNDERPAYMENT BASED ON AGE DISCRIMINATION: A United States Court of Appeals has held that a pension trust falls within the Age Discrimination in Employment Act definition of employer, employment agency, labor organization or any combination thereof. In the subject case a private pension fund calculated a benefit based on the "fiction" that an employee had retired in 1990 when he reached 701/2 years of age, rather than in 1992 when he actually retired. As a result, the pension payment was reduced by almost 50%. In defense, the plan said that the Internal Revenue Code then required payment of pensions when an employee reached 701/2years of age. The Court found that the IRC provision dealt with use of pension plans as tax shelters and did not require employees to stop working or allow plans to halt increases and accruals for those worldng beyond age 701/2. Whether we agree with this expansion of AREA or not, quite frankly, the defense raised does not even pass the "giggle test." BNA' reported the case of Lee v. California Butchers' Pension Trust Fund, Case Nos. 96-16408, 96- 16562 and, 97-15272 (9th Cir., September 9, 1998). "In case of doubt, make it sound convincing." 25. IN EQUITABLE DISTRIBUTION, PENSION SHOULD NOT HAVE BEEN REDUCED FOR FUTURE TAXES: Tor equitable distribution purposes in a dissolution of marriage case, the trial court valued the pension of husband, an Orlando police sergeant. After arriving at a present value of approximately $300,000.00, the court then reduced the figure by about 3217n, to account for the "tax effect" of distribution. The appellate court found reversible error in the trial court's reduction in the present value of husband's pension. "Moreover, the record contains no indication that the parties ever submitted any evidence with regard to the taxes husband may have to pay on the distributions." Thus, the opinion is unclear as to whether or not the reduction for taxes is per se error or was error merely because no evidence was submitted as to the effect of taxes. We would opt for the latter interpretation, as did the judge who filed a specially concurring opinion: "I believe that it would have been appropriate to consider the impact of taxes had there been such evidence presented by a party and that the reduction would be fair to both parties." The appellate court also reversed the trial court's failure to award wife any portion of husband's accumulated sick leave, even though wife did not identify the number of hours accrued by husband as of date of separation. Curiously, the court found the burden of proof on this issue to be on husband, "who is effectively seeking a credit for sick leave accrued subsequent to the parties' separation." Talk about tortured logic! King Y. King, 23 Fla. L. Weekly D2013 (Fla. Sth DCA, August 28, 1998). "An assumption is the first step toward a screw-up." 26. COURT ALLOWS MARRIAGES TO BE 'TACKED" FOR EQUITABLE . DISTRIBUTION OF MILITARY PENSION: In another case involving equitable 12 CYPEN & CYPEN P 0, BOX 40P-022 MIAMI BEACH, FLORIDA 33140.0099 Vol. III, No. 10 distribution of a pension, the Florida Fifth District Court ofAppeal allowed the parties' two marriages to be aggregated. The parties were married for about four years, were divorced for about one year, remarried and redivorced over twenty-rive years later. Husband was already in the military prior to the first marriage. The appellate court aMrmed the trial court's ruling that the length of both marriages should be combined in computing wife's entitlement to a share of husband's retirement benefit, "especially given the brevity of the first separation." With all due respect, the brevity of separation should have nothing to do with it: presumably, the wife received an "equitable distribution" of husband's pension in the first dissolution proceeding; if not, then shame on her or shame on her lawyer. Beasley v. Beasley, 23 Fla. L. Weekly D2161 (Fla. Sth DCA, September 18, 1998). 27. FLORIDA RETIREMENT SYSTEM GENERAL AMENDMENTS APPROVED: As is its annual custom, the Florida Legislature has enacted general amendments that affect members of the Florida Retirement System. The following are some of Chapter 98413's more notable changes. Beginning January 1, 1999, the retiree health insurance subsidy multiplier will increase from $3.00 per year of creditable service to $5.00; the monthly floor and cap will respectively increase from $30.00 to $50.00 and from $90.00 to $150.00; and the employer contribution will immediately increase from .66% of gross compensation to .94117c. "Compensation" shall specifically include accumulated annual leave payments, certain payments in addition to base rate of pay, amounts withheld for tax sheltered annuities or deferred compensation programs and payments made in lieu of a permanent increase in the base rate of pay. Effective July 1, 1998, the employer contribution for special risk members is 24.38%, down from 26.44% (in effect for the previous two years). An eligible joint annuitant of a member whose employment is terminated by death within 1 year of such member satisfying the service requirements for vesting and retirement eligibility shall be permitted to purchase the additional service credit necessary to vest and qualify for retirement benefits, using the deceased member's accumulated hours of annual, sick and compensatory leave. A member who is required to resign as a subordinate officer, deputy sheriff or police officer because lie or she is a candidate for a public office which is currently held by his or her superior officer who is also a candidate for reelection in the same office shall upon return to covered employment be eligible to repurchase retirement credit for the period between his or her date of resignation and the beginning of the term of office for which lie or site was a candidate, as a leave of absence without pay. And, the Executive Director of the State Board of Administration and the Director of the Division of Retirement shall undertake a comprehensive review of the assumptions and contribution rate structure underpinning operation of FRS, the results to be submitted by March 1, 1999. 28. ONE WAY OR ANOTHER, CORRECTIONAL OFFICER'S WIDOW TO RECEIVE FRS BENEFITS: Jack Tilley was employed by the Florida Department of Corrections in August, 1987 and was a meniber of the Florida Retirement System. Officer Tilley died on June 26, 1997, having accumulated 9.92 years of creditable service, one month short of 13 CYPEN 6 CYPEN P. 0. DOX 402009 MIAMI BEACH. FLORIDA 33140.0099 Vol. III, No. 10 completing the required ' 10-year vesting period under FRS, meaning that no survivor benefits were available. Had the officer lived into the month of July, 1997, his surviving spouse would have received a monthly benefit of about $330.00. As it then existed, FRS precluded any accrued leave time from being used to "extend" employment and also prohibited purchase of additional service credit. Significantly, Officer Tilley had sufficient unused sick leave which, if credited toward his service, would have vested him in FRS. Thanks to the Florida Legislature, Penny Tilley will receive the foregoing monthly retirement benefit, plus an annual cost of living allowance. Chapter 98-430 specifically directs the Comptroller to pay Mrs. Tilley the amount she would have received as surviving spouse had Officer Tilley survived to the date on which he would have vested In FRS. One very interesting sidelight: the Act was to take effect on July 1 unless "an amendment adding subparagraph (f)1. to subsection (7) of section 121.091, Florida Statutes, becomes a law, which authorizes the use of a deceased member's accumulated leave in the Florida Retirement System to purchase additional creditable service." As we said in item 27 above, FRS was so amended, and thus the Tilley Relief Act never became effective. "What the large print giveth, the small print taketh away." 29. A VERY SHORT SUMMARY OF SOME REGENT ATTORNEY GENERAL OPINIONS: A. A tax collector, who previously purchased additional retirement credits in the Elected State and County Officers' Class of the Florida Retirement System with personal funds, is not entitled to reimbursement for this expense from public funds (Oink, oink). AGO 97-85. B. The Hoard of Trustees of the Fort Lauderdale Fire Fighters Insurance Trust Fund is subject to the Government in the Sunshine Law. AGO 98-01. C. Orange County, in its sole discretion, is authorized to make deductions from the salary or wages of any employee when the deduction meets the county's standards or restrictions for such withholding and the deduction is in an amount authorized and requested by the employee for those purposes. AGO 98-19. D. The Florida Whistle-blower's Act provides confidentiality for those records received by a municipality conducting an active investigation of a whistle-blower complaint and is not limited to those records received as part of an active investigation of a complaint of retaliation. However, while the name or identity of the individual disclosing this information is confidential, the initial report of wrongdoing received 14 CYPEN 6 CYPEN P. O. 13OX 402009 MIAMI BEACH. FLORIDA 33140.0099 vol. III, NO. 10 by the municipality Is a public record, since that information was received before an investigation was begun. AGO 98-37. L Section 115.07, Florida Statutes, authorizes the State and its subdivisions to grant leaves of absence for up to 17 working days for public employees who have been assigned to, participate in military training. Section 115.09, Florida Statutes, authorizes leaves of absence for 30 days for public officers who are called to active military service. Both statutes require a public employer to pay full public salaries to its employees on military leave during these statutorily-recognized periods of absence from their, public employment, regardless of any other compensation from the military or other source. AGO 9843. 30. EVIDENTIARY NEARING NOT REQUIRED BEFORE REINSTATEMENT UNDER WHISTLE-BLOWER'S ACT: Our readers know that in an action under the Florida Whistle-blower's Act a plaintiff may be entitled to temporary reinstatement to his or her former position or to an equivalent position, pending final outcome of the complaint see C&C Newsletter for April, 1998, page 2).. A circuit judge has held that all evidentiary hearing is not mandatory prior to determining whether temporarily to reinstate a whistle- blower plaintiff. The court reasoned that the relief of temporary reinstatement is not the same as a temporary injunction, which, under the Florida Rules of Civil Procedure, requires an evidentiary hearing. The Whistle-blower's Act simply seeks to maintain an employee in a,job position, while no prejudice accrues to the employer by having the employee continue to render service while the merits of his claim are decided. It sure sounds to us like the equivalent of a temporary injunction. Moses v. Neumann, 5 Fla. L. Weekly Supp. 762 (Fla. 15t1i Cir., June 19, 1998). 'Me facts, although interesting, are irrelevant." 31. EMPLOYERS UNLIKELY TO INCREASE BENEFITS TO COVER SOCIAL SECURITY CUTS: A survey conducted by KPMG Peat Marwick and reported in Pension & Benefits Update found that 54% of surveyed employers would not raise retirementbenefits if Social Security benefits were reduced as part of a plan to maintain the system's solvency. Only 18% said they would increase benefits, while 28% were undecided. Many employers are worried that Congress is relying on employers to make up for the reduction in Social Security benefits by increasing pension plan contributions. The issue is important because some employers promise a total benefit package that includes Social Security, so that a reduction in those benefits means higher cost to the employer. 15 CYPEN & CYPEN P. O. BOX 40$099 MIAMI BEACH, FLORIDA 33140.0099 ?? April, 1997 SPECLAL SUPPLEMENT TO CYPEN.& CYPEN NEWSLETTER SOCIAL SEC URITY/M ED [CARE AND LOCAL GOVERNMENTS The February 1997 Government Finance Revpublished by GFOA, contains a compre- hensive article on Social Security and Medicare as they relate to local government employers. The following summary is from that report, written by Betsy Dotson of GFOA's Federal Liaison Center. Social Security was enacted in 1935, as a social insurance program to pay retired workers a continuing income. Survivors' and descendants' benefits were extended in 1939. In 1956 disability benefits were added and in 1965 Medicare was created to provide health coverage to the elderly. However, public employees were not originally covered by Social Security. But, because many governments did not have their own retirement systems, Congress, in 1951, permitted public employers to participate in Section 218 agreements (named for the applicable portion of the Social Security Act). Thus, states and their political subdivisions could voluntarily enter into agreements with the Social Security Administration to cover some or all of their employees. A 1955 amendment permitted employees (except firefighters and police officers) to be covered by Social Security even where there was a government retirement system. A year later, Congress determined to allow state and local governments to maintain two coverage systems, one of which could exclude those employees not desiring Social Security coverage. (In certain states, even firefighter and police officer coverage was permitted.) When Social Security was overhauled in 1983, Congress set April 20, 1983 as the date after which any and all public employees and their employers were prohibited from opting out of Section 218 agreements. Since that date, state and local governments must continue operating under Section 218 agreements even if a qualifying government retirement plan is available. The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) required that employees hired after March 31, 1985 become subject to Medicare-only coverage, unless specifically excluded by law. By subsequent amendment, as of July 2, 1991 all state and local government employees who are not covered by a public retirement system or covered under a Section 218 agreement are mandatorily subject to Social Security, unless specifically excluded. Amendments in 1994 now permit optional Social Security coverage for firefighters and police officers in all states. CYPEN & CYPEN P. O. BOX 402099 MIAMI BEACH, FLOR10A 33140-0099 ? i April, 1997 For purposes of mandatory Social Security coverage (but not for Section 218), a public retirement system must provide a meaningful benefit; that is, one comparable to the benefit provided by the Old-Age Survivor and Disability Insurance (OASDI). IRS Regulations spe- cifically provide that Section 457 Deferred Compensation Plans qualify. To be considered a member of a qualified' retirement system, one must actually participate (as opposed to just being eligible therefor). As part of her article, Ms. Dotson created an easily-understandable flowchart to determine employee coverage for Social Security and Medicare. With her permission, that chart is reproduced below. DETERMINING EMPLOYEE COVERAGE FOR SOCIAL. SECURr Y AND MEDICARE Social Security Coverage Medicare YES Are the employee's services covered for full Social Security under a Section Are the services covered by NO 218 agreement for FICA purposes? a Section 218 agreement? NO YES Are the services ,4,NO Is the employee a member of a NO covered by•a Withhold Social Securit] public retirement system? public retirement- and Medicare taxes for this employee. Social Security and system? YES Medicare should be Has the employee been in co 11nuous withheld. 2 employment by the state o NO government since before April YES NO Withhold Medicare tax YES for this employee. Has the employer voluntarily elected Were the services excluded FICA taxes should not be withheld--- Medicare-only coverage for all or some employees' positions under a Social [ro coverage the under voluntary agreement or withhold Medicare- Security Section 218 agreement7 under mandatory Social YES if only after iro hi red YES NO Security? Mr March 31, 1 Do not withhold Medicare for this employee. CYPEN & CYPEN NEWSLETTER Copyright, 1996 Stephen H. Cypen, Esq., Editor 825 Arthur Godfrey Road Miami Beach, Florida 33140 Telephone: (305) 532-3200 Telecopier: (305) 535-0050 2 CYPEN G CYPEN P. O. BOX 402099 MIAMI BEACH, FLORIDA 33140-0099 February, 1997 SPECS SUPPLEMENT TO OPEN & CYPEN NEWSLETTER A LITTLE REFRESHER COURSE ON QDROS AND GOVERNMENTAL PLANS Hardly a week goes by now without a governmental pension plan being served with a Qualified Domestic Relations Order (QDRO). As a rule, the QDRO purports to direct payment of a portion of the retiree's pension benefits to his or her spouse as part of a plan for equitable distribution of the parties' marital assets. What to do? Simply put, do nothing -- other than advise the party for whose benefit the QDRO was obtained -(or the attorney who obtained it) that the QDRO cannot be enforced against a governmental plan which contains an anti-alienation clause.' Believe it or not, this whole rush-to-QDRO began because of misinterpretation of Federal law, which by its own terms, does not apply to governmental plans. In 1974, Congress passed the Employee Retirement Income Security Art (ERISA), to protect the interests of participants in employee benefit plans. ERISA expressly excludes from coverage governmental plans (including plans established or maintained by a political subdivision or a State). Originally, ERISA required that all pension plans to which it applied provide that benefits could not be assigned or alienated in any circumstances. However, by adoption of the Retirement Equity Act of 1984 (REA), Congress amended ERISA to permit assignment or alienation of benefits when (and only when) a QDRO has been entered. So far so good. Maybe not, because after 1984, many people (including seasoned attorneys) argued that REA authorized QDROs as to governmental plans. Clearly, there was a wholesale misreading of Federal law, Congress had, for the first time, merely permitted QDROs to be enforced against ERISA (private) plans. Another argument was advanced in favor of enforcement of QDROs against governmental plans in Florida: that, irrespectiveof Federal law, pre-existinganti-alienation clauses have been impliedly repealed by subsequent adoption of general law.' 'Basically, an anti-alienation clause provides that pensions are not assignable or subject to any legal process. Most public plans, firelighter and police officer included, contain such clauses. In addition, anti-alienation provisions can be found in State law: Section 175.241, Florida Statutes (firefighters), and Section 18525, Florida Statutes (police ofIIeers). These clauses are applicable to all funds created under said Chapters ("local law" as well as "chapter"), regardless or whether or not the plan itself contains an anti-alienation clause. 21a Florida, a Special Act of the Legislature may be Impliedly repealed by a subsequent General Act when the latter either is a complete revision of the entire subject or so Irreconcilable with the Special Act as to manliest a clear legislative Intent to do so. Firefighter and Police Officer Plans can be created by Special Act of the Legislature or by ordinance. Since an ordinance is inferior to any Act of the Legislature, those plans created by ordinance may only be protected by $$175.241 and 18515, Florida Statutes, as referred to in note 1 above. CYPEN & CYPEN P. 0. BOX 402099 MIAMI BEACH, FLORIDA 33140-0099 February, -1997 First, there. Is Section 222.21, Florida Statutes, adopted in 1987. In relevant part the statute merely provides that, while sums payable to a 'debtor from an ERISA-quallfied plan are generally exempt from creditors' claims, they are not exempt from the claims of an alternate payee' under a QDRO. Nothing in Section 222.21, Florida Statutes, is so irreconcilable with an anti-alienation clause as to manifest a clear legislative intent to repeal same .4 Second, there is Section 61.075, Florida Statutes. But the statute merely provides that all interest in retirement or pension plans (whether vested or not) which accrue during the marriage are marital assets subject to equitable distribution. The statute says nothing about whether a court may require that payment of any portion of such an 'interest equitably distributed to the nonparticipant spouse be made by the retirement or pension plan to the non-participant spouse. Again, the statute does not manifest a clear legislative intent to repeal an anti-alienation clause s Finally, there is Section 61.1301, Florida Statutes, which addresses the use of Income Deduction Orders as a means of collecting sums due on account of orders entered in domestic relations litigation. At first blush, one might think that an Income Deduction Order could serve as a vehicle for enforcement of a QDRO 6 However, Section 61.1301, Florida Statutes, is expressly limited in its application to collection of alimony and child support. On the other hand, a QDRO is not for collection of either alimony or child support, but, rather, for the purpose of effectuating a plan for equitable distribution of marital assets. Thus, although a so-called QDRO might be enforceable as an Income Deduction Order under Section 61.1301, Florida Statutes, if it is for collection of either alimony or child support, it cannot be used to force direct payment to another of a retiree's pension benefits in order to achieve an equitable distribution of the parties' marital assets. Under RF.A, an "alternate payee" is the one for whose benefit a QDRO is entered and to whose direct payment Is to be made. 4Mc Florida Retirement System (FRS) contains an anti-alienation clause virtually identical to the ones In Chapters 175 and 185, Florida Statutes. See Section 121.131, Florida Statutes. Nevertheless, the author has been advised that FRS routinely honors QDROs, under the theory that It is easier to pay than to tight. In fact, we believe that the Florida Legislature adopted Section 222.21, Florida Statutes, at the behest of MS In order to provide FRS with something to hang its hat on. $Section 61.076, Florida Statutes, reiterates that all interest in retirement or pension plans (whether vested or not) which accrue during; fhe marriage are marital assets subject to equitable distribution. The statute then sets forth the procedure to be followed by the court when a military pension is Involved. aRemember that Section 61.1301, Florida Statutes, was held by the Supreme Court of Florida to be irreconcilable with, and, therefore, to repeal, an anti-allenation clause contained in a municipal police officers' and firefighters' pension plan created by Special Act or the Legislature. Alvarez v. Board of Trustees, 580 So.2d 151 (Fla. 1991). T 2 CYPEN f. CYPEN P. O. BOX 402099 MIAMI 6EACH, FLORIDA 33140-0099 .February, 1997 We have been berated by attorneys who represent spouses and who have either negotiated a -marital settlement agreement, or tried a dissolution of marriage case, resulting in an unenforceable QDRO. Regardless, we .have consistently been advising our governmental pension clients not to honor QDROs which seek to force direct payment in order to achieve equitable distribution. And until recently, there has been no Florida appellate authority to sustain this position., Fortunately, in an extremely well reasoned opinion, the First District Court of Appeal discussed all of the above arguments and correctly rejected them, holding that a trial court lacked the power. to order a governmental pension plan to pay to one former spouse a portion of the other former spouse's retirement pension benefits as part of ,,a plan for equitable distribution of marital assets. Board of Pension Trustees of. tale City. General Employees Pension Plan, City of Jacksonville, Florida, Pension Plan Administrator v. Vizcaino, 635 So.2d 1012 (Fla. 1st DCA 1994). t , a CYPEN & CYPEN P. O. BOX 402099 MIAMI BEACH, FLORIDA 33140-0099 CLIENT LIST Boca Raton General Employees' Pension Fund, Glenda R. Rowley, 201 West Palmetto' Park Road, Boca Raton, Florida 33432, (561) 393- 7714, since 1974. City of Coral Springs Police, Officers' Retirement Plan, Gina Salinsky,.9551 West Sample Road, Coral Springs, Florida 33065, (954) 344--1147, since 1989. City of Delray Beach Police & Firefighters Retirement System, Anne Woods, 609 Homewood Boulevard, Delray Beach, Florida 33445, (561) 243-4707, (800) 327-1162, since 1920. .City of Fort Lauderdale Police and Firefighters' Retirement Sys- tem, Lynn Wenguer, Suite 202, 888 South Andrews Avenue, Fort Lauderdale, Florida 33316, (954) 761-5595, since 1987. City of Gainesville Consolidated Police Officers and Firefighters Retirement Fund, Timothy Christiansen, Post Office Box 490, Gainesville, Florida 32602, (352) 334--5000, Extension 5437, since 1988. City of Hialeah Employees' Retirement System, Yolanda Rivero, Post Office Box 110040, Hialeah, Florida 33011--0040, (305) 883-5872, since 1995. Hollywood Firefighters' Pension Fund, Rich Brito, Suite 700, 450 North Park Road, Hollywood, Florida 33021, (954) 967-4331, since 1972. Hollywood Police Pension Fund, Dick Schiano, 4205 Hollywood Boule- vard, Hollywood, Florida 33021, (954) 967-4395, since 1969. Homestead Retirement Income Plan for Firemen, Donald R. Smoak, 12508 S. W. 75th Avenue, Miami, Florida 33156, since 1991. Homestead Municipal Police Officers' Retirement Trust Fund, James M. (Mickey) Guest, Suite 310, 15600 S. W. 288th Street, Homestead, Florida 33031, (305) 248-0861, since 1997. Key Biscayne Police Officers, and Firefighters' Retirement Plan, Sandy Winters, Post Office Box 1318, Key Biscayne, Florida 33149 (305) 361-0507, since 1997. Miami Firemen's Relief and Pension Fund, Dan Givens, 2980 N. W. South River Drive, Miami, Florida 33125-1146, (305) 633--3447, since 1983. City of Miami Fire Fighters, & Police Officers' Retirement Trust, Dania B. Orta, Suite 101, 2828 Coral Way, Miami, Florida 33145- 3214, (305) 461-7060, since 1985. CYPEN 6 CYPEN P. a. BOX 402090 MIAMI BEACH. FLORIDA 33140.0092 CLIENT LIST (Continued) City Pension Fund for Firemen and Policemen in the City of Miami Beach, Celia Locke, Suite 400, 605 Lincoln Road, Miami Beach, Florida 33139-2902, (305) 673--7039, since 1946. City Supplemental Pension Fund for Firefighters and Police Officers in the City of Miami Beach, Celia Locke, Suite 400, 605 Lincoln Road, Miami Beach, Florida 33139--2902, (305) 673-7039, since 1989. Miami Beach Firemen's Relief and Pension Fund, Jack Richardson, Jr., 2300 Pine Tree Drive, Miami Beach, Florida 33140, (305) 673- 7120, since 1968. Miami Beach Policemen's Relief and Pension Fund, Sgt. Peter Matthews, 1700 Convention Center Drive,' Miami Beach, Florida 33139, (305) 673-7776, since 1968. Miami Shores Village Pension Board, Michael R. Couzzo, Jr., 10050 N. E. 2nd Avenue, Miami Shores, Florida 33138, (305) 759-2207, since 1998: North Miami Employees' Retirement System (691) Clair T. Singerman Pension Fund, Vernet Y. Curry, 776 N. E. 125th Street, North Miami, Florida 33161, (305) 693-6511, since 1996. North Miami Employees' Retirement System (748), Frank.ie Livsey, 776 N. E. 125th Street, North Miami, Florida 33161, (305) 893--6511, since 1996. North Miami, Special Police Officers Fund, Lt. Douglas Brown, 700 N.E. 124th Street, North Miami, Florida 33161, (305) 891-0294, Ext. 4109, since 1997. Retirement System for General Employees of the City of Miami Beach, Margaret A. Arculeo, 1700 Convention Center Drive, Miami Beach, Florida 33139, (305) 673-7437, since 1983. Retirement System for Unclassified Employees and Elected Officials of the City of Miami Beach, Margaret A. Arculeo, 1700 Convention Center Drive, Miami Beach, Florida 33139, (305) 673-7437,• since 1988. City of Miami Springs General Employee's Retirement System, Barbara Robinson, 201 Westward Drive, Miami Springs, Florida 33166, (305) 885-4581, since 1994. City of Miami Springs Police and Firefighters Retirement System, Chief Gene Duffy, 201 Westward Drive, Miami Springs, Florida 33166, (305) 888-9711, since 1994. CYPEN 6 CYPEN P. 0. BOX 402099 MIAMI BEACH, FLORIDA 35140.0099 [A '. CLIENT LIST (Continued) Palm Bay Police & Firefighters' Retirement Pension, Plant Mike .,Havener;.' Post. Office Box 100225, Palm Bay, Florida 32910-0225, (407) 724-8877,.since 1988. Pembroke Pines Pension Fund for Firefighters and Police Officers, Joan Wall, Post Office Box 841009, Pembroke Pines, Florida 33084 2906, (954) 431-3124,--since 1981. Pompano Beach Police and Firefighters'.Retirement System,?Lindsay Dalton, Suite 407,' Square One Office Building, 351-South Cypress Road, Pompano Beach, Florida 33060, (954) 782--4161, since 1972, Riviera Beach Municipal Firemen's Pension Trust Fund, Robert L. Cleva, 600 West Blue Heron Boulevard, Riviera Beach, Florida 33404, (561) 845-4104, since 1987. Town of Surfside, Eduardo Rodriguez, Municipal Building, 9293. Harding Avenue, Surfside, Florida 33154, (305) 861-4863, since 1976. M. CYPEN & CYPEN P. O. BOX 402029 MIAMI BEACH. FLORIDA 33140.0099 Disability Retirees Not Entitled To Benefits... Hlghllghted Article for January 6, 1999 Disability Retirees Not Entitled To Benefits Available To Service Retirees by Stephen H. Cygen Cweenn &?Cypen One cannot eat his calve and have it too. Approximately 2,000 disabled former New York City Police Officers filed suit under the Americans With Disabilities Act ("ADM) and the Rehabilitation Act ("Rehab'Act"). They claimed discrimination by reason of their disabilities because police officers who retire after twenty years of service receive supplemental benefits not available to disability retirees, (There are Variable Supplements Funds funded from excess earnings of the police pension fund, which pay additional benefits to service retirees but not to disability retirees.) In dismissing the case, a .federal judge held that "although it may seem undesirable and perhaps unpalatable, an individual who is totally disabled -- that is, unable to perform the essential job functions even with reasonable accommodation -- is not entitled to relief under these provisions [Title I of the ADA and Section 504 of the Rehab Act], Also, the court quoted with approval from EEOC Guidelines stating the "ADA does not require that service retirement plans and disability retirement plans provide the same level of benefits, because they are two separate benefits which serve different purposes.... Therefore, the employer does not violate the ADA simply by providing different benefits under service and disability retirement plans;" Our clients will remember our advice to this effect on August 2, 1995. &W I Qda;uk 1 site-mw 1112M o 1220 West Group I q,i G tp Home Page 1 of 1 Tuesday, January 05, 1999 9:52 AM HEM LM Mn Nova and Mews: Highlighted Article for December 16, 1998 Read Those ADV's by ,S;rphm H. Cypen QMen & en Form ADV, Part U, provides a wealth of information about a money manager. Besides biographical and educational background of the principals, there must be a detailed disclosure of the following concerning-the money manager's soft dollar practices: (1) a description of the products, research and services obtained with soft dollars; (2) whether the client is paying higher commissions in order for the money manager to obtain the soft dollar services; (3) whether commissions generated by one account may be used to purchase a service that benefits other accounts; and (4) any procedures the money manager uses to direct brokerage in exchange for soft dollar arrangements. If research or brokerage services are not provided as part of a soft dollar anangement, that arrangement may also have to be disclosed. A "must read" for fiduciaries. Hsla I Coast! Q I SRO Mao I HM "'° ..... a J %M MY nt Groua I West-Group-Home Wednesday, December 16, 1998 7:11 PM ".[. ' www.lwtww?. 1 Another Reason Not To Privatize [Private Firm,,. Page •1 of 1 Jim= j m Ne n and V km' Highlighted Article for December 1, 1998 Another Reason Not To Privatize [Private Finn Prison Guards Not Entitled To The Immunity Provided To Government Employee Guards] by Stephen H._ ,ypen- Cypen & Cypen In a civil rights action under 42 U.S.C. §1983, government employees may be entitled to qualified immunity from suit. In this case, a Tennessee state prisoner sued two prison guards for injuring him by placement of extremely tight physical restraints, thereby "unlawfully subjecting him to the deprivation of a right secured by the Constitution of the United States." Tennessee had "privatized" the management of its correctional facilities, so that a private firm, not the state government, employed the guards. In a S to 4 decision, the United States Supreme Court affirmed denial of the guards' motion to dismiss because the guards were privately employed and not entitled to the immunity provided their governmental counterparts. Richardson v McKnight, 11 Fla. L. Weekly Fed. 564 (U.S., June 23, 1997). !1121 Contact Us I Site Man I Home ?. O 7998 West Group I West Group Home Tuesday, December 0 1, 1998 9:44 AM Florida Legislature Grants Year 2000 Immunity Page 1 of 1 lams: Aron or Lobe From the Desks of Law-Finns Florida Legislature Grants Year 2000 Immunity Cmen & Coven Stephen 11, Q=n On May 30, 1998 House Bill 3519 became law without the Governor's signature. Among other things, the legislature makes the finding that the state and units of local government have taken due care to prepare for the date change that will accompany the year 2000. State agencies will spend an estimated $75 Million to $90 Million in remediation costs to prevent computer failures and date miscalculations. All of these actions have been taken in an effort to ensure the continuity of state services to the ,citizens of Florida as the 20th Century nears an end. Thus, "there shall be no cause of action at law, nor administrative actions maintained, against the state, its agencies or instrumentalities, or any unit of local government for actions or inactions that are attributable to a year 2000 computer date calculation failure, and there shall be no waiver of sovereign immunity with respect to the same." We would not rely on a pension board's being considered a "unit of local government" for Y2K immunity. In fact, we are in process of preparing Y2K questionnaires for-our clients to send to their vendors, in an attempt to determine Y2IG preparedness. tw I S&ci U I She Map I lismn 00. O 1898 West grow I bleat Won Home Tuesday, November 17, 1998 9:45 AM 1 Page 1 of 1 HM Meal of tsvv From the Desks of Law Firms IRS Issues Guidance On Section 457 Trust Requirement QMgn C en Stephen 1'I. Cypen The Internal Revenue Service has issued Notice 98-8 to provide guidance on changes brought about in 1996 by the Small Business Job Protection Act. Generally, IRC §457(b) plans maintained by a state or local government must hold all plan assets and income in a trust for the exclusive benefit of plan participants and their beneficiaries. The change is effective for plans established on or after August 20, 1996. Plans in existence on that date are not required to establish a trust until January 1, 1999. (Remember that Florida, in a rather farsighted move, amended Section 112,215, Florida Statutes, to require that assets of state employees be held in trust as of July 1, 1997; see C&C Newsletter for August, 1997, page 1). To satisfy the trust requirements, Section 457(b) plans must transfer deferred amounts to the trust "within a period that is not longer than is reasonable for the proper administration of the accounts of participants." For example, a governmental Section 457(b) plan could provide for amounts deferred under the plan to be contributed to the trust within fifteen business days following the month in which these amounts would otherwise have been paid to the participant. . H IS'ordact UsIShe?MapIJLQM ..... Qj= WW Grout) I YVest Group Home ;;Wf?ff Tuesday, November 17, 1998 9;44 AM Page 1 of 1 Hsi: &M of LM From the Desks of Law Firms FRS [Florida Retirement System] Permits Service-Connected Disability For Aggravation Of Pre-Existing Condition Cy pen Cygen Stephen H ygen. Section 121.091(4), Florida Statutes, contains the provision for disability retirement benefit under the Florida Retirement System. Although that section does not explicitly so state, courts have held that the test for in-line-of-duty disability is whether an injury or illness, arising out of and in the actual performance of a duty required by a member's employment, was a substantial producing cause or an aggravating cause of a member's total and permanent disability. A member of FRS, who had pre-existing rheumatoid arthritis and epicondylitis, in the course of her employment was attacked by a student. The undisputed medical testimony established both a work-related aggravation of a pre-existing condition and "a causal relationship between the work-related injuries and the total and permanent disability of the employee. Because the State Retirement Commis-sion denied benefits based upon whether the kick to the elbow was the major cause of the total and permanent disability, it erroneously failed to analyze whether the kick was an aggravating cause. Thus, the court reversed the denial and remanded with directions to the Commission to award service-connected disability. Westbrook v. Division of Retirement, 22 Fla. L, Weekly D2283 (Fla. 1 st DCA, September 25, 1997). Whether or not your plan permits service-incurred disability for in-service aggravation of a pre-e?dsting condition depends upon its particular terms. .............. ?I?at?4lal.al? . ...... c 120 M9 QMR f I r Saturday, November 14, 1998 12:07 AM F U.S. Supreme Court Holds "Salary Basis" Test... Hms: Amu of1m From the Desks of Law Firms U.S. Supreme Court Hoick "Salary Basis" Test For Determining Exempt Status Of Public-Sector Eemployees Under FLSA Permissible Cypen & Cypgr? Stephen H C en As you probably know, the Fair Labor Standards Act of 1938 (FLSA) exempts "bona fide executive, administrative or professional" employees from overtime pay requirements. The Secretary of Labor has promulgated a regulation requiring for exempt status that the employee earn a specified minimum amount on a "salary basis." The Secretary interprets this salary-basis test to deny an employee salaried status (and thus make available overtime pay) only when his compensation may "as a practical matter" be adjusted in ways inconsistent with the test, which requires that compensation not be subject to production because of variations in the quality or quantity of the work performed. Thus, the fact that compensation could "theoretically" be reduced (though this was not the police department's general practice) for a variety of disciplinary infractions related to the "quality or quantity" of their work did not mean the employees were nonexempt. Interestingly, the salary-basis test was adopted in 1940, when the FLSA did not apply to state and local employees. Although Congress extended FLSA coverage to virtually all public-sector employees in 1974, it was not until the United States Supreme Court's decision in Garcia eleven years later that the extended coverage was upheld. The salary-basis test was expressly made applicable to public-sector employees in 1996. Auer v Robbins, 10 Fla. L. Weekly Fed. S284 (U. S., December 10, 1996). Hg1Q l Sontmpt U? I Site Man I tip O IM West GM91 Mzt Group Home Page 1 of l Wednesday, November 11, 1998 9;19 AM Page I of.1 From the Desks of Law Firms Acceptance Of Early Retirement Not A Discharge Cyoen & Omen SWhen H. Cvnen_ Appellant's department was scheduled to close down at an undetermined future date. Her employer encouraged her to take advantage of an early retirement package for, employees over 50 years of age. After accepting those early retirement benefits, appellant sought unemployment benefits on the ground that she had been discharged by • her employer. In upholding the unemployment appeals commission's denial thereof, the appellate court found that appellant's acceptance of the early retirement benefits was a voluntary abandonment because she was not faced with imminent termination and. simply had good reason to accept the early retirement opportunity. Give 'em an inch... . Calle v. Unemployment Appeals Commission, 22 Fla: L. Weekly D1026 (Fla. 4th DCA, April 23, I997). W21 CO[ t cl us I SKO Wg I IkM s 2-1MMSt Grsuo Jylles! Groj2 Home [.41 , Friday, November 06, 1998 9: 19 A.M Page 1 of 1 HWL Amn of LM From the Desks of Law Firms TITLE VII ACTION NOT NECESSARILY BARRED BY WORKERS' COMP SETTLEMENT: Cynen & Cynen Stephen H. Cypen An employee who was attacked by her supervisor at work settled her workers' compensation claim with the employer-carrier "on account of the alleged work related accident:" The settlement agreement released the employer from all workers' compensation liability, but not the Title VII action that was then pending. Nevertheless, the trial court granted summary judgment for the employer based on its belief that the election of remedies doctrine barred the employee from seeking relief under Title VII, In partially reversing, the District Court of Appeal discussed the nature of Title VII of the Civil Rights Act of 1964: to address sexual harassment and to compensate for intangible injury to personal rights. (Workers' compensation, on the other hand, is directed at compensating a worker for lost. resources and earnings, purely economic 'injuries.) Thus, the appellate court did affirm that part of the summary judgment dealing with the claims for physical injuries and economic losses. Moniz v. Reitano Enterprises, Inc., 23 Fla. L. Weekly D803 (Fla, 4th DCA, March 25, 1998). H&W I Contact Us I I H2= C 120 West GMW I West Grow Home Wednesday, October.28, 1998 1:26 PM JWM Amn of JAM From the Desks of Law Firms GASB 32 ISSUED FOR §457 PLANS: C Cypen Stephen H C en The Governmental Accounting Standard Boards has issued Statement No. 32 on Accounting and Financial.Reporting for IRC §457 Deferred Compensation flans of state and local government employers. The new statement, which replaces Statement No. 2, was necessitated by the Small Business Job Protection Act of 1996 amendments to IRC §457 that require all amounts of compensation deferred under eligible state and .local government deferred compensation plans and income earned thereon to beheld in trust for participants and beneficiaries. GASB 32 will require that §457 plan assets be included in the government's financial statements only if they are fiduciary funds (that is, held by the governmental employer acting in a trustee capacity). SBJPXs trust requirement was effective immediately for plans established on or after August 20, 1996 and for all plans after December 31, 1998, GASB 32 is effective for financial statements for periods beginning after December 31, 1998, unless the governmental employer complies with the trust requirement in an earlier period, in which case the statement is required for the financial reporting period in which compliance occurs. HYJu 1 Us I SRO Mao I HQlm4 0 1 west Grano Home t Tuesday, October 27, 1998 5:57 PM Ls' Local Government LaW Weekly FOPMERI Y MUMGPAI- ATToF-r S' DIGEST 630.323.7578 a FAX: 630.323.8415 Vr- Section of Slate and Local Gownment Law /M P.O. Box 98 Hinsdale, IL 60522-0098 7998.51 and 52 December 18 and 25, 1998 Monteiro v. Tempe Union High, School District 158 F.3d 1022 (9th Cir. 1998) School District Liability Under Title VI For Student-To-Student Racial Harassment By. James C. Hanb, Ahlers, Cooney, Dorweiler flaynfe, Smith & AOee, P.C. Des Moines, !A In Montelro v. Tempe Union High School District, 158 F.3d 1022 (9th Cir. 1998), the Ninth Circuit Court Of' Appeals considered an issue of racial discrimination which, according to the Court, was not the subject of any reported decision. The issue was whether a school district may be liable under Title V1 of the Civil Rights Act of 1964 for failing to respond to racial harassment of one or more students by other students. The Montelro case began with a reading assignment for 9th Grade English. The assignment was to read "The Adventures of Huckleberry Finn" by Mark Twain, and the short story "A Rose for Emily" by William Faulkner. Kathy Monteiro, mother of one of the students in the 9th Grade class, filed a complaint in federal district court alleging that the decision by the school district to assign these literary works as part of the curriculum for the class and the refusal of the district to remove them from the curriculum violated the Equal Protection Clause of the 14th Amendment and Title VI of the Civil Rights Act of 1963. The basis of Monteiro's first claim was that the assigned material contained a racially derogatory term ("n-----"), that the material was not an essential compo- nent of the class, and that the curriculum did not include any material which was derogatory to Caucasians. With regard to the matter of first impression, Monteiro alleged that her daughter and other students were "subjected to a hostile racial educational environment because they were repeatedly called "n-----" and other racial slurs by white students." She also alleged that complaints were made to appropriate authorities at the school but that the school made no effort to halt the racist conduct. Tl?e two literary works were relevant to this second claim because Monteiro alleged that the assignment of these works "created and contributed to a racially hostile education environment." (Continued on page 21) GAO REPORTS ON MANDATORY SOCIAL SECURITY COVERAGE OF PUBLIC EMPLOYEES; PUBLIC PENSION PLANS MOUNT OPPOSITION By: Stephen H. Cypen, Open & Open Miami Beach, rL The United States General Accounting Office has issued a report entitled "Social Security: Implications of Extending Mandatory Coverage to State and Local Employees" (GAOIHEHS-98-196). The Social Security Administra- tion estimates that 5 trillion state and local government workers, with annual salaries totalling $132.5 million, are currently not covered by Social Security. The report examines the implications of extending manda- tory coverage to all newly-hired state and local employ- ees. GAO also discusses the effect of mandatory cover- age on the Social Security program, public employers, public employees and pension plans. Specifically, GAO notes that (1) extension of mandatory Social Security coverage to all new state and local government hires would reduce the program's long-term actuarial deficit by 10% and would extend the trust fonds' solvency by about two years; (2) mandatory coverage would broaden participation in an important national program and simplify program administration; (3) the impact would depend on how state and local governments with non- covered employees respond to the additional cost and benefits associated with Social Security coverage; (4) Social Security retirement benefits are fully protected from inflation and are weighted in favor of families and low-income employees, while many public pension plans permit employees to retire earlier and provide a higher retirement income benefit than Social Security; (5) those (Continued on page 22) ALSO IN THIS ISSUE Cases of General Interest .............p.3 Cases of Local Interest .............. p.4 U.S. Supreme Court .... ........... p.20 Federal Agencies ....... ...........p.2() What the Press Says .... ........... p.20 Notable Cases and Trends .... ... . p.21 , Posiville Community School District, 929 F.Supp. 1193 (N.D. Iowa 1996); Seamons v, Snow, 84 F. 3d 1226 (10th Cir. 1996); Nicole M. V. Martinez Unified School District, 964 F.Supp. 1369 (1997)). Briefs have been submitted and the United States Supreme Court will. address the issue of the liability of school districts for student-to-student sexual harassment in Davis v. Monroe County Bd.Of Educ., 120 P.3d 1390 (11th Cir. 1997). Certiorari has also been granted in the Oona R.S. case. m 1998 American Bar Association. All rights reserved. GAO REPORTS ON MANDATORY SOCIAL SECURITY COVERAGE OF PUBLIC EMPLOYEES;' PUBLIC PENSION PLANS MOUNT OPPOSITION (Continued from page 1) states and localities that decide to maintain benefit levels for new employees would experience increased costs; (6) several groups have stated that mandating Social Security coverage would raise constitutional issues and would be challenged in court; (7) mandatory, coverage would also present administrative issues for implementing state and local governments; and (8) up to four years could be required for states and localities to develop, legislate and implement pension plans that are coordinated with Social Security. To read the entire 27-page letter report, visit GAO's World Wide Web Home Page at http:\\www.gao.gov and select "Income Security" in the August 1998 Month in Review. Meanwhile, over 20 public pension plans in 13 states have joined to fight legislative proposals that would require newly-hired state and local government employees to join the Social Security System, in an attempt to defeat proposed laws that would cost $77,5 billion over the next ten years, these • plans have formed the Coalition to Preserve Retirement Security. In California alone. cities would have to pay the federal government an aggregate of about $2.7 billion over the next ten years. C 1998 American Bar Association. All rights reserved. Local ?? a Local Government Law Weekly is published weekly in cooper- ation with the Section or state and Local Government Law of the American Bar Association. [oral Government law Weekly provides a weekly briefing of caselaw of intemt to local government attorneys. Subscriptions are 5360 a year for 50 issm, 5300 for Swtion members. Any ABA member may join the section by paying its annual dues of $35. . The views expressm herein arc not necessarily those of the American Bar Association or its Section of State And local Government Law. Co•Editort Charles P. Culson Robert Baker P.O. Box 98 750 North Lake Short Dr. Hinsdale, d. 60522 Chicago, IL. 60611 Publisher Rita Carlsmt Address tcxtections should be sort to local Government Law Weekly P.O. Box 98. Hinsdale, B.. 60522 0 1998 bond Case Briefs, Inc. All rights reserved. Produced by Bond Case Briefs. Inc 22