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11/02/1992 TRUSTEES OF THE EMPLOYEES' PENSION FUND MEETING November 2, 1992 The City Commission, meeting as the Board of Trustees of the Employees Pension Fund, met in regular session at City Hall, Monday, November 2, 1992 at 10:30 A.M., with the following members present: Rita Garvey Chairperson Lee Regulski Trustee Richard Fitzgerald Trustee Sue Berfield Trustee Arthur X. Deegan, II Trustee Also Present were: Michael J. Wright City Manager Milton A. Galbraith, Jr. City Attorney Cynthia E. Goudeau City Clerk ITEM #2 - Minutes: Trustee Berfield moved to approve the minutes of the September 28, 1992, meeting. The motion was duly seconded and carried unanimously. ITEM #3 - Request for Acceptance into Membership: The City Manager presented the recommendation of the Pension Advisory Committee to approve membership for the employee(s) listed below: a) Charles Howard b) David Fletcher c) Charles Charity d) Norma Mathews e) Veronica Hunt f) Wayman Pearson II g) Ronnie White h) Dina L. Ayres i) Phillip D. Hughes j) Vincent R. Booker k) Richard A. Carroll l) Steven M. Sears m) Donald E. Main Trustee Fitzgerald moved to accept the recommendation of the Pension Advisory Committee. The motion was duly seconded and carried unanimously. ITEM #4 - Request for Pension: The City Manager presented the recommendation of the Pension Advisory Committee that Richard D. McManus be granted a regular pension under Section(s) 26.34 and/or 26.37 of the Employees' Pension Plan. Mr. McManus was employed by the City on March 13, 1968, and began participating in the Pension Plan on that date. His retirement will be effective on November 10, 1992, at the end of the day. Trustee Regulski moved to accept the recommendation of the Pension Advisory Committee. The motion was duly seconded and carried unanimously. ITEM #5 - Request for Pension: The City Manager presented the recommendation of the Pension Advisory Committee that the employee(s) listed below be granted a job-connected disability pension under Section(s) 26.35 of the Employees' Pension Plan. a) Arthur Carpentieri Mr. Carpentieri, Firefighter, was employed on October 16, 1963 and began participating in the Employees' Pension Plan on that date. In October, 1991, Mr. Carpentieri applied for a regular pension based on 28 years of service. With his application for pension, he exercised his option to extend his retirement date by the use of vacation and one-half of his accumulated sick leave. That request was approved by the PAC and the Trustees, resulting in a pension benefit of 70% (28 yrs. x 2 1/5 percent) of his last five years' average salary of $32,917 annually or approximately $23,042 per year. While using his vacation benefits and prior to his extended retirement date, Mr. Carpentieri suffered a heart attack. In January, 1992, Ed Hooper, President of the IAFF, appeared before the PAC as a representative of Mr. Carpentieri to ask that the regular pension be changed to a job-connected disability pension based on provisions of Chapter 112, Florida Statutes, which provides that disabilities due to heart disease, hypertension or tuberculosis are presumed to be job-related for Firefighters. The PAC was receptive to that request; however, they advised Mr. Hooper that the employee would need to submit two letters in support of the disability (pursuant to the PAC Policies & Procedures Manual). In February, 1992, an informational agenda item was submitted to the Trustees to advise them Mr. Carpentieri would be requesting a change from regular pension to job-connected disability. Mr. Carpentieri has submitted letters from Dr. Marshal DeSantis, dated February 13, 1992, and Dr. Akshay Desai, dated February 10, 1992, in support of his request for a job-connected disability pension. The PAC approved Mr. Carpentieri's request at its meeting of September 16, 1992. Mr. Carpentieri's pension will approximate $24,688 annually. Charts from Finance which take into consideration mortality rates and age reflect that the "present value cost of financing" this pension will be approximately $221,777. Mr. Carpentieri has no dependent children under the age of 18. This situation, while seemingly incidental in terms of cost (the difference between the regular and job-connected disability pension for Mr. Carpentieri is but $1,646 annually), raises a major issue which may have considerable cost impact to the Pension Plan in the future. The issue being whether a Firefighter has to be incapacitated while on active duty to have the "presumption law" apply. The employee in this case had retired from active duty status but remained on the payroll through the use of accrued vacation and sick leave benefits and, during the time of use of the extended benefits, suffered a heart attack. The same question could conceivably be raised for a Firefighter who retires, has his last "active" day of work, uses all extended leave benefits, has a formal retirement date, and thereafter suffers a heart attack. At the September 28, 1992 Trustees' meeting, City staff recommended deferral of this item so a legal opinion could be obtained as to the applicability of the Firefighter line-of-duty injury presumption as it relates to the situation of Mr. Carpentieri. Deborah Crumbley of the law firm of Thompson, Sizemore & Gonzalez has rendered an opinion which relates that the presumption should not be applied in this case. The basis of that opinion is Mr. Carpentieri was not in "active service" and appropriately is classified as a "retired" Firefighter. Mr. Carpentieri had signed a resignation and had exercised an option made available to employees at retirement to utilize vacation leave and one-half of accrued, unused sick leave to extend the date between their last day of actual service and removal from payroll. Alternatively, the employee could have exercised the option to be paid in a lump sum for his accrued vacation leave and one-half of his unused sick leave. Staff recommends this item be remanded to the PAC with a copy of the legal opinion of Deborah Crumbley, Esquire, relating to the applicability of Chapter 175 Presumption to Retired Firefighters. Trustee Deegan moved to remand this item to the Pension Advisory Committee with a copy of the legal opinion. The motion was duly seconded and carried unanimously. b) Shirley Mobley Ms. Mobley, Recreation Leader, was employed on January 9, 1970. She began participating in the Pension Plan on May 29, 1978, when her position was converted to full-time status. She has a back problem which resulted in her application of a job-connected disability pension. Ms. Mobley submitted letters from Dr. Cynthia Huffman (dated 8/3/92), Dr. James Rivenbark (dated 7/15/92) and Dr. David Seales (dated 6/17/92) in support of her request. The letter from Dr. Seales states Ms. Mobley has a "lesion in your lumbosacral spinal region giving you the symptoms in an L5 distribution in both legs ... Limitations on your activity would be to refrain from lifting 10 to 15 pounds. You will probably continue to have a great deal of exacerbation of your pain by your present job in which you push, pull, and lift heavy cleaning equipment". The letter from Dr. Rivenbark states "she indeed did have injury to her back occurring on the job on 9/6/90". The letter from Dr. Huffman states she "sustained a back injury 9/6/90 ... I concur with Dr. Seales that the patient sustained a job injury 9/6/90 that has led to her continued right leg pain and weakness. She should not lift more than 10 or 15 pounds". Ms. Mobley also was sent for an independent medical examination (IME) by the PAC. The IME report from Dr. William Greenberg states " .. I feel this patient does not represent an individual who is totally disabled, and could be handling a sedentary type of position .. I do not feel she should be outside, should not be moving heavy furniture, heavy lifting, limited bending ... This limitation is solely based upon subjective pain complaints and partly related to ... symptoms she dates back to the job related injury two years ago". Ms. Mobley's disability pension was approved by the PAC at its meeting of October 21, 1992. Her pension will approximate $14,382 annually. Charts from Finance which take into consideration mortality rates and age reflect the "present value cost of financing" this pension will be approximately $170,401. Concerns were expressed regarding Ms. Mobley not being totally disabled. A question was raised whether Ms. Mobley could be placed in another job. It was indicated staff has been operating under the belief that this was an option of the employee, not the City. A question was also raised regarding the impact of ADA requiring reasonable accommodation for disabilities would have on disability pensions. Trustee Fitzgerald moved to remand this item to the Pension Advisory Committee. The motion was duly seconded and carried unanimously. c) Caleb Winston Mr. Winston, Maintenance Worker II, was employed on November 23, 1981, as a permanent part-time Custodial Worker. He began participating in the Pension Plan on August 6, 1984, the date of his promotion to full-time status as a Maintenance Worker I. He has three herniated discs which resulted in his application for a job-connected disability pension. Mr. Winston submitted letters from Dr. Joseph M. Sena (dated 6/29/92) and Dr. Rosario Musella (dated 6/15/92 & 5/15/92) in support of his request. The letter form Dr. Sena states Mr. Winston's "herniated disc and unresolved cervical strain is related to his on the job injury which occurred in January, 1991". The letter from dr. Musella states that "because of the long standing nature of this patient's symptoms .. it is my opinion that the patient is mildly partially disabled ... with limitations as to bending, squatting, and lifting weights not greater than 20 pounds". Mr. Winston also was sent for an independent medical examination (IME) by the PAC. The IME report from Dr. Michael Slomka states "I believe that he does have a permanent physical impairment ... He may not be a candidate for doing heavy manual labor but, certainly, he is not totally disabled from doing any type of work, especially when lifting and bending restrictions can be placed upon him". Mr. Winston's disability pension was approved by the PAC at its meeting of October 21, 1992. His pension will approximate $13,801 annually. Charts from Finance which take into consideration mortality rates and age reflect the "present value cost of financing" this pension will be approximately $163,582. Staff recommends this item be remanded to the PAC for a more thorough review of the independent medical examination which indicates Mr. Winston has mild degenerative changes, that part of the findings are due to his age and history of heavy labor, and that his well-developed musculature is surprising for an individual who states he has not been able to exercise normally for the last three years. Casey Carlson, attorney for Mr. Winston, stated Mr. Winston has also had workers compensation claims which have been settled and that the doctors statement say he has a total and permanent disability. He felt that remanding the request to the PAC would merely postpone what is eminent. In response to a question, he indicated the workers compensation claim was settled on May 13, 1992. It was pointed out that in the IME, it is stated Mr. Winston is mildly, partially disabled. In response to a question, it was indicated Mr. Winston had been injured on three different occasions. It was also pointed out that there is a difference between workers compensation and a disability. Mr. Carlson referred to the City's criteria for two letters from doctors regarding a patient being disabled and not able to return to their duties. It was stated this goes back to the question of whether or not an accommodation can be made for this individual in a different position or in the current position which would allow him to continue to work with the partial disability. A question was also raised regarding a publication by the PAC called "How do I retire". It was suggested this publication needed to be rewritten in light of the American with Disabilities Act. It was again pointed out that the doctors statements clearly say that Mr Winston is not totally disabled. Trustee Deegan moved to remand this request to the Pension Advisory Committee. The motion was duly seconded and carried unanimously. ITEM #6 - Request for Pension: The City Manager presented the recommendation of the Pension Advisory Committee that Ray Brock be granted a non-job-connected disability pension under Section(s) 26.34 of the Employees' Pension Plan. Mr. Brock was employed on June 3, 1975, and began participating in the Pension Plan on December 4, 1975. He has a herniated disc which resulted in his application for a non-job-connected disability pension. He has submitted a letter from Dr. Douglas J. Weiland (dated 9/25/92) in support of his request. Although he has applied for non-job-connected disability, there is the possibility his current spine problem is related to an on-the-job injury he incurred several years ago. In view of this fact, Mr. Brock also submitted copies of the medical documentation contained in his Worker's Compensation file. There is a Worker's Compensation claim pending for his current injury, but a final decision will not be rendered until after a hearing to be held in January. If the ruling is in his favor, this pension would be changed to a job-connected disability pension. At its meeting on October 7, 1992, the PAC passed a motion that Mr. Brock be sent for an independent medical examination (IME). This examination has been scheduled for December 23, 1992. Mr. Brock has exhausted all his City benefits and has no income other than food stamps. There is no question that he is disabled from performing his duties as a Maintenance Worker I. This is substantiated by the letter from Dr. Weiland. In light of these extenuating circumstances, the PAC, at its meeting of October 7, 1992, passed a motion granting Ray Brock a non-job-connected disability pension based on Dr. Weiland's letter and the other documentation from his Worker's Compensation file. The PAC requests the Trustees approve this pension request as a non-job-connected disability in an effort to alleviate this employee's financial hardship. Based on an average salary of approximately $18,046 over the past five years and using the formula for computing a non-job-connected disability pension, Mr. Brock's pension will approximate $7,218 annually. Charts from Finance which take into consideration mortality rates and age reflect the "present value cost of financing" this pension will be approximately $57,020.69. Staff recommends adherence to the provisions of the PAC Policies and Procedures Manual. This Manual was adopted by the PAC and the Trustees. Provisions of the Manual relating to the subject area "Processing Disability Pension Requests" (p.6) require that an applicant for disability pension submit "letters from at least two (2) medical doctors (MD or DO) in support of the employee's request". Mr. Brock has not submitted two letters and approval with only the single letter will likely be seen as a precedent leading to other similar requests. Staff recommends the item be denied until the IME is received and reviewed by the PAC and a subsequent recommendation is submitted to the Trustees. H. M. Laursen, Human Resources Director, again indicated that all benefits for this employee have been exhausted and he can not afford the second opinion. He also indicated Mr. Brock has contacted an attorney trying to establish his workers compensation claim. A question was raised regarding how he could afford an attorney if he can not afford a second medical opinion. It was indicated the attorney's fee is based on a share of the proceeds if the workers compensation claim is won. Discussion ensued regarding the need for two letters with it being indicated the PAC was sympathetic to Mr. Brock's situation and staff is as well. Staff has been working with Mr. Brock for a long time, however, due to his limited literacy, it is sometimes difficult to communicate with him. It was stressed again that staff has worked with this employee and has not abandoned him. There is concern regarding setting a precedent in awarding a disability pension without the two letters from doctors required by the Policies and Procedures Manual. A question was raised regarding whether or not there was a fund which could be used to offer some financial assistance to Mr. Brock until such time as this issue can be resolved. A question was raised regarding why it takes so long to get an IME and it was indicated that many doctors are reluctant to perform this service for the City. It was requested for staff to see if they could find a doctor that would perform the IME earlier than the December 23rd date. Trustee Berfield moved to remand this item to the Pension Advisory Committee. The motion was duly seconded and carried unanimously. The City Manager indicated he would try to have a report by Thursday regarding the IME and it was also suggested staff see if specialists used by CIGNA would be willing to perform this service for the City. ITEM #7 - Temporary Amendment to the PAC Policies & Procedures Manual to allow a quorum of the PAC to vote on disability pensions The PAC consists of three employees who are elected by City employees covered by City pension. The PAC Policies & Procedures Manual contains a provision for "Processing Disability Pension Requests" which states all three members of the Committee must be present when the Committee votes on disability pension requests. This Manual was approved by the PAC and the Trustees. The pension ordinance itself does not contain any language relating to a requirement that all PAC members be present when voting on such a request. Due to the illness of the Chairman of the PAC, this policy was temporarily amended for 90 days earlier this year to allow a quorum (2 members) to vote on disability pension requests. Subsequently, an extension of this amendment was requested by the PAC and approved by the Trustees. At its meeting of October 7, 1992, the Committee voted to amend this policy again for an indefinite period of time due to the fact that Mr. Nicholson was expected to resign. Mr. Nicholson did resign effective October 21, 1992. The City Attorney's Office has advised that the action of the PAC in proposing an amendment to the policy is reasonable and appropriate. A vote by the PAC under these conditions will require a unanimous vote of the remaining members (2 members represent a quorum and a split vote would not carry an approval action). Two votes represent the number of votes that would be required by the PAC to approve a disability pension even with all three members present. The City Clerk has scheduled an election for January 26, 1993 to elect a replacement for Mr. Nicholson. Staff recommends the temporary amendment be extended until the election is held. A question was raised regarding why it would take so long to hold the election and it was indicated that due to the standard process, that is the earliest the election could be scheduled. A question was raised regarding whether or not an appointee could serve in the interim and the City Attorney will report. It was stated the PAC has been operating with the temporary amendment to allow two members to vote on the disability pension for approximately six months. Concerns were raised that the extension to the temporary amendment had been given grudgingly and during that six months time, four to five disability pensions had been remanded to the PAC. The Human Resources Director indicated the PAC does require two meetings prior to approving disability pensions and a disability pension can be reviewed without three members but the permanent policy requires three members be present to approve a disability pension. Trustee Berfield moved to continue this item to the next Pension Advisory Committee meeting of November 30, 1992. The motion was duly seconded and carried unanimously. ITEM #8 - Medical Standards for Pension Physical Examinations The City of Clearwater Employees' Pension Plan provides that permanent employees of the City shall participate in the Pension Plan. The Plan also provides that those "...who have failed to pass a comprehensive physical exam and by reason of such fact have not been recommended for acceptance into the plan by the PAC ..." shall be excepted from plan participation. In an effort to enhance the process of identifying and administering a comprehensive physical exam while ensuring compliance with appropriate laws, such as the Americans with Disabilities Act (ADA), staff has worked with medical and legal representatives over the past several years to establish a written manual for the City of Clearwater Medical Standards. Noted in the proposed manual is that the ADA makes it unlawful for a covered employer to use standards, criteria, or methods of admission which are not job-related and consistent with business necessity and have the effect of discriminating on the basis of disability. The ADA also requires that "reasonable accommodation" be made for the known physical or mental limitation of an otherwise qualified individual who is a job applicant unless the employer can demonstrate the accommodation would impose an undue hardship. The medical standards are intended to provide general guidelines to be utilized by examining physicians to assist them in making recommendations as to placement in City of Clearwater employment. Medical standards for hire and for pension will be the same; thus, each applicant approved for hire in a full-time permanent position will be approved for pension. The City is now implementing a process where factors of physical ability, working conditions, and other relevant job facts on an individual position basis are identified and made available to medical examiners. The combination of this individual position assessment and the use of medical standards will enable the examining physicians to assess post-hire candidates to determine if they can perform essential job functions of the position with or without reasonable accommodation. The PAC approved the proposed medical standards at its meeting of September 2, 1992, and recommended adoption by the Pension Trustees. The Human Resources Director indicated that previously 1% of the individuals approved for hire were not approved for the pension, however, there were no standards for this determination. He stated that in light of ADA, the City can not deny an individual participation in the Pension Plan due to the presumption of possible future problems. Essentially, an employee approved for hire will be approved for the pension plan. Concerns were expressed regarding the City not having an option in this regard as, while an individual may be able to perform essential job functions at the time, it was felt an individual should be able to be excluded from the pension plan if they have a known medical problem that would increase the likelihood of them requesting a disability pension in the future. A request was made that the City's labor attorneys be asked to review this question. Trustee Fitzgerald moved to continue this item to the Pension Advisory Committee meeting of November 30, 1992. The motion was duly seconded and carried unanimously. ITEM #9 - Purchase of Pension Service Credit - Lois Maroon Ms. Maroon was employed on September 27, 1978 and resigned on January 4, 1985. Upon resigning, she received a return of her pension contributions. She subsequently withdrew her resignation and was re-employed in her former position on July 15, 1985. During the 191 days between her resignation and re-employment, she turned 45 years of age. On August 13, 1985, she appeared before the PAC to request to rejoin the Pension Plan by returning her pension contributions so she could receive pension service credit for the time of her original employment period. The request was denied due to the age provision in the pension ordinance. Ms. Maroon was not allowed to buy back her pension service time nor re-enter the Pension Plan at that time. Four years later, the age-45 limitation was removed from the pension ordinance and employees were given an option to join the Plan. She rejoined the Plan in November, 1989. On January 8, 1992, Ms. Maroon returned to the PAC to request to buy back her previous pension service credit (for her original employment period of 9/27/78 to 1/4/85). She additionally requested that the Pension Plan grant her credit for the four years between the time of her return to work and her re-entry in the Plan. The PAC passed a motion that Ms. Maroon be permitted to buy back her original pension service credit time by returning the pension contribution amount which she withdrew upon resignation in 1985, plus interest, and that the Plan grant to her pension service credit without contribution by her for the four years and four months she was not covered by the Plan. The amount of pension contribution withdrawn by Ms. Maroon when she resigned in 1985 was $10,090.12 and the interest calculated by the Finance Department was $2,320.04. The Finance Director advised there would be a considerable difference between the cost to the Plan and the amount of pension "contributions" that would have been made to the Plan for the four years and four months Ms. Maroon served before being readmitted to the Plan. The pension "contribution" would have been approximately 20% of her salary for that period of time (an 8% contribution by the employee and approximately 12% by the City). The total "contribution" amount was approximated at $27,717.48. At that time, the Finance Director advised that the actuarial cost to the Plan for granting the four years and four months of pension service credit to Ms. Maroon would be considerable and could only be determined by an actuarial study. The Trustees, at their meeting of March 2, 1992, approved that Ms. Maroon could buy back her original pension service credit time that accrued between her initial employment and her resignation by the return to the Plan of her contributions ($10,090.12) plus the computed interest ($2,320.04). After this Trustee approval of that portion of her request, Ms. Maroon made the payment to the City Pension Fund to gain the pension service credit for her original period of employment. The Trustees rejected granting pension service time without an employee contribution for the four years and four months of time. Ms. Maroon subsequently employed an attorney and actuary to further pursue her desire to be credited with the four years and four months of time between her re-employment and her re-entry into the Pension Plan in November, 1989. A presentation was made to the PAC at their meeting of October 21, 1992, with the employee requesting to be credited the above-referenced time without employee contribution. This presentation included a report from Eugene H. Frost, Enrolled Actuary with Dun & Bradstreet Pension Services. Upon discussion as to whether the City should have an actuarial study performed on the cost of the employee's request, the Finance Director indicated that the actuary's report submitted by the employee was reasonable. It was the position of the PAC that Ms. Maroon be allowed to "buy" the requested four years and four months of pension service time by paying to the Pension Fund the amount of monies, without interest, that she would have paid into the Plan had she been covered by it at the time and that the Pension Fund absorb the employer cost. It was further the position of the PAC that Ms. Maroon be granted a reasonable period of time in which to make this payment through payroll deduction. This decision was predicated upon the efforts made by Ms. Maroon upon being re-employed to rejoin the Plan and the circumstances which precluded that occurrence at the time. After the PAC's recommendation, staff contacted the City's legal counsel as to whether approval of this action would impact the current suit by AARP against the Pension Plan. Counsel related that to allow Ms. Maroon to buy back pension service credit for a time when she was not eligible to be in the Plan might adversely impact the position of the City in the suit. Based on this opinion, staff recommends the PAC's action be deferred for further review as to whether an error occurred in not allowing Ms. Maroon to rejoin the Pension Plan when she was re-employed (and, if so, how to correct that error) or, if no error occurred, the deferral be made until such time as the Pension suit is concluded. The Human Resources Director reviewed the history of Ms. Maroon's case and reiterated that it was the City's labor attorney's opinion that to allow her to buy back the credit would negatively impact the pending AARP suit regarding the age 45 limitation. Nancy Paikoff, attorney for Ms. Maroon, indicated this issue is different from the lawsuit. She also reported the Pension Handbook now covers this circumstance and would allow this buy back of credit. She did not feel Ms. Maroon should have to wait for a decision on this issue. In response to a question, it was indicated Ms. Maroon is currently in the Pension Plan and the question is regarding the middle four year period in which she was not allowed to re-enter the plan when she was re-employed. It was indicated staff's recommendation is that the issue be remanded to PAC for them to consider whether or not an error was made in not allowing Ms. Maroon into the plan when she was rehired. Trustee Regulski moved to remand this item to the Pension Advisory Committee to see if an error was made in not allowing Ms. Maroon to re-enter the Pension Plan when she was rehired. The motion was duly seconded and carried unanimously. ITEM #10 - Other Business: None. ITEM #11 - Adjournment: The meeting adjourned at 11:45 a.m.