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05/15/1995 TRUSTEES OF THE EMPLOYEES' PENSION FUND MEETING May 15, 1995 The City Commission, meeting as the Board of Trustees of the Employees Pension Fund, met in regular session at City Hall, Monday, May 15, 1995 at 10:58 A.M., with the following members present: Rita Garvey Chairperson Fred Thomas Trustee J. B. Johnson Trustee Absent: Sue Berfield Trustee Resigned effective today: Michael R. Dallmann Trustee Also Present were: Elizabeth M. Deptula City Manager Pamela K. Akin City Attorney Cynthia E. Goudeau City Clerk ITEM #2 - Minutes: Trustee Johnson moved to approve the minutes of the May 1, 1995, 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) Lyle Adams b) Carolyn Sanders c) Daniel Carpenter d) Peter D. Bach e) Louis Farquhar f) Jeffrey Daines g) John Tierney Trustee Thomas 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 Forrest Saylor, Jr. be granted a regular pension under Section 2.396 of the Employees' Pension Plan. Forrest Saylor, Jr. was employed on November 22, 1963, and began participating in the Pension Plan on that date. His retirement will be effective on May 13, 1995, at the beginning of the day. Mr. Saylor's pension was approved by the PAC at its meeting of April 25, 1995. Based on an average salary of approximately $27,546 over the past five years and the formula for computing regular pensions, this pension will approximate $21,486 annually. Charts from Finance which take into consideration mortality rates and age reflect the "present value cost of financing" this pension will be approximately $266,438. The estimated pension cost (cash payout over the life of the pensioner and his spouse) is $580,110. Trustee Thomas moved to accept the recommendation of the Pension Advisory Committee. The motion was duly seconded and carried unanimously. ITEM #5 - Other Business: a) Establish Budget for writing Pension Plan changes as bargained with unions The City and the four employee unions have been meeting over recent months to negotiate collective bargaining agreements. A major issue in the bargaining process has been proposed revisions to the Employees' Pension Plan. Tentative agreement was reached on the collective bargaining agreements with each respective union on Friday, April 28, 1995. A component of the tentative agreement in each case includes a number of proposed changes to the Employees' Pension Plan. Those changes were agreed to in concept with the actual language of the Plan to be developed, subsequently approved by the City Commission, and then to be submitted for referendum to the voters. Several specific steps will be required to bring the conceptual changes to final approved status. First, the Plan has to be revised to incorporate the proposed conceptual changes. It is proposed that a pension attorney be engaged to develop the language for the initial revisions. The second step would involve review of the proposed revisions by the City's labor attorney which would also include a review by a separate pension and tax expert (attorney). An additional step, as required by the State of Florida, is that an actuarial review be done to project the funding impact and actuarial soundness. A final step will involve the administration of a referendum so that citizens can vote whether to approve or disapprove the proposed Plan. Revisions in the Employees' Pension Plan are based on City/Union consensual agreement for changes to the Plan and to take the revised Plan to referendum. These revisions have been agreed to in concept and specific language will be written. Attached to these minutes as Exhibit A is a list of what the revisions include. The Employees' Pension Plan does allow for the Plan to fund certain costs associated with the administration of the Plan. A budget is required for the services outlined and the projected budget request for this purpose if $40,000 ($20,000 for the pension attorney to write the plan consistent with agreed upon changes; $10,000 for review and analysis by labor and tax attorneys; and $10,000 for actuarial studies). Kathy Rice, Deputy City Manager, reviewed the changes to be made to the plan. It is hoped the plan can be rewritten by July 1, reviewed by the actuaries by August 1, and a referendum held in October to approve the changes. Trustee Thomas questioned, in connection with item #5b, why the plan should pay the unions' attorney. Ms. Rice indicated Mr. Dehner had brought "a lot to the Table". Chairperson Garvey pointed out the plan paid the city's attorney for negotiation efforts. Trustee Thomas questioned if the city's attorney was paid by the pension fund or the general fund. Ms. Rice indicated if the work dealt with the pension plan, the pension fund paid the cost, for other issues, the general fund paid. Trustee Thomas requested information regarding how much the city's attorney was paid from the pension plan. Trustee Thomas questioned the $40,000 and what hourly rate that represented. Ms. Rice pointed out Mr. Dehner's portion of the $40,000 would be a maximum of $20,000. She stated as the agreement has not been finalized, she did not have an hourly rate. Trustee Thomas questioned if the City Attorney was comfortable with this proposal. She indicated she was. Ms. Rice indicated she will bring back the details in memorandum form. Trustee Johnson pointed out the cost could be less than estimated. Trustee Thomas moved to authorize a budget not to exceed $40,000 to provide funding for rewriting the Employees' Pension Plan, having it reviewed by labor and tax attorneys, and conducting an actuarial review of the Plan to bring a proposed plan to the point of administering a referendum on the changes. The motion was duly seconded and carried unanimously. b) Request funds to pay for prior services of Union Pension Attorney Lee Dehner Trustee Thomas requested this item be continued until information regarding how much the City's attorney had been paid through the pension fund is provided. Trustee Thomas moved to continue this item to the May 30, 1995 Pension Trustees meeting. The motion was duly seconded and carried unanimously. ITEM #6 - Adjournment: The meeting adjourned at 11:09 a.m.