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04/09/1998 PENSION ADVISORY COMMITTEE MEETING CITY OF CLEARWATER April 9, 1998 Present: Rita Garvey Chair/Mayor J. B. Johnson Vice Chair/Commissioner Robert Clark Committee Member/Commissioner Pat Greer Committee Member Pat Shepler Committee Member John Scacca Committee Member Dick Fitzgerald Committee Member - arrived 9:06 a.m. (following vote to reappoint) Leslie Dougall-Sides Assistant City Attorney Steve Rosenthal Interim Human Resources Director Debbie Ford Human Resources Technician Patricia O. Sullivan Board Reporter The Chair called the meeting to order at 9:00 a.m. at City Hall. To provide continuity for research, items are in agenda order although not necessarily discussed in that order. ITEM #2 - Approval of Minutes Member Johnson moved to approve the minutes of the regular meeting of March 12, 1998, as recorded and submitted in written summation to each board member. The motion was duly seconded and carried unanimously. ITEM #3 - Employees to be Heard - None. ITEM #4 - Action Items a) Review and Action on Employee Requests for Years of Service Pension 1) William H. Zellner - Solid Waste Supervisor I, Solid Waste Department 2) Jasper W. Campbell, Jr. - Firefighter, Fire Department - hazardous duty provision 3) Richard J. Jones - Public Service Supervisor, I, Public Works Department 4) Calvin Mitchum - Public Services Technician II, Public Works Department Member Clark moved to approve Years of Service Pensions for William H. Zellner, Jasper W. Campbell, Jr., Richard J. Jones, and Calvin Mitchum. The motion was duly seconded and carried unanimously. b) Approval of New Hires as Pension Plan Members Member Greer moved to accept the following employees into membership in the Pension Plan: Date of Pension Employment Elig. Date. Catherine Ippolito, Staff Assistant I Clearwater Gas System 03/02/98 03/02/98 Gary Sheftel, Accounting Clerk Clearwater Gas System 03/02/98 03/02/98 Karma Killian, Environ. Spec. Supv. Public Works Department 03/02/98 03/02/98 Laura D’Amico, Accountant Clearwater Gas System 03/25/98 03/25/98 The motion was duly seconded and carried unanimously. ITEM #5 - Pending/New Business a) Appointment of Seventh Member After the March 12, 1998, meeting, a memorandum was issue to committee members indicating Member Fitzgerald’s term expired on March 21, 1998. As the City Commission will consider appointments to the Pension Advisory Committee (PAC) at their next meeting, it was suggested it may be more appropriate to consider this issue on May 14, 1998. Consensus was to appoint the seventh member today. It was suggested this position’s term be extended slightly so future “seventh member” appointments are made after the City Commission considers their representation. Member Johnson moved to reappoint Dick Fitzgerald. The motion was duly seconded and carried unanimously. b) Vesting Policy Human Resources Technician Debbie Ford reviewed the vesting policy and procedure drafted by former Human Resources Director Mike Laursen in September 1997. The drafted policy states Pension Plan participants, with 10 or more years of continuous Pension service credit who by Plan provisions are vested, shall have 60 days from separation to submit either form: 1) Application for Vested Rights Pension or 2) Request for Refund of Employee’s Pension Contributions. If no form is submitted, the Payroll Department shall be authorized to process a Pension refund payment to the former participant. Employees who separate from the City with less than 10 years of service, will be refunded their Pension contributions automatically if the Payroll Division does not receive a refund request within 60 days of their departure. Ms. Ford stated the City currently has no vehicle to refund Pension contributions. Those who terminated after the January 1, 1996, change to the Pension Plan, will receive 5% simple interest on their total contribution. Prior to 1996, the Plan had no provision to pay interest. Staff recommends approval of a procedure whereby the Pension Fund refunds participant contributions automatically if the Payroll Division does not receive, within 60 days of separation, an Application for Vested Rights Pension or Pension Refund Request from participants who qualify for benefits. In response to a question, Assistant City Attorney Leslie Dougall-Sides reviewed the provision to pay interest on refunds included in the new Pension Plan, effective January 1, 1996, which specifies the payment of 5% simple interest on the total refund, which includes contributions made prior to 1996. Participants who recover their Pension contributions do not qualify for retirement benefits. Member Greer moved to recommend the Pension Trustees approve the proposed Vesting Policy effective May 1 1998, whereby Pension Plan participants, with 10 or more years of continuous Pension service credit who by Plan provisions are vested, shall have 60 days from separation to submit either form: 1) Application for Vested Rights Pension or 2) Request for Refund of Employee’s Pension Contributions. If no form is submitted, the Payroll Department shall be authorized to process a Pension refund payment to the former participant. Employees, who separate from the City with less than 10 years of service, will be refunded their Pension contributions automatically if the Payroll Division does not receive a refund request within 60 days of their departure. The motion was duly seconded and carried unanimously. ITEM #6 - Director's Reports Thomas Pearson III In her April 7, 1998, memorandum to the PAC, Ms. Dougall-Sides referred to City retiree Thomas Pearson’s March 16, 1998, letter regarding a worker’s compensation offset Risk Management has scheduled to implement beginning April 1998. Due to the payment of wage loss benefits, Mr. Pearson’s total payments of worker’s compensation plus pension benefits exceeded the amount allowed under worker’s compensation law, which is 100% of the average monthly wage. To recoup the overpayment of $26,706.87, the City is crediting 18.89 months of Mr. Pearson’s benefits to the City. In his letter, Mr. Pearson states the offset will leave his family without an income and argues a portion of the monthly benefit in question should not be withheld since it represents an increased benefit based on his dependent child. He requested the PAC rule on the amount of his pension benefit and if the dependent child benefit was due his daughter. Ms. Dougall-Sides had reviewed the cases cited by Mr. Pearson, case law, and the pension ordinance under which Mr. Pearson received benefits, and concluded the ordinance provides for an increase in the existing benefit amount, as opposed to a separate benefit for dependent children Past practice has been to issue only one monthly check made payable to the pensioner. Case law does not suggest differently. Ms. Dougall-Sides concluded the City is legally entitled to offset the entire monthly check amount payable to Mr. Pearson. Ms. Dougall Sides said the question regarding child benefits was not posed to the courts. The Barragan vs. City of Miami case ruled worker’s compensation and pension benefits cannot equal more than 100% of the average monthly wage. It was suggested the PAC should have its own attorney to advise the committee regarding conflicts between employees and the Plan. It was felt the issue should be continued. Ms. Dougall Sides said the City had contacted Mr. Pearson regarding this issue on January 17, 1997. He did not contact the PAC until March 1998. It was noted the dependent child had not received the entitlement directly. Ms. Dougall-Sides said if the intent for a separate benefit had existed in the Pension Plan, a mechanism would have been established to separate that benefit. In response to a question, Ms. Ford said Mr. Pearson had indicated previously he would return these funds to the City once he received his check for approximately $144,000 which covered worker’s compensation he was due. Member Johnson moved to accept staff recommendation to recoup the overpayment of $26,706.87 to Thomas Pearson III by crediting 18.89 months of Mr. Pearson’s Pension benefits to the City. The motion was duly seconded and carried unanimously. Placement of disabled workers Interim Human Resources Director Steve Rosenthal reported 2 disabled employees have been placed in City positions. Staff is working with a third employee. He noted some internal resistance by departments due to higher salary costs and concerns the subject employees may not perform at full potential. Staff is drafting a policy with incentives for departments to accept these workers and integrate them into new jobs. Placing disabled workers in available positions saves the Pension Plan substantial funds. The next PAC meeting is scheduled for May 14, 1998. ITEM #7 - Adjournment The meeting adjourned at 9:40 a.m.