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02/08/2001PENSION ADVISORY COMMITTEE MEETING CITY OF CLEARWATER February 8, 2001 Present: Brian Aungst Chair/Mayor J. B. Johnson Vice Chair/Commissioner Dick Fitzgerald Committee Member Pat Greer Committee Member Ed Hart Committee Member/Commissioner - arrived 9:07 a.m. John Lee Committee Member John Schmalzbauer Committee Member Also Present: Lee Dehner Pension Advisory Committee Attorney Paul O’Rourke Human Resources Administrator Margie Simmons Financial Services Administrator Brenda Moses Board Reporter The Chair called the meeting to order at 9:03 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 of January 11, 2001 Member Johnson moved to approve the minutes of the regular meeting of January 11, 2001, as 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 Review and Action on Employee Requests for Years of Service Pensions Howard Huff, Public Works Member Fitzgerald moved to approve the request by Howard Huff for a Years of Service Pension. The motion was duly seconded and carried unanimously. Review and Action on Employee Requests to Vest Pensions Deborah Earney, Public Works Member Johnson moved to approve the request by Deborah Earney to vest her pension. The motion was duly seconded and carried unanimously. Approval of New Hires as Plan Members As of February 1, 2001, the City had 1664.77 FTEs out of 1799.3 budgeted positions (including the City Commission). In response to a question, Human Resources Administrator Paul O’Rourke said the data provided indicates incremental growth. Staff reports positions approved and budgeted for the fiscal year. Any changes are noted monthly. Member Fitzgerald moved to accept the following employees into membership in the Pension Plan: Date of Pension Employment Elig. Date Charles Ashe, Police Cadet Police 1/8/01 1/8/01 Adam Leach, Maintenance Workers I Solid Waste 8/1/00 1/15/01* Julia Tynefield, Cust. Service Rep. Cust. Service 1/16/01 1/16/01 Douglas Lovejoy, Welder Solid Waste 1/16/01 1/16/01 Philip Charles, Public Service Tech I. Public Services 1/16/01 1/16/01 Maria Quioco, Utilities Chemist Public Utilities 12/2/00 12/2/00 * Originally employed as temporary; changed to full-time and pension eligible as of 1/15/01. The motion was duly seconded and carried unanimously. ITEM #5 – Pending/New Business James Kleinsorge – Request to Buy Back Pension Service Credit Pension Advisory Committee Attorney Lee Dehner said James Kleinsorge has requested to buy back pension service credit. He was employed in 1992, left the City’s employment in February 1994, returned to the City in July 1994, at which time he withdrew his resignation. Upon re-employment as a Police Officer, Mr. Kleinsorge was provided with the rules for buy-back provisions but did not comply with them. In 1996, Mr. Kleinsorge applied for buy back pension service credit. Andra Dreyfus, representative, said her records indicate Mr. Kleinsorge’s hire date is December 30, 1991. He terminated his employment with the City on February 11, 1994, and withdrew his resignation within 6 months. He was reinstated as a Police Officer with all seniority but was unable to buy back his pension service credit at that time. On May 5, 1999, Ms. Dreyfus said Mr. Kleinsorge made application via written correspondence from her to buy back his pension service credit, but due to pending litigation regarding pension buy backs, the matter was tabled. Ms. Dreyfus said Mr. Kleinsorge is now prepared to buy back his pension service credit with 5% interest. It was remarked that the other employees affected by pension service credit buy backs were ADA (Americans with Disabilities Act) and age discrimination cases. It was commented that no correspondence is in Mr. Kleinsorge’s personnel file indicating he filed the necessary papers to buy back his pension service credit. Ms. Dreyfus said she has a letter from former Human Resources Director Michael Laursen dated July 7, 1994, regarding approval of Mr. Kleinsorge’s reinstatement as a Police Officer. It was noted that Mr. Kleinsorge was sent a letter July 20, 1994, with attached policy regarding his obligations for buying back his pension service credit. There is no record of Mr. Kleinsorge applying for or complying with those provisions. After conferring with her client, Ms. Dreyfus said Mr. Kleinsorge does not recall receiving attachments to the letter regarding the Pension Advisory Committee and Pension Trustees buy back policy. She said he has a different version of the July 20, 1994, letter and has no attachments. She said in 1996, Mr. Kleinsorge received a telephone call from the City asking if he was interested in buying back his pension service credit. He was given a large actuarial amount, which he was unable to pay. She said it was not until the change in the system occurred, that Mr. Kleinsorge was able to consider moving forward to buy back his pension service credit. Mr. O’Rourke said in 1996, action was taken by the Human Resources Department as a result of an ordinance change. At that time, approximately 30 employees who had experienced a break in service responded to correspondence soliciting their interest in buying back pension service credit. Actuarial amounts were calculated for those employees who responded. Mr. O’Rourke said the ordinance required Mr. Kleinsorge to apply for benefits at the time he was reinstated in 1994. In response to a question, he said two other employees were granted relief and permitted to buy back their pensions at specific amounts, however their situations were different than Mr. Kleinsorge’s. As Mr. Kleinsorge never applied for buy back pension service credit, no actuarial calculations were made. Ms. Dreyfus said in 1996, Mr. Kleinsorge was one of the individuals contacted by the City to solicit his interest in buying back his pension service credit. At that time, Mr. Kleinsorge said he could not afford to buy back credit. In June of 1999, the City took further action to determine those employees that were affected. Mr. Dehner said Mr. Kleinsorge was reinstated in July 1994, effective August 1994. In the July 20, 1994, letter from Mr. Laursen to Mr. Kleinsorge, the buy back pension service credit policy was attached, requiring Mr. Kleinsorge to apply for buy back of service. Under that buy back provision, Mr. Kleinsorge was required to take action to apply for service credit as well as pay the actuarial amount with interest, which did not occur. In 1996, some interested employees responded to a request for interest to buy back pension service credit. That action was pursuant to the adoption of the January 1, 1996, buy back provision of the plan which outlined specific requirements under which Mr. Kleinsorge also was not eligible. Mr. Kleinsorge did not comply with the provisions in effect in 1994 or in 1996. In response to a question, Mr. Dehner said he did not know why the City solicited Mr. Kleinsorge’s interest in buying back pension service credit, as he was not eligible. It was remarked that a blanket solicitation was made to employees with service breaks. It was commented that no documentation exists regarding applications to buy back pension service credit by Mr. Kleinsorge. It was remarked that in the past, the City has made large actuarial calculation mistakes that may have prevented employees from buying back their pension service credits. Ms. Dreyfus said Mr. Kleinsorge had returned to Florida at the time the letter from Mr. Laursen was mailed to Arkansas. In response to a question, Ms. Dreyfus said she did not know if Mr. Kleinsorge’s mail had been forwarded. She said this matter has been pending with the City for two years and Mr. Kleinsorge is prepared to pay the funds necessary to buy back his pension service credit. It was remarked that Mr. Kleinsorge has had every opportunity to make application to buy back his pension service credit. Member Johnson moved to deny the request by James Kleinsorge to buy back his pension service credit. The motion was duly seconded. Upon the vote being taken, Chair Aungst and Members Johnson, Fitzgerald, Greer, and Lee voted “aye”; Member Schmalzbauer voted “nay”. Motion carried. ITEM #6 – Director’s Reports Mr. O’Rourke said after this meeting there will be a meeting to discuss aspects of the retirement plan with union representatives. The meeting is open to the public, however, only one committee member can attend. Member Lee said he would attend. ITEM #7 – Committee Members to be Heard Member Schmalzbauer requested staff update the committee on the status of policy that would allow an employee to choose his pension plan benefit choice before death. Mr. O’Rourke said staff is working with Mr. Dehner and the Legal Department to amend the pension policy to allow an option once an employee reaches retirement to provide for more than one option. ITEM #8 – Adjournment The meeting adjourned at 9:41 a.m.