HomeMy WebLinkAboutO-2017-025 Fire Pension Mutual Consent Agreement ORDINANCE NO. 2017-025
AN ORDINANCE OF THE CITY COMMISSION OF THE CITY OF DANIA
BEACH, FLORIDA, PERTAINING TO THE POLICE AND FIREFIGHTERS
RETIREMENT SYSTEM; AMENDING ARTICLE IV, ENTITLED
"POLICEMEN AND FIREMEN", OF CHAPTER 18, ENTITLED "PENSIONS
AND RETIREMENT", OF THE CITY CODE OF ORDINANCES, TO
IMPLEMENT THE MUTUAL CONSENT AGREEMENT BETWEEN THE
CITY AND ACTIVE FIREFIGHTER MEMBERS CONCERNING THE USE
OF PREMIUM TAX REVENUES RECEIVED PURSUANT TO CHAPTER
175, FLORIDA STATUTES; AMENDING SECTION 18-42, ENTITLED
"BENEFIT AMOUNTS AND ELIGIBILITY", CREATING A SHARE PLAN
FOR FIREFIGHTERS; AMENDING SECTION 18-44, ENTITLED
"CONTRIBUTIONS", TO AMEND PROVISIONS REGARDING THE USE OF
PREMIUM TAX REVENUES RECEIVED PURSUANT TO CHAPTER 175,
FLORIDA STATUTES; PROVIDING FOR CONFLICTS; PROVIDING FOR
SEVERABILITY; FURTHER, PROVIDING FOR AN EFFECTIVE DATE.
BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY OF DANIA
BEACH,FLORIDA:
Section 1. That Article IV, entitled "Policemen and Firemen" of Chapter 18, entitled
"Pensions and Retirement", and specifically Section 18-42, `Benefit Amounts and Eligibility" of
the City Code of Ordinances, is amended to read as follows:
Sec. 18-42. - Benefit amounts and eligibility.
(10) FUTURE BENEFIT RESERVE AND HEALTH INSURANCE SUBSIDY. All
firefighter retirees and firefighter survivors receiving benefits shall be eligible for an
annual health insurance subsidy computed as follows. Seventy-five (75) percent of the
prior year's actuarial gain allocable to firefighters, firefighter retirees and firefighter
survivors remaining after the application of section 18-42(6)(a) plus seventy-five (75)
percent of any increase in the percentage of covered payroll received by the city pursuant
to F.S. § 175.121 over the amount received by the city in 1997 shall be defined as the
"available actuarial gain." The available actuarial gain for a fiscal year shall be calculated
by the following June 1 and shall be paid in the following October to the City of Dania
Beach to be utilized per capita to subsidize up to one (1) year's payments for retiree
health insurance due from each firefighter retiree and firefighter survivor who receives
benefits from the system, which payments shall be one-third (1/3) of the premium cost
for such insurance. Should the available actuarial gain not be fully expended by this
health insurance subsidy, then the balance of actuarial gain shall be paid to the City of
Dania Beach to subsidize the City of Dania Beach's cost of providing one (1) year of
retiree health insurance to such firefighter retirees and survivors, which cost shall be two-
thirds (2/3) of the premium cost for such insurance. Premium costs shall be determined in
accordance with F.S. § 112.0801. Should the available actuarial gain not be fully
expended by this subsidy to the city, then the balance, together with any unexpended
available actuarial gain from prior years, shall be accrued by the retirement system in a
"future benefit reserve account" which shall be used only to pay the full cost of additional
future benefits to the system's firefighter retirees and survivors, the determination and
payment of which are hereby delegated by the city commission to the board of trustees in
its sole discretion. DROP participants shall receive credit for any such future benefits
paid while participating in the DROP but not for the health insurance subsidy.
Notwithstanding any other provision of this subsection (10), and pursuant to mutual
agreement of the City and active firefighter members, effective [effective date of
ordinance] the first $124,055.00 in premium tax revenues received each year pursuant to
Chapter 175, Florida Statutes, shall be used to offset the City's annual pension
contribution, and annual premium tax revenues received in excess of $124,055.00 shall
be used to fund the health insurance subsidy and future benefit reserve as provided in this
subsection(10).
,(12) FIREFIGHTER SHARE PLAN. In accordance with F.S. § 175.351(6), a defined
contribution plan component ("share plan") is established as part of the System, to be
funded exclusively with Ch. 175 premium tax revenues. However, the City and active
firefighter members have mutually agreed that no Chapter 175 premium tax revenues will
be allocated to the share plan at this time. The share plan will not be activated until
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Chapter 175 premium tax revenues are allocated to the share plan by mutual agreement of
the parties.
Section 2. That Article IV, entitled "Policemen and Firemen" of Chapter 18, entitled
"Pensions and Retirement", and specifically Section 18-42, `Benefit Amounts and Eligibility" of
the City Code of Ordinances, is amended to read as follows:
(3) EMPLOYER CONTRIBUTIONS. So long as this system is in effect, the city, on
behalf of members who are city employees, and the sheriff, on behalf of members who
are sheriffs employees, shall make an annual contribution, payable at least quarterly, to
the trust fund in an amount equal to the difference in each year as between the total of
aggregate member contributions for the year plus state contributions for the year and the
total cost for the year as shown by the most recent actuarial valuation and report for the
system. The total costs for any year shall be defined as the total or normal cost plus the
additional amount sufficient to amortize the unfunded accrued past service liability over a
forty-year period commencing with the fiscal year in which the effective date of this
system occurs and over a thirty-year period for all improvements to the system thereafter.
The amount of the sheriffs contribution shall be subject to the limitations of subsection
(5) of this section. The employee contributions for police and firefighter members shall
be computed and accounted for separately for each group of members. Notwithstanding
any other provision of this subsection (3), and pursuant to mutual agreement of the CitX
and active firefighter members, effective [effective date of ordinance] the first
$124,055.00 in premium tax revenues received each year pursuant to Chapter 175,
Florida Statutes, shall be used to offset the City's annual pension contribution, and annual
premium tax revenues received in excess of $124,055.00 shall be used to fund the health
insurance subsidy and future benefit reserve as provided in section 18-42(10).
Section 3. That if any section, clause, sentence or phrase of this Ordinance is for any
reason held invalid or unconstitutional by a court of competent jurisdiction, the holding shall not
affect the validity of the remaining portions of this Ordinance.
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Section 4. That all ordinances or parts of ordinances and all resolutions or parts of
resolutions in conflict with this Ordinance, are repealed to the extent of such conflict.
Section 5. That this Ordinance shall take effect on immediately following City
Commission adoption.
PASSED on first reading on July 25, 2017.
PASSED AND ADOPTED on second reading on August 22, 2017.
ATTEST:
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LOUISE STILSON, CMC - TAMARA JA S
CITY CLERK MAYOR
APPROVED AS TO ORM
AND CORREC E
THOM S J N RO
CITY ATTORNEY
4 ORDINANCE 42017-025
iQGRSRetirement P:954.527.1616 ' F:954.525.0083 www.grsconsulting.com
Consulting
July 7,2017
Ms.Cathy David
Administrator
Dania Beach Police& Firefighters'
Retirement System
101 S.W. 1st Street,#111
Dania Beach, Florida 33004
Re: Dania Beach Police and Firefighters Retirement System
Dear Cathy:
As requested,we have reviewed the proposed ordinance that would amend the Dania Beach Police and
Firefighters Retirement System as follows:
■ Pursuant to mutual consent with the City and active Firefighters, annual Chapter 175 revenue to
be used to fund the annual cost of the Firefighters' Plan remains unchanged at$125,055, and
annual Chapter 175 revenue in excess of this amount will be used to fund the health insurance
subsidy reserve in accordance with Section 18-42(10)of the ordinance.
■ Establishes a Share Plan as part of the System pursuant to F.S.§Chapter 175.351(6). The City
and active Firefighters have mutually consented to not fund the Share Plan until such time that
the City and active Firefighters mutually consent to allocate Chapter 175 revenue to the Share
Plan.
Since the above proposed amendment does not change how the Chapter 175 money is reflected in our
annual valuation, it is our opinion that this amendment will have no actuarial impact on the cost of the
Retirement System. Because the changes will not have an actuarial impact, it is our opinion that a formal
Actuarial Impact Statement is not required. However,a copy of this letter and proposed ordinance should
be sent to the Municipal Police Officers and Firefighters' Retirement Trust Funds Office and to the
Bureau of Local Retirement Systems.
Melissa R. Moskovitz is a member of the American Academy of Actuaries and meets the Qualification
Standards of the American Academy of Actuaries to render the actuarial opinions contained herein. The
undersigned actuary is independent of the plan sponsor.
We welcome your questions and comments.
Sincerely yours,
Melissa R. Moskovitz, EA, MAAA, FCA
Consultant&Actuary
This communication shall not be construed to provide tax advice, legal advice or investment advice.
One • Boulevard