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HomeMy WebLinkAboutM-85-0107op e /o. &Lybrand certified public accountants Mr. Randolph B. Rosencrantz City Manager City of Miami 3500 Pan American Drive Miami, Florida Dear Mr. Rosencrantz : 1 S. E.3rd Avenue (AmeriFirst Building) Suite 2900 Miami, Florida 33131 telephone (305) 358-6363 in pnncipel areas of the world January 24, 1985 In accordance with your request, we have performed certain procedures with respect to the termination benefits to be paid to Mr. Howard V. Gary, former City Manager, as of December 7, 1984. BACKGROUND On June 249 1984, the City Commission passed and adopted Resolution #84-748 - "A Resolution Setting Forth the Compensation Benefits and Emoluments to be Received by Howard V. Gary as City Manager of the City of Miami, Florida" (Resolution). As stated, the purpose of the Resolution was "...to outline specifically the exact benefits and emoluments to be afforded to the City Manager". The Resolution also stated that "...it is the desire of the City Commission that this resolution be substantially consistent with the compensation, benefits, and emoluments articulated in Resolution #81-514, entitled "A Resolution Expressing the Agreement of the City Commission to Engage the Services of Howard V. Gary as City Manager of the City of Miami, Florida, in Accordance with the Terms and Conditions Set Forth in the Attached Compensation iN► OT 101V 85-107� P e JL, r6a /" Mr. Randolph B. Rosencrantz City Manager Page 2 Agreement; Further Providing for the Acceptance, Approval and Agreement of Howard V. Gary to Perform the Duties Required of the City Manager, to Be Evidenced by Mr. Gary's Execution of the Said Compensation Agreement; Further Providing that the Terms and Conditions of the Said Compensation Agreement Shall Be Retroactive to April 16, 1981", passed and adopted by the City Commission on June 8, 1981. - We reviewed the contents of Resolution #84-748 and deter- mined that benefit areas in which our procedures were required are the following: ' Section 10 - Severance Pay • Section 2 - Vacation and Sick Pay • Section 5 - Pension Trust Fund • Section 6 - Life Insurance We recognize that the Compensation Agreement incorporated into Resolution #81-514 was subsequently forfeited by the City Manager,, and has been used by us as a reference only, recognizing that it is no longer in force. 85-10 ._. i- - t --- - ---- r Ewa::,;.; ;_,�•- Oak c Mr. Randolph B. Rosencrantz - City Manager } Page 3 Pursuant to Resolution84-748, the Finance Department of the City calculated the termination benefits to be made to Mr. nary as follows: Vacation Time Hours Dollars r� • Accumulated time per payroll records 802.00 $41,203 • 1984 accrued vacation based upon 11 full months through December 6, 1984 220.00 11,303 r _ 1,022.00 52,506 � Ill Time • Accumulated time per payroll records 337 hours x 1/4 84.25 4028 r Severance Pay Per Resolution #84-748 520.00 26,715 Amount due before AT f FICA and Federal 7 income taxes 1 626.2 83.549 85-107._ Mr. Randolph B. Rosencrantz City Manager Page 4 Our procedures, findings and recommendations, with respect to the Finance Department's calculations and the other benefit areas previously mentioned, are described in the sections that follow in this report. The scope of our engagement did not include procedures of an investigatory nature outside the City environment. SEVERANCE PAY Section 10 of the Resolution states the following: "In the event Howard V. Gary is terminated by the City Commission, the City shall pay him the severance benefits of 8 months aggregate salary in addition to any other benefits due him". Based upon Mr. Gary's annual base salary of $106,861, as per Section 9 of the Resolution, we concur with the calculation of severance pay prepared by the Finance Department of $26,715, s+* which should be paid to Mr. Gary, less appropriate FICA and Federal income taxes. 85-10'7- A r P r k t,M Mr. Randolph B. Rosencrantz City Manager Page 5 VACATION AND SICK PAY Section 2 of the Resolution states the following with respect to vacation and sick pay benefits: "Howard V. Gary is hereby entitled to a vacation of 30 working days per year. In addition, he is hereby entitled to 12 days annual sick leave and personal holiday leave. Provisions governing accrual and payment of the benefits in this section shall be the same as accorded City Department Heads." Policies Regarding Terminal Pay Procedures for Unusual Time The City's policies with respect to payment of vacation and sick pay upon termination, effective at the time of Mr. Gary's termination, and applicable to his position, are as follows: • "At such time that a policy is promulgated on how vacation carryover will be handled for managerial/ confidential employees, the old method of requesting carryover above the new 100 hour carryover amount will remain in effect. No requests however, for carryover above the 100 hours by managerial/confidential em- ployees will be accepted until after December 31, 1984." (Memo dated November 13, 1984 to All Depart- ment Divisions from Dean R. Mielke, Labor Relations Officer.) 85"-:107 . 4OCZS. Mr. Randolph B. Rosencrantz City Manager Page 6 • Employees terminating from the City will be paid for all unused vacation time. (City Personnel Policy Manual, Section 21.8). • Employees with seven or more years of service who terminate employment with the City under honorable conditions shall receive cash payment equal to one- fourth of their unused accumulated sick leave. (City Personnel Policy Manual, Section 21.81 as amended by Section 16 of AFSCME labor contract effective October 1, 1984.) Based upon the above stated policies, Mr. Gary would be entitled to payment of all accumulated vacation time through the date of his termination We could not locate a vacation carryover request for 1982; however, we did examine the request for carryover of cumulative excess vacation hours for 1983 approved by Dean R. Mielke, Labor Relations Officer on January 31, 1984. The request for 1984 was not to be submitted until after December 31, 19840 subsequent to Mr. Gary's termination. Mr. Gary f irst was employed by the City on December 6. 1976; therefore, he had completed the seven years of employment to be eligible for payment of one-fourth of accumulated sick pay. However, the policy states that an employee will be paid if he terminates under "honorable conditions." We could not find a definition of this term, therefore, we believe that the inter- pretation of this term in light of the circumstances of Mr. Gary's termination is one to be made by the City Commission on 85-t07, 001c_, Mr. Randolph B. Rosencrantz = City Manager Page 7 advice of the City Attorney. We noted that Section 9 of the AFSCME contract states that "...employees who resign in the face of discharge after the effective date of this agreement (October 1, 1984), shall not receive compensation for unused sick leave upon termination or retirement"; however, Mr. Gary was a non- union employee. Propriety of Amount of Accumulated Time The City Commission by Motion #84-1359 directed the City Manager to have the outside auditors do the following: "...examine payroll records utilizing the same method as used by former City Manager Howard V. Gary, in the computation of accrued time such ..as sick leave, vacation, compensatory or earned time, that was determined to be owed to former Chief of Police Kenneth Harms taking into consideration the amount of time spent by the former City Manager attending meetings of his capacity as a member of the Board of Directors of the Sunshine State Bank and also a computation of the time spent of the former City Manager over and above the normal 40-hour workweek such as attendance to public meetings, the handlings of emergency situations such as the civil distrubance, etc." 85-107- r x ,rip, w s �tf 4 F'. z Mr. Randolph B. Rosencrantz City Manager Page 8 The performance of such procedures would require the existence and availability of detailed time records that are not required to be maintained by City policy. In the case of Mr. Harms, it is our understanding that he personally maintained very detailed records and such records were available to the internal auditors. Employees of the City Manager's Office could not locate such detailed records. Also, Mr. Gary stated that such records did not exist. The scope of our work did not include investigatory procedures outside the City environment. Various ancillary records within the City (e.g., correspondence files, expense documentation, etc.) could not be utilized to recon- struct such detailed information in any practical, complete, reliable or cost-effective manner. In the absence of such detailed time records, we believe that the issue then becomes one of an overall assessment of what is required by a "Job -basis" employee within the City. In light of the definition of a "job basis" employee, we examined copies of the time and attendance records maintained in the City Manager's Office and compared them to the detailed analyses of vacation and sick pay prepared by the Payroll Division of the Finance Department. Our findings and observations as a result of these procedures are presented later in this report section. % 85-107, r AIR-%_ W Mr. Randolph B. Rosencrantz City Manager Page 9 Definition of Job Basis Employee Mr. Gary was classified as a managerial/confidential, "job -basis employee". The definition of "Job basis" per Administration Policy Memo 5-78, Section II, paragraph 51, is as follows: "Job Basis shall include a normal work week plus any additional time over and above the normal work week that is needed to adequately perform the duties of the position. Positions on "Job Basis" include department directors and assistant directors, assistants to the City Manager, and such other supervisory, professional and senior paraprofessional positions as may be designated. The Director of Human Resources shall designate position on "Job Basis" provided such designation does not conflict with relevant labor contracts. Any time less than the normal hours in a day or week is not charged nor debited in any manner; provided, however, that it is the responsibility of each Department Director to assure that such personnel work at least the normal hours, on the average, for their departments; and provided that use of vacation, sick leave, and personal leave shall be properly recorded. The designation of working on "Job Basis" shall be a favorable factor in approving discretionary benefits such as scheduling and using vacation in units of less than one week, in approving merit increases, and advancing sick leave." �5 85 107- C r ?A4` •z� Mr. Randolph B. Rosencrantz City Manager Page 10 The City's policy with respect to personal pensatory leave) is outlined in a May 10, from then City Manager, Joseph R. arassie, Directors, entitled "Payroll Designation Leave," which states the following: leave (i.e., com- 1979 memorandum to All Department for Compensatory "Administrative Directive 5-78, Section II, #5, provides a definition for 'Job basis .' At the recent conclusion of contract negotiations with AFSCME Local 19079 designations of job basis and non -job basis were made for each classification in the City. In addi- tion, the Department of Human Resources has completed a designation for all those classifications outside the bargaining unit. The definition provides that time worked in excess of the normal hours in a day or week shall not be compensated nor credited in any way; and, similarly, any time taken off during the normal day or workweek is not charged nor debited in any manner. As regards the provisions for taking com- pensatory time off, it is necessary that payroll records indicate something other than being present. For this purpose, you are advised to use the letters 'CL' to stand for compensatory leave. No payroll designation is needed for hours worked in excess of the normal workday or workweek and no leave of absence forms are necessary for employees on compensatory leave-" 85-107. - f f h ,-N Mr. Randolph B. Rosencrantz City Manager Page 11 For job basis employees, the City payroll system does not provide for recording any time in excess of 8 hours per day. The approval of compensatory leave is at the discretion of the Department Heads, who utilize various methods for indicating approval, including the signing of the Departmental Time and Attendance Report. In the City Manager's Office, individuals, other than the City Manager, requesting compensatory leave generally completed individual request forms which are main- tained in the Department. However, with respect to the City Manager, it is unclear as to who, if anyone, would be in a position to authorize compensatory leave other than members of the Commission. However, regardless of the approval process, if the City Manager is expected to follow the procedures outlined in the May 10, 1979 policy memorandum for recording his time, then compensatory leave on the part of the City Manager during the normal 8 hour day should have been indicated on the Time and Attendance Report as such, rather than as "City Business", which is the designation used for time out of the office but spent conducting the business of the City. If the City Manager is expected to be generally on call at all times, then some other reporting procedures would have to be estab- lished to account for the time of the City Manager spent on City business conducted on nights and weekends if the Commission desires to measure earned time against personal leave on the basis of actual time records. 85-1U7_. C� r Mr. Randolph B. Rosencrantz City Manager Page 12 Observations As a Result of Review of Time and Attendance Records The Payroll Division of the Finance Department prepared a detailed analysis of vacation and sick time earned and used for the period January 1, 1980 through December 7, 1984. Records were not reasonably accessible for periods prior to 1980; however, the vacation carryover hours of 292 agreed with the approved carryover request initialed by the former City Manager. Cumulative sick leave records prior to September 9, 1982 were no;0 reasonably accessible; therefore, the Payroll Division's analysis started with a cumulative 404 hours as of April 9, 1982, which we could not otherwise verify. We compared the vacation and sick time indicated as used during the period April 16, 1981 through December 7, 1984, to copies of the Time and Attendance Reports maintained in the City Manager's Office. We also recalculated the vacation and sick time earned for 1980 through 1984. Based upon our procedures, we noted the following exceptions: • 16 hours of vacation time indicated for August 9 and 10, 1981 on the time and attendance records did not appear as used per the payroll analysis or payroll register. The City changed to a new system effective for the pay period ending August 22, 1981, which may have caused this discrepancy. Absent any further information, we recommend these hours be deducted from the unused vacation hours to be paid on termination. 85-0 7, Mr. Randolph B. Rosencrantz City Manager Page 13 The time and attendance records Indicated "Personal holiday leave" during the following pay periods: Hours February 19, 1983 8 January 7, 1984 16 February 18, 1984 8 March 3, 1984 8 40 Resolution #81-514 stated that Mr. Gary is entitled to 12 days annual sick leaves but will not receive time off for the personal holiday leave afforded all other City employees." Resolution #84-748 subsequently stated that Mr. Gary "... is entitled to 12 days annual sick leave and personal holiday leave." It is unclear as to whether Resolution #84-748 intended personal holiday to be In addition to or Inclusive of 12 days annual sick leave. Assuming that Mr. Gary was entitled to personal holiday leaves he would earn 16 hours per year with no carryover. Therefore, Mr. Gary had excess personal holiday leave in 1984 of 16 hours, which should be deducted from the unused vacation hours to be paid on termination. 85-107- tI", Mr. Randolph B. Rosencrantz City Manager Page 14 The time and attendance records indicated only 34 hours of compensatory time for Mr. Gary during his entire tenure as City Manager on the following dates: Hours September 5, 1981 8 March 27, 1983 8 August 30, 1984 4 August 29, 1984 4 August 24, 1984 4 August 23, 1984 2 August 22, 1984 4 w 'A During his tenure as City Manager, Mr. Gary had recorded sick time of 375 hours and vacation time of 271 hours. Sick time 1, appears to have been taken principally in large blocks of time in April/May 1983 (87 hours ), August/September 1983 (124 -. hours) and August/September 1982 (84 hours). We located medical claim information indicating illness during at least the f August/September 1982 and April/May 1983 time periods, and no contrary information regarding the August/September 1983 time period. Except for three full week vacation periods of 40 hours each, the rest of the vacation time was taken in no more than 3 days at a time, and not on a regular monthly basis. 85-107, 1 IP sy t Mr. Randolph B. Rosencrantz City Manager Page 15 There are no detailed time records to indicate specifically when Mr. Gary attended Board of Directors meetings of Sunshine State Bank or other meetings related thereto. Also, the dates of Board meetings and attendance records of the Bank are not public information. Based solely on our review of the pattern of sick time, vacation time and compensatory time described above, it appears that Mr. Gary's attendance at such meetings was not charged to these categories but rather included in regular "in -office" or "City business" time. However, this is only an assumption without specific evidence. We also do not know how much time Mr. Gary spent on Sunshine State Bank mat- ters; however, bank regulatory examiners usually comment upon any lack of attendance by Bank Directors at Board meetings, which are typically held monthly. Therefore, there is some pressure to maintain a resonable attendance record. The Commission could estimate a minimum number of hours per month during Mr. Gary's tenure as a Director. A decision would then have to be made as to whether the time should be offset against unrecorded earned time (i.e., compensatory leave) with no monetary penalty, or against unused vacation time, with a monetary penalty. 85--107- 0, Mr. Randolph B. Rosencrantz City Manager Page 16 PENSION TRUST FUND Section 5 of the Resolution states the following: "The City shall contribute on a bi-weekly basis to a pension trust fund established by Howard V. Gary based on a percentage of his gross bi-weekly salary. Such percentage will be equal to the cost estimated as that percentage of payroll determined annually, and effective October 1, by the pension actuarial report for general employees". We reviewed the procedures utilized by the City for the opera- tion of the pension trust fund and the method of calculating the amounts contributed thereto. The City made its contributions to the pension trust fund through December 6, 1984; therefore, the pension trust fund was not expected to be a consideration with respect to the amount of termination benefits to be paid to Mr. Gary. However, the contributions to the pension trust fund from 1981 through 1984, constituted taxable income to Mr. Gary which the City did not report to the Internal Revenue Service (IRS) as additional compensation to Mr. Gary,, subject to Federal income tax withholding. IRS regulations provide that if none or less than the correct amount of tax is deducted and the error is discovered after the payroll tax returns are filed, the employer must report the additional amount on a supplemental return for the period in k'. which the wages were paid. The amount of the undercollection xy must be paid to IRS, without interest, at time prescribed for payment of tax for the quarter in which the adjustment is made. $s~107 - P 11 i x ` Mr. Randolph H. Rosencrantz City Manager Page 17 3o far as the employer is concerned, the employer may deduct the amount of undercollection from any remuneration of the employee after discovering the error, even though that remuneration does not constitute wages. If there has been an error and the employer has not deducted the undercollection from the employee's pay, the employer is liable for the underpayment and reimbursement is a matter for settlement between employee and employer. However, if the employee pays the tax, the employer is relieved from liability. We recommend that the City deduct the Federal income taxes relating to the 1981 through 1984 pension trust fund contribu- tions from the net termination pay to Mr. Gary, and prepare the necessary supplemental payroll tax returns for the periods involved. We believe that this method is clearly preferable to attempting to obtain sufficient evidence that the taxes have already been paid personally by Mr. Gary. If the pension contributions are considered supplemental payments, the amounts to be reported as taxable income to Mr. Gary for each of the calendar years and the related Federal income tax withholdings are as follows: Calendar Year Pension Contribution Tax (20x 1981 $ 8,084 $ 1,617 1982 18,993 3,799 1983 229547 4, 509 1984 24,695 4,939 •$74,319 114,864 85-10'7- rj r N� ry 7.: Mr. Randolph B. Rosencrantz City Manager Page 18 The background for the concept of Mr. Gary's pension trust fund appears to be from the present Section 40-229 of the City Code - "Participation of City Manager in Plan", which codified Ordinance # 8583 passed and adopted by the City Commission on October 14, 1976. This ordinance, among other things, provided for a separate account entitled "City Manager's Retirement Benefits Account" to be established by the Finance Department, to which both City and City Manager contributions were to be accumulated. The contribution of the City to the account were "...that amount which would have been contributed by the City if the City Manager were a member of the herein plan" (Employees' Plan). The Ordinance also provided for forfeiture of the City's contribution if the "City Manager terminates employment with the City prior to completion of at least five (5) years employment". When Resolution #81-514 was adopted by the City Commission, the Compensation Agreement stated the following regarding the pension trust arrangement: "Section 11. NORMAL RETIREMENT SYSTEM Howard V. Gary shall be entitled to the same pension emoluments as the previous City Manager. The City shall deposit pension contributions to a trust fund established by Howard V. Gary on a biweekly basis. Howard V. Gary can use these funds to join any pension plan he desires. Howard V. Gary may, upon severance of employment, designate a public trust fund to which all monies in his Pension Trust Fund, plus accrued interest thereon, shall be transferred within 20 days from the date of such designation". SS-10 - j3. F. X. �z 1r h 'fia dip s� Mr. Randolph B. Rosencrantz City Manager Page 19 When Resolution #84-748 was adopted by the City Commission, the language relating to the pension trust arrangement was as previously stated in this report. No reference was made to City Code Section 40.229 and/or Ordinance #8583. We, therefore, have assumed for purposes of this report that the specific provisions of this Code Section do not apply to the pension trust arrange- ment for Mr. Gary described in Resolutions #84-748 and #81-514. If Code Section 40-229 does apply, or was intended by the Commission to apply to Mr. Gary's pension trust arrangement, then the specific aspects of non-compliance with the provisions of the Code by the City would have to be addressed as to their ' impact on the City and Mr. Gary. :< In the case of Mr. Gary's pension trust arrangement, contribu- tions by the City effective beginning April 160 1981, were originally recorded in a "Trust and Agency" fund of the City, under the control of the City. In November 1981, accumulated City contribution and interest thereon were deposited to the "Howard V. Gary Pension Trust Account" at the Sunshine State ,.•. Bank. All contributions thereafter were deposited to this account over which the City had no control, in accordance with the literal interpretation of the wording in Resolution 081-514 stating "the City shall deposit pension contributions to a trust fund established by Howard V. Gary on a bi-weekly basis". The relinquishment of all control over the account by the City, the lack of a formal pension trust arrangement, and the absence of { certain other restrictive provisions of Code Secton 40.229 caused the contributions to be fully taxable to Mr. Gary. 1� 8T-107- b Y. Mr. Randolph H. Rosencrantz City Manager Page 20 We recalculated the amounts contributed by the City to the pension trust account by reference to the actuarial reports of E.H. Friend A Company. We noted that for the payroll periods ending February 18, 1984 through December 7, 1984, the contribu- tion was calculated using a contribution percentage of 22.77x rather than 23.80%. This should result in an additional amount to be added to Mr. Gary's termination benefit of $927 ($20,495 x 23.80%/22.77% _ $21, 422 ), net of Federal income taxes. Since Mr. Gary, along with a number of other managerial 'K employees of the Cit was a participant since 1977 in the Y , International City Management Association Retirement Corporation (ICMA) Deferred Compensation Plan sponsored by the City, we reviewed the provisions of this plan to determine that City contributions to the ICMA plan on Mr. Gary's behalf ceased when he became subject to the pension trust arrangement described above. Although initially we noted an overlap in the contribu- v tions during the time the original Compensation Agreement was y. being negotiated, the Finance Department made the necessary >, retroactive adjustment in 1981 to correct the situation. The only other issue we noted regarding the ICMA Plan was with respect to the payout of amounts contributed by the City. The ICMA Deferred Compensation Plan was signed by the City Manager, City Clerk and City Attorney in April 1977, pursuant to Ordinance #8610 passed and adopted by the City Commission on January 27, 1977, which was codified into City Code Section 40-230 - "Right of Certain Persons to Reject Membership". Section 1(b) of the Ordinance provided that the written trust 85-t4'7__ Mr. Randolph B. Rosencrantz City Manager Page 21 agreement to be approved by the Commission contain a provision that "at no time shall any employee hereunder enjoy actual or constructive receipt of his or her contribution or those contri- butions made by the City on his or her behalf prior to reaching age 55 or becoming disabled...". Paragraph 9 of the ICMA Plan approved in 1977 states that "payment shall commence on the first day of the month following the attainment of the desig- nated age or later ... or following permanent disability or death ...". However, since the adoption of the Plan by the City, the actual operations of the plan by ICMA allowed for withdrawals upon termination of employment, withdrawals in the case of emergencies, and certain other flexibilities as long as approval of employer is obtained. Such provisions are outlined in the "Guide to Benef it Payments and 'Emergency Withdrawals" issued by ICMA. Based upon our discussions with the Finance Director and review of certain documents, it appears that withdrawals upon termination of employment have been approved when requested by the employee. ICMA releases the check payable to the City and the City, in turn, pays the employee, net of Federal income tax withholding on the entire amount of the withdrawal and FICA, if applicable, on the City's-contribution portion. We were advised by the Finance Director that the Early Payment Date Application has been sent to ICMA requesting payout of Mr. Gary's account (approximately $60,000) by a check payable to the City of Miami. The payout, net of taxes, will then be sent to Mr. Gary. It appears that there is precedent within the City for approval of withdrawals from the ICMA account by terminating employees. However, since early payment is not provided for in Code Seaton 40-229, we felt this issue should be h t0 Mr. Randolph B. Rosencrantz City Manager Page 22 brought to your attention before the funds are received from ICMA and released to Mr. Gary. Since the ICMA Deferred Com- pensation Plan has been widely used by many governmental unite, it appears that Code Section 40.229 has simply not been amended to reflect the actual operation of the Plan, and amend- ments thereto, since its original approval by the Commission. LIFE INSURANCE Section 6 of the Resolution states the following with respect to life insurance benefits: "The City shall purchase and pay the required pre- miums on a whole life insurance policy in an amount equal to two (2) times the annual gross salary of Howard V. Gary with the beneficiaries named by him to receive one-half of any benefits paid, and with the City to receive the other one-half". As of the date of termination, two life insurance policies purchased by the City in the amount provided. for in the Resolution were outstanding: " #81-452-196 $140,000 whole life, issued April 16, 1981 • 334-641-531 $ 740000 life account, issued September 21, 1984 214 000 85-107. Mr. Randolph B. Rosencrantz City Manager Page 23 According to Edwin H. Cole C.L.U. (insurance agent), the policies are owned by, and in the name of Howard V. Gary. The City is listed as a 50% beneficiary. According to Mr. Cole, the City cannot cancel or change the policies since they are owned by Mr. Gary. Therefore, any cash value of the policies could only be returned to the City if Mr. Gary reimbursed the City with or without his canceling the policies. Therefore, we recommend that the City consider 50% of the cash value of the policies as of December 31, 1984 of $5, 615 as taxable compensa- tion to Mr. Gary, net of Federal income taxes. Also, due to the nature of the life insurance benefits, 50% of the premiums paid by the City for 1981 through 1984, should have been reported as taxable income to Mr. Gary subject to Federal income tax with= holding. Therefore, the same procedures as recommended for the pension trust contributions should be followed with respect to the 1981-1984 life insurance premiums. The result is as follows: 50% of Premiums Paid: 1981 1982 1983 1984 50% of Cash Value: 1985 Taxable Amount Tax (20%) $1,161 $ 232 1,161 232 1,161 232 1,890 378 1 0 4 2 808 ,$562 8s-IL07.. Mr. Randolph B. Rosencrantz City Manager Page 24 CONCLUSION Based upon the results of our procedures outlined above, and assuming that the resolution of the other issues we have raised have no monetary impact, we recommend that the final termination payment to Mr. Gary be revised to the following: Vacation Time Per Finance Department . Excess personal holiday leave in 1984 . Vacation time not recorded in 1981 Revised amount Sick Time Per Finance Department - assuming "termination under honorable conditions" no adjustment Severance Pay Per Finance Department - no adjustment Pension Trust Fund Rate adjustment on 1984 contribution Gross account before FICA and Federal income tax (FIT) Hours 12,022.00 (16.00) (16.00) 990.00 84.25 520.00 Dollars $52,506 (822 ) (822 ) 50,862 4,328 26,715 81,905 927 1, 594-. 25, $829832 (Continued) 85-107- 0 Mr. Randolph B. Rosencrantz City Manager Page 25 Balance Forward Less: • FICA (7.05% of $399600 wage base) . FIT withholding (20%) Net payment relating to 1985 Adjustment for prior years' FIT withholding (20%): • Pension Trust Fund contributions ($74019 ) • Life insurance premiums ($5, 373 ) • Cash value of life insurance policies ($2, 808 ) Net payment to Mr. Gary Dollars $82,832 (2, 792 ) (16,566) 63,474 (14,864) (1,074) (562) (16,500) 46 4 If you or any members of the City Commission have any questions with regard to the contents of this report, please contact Ms. Sharon C. Brown, Partner in our Miami office. Very truly yours, 50 January 28, 1985 Dear Sir or Madame: I am requesting an item on the Agenda for the first meeting of the City of Miami Commission in February. The issue is the grave concerns in Overtown. Thank you. Sincerely, Ann -Marie Adker 407 N. W. 5th Street Miami, Florida 33128 �isoussiaiU