HomeMy WebLinkAboutM-79-0658CITY OF MIAMI, FLORIDA
INT5R-01=FICE i'fIEMORANDUM
TO;
FrOM:
Joseph R. Grassie
City Manager
L(4. &vC, kLeot4,
Elena Rodrigue, Secretary
The Miami City Empl. Retirement
System & Plan
DATE:
September 14, 1979 PILE'
suwtcn Re: Proposed Policy and,
ResolUtion by the Finance
Director Regarding Pensions
11EFERENCES:
ENCLO8URES:
The enclosed package was brought up by Commissioner J. L. PluTflrfler, Jr.
at the meeting of September 13, 1979, as an item for discussion.
It was his request that the attached package be reviewed by, the
Commissioners, and that the item be placed again on the agenda ,of
the City of Miami Commission Meeting of September 27, 1979.
I respectfully request that this item be placed on the agenda of
September 27th for discussion.
cc:
J. L. Plummer, Jr.
"SUPPORTIVE
DC CUMENTS
FOLLOW"
54
"ivail‘le 04e
CITY OF MIAMI. FLORIDA
INTEROFFICE MEMORANDUM
TO:
City Commission
FROM; Elena Rodrigues, S6cretary,
Wen The Miami City Empl. Retirement
System & Plan
cr. w
0 n August 31, 1979, The Miami City Employees' Retirement System and
f he Miami City Employees' Retirement Plan met in a joint session, as
--J equested by the City Commission at their meeting of July 23, 1979.
V Q'he purpose of this meeting was to discuss and review suggested
0 Llalternatives for pension funding for future years, as submitted in
C/) 0 memorandum form by J. E. Gunderson, Director of Finance. The Boards'
recommendations were to be presented to the City Commission at their
meeting of September 13, 1979.
Attached, please find a letter to you from the Miami City Employees'
System with their recommendations. After due`,, deliberation and
discussion, they have resolved to adhere to the previous pension
funding recommendation to".the City Manager, for the fiscal year
1979-1980, without deviation whatsoever.
The Miami City" EmployeesRetirement Plan also convened separately
at the conclusionof the joint meeting. They made the"following motions:
A motion was made by J. Gunderson and secondedryby L. De"Jesus,ofor ethe
purpose, of discussion, "to instruct; the,actua'>:to' come .back t. th
Board and tell them',what rateof interestthey must -use in their assumption
to make up the 3.8 million dollar deficit". After'a brief discussion,
this motion was withdrawn:.
A motion wasmade by J. Gunderson and seconded by H. Gary, to instruct
the actuary to come` back to the Board and tell them how much the Plan's
contribution could. be.reduced 'by 'an.increas�e.n the interest assumption
in .5"(half):% increments. This motion'failedby a 4 to 3 vote. "Yes"
votes: C.`Arauz, C. E.`Cox,',H..`:Gary, J. Gunderson; dissenting: L. DeJesus,
A. Harris, P. Joffre:..
DATE:
SUBJECT:
September 12, 1979
Re: Proposed Policy and
Resolution by the Finance
Director Regarding Pensions
REFERENCES;
ENCLOSURES;
A motion was. made.bya-A.;;Harris ",and seconded by L. De Jesus, to recommend
y" to the' CitCommission toaccept` the actuary's figures as presented to
1
the Board. This motion > faired b'y- a ;3 to " 4 vote. "Yes" votes: L. De Jesus,
A. Harris,'P.'Joffre; dissenting:"C.E. Cox, H.-Gary, J. Gunderson,C. Arauz.
At this point, the Secretary was requested to submit
motions and their votes to the City Commission.
A motion was made by,"H Gary that the Secretary should not submit anything
to the, City" Commission;without"a=motion. This motion was seconded by
J. Gunderson and failed' by a 4 to 3 vote. "Yes"`.votes: C.E. Cox, H. Gary,
J. Gunderson, C. Arauz; dissenting: L. De Jesus, A. Harris, P. Joffre.
a detail of the
•
THE
MIAMI CITY EMPLOYEES'
RETIREMENT SYSTEM AND PLAN
City Commission
City of Miami
City Hall
Miami, Florida
August 31
Re: Proposed Policy and Resolution
Dear Mayor and Commissioners:
At your Commission Meeting of July 23, 1979, James Gunderson,
Director of Finance, proposed a resolution adopting a new
City Commission policy on pension funding recommended by him
and the City Manager. A copy of this proposed resolution and
an inter -office memorandum dated July.28, 1979, subject:
"Pension Problem and Recommendation, Proposed Policy and
Resolution", from Mr. Gunderson to the City Manager, setting
forth the new proposed policy is attached .to this letter for
your information.
Rather than acting on Mr. Gunderson's proposal, the' Commission
moved to refer his proposal to each of the Boards of Trustees
.of the Plan and System for their deliberation and recommendations.
On this date, we met in joint session with the members of the
Retirement Board end Board of Trustees of the Plan in a public
meeting in City Commission Chambers to receive Mr. Gunderson's
proposal in detail and to receive his answers to many questions
from Plan and System Board members, employees, employee
representatives, and other interested parties.
At the conclusion of this joint meeting, we convened to formally
address the Gunderson proposal as Retirement Board and Board of
Trustees of the System: After due deliberation and discussion,
we have resolved to adhere to our previous pension funding
recommendation to the City Manager for the fiscal year 1979-1980
without any deviation whatsoever. A copy of this recommendation
is attached.
"SUp'O?TI E
D •C;t -: Efv.`S
.. L►_O�11,
FV
P+79- 658
-2-
Messrs. Bertzel, Jaremko, Grimm, Garcia, March, and Reese
voted for this resolution. Mr. Houck voted against the
resolution, and Mr. Jennings was absent. Commissioner Plummer,
Chairperson of the Board, was not required to vote.
It was the consensus of membersthe voting
themntofvi lateor the rtheirtion
that to vote otherwise, would
respective fiduciary
andas rustees of currentTrusteLawstem under
City Ordinances, State� 1
S
•
IIIIIINNIIIIIIIMI
diSUP1:1)07719iNIE
FOLLOW"
p.79- 658
TO:
11110M :
CITY or MIAMI, FLORIDA
INTEROFFICE MEMORANDUM
A11 Trustees of
System & Plan Retirement Boards
r
Elena Rodrigues, S6.6retar,
Retirements Boards;.
James Gunderson, Director".of Finance,
the City'Commission Agenda.of:July 23
action, two rnotions were Passed:
DATt.
.u.JtcT:
0
July 23, 1979.
Rtit11ENC[[-
[NCLOSU11t£
1) Tc refer.this item back
and recommendations.
placed . the , attached item . on,
.1979 .Consequent =tOthis
'or deliberation.
2) 'To direct , the Board of, Trustees to authorize an `actuarial
analysis . be made of the: proposals.. ` Payment far_ this' ° study is to
cane from the; City of Miami:
r ease ad..i.,t inwriting the earliest date you
a joint meeting' °of both` Boards.
A confirmed date' of this
have been received.
will be "available for
•
1"replies
n•
rs
1�79-658
CITY OMMIS.SI.ON. AGENDA
CITY N1LL - DINNER HEY
10600 A.M. Invocation and Pledge of Allegiance
COMMITTEE OF THE WHOLE
Discussion of proposed lease agreements with the Miami Outboard
Club, Miami Yacht Club and the Coconut Grove Sailing Club.
Discussion of pension funding for future years.
os Florida
to purchase Interam' property.
D. Discuss:on of a traffic sign by Commissioner Gordon.
12:00 Noon Dedication of "Douglas Road Refurbishing Project" at corner of
Florida Avenue sad Douglas Road.
"SUPPORTIVE
DOCUMENTS 200 P.M.
FOLLOW"
PRESENTATIONS, PROCLAMATIONS AND SPECIAL ITEMS
Presentation of • cake to the City Commission by children
City playgrounds on the occasion of the City's birthday.>
2:30 P.M. SEALED BID
2. Point View Highway Improvement
PUBLIC HEAR NCS
Regarding possible Urban Development Action Grant (UDAG) for
Shell City.
RESOLUTION
Confirming ordering Resolution and authorizing City Clerk to
advertise for sealed bids for Englewood Sanitary Sever Improve-
ment SR-5461-C (Centerline Sever). City Manager recommends.
RESOLUTION
Confirming ordering Resolution and authorizing City Clerk to
advertise for sealed bids for Englewood Sanitary Sewer Improve-
ment SR-5461-S (Sideline Sewer). City Manager recommends.
3:00 P.M. PERSONAL APPEARANCES
Mr. Allen Porter and Mr. Harvey Green re Portside Cafe.
7 Mr. Jack Arias re !Wilding* in the Culmer area.
6. Mr. John Baratta re Greater Miami International Film Festival.
Ms. Carolyn Wilder re Wynwood Elderly Center.
Ms. Pat Skubish re International Year of the Child celebration.
10.
.w 79.658
CITY =MISSION AGENDA
A
31.
3
"SUPPORTIVE
DOCUMENTS
FOLLOW" 35
MEETING DATE:
July 23. 1979
RESOLUTION
Appointing. certain individuals to the Advisory Council on
Economic Development, and appointing • Chairperson.
PAGE NO.
RESOLUTION
Authorizing the City Manager to enter into Collective Bargain-
ing Agreement between the City and the Sanitation Employees
Association, Inc. for the period of October 1. 1979. through
September 30. 1972. City Manager recommends.
RESOLUTION
Authorizing the City Manager to accept the proposal and execute
the contract with Jerr�ts, Inc. for operation of restaurant
and concession stands at the Coconut Grove Exhibition Center.
City Manager recommends.
RESOLUTION
Item: Custodial Services Contract
Location: Building and Vehicle Maintenance
Vendor: Versailles Maintenance Contractors, Inc.
Continental Building Services, Inc.
C i A Building Maintenance, Inc.
Total: 5286,771
Funding: 1979-80 Operating Budget
Accepting the bids and authorizing the City Manager and Purch-
asing Agent to issue the Purchase Orders. City Manager rmcom-
mend&.
FORMALIZATION OF COMITEE OF THE WHOLE RECOM!SENDATIONS
RESOLUTION
Authorizing tht City Manager to execute a lease agreement with
the Miami Yacht Club. City Manager recommends.
RESOLUTION
36. Authorizing the City Manager to execute a lease agreement with
Miami Outboard Club. City Manager recommends.
RESOLUTION
Authorizing the City Manager to execute • lease with Coconut
Grove Sailing Club. City Manager recommends.
RESOLUTION
Adopting a City Commission policy on pension funding. City
Manager recommends.
RESOLUTION
Approving in principle the terms offered by the.State of Florila
to purchase Interama property. City Manager recommends.
CONSENT AGENDA
Unless a member of the City Cosmaiation wishes to
remove specifi ems from this portion of the
agenda. It constitute the Consent Agenda.
These resolutions are self-explanatory and are not
expected to require additional review or discussion.
Each item will be recorded as individually numbered
resolutions. adopted unanimously by the following
Motion:
...t, he Consent Agenda. comprised of
Items' C42 be adopted."
Mayor or City Clerk: Before the vote on adopting
items included in the Consent Agenda is taken. is
there anyone present who is an objector or proponent
that wishes to speak on any item in the Consent
Agends?...Hearing none, the vote on the adoption
of the Consent Agenda will now be taken."
'7J. 658
vs: Joseph R. Grassie
City Manager
James E. Gunderson
Director of Finance
C1:,11 OF MIAMI. v1.01t10A
$ 4TRR•CFFICZ ;1EMC:IANDUM
?ILI:
Pension Problem and Recommendations
[NCI.OSU11sa:
Policy,•nd Resolution
It is recommended that the City Commission adopt a policy limiting the
annual expenditure for pension program funding to a 57, increase in
property taxes each year; however, not to exceed 4 mills. (Attached)
Further, that the attached resolution be adopted directing the pension
actuaries to prepare a report indicating the revisions necessary to
offset the increased cost to the City in excess of the 5% limitation in
property taxes.
Scope of Problem
The table below reflects the increase required to fund the City's pension
program from FY-79 to FY-80. This dramatic rise has been caused in the
main by less favorable experience than predicted by the actuarial assumptions.
The Plan actuary has defined the problem as a crisis because costs are
rising while the employee population is declining. This can lead to•contin-
ued cost escalation unless corrected.
"SUPPORTIVE Estimated Pension Requirement FY-80 compared with FY-79 Cost
DOCUMENT'S SUMMARY
FOLLOW"
APPROPRIATIONS
FY-79 FY-80 Increase Percent
Adopted Estimated Decrease) Chime
System 11,345,461 12,737,046 1,391,584 127.
Plan 4,648.884 8.906,981 4.258,097 927.
I.C.M.A. 27,563 50,000 22.437 817.
Total Appropriations 16,021.908 21,694,027 • 5,672,119 3
REVENUES,
System
Plan
I.C.M.A.
Total Revenues
384,093 209.500
969,259 1,231.319
•0- •0-
(174.593) 45%
262,060 27%
•0- •0-
1.353.352 • 1,440,819 87,467 67.
,eseph R. Crassie
July 18. 1979
Base
Difference (Tax Requirement)
Divided Value of 1 mill
Pension Millage Rate
TY•79
_ Adopted
14,668,556
3,883,213
3.78
TT•80
Estimated
20, 253.208
4,020,391
3.04
Increase Percent
,(Decrease) ;Chance
5,584,652 387.
137,178 47.
1.26 33:
In order to put the above in perspective, Table 2 has been attached. This shows
the City of Miami's contributions toward the pension fund and Social Security
benefits compared with forty other cities in the State of Florida.
It is revealing to note that the City of Miami is second highest after Miami
Beach in the percentage of payroll for pension purposes.
The seventh column from the left shows the 'Pillage rate necessary to pay the
pension and Social Security expenses. This column reveals the fact that the
City of Miami is fifth highest after Miami leach, Pensacola, Tampa and Orlando.
(Data supplied by the Advisory Council on Intergovernmental Relations)
Since that study for fiscal year 1976-77, the City of Miami has experienced a
tremendous increase in cost to the pension programs and would require 5.04 mills
for FY-80, or an in:rease of 55,584,652 in one year.
In order to address this problem the following seven solutions are discussed.
▪ Provide a new resource for funding. As you know, the City is faced with
a 9 million dollar problem next year, and our property tax rate has been
lowered to 9.79 mills, by legislative action. So, no new resource is
available.
Increase the investment earnings assumption from the current 77. to a
percentage sufficient to offset the problem. "The importance of investment
income can be grasped by considering that for a fully funded plan earning
4 percent per year on its investments, interest earnings will ultimately
pay for approximately fifty percent of the benefits conferred by the
program. Moreover, in a fully funded plan, an increase of one percentage
point (1%) in investment yield may reduce contribution requirements by
fifteen to twenty percent."
(William F. Marples, Actuarial Aspects of Pension Security, Homewood, I11.,
Richard D. Irvin, Inc., 1965.)
• Reduce benefits. Consideration could be given to reducing active employees
benefits. '
• Integration of Plan Benefits with Social Security Benefits.
One of the reasons for the high post -retirement income to pre -retirement
income is the fact that there has been inadequate btegration of locally -
IL 79-658
July 15, LY1Y
l a •I•
provided benefits with those provided by the Social Security system.
Integration methods are admittedly fraught with problems, however,
since successful integration can mean reduced city contributions to
the plan, the issue merits.attention. In 1976 the State of Nev York
enacted such an offset plan. Its basic provisions are simple. An
employee retiring at age sixty-five after thirty years of service
will receive a total benefit of approximately Ieventy-five percent
of his or her final average salary inclusive of Social Security benefits.
• Another aspect of the benefit package which merits some consideration
is the disability provision. This provision should be reviewed for
integration with Workmen's Compensation and Social Security. When
considering the generosity, and, therefore, the cost of disability
provisions, the definition of disability, the manner in which Social
Security and Workmen's Compensation benefits are considered, and the
periodic review practices of the pension board are important but neglec-
ted factors.
Shift pension programs to state auspices. The state requires a 9.1%
contribution from employers. however, the liability for retired
employees would still be funded by the City. Inasmuch as it requires
approximately 97. to fund active employees there would be no reduction
to the City.
• Defer payment of the $5.6 million City contribution for FY-80 by
spreading the payment over the remaining years•of the unfunded liability.
Such a program could impair the City's Bond Rating.
Recommendations
• The City Commission adopt the attached policy limiting annu:.l expendi-
ture for pension programs funding to a 5% increase in property taxes
each year; however, not to exceed 4 mills. (Attached).
•
• Adopt the attached resolution directing the pension actuaries to prepare
a report indicating the revisions necessary to offset the increased cost
in excess of the 5% limitation in property taxes.
Impact
• The net shortfall to the pension program after allowing for a 5% increase
in property tax revenues would be$4,851,225.
JEC: hb
Attachments
"SUPPORTIVE
L)C%.L} iii r S
K ' OW"
ler
Cttr
GaiaosWllla
Soctled's
Titusville
Wert/old Bosch
Pt. Lauderdale
allaadale
Nollyvood
Oakland Part
Plaatatioa
ragas* Beach
Sunrise
flay Parbor island
Coral Gables
Hialeah
•
•
TABLE 2
RETIREMENT I'IuiGMAM t XPI:Nti1:_ Snit ric;inA CiTl1S
11SI:AL YI:Aa 1976 197/
Social
Populatloe Security
61,125 532,651
10.912 56,099
32,383 195.030
30,649 : 262,113
153,374 1,745.016
34.114 226.193
117,177 1,013,905
1 391 211,140
2.
41.240
54,709
29,241
4..46
4311S
124,163
344,109
Pension
Plan
621.221
34.435
313.194
179.165
3,712.064
110,273
1,741,050
217..61
167,424
643,S33
161,731
20,341
148,121
467,573
235.419
47.91 3
'466,119. 1,046,343
776,956' 2,319,032
2,020,779'11,091,729
Payroll(3)
10,301,291
919.170
3,116,795
4,617,014
32,161,012
4,232,670
11,371.460
City Contributions
To Social Security
awe Pension Plans
as a 11 ..f Ferrol)
11
1
12
10
17
17;.
14
3,116,342 74
ea
4.424.443
4.146.6AS
626,4u6
10.191.663
16.Su71S4
61.286,194
ace•
12
10
6
14
19
21
CONTINUED ON NI -if PAGE'
%.
;.:��_.:..j
•
N1:la e
bcedad
To Support
Pension
and Social
Security
2.3214
1.1990
1.0111
1.0722
1.1113
1.2099
1.5529
1.4000
.3992
1.0579
.9947
.6911
1.6721
2.2514
3.477S
Operatiaj
UMW.
7.7613
7.5200
6.2520
6.4342
1.7500
5.7311
S.7100
3.0601
2.0100
4.6330
5.1746
S.2S00
0.6910
5.9120
10.0000
0
us
i•
Pass 1 al 3
C.�Y
Delray Mach
hearses
Wit Pals Smack
Clearwater
Large
tlaellss tart
St. Petersburg
Lake/sad
lake Males
Pt. tierce
Sarasota
Millets •
Ne
To Sedeupd
port
City Contributions tension
and Social Operating
To Social Security Security Of
Pension and feasloa flans Security_
s� c� s1 Ni ��
Social flan fs colt as�f faYsell _
fopulatin� Sewrit 17 2.12�5 1.l6l6
2l.4S6 1i6.674 S72.Opl 4.739.30! 4.4:00
0 .l�36
42.022 26,000 642,466
0.150 17 1.6961 10.3630
61,560 467.536 1.427.666 16.676.767 1.l�077177 �.01�0
666.676 14.309,599 15 76.022 235.�9� 1. .1.f0l0
52.170 4,473.190 7
St 906 iS0.2S! 1.6410 6.4400
7s o6s 1.101041
13 .
•
26.966 154.692 1 •sa 2.500! 0.6000
6
37,430 1.460,6N 3•490.412 22.506,01- f.0620
109fi
.0- 732.517 11.601.142 0.03=0
�6.77! 7 1.2001
66 6S7 5.557 1.046.09S �12300
0.916 • 5 1.0373
32.422 276.197 631,7�15 4.676,603 l6.0336
la.2.2007
219.666 1.292.642• 9.112.036
N,�li
w • tedicstes titer data was Rot available. moults be necessary to fund the cit7's retirement costs It
• This cottons e so refs solely
lyto property tea shillala T e sal•Iy on its ad valorem tea to fund this aspens'. It is acknowledged coat otAst rsysaw
the city were to rely
sources way be used.
SOURCE
S: Florida fepartaent of 0evcnUC. Lwpida tro A•rWare Valuations and Taa Sacs. 1977.
Stale of Florida. OEEtte of t
Pile Z •l 3
Cicr
Miami Mach
North li awl
North Waal Peach
Jacksoavllle
Jacksoavllle Mach
Pensacola
Pleat City
Taupe
Clot/meat
Ft. Myers
Tallahassee
Oca.s
Orlando
Socs Caton
Povvulat iun
19.1133
43371
35117
343.542
14.693
60.336
16,022
273162
1,136
34,706.
06350
32.61S
12209
44.614
33,036,
Social ►cas/oa
SecuriLE Man
113,196 1.633.933
301,513 752.092
-0- 1,126,SSS
1,020.911 13,619,162
150,491 170.709
439.240 1.413.697
125.411 107,612
-0- 9,241.771
23,416 14,413
347,071 206,459
99.603.`2,170357
a47.107:: 310 144
1,40:;961,; 3,016,933
370,075" 771i2S
254,009 123,000
mat 2-3
CONTINUtO-
Payroll(1i
20,760,967
3.362.067
6.427.106
41.311.991
2.611.995
13.021.002
2,095,300
S6,022.517
413.201
6.002.040
19,090.S32
6,194,990
26;0S1.6SS
7,129,100
4,499,910
City Contributions
To Social Security
end Peaslon Plans
as a t of Patrol l
37
19
17
10
13
14
15
16
9
9
Ni11age
Needed
To Support
Pension
and Social
Security
Eapcosee2
4.1794
1.9644
2.5071
as
1.7270
4.3417
2.6120
3.6433
.0067
1.6770
3.2160
1.6Sli
3.7542
1.0469
1.2309
Operating
N11 lei.'
9.2600
5.2620
0.6000
/a
3.6000
3.0600
7.9600
9.0000
11.0006
7.7000
3.6000
4.4000
0.9050
6.1070
6.7970
pogo 3 al 7
i
CITY. OF MIAMI
.COMMISSION POLICY
SUBJECT:
A policy providing a framework,, forcommission
of„,Miami 's Pension System and Pension Plan.
PM OSEs'i
eeisions affecting the City
In'viev Of the many requests for modifications to the City of Miami's Pension
programs by their respective boards, and the need to provide some guidelines
or general policy for making changes in those programs, it is desirable that
a policy be established.
POLICY:
It should be the policy of the City of Miami to provide an equitable pension
program for all its employees, a program which does not impair the City's
primary responsibility to provide needed municipal services to its citizens.
•
Ir order t2 attain these goals, the following objectives are adopted as a
firm commission policy, a framework for continuing review of Miami's pension
programs:
1. To establish anu maintain essential parity between the Pension Plan
for nor -uniformed city employees and the Pension System for uniformed
personnel.
. To evaluate, on a continuing basis, the components of both the Plan
and the System for the purposes of making the benefits equitable for
all employee members in each program.
3. To limit, until this policy is revised, or the 10 mill cap on municipal
taxing ability is removed,•the annual expenditure on pension program
funding to a 5% increase in property tax revenues each fiscal year;
however, not to exceed 4 mills. If the state legislature reduces the
millage below 10 mills, then the 4 mills will be reduced to the
arithmetic equivalent.
. This policy to become effective for the 1979-80 fiscal year.
$N79-658
i
04%.4/ 38
RESOLUTION Mo.
A RESOLUTION DIRECTING THE CITY'S PENSION BOARD
TRUSTEES FOR THE PLAN AND SYSTEM TO IMPLEMENT TEE
?, SION POLICY ADOPTED SY THE CITY COMMISSION ON
JULY 23, 1979; AND AUTHORIZING THE ACTUARIES OP
EACH PENSION PROGRAM 10 PREPARE A STUDY; AND
FURTHER PROVIDING THAT THE COST OF SUCH STUDY TO
SE PAID FROM THE PENSION TRUST AND AGENCY FUND.
VH 1AS, an amendment to the chaster of the City of Miami
enacted by the Special Acts 1947, C. 24696 provides: "that the Cos -
mission of the City of Miami , shall establish a fund or
funds for the relief or pension of persons is the classified and un-
classified service , and shall have the right to raise by
taxation such amount as say be necessary for such purpose, sot to as -
coed four (4) silts on the dollar of the iisessed value of all proper-
ty it said City, both reel and personal"; and
WHEREAS, for the purpose of remaining within the four (4)
mill limitations it wilt be necessary to engage the pension actuaries in
a study to reduce the projected cost for tbs 1980 fiscal year; and
NOW. T1.RE7'ORU SE TT RESOLVED SY TEE COIMISSION OF THE CITY
0114LAMl, FLORIDA:
Section 1. That the Trustees of the Pension Plan and System
are hereby directed to implement tbs Pension Policy adopted by the City
Commission on July 23, 1979;
Section 2. That the Trustee of the Pension Plan and System
are hereby authorised to pay the actuarial firms fsos the Pension Trust
fund the amount necessary to conduct the study to isipleseot the afosemeo-
`tloned policy.
•
PENSION
APPROPRIATIONS FROM FISCAL YEAR 1975 TO
18,000,000
4,000,000
11.6 M
FY75 FY76 .FY77
* Estimate
McMi1110n
253
16.8 M"'
FY78 FY79 FY80
79-65S
PENSION
DEPARTMENTAL POSITON SUMMARY
1978-79 1979-80 CHANGE
'TRUST & AGENCY 3 1PT 4 1PT
CETA 1 1
OTHER 0 0
TOTAL
4
5 1PT
0
POSITION TABLE
1978-79 1979-80 , CHANGE
Accountant II 1 1. ,
Accountant 111 1
Executive0
Secretary 1PT 1PT •
0
Secretary 111 1 1 0
Typist Clerk II 0
3 1PT. 4 1PT.
1 • 1 ,
1
CETA
4 1PT
04/9-668
11111111111M NM
254*
c
DEPARTMENTAL
Expended
1976-77
Personnel Services $
Operating Expenses
Capital Outlay
Debt Service
Capital Reserve
Total
Positions
PENSION 114
$16,755,336
BUDGET AND POSITION SUMMARY
Expended Adopted
1977-78 1978-79
- o-
- o-
- o-
-0-
- 0-
$15,554,645
462,921
-o-
-o-
-0-
-0 - $16,017,566
3 1PT
Amended
1978-79
$ 72,336
15,949,572
- 0-
-0-
- o-
Requested
1979-80
$ 84,663
16,670,673
- 0-
- 0-
-0-
$16,021,908 $16,755,336
3 1PT 4 1PT
The Pension Trust and Agency Fund is set up to pay the cost of t
retirement benefits.
Ci ty' s employee
The Pension Boards administer and manage the employee retirement system and assures
the provision of retirement benefits to former City employees and the actuarial
soundness of the City's pension plan.
BUDGET HIGHLIGHTS
* This request is $733,428 or 4.6% more than the FY 1978-79 Amended Budget.
* Only $15,401,984 of this request will be contributed by municipal operations for
FY 1979-80, which is 5% more than last year's contribution of $14,668,556.
255
79- bo8
LEISURE SERVICES
CHILD DAY CARE
OFFICE'OF THE DIRECTOR 1
CHILD DAY CARE
1978-79 1979-80 CHANGE
Account Clerk 0 1 1
Day Care Administrator 1 1 0
Custodian I 3 0. (3)
Day Care Aide 0 `5PT 0 0 (5PT)
Day Care Assistant 0 12PT 0 0 (12PT)
Day Care Center Supervisor 4 4 0
Day Care Teacher 0 2PT 0 (2PT)
Typist Clerk II 1
,.~9 19PT. 6 _ - M (19PT)
CETA 12 30 18
TOTAL
,.79-658
256
RETIREMENT SYSTEM
The City costs calculated for the fiscal year
beginning October 1, 1979 for the System are
$11,994,785,.as compared to $10,864,939 for the
previous year (See Table 1, page 3). A portion
of the cost increase ($95,604) is due to the
October 1, 1978 cost of living increase.
The remainder of the reasons for the cost increases
are shown in Table 2; most elements of System
experience were less favorable than predicted by
the actuarial assumptions.
Costs have also been calculated on the basis of the
assumptions derived in the 1976-78 experience report.
Costs calculated on this basis are $13,781,295 (See
Table 4, page 10).
.,ur continuing analysis of System experience results
in` conclusions consistent with those of the experience
report in most respects. In addition, we recommend
that the Board consider further adjustments., including
an 'increase in the investment assumption to 7%. This
results in a 1979/80 cost of $11,601,854 (Table 4).
We also recommend that the expected actual timing of
deposits be reflected in the deposit amount, which
increases our recommended deposit to $12,413,984
("Additional Funding Considerations"), and that non --
investment expenses either be paid outside the Fund
or added to the deposit amounts.
Our review of the funding progress for the last three
valuations indicates that good progress is being made
toward having sufficient assets to cover benefits
already earning but that the portion covered is only
58% at January 1, 1979. ("Funding Policy", page 14).
79-.658
EDWARD H. FRIENDS COMPANY
CONSULTING ACTUARIES • EMPLOYEE BENEFIT PLAN CONSULTANTS '+ CASUALTY RISK CONSULTANTS'
COWARD M. /NIOND, /. S.A., /. C.A. ONC$IDINT
armor M too .stOlr-Al U. OSu M K.Tu1WO •
. oww S. t+ttttCA. Stw1001 VICE-.11t$IOENT
JOMN A. MACDOUOALL,.1N. I. LA, I. C. VICE ••NCIIOLNT
strata Or tit YtaKra KrDIN? Or ac,WNsa
ALSO NT 'Mt, !,A A. S. A. P. C.A. Viet •,NCSIDCWr
stoat, Or trs .st„CY .CYsat M aCT1/Mt0
OU$TAVt A. aNAU$t, ►. CA. S. A$S? VICE.I UCSIOENT
*SOW! Or 'MI .start .Carat M AC/WMO
, ASS? VICC•SNLSIOINT
minuets Or not at,Krs ,Castor OP aCT.6114,
DAVID I. SLNCIVCNOA. A. L A. ASS? VICE • 9NtSIOCNT
.IANE D. NACtLLb A. S. A. ASS? vlCt•NNCSIOCNT
Mrs. Elena Rodriguez
Secretary
Miami City General Employees'
Retirement Plan
Post Office 330708
Coconut Grove Station
Miami, Florida 33133
Dear Elena:
INYENNATtONAL CLUS SUILOINO
SUITE S00
MOO a siOIEET, N. W.
WASNINOTON, D. C. E00011
(SOO) TSS•SOSo
TANTS
110SCNT.1. MTCU0, I. S. A. OP C. A.S., RCA.
sass. Or tot astalCA, AMAssst M &MON SS
•AUL S. L1$C0N0, P CA.
meow M tit uIwtrs ACYtat M aCPUMt0
17, 1979
Miami City General Employees' Re-
tirement Plan; Actuarial Valuation
Report as of October 1, 1978 (6000)
Enclosed are 15 copies of the Actuarial Valuation Report as of October 1,
1978 for the Miami City General Employees' Retirement Plan.
The Report indicates that the City's required contribution amounts to
$7,849,446 or 26.912 of pay if the contribution were made on October 1,
1978. Since the City will actually make the contribution on average
as of December 31, 1979 (i.e., during the fiscal year October 1, 1979
through September 30, 1980), interest must be added at the effective
annual rate of 72 for the 15 months of deferred payment,resulting in
a City's required contribution of $8,542,180.
These amounts do not include any allowance for administrative or other
expenses which may be charged to the Trust Fund. Any such expenses
so paid must be added to the $8,542,180 amount.
At first it may be difficult to imagine the circumstances which would
lead to such a dramatic increase in the contribution requirements from
previous levels (the City's required contribution determined in the
previous actuarial valuation was only $4,184,734 or 13.862 of pay).
But the following facts uncovered during the course of the valuation
strongly support the need for the much higher level of contribution.
79-658
CDWANO H.'F1NfND i COMPANY
Mrs. Elena Rodriguez
May 17, 1979
Page Two
1. The benefit payments to retired participants, disabled participants,
and beneficiaries are estimated to amount to $5,950,000 during the
October 1, 1978 to September 30, 1979 fiscal year. These benefit
payouts equal 20.4% of pay.
In addition to benefit payments, refunds of accumulated member con-
tirubitions are estimated to amount to $500,000 during the October 1,
1978 to September 30, 1979 fiscal year. These contribution refunds
equal 1.7% of pay.
Of the 1,999 active members in the Plan as of October 1, 1978, 415
are eligible for normal retirement with an aggregate annual benefit
of $2,100,000.
The actuarially computed value of vested benefits as of October 1,
1978 amounts to $104,100,000. his compares with the market value
of assets of $46,900,000.
. Any examination of trends in the Plan over the past few years is
absolutely alarming. We have attached Exhibit 1 displaying a few
of these trends.
With disbursements from the Trust Fund due to benefit payments and refunds
currently amounting to 22.1% of pay, and with the very real prospect
of a continued escalation in disbursements, it is clear that not only
is a much higher level of contribution called for --it is essential!
We can only conclude that prior contribution levels have been too low
rather than the current contribution being too high.
If this were the only retirement program of a private employer and if
that employer were unable to meet the $8.5 million contribution require-
ment, he would likely take remedial action in order to protect the in-
terests of all participants by effecting changes in plan design and/or
financing.
However, since this is only one of the retirement programs of a public
employer, we believe that options for a more gradual solutuion may exist,
but those options involve the entire City's outlook and not merely a
solution which exists within the Plan itself. We believe that the City,
working with the Retirement Boards, should:
1. determine the cash flow requirements of all retirement programs
(and perhaps interface these requirements with other City cash flow
projections);
79-658
--......- ... v..•..... • .•••....°
&WAND M. F111cNo & COMM"
Mrs. Elena Rodriguez
May 17, 1979
Page Three
2. determine the revenues available for funding all of the retirement
programs and allocate them equitably to each program;
3. examine the investment policy and objectives of the retirement pro-
grams (a high risk retirement program should not be invested in
high risk assets); and
4. examine the retirement policy and objectives of the City, particularly
within the framework of the revenues available for retirement pur-
poses.
As a result of initiating these actions, possible solutions may evolve,
such as (i) a 3- to 5-year phase -in to full actuarial funding on all
retirement programs, or (ii) the ability to offset City required contribu-
tions by additional investment earnings.
Sincerely,
David F. Bencivenga
P 79 658
•
i
i
10610111.1111111.11111111
•••.
CITY OF MIAMI
SUMMARY OF BUDGET REQUEST
FISCAL YEAR 1979-80
u pa men
A C p NSTAN
e
s STE/77 a P.C.i9/V
PFJ STOP T811S
1. COMPARISON 0U RCQU ST 6 LfMIT:
•
Budget L1ntBudget Request
Increase ecrease[
.. •
/. / /
11/fJ • • . I /, '/,/, ; .• %
- 1i
II. APPROPRIATIOI b)hPM USON
1
1
3
4
�' [ 6) 1 c
get '
S
increase
Decrease)
(5l-(3).(6)
%
Increase
Decrease)
(5)-(4)•(7)
Obj.
Code
Description.
Form
No.
optea
Budget
1978-79
Hodlfle
Budget :A-79
As o��.3131/79
S
Request
1979-80
001-
031
Salaries And Wages
6.2
55.274
35
s9,,Ur ,
_
70 844
„ LS,$70
/4474
,�•
1.099 _•
•
JP '
•
056-
199
Other Pay
6.3
12.720
_08
1.2497/
s
13.819
•
001•
199
TOTAL PERSONNEL
SERVICES
67.994
13
T.z —134
84,663
-1
16.669 -.
/2;.32Y
ZOO• _
799
Operating Expenses
6.4
46W21 ..._
1162,921
4r7Voo
' il},1179
4
ao6-
R99
Capital Outlay
6.6
00
nn
00
.00,.
00
.00
00
00
900-
924
Debt Service
6.7
00
.00
00
.00
00
.00
00
00
975-
999
Non -Operating*
15,486,651
yt4115,486,651
,,2/,
0.3i,964
AS 3/3 (
'
f, 31!23
200,
999
TOTAL OTHER EXPENSES
15,949,572
,9pp115,949,512
2/.6og36 �!
3�9 79�-
4 (�
•_-
S6s9 �'9z
.
,5 692 f il
/
001•
999
TOTAL APPROPRIATION
,16,017,566 ,10(1J/
a/ 908
100
al, 027
l00
5,��6 �I/
'
III.
POSITI0N4O PARISON
'14
3 i i
rP
.
4 ,�,�_
;;
1
�;
1
,,�
General Fund
CETA
Other
TOTAL N0. OF POSITIONS
3 /Fi
1
1
1
a
---
---
4 1M
100b
4 .1 e!
100
5 1
100
1
`,
1
„
_
0MB'6,1
*OMB Use Only.
Pane 5,l.o
•
- CITY OF MIAMI •
SUMMARY OF BUDGET REQUEST
FISCAL YEAR 1979-80
00
W.
•
Fund Ifepartment
C pFNSInH
Gode I
.IV DIVISIONS
s srE ALL
pF,�S7pp Tg[1ST AGE
1. COMP RA 1SIN 0 REQULS 6 LfN7
T: Budget Limit Budget Request
Increase ecrease
II. APPROPRIATIaZ &0(iP)lISON
..-r.:�--
[b) l
[7)
(11
[)
[fit
41
Bridget
Request
1979-80
S
Increase
Decrease)
�5)-(3)•(6)
%
Increase
Decrease)
�5)-(4)�(7�
/4109
Obj.
Code
ion.
Description
OMB
Form
No.
Adopted
'Budget
1978-79
1:
.Modiffed
Budget :A-79
As o:' 3)31/79
>:
001-
031
` �
Salaries And wages
6.2
55.274
35,
s9,3/.-r
70.844
L4,570
1 i099
- lye •
050-
199
Other Pay
6.3
12.720
8
1.2 y97/
13,819
00r-
199
TOTAL PERSONNEL
SERVICES
67.994
_,3
�►2-.334 _
84 663
•
16.669
/2;3�r
790•
799
Operating Expenses
_
6.4
462,921
ja9
462.921
�'77�ro0
�
1I'6479
.1L4
l79
800-
899
Capital Outlay
6.6
,y
00
nn
Q0
.00
00
.00
00
00
•
900-
924
Debt Service
6.7
00
.00
00
.00
00
.00
00
00
975-
999
Non -Operating*
15,486,651
y%41
i5,486,651
1
'24 031,965!
S , 313
,,9
,3/�
_.3
200..
999
TOTAL OTHER EXPENSES
15,949,572
gfJ715,949,5r2
z/.6o9,3GJ
5,639, '79�
,, 6z
s979! • s
- 5;�72,J�
001-
999
TOTAL APPROPRIATION
16,017,566
InnJ
&0a/l 908
Ivo. 2I, 69y, 027
100iS6i6,I
/
_-
III.
POSITIONAQMPARISON
3 , r.
-. ;
3 / / . %
'i r
.
4 / /7
s ;"
'
#•• •
.•r
General Fund
CETA
Other
TOTAL NO. OF POSITIONS
1
: _
s'
---
---
4 1PT
_ _.
100
4 1 /- i"
_
100
5 1Fi
100
1
% 2 1
1
OMB6.1A
*OMB Use Only.
_ Pace ..
CITY OF MIAMI
PERSONNEL SERVICES: SALARIES & WAGES
FISCAL YEAR 1979-80
. Fund
Department
(1)
(2
Object
Code
001
Title
Accountant III
Accountant
Secretary III
Typist Clk.
Executive Sec.
(Pt. Time)
Total Personnel
Services, Salarle
and Waxes
Subtotal#*
(3)
Modified
Budget 78-79
As of 3/31/79j
20,387
*Delete as necessary:,
# of
Pos.
1
j Code
(4J
Budget
Request
1970-80
24,102
1 Division
# of
Pos.
1
4 1pt►
(5)
Increase
(Decrease)
(4)-(3) =(5)
3715
15 570
# of
Pos.
0
1
(6)
ICode
Explanation
General Salary
Increases
Addition of TC IIj
Position 4/79
alary.Increases:
12-31-78
4-8-79
Page of
CITY OF PUAMI
PERSONNEL SERVICES: OTHER PAY
FISCAL YEAR 1979-80
Fund AGCY Departnmint
PENSION TRST &
(u--- • 121
.Object
Code
Description
PENSION
Modi �)
ied
Budget 1978-79
As of 3/31/79
Code
(4)
Budget
Request
1979-80
Division
(5)
Increase
(Decrease)
(4)-(3)=(5)
Code
S15Ti f Ps_ PO
(bj,�
Explanation
100
110
120
(P$ 6.3
FICA TAXES
RETIREMENT
CONTRIBUTION
INSURANCE --
ACCIDENTAL DEATH
CONTRIBUTION TO
CROUP INSURANCE
7o7i9c OMMER Py re:
/UEGoeiRied /ncReAs s'
Subtotal/Total*
*Delete as necessary
3,388
4,343
955
Increases with
Salary
Page 8 of _4
4
I
1
1
Fund - AGCY Department
P STON TAMP
Object
Code
Description
PENSI
Modified
Budget 1978-79
As of 3/31/79
CITY OF MIAMI
OPERATING EXPENSES
FISCAL YEAR 1979-80
a)
u,
co
1
CD
i~
'Code 'Division
1 C
((S) Cb)._•
Budget Increase
Request (Decrease)
1979-R0 4)-(3)■(5)
Explanation
110
110
110
110
110
,--------
DM 6.3
ACTUARIAL REQUIREMENT
PLAN
•
ACTUARIAL REQUIREME
SYSTEM
SYSTEM OLD FIRE &
POLICE
ICMA
BENEFITS TO
RETIREES
Subtotal/Total*
4,184,734
10,864,939
212575
27563
387840
15 486,651
*Delete as necessary
,syz,/St
2/, 03/, y1,4/
4; 3s'; /'/b
S•/S, 3/3
/7r VPcvoiins)
A5 Pro' YphvAr/OA)
Membership doubled
and salaries increased
approx. 20%
•Included in valuaticn
Page _•_ of 14
CITY OF MIAMI
OPERATING EXPENSES
FISCAL YEAR 1979-80
op
OD
Fund AGCY beoartmcnt
PENSION TRST. _ PENSION
I Code
1
Division
sc .."• "%r., ` n_ P eu
I Code
(1)
L_.
(4
)
_ (5)
MI. ,
'
.Object
Code
�..
Description ;
Modi �d
Budget 1978-79
As of 3/31/79
_
Nudget
Request
. 1979-80
Increase
(Decrease)
(4)-(3)=(5)
4,875
00
/7 A-0•
0?
/? 4.3 0,
00
.
Explanation
Rea mbuRSEmErui to
T tusr Ex pc&sE
Addition of 2 consult
' 3L,oco icnu.,.rnnirs
,3/9,oco mmi:Cy ; motv:)(./
'le,ee4. :4tI1F R ( t g
yen'c_y PUbfr
•
lye 4le:h.
210
250
26Q
270
280
PROFESSIONAL SERVICE3
(ACTUARIAL)
PROFESSIONAL SERVICE3
(LEGAL)
PROFESSIONAL SERVICES
(MEDICAL)
PROFESSIONAL SERVICE
(OTHER).
ACCOUNTING AND
AUDITING
'fit.
25,125
40,000
35 000
337,700
12 000
30,000
40,000
/ , roo
b/,00a
.12,000_
..`
Subtotal/Ta1sl*
iif), - •-"
OMB 6.4
*Delete as necessary
Page 10 of 14
CITY OF MIAMI
OPERATING EXPENSES
FISCAL YEAR 1979-00
Fund AGCY Department
PENSION TRST &
(11
Object
Code
4 410
485
510
670
680
Division
{Si
Increase
(Decrease)
(4)-(3)=(5)
Sy=rFm * PL/>P)
[6kka
r.. L�
Description
TRAVEL & PER DIEM —
TRAINING
POSTAGE
COMMUNICATIONS SERV.
TELEPHONE --
OUTSIDE
REPAIRS & MAINT.
SERVICE — OUTSIDE
PRINTING/BINDING -
OUTSIDE
PENSION
Modi i3
ed
Budget 1978-79
As of 3/31/79
3,516
'Code
(4)
Budget
Request
1979-80
3,500
Subtotal/T Vi *
11.3, /29
Code
s
4A
es
Explanation
Cost of postage
increased
Older equipment
requires more repair
Cost of envelopes
•and check printing h
increased
ors 6.4
*Delete as necessary
Pagel]. of 14
s.
as
CITY IW MIAMI
OPERATING EXPENSES
FISCAL YEAR 1979-00
00
a
Fund AGCY lepartment
PINION TRST X ZL
'Object
Code
(.00
760
773
PENSION
Modif33
ied
Budget 1978-79
As of 3/31/79
2,000
Code
Nu get-
Request
1979-00
2,500
Division
rn' 1 re_r
Increase
(Decrease)
(4)-(3)=45)
500
Description
OFFICE SUPPLIES
PUBLICATIONS &
MEMBERSHIPS
INTRA—GOVERNMENTAL
CHARGES --
PRINT SHOP
Subtotal. 0 Prp:xa
xl62, 9.z1
//4/,y/79
ICode
[61.:
Explanation
Increase cost of
supplies
Wes/rose Cc:'rnF
n!F')fl*'T•: S1agP
OMR 6.4 still ,)L= orH£R EXP.
/5:.7.14
Page 12 of 14
00.
•
•
CITY OF MIAMI
TRAVEL REQUEST
FISCAL YEAR 1979-80
urn AGCY Departmen
PENSION TRST &I
Traveler's Name and Title
11 RETIREMENT BOARD
MEMBERS
E. RODRIGUEZ,
SECRETARY
TOTAL
t
PENSION
(2)
Name of Official Meeting
Or Reason for Trip
International Foundation
of Employee Benefit
Plans Annual Public
Conference
State Treasures
Retirement Conference
Miscellaneous travel,
attend hearings of the
Committee of Retirement
Code
(3)
'Division
Destination
Hollywood, Fl.
Tallahassee,F1.
Subtotal/Total*
(4)
Modified
Budget 78-79
As of 3/31/79
s't rE►n ' i 1, �).
Budget
Request
\_ 1979-80
3,516
1, 500•
100 '
1,900
3,500
Code
�• (6)
Increase
(Decrease)
(5)-(4)=(6)
tMB 6.5
*nftl ebto
Dine+ 1 ) of 1II
1("'
CITY OF MIAMI
GENERAL REVENUES
FISCAL YEAR 1979-80
Fund PENSION Department
ac
r t2�
Actual
• Revenue
1976-77
Revenue
Source
WATER & SEWERS :. re..,0 1
DADE COUNTY .,",
LLv �
"OFF STREET PARKII4G'a2
STATE OF FLOR-DA I, / 9 5-
DEPARTMENTAL-CONTRIBU7i
Plan .? r•tt, RF7
System
I.C.M.A
Actual
Revenue
, 1977-78
IONS:
3,6�7, S1 `7 .
,o;ny,• I, /0,973ii
2'4563
(4)
Adopted
Revenue
1978-79
321,393
160,579
16,332
�4+56
:RETIREMENT SYSTEM &PLAN
TRUST *CCOUNT:
(Money Managers
Subtotal/Total*
*Delete . as necessary
Code -
Revised
Estimate
1978-79
321,393
160,579
16,332
1,456.s;
sion
SYSTEM & PLAN
6)
Budget
Estivate
1979-80
674,819
335,227
32,914
4215
/2,547.5-464
50,000
•
(7)
Increase
(Decrease)
(6-5) (6-4) (5-4)
353,/ !2A
/6,5R2
2,7S9
•/r 4�,H ,` 2/; i•9` , 9 7 6,/4•,''1
—D-
0
eta
ICode
(8i2
Explanation
F.01fer;,je Is n �a.•�. ,;.�,.:r..�r
Page of
FROM:
CITY of MIAMI. FLORIDA
1NTER•OFF CE MEMORANDUM
Elena Rodriguez, etary
Miami City Employees Retirement
Plan & System.
ntrERENcEss
I was requested by Mayor M. Ferre, during a budget hearing, held
in the C.O.W. Room on September 11, 1979,to supply -the Miami City."
Commission . for" .their meeting of September 27, 1979, with a copy of
that part of the pension meetings dealing ,with alternate investments.
As requested,
I respectfully
September'27, 1979.
I have highlighted the items: for them.
request that this item be placed on the agenda o
79.658
0/2z.)
Minutes of May 4 1979 Special Brd. of Trustees Meeting
ALEXANDER & ALEXANDER (Con'd):. . .
A motion made by J. Reese, seconded by March, adopted the
recommended 7% assumption, proVidingtheretiteMentpenalty factor
did not increase from 6%. Thevote:'4d6ttlAV,-:GriiiiM dissenting).
A motion by E. Jaremko, seconded:bytetei to set up a separate
account to be administered bY:thejenSiOnBoard for administrative
purposes, was substituted by a motion by D. March, seconded by
J. Bertel. The Monies for adMinittratiVe expenses should be paid by
the City to the Trust, set 110in-:a:teparate bank account, and
administered by the Board. This motion failed by a 4 to 5 vote
(disbentitigCGarcia, G. Houck, V. Grimm, B. Jennings, & Commissioner
of 3
E. Jaremko Moved. to accept the recommendation that the Money Managers
be contidered expensesof the Trust. This motion passed by an
unanimous vote.
A rnove:- by , E. Jaremko, secondedby G. Houck, that all remaining
certifications ' be approved, brought an ' Unanimous vote.
- ' -
J. L. Plummer informed the Board Major .J. :Reese-had:applied and was
one of the finalists for the job of:exedutive- director of the Florida
Department of Law Enforcement,
A motion by E. Jaremko, seconded by D. March, to write' a letter to
the Governor, supporting and recommending J., Reese!A. appointment,
passed Unanimously! ' •
The Secretary was instructed to prepare such a letter for. the
Chairman's signature.
J. L. Plummer brought up the fact the Board should expand its
horizon and should look at other types of investments. It should
take advantage of the present high interest market. A committee,
consisting of D. March, G. Houck, and E. Gong, was asked to look at
different investment possibilities and report back to the Board.
Being no further business, this meeting ne at 4:25 PM
W/
40007"b.lummer, r., iarrman
Attest:
Secretary
Elena
9-658
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Minutes of May Th , 1979 Board'
QUARTERLY REPORTS (Con'd):
Coopers & Lybrand:
T. Jennings represented the auditing firm of,Coopers• & Lybrand
They have been our auditors Tor 'the. past three "years
Mr. Jennings; rendered an unqualified or clean opinion. The Fund
has grown in the last year,approximately;!10 million. The:investments
:are:'reported as of 9-3.0-7.8
D. March wanted to know if the auditors.,: had any observations to
makeregarding the validity of the assumptions"that were"currently
made
.T.-.Jennings answered, "That would be but of iis.:field of expertise.
°His firm`has an actuary division"that reviews the:"assumptions,.j: If
they:had any particular disagreement, they would-have,:stated"so."
E.:.Gong explained he saw a problem with,the vested benefits being
'reported as of 1-1-78, and the investments as "of ;9 30.-78.:He
believesthere. is'asignificant:difference. �Itwoul3:tie-very
valuable for the Board;of."Trustees"to have'.a-true picture.,.
T. Jennings. suggested that -next year, his. auditing. firm would provide
the Board with comparative statements. `They were unable to do so
this,'year, because; of, the -change on the;year-end. Last -year, they
had only a nine -month year.
f 9
T. Jennings was requested to produce"a.follow -up report, now that
the actuarial report is available. This report should show both
the unfunded liability'balance'and the as"sets available as of 9-30-78.
A brief recess"was called at 355.PM. This meeting was reconvened
by the 'Acting, Chairman, E.:;Jaremko, at u : 05 PM.
INVESTMENT COMMITTEE REPORT:
D. March reported for this: committee. "They have agreed in their
discussions that: their...methodology,needs to be looked at. The
criteria given to.`theMoney Managers has to be reviewed. They are
looking to a better way in which they, can evaluate their alternatives.
De' Marche gives -us an excellent summary that describes the Money
Managers' activities. However,the committee does not feel
comfortable with their expertise on evaluating the information
provided in these',reports."
What the committee is ;looking into is a series of workshops. That
would help them lookat all the legal investment activities that the
Board can enter into; tracking the experience through the investment
fields from 141=7;L► to _date; seeing how our current approach stacks
414..1o411e various' alternatives, and going from there. Hopefully,
after all"this,they can come up with a methodology available to all
Boards in the future, regardless of who their members are."
79-658
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of.August'.30, 1979 Board of Trustees' Meeting
QUARTERLY REPORTS: (Con'd)
De'Marche Associates (Con'd)
S. De Kinder answered "Most Managers negotiate trading methods in
advance. The trading department works out some arrangement that
describes the type of trade and the approximate discount you can
expect. Montag & Caldwell's discount is reasonable. There are
probably other firms that would quote you maybe 60 or 70%. The
problem:is that perhaps the firms that quote you the lower discounts
might not be available to you on a particular kind of trade."
J Bertzel asked "Is it possible for De'Marche to report on how well
the Money Managers ?cute on their trades?"
S. De Kinder answered "Yes,and it's usually reported in two parts.
One is the trading effectiveness. HowAmany.dollars can they trade for
x amount, of money? .In .other"words, how did we, do with the commissions?
The other. part is how 'effective are they.on purchase and sales in
terms of profit and loss on longtermbasis, or how did the trading
over-all affect the' value of fund?""
J. Bertzel.-inquired as to what the cost of this job would be for all
three.Money Managers for a .6`month period?
S. De Kinder answered that
between $5 000 and $7,000.
The Secretary was asked to
Special >'Jorkshop Meeting.
COM4ITTEE`REPORTS :
a) Investment Committee
D. March reported the Committee has not met as often as it would have
liked. They will be circulating a workshop format as soon as possible.
Several people, including the Money Managers and De'Marche, have
shown interest in this workshop. The Committee is trying to schedule
the workshop during the time that the Money Managers will be in town.
What they are planning is schedule a day for discussions and presenta-
tions without an agenda. He would like to have some kind of a
commitment from all the parties involved before a date can be set.
MONEY MANAGERS' COMMISSIONS:
J. Reese moved to have each one of the Money Managers report, at no
cost to the Board, for the period of six months (January to June, 1979),
each stock trade, the shares, the commissions paid, and the commissions
per share. His motion was seconded by J. Bertzel and passed unanimously.•
79-658
Minutes of April 6
INVESTMENTS:
Ed Cole represented Equitable Insurance Co. He explained he had
been asked by the.Director.of Finance to make a presentation. He
would like to propose a guarantee investment to the Board. R. Gordon
asked if Mr. Cole was trying to become a Money Manager.. Upon his
affirmative answer,she proceeded to explain that at this time the
Board was not looking for any addtional Money Managers. If in the
future,they should be in this positon,they would advertise publicly.
ATTORNEY REPORT:
1) Insurance:
R. Silver; reported he hadbeen in contact with Aetna Insurance Co.
recently. They are the only firm offering this kind of coverage
we are looking for. At, the. present time,they.are still trying to
put together our requirements and the fee they will be charging.
2)Legislature:
R., Silver explained he had brought with him ,a package containing
the most .recent bill proposed in.Tallahassee.. He 'would make available
copies to all the Trustees of the Board.
A. 'Harris said this bill required the Board to hire an administrator,
otherwise the Plan sponsor would be considered the Plan administrator.
3)Other:(Consolidation of Bodth Boards)
R. Silver explained he favored this move, to consolidate both
Boards and their legal counsel. The Boards would be placed on a
more advantageous position. They would be combined under the.
Board of Trustees and as one board handle investments aswell as
administrative functions.
1979 Board
rbi
f Trustees Meeting
No increase in posible liability is foreseen; By, consolidating
both Boards in no way are we shutting ,out:: the.City,`Attorney,;
simply the ultimate responsability to the Board would be vested
on the one attorney.
REMOVING THE FINANCE DIRECTOR FROM THE BOARD:
Several of the Trustees expressed their concern that as two Boards,
certain members, wore one!': hat for the Board of Trustees and another
for the Regular Board. They felt the Finance Director had placed
himself in this position_sev,eral`times. There was also the feeling
that he hadunlimited.powers,since he alone could stop a check
for a retiree from being issued. No other trustee,including the
Chairperson had this authority. The posibility of ammending the
ordinance to remove theFinance Director from the Plan Board was
discussed. After a brief discussion this matter was tabled
temporarily.
79-658
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• 0
Minutes of the May
Board of Trustees' Meeting.
RECONCILIATION"OF: BANK STATEMENTS:
The Secretary'explain,ed she had discussed this item with Ron Silver
and`.they had agreed it should be brought -up at the meeting..
m
Several years ago, at the request of;the auditors, the checking
account reconciliation was doneby someone in the Finance Department
not connected with the Pension Office. Now that the Pension Office
is no longer a part of the Department of Finance, the -Finance Director
announced this reconciliation will no longer be made. She had spoken
to Pan American Bank and inquired what the cost would be for them
to perform a full reconciliation. They should be answering shortly.
Approximately $14,000,000 in checks are issued a year between the
,System and the Plan, all bearing the Director of Finance's signature.
After a brief discussion, the Director of Finance volunteered to have
the: -Treasury Management Section reconcile the, checking account at
no cost to the Pension Offices
of 9
II. Gary offered a' motion to accept this
unanimously:
The balance of the agenda (see. below) was deferred until the next
meeting, because Ron Silver was.. not present.
BUDGET:
COMMITTEE REPORTS:;.
a) Report on `Legislative C
bL Comprehensive Booklet
ITEMS FOR ,DISCUSSION:
Investment
ATTORNEY REPORT .........'...
a) Insurance
b) Authorization of.Signatures
c) Reconciliation of Bank Statements
d) Other
The next meeting was tentatively set
This meeting was adjourned at 3:40 PM.
Attes
Elena Rodriguez,) SeJretary
Note: This meeting is recorded on tape and; is available for listening
purposes in the Pension Office. This resume''was"prepared by the
Secretary.
which was approved
for June 22, 1979.
R. Gordon, Chairperson
7 9,• 6 5 8
iii i �uI IIIII
Minutes of the June
ITEMS FOR DISCUSSION:
a) Investments
There had been a Workshop Meeting following the meeting of
Plan Board of Trustees on June-22, 1979. The members that were in
attendance reported to those that were not there.
A. Harris inquired how the Board should proceed should they decide
to invest in "options".
R. Silver answered "First, .we would have to check and see if this
type of investment is one permitted under the present Ordinance.
If it is permitted under the Ordinance, a simple direction to the
Money Managers is all we would need to do. If this is not one of
the investments permitted and the Board wishes to pursue it, then
a change to the Ordinance should be prepared and presented to the
City Commission for consideration."
D. Bencivenga added "Options are considered a very speculative
type of investment; however, he has seen some very favorable reports
from pension systems that have employed them."
R. Silver said that there is also another area he: would- recommend
the.Board look into. Interest rates on mortgages=,have exceeded -the
10% figure, real estate is a good hedge against inflation, and
second mortgages provide a good yield.Perhaps-theBoard would
consider having a presentation in this area,.:'
A motion by A. Harris, was seconded by H. Gary, to request the.
attorney examine the Ordinances and:to report, back to>the'Board with
a list of the investments that would be,.permissible:under the present
guidelines. This motion was passed unanimously.
of 4
ATTORNEY' REPORT:
Insurance
R. Silver; reported more information *as required ::by the Insurance
Company, which he promptly ;supplied. This is the only company-:
writing this "kind: -of _insurance', and they: are`' still . debating " if they
should give us coverage.
b)
Other
R. Silver requested authority, from the'. Board: to. attend the; negotiations
currently being held, regarding settlement. of. the "Gates; -suit". Any
settlement that_is instituted on behalf of the, System, naturally
will be applied to the -Plan.
A motion was made by A. Harris to authorize the attorney to attend
the negotiations_ and make assessment of .the situation, and report
back to the Board. This motion was seconded: by H. Gary and approved
unanimously.
79•658
Minutes of the July 271:197.9`Board of Trustees' Meeting Page 6 of 7
ATTORNEY REPORT (.Con'di:
e) Variable Annuity (Con' d )
The attorney asked that this item be deferred until the'next'
Meeting, so he would have a chance to review it.
f) Possible Negligence of Kruse, O'Connor & Ling
R. Silver reported that when the Board's actuary appeared at the
System's meeting, he suggested that perhaps the reason for some of the
deficit, might be the actuarial methods that were used by the previous
actuary in their computations. This might or might not be the case.
He believes that it would be prudent fot the Board to instruct him to
look for a. possible liability as to any negligence on the part of the
previous actuary.
A motion was made by L. De Jesus, and seconded by B. Smith, to instruct
the attorneyto look at the possibility of any negligence on the part
of the: previous actuary, Kruse, O'Connor & Ling. This motion was
approved unanimously.
g) Investments
The attorney reportedthat he is looking at the possibility of alternate
investments, and will be reporting to the Boardshortly.
R. Sil
ver said he had received some information regarding the PERISA
bill. It has been re -drafted, and;it's going to be re -introduced to
Congress.
i) .:Merger of Boards
The attorney explained>that_he had met with E. Gong and G. Knox. They
are inthe=process of drafting anagreement. As soon as it is completed,
it would-be ;presented to theBoard:-for their approval.
The Secretary was requested that in the future, the -attorney report
be placed onthe agenda right, after the approval of the minutes.
);, Other
L. DeJesus asked whether J. Gunderson, Director of Finance, was within
his right,or acted in violation of his Trustee duties, by drafting a
resolution and placing it in front of the Commission without consulting
with the Board.
R. Silver answered J. Gunderson wears two hats. He believes when he
placed the resolution in front of the Commission,.he was acting as
Finance Director.
79-658
FiliM 4
MEMORANDUM OF VOTING CONFLICT
DATE ON WHICH VOTE OCCURRED:
September 27,
PART A
Name'
Address'
(LAST) 1 ,{fIRSfFT) 111 �t4 'j �IMIDOLE)
3500 Pan American Di:.. UU�� Miami
GORDON
REC
ROSE
(STREET) (CIT.Y
PARTS l'..^, t : i •
City: Cla7 is
i F
Agency is a unit of (chcck one) : 1 1 State of Fl fii�;of (411ateo0ntyla., City or other Political Subdivision
Telephone. (305) 579-6017
(A/C) (NUMBER)
33133 Dade
(ZIP CODE) (COUNTY)
Name of Agency. City of Miami City Commission
Position held in Agency: Commissioner
PART C
MEMORANDUM OF CONFLICT OF IN TEREST IN A VOTING SITUATION (Required by Florida Statutes § 112.3143 (197511
If you have voted in your official capacity upon any measure in which you had a personal, private, or professional interest which inures to
your special private gain or the special private gain of any principal by Whom you are retained, please disclose the nature of your interest
below.
1. Description of the matter
Agenda Item D, Committee of the Whole portion of Mtj
held
9/27/79-
"Discussion of proposed policy and resolution regarding pension
funding and alternative investments." inre M-79-6513.
2. Description of the personal, pri. ate, c r professional interest you have in the above matter which inures to your special private gain or
the special private gain of any principal by whom you are retained'
3. Person or principal to whom the special gain described above will inure:
a. ( ) Yourself b. ( 1 Principal by whom you are retained'
(NAME)
PART D
FILING INSTRUCTIONS
This memorandum must be filed within fifteen 115) days following the meeting during which the voting conflict occurred with the person
responsible for recording the minutes of the meeting, who shall incorporate the memorandum in the meeting minutes. This form need not be
filed merely to indicate the absence of a voting conflict. Florida law permits but does not require you to abstain from voting when a conflict
of interest arises; if you vote, however, the conflict must be disclosed pursuant to the requirements described above.
PART E
SIGNATURE OF PERSON DISCLOSING
DATE SIGNED
NOTICE: UNDER PROVISIONS OF FLORIDA STATUTES §112.317 (19751, A FAILURE TO MAKE ANY REQUIRED DISCLOSURE CONSTITUTES
GROUNDS FOR AND MAY BE PUNISHED BY ONE OR MORE OF THE FOLLOWING: IMPEACHMENT, REMOVAL OR SUSPENSION FROM OFFICE
OR EMPLOYMENT. DEMOTION, REDUCTION IN SALARY. REPRIMAND, OR A CIVIL PENALTY NOT TO EXCEED $5,000.
CE FORM 4. EFF. 1/1/77