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CITY OF !.11AM1. FLORIDA
INTEROFFICE MEMORANbUM
TO:
Joseph R. Grassie
City Manager
,James Gunderson, Director
FRoN: / Finance Department and
Howard V. Gary, Director
DATE
August 23, 1978
FILE:
sunitcr. Increased Behefits to Retirees
nE'F[peh+ces'
ENCLOSURES:
Management and Budset
The City Commission has been discussing the granting of increased benefits
to City of Miami retired employees. Specifically these benefits include
1) increasing retiree pension payments by 1/2% on the first $300 of benefit
times the number of years retired, and 2) increasing retirees pension
payments to compensate for the loss of City contribution to retirees' group
insurance.
The costs to provide the first benefit are approximately $42,750 for three
months of fiscal year 1977-78 and approximately $171,000 for fiscal year
1978-79. The total cost for both fiscal years is $213,750.
The second benefit would cost approximately $17,760 for three months of the
fiscal year 1977-78 and $69,840 for fiscal year 1978-79. The total cost for
both fiscal years is $87,600. However, it should be noted that the Law
Department has rendered a legal opinion prohibiting the City from paying group
insurance costs for retirees. Providing additional payments to assist
retirees in paying for their group insurance might be considered a circumvention
of the state statute by the City's auditors.
The cost to grant both benefits in fiscal years 77-78 and 78-79 is $301,350.
No provisions havQ been made in either budget for these benefits. As you
are aware, departments have had to reduce their fiscal year 1978-79 budgets
considerably to stay within projected revenues.