HomeMy WebLinkAboutM-78-0267•
Joseph Grassie, City Manager April 7, 1978
Funding for three Programs
Howard V. Gary, Director
Department of Management an Budget
Recently you requested that I search for funds to finance three programs:
ACTION (Bus System for Little Havana) $ 30,000
Blind Elderly Program 16,600
Increased Benefits for Retired Employees
(Option No. 2)
190,793*
TOTAL $237,393
We have completed our search, and the only funds available in addition to
the Contingent Fund are $10,000 allocated for "Environmental Protection"
in Special Programs and Accounts. Those funds will not be needed because
the Planning Department will be able to absorb any expenditures related to
environmental protection.
Total commitments against the Co:;gingent Fund to date amount to $84,350,
leaving an uncommitted balance of $169,650. The $169,650, added to the
$10,000 budgeted for Environmental Protection, results in $179,650 currently
uncommitted and available in Special Programs and Accounts. However, the
total is $57,743 less than the $237,393 sought.
Other budgetary requirements should be taken into consideration when deciding
on the use of the above available resources. Firstly, the FY'76-77 Fund Bal-
ance is approximately $198,000 short of anticipation. If you recall, $1 mil-
lion was anticipated in the FY'78 Budget as carry over fund balance from FY'77.
However, preliminary financial reports reveal that only $802,000 will be real-
ized. It should be noted that outside budget experts predicted that the City
would have $2.3 million in fund balance. If the City had agreed to use this
figure, the fund balance would be short approximately $1.5 million instead of
$198,000.
Secondly, the Fire Department needs approximately $140,000 for a new recruit
class, $60,000 for medical examinations and $54,000 for holiday pay for a
total of $254,000.
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Thirdly, the City will owe the University of Chicago approximately $51,000
at the end of this fiscal year for test validations, One of the requiremefts
of the Cohen Decree is that the City obtain the services of an independent
organization to design examinations that measure ones ability to perform the
job being tested for and, in addition, ensure safeguards against any racial,
cultural or ethnic biases, University of Chicago was selected to perform these
services, No provisions have been made in the budgets of the Police or Human
Resources Departments,
Fourthly, $27,884 is needed to operate African Square Park, These operational
expenses are needed to hire personnel, purchase recreational equipment and
supplies and other mandatory costs,
In summary, the following are additional budget requirements that are known
as of today:
Action $ 30,000
Blind Elderly Program 16,600
Increased Benefits for Retired Employees 100,793
Fund Balance Shortfall 198,000
Fire Recruit Class 140,000
Fire Medical Examinations 60,000
Fire Holiday Pay 54,000
University of Chicago Contract 51,000
African Square Park 27,884
EiVr/mt
cc: Richard Fo::moen
TOTAL $768, 277
Joseph R. Grassi°
City Manager
h
Tdmes , Gunderson
`Fib
of Finance
April 21, 1978
Cost of Living Increase
for Retirees
The actuaries have reported on the costs for allowing a 0.57, increase for
each full year since retirement with the percentage limited to the first
$600 of monthly benefit, and in the alternative, the first $300 of monthly
benefit. The following table sets forth the annual cost, the total of the
amortization payments, and the increase in the unfunded liability for each
alternative.
$300 Monthly Base
Annual Cost
Non -Uniformed $ 32,015
Uniformed 89,000
TOTAL $171,015
Non -Uniformed
Uniformed
Total of Increase in Un-
Amortization Payments funded Liability
$1,230,225 $ 773,132
1,513,000 923,000
$2, 7.'3, 225 $1,696,132
$600 Monthly Base
Total of
Increase in Un-
Annual Cost Amortization Payments funded Liability
$108,576
152,000
TOTAL $260,576
$1,628,640
2,584,000
$1,023,509
1,577,000
$4,212,640 $2,600,509
As you know, the Constitutional revision effective January 1, 1977 requires
that all increases in benefits be funded on a sound actuarial basis (Article
XI, Section 14). The System and Plan actuaries have recommended the increased
benefits be amortized over 17- and 15-year periods, respectively. The basis
for these recommendations is that the benefits being considered will only
last as long as the current retirees are living. Therefore, it is desirable
to amortize the new liability over a period that approximates the average
life expectancy of these groups. We have not received an opinion from the
City Attorney, so the above figures have been calculated on the 17- and 15-
year basis and not upon the 33-year basis.
To: Joseph R. Grassie
Res Cost of living Increase for Retirees
April 21, 1978
Page 2
In addition, the System Board has requested that no action be taken on
this matter until they formulate a recommendation. During discussion,
the Board indicated existing benefits should be stabilized as opposed
to paying retirees more than had been promised (see Minutes attached).
The Plan Board split 3-4 on the question.
It should be noted that Board members felt that it was unfair for present
members to pay for benefits that they would not receive.
JEG: j r
Attachment
Minutes Of ..4Piarch _3.-
1978 .Board
Trustees!Veet hr
Page 2 of 3
ATDO_RUY . REPO,t T (Con f d) 3
Upon a motion by J. Reese Which Was seconded by J. Bertzel and
Unanitflously approved, E. Gong Was authorized to contact S. Ufelder,
E?{ecutive Directory to see if he could present this item at the
April 14, 1978 meeting of the Constitutional Revision Cotnrnittee.
J. L. Plummer Jr. stated he Mould bring this matter up before the
City Commission for its sanction. It Was suggested by J. L. P1ummer,Jr.
that E. Gong forward all information to the Florida League of Cities
as this Would affect every city.
Scheduling of Meetings
The Secret., r.;. was instructed to henceforth schedule Trustees' Meetings
every three months, and if in fact a meeting is needed prior to that
time or and: member feels the need for a meeting, to notify the
Chairman ',;r.r) can call a meeting.
The Beard also concurred to try holding quarterly Retirement Board
Meetings. It was felt that if the Secretary was authorized to approve
disability applications, members would not be unduly delayed. The
next meetings were scheduled for April 28 and July 28, 1978.
Satic:.actions of Mortgages
J. L. Plummer, Jr. stated that he has been executing satisfaction
papers on behalf of the Board. The :secretary commented that this
was authorized by the Trustees at the :.:arch 25, 1977 meeting.
J. L. Plummer, Jr. responded that on future legal documents, he
desires to have E. Gongs approval reflecting that the -Attorney
researched the matter and the properties in question are correctly
designated.
Benefit Increases To Retirees
J. Bertzel commented that he thought there was an understanding with
the City administration that any matter concerning pension would come
before the Board for its input and recommendations. He pointed out
that there were four previous increases granted which led to an
additional contribution level of over $900,000. E. Jaremko added
the Board should be stabilizing present benefits instead of payin`,
retirees more than they were promised.
E. Jaremko moved to strongly disapprove of this measure unless the
benefit is extended to all members of the fund. The motion was
seconded by J. Bertzel. J. Reese offered a substitute motion to
defer,which died for lack of a second. R. Jennings commented that
the Commission could say "fine" and give the benefit to everyone.
He stated that he feels giving a .5; increase to retirees at this
tine with the problems the pension system has, and its huge unfunded
liability, would be fiscally irrq�ponsible. He added he could not
support the present motion. I/
•
Mir1uteQf t4arch, 314_ ,1978,_Board of Trusteet Metirig Page 3 of 3
J. Reese Offered a substitute motion to refer this Matter to the
Ordinance RevitiOh Committee 3 addihg that the City CoMMisSioh should
be asked not to act until the CoMmittee has reported. The motion Was
seconded by V. Grimm and approved by a / a 1 Vote; dissenting Was
A. Crouch,
There being ho further busihess3 the meeting adjourned at 3th5 PM&
Irwin Iazi1t Scretary
P ummer3 Jr CYa1tafl
b
April 20, 1978
The Honorable Joseph R. Grassie
Manager, City of Miami
3500 Pan American Drive
Miami, Florida 33133
Dear Manager Grassie:
0n the basis of my review of actual severance payments during
the period October 1, 1977 to March 25, 1978 and for the prior
five years, 1 estimate that actual severance payments for fiscal
year 1978 will be S300,000 less than the $2,055,639 currently
budgeted.
The pattern of expenditures during fiscal year 1978 appears to
be a close approximation of the average for fiscal years 1976 and
1977 in which expenditures from October through March were
approximately 57 percent of those for the entire year; thus,
assuming that the S986,000 in actual severance payments from
October 1, 1977 through March 1978 is 57 percent of those for
all of fiscal year 1978, the total should be about $1,730,000,
or about $300.000 less than the budget.
appreciate the excellent assistance and cooperation that
Howard Gary and his assistants have given me in gathering
data and developing analyses for this estimate.
Sincerely,
arvey n rickson, Ph.D, CPA
9865 / . 158 Terrace
Miami, Florida 33157
r7 f¢ ,2/f•- • 4 7
Mayor Maurice Ferris
City Hall
Miami, Florida
Dear Mayor rerre:
April 24, 1978
Retired Employees raise
Before you and the Commissioners go into the Commission
meeting on Thursday I would appreciate your taking the
time to read the figures below:
1,239 Retired Civilians
900 Receive less than $600.00 per month,
of these
787 Receive Loss than $300.00 per month.
701 Retired Police & Firemen
247 Receive less than $600.00 per month,
of these
160 Receive less than $500.00 per month.
There is no reason to believe that the present rate of
inflation will not continue, so the above figures should
convince each of you that a large percentage of Retirees
need financial assistance.
Trusting in your compassion, and appreciation of what
these people did to help build and make the City of
Miami what it is today, I remain,
CC:
Virg Mayor _Pebn:►.o
Comm. Father Gibson
Comm. Rose Gordon
Comm. J. L. Plummer
Sincerely yours,