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HomeMy WebLinkAbout2011 05 18 City Commission Special Meeting With The Board Of Trustees (2)CITY OF WINTER SPRINGS, FLORIDA CITY COMMISSION MINUTES SPECIAL MEETING WITH THE BOARD OF TRUSTEES WEDNESDAY, MAY 18, 2011 - 6:00 P.M. CITY HALL — COMMISSION CHAMBERS 1126 EAST STATE ROAD 434, WINTER SPRINGS, FLORIDA Mayor Charles Lacey Deputy Mayor Jean Hovey - Seat One Commissioner Rick Brown - Seat Two Commissioner Gary Bonner - Seat Three Commissioner Cade Resnick - Seat Four Commissioner Joanne M. Krebs - Seat Five ( ITY OF WIN IFR SPRINGS. FLORIDA MINUTLS CITY COMMISSION SPF('IAL MLFTING WITH THh BOARD OF TRUSll:FS MAY IR, 2011 PAGI 2 OF 14 CALL TO ORDER The Special Meeting of Wednesday, May 18, 2011 of the City Commission and the Board of Trustees was called to Order by Mayor Charles Lacey at 6:00 p.m. in the Commission Chambers of the Municipal Building (City Hall, 1126 East State Road 434, Winter Springs, Florida 32708). Roll Call: Mayor Charles Lacey, present Deputy Mayor Jean Hovey present Commissioner Rick Brown, present Commissioner Gary Bonner, present Commissioner Cade Resnick, present Commissioner Joanne M. Krebs, present City Manager Kevin L. Smith, present City Attorney Anthony A. Garganese, arrived at 6:09 p.m. Board of Trustees: Chairperson Maria Fair, present Board Member Max Swaim, present Board Member Barbara Watkins, present Board Member Vernon Rozelle, Jr., arrived at 6:16 p.m. A moment of silence was held, followed by the Pledge of Allegiance. PUBLIC INPUT Mayor Lacey asked, "Commissioners, would you be agreeable to modifying our rules to give everyone five (5) minutes tonight? I think we have found that this is a fairly complex issue that people have some well thought out presentations to make; and frequently, three (3) minutes is not quite enough for this particular subject." Commissioner Gary Bonner and Commissioner Cade Resnick stated, "No objection." No objections were voiced. Mr. Corey Green, Seminole County Fire Department: acknowledged that former City of Winter Springs Fire Chief Chuck Holzman had recently passed away. Mr. Green then stated, "My presentation is probably going to take about ten (10) minutes. Can we extend it to that?" Mayor Lacey inquired, "Commissioners?" Commissioner Bonner remarked, "No objection." No objections were noted. Representing some former City of Winter Springs Firefighters, Mr. Green showed a PowerPoint presentation to the City Commission and commented that many Firefighters are close to the end of their careers; mentioned many benefits that they have given up; spoke of their work schedule hours, diseases, and issues that affect them; overtime, and special pay situations. City Attorney Anthony A. Garganese arrived at 6: 09 p.m. Mr. Kip Lockcuff, 2512 Creekview Circle, Oviedo, Florida: as an Employee and Department Director with the City of Winter Springs, Mr. Lockcuff commented on the various incremental changes to the City's Pension Plans over the years; and that based on some of the work some of his Staff does and the hours they work, that they should also be considered as Special Risk Employees. Mr. Lockcuff then mentioned some deaths of Employees in his Department; and noted that he supported the City Manager and the Board of Trustees' recommendation. ('ITY OF WINTER SPRINGS, FLORIDA MINUTES CITY COMMISSION SPECIAL MEETING WITH THE BOARD 01: TRUSTEES -MAY 18, 2011 PAGE 3 OF 14 Board of Trustees Member Vernon Rozelle, Jr. arrived at 6:16 p.m. Chief of Police Kevin Brunelle, Winter Springs Police Department: thanked all the Elected Officials for meeting with him and listening to his issues; mentioned his team and keeping good Employees; that he feels confident he can maintain the same level of service with his current Employees on staff if circumstances remain the same; and remarked about continuing to work as a team with the City Commission and the citizens. Ms. Brian Fields, 185 Nandina Terrace, Winter Springs, Florida: speaking as a City of Winter Springs' Employee, Mr. Fields commented on private sector and public sector differences, and the merits of the City's current Pension Plan. Mr. Fields also complimented the Board of Trustees on their consideration and in-depth Motions at their recent meeting; and noted that he supported the Board of Trustees and the City Manager's recommendation and thought it offered moderate yet substantial changes. Ms. Ellen Simpson, Winter Springs Police Department: spoke on Employee's longevity and loyalty; and mentioned all the City Departments that have helped in many different ways; and suggested that General Employees should be considered as one entity. Ms. Michele Kelly, 280 Mosswood Circle, Winter Springs, Florida: as a City of Winter Springs' Employee, Ms. Kelly remarked about benefits and that she wholeheartedly supported the recommendation of the City Manager and the Board of Trustees. Mr. Michael Scheraldi, Winter Springs Community Development Department, Building Division: commented on differences between private industry and the public sector; that General Employees may not be classified high risk Employees, but General Employees often work as "Silent defenders", handling day-to-day mundane tasks; that the City Commission understand that employees have made family related decisions based on previous actions of the City; and that he supported the recommendations of the City Manager and the Board of Trustees. Mr. Chris Caldwell, 164 Sandalwood Way, Longwood, Florida: as a City of Winter Springs' Employee and Department Director, Mr. Caldwell mentioned that he came to Winter Springs from another City for the great benefits offered; thanked the Mayor and City Commission for the Pension Plan on behalf of his Department; and noted that they supported the City Manager's recommendation. Mr. Caldwell also thanked Mr. Kevin L. Smith, City Manager and Mr. Shawn Boyle, Director, Finance and Administrative Services Department and his Staff for their efforts. Ms. Kelly Balagia, 508 Mark Run, Winter Springs Florida: speaking as a General Employee of the City of Winter Springs, Ms. Balagia understood the issues currently before the City Commission and noted that she appreciated the City's current Pension Plan and spoke of her concerns with a drastic change. Ms. Balagia also thought there were possible options acceptable to both parties; and hoped that a solution be found which did not affect General Employees the most; and that the City Commission would consider the recommendations of the Board of Trustees and the City Manager. Ms. Eloise Sahlstrom, 531 Crimson Lane, Winter Springs, Florida: as a City of Winter Springs' Employee, remarked about previous travel time to and from work; her recent relocation to the City of Winter Springs; Employees dedication to the City; that she supported the City Manager's recommendation; and referenced some Employee pay not going into the Pension Plan analysis. Mayor Lacey closed "Public Input ". CITY OF WINTER SPRINGS. FLORIDA MINUTES CITY COMMISSION SPECIAL MEEFING WITIi I BE BOARD OF TRUSTEES -MAY 1& 2011 PAGE. 4 OF 14 REGULAR AGENDA REGULAR 600. Office Of The City Manager REQUEST: Requests The City Commission To Receive And Review Information Regarding Potential Plan Changes To Winter Springs Pension Plan, And Take Action As Deemed Appropriate. FISCAL IMPACT: No Funding Is Requested As Part Of This Agenda Item. COMMUNICATION EFFORTS: This Agenda Item Has Been Electronically Forwarded To The Mayor And City Commission, City Attorney/Staff, The Board of Trustees, And All eAlert/eCitizen Recipients; And Is Available On The City's Website, LaserFiche, And The City's Server. Additionally, Portions Of This Agenda Item Are Typed Verbatim On The Respective Meeting Agenda Which Has Also Been Electronically Forwarded To The Individuals Noted Above; And Which Is Also Available On The City's Website, LaserFiche, And The City's Server; Has Been Sent To City Staff, Media/Press Representatives Who Have Requested Agendas/Agenda Item Information, Homeowner's Associations/Representatives On File With The City, And All Individuals Who Have Requested Such Information; And Has Been Posted Outside City Hall; Posted Inside City Hall With Additional Copies Available For The General Public; And Posted At Five (5) Different Locations Around The City. This Agenda Item Is Also Available To Any New Individual Requestors. City Staff Is Always Willing To Discuss This Or Any Agenda Item With Any Interested Individuals. RECOMMENDATION: It Is The Recommendation Of The City Manager That The Commission Receive Information From The Joint Special Meeting For Future Discussion And Staff Recommendations Manager Smith suggested the City Commission first listen to a Staff presentation, then a review of the recommendations from the Board of Trustees, followed by discussion. Mr. Smith then remarked, "If that strategy or that thought process is okay with you all, we'll proceed." Commissioner Bonner said, "Sounds good." Commissioner Rick Brown remarked, "Good." Mr. Boyle spoke on Senate Bill 2100 becoming Law and stated, "There are two (2) provisions within that Bill, that Law now that directly impacts the Winter Springs' Pension Fund. The first one is the sick and vacation accruals that the Employees accrued on their stay of employment. In our Pension Plan, those are pensionable wages that go toward the final compensation. That Law has been put into play as of January 1 ", 2011; that will no longer be an option for the City. However, there is a small caveat in there and it is a little bit complicated but we'll keep it simple - whatever vacation and sick accruals that individuals have earned up and to including January 30t1i of 2011 will impact and could impact the Pension going forward. The second major component that Senate Bill 2100 addressed was the overtime and as you've heard from Corey Green and several other people, it's Capped at 300 hours." With further comments, Mr. Boyle then remarked, "In many ways, that kind of looks and feels a lot like the `Garcia' overtime is, that is not part of the 300 (hours). Any hours above that would be inclusive of the 300 (hours). I want to make a very distinct point before Kevin (Smith) does - that is a Cap of 300. It is not a mandatory requirement, it is a Cap of 300 (hours). The City, our interpretation right now from the Attorney's, and it's fairly clear in the Bill, actually, is that we can have anything from zero (0) to 300 (hours), but we cannot exceed it." Discussion. ('ITY OF WIN I FR SPRINGS. FLORIDA MINUTES CITY COMMISSION SPECIAL MIT I ING WITH THE BOARD OF TRUSTEES MAY I X. 2011 PAGE 5 OF 14 Manager Smith then provided a summary from the Board of Trustees' recent meeting, and stated, "Relative to current Public Safety Employees, Police and Fire current Employees, they would remain on a Defined Benefit Pension Plan with certain adjustments that I'm going to speak about in a little bit. So, current Public Safety Employees would remain on the Defined Benefit Pension Plan. Any new Public Safety Employees would remain on the Defined Benefit Pension Plan. Future, new General Employees would be moved to a Defined Contribution 457/401 k style plan. The details of that Plan, still to be determined." Continuing, Manager Smith then said, "Current General Employees would remain on the Defined Benefit Pension Plan as also Amended." Next, Manager Smith spoke of the recommended changes from the Board of Trustees on the current Defined Benefit Pension Plan. Regarding Cliff Vesting, Manager Smith commented, "Recommendation is an all or nothing Cliff Vesting, no Vesting until you've been here seven (7) years." Manager Smith then reviewed retirement age scenarios. Tape 1/Side B With further comments, Manager Smith noted, "Recommendation of the Board (Of Trustees), as well as myself, is to increase that another two percent (2%) to a five percent (5%) Employee contribution level." As to retirement, Manager Smith pointed out, "My recommendation was fifty-five (55) [years old] and fifteen (15) [years of service] — from fifty-five (55) [years of age] and ten (10) [years of service] for all classes of Employees. The Board of Trustees did not accept that recommendation for Public Safety. Their recommendation to you is not fifty-five (55) [years of age] and fifteen (15) [years of service] for Public Safety. It is fifty-five (55) [years of age] and fifteen (15) [years of service] for General Employees." Manager Smith reiterated, "The Board of Trustees recommending fifty-five (55) [years of age] and fifteen (15) [years of service] for General (Employees), but not to make any changes to Public Safety. Leave it at fifty-five (55) [years of age] and ten (10) [years of service]." Next, Manager Smith explained, "We currently have a multiplier of three percent (3%) for all classes of Employees. The recommendation is to retain that multiplier at three percent (3%) for Public Safety Employees and to reduce that multiplier to two point five percent (2.5%) for General Employees." Manager Smith added, "The current multiplier on the Florida Retirement System is one point six [percent] (1.6 %) with a COLA (Cost - of -Living Adjustment)." Mayor Lacey stated, "The transition to two point five [percent] (2.5%) would be the `A plus B' methodology?" Manager Smith explained, "The Law dictates that changes must be made prospectively and cannot be made retroactively. So, Employees — that have earned a benefit to the date certain that we would presumably make these changes; those, for lack of a better description, benefits are locked in. Changes would be prospective going forward. For example, to use the multiplier - if I've been here ten (10) years, I will have ten (10) years at a multiplier of three (3) and then - if I'm a General Employee and this passes, I will have moving forward a multiplier of two [point] five [percent] (2.5%) and there will be a calculation upon retirement. And, that's again, consistent with our requirements under Law." Manager Smith then remarked, "Currently, an Employee's final average compensation is based on their - highest consecutive three (3) years of service. Recommendation of the Board of Trustees is to move to the highest five (5) consecutive years of service. For reference purposes, it's consistent with our Actuary's survey of Florida cities and Florida Plans and consistent with the median and average there." ('II'Y OF WIN'I'ER SI'RINGS. FLORIDA MINUTES CITY COMMISSION SPECIAL MEETING WITH THE BOARD OF TRUSTEES MAY 18. 2011 PAGE 6 OF 14 Continuing, Manager Smith noted, "Recommendation is that sick and vacation payouts not be eligible for Pension purposes." Manager Smith then said, "We did not have a clear interpretation or opportunity to speak to our Pension Attorney at the time we met with the Board of Trustees. So, we had mentioned to the Board of Trustees that we knew this Legislation had passed and that we would be obligated to comply with the Legislation, but we just didn't know what it meant. For example, at that time, we knew that there was going to be a Cap on the overtime at 300 hours. We didn't know if we could move off that, above or below. So, it was difficult for the Board of Trustees to make any type of recommendation not knowing that information; so, they deferred that until tonight. So, they're hearing it first as you all are hearing when Shawn (Boyle) mentioned that we can go below the 300 hours, but we cannot go above the 300 hours. So, a recommendation by myself was not made to the Board of Trustees on this issue, nor did the Board of Trustees bring forward a recommendation to you all." Manager Smith then pointed out, "My thought process is that hours that are regularly scheduled, for example, firefighters as has been presented to you earlier, work over a two (2) week period, ninety-six (96) hours; the next two (2) week period, 120 hours; and the next two (2) week period, 120 hours, and then it repeats. That is their regularly scheduled hours. Whereas, I am scheduled for forty (40) hours and forty (40) hours for a total of eighty (80); their regularly scheduled hours are ninety-six (96), 120, 120. They don't get a choice. Embedded within two (2) of those cycles, each of the 120 cycles, is fourteen (14) hours of overtime in each cycle. So to me, it would be unfair to say, we're not going to apply that overtime for pensionable purposes, because it's regularly scheduled hours. And if abuse is the issue and truth, they couldn't abuse that. It's regularly scheduled. Same with our Police Dispatchers - they work eighty-four (84) hours, eighty-four (84) hours. That's their regularly scheduled hours. Some of our - Water Plant Operators work certain shifts that have regularly scheduled hours beyond forty (40) hours. So, to me again, if the issue is abuse, that's not eligible for abuse because they have no choice. Now beyond that, there's also some situations where Employees may need to come out and work overtime to get the job done. And maybe their Supervisor doesn't give them a choice. This is where it becomes a little bit more cloudy because like trying to weigh that factor with the financial impact; and to allow 300 hours of overtime and to Cap it, seems reasonable from an abuse standpoint, I use that word `Abuse' — but from a financial standpoint, it significantly eats into the cost savings that the Plan, that the Board of Trustees - the Plan that I'm recommending to you because again, the Board did not address this particular issue. It significantly eats into those cost savings to the tune of almost thirty-five percent (35%), forty percent (40%). The Plan that I'm recommending and the Board of Trustees is recommending, which are very close, essentially will save the City in the neighborhood of eight hundred and twenty-five thousand dollars ($825,000.00) off of our two point six million dollar ($2,600,000.00) current required contribution. That eight hundred and twenty-five thousand dollars ($825,000.00), if I were to recommend to you a 300 hour Cap, would be reduced by about three hundred thousand dollars ($300,000.00). So, it makes it very difficult for me on a financial side to bring forward that recommendation. Is it the right thing to do for the Employees? I am thinking it probably is. I just have to also be concerned about the financial viability of this Plan and responsive to the financial situation in the City. So, it makes it very difficult for me to bring forward a recommendation to you beyond regularly scheduled hours." Mayor Lacey asked for the City Manager's recommendation related to "The limit of hours for overtime." Manager Smith remarked, "My recommendation, all things considered, would be to Cap it at regularly scheduled hours." CITY OF WIN I FR SPRINGS. FLORIDA MINUTES CITY COMMISSION SI'ITCIAL MEETING WITH 'I'll E BOARD OF TRUST EES MAY IR. 2011 PAGE 7 OI 14 Discussion ensued on recruitment, retention, and retirement ages. Manager Smith noted, "1 can tell you that the Chief concurs with the recommendation of fifty-five (55) [years of age] and fifteen (15) [years of service] for the Police Employees." Chief Brunelle commented, "Fifteen (15) [years of service] is perfectly acceptable to me." Mayor Lacey spoke of the Budget deadline for the City Manager and stated, "I would encourage the Commission to try to give him very concrete direction before we leave tonight, if you feel like you are able to." Commissioner Joanne M. Krebs said to the audience, "I just want to let you know that I do care." Continuing, Commissioner Krebs commented about Employees who work in high risk areas and added, "I personally would like to see some type of Employee classification that you can apply to those Employees that meet a certain criteria, instead of calling `Special Risk' or not or however you word it. I mean, I think it is more than just Special Risk, in general." Next, Commissioner Krebs spoke about overtime by Exempt City Employees to which Manager Smith stated, "The Department Director has discretion, but for Exempt Employees, you don't earn comp(ensation) time. I certainly work with my Department Heads." Further discussion ensued regarding emergency situations and Exempt Employees to which Manager Smith commented, "I would come to this Commission in situations like that and ask for a deviation from the norm. And FEMA (Federal Emergency Management Agency) for example, has even reimbursed certain Exempt Employees on a straight time basis. So, they recognize exactly what you said. Absolutely." Commissioner Krebs then commented, "For the most part, I do support the City Manager's recommendation. I think the issue that — needs to be discussed is the Cap." Manager Smith explained, "Your options are 300 hours, zero (0) hours, or somewhere in between the two (2); keeping in mind that the recommendation would be to include that those overtime hours within a regularly scheduled work period, would be exclusive outside of that." Discussion ensued on Caps. Commissioner Krebs remarked, "I would support a Cap." Commissioner Bonner asked about impressions from Board of Trustees Members. Board of Trustees Board Member Max Swaim remarked, "I would accept the 300 hour regular scheduled overtime. I do not have a problem with it and I think it is well stated and necessary." Board of Trustees Board Chairperson Maria Fair noted, "I understand that even though we supported at the Board of Trustees meeting, that whatever the State decided, that we would have to honor that. That being said, their Cap is 300 of overtime hours. For every 100 hours, it is going to cost the City about a hundred thousand dollars ($100,000.00), correct?" Mr. Boyle responded, "That's correct. Let me put it into perspective. What we have from Larry (Wilson) is for every 100 hours, it will cost you a hundred thousand dollars ($100,000.00) per year. Ten (10) years, it would be a million [dollars] ($1,000,000.00). Over thirty (30) years, which is the time horizon that this — projection is done, it would be three million dollars ($3,000,000.00)." Board of Trustees Chairperson Fair then remarked, "With that in mind - me personally, my opinion is that we should limit it to first 100 hours. Maybe that be the Cap, because otherwise we are going to limit too much of the cost savings for that to really have much impact on the Plan, both in the short and the long term." CITY OF WIN I FR SPRINGS. FLORIDA MINUTES CITY COMMISSION SPECIAL MEETING WITH THE BOARD OF 1RUS I'EES - MAY 18. 2011 PAGE 8 OI 14 Board of Trustees Board Member Rozelle stated, "My opinion would be following Max's (Swaim) opinion, to go ahead and use the full 300 (hours) because it is calculated over five (5) years average and the best five (5) years." Manager Smith then said, "The question was just how many hours would the Firefighters overtime add up to; and it's somewhere between 230 and 250. That is not part of the 300 hours. My recommendation is that the regularly scheduled hours, in the Firefighter's case, that would include the 250 some years, the 230 other years. That would be included and would be pensionable. That's outside of the 300 hours." Discussion. Commissioner Bonner asked the City Manager, "Does the Plan allow flexibility for flexibility but with some authority process to declare required overtime and therefore, that could be applied under those emergency circumstances?" Manager Smith responded, "The Plan currently does not — don't know if there are any legal issues with that or not. It certainly, from a fairness standpoint, makes sense. Just to be honest, don't know if we could structure the Plan legally to do that or not." Additionally, Commissioner Bonner stated, "Our citizens would certainly expect and have grown to not only respect, but except that level of service under those circumstances and in my opinion, that would be a situation where it was `Required'. If there was a way to deal with that within the Plan, I think that would Vote for the fairness exercise." Manager Smith noted, "We'll certainly look at that." Continuing, Manager Smith remarked, "The Pension is designed to replace `x' percent of your normal salary and emergencies would be abnormal. Secondly though, we certainly want to compensate and reward our Employees for their hard work for our citizens; perhaps we look at a compensation type, bonus type structure as opposed to the Pension." Board of Trustees Board Member Barbara Watkins commented on optional overtime and stated, "I would recommend that it does not go into pensionable pay. They are getting paid for it regularly. I don't think it should be part of the Pension." Further discussion. Commissioner Cade Resnick commented on abused overtime, to which Manager Smith explained, "The term `Abuse' was just to frame the issue and to why it was `An issue and being considered by the State'. I am not suggesting that; again, it was just to frame the issue - the Commission could certainly Cap this overtime at anywhere they wanted to, as long as it's under 300 hours." Mayor Lacey addressed the Commission, "I yield to the Manager and to Shawn (Boyle) on any of these number calculations and the amount of money to be saved - what they have said is there and what is important, I trust that. But, I come at it from more of a point of view of what is the right thing to do and to step back and look at the purpose of a Pension is to provide someone a comfortable lifestyle when they are not able to work any longer and a Pension is a part of that equation. They should also be relying - Social Security is on top of this, personal savings, other methods of taking care of yourself, reduced income requirements as you retire. All take the need for the Pension to be only a portion of what is necessary to sustain the lifestyle that they are accustomed to." Commissioner Krebs added, "Right." Continuing, Mayor Lacey said, "To that end, I think a Pension needs to be based upon what their normal income is and not be perturbed by special circumstances, because a hurricane happened to come through in the last five (5) years of someone's service time. And for that reason, not the financial numbers, but for the reason of what I think is the proper way of structuring a Plan, I think that the Cap that the City Manager has proposed is the right number." CIFY OF -WINTER SPRINGS, FLORIDA MINUTES CI FY COMMISSION SPECIAL MEETING WITH THE HOARD OF TRUSTEES- MAY 18, 2011 PAGI-_ 9 OF 14 Commissioner Bonner commented about Mr. Green's presentation and asked about his reference to 175/185 monies and asked, "Why we do not do that?" Discussion. Tape 2/Side A Further comments followed. Commissioner Brown stated, "You know I have the most upmost respect for our City Manager and I am more than excited over the past few years to have an MBA (Master of Business Administration) in this position, but his recommendation and what we have been talking about with setting or not setting a Cap and leaving it at zero (0). The concern I have with that is that it flies in the face of what the Chief (Brunelle) had presented to us, that even though there aren't required overtime hours in the Police Department and in some of the other areas; and by required, I mean regularly scheduled, they are required and they all worked; so - I don't think it would - pass a fairness test if we didn't consider where that number should be..." Commissioner Krebs said, "...I agree." Furthermore, Commissioner Brown remarked, "I agree with you Commissioner Krebs. I think there should be a Cap somewhere. As confident as I am that the number is not 300, I am equally as confident the number is not zero (0), but it has got to be somewhere in between, because we do have Employees that fall into that gap." Discussion. Board of Trustees Board Member Watkins commented, "I would like to change my recommendation. After I listened to the Chief (Brunelle), I didn't realize that they worked the 109 hours. So, my recommendation would be anywhere from 100 to 150 hours, to give us some leeway in case there is generally overtime that people normally work, just to get their job done." Board of Trustees Chairperson Fair stated, "But, just remember, if they are not working them and you include up to the 100 hours, you are not paying it either..." Commissioner Krebs commented "...Right." Chairperson Fair continued, "So, it is only if they work it." Discussion followed with some Department Directors about overtime. Mayor Lacey asked the City Commission if they would hear from a former Winter Springs Firefighter and inquired, "Is there any objection?" Commissioner Bonner, Commissioner Resnick, and Commissioner Krebs stated, "No objection". No objections were voiced. ❖ ❖ AGENDA NOTE: "PUBLIC INPUT" WAS OPENED UP TO HEAR FROM A REPRESENTATIVE OF THE SEMINOLE COUNTY FIRE DEPARTMENT, AS DOCUMENTED NEXT. ❖ ❖ PUBLIC INPUT Mr. Steve Molnar, Seminole County Fire Department: commented briefly on required monthly overtime. Regarding holding an additional Public Input session, Mayor Lacey asked the City Commission if this was agreeable to the City Commission. Commissioner Krebs stated, "I think we have a Policy that we will hear it at any time." No objections were noted. CITY Ol WINTER SPRINGS. FLORIDA MINUTES CITY COMMISSION SPECIAL MEETING WITH THE BOARD OF TRUSTEES -MAY m 2011 PAGE: 10 OI 14 ❖ ❖ AGENDA NOTE: "PUBLIC INPUT" WAS AGAIN OFFERED AND HELD, AS DOCUMENTED. ❖ ❖ PUBLIC INPUT Detective Valarie Mendelson, Winter Springs Police Department: explained that sometimes required overtime is not associated with a City emergency or catastrophe and mentioned a few different situations. Mr. Michael Scheraldi, Winter Springs Community Development Department, Building Division: commented about his Division's requirements related to when overtime situations arise and stated, "Anytime an Employee is brought in for overtime, it is because something needs to be done to get a job done." Detective Robert Cable, Winter Springs Police Department: also remarked about situations requiring required overtime and noted, "We spend time on call. If there is a disaster or a non -disaster that requires an investigator, that person is who gets that call. That may not be a major emergency or catastrophe but it is required." Mr. Corey Green, Seminole County Fire Department: said he thought that 300 hours was reasonable and added, "By eliminating 300 hours and making it zero (0) and using a straight base pay, you would be taking a seven thousand dollar ($7,000.00) incentive and approximately another seven thousand dollars ($7,000.00) in overtime — you're going to be reducing my pensionable benefit by twelve to fourteen thousand dollars ($12,000.00 - $14,000.00) per year; in addition to the changes of the five (5) years. So, it is a big hit for us. The Fire Department is a lot different than the other Departments that were mentioned. There is a lot more overtime - and a lot of it is forced overtime. There is some elective overtime." Mr. Kip Lockcuff, 2512 Creekview Circle, Oviedo, Florida: pointed out, "As I understand it, you would still have the current benefit calculation and this would be applied to a future calculation..." Manager Smith stated, "...Correct..." Mr. Lockcuff then added, "...So, no one would have any reduction. It would just be a potential reduction on future income." Manager Smith then said, "Correct." Mayor Lacey closed "Public Input ". Manager Smith commented, "I don't disagree with most of anything that's said. I believe that 300 hours is reasonable. I believe again, a lot of these things that were said." Manager Smith added, "I have to figure out a way to pay for it. That is a very difficult challenge." Discussion ensued on funding the Pension Plan. Mr. Boyle explained, "If you take the two point six [million dollars] ($2,600,000.00) and assume that two point six million dollars ($2,600,000.00) will be needed to fund for the next thirty (30) years, no change — none of the other variables are changing. If you add in 300 hours of overtime, you're taking off the table about eight to nine million dollars ($8,000,000.00 - $9,000,000.00)..." Commissioner Bonner said, "...Over the thirty (30) year window..." Mr. Boyle agreed and stated, "...About three hundred thousand dollars ($300,000.00) a year." Mayor Lacey pointed out, "How we pay for it is really another variation of the question of how do we keep this Plan successful and able to sustain itself." Discussion ensued on Actuarial calculations, funding; and that at some point in the future, all General Employees would be on a Defined Contribution Plan, if Adopted by the City Commission. CITY OF WINTER SPRINGS. FLORIDA MINUTES CITY COMMISSION SPECIAL MEETING WITH'THE BOARD OF TRUSTEES -- MAY is. 2011 PAGE 1 1 OF 14 Chairperson Fair pointed out, "Do remember that rarely, if ever, are DB (Defined Benefit) Plans a hundred percent (100%) funded. I don't know of any, ever, that have been a hundred percent (100%) funded. That is certainly your target but because of just the way these Plans work, it is just a little bit kind of like Social Security, in that you are depending on the current — the people that are currently receiving benefit are being funded by those that are contributing now. That is how a DB (Defined Benefit) Plan kind of works." With further discussion, Commissioner Bonner inquired, "Regarding the application of the Cap - within the Plan, is there flexibility for this body to set a Cap by — Class or Job or Position?" Manager Smith responded, "You could do that. I would recommend against that but that's just my recommendation." Discussion. "I WILL MAKE A MOTION TO ACCEPT THE CITY MANAGER'S RECOMMENDATION WITH THE ONE HUNDRED AND FIFTY (150) HOUR CAP OF OVERTIME." MOTION BY DEPUTY MAYOR HOVEY. SECONDED BY COMMISSIONER KREBS. DISCUSSION. MAYOR LACEY NOTED, MOTION "TO ACCEPT THE MANAGER'S RECOMMENDATIONS FOR THE PENSION WITH EXCEPTION OF A HUNDRED AND FIFTY (150) HOUR CAP ON PENSIONABLE OVERTIME." COMMISSIONER KREBS COMMENTED, "I EARLIER HAD ASKED ABOUT JOB CLASSIFICATIONS AND I DON'T KNOW IF ANYBODY THOUGHT ABOUT THAT OR HOW THAT WOULD WORK — DOES ANYBODY UNDERSTAND WHAT I WAS ASKING? MAYBE YOU DON'T FEEL LIKE IT IS NECESSARY." DEPUTY MAYOR JEAN HOVEY ASKED, "IS THAT SOMETHING THAT WE CAN LOOK AT AND REVISIT AND TWEAK..." COMMISSIONER KREBS SAID, "...I DON'T KNOW - IS IT? IF IT IS, THEN WE COULD DO THAT..." MANAGER SMITH COMMENTED, "...YOU COULD." COMMISSIONER KREBS THEN ASKED, "CAN WE DO THAT?" MANAGER SMITH STATED, "YOU COULD — IN THE FUTURE LOOK AT THAT. SURE." COMMISSIONER KREBS NEXT SAID, "I MEAN WITHIN THE FUTURE BUDGET, THIS BUDGET YEAR — DO YOU NEED THAT NOW?" MANAGER SMITH COMMENTED, "I WOULD APPRECIATE IT NOW. MY FEELING, IF I MAY, IS THAT - WE HAVE A MARKET THAT HAS A HIGH RISK CLASS OR A SPECIAL RISK CLASS AND THEN A GENERAL CLASS - AND YOU COULD DO IT, IT WOULD BE DIFFICULT FOR ME, TO SEPARATE DIFFERENT CLASSES OF GENERAL EMPLOYEES. IT BECOMES VERY DIFFICULT FROM A FAIRNESS ASPECT. IT BECOMES DIFFICULT FROM AN ACTUARIAL ASPECT; DIFFICULT FOR A COST ASPECT." BOARD OF TRUSTEES CHAIRPERSON FAIR NOTED, "WHO IS GOING TO WRITE THOSE PLAN DOCUMENTS? WHEN YOU SEPARATE OUT TEN (10) DIFFERENT CLASSES OF PEOPLE, DO YOU HAVE ANY IDEA HOW MUCH THAT IS GOING TO COST YOU — IT IS GOING TO COST YOU A WHOLE LOT OF MONEY. BECAUSE NOT ONLY DO THEY HAVE TO WRITE THE PLAN DOCUMENTS, THEY ALSO HAVE TO DO THE CALCULATIONS EVERY SINGLE YEAR." FURTHERMORE, BOARD OF TRUSTEES CHAIRPERSON FAIR ADDED, "THE MORE, DIFFERENT CLASSIFICATIONS YOU ADD, THEY HAVE GOT TO RUN THOSE CALCULATIONS FOR EVERY SINGLE CLASS." CITY OF WINTER SPRINGS. FLORIDA MINUTES CITY COMMISSION SPECIAL MEETING WITH THE BOARD OF TRUSTEES MAY I8. 2011 PAGE 12 OF 14 CONTINUING, BOARD OF TRUSTEES CHAIRPERSON FAIR POINTED OUT, "IF YOU ARE SEPARATING YOUR PENSION PLAN IN SUCH A WAY THAT YOU ARE TREATING THE DIFFERENT CLASSES OF EMPLOYEES DIFFERENTLY, YOUR PLAN DOCUMENT HAS TO REFLECT THAT AND THE ACTUARY HAS TO PERFORM THOSE CALCULATIONS EVERY SINGLE YEAR FOR EACH CLASS." COMMISSIONER KREBS ADDED, "IT COULD BE AS SIMPLE AS YOU WANT IT OR AS COMPLICATED AS YOU WANTED IT." BOARD OF TRUSTEES CHAIRPERSON FAIR THEN REMARKED, "CORRECT." COMMISSIONER BONNER COMMENTED, "I PERSONALLY HAVE REACHED A CONCLUSION THERE ARE AT LEAST THREE (3) CLASSES THAT WE SHOULD BE CONSIDERING IN OUR DECISIONS; OUR GENERAL SERVICE EMPLOYEES, OUR POLICE, AND OUR FORMER FIREFIGHTERS - IN MY VIEW REPRESENT THREE (3) DIFFERENT CLASSES AND WOULD WARRANT THREE (3) DIFFERENT CAPS." MANAGER SMITH STATED, "AN ISSUE, THAT I HAVE NOT BROUGHT FORTH TO THE FOREFRONT AS OF YET, BUT I BELIEVE I NEED TO NOW - ANOTHER CHALLENGE THAT I HAVE, AND THIS IS ABSOLUTELY NO FAULT OF THE FIREFIGHTERS, BUT WE HAVE AN INTERLOCAL AGREEMENT WITH THE COUNTY RELATIVE TO FIRE SERVICES. AND THAT AGREEMENT SAYS THAT - THE COUNTY WILL PAY THE FIREFIGHTERS PENSION CONTRIBUTION TO THE CITY UP TO THE FRS (FLORIDA RETIREMENT SYSTEM) CAP. PREVIOUSLY, OUR PENSION PLAN, ALTHOUGH WE FOUND IT TO BE ARTIFICIALLY INCORRECT, WAS AN EIGHTEEN PERCENT (18%) FUNDING LEVEL. AT THAT TIME, FLORIDA RETIREMENT WAS AT, ROUGHLY TWENTY-TWO PERCENT (22%), SOMEWHERE IN THAT RANGE. SO, YOU CAN SEE THAT THERE WAS CLEARLY ENOUGH MONEY TO PAY FOR OUR PENSION PLAN. WELL, WE FOUND OUT NOW THAT OUR NUMBER IS CLOSER TO TWENTY-EIGHT PERCENT (28%). WE ALSO KNOW THAT NEXT YEAR, THE SPECIAL RISK CLASS, FLORIDA RETIREMENT SYSTEM RATE IS GOING WAY DOWN - IF I'M ADDING UP THE NUMBERS RIGHT, IN THE TWELVE POINT EIGHT PERCENT (12.8%) RANGE. SO, THERE IS A DELTA BETWEEN TWENTY-EIGHT PERCENT (28%) THAT OUR PLAN COSTS AND TWELVE POINT EIGHT PERCENT (12.8%) THAT THE COUNTY IS GOING TO PAY US, WHICH MEANS WE ARE LEAVING SOMEWHERE IN THE NEIGHBORHOOD OF ONE HUNDRED AND THIRTY THOUSAND DOLLARS ($130,000.00) ON THE TABLE THAT THE CITY IS GOING TO HAVE TO PAY FOR. UNFORTUNATELY, THAT'S THE REALITY THAT I HAVE TO DEAL WITH AND ANYTHING YOU DO TO THE FIREFIGHTER'S PLAN RELATIVE TO BENEFITS - WOULD EXACERBATE THAT. I DON'T HAVE A WAY AROUND THAT. THAT'S WHAT THE AGREEMENT SAYS." MAYOR LACEY STATED, "THAT ADDITIONAL CHALLENGE IS IN ADDITION TO THE PRELIMINARY NUMBERS YOU GAVE US ON THE BUDGET A COUPLE OF WEEKS AGO?" MANAGER SMITH REPLIED, "YES, SIR. I JUST FOUND OUT ABOUT IT RECENTLY." Tape 2/Side B CITY OF WIN II-.R SPRINGS. FLORIDA MINUTES CITY COMMISSION SPECIAL MEEFING WITH THE BOARD OF FRUSIEES MAY 18.2011 PAGE 13 OP 14 MAYOR LACEY SAID, "I AM EXTREMELY UNCOMFORTABLE WITH A HUNDRED AND FIFTY (150) HOURS. THAT IS BASICALLY A HUNDRED (100) HOURS OVER KIP'S (LOCKCUFF) ESTIMATE; PROBABLY ABOUT A HUNDRED AND TWENTY (120) HOURS OVER CHRIS' (CALDWELL) ESTIMATE FOR HIS DEPARTMENT; A HUNDRED AND FORTY-ONE (41) HOURS OVER WHAT THE CHIEF'S ESTIMATE WAS FOR HIS DEPARTMENT." CONTINUING, MAYOR LACEY COMMENTED, "SO, THE ONLY DEPARTMENT THAT THAT HIGH NUMBER BENEFITS IS THE FIRE DEPARTMENT. SO, IT IS A VERY SELECTIVE BENEFIT FOR THE FIRE DEPARTMENT COMPARED TO ANY OTHER DEPARTMENT." MAYOR LACEY THEN POINTED OUT, "ALL OUR DISCUSSION ABOUT WHAT IS PENSIONABLE OR NOT PENSIONABLE, I BELIEVE MISSES THE POINT THAT THEY ARE BEING PAID FOR THE OVERTIME. SO, IT IS NOT LIKE WE ARE ASKING FOR VOLUNTEER WORK OUT THERE. AND IT IS JUST NOT THE INTENT OF A PENSION SYSTEM TO COVER EVERY BLIP IN OVERTIME THAT COMES ALONG THAT INCREASES THE CALCULATION. IT IS MEANT TO COVER THEIR NORMAL EXPECTATION OF INCOME OVER THEIR WORKING CAREER. AND, I BELIEVE ANY OVERTIME CALCULATION IS JUST AN INAPPROPRIATE WAY TO DO IT AND I REALLY BELIEVE A HUNDRED AND FIFTY (150) IS SUBSTANTIALLY TOO HIGH." MAYOR LACEY SUMMARIZED, "THE MOTION IS TO APPROVE THE CITY MANAGER'S RECOMMENDATIONS WITH THE EXCEPTION OF THE CAP ON OVERTIME HOURS BEING AT ONE HUNDRED AND FIFTY (150) FOR THE PURPOSE OF THE PENSION CALCULATION." VOTE: COMMISSIONER KREBS: AYE COMMISSIONER BROWN: AYE COMMISSIONER RESNICK: AYE COMMISSIONER BONNER: NAY DEPUTY MAYOR HOVEY: AYE MOTION CARRIED. As to proceeding, Manager Smith commented, "What we'll do moving forward — we'll need to prepare the necessary documents with the Attorney's Office; have their necessary reviews; our Actuary perform the necessary Actuarial impact statements with the State and information will be coming back to you all for that at a future meeting." Mayor Lacey stated, "Board of Trustees — appreciate all your service leading up to this and your time here this evening." CITY OF WIN TERSPRINGS. FLORIDA MINUTES CITY COMMISSION SPECIAL MEETING WITH THE BOARD OF'IRUS FEES - MAY 1 S, 201 1 PAGE 14 OF 14 ADJOURNMENT Mayor Lacey adjourned the Special Meeting at 8:22 p.m. RESPECTFULLY SUBMITTED: SEA LORENZO-LUACES, MMC CITY CLERK APPRaVED: W NOTE: These Minutes were approved at the June 13, 2011 City Commission Regular Meeting.