AGENDA ITEM REPORT
TITLE:
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AN ORDINANCE AMENDING CHAPTER 21, CODE OF ORDINANCES, ENTITLED "PERSONNEL ADMINISTRATION,” BY AMENDING ARTICLE I, "CIVIL SERVICE CODE,” BY AMENDING SECTION 21-9, “EMPLOYEE BENEFITS”; BY AMENDING ARTICLE II, “AT-WILL EMPLOYEES POLICIES AND PROCEDURES MANUAL,” BY AMENDING SECTION 21-24, “EMPLOYEE BENEFITS” TO PROVIDE FOR EXTENSION OF THE CITY’S 457 CONTRIBUTION RELATING TO EMPLOYEES AS SPECIFIED HEREIN AND SUBJECT TO THE LIMITATIONS AS SPECIFIED HEREIN. (SECOND READING) (PUBLIC HEARING)
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BACKGROUND:
This was approved on First Reading at the September 10, 2015 Commission Meeting. Due to statutory publication requirements, second reading is scheduled after the start of the 2015-2016 fiscal year on October 1, 2015; therefore, language was added to provide for a retroactive application date of October 1, 2015 for all affected employees.
Approval of this Ordinance will revise an existing employee benefit related to the Florida Retirement System (FRS) and the 457 Deferred Compensation Plan (457). This Ordinance affects Civil Service employees and Administrative Officers hired between May 1, 2002 and July 1, 2011 who hold positions designated by the FRS as Regular Class or Special Risk. The background is as follows:
• Fiscal Year 2012 - On July 1, 2011, the City’s required contribution to FRS decreased substantially and a 3% Employee contribution to FRS was mandated. Effective October 23, 2011 the City Commission approved a 3% City contribution to affected employees’ 457 accounts.
• Fiscal Years 2013 and 2014 - The City’s required FRS contribution plus 3% 457 contribution remained less than the City’s Fiscal Year 2011 FRS contributions, so the City commission extended the 3% 457 contribution for another year.
• Fiscal Year 2015 - The City’s required FRS contribution plus 3% 457 contribution remained less than the City’s Fiscal Year 2011 FRS contributions for Regular Risk Class and beginning July 1st, slightly exceeded the City’s Fiscal Year 2011 FRS contributions for Special Risk Class. The City Manager and staff recommend passing this Ordinance in order to revise and automatically sunset the City’s 3% 457 contribution so that the City’s total contribution stays within the City’s required contribution percentages for Fiscal Year 2011.
• This employee benefit is incorporated into the proposed Fiscal Year 2016 budget.
The relevant City contribution history is included within this packet as supporting materials.
DISCUSSION:
The City is committed to providing cost effective and competitive retirement programs for our employees. As such, this Ordinance will provide for the combined payment of the City’s required FRS contribution and the City’s contribution to an ICMA 457 account for all eligible employees not to exceed 10.77% for Regular Class or 23.25% for Special Risk. If the City’s combined contribution exceeds these amounts, the 457 contribution will be eliminated and will not be reinstated should the City’s required FRS contribution be reduced. This change shall be applied retroactively to October 1, 2015 for all affected employees in order to correlate with the start of the 2015-2016 fiscal year.
RECOMMENDATION:
Staff recommends approval of these changes to the referenced sections of the Ordinance.
FISCAL IMPACT: N/A