Fort Walton Beach Council agenda — 08-22-2007 special agenda — reading text

property and as a permanent J use she di not believe there is any way other than the conditional use permit to achieve the objective. he said there are temporary sales permitting but it would be on a much shorter term than a lease nd it would still have to go through the process for CDS and whether or not they would appro it. She said the Code does not allow the use they are dealing with once it has expired. Mayor received confirmation that Council cannot override the Code. I' 16 Regular Meeting 6~12- 07 GENERAL PUBLIC cont. It was questioned whether the Municipal Planning Board could hold an emergency meetin 0 consider the conditional use. The City Attorney replied according to their rules the Municipal PI ning Board could call a Special meeting, but the whole process of a conditional use would h to be satisfied prior to the meeting. , The CDS Director explained there are special advertising r uirements for the conditional use, which they could prepare and meet the requirements by early middle July, which would be in four to six weeks. She said a temporary use is for a limited peri of a week and continual renewal for two months would not be the intent of the ordinance. The question was posed whether Council could pass a resolution to allow time. The City Attorney stated she could not advise Council that would because there is a Code and she would recommend following the Co . eration for the period of a legally defensible actio.n She said it is an unfortunate o situation but she did not believe they should change the Code to Cldress one situation rather than handling it as a comprehensive issue. She explained the use at was grandfathered in as a non- conforming use in a zoning district expired because it was ab doned and. not being used any longer. She said under the Code that meanS they are back at poi zero where they have to follow the code that is now in effect. She said the only thing she could ggest is that she look at the temporary sales issue and perhaps have the City Manager and the C Directqr contacts them later in the week. QUARTERLY REPORTS Presentation of quarterly reports for General mployees Retirement Fund. Chris Toma, AllianceBernstein, gave synopsis of the investment performance through the quarter ending March 31, 2007. He repo since inception they have an absolute return of 7. 1% which is 300 basis points over the bene ark and. one year ending it is 13. 9% which is roughly 200 basis points over the benchmark. went"over a few displays to go over the value market and stated they are well positioned going f ard and they have done well so far. Larry Cole, Merrill Lch, gave a recap of the funds total performance through the quarter ending March 31, 2007. commented the markets have been very strong since the end of March through allocation, the May and the f CI is probably up anoth~ r 3- 4% total return. He went over the asset firms mana . g the money, the total investment returns, and pointed out the Plan has made 11. 3% per year the last few years. as an information only item for Council and required no action. REVIEW OF PENSION PLANS Review of financial condition of the Fort Walton Beach Pension Plans with ten year history. The Mayor noted that Mike Tierney the actuary, Jim Linn the Pension Attorney, and Angela Ballant with the auditors, is present. The Finance Director gave a presentation on the current funding situation and financial condition of o the General Employees' Pension Plan, which included conclusions, findings to date, and recommended improvements. The Finance Director explained funding for the Plancomes from mandatory employee contributions of 5%, employer contributions, and investment earnings. She reported the current situation with the Plan is the City is currently contributing $ 1. 6 million, equivalent to 10% of the annual general fund and .14. 95% as the operating budget; the current funding level is 19. 95% with 5% from the employees current required City contributions, and the averages should be between 5-8%; and it is a significant. burden on the City' s finances. She went over the concerns which included a declining schedule of 95% next year to funding progress, the Actuary warns of increasing contributions from 19.9% to 20. meet the minimum actuarial liability, and there will be a $ 200, 000 increase for unfunded liabilities.  17 Regular Meeting 6- 12- 07 REVIEW 01=PENSION PLANS cont. The' Finance Director mentioned the City Manager and staff have discussed possibly abandoning the Plan due to the cost of contributions and that City Council requested an inquiry into alternatives at the Strategic Planning Workshop, in January. She reported reasons for the Plan' s current situation include poor investment returns; increases in employee benefits; it is a mature plan with a history of negative cash flow, and minimum City contributions in years of poor cash-flow and investment l performance; and a history of redirecting budgeted City pension contributions to other budget needs where the City would budget 8%, 6%, etc., actual contributions would be 2%- 5%, the difference would J be re- budgeted, not saved or contributed, and used to balance the 6% next years. budget, and repeat back to 8%, The Mayor wished to know how it was considered re- directing from the Plan when it is a request to budget a certain amount. The City Manager explained each year the City funded the annual required contribution to the City' s Pension Plan which is an actuarial number estimated in June and July when the budget process comes about then in January they know the final number because that is when the Actuarial Evaluation is due. She further explained it is just like they do for health insurance where they estimate a need of $ 1 million to budget for health insurance then in February the renewal comes in at $ 800, 000 but they do not pay the additional $ 200, 000 to the health insurance company, it goes to fund balance. She said in 2002 a reserve fund was created as part of the designated fund balance and a $ 600, 000 reserve fund was established for future retirement contributions. She said the unspent pension monies either fall to fund balance and in some cases the money is shifted from line item to line item, but in no case did the City exceed its budget amount without a budget amendment in each of those years. She did not believe it is a fair characterization to say budgeted dollars" were redirected, what they did was budget what was thought the annual contribution was going to be and funded that annual required contribution. She believed the Actuary will tell Council that is standard policy for most all of the plans they deal with and in some cases fund in a lag period where what the Actuary says in January of 2007 they budget for 2008 and be a year behind in funding the pension requirements and many City' s do it on a retrospective basis. She said the City is a bit more' pro- active where they adjust it in the current year and last year they had a budget amendmeht because the City budgeted a certain amount then the Actuary Valuation came in and said it was higher so the City had to amend the budget to accommodate it. She said each year when the budget document is presented to Council there is an estimate for workers compensation, health insurance, retirement, social security, salaries, and staff gives their best guess at that time and if at the end of the year they do not need to spend all that money, they don' t and in years where there was a surplus they put money away as part of a designated fund balance. The Mayor commented it may have been a bad management decision on Council not to keep adding to the retirement fund, they just put in what they Were told was the minimum He noted required. they did not take money that was required by the Pension Fund and used it elsewhere because the document said they were required to contribute so much and that is what was contributed and the rest went into fund balance. The City Manager commented the budget is merely an estimate of the requirements. She requested J that Mr. Tierney share with' Council the practice of other pension plans he reviews and provides actuarial services. ' Mr. Garvie asked the City Attorney if Council budgeted 8% for the retirementfund then the decision is made down the line by the result of an actuarial report to only fund 2% or 3% if the decision comes back to Council to approve the lower amount. The City Attorney respectfully requested Mr. Linn or Mr. Tierney to answer the question. The City Manager explained Council adopts a total fund budget, it is not a line item budget and it is not an individual fund budget, and currently there is authority in the ordinance that allows the transfer within funds from line item to line item with City