Fort Walton Beach Council agenda — 12-08-2010 - regular — reading text

2009. 55 56 57 58 59 Mike Anderson, Mayor 60 61 62 Attest: Approved for form and legal sufficiency. 63 64 65 66 67 Helen Spencer, City Clerk Toni L. Craig, City Attorney 68 69  RESOLUTION NO 2009 -50 3 A RESOLUTION OF THE CITY OF FORT WALTON BEACH, FLORIDA 4 FINDING THAT DRS C3 SYSTEMS INC., BE APPROVED AS A QUALIFIED 5 APPLICANT PURSUANT TO CHAPTER 288. 107, FLORIDA STATUTES; 6 REQUESTING A WAIVER OF LOCAL FINANCIAL SUPPORT; AND 7 PROVIDING FOR AN EFFECTIVE DATE. 8 9 WHEREAS, the business under consideration is a defense electronics company, 10 specifically, DRS C3 Systems Inc.; and 11 12 WHEREAS, DRS C3 Systems Inc. is located at 645 Anchors Street, Fort Walton Beach, 13 FL and within a officially designated brownfield area; and 14 15 WHEREAS, DRS C3 Systems Inc. as first established in the Fort Walton Beach area in 16 1957. DRS currently employs approximately 875 full time employees and has added approximately 86 17 full time employees since the establishment of Fort Walton Beach' s Brownfield Redevelopment 18 Program and is projected to add as many as approximately 150 additional new full time employees 19 through the 2011 timeframe. DRS C3 Systems Inc' s provided steady defense electronics employment 20 throughout its 52 years in the Fort Walton Beach area. DRS provides product employment in the areas 21 of electronics manufacturing, airborne test and training, weapon system launch components, air cargo 22 and delivery systems; and 23 f WHEREAS, DRS C3 Systems Inc. has maintained itself as one of the area's largest private sector employers paying salaries considerably above the base wage of the County and 26 providing defense contract service to many of the military service groups; and 27 28 WHEREAS, the City of Fort Walton Beach, Florida requests a waiver from the local 29 financial support requirement authorized under the Brownfield Redevelopment Bonus Refund 30 Program pursuant to § 288. 107, Florida Statutes; 31 32 NOW THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FORT WALTON 33 BEACH, FLORIDA THAT: 34 35 Section 1. The City Council hereby recommends DRS C3 Systems Inc. be approved 36 under the Brownfield Redevelopment Bonus Refund Program pursuant to § 288. 107, Florida Statutes. 37 38 Section 2. The City Council recognizes that Okaloosa County is eligible for the local 39 financial support exemption option authorized under the Brownfield Redevelopment Bonus Refund 40 Program pursuant to § 288. 107, Florida Statutes, and will exercise that option due to a continuous 41 decrease in revenues from Ad Valorem taxes and other related fiscal restraints associated with operating 42 a city budget. 43 44 Section 3. The City Clerk is directed to provide certified copies of this Resolution to 45 the Okaloosa County Economic Development Council. Section 4. This Resolution shall take effect immediately upon approval by the City 48 Council and signature of the Mayor. 49 L b 0- 50 51 Adopted by the City Council on this day of 2009. 52 53 54 55 56 Mike Anderson, Mayor 57 58 59 Attest: Approved for form and legal sufficiency. 60 61 62 63 Helen Spencer, City Clerk Toni L. Craig, City Attorney 64 65 W 4 e&'  CITY COUNCIL MEETING December 8, 2009 General Public Comments from the General Public on items not otherwise on the agenda Agenda Item Number: 4. 1  CITY COUNCIL MEETING December 8, 2009 Quasi- Judicial Agenda - Second Reading No items Agenda Item Number: 5. 1  CITY COUNCIL MEETING December 8, 2009 Ordinance - First Reading No items Agenda Item Number: 6. 1  CITY COUNCIL MEETING December 8, 2009 Ordinance - Second Reading Ordinance 1817 Closes the General Employees Defined Benefit Plan on December 31, 2009 Synopsis: Council directed that employees hired after January 1, 2010 will participate in a Defined Contribution Plan Agenda Item Number: 7. 1  CITY OF FORT WALTON BEACH MEMORANDUM DATE: November 10, 2009 TO: Robert T. Mearns, City Manager FROM: Brandy Wunker, Financial Services Director SUBJECT: Ordinance Amendment to the General Employees' Pension Plan 1. Background 1. 1 At a City Council special meeting on May 5, 2009, Jim Linn, the City' s retained pension attorney and Michael Tierney, plan actuary for the General Employee Pension Plan, presented a report to the City Council which analyzed the concept of transitioning from the current defined benefit plan to a defined contribution plan. 1. 2 As a result of the discussions at this meeting ( copy of minutes attached), City Council approved the concept of moving forward with closing the defined benefit plan (D/ B) and establishing a defined contribution plan (D /C). 1. 3 As proposed, the new defined contribution plan would require a 5% payroll contribution by the employee with a 5% employer match and employees could increase their contribution by an additional 2 V2 % also matched by the employer. 1. 4 In addition, staff was directed to proceed with the issuance of a request for proposal ( RFP) in an effort to secure the services of a third -party administrator for the proposed defined contribution plan. 1. 5 Additionally, City Council authorized attorney to prepare an the pension ordinance amendment which would close the current defined benefit plan effective on the day prior to the implementation of the defined contribution plan for all new hires which, in this instance, would close for new employees effective December 31, 2009. 2. Discussion 2. 1 As noted above, the City' s pension attorney, Jim Linn with Lewis, Longman, & Walker has prepared the attached ordinance amending the General Employees' Retirement Plan effective December 31, 2009. The ordinance is summarized as follows: 2. 1. 1 Closure of the defined benefit pension fund effective December 31, 2009. 2. 1. 2 All full time employees hired on or after January 1, 2010 will become a member of the defined contribution plan as established by separate resolution. 47-  2. 1. 3 Members of the defined benefit plan who are not fully or partially vested may transfer their contributions to the defined contribution plan. Their election to make this transfer will be irrevocable. 2. 1. 4 Members of the defined benefit plan who are fully vested may also transfer to the defined contribution plan and shall be eligible for a deferred vested benefit based on their vested interest in the plan, credited service and final average earnings as of the date they join the deferred contribution plan. From the time of their election to transfer they shall be a member of the defined contribution plan. 3. Financial 3. 1 The City contribution requirements for the defined benefit plan have increased significantly over the last several years which is attributable to factors such as lower than anticipated investment earnings and more plan participants due to the general early -out retirement programs, last offered in FY 2006. 3. 2 The City' s contribution percentage for FY 2009 -10 for the General Employees' defined benefit plan is 18. 890 %. These contributions are likely to increase significantly over the next 3 — 5 years, as the plan recovers prior investment losses, regardless of the switch to the defined contribution plan. 3. 3 The cost of the defined benefit plan and the defined contribution plan combined is projected to be: Year 1 12. 7% Year 5 11. 5% Year 10 9. 8% Year 15 8. 4% Year 20 7. 6% Year 25 6. 9% Year 30 6. 3% 3. 4 The projected costs above do not include the amortization payments ( currently 2. 15 %) to pay off the unfunded actuarial accrued liability and the negative investment returns that will be recognized at 20% per year for the next 5 years. The City will realize savings long -term by making the proposed changes, but likely will continue to see significant increases in the funding requirements for the defined benefit plan for at least the next 5 years, even once the changes proposed have been implemented. 4. Recommendation 4. 1 Based on the above, staff recommends City Council authorize staff to adopt Ordinance 1817 closing the defined benefit plan to new members and requiring all general employees hired on or after January 1, 2010 to participate in the defined contribution plan. 48- Submitted by: B AL=_ dy Wunker, Finance Director l 9 Reviewed for Agenda: z2xl 6g- d: /- o ert T. Mearns, City Manager 49-  ORDINANCE NO. 1817 AN ORDINANCE OF THE CITY OF FORT WALTON BEACH, FLORIDA, RELATING TO THE GENERAL