Fort Walton Beach Council agenda — 02-08-11 regular — reading text

Attorney gave the oath to all parties who expected to testify. It was noted for the record there were no property owners present. PUBLIC HEARING: ORD. 1828 —REZONE 600 & 602 MOONEY ROAD NE The City Attorney read the ordinance on second reading by title. AN ORDINANCE OF THE CITY OF FORT WALTON BEACH, FLORIDA PROVIDING FOR AUTHORITY; PROVIDING FOR FINDINGS OF FACT; PROVIDING FOR PROPERTY DESCRIBED AS 600 MOONEY ROAD NORTHEAST AND 602 MOONEY ROAD NORTHEAST, MORE PARTICULARLY DESCRIBED IN THE BODY OF THE ORDINANCE, TO BE REZONED FROM OKALOOSA COUNTY RSS ( RESIDENTIAL SUBURBAN SINGLE) TO CITY OF FORT WALTON BEACH R -1 ( SINGLE FAMILY) DISTRICT; PROVIDING FOR THE AMENDMENT OF THE AFFECTED PORTION OF THE OFFICIAL ZONING MAP; PROVIDING FOR SEVERABILITY; AND PROVIDING FOR AN EFFECTIVE DATE. Michael Beedie, Utilities/Engineering Director, stated nothing has changed since first reading on the City initiated rezoning. He submitted the staff report for the record.  LEWIS, LONGMAN & WALKER, P.A. REPLY To: TALLAHASSEE MEMORANDUM TO: Brandy Wunker, Finance Director City of Fort Walton Beach FROM: Jim Limn and Glenn E. Thomas DATE: September 23, 2010 RE: Firefighters' Pension Trust Fund —Federal and State Compliance Issues Pension Trust We have reviewed the ordinance amending the City' s Municipal Firefighters' Fund which was enclosed with Lee Dehner' s letter of August 19, 2010. You indicated that the City would like advice on the proposed ordinance; specifically, which proposed revisions are required by federal or state law or regulations, whether there are any substantive changes not Our required by law and whether there are any substantive changes from the prior ordinance. analysis and comments on the proposed plan amendment follow. The proposed amendment contains several changes to the retirement plan, which are addressed by plan section below. Definitions) Section I Actuarial Equivalent The definition of " Actuarial Equivalent" is amended to add language providing that actuarial assumptions are not subject to city discretion The Internal Revenue Code requires that actuarial assumptions be specified in the plan in a way which precludes employer discretion. I.R.C. 401( a)( 25). In our opinion the proposed language accurately reflects the required Code provision. we note that the proposed revision does not update the 1983 Group However, Mortality Table. Other actuaries have recommended that the RP 2000 mortality table, projected to 2010 for healthy participants, be used. The City may wish to have an independent actuary review this. Helping Shape Florida' s Future® BRADENTON JACKSONVILLE TALLAHASSEE WESTWEST PALMPALM BEACHBEACH 2600 Centennial Place 515515 NorthNorth FlaglerFlagler DriveDrive 1001 3`d Avenue West 245 Riverside Avenue Suite 150 Suite 100 SuiteSuite 15001500 Suite 670 Jacksonville, FL 32202 Tallahassee, FL 32308 -0572 WestWest PalmPalm Beach,Beach, FLFL 3340133401 Bradenton, FL 34205 904) 353 -6410 850) 222 -5702 561)561) 640640 - - 08200820 941) 708 -4040 Fax: ( 904) 353 -7619 Fax: ( 850) 224 -9242 Fax:Fax: ( ( 561)561) 640640 - - 82028202 Fax: ( 941) 708 -4024 www.11w -law. com  1' l. Lc September 23, 2010 Page 2 Credited Service The definition of " Credited Service" is amended to reflect changes to the Uniformed Service Employment and Reemployment Rights Act ( USERRA). The suggested revisions accurately reflect recent changes in USERRA and are required. The definition is also amended to permit employees to leave contributions in the Fund for five years following termination of employment. While not required by law, the provision is not objectionable and could be beneficial should a member become reemployed at a later date. However, we would recommend the revised language make it clear that contributions left in the Fund will not earn interest during the period following termination of employment. Language is also included to address IRS automatic rollover rules ( explained in greater detail below). Firefighter The definition of "firefighter" is amended to include certified supervisory and command personnel. The amendment is required by recent changes to Chapter 175, Florida Statutes [ See section 175. 032( 8), Florida Statutes ( 2009)]. Because the current definition includes all certified firefighters, this provision would not materially change the effect of current law. T Salary The definition of "Salary" is amended to conform to Internal Revenue Code and IRS regulations related to compensation limits. While the plan is not required to include the precise language contained in the proposed amendment, the plan is required to be administered in a manner consistent with the provisions expressed in the proposed language. Therefore the language proposed, while not required, accurately reflects applicable federal law. Finances and fund manap-ement) Section 4 The ordinance would revise investment powers and authority of the pension board by increasing the maximum investment in foreign securities from 10% to 25% of plan assets, on a market value basis. The revision is required under recent changes to Chapters 175 and 185, Florida Statutes. The proposed language would also remove certain restrictions on bond classifications. This is not required by state or federal law. Another recently adopted requirement applicable to all plans under Chapters 175 and 185 is a provision requiring divestiture of plan assets in companies doing business with Sudan and Iran. See sections 175. 019( 8) and 185. 06( 7), Florida Statutes ( 2009). The statutes require that the divestiture of such assets be completed by September 30, 2010. There is no divestiture provision included in the proposed ordinance or the current plan. However, although many police and firefighter pension plans have been amended to include a divestiture provision that tracks the statutory language, we do not read the statute as requiring this, as long as the pension board complies with the divestiture requirement. We recommend that the City obtain confirmation September 23, 2010 Page 3 from the board of trustees that they are aware of the divestiture requirement and are taking appropriate steps to comply with it. Contributions) Section 5 Subsection 3 of the current plan requires the City to contribute an amount equal to the difference between the total member contributions, plus state contributions and the total cost for the year as shown in the most recent actuarial valuation. The total cost is defined as the total normal cost plus the additional amount sufficient to amortize the unfunded past service liability, as provided in Chapter 112, Florida Statutes. The current plan language complies with Section 112. 63, Florida Statutes, and is entirely appropriate. The proposed revision would state that the City is required to contribute the required amount as determined by the plan actuary in the applicable actuarial valuation. This change is not required by federal or state law. Benefit Amounts and Eligibility) Section 6 A new subsection has been added to both plans to comply with Internal Revenue Service 2- minimum distribution. rules. Required Minimum Distributions ( RMDs) generally are minimum 0 amounts that a retirement plan participant must withdraw annually starting with the year that he It or she reaches 70V2 years of age or, if later, the year in which he or she retires. The proposed Ir- addition accurately reflects the current IRS rules and is acceptable. in Disability) Section 8 The revision removes, language to clarify provisions concerning recovery from disability. Under the current plan language, the last disability payment will be paid to a member if he recovers from a disability prior to his normal retirement date. Under the proposed amendment, disability payments would stop when a retiree recovers from the disability, regardless of whether he had attained his normal retirement date. The proposed language mirrors the language in section 175. 191, Florida Statutes, and is therefore appropriate. Vesting) Section 9 While the ordinance summary states that this section is being revised to prevent conflict with the proposed section on reemployment, there do not appear to be any changes. Optional Forms of Benefits) Section 10 A few minor changes are proposed for this section, including a citation to an appropriate Treasury Regulation in subsection I. B. The revision is appropriate. Subsection 2 pertains to the designation of a joint pensioner. It permits a member to substitute a new joint pensioner for a deceased joint pensioner. The following additional language is proposed: " In the absence of proof of good health of the joint pensioner being replaced, the actuary will assume that the joint pensioner has deceased for purposes of calculating the new payment." While the proposed  11.1. 0 September 23, 2010 Page 4 language is neither required nor prohibited under state or federal law, it would appear to have no negative effect on the plan. A new subsection 5. E has been included to address the IRS minimum distribution rules discussed above. The change is appropriate. A new Subsection 7 has been included to address automatic Generally, if a plan is making a mandatory distribution that is