Loading...
Res 57-11EITY OF DELRRY BEREH DELRAY BEACH n bsftd All-America City 1 1993 ?001 CITY CLERK = _ CERTIFICATION I, CHEVELLE D. NUBIN, City Clerk of the City of Delray Beach, do hereby certify that the attached document is a true and correct copy of Resolution No. 57 -11, as the same was passed and adopted by the Delray Beach City Commission in regular session on the 6th day of December, 2011. IN WITNESS WHEREOF, I have hereunto set my hand and the official seal of the City of Delray Beach, Florida, on this the 12th day of December 2011. Chevelle D. Nubin, MMC City Clerk City of Delray Beach, Florida .,(SEAL) RESOLUTION NO. 57 -11 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF DELRAY BEACH, FLORIDA SUPPORTING POLICE OFFICER AND FIREFIGHTER PENSION PLAN AND DISABILITY PRESUMPTION REFORMS TO MAKE THE PLANS SUSTAINABLE, SOUND AND SECURE FOR CURRENT AND FUTURE POLICE OFFICERS AND FIREFIGHTERS; PROVIDING AN EFFECTIVE DATE WHEREAS, the City of Delray Beach deeply honors and respects the services provided and sacrifices made by police officers and firefighters, and desires to provide current and future police officers and firefighters with a pension system that is sound, sustainable and reliable. The City of Delray Beach also desires to protect local taxpayers from unsustainable and unsound pension levels. The City of Delray Beach supports responsible reforms that protect pensions so they will be there for future generations of police officers and firefighters and safeguard taxpayer dollars; and WHEREAS, a priority of the City of Delray Beach is for the Florida Legislature to address numerous legislative actions it has taken throughout the past 40 years relating to the City of Delray Beach's police and firefighter defined benefit pension plans. These actions have had significant negative fiscal impacts on the City of Delray Beach and its taxpayers. The legislative reforms the City of Delray Beach is seeking do not provide cities with a "hand -out" from or a "bail -out" by the Legislature relative to police and firefighter pensions. Rather, the City of Delray Beach seeks reasonable and responsible changes to state law to "level the playing field" and allow cities to determine and implement police and firefighter pension reform at the local level; and WHEREAS, in 2011, the Florida Legislature passed SB 1128, which took important initial steps in reforming city police and firefighter defined benefit pension plans. The legislation addressed several issues, including prohibiting "spiking" of pension benefits by restricting the use of overtime and unused sick or annual leave payments for pension purposes; eliminating the requirement that increases in police and firefighter member contributions to the pension plan must also include increases in pension benefits; and creating a task force to study issues with various disability presumptions for firefighters and police and corrections officers. Importantly, the 2011 bill did not address the- 1999 legislative mandate to perpetually provide "extra" pension benefits to police and firefighters with insurance premium tax revenues; and WHEREAS, prior to 1999, cities were largely free to bargain with local police and firefighter unions, or provide for the non - unionized police and firefighters, the pension benefits that best fit the priorities and needs of the city and its police and firefighters. In 1999, the Florida Legislature amended Chapters 175 and 185, Florida Statutes, relating to city police and firefighter defined benefit pensions to require that additional city insurance premium tax revenues (taxes on property and casualty insurance premiums) over a base amount be used to provide only "extra" pension benefits to police officers and firefighters. An "extra" pension benefit is a pension benefit that must have been given to police and firefighters after 1999 and the benefit must be greater than a pension benefit provided to general city employees. In aggregate numbers, this mandate has required cities and city taxpayers to provide more than $460 million in new "extra" pension benefits to police officers and firefighters since 1999. This mandate to keep providing "extra" pension benefits is not sustainable, rather the City of Delray Beach needs the flexibility to use insurance premium tax revenues for the current or a decreased level of police and firefighter pension benefits to meet the City of Delray Beach's budget constraints; and WHEREAS, due to severe budget constraints and rapidly increasing personnel costs, the City of Delray Beach has attempted to reduce pension costs for general employees, police and firefighters. Numerous other cities have also either attempted or considered reducing pension benefit levels for police and firefighters to levels below those in effect before the 1999 legislative pension mandates. The state Division of Retirement interprets current law to say that if a police or firefighter pension benefit is reduced to a level below the 1999 level, the pension plan will violate state law and the city would forfeit all insurance premium tax revenues. Thus, when cities attempt to bring police and firefighter pension costs under control, the cities' actions are frequently blocked by the Division of Retirement; and WHEREAS, the Florida Legislature has provided that health conditions relating to heart disease, hypertension or tuberculosis suffered by a firefighter, law enforcement officer or correctional officer are presumed to be job related. These "disability presumptions" are applicable to both workers' compensation and disability pension claims and have,.introduced significant opportunities for abuse in the police and firefighter pension system. Courts have interpreted_. the presumption laws so favorably toward these employees that cities and other government employers basically cannot overcome the presumption and show the health condition was not work related. A Task Force on Public Employee Disability Presumptions is currently meeting to make findings and recommendations to the Legislature. Changes to presumption laws being considered by the Task Force include requiring an employee to meet age and employment requirements, allowing a presumption to be overcome by a preponderance of evidence, and allowing certain individual risk factors to be considered when applying the presumption, such as tobacco use, weight /diet, genetics and lifestyle choices. All of these proposals are designed to bring a fairer balance to the application of presumption laws. It is important to remember that just because an individual does not have a disability presumption does NOT mean they cannot make a workers' compensation or disability pension claim. Rather, it just means that the individual must show the health condition is work related, just like every other employee who makes a workers' compensation or pension claim; and WHEREAS, beginning in 1986, the Florida Legislature transferred all operational and administrative control of city police and firefighter defined benefit pensions to legislatively created boards of trustees. These boards of trustees run afoul of local control and are separate legal entities apart from a city that exercise broad powers outside a city's control, such as directing all investments of the pension fund; hiring plan attorneys, actuaries and other professionals; and making regular and disability pension determinations. In spite of being legislatively created entities and not locally controlled, all costs and expenses, including investment losses, incurred by the boards of trustees of pension plans ultimately become a cost to the city because the city is responsible for paying for all pension benefits. Additionally, boards of trustees are not required to provide fiscal transparency or accountability for substantial amounts of public funds; and WHEREAS, HB 365 by Representative Fred Costello and SB 910 by Senator Alan Hays have been filed for consideration during the 2012 legislative session. HB 365 and SB 910 would responsibly promote increased police and firefighter pension stability, security and sustainability by making the following changes to current state law: Res No. 57 -11 1. Collective Bargaining Over Retirement Benefits and Revenues: Allow cities and police and firefighter unions to collectively bargain the retirement benefits provided pursuant to, and the use of insurance premium tax revenues provided under, Chapters 175 or 185, Florida Statutes. 2. Alternative Retirement Plans: Allow cities to unilaterally transition to a defined contribution plan, the Florida Retirement System, or another retirement program for police and firefighters and continue to receive insurance premium tax revenues to pay for the retirement expenses. 3. Boards of Trustees Fiscal Transparency and Accountability: Require statutorily created police and firefighter pension boards of trustees to adopt and operate under an administrative expense budget, and require a detailed accounting of pension boards of trustees' expenses. 4. Fiscally Responsible Retirement Plan Termination: Require police and firefighter pension boards of trustees and cities to work together for a fiscally responsible distribution of plan assets if a city must terminate its police or firefighter retirement plan. 5. Clarify (Again) Police Overtime Used for Retirement Purposes: Clarify (due to an incorrect interpretation by the Division of Retirement of the law passed in 2011) that police officers may use up to 300 hours per year in overtime compensation when calculating retirement benefits as provided in the plan or collective bargaining agreement, and that police officers are not entitled to the use of a minimum of 300 hours per year in overtime compensation for retirement purposes. 6. Disability Presumptions: Reform current statutory disability presumptions for firefighters, law enforcement officers and correctional officers relating to health conditions caused by tuberculosis, heart disease or hypertension to require the employee to meet age and employment requirements, allow the presumption to be overcome by a preponderance of evidence, and allow certain individual risk factors to be considered when applying the presumption. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF DELRAY BEACH, FLORIDA, AS FOLLOWS: Section 1. That the City of Delray Beach hereby supports police and firefighter pension and disability presumption reforms in general, and as more specifically provided in HB 365 and SB 910 for the 2012 Florida legislative session. Section 2. That the City of Delray Beach hereby requests the Florida Legislature to allow cities and police and firefighter unions to collectively bargain the retirement benefits provided pursuant to, and the use of insurance premium tax revenues provided under, Chapters 175 or 185, Florida Statutes. Section 3. That the City of Delray Beach hereby requests the Florida Legislature to allow cities to unilaterally transition to a defined contribution plan, the Florida Retirement System, or another retirement 3 Res No. 57 -11 program for police and firefighters and continue to receive insurance premium tax revenues to pay for the retirement expenses. Section 4. That the City of Delray Beach hereby requests the Florida Legislature to require statutorily created police and firefighter pension boards of trustees to adopt and operate under an administrative expense budget, and require a detailed accounting of pension boards of trustees' expenses. Section 5. That the City of Delray Beach hereby requests the Florida Legislature to require police and firefighter pension boards of trustees and cities to work together for a fiscally responsible distribution of plan assets if a city must terminate its police or firefighter retirement plan. Section 6. That the City of Delray Beach hereby requests the Florida Legislature to clarify that, due to an incorrect interpretation by the Division of Retirement of the law passed in 2011, police officers may use up to 300 hours per year in overtime compensation when calculating retirement benefits as provided in the plan or collective bargaining agreement, and that police officers are not entitled to the use of a minimum of 300 hours per year in overtime compensation for retirement purposes. Section 7. That the City of Delray Beach hereby requests the Florida Legislature to close loopholes that promote abuse in the police and firefighter system and amend current statutory disability presumptions for firefighters, law enforcement officers and correctional officers relating to health conditions caused by tuberculosis; heart disease or hypertension to require the employee to meet age and employment requirements, allow the presumption to be overcome by a preponderance of evidence, and allow certain individual risk factors to be considered when applying the presumption. Section 8: That the City of Delray Beach urges the Florida Legislature to pass and the Governor to approve the above responsible reform recommendations relating to police and firefighter pension plans and disability presumptions in the 2012 legislative session. Section 9. That the City Clerk is directed to transmit a copy of this resolution to Governor Rick Scott, the Florida Legislature, and the Florida League of Cities, Inc. Section 10. That this resolution shall be effective upon adoption. PASSED AND ADOPTED in regular session on this 6' day of December, 2011. ATTEST: CITY CLERK Sovy MAYO c000r- 4 Res No. 57 -11 ­7 Please provide a copy of your city's adopted resolution to: Speaker of the House The Honorable Dean Cannon Florida House of Representatives 420 Capitol 402 S. Monroe Street Tallahassee, FL 32399 The Honorable Fred Costello (Bill sponsor) Florida House of Representatives 1101 Capitol 402 S. Monroe Street Tallahassee, FL 32399 The Honorable Seth McKeel Florida House of Representatives 422 Capitol 402 S. Monroe Street Tallahassee, FL 32399 The Honorable Jimmy Patronis Florida House of Representatives 317 House Office Building 402 S. Monroe Street Tallahassee, FL 32399 Senate President The Honorable Mike Haridopolos Florida Senate 409 Capitol 404 S. Monroe Street Tallahassee, FL 32399 The Honorable Alan Hays (Bill Sponsor) Florida Senate 324 Senate Office Building 404 S. Monroe Street Tallahassee, FL 32399 The Honorable Jeremy Ring Florida Senate 210 Senate Office Building 404 S. Monroe Street Tallahassee, FL 32399 Please also provide a copy of your city's adopted resolution to your House and Senate delegations. You can find contact information for your House /Senate members at the links below: House of Representatives - http: / /www myfloridahouse.com/ Sections / Representatives /representatives.aspx Senate - http: / /www.fisenate.gov /Senators/ Please also provide a copy to: Allison Payne Florida League of Cities fax (850) 222 -3806 or e-mail: aPayne(@fIcitjes.com Long Version Specific to HB 365 and SB 910: Draft Resolution on Police and Firefighter Pension and Disability Presumption Reforms 2011- A RESOLUTION OF THE [CITY /TOWN/VILLAGE OF 1 SUPPORTING POLICE OFFICER AND FIREFIGHTER PENSION PLAN AND DISABILITY PRESUMPTION REFORMS TO MAKE THE PLANS SUSTAINABLE, SOUND AND SECURE FOR CURRENT AND FUTURE POLICE OFFICERS AND FIREFIGHTERS. (Please add any additional information specific to the City /Town/Village) WHEREAS, the [City /Town/Village] deeply honors and respects the services provided and sacrifices made by police officers and firefighters, and desires to provide current and future police officers and firefighters with a pension system that is sound, sustainable and reliable. The [City /Town/Village] also desires to protect local taxpayers from unsustainable and unsound pension levels. The [City /Town/Village] supports responsible reforms that protect pensions so they will be there for future generations of police officers and firefighters and safeguard taxpayer dollars; and WHEREAS, 'a priority of the [City /Town/Village] is for the Florida Legislature to address A umerous legislative actions it has taken throughout the past 40 years relating to ,.the [City's /Town's/Village's] police and firefighter defined benefit pension plans. These actions have had significant negative fiscal impacts on the [City /Town/Village] and its taxpayers. The legislative reforms the [City /Town/Village] is seeking do not provide cities with a "hand -out" from or a "bail -out" by the Legislature relative to police and firefighter pensions. Rather, the [City /Town/Village] seeks reasonable and responsible changes to 'state law to "level the playing field" and allow cities to determine and implement police and firefighter pension reform at the local level; and WHEREAS, in 2011, the Florida Legislature passed SB 1128, which took important initial steps in reforming city police and firefighter defined benefit pension plans. The legislation addressed several issues, including prohibiting "spiking" of pension benefits by restricting the use of overtime and unused sick or annual leave payments for pension purposes; eliminating the requirement that increases in police and firefighter member contributions to the pension plan must also include increases in pension benefits; and creating a task force to study issues with various disability presumptions for firefighters and police and corrections officers. Importantly, the 2011 bill did not address the 1999 legislative mandate to perpetually provide "extra" pension benefits to police and firefighters with insurance premium tax revenues; and WHEREAS, prior to 1999, cities were largely free to bargain with local police and firefighter unions, or provide for the non - unionized police and firefighters, the pension benefits that best fit the priorities and needs of the city and its police and firefighters. In 1999, the Florida Legislature amended Chapters 175 and 185, Florida Statutes, relating to city police and firefighter defined benefit pensions to require that additional city insurance premium tax revenues (taxes on property and casualty insurance premiums) over a base amount be used to provide only "extra" pension benefits to police officers and firefighters. An "extra" pension benefit is a pension benefit that must have been given to police and firefighters after 1999 and the benefit must be greater than a pension benefit provided to general city employees. In aggregate numbers, this mandate has required cities and city taxpayers to provide more than $460 million in new "extra" pension benefits to police officers and firefighters since 1999. This mandate to keep providing "extra" pension benefits is not sustainable, rather the [City /TownNillage] needs the flexibility to use insurance premium tax revenues for the current or a decreased level of police and firefighter pension benefits to meet the [City's /Town'sNillage's] budget constraints; and WHEREAS, due to severe budget constraints and rapidly increasing personnel costs, the [City /TownNillage] has attempted to reduce pension costs for general employees, police and firefighters. Numerous other cities have also either attempted or considered reducing pension benefit levels for police and firefighters to levels below those in effect before the 1999 legislative pension I The state Division of Retirement interprets current law to say that if a police or firefighter pension benefit is reduced to a level below the 1999 level, the pension plan will violate state law and the city would forfeit all insurance premium tax revenues. Thus, when cities attempt to bring police and firefighter pension costs under control, the cities' actions are frequently blocked by the Division of Retirement; and WHEREAS, the Florida Legislature has provided that health conditions relating to heart .disease, hypertension or tuberculosis suffered by a firefighter, law enforcement officer or correctional officer are presumed to be job related. These "disability presumptions" are applicable to both workers' compensation and disability pension claims and have introduced significant opportunities for abuse in the police and firefighter pension system. Courts have interpreted the presumption laws so favorably toward these employees that cities and other government employers basically cannot overcome the presumption and show the health condition was not work related. A Task Force on Public Employee Disability Presumptions is currently meeting to make findings and recommendations to the Legislature. Changes to presumption laws being considered by the Task Force include requiring an employee to meet age and employment requirements, allowing a presumption to be overcome by a preponderance of evidence, and allowing certain individual risk factors to be considered when applying the presumption, such as tobacco use, weight/diet, genetics and lifestyle choices. All of these proposals are designed to bring a fairer balance to the application of presumption laws. It is important to remember that just because an individual does not have a disability presumption does NOT mean they cannot make a workers' compensation or disability pension claim. Rather, it just means that the individual must show the health condition is work related, just like every other employee who makes a workers' compensation or pension claim; and WHEREAS, beginning in 1986, the Florida Legislature transferred all operational and administrative control of city police and firefighter defined benefit pensions to legislatively created boards of trustees. These boards of trustees run afoul of local control and are separate legal entities apart from a city that exercise broad powers outside a city's control, such as directing all investments of the pension fund; hiring plan attorneys, actuaries and other professionals; and making regular and disability pension determinations. In spite of being legislatively created entities and not locally controlled, all costs and expenses, including investment losses, incurred by the boards of trustees of pension plans ultimately become a cost to the city because the city is responsible for paying for all pension benefits. Additionally, boards of trustees are not required to provide fiscal transparency or accountability for substantial amounts of public funds; and WHEREAS, HB 365 by Representative Fred Costello and SB 910 by Senator Alan Hays have been filed for consideration during the 2012 legislative session. HB 365 and SB 910 would responsibly promote increased police and firefighter pension •stability, security and sustainability by making the following changes to current state law: 1. Collective Bargaining Over Retirement Benefits and Revenues: Allow cities and police and firefighter unions to collectively bargain the retirement benefits provided pursuant to, and the use of insurance premium tax revenues provided under, Chapters 175 or 185, Florida Statutes. 2. Alternative Retirement Plans: Allow cities to unilaterally transition to a defined contribution plan, the Florida Retirement System, or another retirement program for police and firefighters and continue to receive insurance premium tax revenues to pay for the retirement expenses. 3. Boards of Trustees Fiscal Transparency and Accountability: Require statutorily created police and firefighter pension boards of trustees to adopt and operate under an administrative expense budget, and require a detailed accounting of pension boards of trustees' expenses. 4. Fiscally Responsible Retirement Plan Termination: Require police and firefighter pension boards of trustees and cities to work together for a fiscally responsible distribution of plan assets if a city must terminate its police or firefighter retirement plan. 5. Clarify (Again) Police Overtime Used for Retirement Purposes: Clarify (due to an incorrect interpretation by the Division of Retirement of the law passed in 2011) that police officers may use up to 300 hours per year in overtime compensation when calculating retirement benefits as provided in the plan or collective bargaining agreement, and that police officers are not entitled to the use of a minimum of 300 hours per year in overtime compensation for retirement purposes. 6. Disability Presumptions: Reform current statutory disability presumptions for firefighters, law enforcement officers and correctional officers relating to health conditions caused by tuberculosis, heart disease or hypertension to require the employee to meet age and employment requirements, allow the presumption to be overcome by a preponderance of evidence, and allow certain individual risk factors to be considered when applying the presumption. NOW, THEREFORE, BE IT RESOLVED BY THE [COUNCIL /COMMISSION] OF THE [CITY /TOWN/VILLAGE OF 1, FLORIDA: Section 1. That the [City /TownNillage] hereby supports police and firefighter pension and disability presumption reforms in general, and as more specifically provided in HB 365 and SB 910 for the 2012 Florida legislative session. Section 2. That the [City /Town/Village] hereby requests the Florida Legislature to allow cities and police and firefighter unions to collectively bargain the retirement benefits provided pursuant to, and the use of insurance premium tax revenues provided under, Chapters 175 or 185, Florida Statutes. Section 3. That the [City /TownNillage] hereby requests the Florida Legislature to allow cities to unilaterally transition to a defined contribution plan, the Florida Retirement System, or another retirement program for police and firefighters and continue to receive insurance premium tax revenues to pay for the retirement expenses. Section 4. That the [City /Town/Village] hereby requests the Florida Legislature to require statutorily created police and firefighter pension boards of trustees to adopt and operate under an administrative expense budget, and require a detailed accounting of pension boards of trustees' expenses. Section 5. That the [City /Town/Village] hereby requests the Florida Legislature to require police and firefighter pension boards of trustees and cities to work together for a fiscally responsible distribution of plan assets if a city must terminate its police or firefighter retirement plan. Section 6. That the [City /Town/Village] hereby requests the Florida Legislature to clarify that, due to an incorrect interpretation by the Division of Retirement of the law passed in 2011, police officers may use up to 300 hours per year in overtime compensation when calculating retirement benefits as provided in the plan or collective bargaining agreement, and that police officers are not entitled to the use of a minimum of 300 hours per year in overtime compensation for retirement purposes. Section 7. That the [City /Town/Village] hereby requests the Florida Legislature to close loopholes that promote abuse in the police and firefighter system and amend current statutory disability presumptions for firefighters, law enforcement officers and correctional officers relating to health conditions caused by tuberculosis, heart disease or hypertension to require the employee to meet age and employment requirements, allow the presumption to be overcome by a preponderance of evidence, and allow certain individual risk factors to be considered when applying the presumption. Section 8. That the [City /Town/Village] urges the Florida Legislature to pass and the Governor to approve the above responsible reform recommendations relating to police and firefighter pension plans and disability presumptions in the 2012 legislative session. Section 9. That the [City /Town/Village] Clerk is directed to transmit a copy of this resolution to Governor Rick Scott, the Florida Legislature, and the Florida League of Cities, Inc. Section 10. That this resolution shall be effective upon adoption. PASSED IN 'OPEN AND REGULAR SESSION OF THE [CITY COUNCIL/ COMMSSION OF THE CITY/TOWN/VILLAGE OF j, FLORIDA, THIS DAY OF , 2011. Version: 11/18/2011 Wynn, Kimberly From: Harden, David Sent: Tuesday, November 22, 2011 11:11 AM To: Nubin, Chevelle; Smith, Douglas; Wynn, Kimberly Subject: Police /Fire Pension Reform Attachments: DraftLong Resolution on Pension Reform FINAL .docx Importance: High Please prepare this resolution for the December 6 Commission meeting. Long Version Specific to HB 365 and SB 910: Draft Resolution on Police and Firefighter Pension and Disability Presumption Reforms 2011- A RESOLUTION OF THE [CITY /TOWN/VILLAGE OF I SUPPORTING POLICE OFFICER AND FIREFIGHTER PENSION PLAN AND DISABILITY PRESUMPTION REFORMS TO MAKE THE PLANS SUSTAINABLE, SOUND AND SECURE FOR CURRENT AND FUTURE POLICE OFFICERS AND FIREFIGHTERS. (Please add any additional information specific to the City /Town/Village) WHEREAS, the [City /TownNillage] deeply honors and respects the services provided and sacrifices made by police officers and firefighters, and desires to provide current and future police officers and firefighters with a pension system that is sound, sustainable and reliable. The [City /Town/Village] also desires to protect local taxpayers from unsustainable and unsound pension levels. The [City /TownNillage] supports responsible reforms that protect pensions so they will be there for future generations of police officers and firefighters and safeguard taxpayer dollars; and WHEREAS, `a priority of the [City /Town/Village] is for the Florida Legislature to address numerous legislative actions it has taken throughout the past 40 years relating to the [City's /Town's/Village's] police and firefighter defined benefit pension plans. These actions have had significant negative fiscal impacts on the [City /TownNillage] and its taxpayers. The legislative reforms the [City /TownNillage] is seeking do not provide cities with a "hand -out" from or a "bail -out" by the Legislature relative to police and firefighter pensions. Rather, the [City /Town/Village] seeks reasonable and responsible changes to state law to "level the playing field" and allow cities to determine and implement police and firefighter pension reform at the local level; and WHEREAS, in 2011, the Florida Legislature passed SB 1128, which took important initial steps in reforming city police and firefighter defined benefit pension plans. The legislation addressed several issues, including prohibiting "spiking" of pension benefits by restricting the use of overtime and unused sick or annual leave payments for pension purposes; eliminating the requirement that increases in police and firefighter member contributions to the pension plan must also include increases in pension benefits; and creating a task force to study issues with various disability presumptions for firefighters and police and corrections officers. Importantly, the 2011 bill did not address the 1999 legislative mandate to perpetually provide "extra" pension benefits to police and firefighters with insurance premium tax revenues; and WHEREAS, prior to 1999, cities were largely free to bargain with local police and firefighter unions, or provide for the non - unionized police and firefighters, the pension benefits that best fit the priorities and needs of the city and its police and firefighters. In 1999, the Florida Legislature amended Chapters 175 and 185, Florida Statutes, relating to city police and firefighter defined benefit pensions to require that additional city insurance premium tax revenues (taxes on property and casualty insurance premiums) over a base amount be used to provide only "extra" pension benefits to police officers and firefighters. An "extra" pension benefit is a pension benefit that must have been given to police and firefighters after 1999 and the benefit must be greater than a pension benefit provided to general city employees. In aggregate numbers, this mandate has required cities and city taxpayers to provide more than $460 million in new "extra" pension benefits to police officers and firefighters since 1999. This mandate to keep providing "extra" pension benefits is not sustainable, rather the [City /TownNillage] needs the flexibility to use insurance premium tax revenues for the current or a decreased level of police and firefighter pension benefits to meet the [City's /Town'sNillage's] budget constraints; and WHEREAS, due to severe budget constraints and rapidly increasing personnel costs, the [City /TownNillage] has attempted to reduce pension costs for general employees, police and firefighters. Numerous other cities have also either attempted or considered reducing pension benefit levels for police and firefighters to levels below those in effect before the 1999 legislative pension mandates. The state Division of Retirement interprets current law to say that if a police or firefighter pension benefit is reduced to a level below the 1999 level, the pension plan will violate state law and the city would forfeit all insurance premium tax revenues. Thus, when cities attempt to bring police and firefighter pension costs under control, the cities' actions are frequently blocked by the Division of Retirement; and WHEREAS, the Florida Legislature has provided that health conditions relating to heart disease, hypertension or tuberculosis suffered by a firefighter, law enforcement officer or correctional officer are presumed to be job related. These "disability presumptions" are applicable to both workers' compensation and disability pension claims and have introduced significant opportunities for abuse in the police and firefighter pension system. Courts have interpreted the presumption laws so favorably toward these employees that cities and other government employers basically cannot overcome the presumption and show the health condition was not work related. A Task Force on Public Employee Disability Presumptions is currently meeting to make findings and recommendations to the Legislature. Changes to presumption laws being considered by the Task Force include requiring an employee to meet age and employment requirements, allowing a presumption to be overcome by a preponderance of evidence, and allowing certain individual risk factors to be considered when applying the presumption, such as tobacco use, weight/diet, genetics and lifestyle choices. All of these proposals are designed to bring a fairer balance to the application of presumption laws. It is important to remember that just because an individual does not have a disability presumption does NOT mean they cannot make a workers' compensation or disability pension claim. Rather, it just means that the individual must show the health condition is work related, just like every other employee who makes a workers' compensation or pension claim; and WHEREAS, beginning in 1986, the Florida Legislature transferred all operational and administrative control of city police and firefighter defined benefit pensions to legislatively created boards of trustees. These boards of trustees run afoul of local control and are separate legal entities apart from a city that exercise broad powers outside a city's control, such as directing all investments of the pension fund; hiring plan attorneys, actuaries and other professionals; and making regular and disability pension determinations. In spite of being legislatively created entities and not locally controlled, all costs and expenses, including investment losses, incurred by the boards of trustees of pension plans ultimately become a cost to the city because the city is responsible for paying for all pension benefits. Additionally, boards of trustees are not required to provide fiscal transparency or accountability for substantial amounts of public funds; and WHEREAS, HB 365 by Representative Fred Costello and SB 910 by Senator Alan Hays have been filed for consideration during the 2012 legislative session. HB 365 and SB 910 would responsibly promote increased police and firefighter pension stability, security and sustainability by making the following changes to current I tate law: 1. Collective Bargaining Over Retirement Benefits and Revenues: Allow cities and police and firefighter unions to collectively bargain the retirement benefits provided pursuant to, and the use of insurance premium tax revenues nrnviried rnnrlPr Cl,antPrc 1 7S nr 1 RS T;1`„;rlo C +n+- +— entitled to the use of a minimum of 300 hours per year in overtime compensation for retirement purposes. 6. Disability Presumptions: Reform current statutory disability presumptions for firefighters, law enforcement officers and correctional officers relating to health conditions caused by tuberculosis, heart disease or hypertension to require the employee to meet age and employment requirements, allow the presumption to be overcome by a preponderance of evidence, and allow certain individual risk factors to be considered when applying the presumption. NOW, THEREFORE, BE IT RESOLVED BY THE [COUNCIL /COMMISSION] OF THE [CITY /TOWN/VILLAGE OF 1, FLORIDA: Section 1. That the [City /Town/Village] hereby supports police and firefighter pension and disability presumption reforms in general, and as more specifically provided in HB 365 and SB 910 for the 2012 Florida legislative session. Section 2. that the [City /Town/Village] hereby requests the Florida Legislature to allow cities and police and firefighter unions to collectively bargain the retirement benefits provided pursuant to, and the use of insurance premium tax revenues provided under, Chapters 175 or 185, Florida Statutes. Section 3. That the [City /TownNillage] hereby requests the Florida Legislature to allow cities to unilaterally transition to a defined contribution plan, the Florida Retirement System, or another retirement program for police and firefighters and continue to receive insurance premium tax revenues to pay for the retirement expenses. Section 4. That the [City /Town/Village] hereby requests the Florida Legislature to require statutorily created police and firefighter pension boards of trustees to adopt and operate under an administrative expense budget, and require a detailed accounting of pension boards of trustees' expenses. Section 5. That the [City /Town/Village] hereby requests the Florida Legislature to require police and firefighter pension boards of trustees and cities to work together for a fiscally responsible distribution of plan assets if a city must terminate its police or firefighter retirement plan. Section 6. That the [City /Town/Village] hereby requests the Florida Legislature to clarify that, due to an incorrect interpretation by the Division of Retirement of the law passed in 2011, police officers may use up to 300 hours per year in overtime compensation when calculating retirement benefits as provided in the plan or collective bargaining agreement, and that police officers are not entitled to the use of a minimum of 300 hours per year in overtime compensation for retirement purposes. Section 7. That the [City /Town/Village] hereby requests the Florida Legislature to close loopholes that promote abuse in the police and firefighter system and amend current statutory disability presumptions for firefighters, law enforcement officers and correctional officers relating to health conditions caused by tuberculosis, heart disease or hypertension to require the employee to meet age and employment requirements, allow the presumption to be overcome by a preponderance of evidence, and allow certain individual risk factors to be considered when applying the presumption. Section 8. That the [City /Town/Village] urges the Florida Legislature to pass and the Governor to approve the above responsible reform recommendations relating to police and firefighter pension plans and disability presumptions in the 2012 legislative session. Section 9. That the [City /Town/Village] Clerk is directed to transmit a copy of this resolution to Governor Rick Scott, the Florida Legislature, and the Florida League of Cities, Inc. Section 10. That this resolution shall be effective upon adoption. PASSED IN OPEN AND REGULAR SESSION OF THE [CITY COUNCIL/ COMMISSION' OF THE CITY /TOWN/VILLAGE OF 1, FLORIDA, THIS DAY OF , 2011. Version: 11/18/2011 Coversheet MEMORANDUM TO: Mayor and City Commissioners FROM: David T. Harden, City Manager DATE: November 28, 2011 Page 1 of 1 SUBJECT: AGENDA ITEM 8.S. - REGULAR COMMISSION MEETING OF DECEMBER 6, 2011 RESOLUTION NO. 57-II/POLICE OFFICER AND FIIREFIGHTER PENSION PLAN ITEM BEFORE COMMISSION Approve Resolution No. 57 -11 supporting Police Officer and Firefighter Pension Plan and disability presumption reforms to make the plans sustainable, sound and secure for current and future police officers and firefighters. BACKGROUND: The Florida League of Cities is working closely with several state legislators in seeking further reforms to Police and Fire Pension Plans established under Chapters 175 and 185 of Florida Statutes. Reform is also being sought in disability presumptions for certain illnesses. The attached information from the Florida League of Cities gives additional background information. ;, The League information does refer to abuse of the pension plans. That is a problem in some cities, but I do not consider it applicable to Delray Beach. With that caveat, I believe the rest of the information provided does fit oiir situation. We need relief from state mandates which have accumulated over the years so that we can negotiate with our Police Officers and Firefighters to ensure that we develop sustainable pension plans going forward. RECOMMENDATION Approve Resolution No. 57 -11. RESOLUTION NO. 57-11 A RESOLUTION OF THE CITY COMNIISSION OF THE CITY OF DELRAY BEACH, FLORIDA SUPPORTING POLICE OFFICER AND FIREFIGHTER PENSION PLAN AND DISABILITY PRESUNIl'TION REFORMS TO MAKE THE PLANS SUSTAINABLE, SOUND AND SECURE FOR CURRENT AND FUTURE POLICE OFFICERS AND FIREFIGHTERS; PROVIDING AN EFFECTIVE DATE. WHEREAS, the City of Delray Beach deeply honors and respects the services provided and sacrifices made by police officers and firefighters, and desires to provide current and future police officers and firefighters with a pension system that is sound, sustainable and reliable. The City of Delray Beach also desires to protect local taxpayers from unsustainable and unsound pension levels. The City of Delray Beach supports responsible reforms that protect pensions so they will be there for future generations of police officers and firefighters and safeguard taxpayer dollars; and WHEREAS, a priority of the City of Delray Beach is for the Florida Legislature to address numerous legislative actions it has taken throughout the past 40 years relating to the City of Delray Beach's, police and firefighter defined benefit pension plans. These actions have had significant negative fiscal impacts on the City of Delray Beach and its taxpayers. The legislative reforms the City of Delray Beach is seeking do not provide cities with a "hand-out" from or a "bail- out" by the Legislature relative to police and firefighter pensions. Rather, the City of Delray Beach seeks reasonable and responsible changes to state law to "level the playing field" and allow cities to determine and implement police and firefighter pension reform at the local level; and WHEREAS, in 2011, the Florida Legislature passed SB 1128, which took important initial steps in reforming city police and firefighter defined benefit pension plans. The legislation addressed several issues, including prohibiting "spiking' of pension benefits by restricting the use of overtime and unused sick or annual leave payments for pension purposes, eliminating the requirement that increases in police and firefighter member contributions to the pension plan must also include increases in pension benefits, and creating a task force to study issues with various disability presu rr#ons for firefighters and police and corrections officers. Importantly, the 2011 bill did not address the 1999 legislative mandate to perpetually provide "extra' pension benefits to police and firefighters with insurance premium tax revenues; and WHEREAS, prior to 1999, cities were largely free to bargain with local police and firefighter unions, or provide for the non-unionized police and firefighters, the pension benefits that best fit the priorities and needs of the city and its police and firefighters. In 1999, the Florida Legislature amended Chapters 175 and 185, Florida Statutes, relating to city police and firefighter defined benefit pensions to require that additional city insurance premium tax revenues (taxes on property and casualty insurance premiums) over a base amount be used to provide only "extra" pension benefits to police officers and firefighters. An "extra" pension benefit is a pension benefit that must have been given to police and firefighters after 1999 and the benefit must be greater than a pension benefit'provided to general city employees. In aggregate nurnbers, this mandate has required cities and city taxpayers to provide more than $460 million in new "extra" pension benefits to police officers and firefighters since 1999. This mandate to keep providing "extra' pension benefits is not sustainable, rather the City of Delray Beach needs the flexibility to use insurance premium tax revenues for the current or a decreased level of police and firefighter pension benefits to meet the City of Delray Beach's budget constraints; and WHEREAS, due to severe budget constraints and rapidly increasing personnel costs, the City of Delray Beach has attempted to reduce pension costs for general employees, police and firefighters. Numerous other cities have also either attempted or considered reducing pension benefit levels for police and firefighters to levels below those in effect before the 1999 legislative pension mandates. The state Division of Retirement interprets current law to say that if a police or firefighter pension benefit is reduced to a level below the 1999 level, the pension plan will violate state law and the city would forfeit all insurance premium tax revenues. Thus, when cities attempt to bring police and firefighter pension costs under control, the cities' actions are frequently blocked by the Division of Retirement; and WHEREAS, the Florida Legislature has provided that health conditions relating to heart disease, hypertension or tuberculosis suffered by a firefighter, law enforcement officer or correctional officer are presumed to be job related These "disability presumptions" are applicable to both workers' compensation and disability pension claims and have introduced significant opportunities for abuse in the police and firefighter pension system. Courts have interpreted the presumption laws so favorably toward these employees that cities and other government employers basically cannot overcome the presumption and show the health condition was not work related A Task Force on Public Employee Disability Presumptions is currently meeting to make findings and recommendations to the Legislature. Changes to presumption laws being considered by the Task Force include requiring an employee to meet age and employment requirements, allowing a presumption to be overcome by a preponderance of evidence, and allowing certain individual risk factors to be considered when applying the presmiption, such as tobacco use, weight /diet, genetics and lifestyle choices. All of these proposals are designed to bring a fairer balance to the application of presumption laws. It is important to remember that just because an individual does not have a disability presumption does NOT mean they cannot make a workers' compensation or disability pension claim. Rather, it just means that the individual must show the health condition is work related, just like every other employee who makes a workers' compensation or pension claim; and WHEREAS, beginning in 1986, the Florida Legislature transferred all operational and administrative control of city police and firefighter defined benefit pensions to legislatively created boards of trustees. These boards of trustees run afoul of local control and are separate legal entities apart from a city that exercise broad powers outside a city's control, such as directing all investments of the pension fund; hiring plan attorneys, actuaries and other professionals, and making regular and disability pension determinations. In spite of being legislatively created entities and not locally controlled, all costs and expenses, including investment losses, incurred by the boards of trustees of pension plans ultimately become a cost to the city because the city is responsible for paying for all pension benefits. Additionally, boards of trustees are not required to provide fiscal transparency or accountability for substantial amounts of public funds, and WHEREAS, HB 365 by Representative Fred Costello and SB 910 by Senator Alan Hays have been filed for consideration during the 2012 legislative session. HB 365 and SB 910 2 Res No. 57 -11 v uDuld responsibly promote increased police and firefighter pension stability, security and sustainability by malting the following changes to current state law 1. Collective Bargaining Over Retirement Benefits and Revenues: Allow cities and police and firefighter unions to collectively bargain the retirement benefits provided pursuant to, and the use of insurance premium tax revenues provided under, Chapters 175 or 185, Florida Statutes. 2. Alternative Retirement Plans: Allow cities to unilaterally transition to a defined contribution plan, the Florida Retirement System, or another retirement program for police and firefighters and continue to receive insurance premium tax revenues to pay for the retirement expenses. 3. Boards of Trustees Fiscal Transparency and Accountability. Require statutorily created police and firefighter pension boards of trustees to adopt and operate under an administrative expense budget, and require a detailed accounting of pension boards of trustees' expenses. 4. Fiscally Responsible Retirement Plan Termination Require police and firefighter pension boards of trustees and cities to work together for a fiscally responsible distribution of plan assets if a city must terminate its police or firefighter retirement plan 5. Clarify (Again) Police Overtime Used for Retirement Purposes: Clarify (due to an incorrect interpretation by the Division of Retirement of the law passed in 2011) that police officers may use up to 300 hours per year in overtime compensation when calculating retirement benefits as provided in the plan or collective bargaining agreement, and that police officers are not entitled to the use of a minimum of 300 hours per year in overtime compensation for retirement purposes. 6. Disability Presumptions: Reform current statutory disability presumptions for firefighters, law enforcement officers and correctional officers relating to health conditions caused by tuberculosis, heart disease or hypertension to require the employee to meet age and employment requirements, allow the presumption to be overcome by a preponderance of evidence, and allow certain individual risk factors to be considered when applying the presumption NOW, THEREFORE, BE IT RESOLVED BY THE CITY CON NIISSION OF THE CITY OF DELRAY BEACH, FLORIDA, AS FOLLOWS: Section 1. That the City of Delray Beach hereby supports police and firefighter pension and disability presurnption reforms in general, and as more specifically provided in HB 365 and SB 910 for the 2012 Florida legislative session Section 2. That the City of Delray Beach hereby requests the Florida Legislature to allow cities and police and firefighter unions to collectively bargain the retirement benefits 3 Res No. 57 -11 provided pursuant to, and the use of insurance premium tax revenues provided under, Chapters 175 or 185, Florida Statutes. Section 3. That the City of Delray Beach hereby requests the Florida Legislature to allow cities to unilaterally transition to a defined contribution plan, the Florida Retirement System or another retirement program for police and firefighters and continue to receive insurance premium tax revenues to pay for the retirement expenses. Section 4. That the City of Delray Beach hereby requests the Florida Legislature to require statutorily created police and firefighter pension boards of trustees to adopt and operate under an administrative expense budget, and require a detailed accounting of pension boards of trustees' expenses. Section 5. That the City of Delray Beach hereby requests the Florida Legislature to require police and firefighter pension boards of trustees and cities to vmrk together for a fiscally responsible distribution of plan assets if a city must terminate its police or firefighter retirement plan Section G. That the City of Delray Beach hereby requests the Florida Legislature to clarify that, due to an incorrect interpretation by the Division of Retirement of the law passed in 2011, police officers may use up to 300 hours per year in overtime compensation when calculating retirement benefits as provided in the plan or collective bargaining agreement, and that police officers are not entitled to the use of a minirrrrn of 300 hours per year in overtime compensation for retirement purposes. Section 7. That the City of Delray Beach hereby requests the Florida Legislature to close loopholes that promote abuse in the police and firefighter system and amend current statutory disability presumptions for firefighters, law enforcement officers and correctional officers relating to health conditions caused by tuberculosis, heart disease or hypertension to require the employee to meet age and employment requirements, allow the presumption to be overcome by a preponderance of evidence, and allow certain individual risk factors to be considered when applying the presumption Section 8. That the City of Delray Beach urges the Florida Legislature to pass and the Governor to approve the above responsible reform recommendations relating to police and firefighter pension plans and disability presumptions in the 2012 legislative session Section 9. That the City Clerk is directed to transmit a copy of this resolution to Governor Rick Scott, the Florida Legislature, and the Florida League of Cities, Inc. Section 10. That this resolution shall be effective upon adoption 4 Res No. 57 -11 PASSED AND ADOPTED in regular session on this 6' day of December, 2011. ATTEST: QTY CLERK MAYOR Res No. 57 -11 PENSION REFORM NOW 01 Iw..aaa�su,Sasu,.3a�.', xa..�.,E.a.�.n. �,..,u.,... = ...x.,......::�.,z.�,..., Pension Reform Advocacy Kit Adopt a Resolution ASAP Supporting Police /Fire Pension Reform! One of the top Legislative Priorities for the Florida League of Cities is Reform of City Police Officer and Firefighter Pension Plans and Disability Presumptions to make the pensions sustainable, sound and secure. Florida cities need to let their legislators know that their city supports HB 365 and SB 910. Attached are sample resolutions (a long and short version) that your city can adopt and a talk sheet with key message points on the issue. This information can also be found in electronic form at www.ticities.com. Because the legislative session begins early next year (January 10), we need cities to adopt resolutions immediately. Legislators must hear directly from their cities on the importance of adopting this legislation. Thank you for being a part of the League's advocacy team! Please provide a copy of your city's adopted resolution to: Speaker of the House The Honorable Dean Cannon Florida House of Representatives 420 Capitol 402 S. Monroe Street Tallahassee, FL 32399 The Honorable Fred Costello (Bill sponsor) Florida House of Representatives 1101 Capitol 402 S. Monroe Street Tallahassee, FL 32399 The Honorable Seth.McKeel Florida House of Representatives 422 Capitol 402 S. Monroe Street Tallahassee, FL 3299 The Honorable Jimmy Patrons Florida House of Representatives 317 House Office Building 402 S. Monroe Street Tallahassee, FL 32399 Senate President The Honorable Mike Haridopolos Florida Senate 409 Capitol 404 S. Monroe Street Tallahassee, FL 32399 The Honorable Alan Hays (Bill Sponsor) Florida Senate 324 Senate Office Building 404 S. Monroe Street Tallahassee, FL 32399 The Honorable Jeremy Ring Florida Senate 210 Senate Office Building 404 S. Monroe Street Tallahassee, FL 32399 Please also provide; a copy of your city's adopted resolution to your House and Senate delegations. You can find contact information for your House /Senate members at the links below: House of Representatives - hqp : / /www.Myfloridahouse.com/ Sections / Representatives /representatives. aspx Senate - ht!p://www,.flsenate.gov/Senators/ Please also provide .a copy to: Allison Payne Florida League of Cities Fax (850) 222 -3806 or E -mail: apa eeLa flcities.com Key Messages to Communicate to Public Safeguarding municipal pensions is a critical issue for Florida's 410 cities, towns and villages. Politically driven police and fire fighter pension mandates imposed on municipalities by lawmakers in Tallahassee are driving costs up and increase the potential for abuse in the system. The current taxpayer - funded pension structure is broken. It is unstable, unsustainable and unreliable for future police officers and firefighters. The time has come to fix the system by implementing responsible reform that protects pensions for the future and stops pension abuse. The pension issue is incredibly complicated. It is important to communicate the concerns of Florida's municipalities in a way that is easy for people to understand and framed appropriately to win the public policy debate. Under the umbrella "stop pension abuse" message, key supporting message elements include: 1. Respect;work of police officers and firefighters -- and protect taxpayers. 2. Identify how the current pension system is unsustainable, unsound and subject to potential abuse. 3. Support responsible reforms that stop pension abuse, protect pensions so they will be there for future generations of police officers and firefighters and safeguard taxpayer dollars. This messaging approach is supported by scientific research that shows when it comes to police and firefighter pensions, Floridians are most concerned by issues related to specific pension abuses, like the disability determination and those who retire and make a large sum of money at an early age. Research shows our most effective messages must communicate support for these key elements: • Stopping specific abuses of the system. • Enacting responsible reforms to protect pensions for future generations. These are the strongest points to make to win the debate and bring people to our side of the issue. In this messaging, we are positioned to be advocates for responsible pension reform that curbs abuse in the system and puts the system on a more stable footing for the future. The bottom line is, we support well- deserved pensions for police and firefighters that are sound, secure and sustainable — not only for current officers and firefighters, but for those who choose to protect and serve in the future. 4 Stop Pension Abuse: Key Message Points Umbrella Message • We must stop pension abuse and support responsible reform so good sound, secure and stable pensions will be there for current and future police and firefighters who step up and answer the call to protect and serve our communities now and in years to come. Supporting Message Statements We Honor Police and Firefighters' Service by Stopping Pension Abuse • We all deeply honor and respect the service provided by police officers and firefighters. That's why current and future officers and firefighters deserve a pension system that is sound, sustainable and reliable. • We appreciate the work police and firefighters do but when it comes to their pensions, here are the facts: • The current police and firefighter pension system is full of Tallahassee mandates that have helped make it unsustainable, unstable and unreliable. • Police and firefighter pensions are breaking the bank in many communities and hurting service delivery. • There is a high potential for pension abuse that must be stopped. • Taxpayers deserve to know that their hard - earned tax dollars are not creating inflated windfall lifetime annuities. I Support Responsible Pension Reform to Stop Abuse and Protect Pensions for Current for Future Generations • I support responsible pension reform that curbs abuse, protects local taxpayers and ensures good pensions will be available for current and future generations of police officers. and firefighters. Police and firefighter families are taxpayers, too. They also deserve to have a pension plan that is sound, stable and sustainable. 5 Stopping Pension Abuse Protects Local Taxpayers We've all worked hard to tighten our belts and ensure every taxpayer dollar local government receives is wisely spent. Responsible reform to stop pension abuse is so critical to protecting your hard - earned tax dollars. The current pension system is broken and ripe for abuse that must be tackled. • It allows some police officers or firefighters to retire early and make more than $80,000 a year ... before they turn 50. • It allows officers and firefighters with active lifestyles to claim disability and retire early while collecting full benefits — some even draw disability and leave service to take other physically demanding jobs. • It automatically assumes a police officer with high blood pressure or a breathing condition contracted that illness on the job and allows them to retire early on disability — even if the cause of the illness is due to family history or their lifestyle and not their job. • To protect local taxpayers, responsible reform is needed to reign in unchecked benefit growth, crack down on abuse and put police and firefighter pensions on a strong, secure and sustainable footing for the future. • Local government is the government closest to the people — and the one taxpayers trust the most. We need pension reform that allows local government — not Tallahassee — to determine salaries and benefits for police and firefighters. Let's respect home rule and allow cities to deal with local problems locally.