Staff recommends approval of the contribution up to $164,349.00 and accrued interest, to the City of Leesburg 185 Police Pension Plan.
A copy of the Actuarial Valuation of the Police Officers Pension Trust Fund as prepared by Foster & Foster, Inc. is attached for your review. As required by Florida Statutes, Chapter 185, the City is required to maintain certain minimum benefit levels in order to continue receiving state funds. Therefore, the City is required to contribute the “short fall” which is currently projected to be $164,349.00 in this fiscal year. Although we have some concerns with the specifics of the Actuary Report, and a lesser amount may be appropriate, we are suggesting that you authorize us to make the full contribution with the understanding that any “overage” would be credited to next year’s contribution.
On January 18, 2007, the City received a letter from the Trust Fund’s Actuary advising of a shortfall in this fund as of the close of the fiscal year ending September 30, 2006. We were advised that quarterly contributions were to have begun during the first quarter of the current fiscal year and that interest at the rate of 8% per annum had begun to accrue on the total amount due.
Staff is in the process of investigating the fiscal impact and available options under Florida Statutes to eliminate shortfalls in this fund in the future. I personally met with Detective Jim Dunagan, the Chair of the Police Pension Board, on February 12, 2007 to discuss this situation. Detective Dunagan has agreed that the Board would assist with developing options to resolve this situation in future years. The Police Pension Board will meet on March 14, 2007 and will discuss this situation at that time. Detective Dunagan assured us that he and the Board would make a Good Faith effort to address the City’s concerns and provide recommendations to resolve them.
Rather than continue to delay and accrue additional interest expense as staff continues this investigation, it is prudent to make the required payment now.
1. Approve the contribution to the 185 Police Pension Plan; or
2. Such alternative action as the Commission may deem appropriate
It will be necessary to amend the budget and utilize unappropriated fund balance for this purpose of up to $164,349.00 plus accrued interest in fiscal year 2006/2007.
Prepared by: ______________________
Attachments: Yes____ No ______
Advertised: ____Not Required ______
Attorney Review : Yes___ No ____
Reviewed by: Dept. Head ________
Finance Dept. __________________
Deputy C.M. ___________________
City Manager _____RS_____________
Account No. __001-2111-521-2210__
Project No. ___________________
WF No. ______________________
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA, AUTHORIZING A CONTRIBUTION TO THE 185 POLICE PENSION PLAN; AND PROVIDING AND EFFECTIVE DATE.
BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA:
THAT the Mayor and City Clerk are hereby authorized to fund the designated contribution to the 185 Police Pension Plan for the 2006/2007 fiscal year in an amount up to $164,349.00 and accrued interest as required by Florida Statute, Chapter 185.
THAT this resolution shall become effective immediately.
PASSED AND ADOPTED by the City Commission of the City of Leesburg, Florida, at a regular meeting held the 26th day of February 2007.