AGENDA MEMORANDUM

Meeting Date: January 14, 2008

From: Edward F. Smyth, Jr., Deputy City Manager

Subject: Ordinance amending the City of Leesburg Municipal Firemen's Retirement plan by amending section 1.2, "participation" to provide that employees employed on or after October 1, 2007 as firefighters shall make pension contributions immediately upon employment

Staff Recommendation:

Staff recommends adopting the amendment to the Municipal Firemen’s Retirement plan as presented.

Analysis:

Over the past several years, the Municipal Firemen’s Retirement plan has experienced actuarial shortfalls, requiring the City to make contributions to the fund to maintain its financial stability.

Since February 2007, staff has been working with the Pension Board of the Plan to determine where plan modifications are necessary to reduce or eliminate future City payments to this plan. One particular item in the existing plan “Participation” provided one year of credited service toward retirement benefits without a contribution. Under the current Plan, contributions are not required until after the firefighter completes their first year of employment. Over the years, this provision has created an increasing demand on the investments to provide the additional benefits. This has worked well in years where the investments have performed extremely well, however this is not the case in years where the investments have only performed as expected or below expectations.

Staff worked with the Firemen’s Retirement Board of Directors to develop an amendment that will eliminate this benefit and require participants to make contributions beginning on their first day of employment as a firefighter. This amendment will eventually reduce the actuarial shortfall caused by this benefit.

Options:

1. Adopt the Amendment as presented; or

2. Such alternative action as the Commission may deem appropriate

Fiscal Impact:

This change in the “Participation” section will only affect those hired after October 1, 2007.

Submission Date and Time: 1/10/2008 9:47 AM____

Department: Administration

Prepared by: EF Smyth, DCM

Attachments: Yes X No ______

Advertised: ____Not Required ______

Dates: __________________________

Attorney Review : Yes X No ____

_________________________________

Revised 6/10/04

Reviewed by: Dept. Head ________

Finance Dept. __________________

Deputy C.M. ___________________

Submitted by:

City Manager ___________________

Account No. _________________

Project No. ___________________

WF No. ______________________

Budget ______________________

Available _____________________

ORDINANCE NO. 08-______

AN ORDINANCE OF THE CITY OF LEESBURG, FLORIDA, AMENDING THE CITY OF LEESBURG MUNICIPAL FIREMEN'S RETIREMENT PLAN BY AMENDING SECTION 1.2, "PARTICIPATION" TO PROVIDE THAT EMPLOYEES EMPLOYED ON OR AFTER OCTOBER 1, 2007 AS FIREFIGHTERS SHALL MAKE PENSION CONTRIBUTIONS IMMEDIATELY UPON EMPLOYMENT; PROVIDING THAT INVALIDITY OF ANY PORTION HEREOF SHALL NOT AFFECT THE REMAINING PORTIONS OF THIS ORDINANCE; PROVIDING FOR SEVERABILITY; AND PROVIDING FOR AN EFFECTIVE DATE.

WHEREAS, by Leesburg City Ordinance 00-47 effective April 1, 2000, the Leesburg City Commission adopted the amended and restated City of Leesburg Municipal Firemen's Retirement Plan effective April 1, 2000; and

WHEREAS, by Leesburg City Ordinance 04-55 dated August 9, 2004, but retroactive to October 1, 2003, the Leesburg City Commission adopted Amendment One amending Section 2.2(D), "Supplemental Retirement Income" of the City of Leesburg Municipal Firemen's Retirement Plan; and

WHEREAS, the City Commission of the City of Leesburg has the power by virtue of Section 3.5 of said amended and restated Retirement Plan to amend the City of Leesburg Municipal Firemen's Retirement Plan; and

WHEREAS, the Retirement Committee of the City of Leesburg Municipal Firemen's Retirement Plan, in consultation with the Retirement Committee's attorney has recommended the amendment of the Plan as set forth in the attached Amendment Two; and

WHEREAS, the Leesburg City Commission has considered the changes set forth in the attached Amendment Two, and desires to hereby adopt and establish same in force and effect in the City of Leesburg, Florida;

NOW, THEREFORE, BE IT ENACTED BY THE PEOPLE OF THE CITY OF LEESBURG, FLORIDA:

SECTION I.

The City of Leesburg Municipal Firemen's Retirement Plan as amended and restated, effective April 1, 2000, as further amended effective October 1, 2003, is hereby amended as set forth in the attached Amendment Two which is attached to this Ordinance and by this reference incorporated herein and made a part hereof, and said Amendment Two is hereby approved and adopted.

SECTION II.

The provisions of said Amendment Two to the City of Leesburg Municipal Firemen's Retirement Plan, shall be effective the first pay period of fiscal year 2007-2008.

SECTION III.

The Mayor and City Clerk of the City of Leesburg are hereby authorized and directed to execute said Amendment Two attached to this Ordinance for and on behalf of the City of Leesburg.

SECTION IV.

The provisions of this Ordinance are severable and if any section, sentence, clause, or phrase hereof is for any reason held to be unconstitutional, invalid or ineffective, such holding shall not affect the validity of the remaining portions of this Ordinance, it being expressly declared to be the City Commission's intent that it would have passed the valid portions of this Ordinance without the inclusion therein of any invalid portion or portions.

SECTION V.

All ordinances or parts of ordinances which are in conflict with this Ordinance are hereby repealed.

SECTION VI.

This Ordinance shall become effective upon its passage and adoption according to law.

PASSED ON THE SECOND READING AND ADOPTED at the regular meeting of the City Commission of the City of Leesburg, Florida held on the ____ day of _________________, 2007.

THE CITY OF LEESBURG, FLORIDA

BY:

Mayor

Attest:

City Clerk

AMENDMENT TWO

CITY OF LEESBURG MUNICIPAL FIREMEN'S RETIREMENT PLAN

The City of Leesburg Municipal Firemen's Retirement Plan, amended and restated effective April 1, 2000 as further amended effective October 1, 2003, is hereby amended effective October 1, 2007, as follows:

By amending Section 1.2 – PARTICIPATION to read as follows:

"1.2 - PARTICIPATION

The date of participation for each Employee employed prior to and on or after October 1, 1978, shall be as follows:

(A) Each Employee in the Service of the City on October 1, 1978, who was a Participant in the Superseded Plan shall participate in the Plan on that date.

(B) Each Employee in the Service of the City on October 1, 1978, who had both attained age 18 and completed one [1] year of Credited Service shall be eligible to participate in the Plan on October 1, 1978.

(C) Each other such Employee employed on or after October 1, 1978 but before October 1, 2007 shall participate in the Plan on the date such Employee has both attained age 18 and completed of one [1] year of Credited Service.

(D) Each other such Employee employed on or after October 1, 2007 shall participate in the Plan on the date such employee is employed as a firefighter as defined by Section 175.032(8)(a), Florida Statutes, with the City of Leesburg.

Each such Employee who meets the eligibility requirements as set forth above shall, as a condition of continued employment, become a Participant in the Plan, make contributions to the Plan as required in Section 1.3 hereof, and will be subject to all other provisions in the Plan beginning on such date of participation."

Except as herein amended, the Plan shall remain in full force and effect.

IN WITNESS WHEREOF, the CITY OF LEESBURG, as Employer, has caused these presents to be executed by its duly authorized officers on this ____ day of __________________, 2008, effective October 1, 2007.

ATTEST:

CITY OF LEESBURG,

as Employer

City Clerk

(CITY SEAL)

BY:

Mayor