PENSION FUND FOR FIREFIGHTERS AND POLICE OFFICERS:

AN ORDINANCE OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, AMENDING PART I, SUBPART B, ARTICLE IX, RELATED SPECIAL ACTS, OF THE MIAMI BEACH CITY CODE ENTITLED “PENSION SYSTEM FOR DISABILITY AND RETIREMENT OF MEMBERS OF POLICE AND FIRE DEPARTMENTS”; AMENDING THE PENSION SYSTEM TO IMPLEMENT THE COLLECTIVE BARGAINING AGREEMENT WITH THE FIRE FIGHTERS OF MIAMI BEACH, IAFF LOCAL 1510, FOR THE PERIOD OCTOBER 1, 2015 THROUGH SEPTEMBER 30, 2018, AND THE COLLECTIVE BARGAINING AGREEMENT WITH THE POLICE OFFICERS OF MIAMI BEACH, FOP WILLIAM NICHOLS LODGE NUMBER 8, FOR THE PERIOD OCTOBER 1, 2015 THROUGH SEPTEMBER 30, 2018; AMENDING SECTION 62, ENTITLED “DEFINITIONS”; AMENDING SECTION 65, ENTITLED “COMPUTATION OF CREDITABLE SERVICE; SERVICE RECORD”; AMENDING SECTION 66, ENTITLED SERVICE AND DISABILITY BENEFITS GENERALLY; AMENDING SECTION 79, ENTITLED “DEFERRED RETIREMENT OPTION PLAN”; AMENDING SECTION 82, ENTITLED “MILITARY SERVICE”; AMENDING SECTION 87, ENTITLED “BENEFITS FOR MEMBERS HIRED ON OR AFTER JULY 14, 2010”; AMENDING SECTION 88, ENTITLED BENEFITS FOR MEMBERS HIRED ON OR AFTER SEPTEMBER 30, 2013; CREATING A NEW SECTION 89, ENTITLED “BENEFITS FOR MEMBERS HIRED ON OR AFTER [DATE OF RATIFICATION OF COLLECTIVE BARGAINING AGREEMENT]”; PROVIDING FOR SEVERABILITY; REPEALING ALL ORDINANCES IN CONFLICT THEREWITH; AND PROVIDING AN EFFECTIVE DATE.

The City’s workforce is divided into seven salary groups: (1) those covered by the American Federation of State, County and Municipal Employees, Local 1554 (AFSCME) bargaining unit; (2) those covered by the Communications Workers of America, Local 3178 (CWA) bargaining unit; (3) those covered by the Government Supervisors Association of Florida/OPEIU, Local 100 (GSAF) bargaining unit; (4) those covered by the Fraternal Order of Police, William Nichols Lodge No. 8 (FOP) bargaining unit; (5) those covered by the International Association of Fire Fighters, Local 1510 (IAFF) bargaining unit; (6) those employees who are at-will and are known as unclassified; and (7) “Others” (classified service employees not represented by a bargaining unit).

During the October 1, 2012 – September 30, 2015 contract period, the fire and police unions agreed to significant pension reform, which yielded a reduction of $145 million to the City's ARC over a 3O-year period (2013 net present value). The savings attributed to the 2013 pension reform have aided in the short and long-term sustainability of the plan.

On September 30, 2015, the three-year collective bargaining agreement between the City of Miami Beach and the IAFF (covering the period of October 1, 2012 through September 30, 2015) expired. The City and IAFF began meeting in August 27, 2015 to negotiate a successor agreement. After seven formal negotiation sessions, on March 4, 2016, the City and IAFF reached a tentative three-year agreement covering the period of October 1, 2015 through September 30, 2018. Subsequently, on May 4, 2016, the IAFF confirmed the passage of the contract by the majority (97.4%) of their voting membership.

On June 8, 2016, the City Commission adopted Resolution No. 2016-29442, accepting the proposed 2015-2018 labor agreement between the City and IAFF.

On September 30, 2015, the 2012-2015 collective bargaining agreement between the City and the FOP expired. The parties began negotiating a successor agreement on July 7, 2015. After twelve (12) formal negotiation sessions, on July 12, 2016, the City and the FOP leadership reached a tentative three-year agreement for October 1, 2015, through September 30, 2018. The FOP bargaining unit held a ratification vote from July 15, 2016 through July 18, 2016, whereby the proposed agreement was approved by 235 of 285 of the bargaining unit members who voted.

On July 20, 2016, the City Commission adopted Resolution No. 2016-29518, accepting the proposed 2015-2018 labor agreement between the City and FOP.

After numerous negotiations, the City reached agreements with both the IAFF and the FOP which include significant pension changes for both current and future employees who participate in the Fire and Police Pension Plan. These changes include the follow:

Pension Adjustments/Changes

• Overtime, Off-duty, Accrued Leave and Other Pays –Currently, employees are not able to apply overtime, off-duty or any other compensation for the purposes of calculating a member’s retirement benefit that yields a benefit in excess of eleven percent (11%) of the highest annualized pay rate for the same salary rank that the member is in at time of retirement. This provision does not apply to members who hold the rank of sergeant or lieutenant on September 30, 2013, or any Police Officer promoted to the rank of sergeant prior to the date the 2013 Certified Police Sergeant Promotional Register expired in 2015. As per the 2012-2015 Agreement between the City and FOP, for these members, the inclusion of overtime and/or off-duty in the member’s salary shall be limited to an amount which is equal to 70% of the difference between member’s annualized pay rate at retirement and thee highest annualized pay rate for the next higher salary rank.

As agreed to in the 2015-2018 Agreement, if any of the FOP members that were included in the carve-out of the prior agreement self-demote, their benefit will not exceed eleven percent (11%) of the highest annualized pay rate for the same salary rank the member is in at the time of retirement; and overtime, off-duty or any other compensation will not be applied to produce a benefit that exceeds the eleven percent (11%) limitation.


• Deferred Retirement Option Plan (DROP) and Retiree COLA –
Currently, the maximum DROP participation is five (5) years. Employees in the DROP are eligible to receive a retiree COLA each year that they participate in the DROP. The rate at which the member earns his/her annual retiree COLA shall be based on hire date (2.5 percent for all pre-2010 members and 1.5 percent for all post-2010 members).

Employees who entered the DROP on or before September 30, 2015, who choose to extend their DROP participation period from five (5) to six (6) years shall receive no retiree COLA (soft zeros) while in DROP year six (6) effective upon ratification.

Employees who entered the DROP on or after October 1, 2015, but prior to the date of ratification of the Agreements, who choose to extend their DROP participation period from five (5) to eight (8) years shall receive no retiree COLA (soft zeros) while in DROP years six (6), seven (7) and eight (8), effective upon ratification.

Each negotiated Agreement had specified a deadline of September 1, 2016 for the final DROP extension election date, but as all parties concur that an extension to this deadline be granted until December 1, 2016, due to administrative needs to complete election forms, the City of Miami Beach and the Fire & Police unions will enter into an MOU to align the date of this Pension Ordinance and extend the date specified in the negotiated agreements.

Employees entering the eight (8) year DROP on or after the date of ratification of this Agreement shall receive no retiree COLA (soft zeros) while in DROP years six (6), seven (7) and eight (8), effective upon ratification.


Changes for New Employees Hired After Ratification
• Increase the normal retirement age from 50 to 52
• No retiree COLA (soft zeros) during the first four (4) years in DROP