Resolution 12-1302 RE SOLUTION N®. 12 -1302
A RESOLUTION OF THE CITE' OF LONGWOOD
SUPPORTING POLICE OFFICER AND FIREFIGHTER
PENSION FLAN AND DISABILITY PRESUMPTION
REFORMS TO MAKE THE PLANS SUSTAINABLE,
SOUND AND SECURE FOR CURRENT AND FUTURE
POLICE OFFICERS AND FIREFIGHTERS.
WHEREAS, the City of Longwood 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 Longwood also desires to protect local
taxpayers from unsustainable and unsound pension levels. The City of
Longwood 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 Longwood is for the Florida Legislature to address
numerous legislative actions it has taken throughout the past 40 years relating to
the City's police and firefighter defined benefit pension plans. These actions
have had significant negative fiscal impacts on the City of Longwood and its
taxpayers. The legislative reforms the City of Longwood is seeking do not
provide cities with a "hand -out" fiom or a "bail -out" by the Legislature relative
to police and firefighter pensions. Rather, the City of Longwood 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 tools 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 Longwood 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 budget constraints; and
WHEREAS, due to severe budget constraints and rapidly increasing personnel costs, the City
of Longwood 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 u1 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 ofthese 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, W, Il HE RE F®RE, BE IT RE SOLVED SOLVJLD B ]L THE CITY COMMISSION OF THE
CITY OF LONGWOOD, FLORIDA:
Section 1. That the City of Longwood 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 Longwood 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 Longwood 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 Longwood 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 Longwood 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 Longwood 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 Longwood 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 S. That the City of Longwood 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 of Longwood 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
PASSED AND ADOPTED THIS DAY OF 3 2012
O EP SO, MAYOR
OF LONGWOOD, FLORIDA
ATTEST,
— SARAH M MIRUS, MMC, MBA, CITY CLERK
CITY OF LONGWOOD, FLORIDA
Approved as to form and legality for the use and reli nee of th City of Lo gwood, Florida, only.
aniel Langley, ty orne