2024-02-06 VII. B. PO & FF PB Merger, Ord #1286, Exhibit 12Exhibit 12
02/06/2024
ORDINANCE NO. 1286
AN ORDINANCE OF THE CITY OF OKEECHOBEE, FLORIDA,
PROVIDING FOR THE MERGER OF THE CITY OF
OKEECHOBEE MUNICIPAL POLICE OFFICERS' PENSION
TRUST FUND, CREATED PURSUANT TO ORDINANCE NO. 888
AS SUBSEQUENTLY AMENDED, AND THE CITY OF
OKEECHOBEE MUNICIPAL FIREFIGHTERS' PENSION FUND,
CREATED PURSUANT TO ORDINANCE NO. 889 AND
AMENDED AND RESTATED PURSUANT TO ORDINANCE NO.
1229; PROVIDING FOR CODIFICATION; PROVIDING FOR
SEVERABILITY OF PROVISIONS; REPEALING ALL
ORDINANCES IN CONFLICT HEREWITH AND PROVIDING AN
EFFECTIVE DATE.
WHEREAS, the City of Okeechobee established and maintains the City of Okeechobee Municipal
Police Officers' Pension Trust Fund, created pursuant to Ordinance No. 888, as
subsequently amended; and
WHEREAS, the City of Okeechobee established and maintains the City of Okeechobee Municipal
Firefighters' Pension Fund, created pursuant to Ordinance No. 889 and amended and
restated pursuant to Ordinance No. 1229; and
WHEREAS, to optimize the efficiency of, and minimize the costs related to, the administration of the
above -referenced Funds, the City Council desires to merge the Funds into a single Fund
under the exclusive administration of a single board of trustees; and
WHEREAS, the resulting Fund shall exist for the sole purpose of providing retirement benefits to the
participants of the merged Funds, to their eligible beneficiaries, and to the future participants
and beneficiaries of the resulting Fund; and
WHEREAS, the merger of the Funds shall not result in the reduction of any accrued benefit of any
participant of the merged Funds; and
WHEREAS, the State of Florida Department of Management Services, Division of Retirement, has
approved the merger of the Funds; and
WHEREAS, the City Council intends that the resulting Fund be administered in accordance with all
applicable provisions of the Internal Revenue Code and of Florida Law, including but not
limited to Chapters 175 and 185, Florida Statutes, and
WHEREAS, for the purposes of this Ordinance, double underlined type shall denote additions to and
strike threugl� shall denote deletions from the original text.
NOW, THEREFORE, be it ordained before the City Council of the City of Okeechobee, Florida;
presented at a duly advertised public meeting; and passed by majority vote of the City
Council; and properly executed by the Mayor or designee, as Chief Presiding Officer for the
City:
SECTION 1: The foregoing "whereas" clauses are incorporated herein as legislative findings
by this reference and made a part hereof for all intents and purposes.
SECTION 2: That Ordinance No. 888, as subsequently amended, is hereby further amended
by amending subsection 1., of Section 1., Definitions, of the document made part of said
Ordinance and otherwise amended herein, to modify the definitions of "Board," "Fund," and
"System" and to add a definition, "Merger Date," to read respectively as follows:
SECTION 1. DEFINITIONS.
Ordinance No. 1286, Page 1 of 8
If applicable, language to be added is double_ underlined.
If applicable, language to be deleted is &uGk-threugh
1. As used herein, unless otherwise defined or required by the context, the following
words and phrases shall have the meaning indicated:
Board means the Board of Trustees, which shall administer and manage the System
herein provided and serve as the Trustees of the Fund as provided in Section 3
hereof.
Fund means the Trust Fund established herein as part of the System. Effective as
of the Merger Date, Fund shall mean the Fund resulting from the merger, as
provided in subsection 4.1 hereof.
Merger Date means the date determined in accordance with subsection 6 of Section
3 hereof.
System means the City of Okeechobee Municipal Police Officers' Pension Trust
Fund as contained herein and all amendments thereto. Effective as of the Merger
Date. Svstem means Citv of Okeechobee Municipal Police Officers' and Firefighters'
Pension Trust Fund, as contained herein and all amendments hereto, and as
contained in Ordinance No. 1229 and all amendments thereto.
SECTION 3: That Ordinance No. 888, as subsequently amended, is hereby further amended
by amending Section 3., Board of Trustees, of the document made part of said Ordinance
and otherwise amended herein, to replace subsection 3., to read as follows:
SECTION 3. BOARD OF TRUSTEES.
3, Quorum and Voting A auorum shall consist of no fewer than three (3) Trustees. Each
Trustee shall be entitled to one (1) vote on the Board. Three (3) affirmative votes shall
be necessary for any decision by the Trustees at any meeting of the Board. A Trustee
shall abstain from voting as the result of a conflict of interest and shall comply with the
provisions of Section 112.3143, Florida Statutes as amended from time to time.
SECTION 4: That Ordinance No. 888, as subsequently amended, is hereby further amended
by amending Section 3., Board of Trustees. of the document made part of said Ordinance
and otherwise amended herein, to add a new subsection 6,, to read as follows:
SECTION 3. BOARD OF TRUSTEES.
6. Merger Provisions
A. As soon as administratively reasonable upon the Effective Date of the
Ordinance adopting this paragraph 6 A the responsible parties shall appoint
and elect prospective Trustees (excluding the sixth Trustee) in accordance with
the conditions set forth in paragraph 6.B., below, who shall agree in writing to
assume the duties of Trustees as set forth herein as of a specified date. That
date shall be the same for all five prospective Trustees and shall constitute the
Merger Date.
Ordinance No. 1286, Page 2 of 8
If applicable, language to be added is douhle underlined.
If applicable, language to be deleted is 6trwk threugh
B. As of the Merger Date, this paragraph 6.B., shall supersede subsection 1., of
this Section 3. The sole and exclusive administration of and responsibility for
the proper operation of the System and for making effective the provisions of
this Ordinance is hereby vested in a Board of Trustees. The Board is hereby
designated as the Plan Administrator. The Board shall consist of six (6)
Trustees, two (2) of whom, unless otherwise prohibited by law, shall be legal
residents of the City, who shall be appointed by the City Council, two (2) of
whom shall be a full-time Police Officer Member of the System who shall be
elected by a maiority of the active Police Officers who are Members of the
System, one (1) of whom shall be a former full-time Firefighter Member of the
System, who shall be elected by a maiority of the former Firefighters who were
Members of the System, and one (1) of whom shall be chosen by a maiority of
the five (5) elected Trustees as provided for herein, and such person's name
shall be submitted to the City Council.
Upon receipt of the sixth Trustee's name, the City Council shall, as a ministerial
duty, appoint such person to the Board of Trustees as its sixth Trustee. The
sixth Trustee shall have the same rights as each of the other five (5) Trustees.
If there is no former or retired Firefighter remaining in the System, or willing to
serve the former and retired Firefighters may elect an active or retired Police
Officer to serve in the active Firefighter seat. Upon receipt of such person's
name the City Council shall, as a ministerial duty, appoint such person to the
Board.
When there are fewer than ten (10) former or retired Firefighters remaining, or
in the case where no former or retired Firefighter is available to serve on the
Board and the active or retired Police Officer who is then serving in the active
Firefighter seat either leaves the employment of the City as a Police Officer or
otherwise vacates his or her office as Trustee the active Firefighter seat shall
cease to exist and the Board shall thereafter consist of five (5) Trustees. two
(2) of whom unless otherwise prohibited by law, shall be legal residents of the
City who shall be appointed by the City Council two (2) of whom shall be full-
time Police Officer Members of the System who shall be elected by a maiority
of the active Police Officers who are Members of the System, and one (1) of
whom shall be chosen by a maiority of the four (4) remaining Trustees as herein
provided and shall serve a four (4) year term unless he or she sooner vacates
the office Each resident Trustee shall serve as Trustee for a period of four (41
years unless he or she sooner vacates the office or is sooner replaced by the
City Council at whose pleasure he or she shall serve. Each Member Trustee
shall serve as Trustee for a period of four (4) years unless he or she sooner
leaves the employment of the City as a Police Officer or otherwise vacates his
or her office as Trustee whereupon a successor shall be chosen in the same
manner as the departing Trustee Except in the case that there are fewer than
ten (10) former or retired Firefighters remaining and the active or retired Police
Officer who is then serving in the active Firefighter seat either leaves the
employment of the City as a Police Officer or otherwise vacates his or her office
as Trustee each Trustee may succeed himself or herself in office. Police
Deferred Retirement Option Plan (DROP) participants can be elected as but not
vote for the elected Police Trustee. The Board shall establish and administer
the nominating and election procedures for each election or delegate this task
to the City if the City is so willing The Board shall meet at least quarterly each
year. The Board shall be a legal entity with, in addition to other powers and
responsibilities contained herein the power to bring and defend lawsuits of
every kind, nature, and description.
C. Effective as of the Merger Date all references herein, except for historic
references to the City of Okeechobee Municipal Police Officers' Pension Trust
Fund, shall be read as the City of Okeechobee Municipal Police Officers' and
Firefighters' Pension Trust Fund.
D. Effective as of the Merger Date, it is intended that the Board of Trustees
possess identical powers with respect to the operation and administration,
Ordinance No. 1286, Page 3 of 8
If applicable, language to be added is doubl may dPrlined.
If applicable, language to be deleted is etrask-hfGU0
including the investment of System assets, of the System as it relates to Police
Officers and Firefighters and assets derived from the participation of Police
Officers and Firefighters, including premium tax funds under Chapters 175 and
185, It is further intended that, effective as of the Merger Date, this document
shall apply to all questions relating to the participation, accrual of benefits,
vesting. benefit eligibility, retirement, etc. of Police Officer Members in the
Ss`
SECTION 5: That Ordinance No. 888, as subsequently amended, is hereby further amended
by amending subsection 1., of Section 4., Finances and Fund Management, of the document
made part of said Ordinance and otherwise amended herein, to read as follows:
SECTION 4. FINANCES AND FUND MANAGEMENT.
Establishment and Operation of Fund.
As part of the System, there exists the Fund, into which shall be deposited all
of the contributions and assets whatsoever attributable to the System. Effective
as of the Merger Date, the Fund is hereby merged with the Fund known as the
Cis of Okeechobee Municipal Firefighters' Pension Fund, created as set forth
in Section 4.1 of the document made part of Ordinance No. 1229. The Fund,
which shall thereafter mean the Fund resulting from the merger, shall be known
as City of Okeechobee Municipal Police Officers' and FirefightersPension
Trust Fund.
SECTION 6: That Ordinance No. 1229, as subsequently amended, is hereby further
amended by amending subsection 1., of Section 1., Definitions, of the document made part
of said Ordinance and otherwise amended herein, to modify the definitions of "Board,"
"Fund," and "System" and to add a definition, "Merger Date," to read respectively as follows:
SECTION 1. DEFINITIONS.
1. As used herein, unless otherwise defined or required by the context, the following
words and phrases shall have the meaning indicated:
Board means the Board of Trustees, which shall administer and manage the System
herein provided and serve as the trustees of the Fund, as provided in Section 3
hereof.
Fund means the trust Fund established herein as part of the System. Effective as of
the Merger Date, Fund shall mean the Fund resulting from the merger, as provided
in Subsection 4.1 hereof.
Merger Date means the date determined in accordance with Subsection 6 of Section
3 hereof.
System means the City of Okeechobee Municipal Firefighters' Pension Fund as
contained herein and all amendments thereto. Effective as of the Merger Date,
System means City of Okeechobee Municipal Police Officers' and Firefighters'
Pension Trust Fund as contained herein and all amendments hereto, and as
contained in Ordinance No. 888 and all amendments thereto.
Ordinance No. 1286, Page 4 of 8
If applicable, language to be added is do ubls_ ei ndedined.
If applicable, language to be deleted is sNask thFOUgh
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SECTION 7: That Ordinance No. 1229, as subsequently amended, is hereby further
amended by amending subsection 3., of Section 3., Board of Trustees, of the document
made part of said Ordinance and otherwise amended herein, to replace Subsection 3 to read
as follows:
SECTION 3. BOARD OF TRUSTEES.
3. Quorum and Voting. A quorum shall consist of no fewer than three (31 Trustees.
Each Trustee shall be entitled to one (1) vote on the Board. Three (3) affirmative
votes shall be necessary for any decision by the Trustees at any meeting of the
Board. A Trustee shall abstain from voting as the result of a conflict of interest and
shall comply with the provisions of Section 112.3143, Florida Statutes, as amended
from time to time.
SECTION 8: That Ordinance No. 1229, as subsequently amended, is hereby further
amended by amending Section 3., Board of Trustees, of the document made part of said
Ordinance and otherwise amended herein, to add a new subsection 6, to read as follows:
SECTION 3. BOARD OF TRUSTEES.
6. Merger Provisions
A. As soon as administratively reasonable upon the effective date of the Ordinance
adopting this paragraph 6.A.. the responsible parties shall appoint and elect
prospective Trustees (excluding the sixth Trustee) in accordance with the
conditions set forth in paragraph 6.B., below, who shall agree in writing to
assume the duties of Trustees as set forth herein as of a specified date. That
date shall be the same for all five prospective Trustees, and shall constitute the
Merger Date.
B. As of the Merger Date, this paragraph 6.B.. shall supersede subsection 1 of this
Section 3. The sole and exclusive administration of and responsibility for the
proper operation of the System and for making effective the provisions of this
Ordinance is hereby vested in a Board of Trustees. The Board is hereby
designated as the Plan Administrator. The Board shall consist of six (6)
Trustees. two (2) of whom, unless otherwise prohibited by law, shall be legal
residents of the City, who shall be appointed by the City Council, two (2) of
whom shall be full-time Police Officer Members of the System who shall be
elected by a maiority of the active Police Officers who are Members of the
System, one (1) of whom shall be a former full-time Firefighter Member of the
System who shall be elected by a maiority of the former Firefighters who were
Members of the System, and one (1) of whom shall be chosen by a maiority of
the five (5) elected Trustees as provided for herein, and such person's name
shall be submitted to the City Council
Upon receipt of the sixth Trustee's name, the City Council shall. as a ministerial
duty. appoint such person to the Board of Trustees as its sixth Trustee. The
sixth Trustee shall have the same rights as each of the other five (51 Trustees.
If there is no former or retired Firefighter remaining in the System, or willing to
serve, the former and retired Firefighters may elect an active or retired Police
Officer to serve in the active Firefighter seat. Upon receipt of such person's
name, the City Council shall, as a ministerial duty, appoint such person to the
Board.
When there are fewer than ten (10) former or retired Firefighters remaining, or
in the case where no former or retired Firefighter is available to serve on the
Ordinance No. 1286, Page 5 of 8
If applicable, language to be added is double undefined.
If applicable, language to be deleted is skask-threugh
Board and the active or retired Police Officer who is then serving in the active
Firefighter seat either leaves the employment of the City as a Police Officer or
otherwise vacates his or her office as Trustee, the active Firefighter seat shall
cease to exist, and the Board shall thereafter consist of five (5) Trustees, two
2) of whom, unless otherwise prohibited by law, shall be legal residents of the
City who shall be appointed by the City Council. two (2) of whom shall be full-
time Police Officer Members of the System who shall be elected by a ma_ iority
of the active Police Officers who are Members of the System, and one (1) of
whom shall be chosen by a maiority of the four (4) remaining Trustees as herein
provided and shall serve a four (4) year term unless he or she sooner vacates
the office. Each resident Trustee shall serve as Trustee for a period of four (4)
years unless he or she sooner vacates the office or is sooner replaced by the
City Council at whose pleasure he or she shall serve. Each Member Trustee
shall serve as Trustee for a period of four (4) years, unless he or she sooner
leaves the employment of the City as a Police Officer or otherwise vacates his
or her office as Trustee, whereupon a successor shall be chosen in the same
manner as the departing Trustee. Except in the case that there are fewer than
ten (10) former or retired Firefighters remaining and the active or retired Police
Officer who is then serving in the active Firefighter seat either leaves the
employment of the City as a Police Officer or otherwise vacates his or her office
as Trustee, each Trustee may succeed himself or herself in office. Police DROP
participants can be elected as but not vote for the elected Police Trustee. The
Board shall establish and administer the nominating and election procedures
for each election or delegate this task to the City if the city is so willing. The
Board shall meet at least quarterly each year. The Board shall be a legal entity
with, in addition to other powers and responsibilities contained herein, the power
to bring and defend lawsuits of every kind, nature, and description.
C. Effective as of the Merger Date, all references herein, except for historic
references to City of Okeechobee Municipal Firefighters' Pension Fund, shall
be read as City of Okeechobee Municipal Police Officers' and Firefighters'
Pension Trust Fund.
D. Effective as of the Merger Date, it is intended that the Board of Trustees
possess identical powers with respect to the operation and administration
including the investment of System assets, of the System as it relates to Police
Officers and Firefighters and assets derived from the participation of Police
Officers and Firefighters, including premium tax funds under Chapters 175 and
185 It is further intended that effective as of the Merger Date, this document
shall apply to all questions relating to the participation, accrual of benefits,
vesting, benefit eligibility, retirement, etc. of Firefighter Members in the System.
SECTION 9: That Ordinance No. 1229, as subsequently amended, is hereby further
amended by amending subsection 1., of Section 4., Finances and Fund Management, of the
document made part of said Ordinance and otherwise amended herein, to read as follows:
SECTION 4. FINANCES AND FUND MANAGEMENT.
Establishment and Operation of Fund.
As part of the System, there exists the Fund, into which shall be deposited all
of the contributions and assets whatsoever attributable to the System. Effective
as of the Merger Date. the Fund is hereby merged with the Fund known as the
City of Okeechobee Municipal Police Officers' Pension Trust Fund created as
set forth in Section 4 1 of the document made part of Ordinance 888. The Fund,
which shall thereafter mean the Fund resulting from the merger, shall be known
as City of Okeechobee Municipal Police Officers' and FirefightersPension
Trust Fund.
Ordinance No. 1286, Page 6 of 8
If applicable, language to be added is double underlined.
If applicable, language to be deleted is skask Nueugh
U
SECTION 10: That Ordinance No. 1229, as subsequently amended, is hereby further
amended by amending Section 6., Benefit Amounts and Eligibility, of the document made
part of said Ordinance and otherwise amended herein, to add a new subsection 7., to read
as follows:
SECTION 6. BENEFIT AMOUNTS AND ELIGIBILITY.
7. Retired Firefighter Medical Stipend.
A Reserve shall be established by to pay a Medical Stipend to retired Firefighter
members as set forth in this Subsection 7 with an initial dollar amount to bring
the funded ratio for the Firefighter assets and liabilities to 100% based on
current actuarial assumptions. If the actuary certifies that the funded ratio of the
Pension Fund based on the Firefighter assets and liabilities excluding the
Reserve for the preceding Plan Year exceeds 100% in subsequent years, the
Board will transfer an additional dollar amount to the Reserve to bring the
funded ratio to 100%. If the actuary certifies that the funded ratio of the Pension
Fund based on the Firefighter assets and liabilities for the preceding Plan Year
excluding the Reserve is less than 95%. the Board will transfer the dollar
amount from the Reserve to the Pension Fund needed to increase the funded
ratio to 95%. The assets of the Reserve to pay the Medical Stipend shall remain
invested with the Pension Fund assets and receive a pro-rata share of the
investment results net of investment and administrative expenses. The Board
must provide written notice to the Finance Director of the City of Okeechobee
of any change in actuarial investment and economic assumptions affecting the
actuarial calculation of the funded ratio for the Firefighter assets and liabilities
identifying the specific changes to the assumptions.
A Medical Stipend shall be paid in equal monthly installments from the Reserve
to Firefighter members receiving pension benefit payments as of October 1
each Plan Year. Payment of the Medical Stipend shall commence on the first
day of the month following the otherwise normal retirement date for each retired
member receiving a pension benefit payment. Starting with the Plan Year that
begins October 1, 2023. eligible retired Firefighter members will receive an initial
Medical Stipend based on the retiree's years of Credited Service, as follows:
Years of Credited Service
Monthly Stipend
20 + Years
1 000
17.5 — 20
850
15 —17.5
700
12.5 —15
550
10 —12.5
400
The Board will adiust the Monthlv Stipend pro-rata to eliaible members for the
next Plan Year based on the balance remaining in the Reserve as of October 1
each Plan Year. The Fund will not pay a stipend at any time the Reserve
balance is zero. If the Pension Fund has no retired Firefighter members, any
funds remaining in the Reserve shall be returned to the Pension Fund.
SECTION 11: That specific authority is hereby granted to codify and incorporate this
Ordinance in the existing City of Okeechobee Municipal Police Officers' Pension Trust Fund
Summary Plan Description and the City of Okeechobee Municipal Firefighters' Pension Fund
Summary Plan Description.
SECTION 12: That all Ordinances or parts of Ordinances in conflict herewith be and the
same are hereby repealed.
Ordinance No. 1286, Page 7 of 8
If applicable, language to be added is double underlined.
If applicable, language to be deleted is skask thFough
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SECTION 13: That if any section, subsection sentence, clause, phrase of this Ordinance, or
the particular application thereof shall be held invalid by any court, administrative agency, or
other body with appropriate jurisdiction, the remaining sections, subsections, sentences,
clauses, or phrases under application shall not be affected thereby.
SECTION 14: That the language of this Ordinance shall be adopted as part of the
corresponding Pension Plan immediately, and the provisions of this Ordinance shall become
effective immediately upon the Merger Date as defined in Sections 4 and 8, herein.
INTRODUCED for First Reading and set for Final Public Hearing on this 6th day of February 2024.
Roll Call Vote:
Yes No Abstained Absent
Council Member Chandler:
Council Member/Vice Mayor Clark:
Council Member Jarriel:
Council Member McAuley:
Mayor Watford:
Dowling R. Watford, Jr., Mayor
ATTEST:
Lane Gamiotea, CMC, City Clerk
PASSED AND ADOPTED after Second and Final Public Hearing this 5th day of March 2024. Roll
Call Vote:
Yes No Abstained Absent
Council Member Chandler:
Council MemberNice Mayor Clark:
Council Member Jarriel:
Council Member McAuley:
Mayor Watford:
Dowling R. Watford, Jr., Mayor
ATTEST:
Lane Gamiotea, CMC, City Clerk
REVIEWED FOR LEGAL SUFFICIENCY:
John J. Fumero, City Attorney
Nason Yeager Gerson Harris & Fumero, P.A.
Ordinance No. 1286, Page 8 of 8
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If applicable, language to be deleted is struck thFough
0
GRS
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August 15, 2022
Board of Trustees
City of Okeechobee Firefighters' Retirement System
c/o Mr. Scott Baur
Resource Centers, LLC
4360 Northlake Blvd
Suite 206
Palrn Beach Gardens, FL 33410
Re: City of Okeechobee Firefighters' Retirement System
Actuarial Study as of October 1, 2021
Dear Scott:
As requested, we have performed an Actuarial Study as of October 1, 2021 to determine the effect
on the minimum annual contribution requirement of proposed provision changes under the City of
Okeechobee Firefighters' Retirement System (System). This study was performed at the request of
the Pension Board.
Current System Provisions — Currently there is no stipend for any members.
Proposed Change — We understand the Board is interested in determining the financial impact of
the proposed changes on the System contribution as follows:
Scenario 1 - Provide a $1,000 monthly stipend for members with 25 or more years of
credited service from retirement until Medicare age when the stipend will be reduced
by 50%. The amount of the monthly stipend will be reduced for member with less than
25 years of credited service in 5-year increments as follows:
Scenario 2 - Provide a $1,000 monthly stipend for members with 25 or more years of
credited service from retirement until Medicare age when the stipend will be reduced
by 50%. The amount of the monthly stipend will be reduced for member with less than
25 years of credited service in 3-year increments as follows:
Mr. Scott Baur
August 15, 2022
Page Two
25+ years
$ 1,000
$ 500
22 — 24.99 years
$ 880
$ 440
19 — 21.99 years
$ 760
$ 380
16 — 18.99 years
$ 640
$ 320
13 — 15.99 years
$ 520
$ 260
10 — 12.99 years
$ 400
$ 200
Under both scenarios, if the funding ratio falls below 85% the stipend will cease and restart when
the funding ratio increases above 85%.
We understand based on the Inter -local Agreement, the County will make contributions based on
the level of benefits in place on August 2, 2021. Any potential increase in contributions may need
to be funded by the City.
— The attached Exhibit sets out the key financial results of our Actuarial Study. The
following table summarizes the projected increase in the Present Value of Future Benefits as a
dollar amount and as a percentage of the current Present Value of Future Benefits and the
projected increase in minimum annual required City contribution as a dollar amount.
Scenario 1 — Monthly stipend
decreases in 5-year increments
Scenario 2 — Monthly stipend
decreases in 3-year increments
$ 709,780 $ 0
+ 17.1%
$ 744,640 $ 0
+ 17.9%
Actuarial assumptions and methods, System provisions financial data and member census data —
The actuarial assumptions and methods, System provisions, financial data and employee census
data employed for purposes of our Actuarial Study are the same actuarial assumptions and
methods, System provisions, financial data and member census data utilized for the draft October
1, 2021 Actuarial Valuation with the exception of the proposed stipends described above.
This Actuarial Study only reflects experience through October 1, 2021. It does not reflect the recent
and still developing impact of COVID-19, which may significantly impact the demographic and
economic experience seen in future actuarial valuations.
LG R S
Mr. Scott Baur
August 15, 2022
Page Three
Other Considerations — Under Governmental Accounting Standards Board (GASB) Statement
Number 68, we understand the full cost of benefit changes must be recognized immediately in
pension expenses (for accounting, not for funding). Therefore, pension expense is expected to
increase the first year and then is expected to return to lower levels in fiscal years following initial
recognition of the benefit change.
Risk Assessment — Risk assessment may include scenario tests, sensitivity, or stress tests, stochastic
modeling, and a comparison of the present value of benefits at low -risk discount rates. We are
prepared to perform such assessment to aid the Board in the decision making process. Please refer
to the draft October 1, 2021 Actuarial Valuation Report dated April 18, 2022 for additional
discussion regarding the risks associated with measuring the accrued lability and the minimum
funding payment.
This Actuarial Study is intended to describe the estimated future financial effect of the proposed
benefit changes on the System and is not intended as a recommendation in favor of the benefit
changes nor in opposition to the benefit changes.
If all actuarial assumptions are met and if all current and future minimum required contributions
are paid, System assets will be sufficient to pay all System benefits and future contributions are
expected to remain relatively stable as a percent of payroll. System minimum required
contributions are determined in compliance with the requirements of the Florida Protection of
Public Employee Retirement Benefits Act and Firefighters Retirement Chapter 175 with normal cost
determined under the aggregate cost method.
The Unfunded Actuarial Accrued Liability (UAAL) under the entry age normal cost method
(accounting) may not be appropriate for assessing the sufficiency of System assets to meet the
estimated cost of settling benefit obligations but may be appropriate for assessing the need for or
the amount of future contributions. The UAAL would be different if it reflected the market value of
assets rather than the actuarial value of assets.
These calculations are based upon assumptions regarding future events. However, the System's
long term costs will be determined by actual future events, which may differ materially from the
assumptions made. These calculations are also based upon present and proposed System
provisions that are outlined or referenced in this Actuarial Study.
If you have reason to believe the assumptions used are unreasonable, the System provisions are
incorrectly described or referenced, important System provisions relevant to this Actuarial Study
are not described or that conditions have changed since the calculations were made, you should
contact the undersigned prior to relying on information in this Actuarial Study.
LGRS
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Mr. Scott Baur
August 15, 2022
Page Four
If you have reason to believe that the information provided in this Actuarial Study is inaccurate, or
is in any way incomplete, or if you need further information in order to make an informed decision
on the subject matter of this report, please contact the undersigned prior to making such decision.
Future actuarial measurements may differ significantly from the current measurements presented
in this report due to such factors as the following: System experience differing from that anticipated
by the economic or demographic assumptions; changes in economic or demographic assumptions;
increases or decreases expected as part of the natural operation of the methodology used for these
measurements (such as the end of an amortization period) and changes in System provisions or
applicable law. Due to the limited scope of our assignment, we did not perform an analysis of the
potential range of such future measurements.
This Actuarial Study should not be relied on for any purpose other than the purpose described in
the primary communication. Determinations of the financial results associated with the benefits
described in this report in a manner other than the intended purpose may produce significantly
different results.
This report was prepared using our proprietary valuation model and related software which in our
professional judgment has the capability to provide results that are consistent with the purposes of
the valuation and has no material limitations or known weaknesses. We performed tests to ensure
that the model reasonably represents that which is intended to be modeled.
This Actuarial Study has been prepared by actuaries who have substantial experience valuing public
employee retirement systems. To the best of our knowledge the information contained in this
report is accurate and fairly presents the actuarial position of the System as of the valuation date.
All calculations have been made in conformity with generally accepted actuarial principles and
practices, with the Actuarial Standards of Practice issued by the Actuarial Standards Board and with
applicable statutes.
This Actuarial Study may be provided to parties other than the Board only in its entirety and only
with the permission of an approved representative of the Board.
The signing actuaries are independent of the System sponsor.
The undersigned are Members of the American Academy of Actuaries and meet the Qualification
Standards of the American Academy of Actuaries to render the actuarial opinion contained herein.
�G FA S
•
•
Mr. Scott Baur
August 15, 2022
Page Five
if you should have any question concerning the above or if we may be of further assistance with this
matter, please do not hesitate to contact us.
Sincerest regards,
Gabriel, Roeder, Smith & Company
Nicolas Lahaye, F.S.A., M.A.A.A., E.A., F.C.A
Consultant and Actuary
Enclosure
`G R S
Jennifer M. Borregard, M.A.A.A., E.A., F.C.A.
Consultant and Actuary
A. Participants
1. Active employees
2. Terminated vested
3. Receiving benefits (including DROPS)
4. Annual payroll of active employees
B. Present Value of Future Benefits
C. Total Normal Costs (including expenses)
1. Aggregate Cost Method
2. Entry Age Normal (EAN)'
D. Total Actuarial Accrued Liability (EAN)'
E. Smoothed Value of Assets
F. Unfunded Actuarial Accrued Liability'
G. Net City Cost
H. Increase in:
1. Present Value of Future Benefits
2. Total Actuarial Accrued Liability (EAN)'
3. Net City Cost
Comparison of Cost Data of October 1, 2021 Actuarial Valuation and Actuarial Study
Actuarial Study
Actuarial Study
5 Year Increments
3 Year Increments
Actuarial Valuation
Monthly Stipend
Monthly Stipend
Cost
% of Annual
Cost % of
Annual
Cost % of
Annual
Data
Compensation
Data Compensation
Data Compensation
1
N/A
1
N/A
1
N/A
4
N/A
4
N/A
4
N/A
8
N/A
8
N/A
8
N/A
$
57,842
100.0%
$
57,842
100.0%
$
57,842
100.0%
$
4,162,332
7196.0%
$
4,872,112
8423.1%
$
4,906,972
8483.4%
$
44,943
77.7%
$
44,943
77.7%
$
44,943
77.7%
$
63,513
109.8%
$
63,513
109.8%
$
63,513
109.8%
$
4,021,171
6952.0%
$
4,730,951
8179.1%
$
4,765,811
8239.4%
$
5,110,560
8835.4%
$
5,110,560
8835.4%
$
5,110,560
8835.4%
$
(1,089,389)
(1883.4%)
$
(379,609)
(656.3%)
$
(344,749)
(596.0%)
$
45,922
79.4%
$
45,922
79.4%
$
45,922
79.4%
N/A
N/A
$
709,780
1227.1%
$
744,640
1287.4%
N/A
N/A
$
709,780
1227.1%
$
744,640
1287.4%
N/A
N/A
$
0
0.0%
$
0
0.0%
' For purposes of GASB Statement Numbers 67 and 68 only
QRS
• 0
City of Okeechobee, Florida
Business Impact Estimate
Pursuant to §166.041, Florida Statutes
Proposed ordinance's reference and title: Ordinance No. 1286
AN ORDINANCE OF THE CITY OF OKEECHOBEE, FLORIDA, PROVIDING FOR THE
MERGER OF THE CITY OF OKEECHOBEE MUNICIPAL POLICE OFFICERS' PENSION
TRUST FUND, CREATED PURSUANT TO ORDINANCE NO. 888 AS SUBSEQUENTLY
AMENDED, AND THE CITY OF OKEECHOBEE MUNICIPAL FIREFIGHTERS' PENSION
FUND, CREATED PURSUANT TO ORDINANCE NO.889 AND AMENDED AND RESTATED
PURSUANT TO ORDINANCE NO. 1229; PROVIDING FOR CODIFICATION; PROVIDING
FOR SEVERABILITY OF PROVISIONS; REPEALING ALL ORDINANCES IN CONFLICT
HEREWITH AND PROVIDING AN EFFECTIVE DATE.
This Business Impact Estimate is provided in accordance with section 166.041(4), Florida Statutes. If one or more
boxes are checked below, this means the City is of the view that a business impact estimate is not required by
state law' for the proposed ordinance, but the City is, nevertheless, providing this Business Impact Estimate as a
courtesy and to avoid any procedural issues that could impact the enactment of the proposed ordinance. This
Business Impact Estimate may be revised following its initial posting.
❑ The proposed ordinance is required for compliance with Federal or State law or regulation;
❑ The proposed ordinance relates to the issuance or refinancing of debt;
❑ The proposed ordinance relates to the adoption of budgets or budget amendments, including revenue
sources necessary to fund the budget;
❑ The proposed ordinance is required to implement a contract or an agreement, including, but not limited
to, any Federal, State, local, or private grant or other financial assistance accepted by the municipal
government;
❑ The proposed ordinance is an emergency ordinance;
❑ The ordinance relates to procurement; or
❑ The proposed ordinance is enacted to implement the following:
a. Part II of Chapter 163, Florida Statutes, relating to growth policy, county and municipal planning,
and land development regulation, including zoning, development orders, development
agreements and development permits;
b. Sections 190.005 and 190.046, Florida Statutes, regarding community development districts;
c. Section 553.73, Florida Statutes, relating to the Florida Building Code; or
d. Section 633.202, Florida Statutes, relating to the Florida Fire Prevention Code.
In accordance with the provisions of controlling law, even notwithstanding the fact that an exemption noted above
may apply, the City hereby publishes the following information:
1. Summary of the proposed ordinance (must include a statement of the public purpose, such as serving the
public health, safety, morals, and welfare):
The ordinance merges the municipal police officers' and municipal firefighters' pension fund.
An estimate of the direct economic impact of the proposed ordinance on private, for -profit businesses in
the City, if any:
(a) An estimate of direct compliance costs that businesses may reasonably incur;
(b) Any new charge or fee imposed by the proposed ordinance or for which businesses will be
financially responsible; and
(c) An estimate of the City's regulatory costs, including estimated revenues from any new charges
or fees to cover such costs.
None.
3. Good faith estimate of the number of businesses likely to be impacted by the proposed Ordinance:
None.
4. Additional information the governing body deems useful (if any):
None.
1 See Section 166.041(4)(c), Florida Statutes.
Page 1 of 1
MEMORANDUM
TO: Mayor Watford & City Council
FROM: City Clerk Gamiotea
MINUTE FILE
�a Ile taoc?_f
k n Lb �a
�js-}Yibwk-e-d G�-`l1►a-
DATE: February 6, 2024
SUBJECT: Request amendments to
proposed Ordinance #1286
After the materials for the Exhibit for proposed Ordinance No. 1286 was published, a
few amendments were realized. We ask the City Council to consider a motion to
amend before the final vote approving the first reading as follows:
1. Remove the sixth Whereas paragraph on page 1.
2. Remove elected and replace
with other, page
3, first paragraph, B.,
last
sentence.
3. Add "in the System" after the
word remaining, page
3, fourth paragraph,
first
sentence.
4. Remove elected and replace
with other, page
5, fifth paragraph, 6.13.,
last
sentence.
5. Add "in the System" after the
word remaining,
page 5, last paragraph,
first
sentence.
Pages 1, 3, and 5, with the above changes shown are attached.
ORDINANCE NO.1286
AN ORDINANCE OF THE CITY OF OKEECHOBEE, FLORIDA,
PROVIDING FOR THE MERGER OF THE CITY OF
OKEECHOBEE MUNICIPAL POLICE OFFICERS' PENSION
TRUST FUND, CREATED PURSUANT TO ORDINANCE NO. 888
AS SUBSEQUENTLY AMENDED, AND THE CITY OF
OKEECHOBEE MUNICIPAL FIREFIGHTERS' PENSION FUND,
CREATED PURSUANT TO ORDINANCE NO. 889 AND
AMENDED AND RESTATED PURSUANT TO ORDINANCE NO.
1229; PROVIDING FOR CODIFICATION; PROVIDING FOR
SEVERABILITY OF PROVISIONS; REPEALING ALL
ORDINANCES IN CONFLICT HEREWITH AND PROVIDING AN
EFFECTIVE DATE.
WHEREAS, the City of Okeechobee established and maintains the City of Okeechobee Municipal
Police Officers' Pension Trust Fund, created pursuant to Ordinance No. 888, as
subsequently amended; and
WHEREAS, the City of Okeechobee established and maintains the City of Okeechobee Municipal
Firefighters' Pension Fund, created pursuant to Ordinance No. 889 and amended and
restated pursuant to Ordinance No. 1229; and
WHEREAS, to optimize the efficiency of, and minimize the costs related to, the administration of the
above -referenced Funds, the City Council desires to merge the Funds into a single Fund
under the exclusive administration of a single board of trustees; and
WHEREAS, the resulting Fund shall exist for the sole purpose of providing retirement benefits to the
participants of the merged Funds, to their eligible beneficiaries, and to the future participants
and beneficiaries of the resulting Fund; and
WHEREAS, the merger of the Funds shall not result in the reduction of any accrued benefit of any
participant of the merged Funds; and
ent, has
appr -ved the eFgeF of the Funds_an
WHEREAS, the City Council intends that the resulting Fund be administered in accordance with all
applicable provisions of the Internal Revenue Code and of Florida Law, including but not
limited to Chapters 175 and 185, Florida Statutes, and
WHEREAS, for the purposes of this Ordinance, double underlined type shall denote additions to and
stfike thFeugh shall denote deletions from the original text.
NOW, THEREFORE, be it ordained before the City Council of the City of Okeechobee, Florida;
presented at a duly advertised public meeting; and passed by majority vote of the City
Council; and properly executed by the Mayor or designee, as Chief Presiding Officer for the
City:
SECTION 1: The foregoing "whereas" clauses are incorporated herein as legislative findings
by this reference and made a part hereof for all intents and purposes.
SECTION 2: That Ordinance No. 888, as subsequently amended, is hereby further amended
by amending subsection 1., of Section 1., Definitions, of the document made part of said
Ordinance and otherwise amended herein, to modify the definitions of "Board," "Fund," and
"System" and to add a definition, "Merger Date," to read respectively as follows:
SECTION 1. DEFINITIONS.
Ordinance No. 1286, Page 1 of 8
If applicable, language to be added is douNe mdnd'n,M.
If applicable, language to be deleted is ekack-thwugp
B. As of the Merger Date, this paragraph 6.B., shall supersede subsection 1.. of
this Section 3 The sole and exclusive administration of and responsibility for
he proper operation of the System and for making effective the provisions of
this Ordinance is hereby vested in a Board of Trustees. The Board is hereby
d sianated as the Plan Administrator. The Board shall consist of six (6)
Trustees. two (2) of whom, unless otherwise prohibited by law, shall be legal
residents of the City. who shall be appointed by the City Council. two (2) of
whom shall be a full-time Police Officer Member of the System who shall be
elected by a majority of the active Police Officers who are Members of the
System, one (1) of whom shall be a former full-time Firefighter Member of the
System, who shall be elected by a majority of the former Firefighters who were
Members of the System, and one (1) of whom shall be chosen by a majority of
the five (5) other eiested-Trustees as provided for herein and such person's
name shall be submitted to the City Council.
Upon receipt of the sixth Trustee's name. the City Council shall, as a ministerial
duty, appoint such person to the Board of Trustees as its sixth Trustee. The
sixth Trustee shall have the same riahts as each of the other five (5) Trustees.
If there is no former or retired Firefighter remaining in the System. or willing to
serve the former and retired Firefiahters may elect an active or retired Police
Officer to serve in the active Firefighter seat. Upon receipt of such person's
name. the City Council shall. as a ministerial duty, appoint such person to the
Board.
When there are fewer than ten (10) former or retired Firefighters remaining In
the System, or in the case where no former or retired Firefiahter is available to
serve on the Board and the active or retired Police Officer who is then serving
in the active Firefiahter seat either leaves the employment of the City as a Police
Officer or otherwise vacates his or her office as Trustee, the active Firefighter
seat shall cease to exist, and the Board shall thereafter consist of five (51
Trustees. two (2) of whom, unless otherwise prohibited by law, shall be legal
residents of the City who shall be appointed by the City Council. two (2) of whom
shall be full-time Police Officer Members of the System who shall be elected by
a majority of the active Police Officers who are Members of the System, and
one (1) of whom shall be chosen by a majority of the four (4) remaining Trustees
as herein provided and shall serve a four (4) year term unless he or she sooner
vacates the office. Each resident Trustee shall serve as Trustee for a period of
four (4) years unless he or she sooner vacates the office or is sooner replaced
by the City Council at whose pleasure he or she shall serve. Each Member
Trustee shall serve as Trustee for a period of four (4) years, unless he or she
sooner leaves the employment of the City as a Police Officer or otherwise
vacates his or her office as Trustee whereupon a successor shall be chosen in
he same manner as the departing Trustee. Except in the case that there are
fewer than ten (10) former or retired Firefighters remaining and the active or
retired Police Officer who is then serving in the active Firefighter seat either
leaves the employment of the City as a Police Officer or otherwise vacates his
or her office as Trustee. each Trustee may succeed himself or herself jn office.
Police Deferred Retirement Option Plan (DROP) participants can be elected as
but not vote for the elected Police Trustee. The Board shall establish and
administer the nominating and election procedures for each election or delegate
this task to the City if the City is so willing. The Board shall meet at least
uartedy each year. The Board shall be a legal entity with, in addition to other
powers and responsibilities contained herein, the power to bnna and defend
lawsuits of every kind, nature, and description.
C. Effective as of the Merger Date, all references herein, except for historic
references, to the City of Okeechobee Municipal Police Officers' Pension Trust
Fund, shall be read as the City of Okeechobee Municipal Police Officers' and
Firefighters' Pension Trust Fund.
D. Effective as of the Merger Date. it is intended that the Board of Trustees
possess identical powers with respect to the operation and administration
Ordinance No. 1286, Page 3 of 8
If applicable, language to be added Is double undedleed
If applicable, language to be deleted is sHdsk-Uxeugh
SECTION 7: That Ordinance No. 1229, as subsequently amended, is hereby further
amended by amending subsection 3., of Section 3., Board of Trustees, of the document
made part of said Ordinance and otherwise amended herein, to replace subsection 3., to
read as follows:
SECTION 3. BOARD OF TRUSTEES.
3. Quorum and Voting. A quorum shall consist of no fewer than three (3) Trustees.
Each Trustee shall be entitled to one (1) vote on the Board. Three (3) affirmative
votes shall be necessary for any decision by the Trustees at any meeting of the
Board. A Trustee shall abstain from voting as the result of a conflict of interest and
shall comply with the provisions of Section 112.3143, Florida Statutes. as amended
from time to time.
SECTION 8: That Ordinance No. 1229, as subsequently amended, is hereby further
amended by amending Section 3., Board of Trustees, of the document made part of said
Ordinance and otherwise amended herein, to add a new subsection 6., to read as follows:
SECTION 3. BOARD OF TRUSTEES.
Merger Provisions
A. As soon as administratively reasonable upon the effective date of the Ordinance
adopting this paragraph 6.A., the responsible parties shall appoint and elect
prospective Trustees (excluding the sixth Trustee) in accordance with the
conditions set forth in paragraph 6.B., below, who shall agree in writing to
assume the duties of Trustees as set forth herein as of a specified date. That
date shall be the same for all five prospective Trustees, and shall constitute the
Merger Date.
B. As of the Merger Date, this paragraph 6.B., shall supersede subsection 1., of
this Section 3. The sole and exclusive administration of and responsibility for
the proper operation of the System and for making effective the provisions of
this Ordinance is hereby vested in a Board of Trustees. The Board is hereby
designated as the Plan Administrator. The Board shall consist of six (61
Trustees. two (2) of whom, unless otherwise prohibited by law, shall be legal
residents of the City. who shall be appointed by the City Council. two (2) of
whom shall be full-time Police Officer Members of the System who shall be
elected by a majority of the active Police Officers who are Members of the
System, one (1) of whom shall be a former full-time Firefighter Member of the
System who shall be elected by a majority of the former Firefighters who were
Members of the System. and one (1) of whom shall be chosen by a majority o
the five (5) other elested-Trustees as Drovided for herein, and such person's
name shall be submitted to the City Councill.
Upon receipt of the sixth Trustee's name. the City Council shall, as a ministerial
duty, appoint such person to the Board of Trustees as its sixth Trustee. The
sixth Trustee shall have the same rights as each of the other five (5) Trustees
If there is no former or retired Firefighter remaining in the System. or willing to
serve, the former and retired Firefighters may elect an active or retired Police
Officer to serve in the active Firefighter seat. Upon receipt of such person's
name. the City Council shall, as a ministerial duty, appoint such person to the
Board-.
When there are fewer than ten (10) former or retired Firefighters remaining in
the System or in the case where no former or retired Firefighter is available to
Ordinance No. 1286, Page 5 of 8
If applicable, language to be added is dcli�Me imdnd�ned.
If applicable, language to be deleted is stwskahrough
IIeH ailO
ueuaseaaD ugor:
uoluelD a1a4:)iw
Aaelaa:)aS 'paeMOH euuoa
aie4D 'AauaH essiPW
wa}sAS juawaiijaU saaAoldw3 leaauaE)
AalaoM Ae�l
pAOJIOH ueAd
ilneaugieo ApoD
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aieq:) 'aolAel aAlla9
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siapueS engsof
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39ROH32iralmito do AID
n m
.A
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rD
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M
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h
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0
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rt
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0
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0-0
Sources of Funding
• City of Okeechobee
• State of Florida
• Plan Members
� �. Wit— - .'•i.`•�•�~ .ter•"��111t. a
•
Pension Normal Cost
Benefits + Expenses
•
•
Fully
funded
defined benefit
Pens io►i plan
Chapter 175 Premium Tax Receipts from Florida will stop.
•
Normal Cost:
City $ = Plan Expense
Even though the Firefighters Retirement
System is fully funded, the City of
Okeechobee must continue to contribute
the normal cost each year. While the
benefits are frozen and fully funded, the
normal cost of the pension includes the
ongoing expense to administer the plan.
•
Pension Expense
Accounting Fees
Actuary
Auditor
Administrator
Insurance
Lega I Fees
Pension Expense
Accounting Fees $21988 $21000
Actuary 23,265 341600
Auditor 3,700 41554
--- Administrator 71338 71559
` Insurance 21110 21110
Legal Fees 41132 121356
•�j
e-
Total Expense $44,387 $62,325
�r
r
ti•
ILA
c
� : 4,
DEPARTMENT
ni: RF\/FNI IF
Ch 175 Premium
Tax Receipts
• 2020 : 521670
• 2021: 451578
• 2022: 391083 *
• 2023: 771569
*Based on formula and reduced payroll.
i
DEPARTMENT
nF: 1?1:\/F:Nll IF:
Ch 175 Premium
Tax Receipts
Continued receipt of
Chapter 175 Premium
Tax contribution offsets
the City contribution
requirement.
•
Fully
-� fund
defined bens
pension pla 'DEPARTMENT
Continue Ch. 175 Premium Tax
Contribution:
Reduce Funded Ratio to 100%.
• Manage Future Expense
• Use some of the money in
the Retirement System for
something else.
Balance Sheet
Reserves
['ba-lan(t)s 'shetri-'zarvz]
Accounting entries that
show money set aside to
pay future obligations.
Firefighter Benefit
Reserve
f
�
l
-q
WWI,
.1, � • rI a
Adjustable Reserve:
• Variable Benefit
• Maintain Funding at 100%
0
•
7
-4
0
0
9
3
rD.
rD
0
on
V)
O-Q
FO
ou
77
IT.,
Awl
E
e rge r
Plans:
Modest cost
savings over time
Merger not
supported by
Police Officer
Board of Trustees