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<br />
<br />July 26, 1977
<br />
<br /> 77-251 - The following ordinance approved on first reading at the regular meeting of
<br />July 12, 1977, was taken up and read:
<br />
<br />"AN ORDINANCE TO APPROPRIATE $80,000 FROM THE CAPITAL IMPROVEMENT FUND FOR
<br />REPLACEMENT AND REPAIR OF SIDEWALKS, CURBS AND GUTTERS."
<br />
<br /> On motion of Mr. Wentz and seconded by Mr. Early, the ordinance was adopted, and by the
<br />following vote:
<br />
<br />Ayes: Barnes, Early, Elliott, Holley, Oast, Wentz, Davis
<br />Nays: None
<br />
<br /> 77-252 - The following ordinance approved on first reading at the regular meeting of
<br />July 12, 1977, was taken up and read:
<br />
<br />"AN ORDINANCE TO APPROPRIATE $25,000 FROM THE ANTI-RECESSION FISCAL ASSISTANCE
<br />FUND FOR THE CONTINUATION OF THE VPISU EXTENSION PROGRAM IN PORTSMOUTH."
<br />
<br /> On motion of Mr. Wentz and:seconded:by Mr. Elliott, the ordinance was adopted, and by
<br />the following vote:
<br />
<br />Ayes: Barnes, Early, Elliott, Holley, Oast, Wentz, Davis
<br />Nays: None
<br />
<br /> 77-253 The following ordinance deferred from the regular meeting of July 12, 1977,
<br />was taken up and read:
<br />
<br />"AN ORDINANCE TO AMEND THE CODE OF THE CITY OF PORTSMOUTH, VIRGINIA, 1973, BY
<br />AMENDING SECTI©NS 31-1~ 31-30(a)(1), 31-41, 31-62, 31-63, 31-65, 31-67, 31-70,
<br />31-'77(a), 31-91, 31-118(a)(1), 31-129, 31-148(b)(c), 31-149, 31-151, 31-153(a),
<br />31-156 AND 31-162(a); PERTAINING TO THE PORTSMOUTH SUPPLEMENTAL RETIREMENT SYSTEM
<br />AND THE PORTSMOUTH FIRE AND POLICE RETIREMENT SYSTEM."
<br />
<br />The following report was presented by the City Manager:
<br />
<br /> "The attached results of the retirement survey indicate an approximately S0/50 split of
<br />employee preferences. It should be noted that the survey was designed to be very general in
<br />nature, and did not offer specific choices. Prior to offering a choice of benefits, the
<br />appropriateness of the specific benefits would need to be considered and an actuarial de-
<br />termination of the cost of each of the specific benefits would need to be made. The survey
<br />does indicate, in general, that there is a substantial number of employees who would be
<br />receptive to the opportunity for considering employee funded benefits. Based on the results
<br />of this survey of employee preferences, we should not fail to consider employee contributions
<br />as a source of funding desirable benefits in the future.
<br />
<br /> In my opinion, the survey results provide more utility as they relat~to future retire-
<br />ment decisions than in regard to the changes currently proposed by the Retirement Board of
<br />Trustees, It is my recommendation that the currently proposed changes to the retirement
<br />systems be adopted at this time for the following reasons:
<br />
<br />1. Many of the changes are to improve equity and to clarify legal language, and are
<br /> not cost inspired.
<br />2. The changes which represent benefit reductions for cost savings purposes ~re
<br /> directly related to the benefit expansions which were made in order to comply
<br /> with State legislation which has since been amended. If the currently proposed
<br /> changes are adopted, the benefits will still be significantly greater than they
<br /> were before the State legislation.
<br />3. If the retirement systems were to be augmented with "employee funded" benefits,
<br /> the specific benefits which the employees would be willing to pay for would pro-
<br /> bably not be the same specific items as those which are now under consideration.
<br /> Fore example, the employees would probably not be will to "pay for" a shorter
<br /> period of vesting since this provision does not affect current employees.
<br />4. If employee withholding for retirement were initiated, the withholding would
<br /> probably be better received by the employees if the action were made concurrent
<br /> with an increase in benefits; as opposed to initiating withholding to avert a
<br /> reduction of benefits.
<br /> 5. The Portsmouth retirement systems, with the changes currently proposed, will con-
<br /> tinue to provide a very high level of employee benefits.
<br />
<br /> Some additional observations associated with the survey which warrant comment are
<br />as follows:
<br />
<br />1. Of the 1700 to 1800 employees covered by the retirement systems, responses to the
<br /> survey were returned by approximately one-half of the employees. Although 332
<br /> indicated a~preferencel for higher benefits with employee~cost, that number re-
<br /> presents something less than twenty percent of those affected.
<br />2. For those who desire them, some forms of additional benefits are available from
<br /> sources outside of the retirement systems (savings accounts, annuities, life
<br /> insurance, etc.). This being the case, it would probably be inappropriate to
<br /> impose "empl~oyee funded,' benefits upon those employees who do not desire them,
<br /> unless there was a very high percentage of employees who favored the employee
<br /> funding.
<br />3. The refund of prior employee contributions was completed in fiscal year 1975-76,
<br /> less thant two years ago.
<br />4. Employee funding is disadvantageous from the standpoint of income taxes. For
<br /> example, assume a 20% tax bracket for an employee, and a proposed contribution
<br />
<br />
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