Minutes 07/28/1970 - Laserfiche WebLink

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.T~IV 2R 1970 Motion of Mr. Johnson to grant the privilege of the floor to Mr. Seaborn Flournoy and Attorney Norman Olitsky ~ adopted. Mr. Flournoy and ~4r. Olitsky spoke. On motion of Mr. King, privilege of the floor was granted ~{r. George talker, who spoke. On motion of Mr. Johnson, the ordinance was adopted and by the following vote: Ayes: Johnson, King)Smith (R), Barnes Nays: Holley, Turner The following statement was made by the Mayor: "Quotations atributed to several members of the Fire Department in a Monday newspaper article implied c~rtain misconceptions concerning effect of inclusion of the City Manager under the Police-Fire Retirement $~stem. It is important that these erroneous assertions be cleared up. First, a fire captain was quoted as ~iaying that the firemen had worked hard to get their system started while the administration was against it. This is untrme. The program could never have been instituted with- out majority City Council approval. During the ensuing years, City Councils have strengthened the program and increased the benefits through annual City contributions to the fund. Benefits cannot be reduced except by ordinance adopZed by the City Co~.~ncil and no such ordinance is being adopted. To the Contrary, the current amendment materially improves benefits for those in our Police-Fire system and those in the Supplemental System. A statement also was made that, Quote: pay for someone else's retirement." "The firemen feel the money is their's and they don't want to ~ Prior et July 1, 1967, employees contributed to the retirement system through payroll deducti~m. There have been no employee contributions since that date, when the City decided to defray the total cost of both retirement programs. The !aw requires that allemployee contrib,utions be retained in the assets of the systemuntil the member ceases to be an employee. For investment purposes only the two retirement funds are commingled and the custodian must keep such records as may be necessary to acgurately determine at any time the proportions of the total funds representin funds of the individual systems. Allocation of investment income, capital gains and losses, and expenses of administration of the commingled funds between the two ~ystems are made by the custodian in the ratio of amounts of the funds of the respective systems. These individual contributions are returned in a lump sum with interest to retirees upon their retire- ment, for any reason, or to their families in event of the members' d ~tlt,~ Therefore, in actuality, no retiree is paying for his own or anyone else's retirement. The 6ity, and earnings from the fund investments are. A contention that inclusion of the City Manager under the program will result in reduced benefits to ~ other members is grossly erroneous. The law enacted by the City Council requires that actuamial valuations be made every 5 years and, as necessary, the bases of rates of City contributions be revised. The law also provides that the aggregg~e employer contributions for any year shall be at least ~ufficient, when combined with the amount then held in the retirement account, to provide benefits payable during the current year. We must recognize that neither of our retirement ystems are ~funded on an individual b~s. Needs are actuarily computd and lump sum contributions made by the city. as determined necessary by the actuaries. Review of these funds periodically is necessary because any increases in salaries or upgrading of re- tirement benefits affect requirements for City contributions. Earnings of the system, based on investment of funds, also is a factor in determing the size of the required City contribution. The City Manager has held the dual'post of manager and Public Safety director since 1958. He has direct, overall responsibility for effective operation of the Police and Fire Departments through their respective chiefs. He qualifies for membership in either of the two City retirement system~. The primary benefit for his inclusion in the Police-Fire system is eligibility for retirement at SS,.instead of 65. In our opinion, with thepphysical demands required of our City Manager, and for that matter of most city managers in Virginia, earlier retirement eligibility is not anunreasonable or undeserved benefit." 70-289 - The following ordinance, approved on first reading at last meeting was taken up and read: "N~ ORDINANCE TO APPROPRIATE $2,000.00 FROM THE GENERAL FUND FOR A PILOT PROJECT ON CO~g~ITY .RECREATION." On motion of Mr. Holley the ordinance was adopted and by the following vote: Ayes: Holley, Johnson, King, Smith (R), Turner, Barnes Nays: None