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Legislation #: 100607 Introduction Date: 7/22/2010
Type: Ordinance Effective Date: 10/1/2011
Sponsor: COUNCILMEMBER HERMANN
Title: Amending Article IX of Chapter 2, Code of Ordinances, by repealing Sections 2-1171, 2-1172 and 2-1189 and enacting in lieu thereof new sections of like number and subject matter; enacting a new Section 2-1201, Former MAST Employees; directing the City Manager to file a cost statement and report back to the City Council any public input; and establishing an effective date.

Legislation History
DateMinutesDescription
7/22/2010 Filed by the Clerk's office
7/22/2010 Referred to Finance, Governance & Ethics Committee
8/4/2010 Hold On Agenda (8/18/2010)
8/18/2010 Hold On Agenda (9/1/2010)
9/8/2010 Advance and Do Pass as a Committee Substitute, Debate
9/9/2010 Councilmember Sharp Move to Advance
9/9/2010 Failed
9/23/2010 Councilmember Hermann Move To Re-refer
9/23/2010 Re-Referred Finance, Governance & Ethics Committee
9/29/2010 Hold Off Agenda
10/20/2010 Hold On Agenda (10/27/2010)
10/27/2010 Hold On Agenda (11/3/2010)
11/17/2010 Hold Off Agenda
6/16/2011 Assigned Third Read Calendar as Substituted
6/23/2011 Councilmember Marcason Move to Amend
6/23/2011 Passed as Substituted and Amended

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COMMITTEE SUBSTITUTE FOR ORDINANCE NO. 100607, AS AMENDED

 

Amending Article IX of Chapter 2, Code of Ordinances, by repealing Sections 2-1171, 2-1172 and 2-1189 and enacting in lieu thereof new sections of like number and subject matter; enacting a new Section 2-1201, Former MAST Employees; directing the City Manager to file a cost statement and report back to the City Council any public input; and establishing an effective date.

 

WHEREAS, on April 15, 2010, the Council adopted Resolution No. 100291 which adopted an article to be added to the Collective Bargaining Agreement between the City and Local 42, I.A.F.F., which memorialized the agreement between the City and Local 42 concerning compensation, benefits and working conditions for those persons then employed by the Metropolitan Ambulance System Trust ("MAST") and represented by Local 42 who were to become City employees of the Fire Department on April 25, 2010 and would continue to be represented by Local 42 by incorporating various provisions of the CBA into the new Medical Bureau article; and

 

WHEREAS, Article IX of the CBA was incorporated into the new Medical Bureau Article, with a new section, Section 5, entitled "Pension Rights" adopted which provides that, in pertinent part:

 

. . . members of the Medical Bureau, . . . will also receive a supplemental pension benefit, in recognition of the fact that they have public safety and /or emergency response duties and responsibilities. This supplemental pension benefit is also granted in recognition of the unique skills and experiences of this group, including knowledge of the demographics, diversity and socioeconomic status of Kansas City's population, as well as a familiarity and knowledge of the City's geographic layout and street system, as they relate to emergencies. The City has determined that these and other attributes possessed by this group are essential to the efficient delivery of emergency medical services in Kansas City and that outside of this group, such attributes are not readily available in the Kansas City labor market. Accordingly, the City and the Union recognize that it is imperative to retain the composition and integrity of this group upon consolidation. An employee electing this option must work a minimum of eighteen (18) months for the City to be entitled and eligible to collect the described pension benefit; and

 

WHEREAS, on April 15, 2010, the Council also adopted Resolution No. 100290 which adopted the "Appendix to the Local 3808 Collective Bargaining Agreement / May 1, 2008 – April 30, 2011 / Former MAST Personnel" containing appendices to the then current Collective Bargaining Agreement between the City and Local 3808, I.A.F.F., which memorialized the agreement between the City and Local 3808 concerning compensation, benefits and working conditions for those persons then employed by MAST and represented by Local 3808 who were to become City employees of the Fire Department on April 25, 2010; and

 

WHEREAS, Section 4 of the above Appendix is entitled "Pension" and provides that: "The city agrees to grant to members the pension provisions and conditions that are granted to other former MAST employees".

 

WHEREAS, on April 25, 2010, these former MAST employees did become City employees of the Fire Department; and

 

WHEREAS, this ordinance fulfills these CBA agreements and establishes a new pension plan which will be known as “The Former MAST Employees’ Retirement System”; NOW, THEREFORE,

 

BE IT ORDAINED BY THE COUNCIL OF KANSAS CITY:

 

Section 1. That Chapter 2, Code of Ordinances of the City of Kansas City, Missouri, is hereby amended by repealing Sections 2-1171, 2-1172 and 2-1189, and enacting in lieu thereof new sections, to read as follows:

 

Sec. 2-1171. Definitions.

 

The following words and phrases as used in this division shall have the following meanings, unless a different meaning is plainly required by the context. The masculine pronoun shall include the pronoun of feminine gender, unless otherwise indicated by the context.

 

Actuarial equivalent means a benefit of equal value to another benefit when computed upon the basis of such mortality tables and interest rate as shall be adopted by the board of trustees upon recommendation of the actuarial consultant.

 

Adjustment for prior retirement benefit means 82 months of service with MAST or if the MAST employee has worked less than 82 months with MAST then the adjustment will be the entire amount of the employee’s service with MAST.

 

Annuity means a monthly payment for life as established herein. The first payment shall be made at the end of the month after the effective date of the benefit as established by the board of trustees. The final payment of all annuities shall be made at the end of the month in which the event causing cessation of the payment occurs and shall be made for the full monthly amount without reduction.

 

Beneficiary means the person designated by a member to receive any benefits payable upon his death.

 

Compensation means the basic monthly wage or salary paid an employee excluding bonuses, overtime, expense allowance and other extraordinary compensation. Compensation shall include amounts contributed to any plan maintained by the employer pursuant to a salary reduction agreement where the member could have elected to receive such amount as case compensation.

 

Annual compensation means compensation defined in section 415(c)(3) of the Internal Revenue Code and section 1.415-2(d) of the Treasury Regulations, but in no event more than $200,000.00 per calendar year (as adjusted annually under section 401(a)(17) of the Internal Revenue Code). Annual compensation also includes amounts contributed by the employer pursuant to a salary reduction agreement which are excludable from a member's gross income under sections 125, 401(a)(8), 402(h), or 403(b) of the Internal Revenue Code.

 

Effective on and after January 1, 1996, in addition to other applicable limitations set forth in the plan, and notwithstanding any other provision of the plan to the contrary, for plan years beginning on or after January 1, 1996, and only for employees who were not members before January 1, 1996, the annual compensation of each member taken into account under the plan shall not exceed to OBRA '93 annual compensation limit. The OBRA '93 annual compensation limit is $150,000.00, as adjusted by the commissioner for increases in the cost of living in accordance with section 401(a)(17) of the Internal Revenue Code. The cost-of-living adjustment in effect for a calendar year applies to any period, not exceeding 12 months, over which compensation is determined (determination period) beginning in such calendar year. If a determination period consists of fewer than 12 months, the OBRA '93 annual compensation limit will be multiplied by a fraction, the numerator of which is the number of months in the determination period, and the denominator of which is 12.

 

For plan years beginning on or after January 1, 1996, and only for employees who were not members before January 1, 1996, any reference in this pension system plan to the limitation under section 401(a)(17) of the Internal Revenue Code shall mean the OBRA '93 annual compensation limit set forth in this provision.

 

If compensation for any prior determination period is taken into account in determining a member's benefits accruing in the current plan year, the compensation for that prior determination period is subject to the OBRA '93 annual compensation limit in effect for that prior determination period. For this purpose, for determination periods beginning before the first day of the plan year beginning on or after January 1, 1996, or OBRA '93 annual compensation limit is $150,000.00.

 

Employer means the city or participating boards of control as defined in RSMo 95.540.

 

Employment and service means service for the employer as an employee.

 

Final average compensation means the monthly average of the two highest years of compensation with the city of the member in the last ten years whether or not such years are consecutive. For former MAST employees, only compensation with the city will be used for this calculation.

 

Interest means the rate declared by the board of trustees compounded annually.

 

Last continuous employment means the most recent period of uninterrupted employment excluding all service previous to last reemployment date. For former MAST employees the most recent period of uninterrupted employment including service with MAST prior to April 25, 2010. In determining this number, part-time service with MAST will be used only to determine whether the MAST service was continuous.

 

Retirement system the retirement system established herein to be known as "The Employees' Retirement System."

 

Surviving spouse means the legally married wife or husband of a member surviving the member's death.

 

Termination means resignation or discharge from service of the employer.

 

Sec. 2-1172. Membership.

 

(a)    Generally. All full-time, permanent employees in the classified and unclassified services shall become members of the retirement system as a condition of employment, including, all full-time, permanent former MAST employees who became city employees as of April 25, 2010, and who did not become members of the Fire Fighters’ Pension System. Former MAST employees have the option within sixty days of the passage of this ordinance to elect to become members of this plan in lieu of participation in the defined contribution plan set out in Division 10. Also included in membership are those who have retired in circumstances establishing eligibility for an annuity in this pension system and inactive members on leave of absence.

 

(b)   Employees of boards. Employees of any administrative board or board of control as organized and existing under the general laws of the state and as defined in RSMo 95.540, whose governing body has elected membership, shall be members.

 

(c)    Effective date. Membership shall begin on the first day of employment. It shall cease upon termination of employment or death.

 

(d)   Ineligible employees. Members of the police, firemen's, municipal judges' or any other pension system involving city funds, receiving or entitled to receive a future pension from the systems, are ineligible for membership.

 

(e)    Persons hired at age over 60 years. Employees previously deemed ineligible for membership because they were hired at an age over 60 years shall immediately become members. They may elect to claim membership service since date of employment by paying into this retirement system, no later than July 1, 1988, a single sum equaling the employee contributions they would have made had they been members at the time of their employment.

 

Sec. 2-1189. Board of Trustees.

 

(a) Function. The board of trustees shall manage and direct the affairs of this division. It shall have the exclusive right to interpret this division and its provisions including but not limited to any benefit or claim for benefit hereunder, determination of creditable service, final average compensation, eligibility and termination of membership.

 

(b) Investments.

 

(1) The board of trustees shall be trustee of all funds created by this division and shall have full power to invest and reinvest them. Investments may include, but are not limited to, bonds of the United States government, State of Missouri, municipal corporations including school districts, corporate bonds, real estate mortgages, common and preferred stocks.

 

(2) No trustee nor any member of the system shall have any direct interest in the gains or profits of any investment made by the board of trustees.

 

(c) Membership. The board of trustees shall consist of nine members, including the director of human resources and director of finance. Seven shall be appointed by the mayor as follows:

 

(1) One shall be a retired member of the system.

 

(2) Four, other than the foregoing, shall be recognized business and/or civic leaders with financial backgrounds, such as investments, management of employees benefit plans, who are not employees of the city. At the mayor’s option, one of this group may be a city council person with a financial background who shall serve as an ex-officio member of the board with a right to vote.

 

(3) Two shall be active employees and members of the retirement system as recommended by the union.

 

(4) In the event that Local 42, IAFF, has two hundred (200) or more members, including retirees, participating in the Employees’ Retirement System, Local 42 will have one designated member who will be vested with the same voting rights as the other trustees.

 

The appointed members shall serve for a term of one to five years each for each initial appointment, at the expiration of which their appointed successors shall each serve a term of four years.

 

(d) Compensation. The trustees shall be reimbursed by the retirement system for all necessary expenses incurred for service on the board.

 

(e) Organization. The board of trustees shall adopt rules and regulations for administration. Each member shall be entitled to one vote. A majority of five trustees shall constitute a quorum and a majority of the quorum shall be required for any decision. The board of trustees shall elect a chairman and such other officers as it deems necessary from its membership by majority vote.

 

(f) Professional services.

 

(1) The board may engage in investment, safekeeping and other services as deemed necessary. The city counselor of Kansas City, or his designated assistant, shall be the legal advisor.

 

(2) At least every five years an actuarial investigation of the system shall be conducted. Results shall be reported to the city council, together with recommendations to maintain the system on a sound actuarial basis.

 

(g) Records and reports. The retirement systems administrator shall maintain records of all proceedings open to public inspection. He shall annually publish a report approved by the board showing the financial transactions for the preceding year, and the financial condition of the system.

 

(h) Regulations. The board of trustees shall prescribe such rules, regulations, forms and procedures as are necessary to administer the system.

 

(i) Portability agreements. The board of trustees may enter into cooperative agreements as set forth in RSMo 105.985, providing for the transfer of funds to other public entity retirement plans and to receive transfer of funds into this plan.

 

(j) Administration. The retirement systems administrator shall be appointed by the director of human resources. The administrator shall attend all meetings of the board of trustees, but shall not have a vote. The administrator shall conduct the operations of the system in accordance with this division and the rules and regulations, directives and resolutions of the board of trustees.

 

Section 2. That Chapter 2, Code of Ordinances of the City of Kansas City, Missouri, is hereby amended by enacting a new Section 2-1201, Former MAST Employees, to read as follows:

 

Sec. 2-1201. Former MAST Employees.

 

(a)    Generally. Former MAST employees who became city employees as of April 25, 2010, and who did not become members’ of the firefighters’ pension system are eligible to participate in the employee’s retirement system set forth in this division in lieu of participation in the defined contribution plan set out in Division 10. All of the provisions of Division 2 will apply to former MAST employees with the exception of Sections 2-1173 and 2-1186. For these employees, creditable service and contribution rates will be calculated differently than what is set forth in Sections 2-1173 and 2-1186.

 

(1)               Creditable service. Total creditable service for former MAST employees shall be the sum of membership service from date of employment with the City as of April 25, 2010, to last day on pay status and prior full time service with MAST as computed under this section. For these employees if membership service equals or exceeds eighteen (18) months, their prior service shall be the years and full calendar months of employment with MAST preceding April 25, 2010, exclusive of part-time service, based upon the following table:

 

Sum of Age and

Prior Service as of 4/25/10 Less Adjustment for Prior Retirement Benefit

Percent of

Prior Service Credit

Over 80

100%

74    to 79

90

68 to 73

80

62 to 67

70

56 to 61

60

50 to 55

50

44 to 49

40

38 to 43

30

32 to 37

20

26 to 31

10

20 to 25

0

 

(2)               Former MAST employee member contributions. All former MAST employees shall contribute the following percentages of compensation:

 

Sum of Age and

Prior Service as of 4/25/10 Less Adjustment for Prior Retirement Benefit

Employee

Contribution

Over 80

6.0%

74 to 79

5.0%

68 to 73

4.8%

62 to 67

4.6%

56 to 61

4.4%

50 to 55

4.2%

44 to 49

4.1%

38 to 43

4.0%

32 to 37

4.0%

26 to 31

4.0%

20 to 25

4.0%

 

(3)               Effective date. Member contributions shall begin with the first pay period following April 25, 2010, and shall cease on the member’s retirement date, termination of employment or death.

 

Section 3. The Director of Finance is authorized to make payment arrangements from former MAST employees who elect to participate in the employee’s retirement system in order to collect any additional percentages of compensation as set forth in Section 2-1201(2) that has not been withheld since April 25, 2010.

 

Section 4. A cost statement will be prepared and then made available as public information for 45 days in the office of the City Clerk. The City Manager will report back all comments received during the 45 day period within 15 days of the close of the 45 day period. This ordinance will be presented again to the Council for its consideration after being informed of the public input.

 

Section 5. The effective date of this ordinance will be October 1, 2011.

 

_____________________________________________

 

Approved as to form and legality:

 

 

___________________________________

Lana Torczon

Assistant City Attorney