HomeMy WebLinkAboutAgenda Packet City Council - 06/21/2018 (W) 1201 Leopard Street
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Meeting Agenda - Final
JUN 15 2018 1-1'
City Council Workshop Session ahe 'tea Vitt-Pu�
Thursday,June 21,2018 9:00 AM City Council Chambers
Public Notice--ITEMS ON THIS AGENDA ARE FOR COUNCIL'S INFORMATIONAL
PURPOSES ONLY. COUNCIL MAY GIVE DIRECTION TO THE CITY MANAGER, BUT NO
OTHER ACTION WILL BE TAKEN AND NO PUBLIC COMMENT WILL BE SOLICITED.
THE USE OF CELLULAR PHONES AND SOUND ACTIVATED PAGERS ARE
PROHIBITED IN THE COUNCIL CHAMBERS DURING MEETINGS OF THE CITY
COUNCIL.
A. Mayor Joe McComb to call the meeting to order.
B. City Secretary Rebecca L. Huerta to call the roll of the required Charter Officers.
C. BRIEFINGS TO CITY COUNCIL:
The following items are for Council's informational purposes only. Council may give
direction to the City Manager,but no other action will be taken taken and no public
comment will be solicited.
1. 18-0746 Review of the Corpus Christi Firefighters'Retirement System
2. 18-0745 United Corpus Christi Chamber of Commerce Recommendations
for Funding of Residential Streets
3. 18-0731 Budget Workshop 5-Overview of Fiscal 2018-2019 Budget
sponsors: Office of Management and Budget
D. ADJOURNMENT
*City Council will not be taking action in this workshop session, except for the purpose of
directing the City Manager in accordance with the Charter To the extent the classification
of this meeting as a workshop is construed to limit this authority, then this meeting is
determined to be a special meeting.
City 0/Corpus Christi Page 1 Printer on 0/1512018
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+0 pppt AGENDA MEMORANDUM
18'52 City Council Budget Workshop Meeting of June 21, 2018
DATE: June 15, 2018
TO: Mayor and Council
A Review of the Corpus Christi Firefighters' Retirement System
PRESENTER(S):
Name Title/Position Organization
1. Gracie Flores Plan Administrator Corpus Christi Firefighter's
Retirement System
BACKGROUND:
The Plan Administrator for the Corpus Christi Firefighter's Retirement System will present
a review of said system.
LIST OF SUPPORTING DOCUMENTS:
PowerPoint—A Review of the Corpus Christi firefighters' Retirement System
A Review of the
Corpus Christi Firefighters' Retirement System
(CCFFRS)
For the
City of Corpus Christi Budget Workshop
June 21, 2018
Presented by
Matt Wood, Board Chairman
711 N. Carancahua, Suite 724
Corpus Christi, TX 78401-0544
361-882-1486
ccfirepension.com
CCFFRS History
• Corpus Christi Firefighters' Retirement System (CCFFRS) was
established 1942 under the Texas Local Fire Fighters Retirement Act.
• The Texas Local Fire Fighters Retirement Act (TLFFRA) applies to
each municipality in the state that has a regularly organized fire
department.
• 42 fire fighter retirement systems are governed by TLFFRA.
• Participating fire departments vary in size from 25 to over 400
active fire fighters and from 10 to over 300 retirees.
CCFFRS History - Continued
• TLFFRA mandates that the Board of Trustees for the CCFFRS meet
once a month.
• CCFFRS meets on the 3rd Thursday of each month.
• TLFFRA establishes the retirement system to be governed by a 7
member Board consisting of the Mayor or the Mayor's appointee,
the Finance Director or his/her appointee, 3 members of the
retirement system elected by the participating members and 2
persons who are citizens, who are not officers or employees of
the municipality.
Current Board Members
Darron Bergstrom
Michael Gilley
Javier Jasso
Laurelyn Pohlmeier
Constance Sanchez
Penn Thomas
Matthew Wood
Past Board Members
Jon Hepner
Dennis Daugherty
Buck Sosa
George Newgarden
Alan Wilson
Jorge Cruz-Aedo
Sid Ridlehuber
Dorothea Montoya
Lois Meith
CCFFRS Board Members
Employer
Bergstrom Financial
City of Corpus Christi- Fire Fighter
City of Corpus Christi- Fire Fighter
Edward Jones Investments
City of Corpus Christi
Penn Thomas CPA
City of Corpus Christi- Fire Fighter
Stifel, Nicolaus & Company
Wachovia Securities
Retired Fire Fighter
PaineWebber
Frost Bank
City of Corpus Christi
Charter Bank
City of Corpus Christi
City of Corpus Christi -Retiree
Board Title
Citizen
Elected Member
Elected Member
Citizen
Finance Director
Mayor Appt.
Elected Member
Citizen
Citizen
Mayor Appt.
Citizen
Mayor Appt.
Finance Director
Citizen
Finance Director
Citizen
Beg Term End Term
Mar -14 Mar -20
Dec -15 Dec -18
Dec -16 Dec -19
Nov -16 Nov -19
Aug -03 N/A
Dec -09 N/A
Dec -14 Jan -19
Mar -13 Mar -15
Oct -06 Mar -12
Jun -05 N/A
Mar -04 Mar -06
Dec -04 N/A
Jan -01 Jan -02
Mar -99 Mar -01
Jun -99 Jan -00
Mar -96 Mar -98
Membership/Retirement Eligibility
• CCFFRS has approximately 400 contributing active fire fighters
and 300 retirees and beneficiaries.
• A participant is 50% vested at 10 years and 100% vested at 20
years.
• A participant can retire at age 54 with at least 20 years of
service.
CCFFRS Benefit Formula
• Benefit is the sum of
(i) 52% multiplied by the Participant's Highest
60 -Month Average Pay, plus
(ii) $150.00 multiplied by the Participant's Years of Service
in excess of 20 Years.
CCFFRS Funding Basics
• CCFFRS is a defined benefit olar with statutory provisions in place that
ensure oversight and responsible funding.
• CCFFRS investment return assumption is 7.75%, the median for TLFFRA
plans.
• Several changes were made to the CCFFRS Plan in 2007 to ensure
compatibility, to strengthen the financial condition of the Fund, and to
incorporate recommendations of an Advisory Board established by the
City of Corpus Christi.
• The changes to the Plan also helped ensure a benefit increase to
retirees based on the good financial condition of the Fund.
CCFFRS Funding Basics - Continued
• Fire fighters do not contribute into Social Security.
• Medicare contributions are made by fire fighters hired after
April 1, 1986.
• Fire fighters contribute 13.1% of their covered biweekly pay.
• City contributes 20.78% of the participant's covered biweekly
pay.
Plan
(System)
Amarillo
(Pop. 199,582)
- Tier 1 Hired
before 1/1/2018
Amarillo
(Pop. 199,582)
- Tier 2 Hired
on/after 1/1/2018
Beaumont
(Pop. 118,299)
Corpus Christi
(Pop. 325,733)
Irving
(Pop. 238,289)
Killeen
(Pop. 143,400)
Laredo
(Pop. 257,156)
Lubbock
(Pop. 252,506)
Midland
(Pop. 134,610)
Actuarial
Assumed
Invst Rate of
Return
8.00%
Active
Members
271
Peer TLFFRA Systems
Total EE Cont
Annuitants (% of Pay)
215 13.00%
Peer Cities and their Plans
Actual ER Cont
(% of Pay)
18.99%
8.00% 232 217 15.13% 15.00%
7.75% 428 326 13.10%
8.25% 360 180 12.00%
7.75% 228 68 11.00%
7.90% 379 169 15.00%
7.75% 402 289 12.43%
8.00% 207 162 13.20%
Eligibility
Requirements
50/20 Highest 36 months
Final Average Salary
50/20 Highest 60 months
50/20 Highest 60 months
20.78% 54/20 Highest consecutive 130 biweekly pay
periods
15.65% 50/20 Highest consecutive 78 biweekly pay
periods
13.13% 55/20 or 50/25 Highest 60 months
20.13% 50/20 Highest 78 consecutive biweekly pay
periods within final 104 biweekly pay
periods
21.73% 50/20 Final consecutive 48 months
21.83% 50/20 or 25 YCS Highest 60 months
COLA
None
None
SS
No
No
Ad hoc, as determined by actuary based on No
financial condition of the fund.
Ad hoc based on financial condition of the No
retirement system shown in actuarial
valuation.
Option for a Service Retirement Benefit with No
COLA.
None Yes
Ad hoc based on financial condition of the No
system as determined by the actuary.
None No
2% simple, after receiving benefits for 5 yrs No
provided fund's investment performance does
not fall below rolling audited 5 -yr avg of
8.25%.
Contributions/Distributions 2017- 2006
CONTRIBUTIONS -DISTRIBUTIONS 2017-2006
Contr Rate UAAL
Date FF / City Fire Fighter City Total Total Benefits Paid Amort. Period
12/31/17 $4,137,182.45 $6,562,646.31 $10,699,828.76 $10,778,327.68
12/31/16 $4,137,400.31 $6,562,992.65
12/31/15 $3,896,613.02 $10,700,392.96 $14,056,060.84 23.1 Yrs
$6,361,275.81 $10,257,888.83 $11,091,484.65
06/01/15 13.10% / 20.78%
12/31/14 $3,526,755.54 $6,007,047.96
12/31/13 $9533,803.50 $11,757,922.76 23.1 Yrs
$3,605,345.70 $6,140,906.37
$9,746,252.07 $10,888,832.24
01/12/13 12.20% / 20.78%
12/31/12 $3,422,314.98 $5,654,367.86 $9,076,682.84 $11,847,957.80 26.7 Yrs
12/30/12 12.20% / 20.13%
12/31/11 $3,322,962.32 $5,060,579.52 $8,383,541.84 $11,136,431.30
01/02/11 12.20% / 18.78%
12/31/10 $3,338,939.70 $4,711,698.34 $8,050,638.04 $9,232,729.97 22.3 Yrs
01/03/10 12.20% / 17.68%
12/31/09 $3,045,042.43 $4,251,376.72 $7,296,419.15 $9,024,578.88
01/04/09 12.20% / 16.58%
12/31/08 $2,937,182.51 $3,705,091.70 $6,642,274.21 $9,447,986.86 26.0 Yrs
01/06/08 12.20% / 15.39%
12/31/07 $2,415,259.13 $3,308,020.34 $5,723,279.47 $8,848,242.69
07/09/07 11.10% / 14.58%
12/31/06 $2,209,566.37 $2,748,150.04 $4,957,716.41 $9,163,007.78 25.0 Yrs
01/03/00 10.00% / 12.00%
TOTAL $35,857,382.01
$54,511,507.31 $90,368,889.32 $116,495,235.77
Benefit Increases for Retirees
• Eligible retirees received an approximately 1% increase in
December 2015 based on the good experience of the Fund and
an increase of contribution from the fire fighters from 12.2% to
13.1%.
• Previous retiree benefit increase was approximately4% in July
y
2007 after the complete restructuring of the retirementp lan.
• CCFFRS retirees have not received any other benefit increases
in over 10 years.
System Soundness
• CCFFRS will amortize the unfunded actuarial accrued liability (UAAL) in 23.1
years.
• CCFFRS Board policy precludes benefit increases if UAAL exceeds 25 years.
• The Pension Review Board considers periods of 10 years to 25 years to be
preferable and 30 years to be the maximum acceptable period.
• CCFFRS funded ratio is 62.1%.
• UAAL is $86 million (as of 12/31/16).
Basics of December 31, 2016
Actuarial Valuation Results
• Total liability of system $277,000,000
• Liability that should be funded to date $227,000,000
• Assets
$141,000,000
• Unfunded liability to date $ 86,000,000
• Annual contributions (13.10% by fire fighters + 20.78% by city) 33.88%
• Annual cost of current benefit provisions 15.91%
• Amount of contributions to pay off unfunded liability 17.97%
• How many years to pay off unfunded liability 23.1 years
Steps Taken to Strengthen the System
• CCFFRS fire fighters increased their contribution rate from
12.2% to 13.1%.
• Reduced the actuarial assumed rate of return from 8.00% to
7.75%.
• Portfolio of assets is well diversified and professionally
managed.
• City has honored its resolution to contribute 20.78% of
covered pay.
Requirements for Benefit Increases
• TLFFRA requires an actuarial valuation be performed to determine if system's
financial condition allows the actuary to approve benefit changes.
• To be eligible to approve an addition or change, an actuary must be either a
fellow of the Society of Actuaries or a member of the America Academy of
Actuaries.
• The unfunded liability pay off period must be Tess than 25 years.
• The participants of the System must approve any benefit changes through an
election.
• Board of Trustees must approve election for benefit changes.
• Changes must meet funding guidelines of the State Pension Review Board.
Benefits -Retirees
• The average CCFFRS benefit paid to retired CCFFRS members
and surviving spouses is $3,100.00 per month.
• The average retiree age is 68.6.
• The average surviving spouse age is 76.2.
Monthly Benefits Amounts
Exhibit 3
Breakdown of Pensioners by Monthly Benefit Amounts as of December 31, 2016
Retirees
S2,000-$2,999 $3,000
22%
$1,00041,999
9%
Under $1,000
2%
Surviving Spouses
$2,000-$2,999
24%.
$1,000-$1,999
15%
Under $1,000
$50+ $4,000-$4,999 17 $5,000+ $4,000-$4,999
5%
2% 4%
$3,000-$3,999
38%
I Min Under $1,000 $1,000-$1,999 El$2,000-$2,999 $3,000-$3,999 MEI $4,000-$4,999 0$5,000+
Benefits -Actives
• The average age of CCFFRS active fire fighter is 41.4.
• The average years of service is 14.6.
• The average age at hire is 26.8.
• The average expected retirement age is 58.1 years.
• The expected retirement benefit by CCFFRS members is based
on their years of service, their final five-year average salary,
and the benefit formula.
City's Vested Interest in CCFFRS
• Providing benefits that are adequately funded.
• Reduce contingent liabilities.
• Benefits that are attractive for hiring and retaining good fire fighters.
• Benefits affordable for the long term.
Recognition of CCFFRS Practices
• Meets all of the current funding guidelines of the Texas State Pension
Review Board.
• CCFFRS Board of Trustees have met or exceeded the educational
requirements set by the Texas State Pension Review Board.
• As one of the 42 Fire Fighter TLFFRA Systems, CCFFRS is recognized as a
leader in the development of effective approaches to pension
administration, reporting, communication, and transparency.
• Successful actuarial peer review by actuary selected by the City of
Corpus Christi.
CCFFRS Investment Best Practices
• Investment consultant is a fiduciary of the Retirement System, oversees
performance of seven professional investment managers and attends
Board meetings quarterly.
• Investment managers are monitored monthly and reviewed quarterly at
regularly scheduled Board meetings.
• Local bank is custodian of actively managed investment accounts.
• Audit conducted annually.
CCFFRS Investments
Investment Asset Allocation as of
12/31/2017
(Target Allocation 60% Equity/40% Fixed Income and Real Estate)
Total Market Value: $148 Million
• Domestic Equity
• International Equity
Emerging Markets Equity
• Fixed Income
■ Real Estate
Returns (net of fees)
as of 12/31/2017
1 -Year
Return
3 -Year
Average
5 -Year
Average
13.34%
6.32%
8.42%
10 -Year
Average
20 -Yea r
Average
6.27%
7.18%
Actuarially Determined Contributions by the city
• The preferred range for the UAAL amortization period is 10 to 25 years in the
Pension Review Board's pension funding guidelines. If the City decides the UAAL
period should be reduced below the current 23.1 years, it would need to increase its
contributions as follows to achieve amortization periods of 15, 18 and 21 years.
UAAL
Amortization
Period
15 Years
18 Years
21 Years
(Actuarial Valuation 12/31/16)
Actuarially
Determined
Contribution Rate
By the City
26.83%
23.93%
21.89%
Firefighter
Contribution
Rate
13.10%
13.10%
13.10%
Total
Contribution
Rate
39.93%
37.03%
34.99%
Summary of CCFFRS Goals
• Comply with Texas law and CCFFRS plan document.
• Carry out fiduciary duties to Corpus Christi fire fighters,
retirees and beneficiaries, and City of Corpus Christi.
• Strengthen the financial condition of the CCFFRS.
• Provide for increases in benefits when prudent and
possible to do so.
QUESTIONS
•
2
SLEiti85j
AGENDA MEMORANDUM
iz City Council Budget Workshop Meeting of June 21, 2018
DATE: June 15, 2018
TO: Mayor and Council
United Corpus Christi Chamber of Commerce Recommendations for Funding of
Residential Streets
BACKGROUND:
A member of the United Corpus Christi Chamber of Commerce will preset
Recommendations for funding Residential Streets.
LIST OF SUPPORTING DOCUMENTS:
Not Included in packet.
3
Ceij•S C%
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o 1 AGENDA MEMORANDUM
4.c ioe,o
1852 for the City Council Meeting of June 21, 2018
DATE: June 15, 2018
TO: Keith Selman, Interim City Manager
FROM: Eddie Houlihan, Director Office of Management and Budget
EddieHocctexas.com
361-826-3792
BUDGET WORKSHOP 5
Overview of Fiscal 2018-2019 Budget
STAFF PRESENTER(S):
Name Title/Position Department/Division
Eddie Houlihan Director Office of Management and Budget
BACKGROUND:
Staff will review information presented at previous workshops regarding the Fiscal 2018-2019
Operating Budget. Updated information will be presented on some items discussed previously and
new information will also be presented. The focus of the presentation will be the General Fund Budget
and the tax rates but other areas in the Budget will also be discussed.
LIST OF SUPPORTING DOCUMENTS:
N/A