HomeMy Public PortalAbout15-9008 Implement a Voluntary Early Retirement and Separation Incentive Program Sponsored by: City Manager
RESOLUTION NO. 15-9008
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF OPA-
LOCKA, FLORIDA, AUTHORIZING THE CITY MANAGER TO IMPLEMENT
A VOLUNTARY EARLY RETIREMENT AND SEPARATION INCENTIVE
PROGRAM PAYABLE FROM THE GENERAL FUND AND WATER AND
SEWER FUND RESERVES; PROVIDING FOR INCORPORATION OF
RECITALS; PROVIDING FOR AN EFFECTIVE DATE.
WHEREAS, The City of Opa-locka requires immediate measures to achieve cost
savings and insure financial stability, while still providing excellent quality services;
and
WHEREAS, the City's current level of staffing will have to be reduced in order to
achieve cost savings and insure that the City's finances are financially stable; and
WHEREAS, voluntary separation programs can produce cost savings, while
minimizing impact to employees who meet the eligibility requirements.
NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COMMISSION OF
THE CITY OF OPA-LOCKA, FLORIDA:
Section 1. The recitals to the preamble herein are incorporated by reference.
Section 2. The City Commission hereby authorizes the Manager to implement a
voluntary early retirement and separation program to be funded from the
General Fund and Water and Sewer Reserves, with the following options:
Program#I— Twenty-five (25) Years of Service or greater;
Option A: Two (2) years of health insurance coverage, and $5,000 cash;
or
Option B: No health insurance coverage and $15,000.
Program #2—Five (5) Years to less than Twenty-five years of Service
Option A: One (1) years of health insurance coverage, and $1,000 cash for the first five
years of service, and an additional $500 for each year up to $5,000;
or
Resolution No. 15-9008
Option B: No health insurance coverage and $1,000 for each year not to exceed
$12,000.
Program #3—Early Retirement
Option A: One (1) year of health insurance coverage and $2,500 cash for the first
five (5) years of service, and an additional $500 for each additional year up to
$10,000;
or
Option B: No health insurance coverage and $1,250 for each year not to exceed
$15,000.
Election Period: Start date: Monday, June 1, 2015
End date: Friday, June 26, 2015
Separation date: July 3, 2015
Section 3. This Resolution shall take effect immediately upon adoption.
PASSED AND ADOPTED this 10th day of Tune, 2015.
M ra L. Taylor
Mayor
Attest to: Approved as to form and legal sufficiency:
rI
kLcLkJO-
JoJina Flores Vincent T. Brown
City Clerk BROWN LAW GROUP, LLC
City Attorney
Moved by: COMMISSIONER SANTIAGO
Seconded by: COMMISSIONER KELLEY
Commission Vote: 4-0
Commissioner Kelley: YES
Commissioner Pinder: YES
Commissioner Santiago: YES
Vice Mayor Holmes: OUT OF ROOM
Mayor Taylor: YES
OQP-LOCj 7
i>
O!ORAI-
City of Opa-Locka
Agenda Cover Memo
Commission Meeting 06/01/2015 Item Type: Resolution Ordinance Other
Date: X
(EnterX in box)
Fiscal Impact: Ordinance Reading: 1st Reading 2"Reading
(Enter X in box) Yes No (Enter X in box)
Public Hearing: Yes No Yes No
(Enter X in box)
Funding Source: (Enter Fund&Dept) Advertising Requirement: Yes No
(Enter Acct No.) (Enter X in box)
Contract/P.O.Required: Yes No RFP/RFQ/Bid#:
(Enter X in box) N/A
Strategic Plan Related Yes No Strategic Plan Priority Area: Strategic Plan Obj./Strategy: (list the
(Enter X in box) specific objective/strategy this item will address)
Enhance Organizational
Bus.&Economic Dev 0
Public Safety
Quality of Education
Qual.of Life&City Image p
Communcation
Sponsor Name City Manager Department: City Manager
Shcwt Title:
Voluntary Separation Incentive Program
Staff I nary:
The City of Opa-locka is committed to identifying cost savings opportunities. Programs that reduce recurring
expenses while minimizing impact to employees are the most advantageous. Voluntary employee separation
programs offer employees with the qualifying years of service and/or who have met the eligibility requirements
for pension programs a greater incentive when voluntarily separating from the City.
Proposed Action:
Approval
Attachment:
1.Ordinance 03-05—Financial Integrity Principles
2.Voluntary Separation Incentive Program information
3. Employee Separation Agreement
4. Employee Separation application
LCJC
Cit5 of
Mori&
LU 4851
Memorandum
TO: Mayor Myra L. Taylor
Vice-Mayor Timothy Holmes
Commissioner Joseph L. Kelle
Commissioner Ter nce K. p..der
Commissioner LW. B. S, i tiago
FROM: Kelvin L. Baker, Sr. , City M.
DATE: May 29, 2015
RE: Resolution: Voluntary Early Retirement and Separation Incentive Program
Request: A RESOLUTION OF THE CITY OF OPA-LOCKA, FLORIDA AUTHORIZING
THE CITY MANAGER TO IMPLEMENT A VOLUNTARY EARLY
RETIREMENT AND SEPARATION INCENTIVE PROGRAM PAYABLE
FROM THE GENERAL FUND AND WATER AND SEWER FUND RESERVES
Description: The City of Opa-locka is committed to identifying cost savings opportunities.
Programs that reduce recurring expenses while minimizing impact to employees are the
most advantageous. Voluntary employee separation programs offer employees with the
qualifying years of service and/or who have met the eligibility requirements for pension
programs a greater incentive when voluntarily separating from the City.
Financial Impact: Approximately $200,000 payable from the General Fund and Water & Sewer
Fund Reserves.
Implementation Timeline: Implement June 2nd. Election period ends June 26th. Separation occurs
by July 3rd
Legislative History: None.
Recommendation(s): Staff recommends approval.
Analysis: A voluntary early separation program provides incentives to employees, but also
provides the City with cost saving opportunities. Only employees with certain years of service that, in
some cases, may have reached a high/maximum salary level are likely to take advantage of these
programs. This will allow the City to replace that an employee with one at a lower rate of pay. In
most cases, due to the City's financial condition, the positions will not be filled at all.
Below are details of the three programs offered:
Program #1 — Twenty-five (25) Years of Service, Regardless of Age
Option A: Two (2) years of health insurance coverage, and $5,000 cash; or
Option B: No health insurance coverage and $15,000.
Program #2—Fifty-Five (5) Years to less than Twenty-five years of Service
Option A: One (1) years of health insurance coverage, and $1,000 cash for the first
five years of service, and an additional $500 for each year up to $5,000; or
Option B: No health insurance coverage and $1,000 for each year not to exceed
$12,000.
Program #3—Early Retirement
Option A: One (1) year of health insurance coverage and $2,500 cash for the first five
(5) years of service, and an additional $500 for each additional year up to $10,000; or
Option B: No health insurance coverage and $1,250 for each year not to exceed
$15,000.
Election Period: Start date: Tuesday, June 2, 2015
End date: Friday, June 26, 2015
Separation date: July 3, 2015
Based on the number of employees eligible for both programs and also taking into consideration that
not every eligible employee will elect for early separation, we estimate the total expenses including the
cash incentive and leave balances will be approximately $200,000.
Since the cash incentive payments and the payout of a significant amount of leave balances is not
budgeted, we are recommending the approval of the use of General Fund and Water & Sewer Fund
reserves. The City's Financial Integrity Principles (Ordinance 03-05) allows up to $300,000 of
General Fund annual budgeted reserves be used with Commission approval and directs the Water &
Sewer Fund retain at least a 2-5% reserve. Currently, the General Fund Reserve bank account has a
balance of$303,093.30 and the Water & Sewer Fund reserve account has a balance of$1,451,853.39.
We recommend the costs of the incentive separation program be divided between the two accounts as
follows: General Fund— 30% and Water& Sewer Fund 70%.
Once we reduce or eliminate recurring expenses and allow the General Fund the chance to end the
fiscal year with a positive fund balance, we can slowly begin rebuilding the General Fund reserves.
Attachments: 1. Ordinance 03-05 —Financial Integrity Principles
2. Voluntary Separation Incentive Program information
3. Employee Separation Agreement
4. Employee Separation application
PREPARED BY: Faye Douglas, Budget Administrator
oQp-�ocka
o� <o City of Opa-locka
6\1 Voluntary Early Separation Incentive Program
Employee Application
9N
Name: Home Phone Number:
Home Address: Home email Address:
Last 4 digits of SSN:
Estimated Number of Years of Service:
Job Title: Department:
Yes, I elect to participate in the Voluntary Early Separation Incentive Plan offered by the City of Opa-
locka. I understand that if my participation is accepted by the City of Opa-locka that I am tendering my
resignation from the City of Opa-locka, effective July 3, 2015.
Yes, I have had an opportunity to read and understand the Voluntary Early Separation agreement.
Yes, I understand it is my responsibility to update the City of Opa-locka, in writing, as to any change in
my home phone number, home address and home email as some communication will be delivered after I
separate from service.
Employee Signature:
Date:
(Forward completed application and signed agreement to the Human Resources Department.)
HUMAN RESOURCES USE ONLY
Date Application Approved:
Date Applicant Notified of Approval:
City of Opa-locka
Voluntary Early Separation
Program Information
Purpose
The purpose of this Voluntary Early Separation Incentive Program (VESIP) is (1) to provide a
financial incentive to certified employees, as defined below, who elect early separation from the
City of Opa-locka (City) and (2) to provide the City with an improved budget position.
Eligibility Requirements
This Plan is offered for the FY 2014-2015 Fiscal Year. Any subsequent years must be approved
by the City Commission. The following Voluntary Early Separation Incentive Program (VESIP)
will be available to employees who meet the following criteria and therefore are considered
eligible:
• Eligibility:
1. The recipient of the early separation incentive benefit must be a certified employee,
as defined below.
2. The certified employee must have at least twenty (25) years of full-time employment
with the City for Program #1, at least five (5) years of full-time employment with the City for
Program #2, and eligible for retirement for Program #3, as determined by the criteria outlined in
Years of Service below.
• All eligible certified employees who participate in this Plan must submit a written
application and signed Separation Agreement by the dates stated in this Plan. A certified
employee who fails to comply with the timelines required in this Plan waives the right to
participate in the Plan for the applicable fiscal year.
Years of Service
For purposes of this VESIP policy only, "Years of Service" shall mean the sum of all full
consecutive years of service during which the employee was employed as a full-time certified
employee by the City. The number of years of service shall be determined by the records in the
employee's personnel file.
Separation Important Dates
The City will remit the early separation payment to an eligible certified employee who elects to
separate under this Plan on July 3, 2015. The early separation payment will be determined
based upon Program selected (1 or 2), Option selected (A or B), and leave balances.
1 of 4
City of Opa-locka
Voluntary Early Separation
Program Information
Each certified employee is solely and entirely responsible for determining whether he or she
may be eligible to participate in this Plan, and for submitting the required documents in
accordance with the timelines established herein.
Potentially eligible certified employees who desire to separate from the City must apply to the
Human Resources Office for the VESIP benefit no later than 4:00pm, June 26, 2015. The
Human Resources Office will make a final eligibility determination and will notify all applicants
whether they qualify for the VESIP benefit. Certified employees who do not qualify for the
VESIP benefit will not be eligible to participate in this Plan. Only the names of eligible
employees who have complied with all requirements under this Plan will be submitted to the City
Manager for approval.
Voluntary Early Separation Incentive Payment Programs 1, 2, and 3
Below are details of the three programs offered:
Program #1— Twenty-five (25) Years of Service, Regardless of Age
Option A: Two (2) years of health insurance coverage, and $5,000 cash; or
Option B: No health insurance coverage and $15,000.
Program#2— Five(5) Years to less than Twenty-five years of Service
Option A: One (1) years of health insurance coverage, and $1,000 cash for the first five
years of service, and an additional $500 for each year up to $5,000; or
Option B: No health insurance coverage and $1,000 for each year not to exceed $12,000.
Program#3— Early Retirement
Option A: One (1) year of health insurance coverage and $2,500 cash for the first five (5)
years of service, and an additional $500 for each additional year up to $10,000; or
Option B: No health insurance coverage and $1,250 for each year not to exceed $15,000.
2 of 4
City of Opa-locka
Voluntary Early Separation
Program Information
Separation Agreement
In return for the financial incentives provided under this Plan, the certified employee shall enter
into a Separation Agreement with the City, releasing the City and its directors, officers, agents,
commission, and employees, and their attorneys from any and all claims or other causes of
action the certified employee may have against them. The signed Separation Agreement shall
be submitted to the office of Human Resources no later than 4:00 p.m. on June 26, 2015.
Group Medical, Dental, and Vision Benefits
The City will also pay the premiums for individual medical, dental, and vision coverage under
the City's group health insurance plan based on the employee coverage at the time of
separation and VESIP program and option selected as follows:
• The City will not pay premiums for coverage under any other health insurance plan other
than the City's group medical, dental and vision plans.
• Employee can remove spouse or dependant coverage during the City's annual open
enrollment period, but cannot add or increase spouse or dependant coverage.
• Payment of premiums under this section shall begin on July 1 of the year of separation,
with coverage to end on Sept 30 of the final year of coverage.
• Certified employees must ensure the City receives any portion of the premiums for which
the employee is responsible by the 15th of preceding month for which insurance service is
required. For example, insurance premiums for the month of July are due no later than June
15th. The City's obligation to remit partial premiums under this Plan shall terminate immediately
and permanently upon the certified employee's initial failure to submit, by any applicable
deadline, the certified employee's portion of the premium due.
• The payment of insurance premiums for insurance coverage becomes the sole
responsibility of the certified employee after the benefit period provided in this Plan has expired.
• The City's obligation to pay insurance premiums for the employee and dependants will
terminate upon the death of the individual certified employee.
Payment for Unused Sick and Vacation Leave
Certified employees who participate in this VESIP Plan will also be eligible for payment for
unused sick and vacation leave in accordance with City policy. Payment for unused
accumulated sick and vacation leave will be made on July 3, 2015 and shall be subject to all
deductions required and/or authorized by law.
3 of 4
City of Opa-locka
Voluntary Early Separation
Program Information
Other Provisions
• A certified employee who fails to submit a written application and signed Separation
Agreement by the required dates waives the right to do so for the applicable fiscal year.
• This VESIP is available only to eligible certified employees who apply no later than June
26, 2015.
Withdrawal of Notice
Once the certified employee has submitted a notice of intent to elect early separation, the
certified employee will be permitted to withdraw such notice only in accordance with the terms of
the Early Separation Agreement or in life or death emergency situations, subject to approval of
the City Manager.
Advice of Counsel and Tax Preparer
Participants in the Voluntary Early Separation Incentive Program should seek advice of their
own counsel and their own tax preparer prior to signing the Separation Agreement. The law
regarding treatment of early separation payments and the payment of insurance premiums to
early separation agreements is complex and changes from year to year. The City is not
responsible for providing legal or tax advice to employees regarding the Voluntary Early
Separation Incentive Program or the Separation Agreement. It is the employee's responsibility
to obtain such advice in sufficient time to submit all applications and forms, as well as the
signed Separation Agreement, in accordance with the deadlines established under this Plan.
Termination of the Program
Notwithstanding any other provision of the Program or any other policy, regulation, contract,
agreement, or other writing adopted before or after this Program is approved by the City
Commission, the City reserves the right to amend, modify, or repeal this Program, in whole or in
part, at any time —provided, however, that any and all Separation Agreements that have been
approved by City Manger and signed by the parties prior to such amendment, modification, or
repeal shall be honored in accordance with the terms of the Agreement.
4 of 4
Separation Agreement and Release
City of Opa-locka
Separation Agreement and Release
This Agreement and Release is between the City of Opa-locka (CITY) and the undersigned
employee, the Parties to this Agreement and Release. For and in consideration of the mutual
promises and covenants expressed herein:
1) On or before June 1, 2015, the CITY notified me that I was eligible to enroll in the CITY
Voluntary Early Separation Incentive Program (the "Program"). I acknowledge receipt of
the description of the Program, and I understand the benefits available through the
Program. In a timely manner, I voluntarily enrolled in the Program. The acceptance of
my Enrollment Form and my participation in the Program are conditioned upon my
execution of this Agreement and Release. I hereby voluntarily execute, and freely
deliver this Agreement and Release to CITY. In consideration of the benefits I will
receive, as outlined in paragraph 4 of this Agreement and Release, I hereby agree to be
bound by all of the terms of this Agreement and Release.
2) Effective , (Separation Date — must be on or before
July 3, 2015), I hereby voluntarily and irrevocably resign as an employee of the CITY.
3) In consideration for my voluntary decision to resign, which is further evidenced by the
release and waiver included in paragraph 5 below, the CITY shall make the Separation
Incentive payment described in paragraph 4 below.
4) The CITY shall make a Separation Incentive Payment (SIP) based on my eligibility in
one of the programs offered below in addition to accumulated sick and vacation leave in
accordance with City policy:
Program #1— Twenty-five(25) Years of Service, Regardless of Age
Option A: Two (2) years of health insurance coverage, and $5,000 cash; or
Option B: No health insurance coverage and $15,000.
Program #2— Fifty- Five (5) Years to less than Twenty-five years of Service
Option A: One (1) years of health insurance coverage, and $1,000 cash for the first five
years of service, and an additional $500 for each year up to $5,000; or
Option B: No health insurance coverage and $1,000 for each year not to exceed
$12,000.
Program #3—Early Retirement
Option A: One (1) year of health insurance coverage and $2,500 cash for the first five
(5) years of service, and an additional $500 for each additional year up to $10,000; or
Option B: No health insurance coverage and $1,250 for each year not to exceed
$15,000.
Page 1 - Employee Initial
Separation Agreement and Release
My acceptance of the SIP payment shall constitute my acceptance of the accuracy of the
calculation of the amount of the SIP and leave balance payment. This payment will be
made on July 3, 2015. The payment will have no effect on the calculation of my
retirement benefits.
5) This Agreement and Release are entered into voluntarily at a time of budget reductions
and not in response to any matter between the Parties. As consideration for the SIP
payment provided for in this Agreement and Release, I on behalf of myself and my heirs,
executors, attorneys, administrators, and assigns, hereby release, acquit, remise and
forever discharge all of the past, present and future trustees, officers, employees,
agents, members, servants, public officials, independent contractors, insurers, benefits
plans, third party administrators, attorneys and legal representatives of the City o f Opa-
locka from all claims; demands; expenses; costs; attorneys and expert fees; causes of
action; recoveries; relief; penalties; direct, special, exemplary, punitive, liquidated,
consequential and all other monetary or other damages whatsoever; and liabilities of
every kind and on any basis whatsoever, and waive all of my rights of every kind and on
any basis whatsoever, whether known or unknown, fixed or contingent, direct or indirect,
based on or arising under contracts, tort (of negligence, intent, or other), common law,
equity, statute, regulation, constitution, strict or special liability, warranty or on any other
basis, or of any other kind, that I have or may have as of or through the date of
execution of this Agreement and Release (collectively and individually "Claims"). These
released and waived Claims include but are not limited to claims arising under the Age
Discrimination in Employment Act, 29 U.S.C. Section 621 et seq., as amended by the
Older Worker's Benefit Protection Act of 1990 or any other federal or state law relating to
discrimination in employment based upon age; the Family and Medical Leave Act; the
Equal Pay Act; the Americans with Disabilities Act; the Rehabilitation Act; Florida and
Federal Civil Rights Acts; False Claims Act; and the Fair Labor Standards Act. I
understand that nothing in this Agreement and Release prevents me from filing a
charge, cooperating with or participating in any proceeding before the Equal
Employment Opportunity Commission or a state or local fair employment practices
agency, but I acknowledge I may not recover monetary damages in connection with any
such claim, charge, or proceeding. I do not release any claim, demand, or cause of
action that may arise after the date of execution of this Agreement and Release or that
law absolutely prohibits me to even voluntarily waive.
Upon entering into this Agreement and Release, I waive the right to any future re-
employment by CITY and to participate in any phased retirement program.
6) I acknowledge that I have at least twenty-five days beginning June 1, 2015 and ending
at 4:00 pm on June 26, 2015, to consider whether or not to enter into this Agreement
and Release.
Page 2 - Employee Initial
Separation Agreement and Release
7) If I do not enter into this Agreement and Release by signing and returning it to Human
Resources Department, 3400 NW 135 Street, Bldg B, Opa-locka, FL 33054 by 4:00 pm
on June 26, 2015, the offer to participate in the Program will expire and I will no longer
have the opportunity to enter into this Agreement and Release or to participate in the
Program.
8) I understand that I may revoke this Agreement and Release until five (5) days after I
execute this Agreement and Release--but only as provided in this paragraph. To revoke
this Agreement and Release, I must deliver to Human Resources Department, 3400 NW
135 Street, Bldg B, Opa-locka, FL 33054, on or before 4:00 P.M. of the fifth calendar
day after the day on which I execute this Agreement and Release, my written notice that
I am revoking this Agreement and Release. If I enter into and do not timely revoke this
Agreement and Release in the manner provided in this paragraph 8, this Agreement and
Release will remain in effect.
9) The terms of this Agreement and Release shall be construed and governed according to
the laws of the State of Florida for all purposes, without giving effect to any Florida law
governing choice of law.
10)This Agreement and Release may not be amended or terminated except by an
instrument in writing executed by the Parties hereto or their authorized representatives.
Its provisions are severable. If any part of this Agreement and Release is found to be
unenforceable, the remainder of the Agreement and Release will continue to be valid
and effective, except that the payment made under paragraph 4 shall not be owed
unless the release and waiver in paragraph 5 are enforceable. The release and waiver
are central consideration for the payment.
11)This Agreement and Release is not assignable.
12)This Agreement and Release constitutes the sole and exclusive agreement of the
Parties with respect to the subject matter addressed and supersedes any prior or
simultaneous written or oral understandings or agreements respecting the subject matter
addressed. Forbearance or indulgence by any party in any regard shall not constitute a
waiver of any term or provision of this Agreement and Release. No waiver shall be
binding unless it is specific and executed in writing by the Party making the waiver.
13)This Agreement and Release shall become effective the first business day following the
revocation period described in paragraph 8, unless I revoke this Agreement and Release
in accordance with the requirements of paragraph 8.
14) I acknowledge and reaffirm my obligation to return all CITY property and records.
15)I acknowledge that I will not be eligible for rehire for any position for a period of one (1)
year from the last date of employment with the City (i.e. voluntary separation date).
Page 3 - Employee Initial
Separation Agreement and Release
16)1 agree that after my resignation from CITY, I will provide CITY all reasonable
cooperation to assist in transitioning my job duties and to assist in any legal or
administrative matters relevant to me or for which I may have knowledge. I will perform
any other transition tasks as reasonably requested by CITY.
17) I affirm that: (a) the only consideration for signing this Agreement and Release is set
forth above in Paragraph 4, (b) no other promise, representation, or agreement of any
kind has been made by any person or entity to cause or induce me to sign this
Agreement and Release, (c) I fully understand the meaning of this Agreement and
Release, including its final and binding effect, and freely and voluntarily assent to all of
the terms and conditions hereof, and (d) I sign my name of my own free act. I state and
represent that I have had an opportunity to fully discuss and review the terms of this
Agreement and Release, including Exhibit I, with an attorney of my choosing.
18) I also acknowledge that I have been advised in writing by CITY to consult with an
attorney and tax professional in regard to whether to enter into this Agreement and
Release. I acknowledge and understand that I have had at least 25 days from the date
(indicated in paragraph 1) on which this Agreement and Release was delivered to me, to
consider whether to sign this Agreement and Release. If I sign this Agreement and
Release, whether or not before the expiration of those 25 days, it is because I freely
choose to do so.
19) Finally, as described in more detail in paragraph 8, I have 5 days from the date I sign
this Agreement and Release to change my mind and revoke this Agreement and
Release, upon which event I will be excluded from the Program and will be ineligible for
any benefits provided under the Program. I understand and agree that by entering into
this Agreement and Release I am releasing and waiving any and all rights and claims I
might have under the Age Discrimination in Employment Act, as amended by the Older
Workers Benefit Protection Act, and that I have received consideration beyond that to
which I was previously entitled.
Employee:
Signature:
Print Name: Date:
Page 4- Employee Initial
Separation Agreement and Release
City of Opa-locka:
Signature:
City Manager or designee
Print Name: Date:
Page 5- Employee Initial
1St Reading: February 1 2, 2003
2nd Reading/Public Hearing: February 2 6, 2 0 0 3
Adopted: February 26, 2003
Effective Date: February 26, 2003
Sponsored by: City Manager
Ordinance No. 0 3-0 5
AN ORDINANCE OF THE CITY COMMISSION OF THE
CITY OF OPA-LOCKA, FLORIDA RELATING TO
FINANCIAL POLICIES; PROVIDING FOR FINANCIAL
INTEGRITY PRINCIPLES; CONTAINING A REPEALER
PROVISION AND SEVERABILITY CLAUSE;FURTHER
PROVIDING FOR AN EFFECTIVE DATE AND
CODIFICATION IN THE CODE OF ORDINANCES
WHEREAS,on February 28,2002,the Governor of the State of Florida was officially
notified of a financial emergency in the City of Opa-locka; and
WHEREAS, the City of Opa-locka and Governor entered into an Interlocal
Agreement (IA) which set forth corrective actions to be taken to eliminate the financial
emergency; and
WHEREAS, the city desires that the use of financial "best practices" to assure
maximum protection of public funds entrusted to the City of Opa-locka; and
WHEREAS, the City recognized it has been making improvements in its financial
position through adherence to financial "best practices"; and
WHEREAS,these principles provide a framework to prevent another financial crisis
through use of its own municipal home rule powers; and
WHEREAS, the City desires to formalize eight (8) financial principles which will
serve as the underlying basis for governing the City's finances in the future; and
WHEREAS, these principles are crucial to assuring potential investors that
investments in the City are safe as the City plans to reenter the credit market;
NOW,THEREFORE,BE IT ORDAINED BY THE CITY COMMISSION OF THE
CITY OF OPA-LOCKA, FLORIDA:
1
Section 1. The recitals and findings contained in the Preamble to this Ordinance are
hereby adopted by reference thereto and incorporated herein as if fully set forth in this
Section.
Section 2. Financial Integrity Principles
Financial Integrity Principles and Policies to assure and maintain financial
integrity in the City of Opa-locka are hereby established and shall be implemented
immediately upon adoption to this Ordinance.
The Financial Integrity Principles as set forth herein shall be reviewed and
updated as necessary, at least every three years.
The following Financial Integrity Principles are hereby adopted:
1. Structurally Balanced Budget—The City shall maintain a structurally-balanced budget.
Recurring revenues will fund recurring expenditures. Non-recurring revenues and budget
surpluses shall replenish reserve levels, support outstanding liabilities and pay for non-
recurring expenditures, in the order set forth herein.
2. Professional Estimating Process—The City shall adopt budgets and develop its long and
short-term financial and capital improvement plans containing estimates developed
utilizing a professional estimating process. Estimates shall be prepared based on
historical trends and shall be well substantiated.
3. Interfund Borrowing—The City shall not borrow or use internal fund transfers to obtain
cash from one fund type or reserve to fund activities of another fund type or reserve
unless such use is deemed lawful,and unless the Finance Director has determined that(a)
the funds to be borrowed will not be needed during the lending period,and(b)the funds
2
for repayment will be available within a two-year period. Any actions taken to borrow
funds under these conditions must be separately presented to and approved by the City
Commission and the term of such borrowing shall not extend beyond the last day of the
subsequent fiscal year. Recognizing that some programs are funded by grants or other
entities on a reimbursement basis, the City shall apply for such reimbursements on a
timely basis to minimize the period that City funds are used as float. In the event
loans/float for these reimbursements extend beyond the end of a fiscal year, such
reimbursements shall be reflected as receivables and noted as part of the annual budget
process.
4. Reserve Policies—The City shall retain an annual end-of-year General Fund reserve of
approximately$200,000. Further, upon resolving the deficits in the Water and Sewer
and Solid Waste Funds, the City shall retain at least a 2-5%reserve in these funds.
(a) Current Fiscal Year General Fund Contingency—A"contingency"reserve level
of$500,000 shall be budgeted annually. $300,000 of such contingency reserve
shall be available for use,with City Commission approval,during the fiscal year,
to fund unanticipated budget issues, emergencies/natural disasters which may
arise or potential expenditure overruns which cannot be offset through other
sources or actions. This reserve level shall be replenished at the beginning of
each fiscal year so it is available on an on-going basis. $200,000 shall remain
unspent to provide for the year end reserve.
(b) Reserve for uncompensated absences and other employee benefit liabilities-the
City shall budget $65,000 annually in the General Fund, $17,500 in the Water
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and Sewer Fund and $17,500 in the Sold Waste Fund to build the reserves
sufficient to cover these liabilities for each fund.
5. Multi-Year Financial and Capital Plan(CIP)—The City Commission shall annually adopt
a Financial Plan by September 30 of each year,in concert with the annual budget,which
contains five years of financial forecast. Such plan will include cost estimates of all
current city operations and proposed capital outlay expenditures,anticipated increases in
operations, debt services payment, reserves to maintain the City's officially adopted
levels and estimated recurring and non-recurring revenues. The Plan will be prepared by
fund with a "Financial Summary Table" to reflect forecasted surpluses or deficits and
potential budget balancing initiatives,where appropriate.
The capital improvement component of the Plan shall cover cost estimates for all
necessary infrastructure improvements needed to support City services, including
information technology with an adequate repair and replacement(R&R)component. To
the extent feasible, department heads shall be required to submit independent needs
assessments for their departments for use in preparing the CIP.The plan will be detailed
by fund,include recommended project prioritization rankings,identified revenue sources,
planned financing options and unfunded projects. The CIP shall include a component
reflecting all on-going approved capital projects of the City, the date funded, amount
budgeted, amount spent since the start date, remaining budget, fiscal impact of known
changes to financial assumptions underlying the project and estimated completion date.
Approved projects,with circumstances that arise which change the funding requirements
of the project, shall be addressed in the CIP annually.
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6. Financial Oversight and Reporting—The City shall provide for the on-going generation
and utilization of financial reports on all funds comparing budgeted revenue and
expenditure information to actual on a monthly and year-to-date basis. The Finance
Department shall be responsible for issuing the monthly reports to departments, the
Mayor and City Commission, and provide any information regarding any potentially
adverse trends or conditions. These reports should be issued within thirty(30)days after
the close of each month.
The annual external audit of the City shall be prepared and presented to the Mayor and
City Commission within 195 days of the close of each fiscal year 2003 and within 180
days of the close of each subsequent financial year.
7. Basic Financial Policies— The City shall endeavor to maintain formal policies, which
reflect "best practices" in the areas of:
i. Debt—such policy shall address affordability, capacity, strategies
for re-entering the bond market in the future, debt issuance and
management.
ii. Cash Management and Investments — such policy shall require
twenty-four(24)month gross and net cash-flow projections by fund
and address adequacy, risk, liquidity and asset allocation issues.
iii. Budget Development and Adjustments—such policy shall establish
proper budgetary preparation procedures and guidelines,calendar of
events, planning models by fund, budget adjustment procedures,
establishment of rates and fees, indirect costs/interest income and
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the estimating conference process.The proposed budget should be
scheduled to allow for sufficient review by the Mayor and City
Commission while allowing for sufficient citizen input. The City
budget document reflecting all final actions as adopted by the City
Commission on or before September 30, of each year, shall be
printed and made available within thirty(30)days of such adoption.
iv. Revenue Collection — such policy shall provide for maximum
collection and enforcement of existing revenues, monitoring
procedures, and the adequacy level of subsidy for user fees.
v. Purchasing Policy — such policy shall establish departmental
policies and procedures and provide appropriate checks and
balances to ensure the City departments adhere to the City's
purchasing policies.
8. Promoting Operating Efficiencies—the City shall develop programs and incentives to
encourage operating efficiencies through the use of technology,outsourcing,or any other
curriculum.
Section 3. All ordinances or parts or parts of ordinances insofar as they are inconsistent
or in conflict with the provisions of this Ordinance are hereby reapealed.
Section 4. If any section, part of section, paragraph, clause, phrase or word of this
Ordinance is declared invalid, the remaining provisions of this Ordinance shall not be
affected.
Section 5. This Ordinance shall become effective in the manner provided by law.
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Section 6. This Ordinance upon adoption shall be codified and included in The City of
Opa-locka Code of Ordinances.
PASSED AND ADOPTED this 2 6 day of February , 2003.
MAYO
Attest: Approved as to form and legal sufficiency:
Ak,(\(1 - V. u, (, iii
K s4• CI ►- CLERK C Y TTO Y
Z � O�
DAT
Moved by: Commissioner Holmes
Second by: Vice Mayor Johnson
Commission Vote: 5-0
Commissioner Holmes: YES
Commissioner Tydus: YES
Commissioner Kelley: YES
Vice-Mayor Johnson: YES
Mayor Taylor: YES
Ordinance/Financial Policies
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