HomeMy WebLinkAboutMinutes CC - 10/11/2010 - 10-11-10 W.S. (Migrated from Optiview)Work Session of the Milton City Council
Monday, October 11, 2010 at 6:00 pm
Page 1 of 11
This summary is provided as a convenience and service to the public, media, and staff. It is not the
r... intent to transcribe proceedings verbatim. Any reproduction of this summary must include this notice.
Public comments are noted and heard by Council, but not quoted. This document includes limited
presentation by Council and invited speakers in summary form. This is an official record of the Milton
City Council Meeting proceedings. Official Meetings are audio recorded.
The Work Session of the Mayor and Council of the City of Milton was held on October 11, 2010 at
6:00 PM, Mayor Joe Lockwood presiding.
Council Members Present: Councilmember Karen Thurman, Councilmember Julie Zahner Bailey,
Councilmember Bill Lusk, Councilmember Burt Hewitt, Councilmember Joe Longoria, Councilmember
Alan Tart.
Mayor Lockwood:
• Work Sessions are an informal setting to update Council on business items.
• No votes will be taken during these sessions.
• There are two (2) items on our Agenda tonight.
• Public comment is allowed that is germane to an Agenda Item.
• If you wish to speak you are required to fill out a comment card and turn it into the City Clerk
staff.
• Public comment will be allowed for a total of 10 minutes per agenda item and no more than 2
minutes per person.
• Public comment will be heard at the beginning of each Item.
• Once the item is called, no other comment cards will be accepted.
Public Comment
No Public Comment.
City Clerk Gordon read Agenda Item #1.
1. Discussion of Defined Benefit Pension Plan.
(Presented by Randy Logan — Georgia Municipal Association)
Randy Logan:
• I would like to introduce Rocky Joiner.
• He is a nationally known Actuary and is well versed and he will be giving the presentation.
Rocky Joiner:
• Tonight we will be discussing the current and fixture City Retirement Program.
• Current City Retirement plan
*^ • Milton employees do not receive Social Security credit for their employment with the City.
• The City provides three retirement plans
• A defined benefit (DB) plan
• Accrual multiplier of 2.75%, normal retirement age of 65, employee contributions of 3.00% of
pay
0 A mandatory defined contribution (DC) plan
Work Session of the Milton City Council
Monday, October 11, 2010 at 6:00 pm
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• Both the City and the employee contribute 3.75% of pay
• An optional DC plan with an employer match
• The City will contribute up to I% if the employee contributes 2% or more
• The combination of the City's plans is expected to replace 70% to 90% of an employee's pre-
retirement income before inflation.
• Social Security would typically replace half that amount at retirement.
• Contribution requirements for the 2011 budget year
• Recommended Contribution, 3.87% of pay or $150,660
• "Absolute Minimum", 3.69% of pay or $143,533
• The Plan funded ratio on a GASB reporting basis is 80.62%.
• The funding ratio on an accrued benefit basis compared to the market value of assets is 109.75%.
• The unfunded actuarial accrued liability is scheduled to be amortized over a 15 year period.
(Current State law would allow up to 30 years)
• The valuation included 79 employees with a total salary base of $3,789,764.
• The average age of the group is 38.8 years with an average service of 2.3 years
• The following graphs present a projection of future valuation results based on the following.
• All current assumptions used to determine the valuation are met each year.
• The demographic make-up of the active workforce will not change remarkably over the near
future.
• The City contributes the recommended amount each year.
• The results show that as a % of pay the recommended contribution is expected to decrease over
the 15 year period, $'s of contributions will increase as salary increases and the fund is expected
to approach 100% GASB funding during the period.
• If the average age of the group increases this may cause the actual recommended % to increase.
• Investment market behavior will impact these results.
• If the market should continue its erratic behavior, there are built in safety features for plan
funding that will mitigate dramatic changes in recommended contributions.
4.50%
4.00%
3.50%
3.00%
v4
e
2,50%
a
r
cp 2.00%
�I C7
1.50%
1.00%
City of Milton
Projected Contribution %
0.50% �— -- -- —
i
0.00%
2010 2011 2012 2013 2014
Now
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Work Session of the Milton City Council
Monday, October 11, 2010 at 6:00 pm
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$250,000
$200,000
CN $150,000
O
$100,000
$50,000
City of Milton
Projected Contribution $
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
II
City of Milton
Projected Funded %
105.00%-------- --_---___.__-._.__..__ _----------- - 1
100.00%
95.00%
e
v
0 90.00%
C
7
LL
85.00%
80.00%
75.00%�—__11 ___-T� --T -T- ___._._-_�
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
• Retirement Plans fall into 2 broad categories:
• Defined Benefit Plans — which focus on benefit security
• Defined Contribution Plans - which focus on wealth accumulation
• Defined Benefit Plans include final average salary plans, career average salary plans and flat
dollar plans
• Risk borne by Employer
• Risk includes: Wage inflation, Inflation risk, Interest rate, Investment risk, Longevity risk,
Incentive risk, Regulatory risk
• Defined Contribution Plans include 401(k), 403(b), 457 and matching plans
• Risk borne by Employee
• Risk includes: Wage inflation, Inflation risk, Interest rate, Investment risk, Longevity risk,
Incentive risk, Regulatory risk, Non -participation risk, Leakage risk, Cognitive and will -power
risk
Work Session of the Milton City Council
Monday, October 11, 2010 at 6:00 pm
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• Funding
• Plan liabilities change
• Employer liability is fulfilled
Certainty
based on actuarial
annually as contributions are
assumptions, e.g., future
made to employee accounts
salary increases,
based on a percentage of
investment earnings,
payroll.
employee turnover.
• Predictable
• Annual contribution may
• Annual cash expenditures are
Contribution
vary from year-to-year
more predictable as they are
Costs
based upon actuarial
based on a set percentage of
assumptions (see above).
employee salaries.
Rates may be set by statute
to increase predictability.
• Recruitment
• Some portability through
• Assets are portable.
Tool
service credit purchase or
return of employee
contributions.
• Reward Career
• Benefits are typically based
• Benefits are based upon
Employees
on final year(s) salary,
accumulated contributions and
rewarding career
earnings.
employees.
• Expenses
• Expenses include actuarial
• Expenses may be lower than a
valuation and investment
defined benefit plan because no
fees, including
actuarial valuation is
recordkeeping and
necessary, and investment fees
investment management.
are shifted to the employee.
Employer pays
Employee education costs may
administrative and
be higher. Actual expenses are
investment fees.
more difficult to determine and
may be included as an offset to
investment return.
01
Work Session of the Milton City Council
Monday, October 11, 2010 at 6:00 pm
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• Benefit Potential
• Benefits paid at
• Benefits paid at retirement are
retirement are for life
based on contributions and
and are guaranteed by
earnings. The final retirement
the plan's benefit
benefit can be eroded by pre -
formula. Cost of
retirement distributions.
living increases are
common.
• Understandable
• Benefits require
• Benefits are based on
Benefits
explanation because
accumulated contributions plus
they are based on a set
earnings at the time of
of variables, e.g.,
retirement. Market fluctuations
future earnings and
make it difficult to predict
year of service at
retirement benefit.
retirement. There are
no separate accounts.
• Access to Benefits
• Benefits may not be
• Benefits may be withdrawn or
While Employed
withdrawn while
loaned under certain
actively employed.
circumstances provided IRS
Loans can be made
guidelines are followed.
provided IRS
guidelines are
followed, but are rare.
• Investment Risk
• Investment risk is
• The employee assumes
assumed by the
investment risk and bears a
employer.
direct relationship to the
Contributions may be
retirement benefit. In some
lowered by earnings
cases, the plan design includes a
that exceed assumed
minimum guaranteed return.
rates of return.
Work Session of the Milton City Council
Monday, October 11, 2010 at 6:00 pm
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• Case Studies
The article "A Better Bang for the Buck: The Economic Efficiencies of DB Plans" revealed
that DB plans are more cost effective than DC plans at delivering retirement benefits as
shown below.
Cost of DB and DC Pari a % of Payroll
N
i
Per;
.s Required
"" ;
DB; # Plan I
56M.000
1,2000
$400,0DO
200;0
Igo e)DID
DB Ran DC Plan
Mayor Lockwood:
• I know it's hard to predict 15 years out, is there a chance that if we project so far out that we
could get ourselves in trouble or our costs way out of line?
Rocky Joiner:
• Could something happen in the economy? The answer is yes.
Councilmember Thurman:
• I believe that it is illegal to base hiring on age or our employees to keep the average age low.
• It is in our best interest if we don't have high turnover and from a city standpoint it is definitely
in our best interest to keep employees for a long time.
am
Work Session of the Milton City Council
Monday, October 11, 2010 at 6:00 pm
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." • We started in a disaster year, so we have nowhere to go but up.
Rocky Joiner:
• A lot of the cities that ran into trouble are the ones that gave big increases to prior service. You
did not do that.
Councilmember Thurman:
• As a city, we are the ones that bear the risk as a City.
• How much does this plan cost us each year to maintain?
Rocky Joiner:
• Defined contribution plans hide their costs well.
• If you were on a standalone plan, the costs would be about three to four times what it is now.
Councilmember Zahner Bailey:
• Is the 10 year period standard?
Rocky Joiner:
• Five years is more of a standard, but 10 is becoming the new standard.
• In the public sector, there are two ways to provide retirement benefits.
• The defined benefit plan provides the employee with benefit security.
• Defined contribution plans attack from a different viewpoint.
Councilmember Thurman:
• It is my understanding that the employer has some liability and employees aren't the ones
investing the money themselves in contribution plans.
• I don't think you can say that the investment return is necessarily higher.
Rocky Joiner:
• You can if you only have two investment options. Long term equities are going to outdo fixed
income roughly 2 to 1.
City Clerk Gordon read Agenda Item #2.
1. Discussion on whether or not to Proceed with Evaluating the Milton Sign Code for a
Possible Text Amendment to the Highway 9 Overlay Specifically Dealing with Neon
Signs.
(Presented by Councilmember Joe Longoria)
Councilmember Joe Longoria:
pv" • As everyone knows we do not allow night sky illumination or neon signs in the Highway 9
Overlay.
Now" • We had a citizen call in about one of our local businesses that had a few neon signs displayed.
• It is not allowed in the area.
0 Of the roughly 60 businesses that we have in Milton, about 50% of those stores have neon signs.
Work Session of the Milton City Council
Monday, October 11, 2010 at 6:00 pm
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• I want to discuss a text amendment that would delete the reference to neon signs in terms of the mo
type of signs that are not allowed in the Highway 9 overlay.
• Either we start enforcing the ordinances, or we take the ordinance out of effect.
Councilmember Thurman:
• How do you define what is a neon sign and one that is simply lit?
Lynn Tully:
• LED, Tube light signs and fluorescent signs are all window signs that we do not allow.
• A code enforcement side, we did notice this and we did enforce the ordinance.
• Almost every business has an "open sign" right next to the door.
Councilmember Longoria:
• Almost everyone has an "open" sign.
Mayor Lockwood:
• I think it is important that businesses have "open" signs.
• Maybe we can change it to say each place is allowed one sign?
• We are going to hurt our businesses if we don't allow the "open" sign.
Lynn Tully:
• You can have up to 5% of window signs without getting a permit.
Councilmember Longoria:
• How is the 5% calculated?
Lynn Tully:
• 5% is the gross area of the window panels, outside of any doors, or above it.
• There are some places that we require a certain amount of windows.
Councilmember Longoria:
• To me, I think it will be difficult to enforce the ordinance for these establishments.
• 1 didn't realize there was a specific test about the 5%.
• I think we should change the ordinance so that we either don't call out neon signs specifically, or
make it to where they have to have a specific permit for neon signs.
• I feel like that is one more thing that we do not need to do.
• I believe most of the businesses on Highway 9 have neon signs and it's not just an "open" sign.
• Where do we document what is grandfathered in and what is not?
Lynn Tully: r•
• There are several places where the signs were grandfathered in that area.
• That would have to be a sign inventory which I'm not sure has ever been done.
• They have to show that they had the sign in place before we enacted the Highway 9 overlay
ordinance.
Work Session of the Milton City Council
Monday, October 11, 2010 at 6:00 pm
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Woo Councilmember Lusk:
• According to our ordinance, there are signs that were grandfathered expire when the businesses
change ownership.
Ken Jarrard:
• The message they want to convey would need to change as well if the business changes.
Councilmember Zahner Bailey:
• From a code enforcement aspect, what do we do to make sure that we are consistently enforcing
all of our ordinances?
• Can we have an update from staff about the sign ordinances as we look at the content of this
request?
Lynn Tully:
• We do have a code enforcement officer who is helped by our City Arborist.
• They have been doing a lot of proactive work as far as working with the Citizens to make them
aware of some of the codes.
• We get so many calls that we are more reactive instead of proactive.
• One of our largest items at the moment is foreclosed homes and abandoned lots and keeping
them maintained.
• It doesn't look like a lot is happening, but we have a lot of things working behind the scenes.
• Signs are such a difficult item to enforce.
• Sometimes they are ones that have to be permitted and some you can plug in or hang up.
• We are working doing sign sweeps during the weekends.
• We tend to end up with many small signs.
Councilmember Thurman:
• Is there a way to put out a pamphlet with our business license renewal forms so they are aware of
the ordinances?
• I think it would help.
Lynn Tully:
• I believe that's a good idea and I'm sure we can work on something.
Councilmember Zahner Bailey:
• The signs became very visually distracting and became overwhelming.
• As soon as you start looking at neon and internally lit signs and it can become visually
unattractive.
• It is difficult to regulate signs and sizes when some can be visually unappealing.
�. Councilmember Longoria:
• Some people may find it unattractive and some may find it fine.
• I just want to try and get a handle on how do we go to one business operator the signs have to
go?
0 How can we be consistent?
Work Session of the Milton City Council
Monday, October 11, 2010 at 6:00 pm
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City Manager Lagerbloom:
• We need direction on whether or not we want to take this topic and put it through the process.
• We have taken and looked at where we think our resources are best served in the code
enforcement department.
• The number one thing is dealing with abandoned properties.
• What is more damaging? I believe it's the abandoned lots.
• We can have code enforcement and make an effort to clean up highway 9 with the neon signs.
• Do we want to start a process to open up neon signs on highway 9?
Mayor Lockwood:
• I think that this issue could work its way into the big picture of signage.
• We need direction as to what the intent is of this.
• Either we go and take them all down, or we change the sign ordinance.
• I get more calls about signs than anything else.
• Do we want to further discuss this issue at a later date?
Councilmember Longoria:
• Taking out the words "neon signs" would mean it would fall into the category as other signs do.
• They will have to be permitted and managed the way we would manage any other kind of sign.
Councilmember Tart:
• I would be interested in knowing how many of the 50% were actually an open sign versus flow
alcohol signs etc.
• We cannot address what the signs say constitutionally.
• I would not be in favor of changing the ordinance.
• We have a highway 9 design standards committee that wants to improve, not detract from the
look of Highway 9.
Lynn Tully:
• The committee has looked at the sign ordinance in terms of what is currently allowed and now
allowed.
• They have not looked to change the ordinance.
Councilmember Tart:
• I think we run the risk if we change every ordinance that we are not consistently enforcing.
• I think that we should send out a pamphlet with business license applications to inform
businesses of the ordinance.
Councilmember Hewitt:
• I think that if we are going to revisit the sign ordinance, I would be in favor of looking at the big
picture and looking at the entire ordinance.
Mayor Lockwood:
MW
• I don't want to see rampant neon signs on highway 9, but I would be in favor of finding a way to
limit the number of them.
Work Session of the Milton City Council
Monday, October 11, 2010 at 6:00 pm
Page 11 of 11
• I think it's healthy to look at our ordinances every so often and make adjustments.
Councilmember Lusk:
• I think our incentive is to promote business development, not discourage it.
• I think it should be a discussion about the entire sign ordinance.
• I think we recognize there are violations of this ordinance and we need to inform them and
educate them on our current policy.
• I think this situation deserves higher priority than some of the other things on the list for code
enforcement.
Councilmember Zahner Bailey:
• I think we need to be more consistent with our codes.
• I think we need to make sure were not setting ourselves up for any legal liabilities.
• I agree that we should educate our businesses on our ordinance.
• I would support proactive communication on the website and via pamphlets.
• Separate from tonight's discussion, are we appropriate allocating resources when it comes to
code enforcement?
• We could offer new suggestions that are positive for signage.
Chris Lagerbloom:
• We are looking at a way to free up a lot of the time code enforcement spends on looking at this
issue.
• We are trying to find ways to benefit us and looking into other cities methods.
Mayor Lockwood:
• Those are all discussions about direction that we will have when this comes back to us.
Councilmember Thurman:
• I think we should keep cutting the grass and keep that number one.
• I believe we need to look at the sign ordinance as a whole instead of just some parts.
• I believe there are parts that are outdated and should be changed to help our business
community.
• We need to educate people and send something out with the business license this year that
doesn't tell what size signs, but add a "Thanks for doing business in Milton" pamphlet.
After no further discussion, the Work Session adjourned at 7:22 p.m.
Date Approved: November 1, 2010
(TL
Sudie AM Gordon, City Clef
..............
Joe Lockwood, Mayor