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HomeMy WebLinkAboutOrdinance 17577-05-2007ORDINANCE NO. 17577-05-2007 AN ORDINANCE AMENDING CHAPTER 2, ARTICLE VI, DIVISION 1, ENTITLED "EMPLOYEES RETIREMENT FUND," OF THE CODE OF THE CITY OF FORT WORTH (1986), AS AMENDED, PROVIDING FOR CHANGES IN THE DEFINITION OF ACTUARY, BOARD, AND MEMBER; CHANGING THE REQUIREMENTS OF MEMBERSHIP IN THE FUND TO COMPLY WITH STATE STATUE; REQUIRING PARTICIPATION IN THE FUND FOR MEMBERS WHO ARE ELGIBLE TO PARTICIPATE; REMOVING THE LIMIT ON MEMBER CONTRIBUTIONS TO THE FUND; REMOVING THE REQUIREMENT THAT THERE BE AN INCREASE IN CITY CONTRIBUTIONS WHEN THERE IS AN INCREASE IN MEMBER CONTRIBUTION; PROVIDING FOR A REVIEW OF PROPOSED ACTUARIAL ASSUMPTION BY THE CITY COUNCIL; REDUCING THE NiTMBER OF TRUSTEES ELECTED BY ACTIVE EMPLOYEES FROM SEVEN TO FOUR; MODIFYING THE EMPLOYEE GROUPS FROM WHICH TRUSTEES ARE ELECTED; INCREASING THE NUMBER OF TRUSTESS ELECTED BY RETIRED MEMBERS TO TH][2EE; INCREASING THE NUMBER OF TRUSTEES APPOINTED TO THE BOARD BY CITY COUNCIL TO FIVE; MAI~NG THE CHIEF FINANCIAL OFFICER OF THE CITY A PERMANENT MEMBER OF THE BOARD; MODIFYING THE ELECTION PROCEDURE FOR ELECTING TRUSTEES; INCREASING THE QUORUM REQUIREMENT TO SEVEN; CREATING A CUSTODIAL TRUSTEE; PROVIDING THAT THIS ORDINANCE IS CUMULATIVE; PROVIDING A SEVERABILITY CLAUSE; PROVIDING THAT ALL CONDITIONS PRECEDENT FOR THE ADOPTION OF THIS ORDINANCE CLAUSE AND PROVIDING AN EFFECTIVE DATE. VV~IEREAS, the City of Fort Worth City Council ("City Council") adopted Ordinance No. 13543, as amended by Ordinance Nos. 13672, 13673, 13674, 13842, 14641, 15334, 15528, 15862, 16967-OS-2006, and 169969-OS-2006, and as codified as Chapter 2, Article VI, Division 1 of the Code of the City of Fort Worth, collectively called the "Employees Retirement Fund Ordinance"; and WHEREAS, the City Council desires to make changes to the Retirement Ordinance to ensure that the Retirement Ordinance is in compliance with applicable state statues ;and Page 1 of 16 WHIEREAS, the following changes to the Retirement Ordinance would place the Retirement Ordinance in compliance with applicable state statutes. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH, TEXAS: SECTION 1. That Chapter 2, Article VI, Division 1, Section 2-201, "Definitions," of the Code of the City of Fort Worth as amended, be and is hereby further amended by deleting the definition of Actuary and substituting the following thereof: Actuary shall mean the technical advisor regarding the operations which are based on mortality, service, and compensation experience, who makes periodic valuations of the assets and liabilities of the Fund and other evaluations as requested by the board and the governing body. SECTION 2. That Chapter 2, Article VI, Division 1, Section 2-201, "Definitions," of the Code of the City of Fort Worth as amended, be and is hereby further amended by deleting the definition of Board and substituting the following thereof: "Board" shall mean the Board of Trustees of the Employees Retirement Fund of the City of Fort Worth. SECTION 3. That Chapter 2, Article VI, Division 1, Section 2-201, "Definitions," of the Code of the City of Fort Worth as amended, be and is hereby further amended by deleting the definition of Member and substituting the following thereof: Member shall mean a "participating member" as defined by Section 1.02(4) of Article 62431 of the Revised Civil Statutes. SECTION 4. That Chapter 2, Article VI, Division 1, Section 2-202, "Membership In the Fund," of the Code of the City of Fort Worth as amended, be and is hereby fiarther amended by deleting it in its entirety and substituting the following language in lieu thereof: Membership in the fund shall be based on the requirements set forth in Section 2.01 of Article 62431 of the Revised Civil Statutes, provided however, that membership in the fund shall be a condition of employment for all Page 2 of 16 employees who are eligible to be members. Any existing physical condition at the time of entry into the fund shall not be a basis for disability retirement. SECTION 5. That Chapter 2, Article VI, Division 1, Section 2-203(b) of "Members' Contributions" of the Code of the City of Fort Worth as amended, be and is hereby further amended by deleting in its entirety and substituting the following language in lieu thereof: (b) The contributions of all members may be raised at any time from the amount stated in this section to a higher amount in accordance with the procedures provided by Article 62431 of the Texas Revised Civil Statutes. SECTION 6. That Chapter 2, Article VI, Division 1, Section 2-204, "City's Contributions" of the Code of the City of Fort Worth as amended, be and is hereby further amended by deleting it in its entirety and substituting the following language in lieu thereof: (a) F'or police officer members only, effective October 1, 1996, the City shall contribute to the fund nine and seventy-eight one-hundredths (9.78) percent of their earnings; effective October 1, 1997, the City's contribution shall increase to ten and thirty-four one-hundredths (10.34) percent; effective October 1, 1998, the City's contribution shall increase to ten and nine-tenths (10.9) percent; and effective October 1, 1999, the City's contribution shall increase to eleven and forty-six one-hundredths (11.46) percent. For all other members, effective October 1, 1996, the city shall contribute to the fund nine and six-one hundredths (9.06) percent of their earnings; effective October 1, 1997, the City's contribution shall increase to nine and sixty-two one-hundredths (9.62) percent; effective October 1, 1998, the City's contribution shall increase to ten and eighteen one-hundredths (10.18) percent; and effective October 1, 1999, the City's contribution shall increase to ten and seventy-four one-hundredths (10.74) percent. Notwithstanding the foregoing, City contributions to the fund shall be reduced for each fiscal year by the amount of benefits paid by the City, if any, under the supplemental retirement ordinance. section 2-203 shall not limit the right of the City Council, through its budget appropriation, to contribute an additional amount over and above the members' contributions, in accordance with Article 62431 of the Texas Revised Civil Statutes, as amended. (b) If, following a member's involuntary termination of employment, the City is required, as the direct result of an appeal or suit arising from the involuntary termination, to reinstate the member's employment, the City shall make the contribution described in this section on any payment by the City to the member as back pay, without reduction for the member's interim Page 3 of 16 earnings, if any. In addition, the City shall, on behalf of the member, make the member's contribution described in section 2-203 above on any interim earnings deducted from the back-pay award. Contributions made by the City on behalf of members whose employment is reinstated following a military leave of absence are governed by the Uniformed Services Employment and Reemployment Rights Act, 38 U.S.C. §§ 4301-33, as provided for in section 2-205(a)(4) of this article. (c) Effective for pay periods ending after April 1,1999, the required member contributions described in section 2-203(a) shall be picked up by the City and shall be treated as City contributions for federal income tax purposes. Such contributions, although designated as member contributions, shall be paid by the City on behalf of the members and in lieu of contributions by the members. The members shall not have the option of receiving such contributions directly instead of having such amounts paid by the City to the fund. Retirement contributions made on behalf of the plan members, as well as the City's contributions to the fund, shall be paid by the City based on weekly worker's compensation benefits (currently referred to as temporary income benefits) paid to those plan members, beginning for such amounts received by plan members on or after January 1, 2006. SECTION 7. That Chapter 2, Article VI, Division 1, Section 2-213 "Annual actuarial valuations" is amended by deleting it in its entirety and substituting the following language in lieu thereof: The board shall appoint an actuary for the purpose of providing annual valuations of the retirement fund. The actuary shall also serve as a technical advisor to the board and the executive director regarding the operations authorized by this division. The actuarial assumptions and tables used by the actuary shall assume such costs, liabilities, rates of interest, mortality, turnover and other factors as are reasonable, taking into account the experience of the fund and reasonable expectations, and shall be subject to board approval. At least thirty (30) days before the date the board adopts actuarial assumptions to be used by the fund, the board shall submit to the City Council a detailed report regarding the proposed actuarial assumptions. The report must include the fiscal impact of the proposed actuarial assumptions on the fund. Page 4 of 16 SECTION 8. That Chapter 2, Article VI, Division 1, Section 2-214 "Administration" (a) "Board of Directors" of the Retirement Ordinance is amended by deleting it in its entirety and substituting the following language in lieu thereof: (a) Board of Trustees. The fund shall be administered by a board to be known as the "Board of Trustees of the Employees Retirement Fund of the City of Fort Worth" The board shall consist of thirteen (13) trustees designated as Place 1, Place 2, Place 3, Place 4, Place 5, Place 6, Place 7, Place 8, Place 9, Place 10, Place 11, Place 12, and Place 13, respectively. A trustee's term shall be for two (Z) years, subject to Section 2-214(a)(1)(i), Section 2- 214(a)(2)(i), and Section 2-214(a)(3). Trustees shall be elected as follows: (1) Trustees elected by employees. Four (4) trustees who are vested, participating members of the Fund, as defined by Article 62431 of the Texas Revised Civil Statutes, shall be elected by the employees of the City, who are also members of the fund; said trustees shall serve in Places 1, 2, 3, and 4 respectively. Each of the trustees shall be elected by one of the employee groups as follows: Place 1. The trustee for Place 1 shall be elected from Group A, which shall consist of those members of the fund who are employed as police officers as defined by this Chapter. Only members of the fund who qualify for Employee Group A shall be eligible to vote for a nominee for Place 1. Only members of the fund who qualify for Employee Group A shall be eligible to serve on Place 1 of the board. Place 2. The trustee for Place 2 shall be elected from Group B, which shall consist of those members of the fund who are employed as firefighters. Only members of the fund who qualify for Employee Group B shall be eligible to vote for a nominee .for Place 2. Only members of the fund who qualify for Employee Group B shall be eligible to serve on Place 2 of the board. Place 3. The trustee for Place 3 shall be elected from Group C, which shall consist of those members of the fund who are assigned to work in the following departments: Water, Waste Water, Reprographics, Planning, Budget & Management Services, City 1Vdanager, City Secretary, Development, Engineering, Finance, Human Resources, Internal Audit, Legal, Municipal Court, including the Marshal's Office, and the Zoo. Group C shall also include members of the fund assigned to work in the Police Department who are not eligible to vote in Place 1. Only members of the fund who qualify for Employee Group C shall be eligible to vote for a nominee for Place 3. Only Page 5 of 16 members of the fund who qualify for Employee Group C shall be eligible to serve on Place 3 of the board. Place 4. The trustee for Place 4 shall be elected from Group D, which shall consist of those members of the fund who are assigned to work in the following departments: IT Solutions, Community Relations, Economic Community Development, Housing, Retirement, Library, Parks and Community Services, Public Events, Public Health, Aviation, Code Compliance, Environmental Management, Equipment Services, Transportation and Public Works. Group D shall also include members of the fund assigned to work in the Fire Department who are not eligible to vote in Place 2. Only members of the fund who qualify for Employee Group D shall be eligible to vote for a nominee for Place 4. Only members of the fund who qualify for Employee Group D shall be eligible to serve on Place 4 of the board. a. Term. In accordance with the nomination and election procedures prescribed in this section, trustees shall be elected to Places 1, 2, 3, and 4, and shall serve for a two (2) year term, subject to the following provisions: Trustees for Places 1 and 3 shall be elected every odd numbered year beginning in 2007, and shall serve from September 1 of such odd numbered year through August 31 of the next odd numbered year. Trustees for Places 2 and 4 shall be elected in 2007 to serve a term from September 1, 2007 through August 31, 2008. Thereafter, the Trustees for Place 2 and 4 shall be elected every even number year and shall serve from September 1 of such even numbered year through August 31 of the next even numbered year. Should the employment status of any employee elected trustee change so that said trustee is no longer a member of the employee group from which the trustee was elected, then said trustee shall automatically forfeit the office of trustee. Should a vacancy occur, for whatever reason, in Place 1, 2, 3, or 4, during the term thereof, then a majority of all trustees remaining on the board shall appoint to the board a qualified employee from the employee group whose place has been vacated, which qualified employee shall serve the remainder of the unexpired term; provided, however, that if, at the time the vacancy arises, more than one (1) year remains in the unexpired term, then in lieu of the board appointing a replacement trustee, there shall be an election pursuant to the nomination and election provisions set forth below, with the board making reasonable modifications in the dates and time frames for the nomination and election in light of the time of the vacancy. Page 6 of 16 (b) Method of nominating members for election. Nominations of members for election to the board of trustees shall be by petition only. Before May 31 of each election year, the executive director shall make available to employees of each employee group eligible to vote in the scheduled election petition forms with written instructions. Petitions containing the names of nominees shall be returned to the executive director prior to July 1 of said election year. Nominees may use copies of the petition form or may create their own petition forms, provided each page of each returned petition shall identify the name of the nominee, the department in which the nominee is employed, the employee group of which the nominee is a member, and the place on the board of trustees for which the employee is being nominated. No person's name shall be placed upon the official ballot as a nominee unless that person is nominated by petition. Said nominating petition must contain the signature and employee number of at least one hundred (100) members of the employee group who are qualified to vote for said place on the date said petition is submitted to the executive director. Only those employees who are members of the fund shall be entitled to be listed upon the official ballot as a nominee. No person's name shall be placed upon the official ballot as a nominee for Place 1 unless that person is a member of Employee Group A. No person's name shall be placed upon the official ballot as a nominee for Place 2 unless that person is a member of Employee Group B. No person's name shall be placed upon the official ballot as a nominee for Place 3 unless that person is a member of Employee Group C. No person's name shall be placed upon the official ballot as a nominee for Place 4 unless that person is a member of Employee Group D. (c) Method of electing member trustees. The executive director shall provide for an election procedure as authorized by the board, including but not limited to voting by mail, telephone, and electronic means, and which may be conducted by a third- party voting service. The executive director shall prepare an official ballot for each place, listing in alphabetical order according to surname the nominees for election to that place. If, however, there is only one (1) nominee for any place, there shall be no election for that place, and such nominee shall automatically be elected to the board of trustees. Only the names of those persons who are nominated by petition as prescribed herein shall be placed upon the official ballot. No person shall be elected as a trustee whose name does not appear upon the official ballot as a nominee. Ballots shall be Page 7 of 16 made available to the members no later than July 20 of the election year. Each employee qualified to vote in said election shall vote for one (1) nominee only. Any ballot containing votes of two (2) or more persons, or for persons who are not nominees as prescribed herein, shall be declared invalid, and shall not be counted. All ballots must be cast no later than August 15. Votes cast by written ballot must be returned no later than August 15 of the election year. If the ballot is returned by mail, the envelope must be postmarked by August 15 of the election year. The executive director or a designated third party shall tabulate all votes for all nominees. The nominee for each place who receives a majority of the votes cast for that place shall be declared elected to the board of trustees. following the tabulation of votes, the executive director shall submit the results to the board of trustees at a meeting to be held before September 1 of said election year, at which time the board shall canvass the results of said election and certify which nominees are elected to the board of trustees. If, at the time of canvassing said results, the nominee receiving the majority of votes for said place is no longer eligible to serve on the place to which that nominee was elected, then the nominee finishing second in the election shall be certified by the board as elected to the board of trustees. If there is more than one (1) nominee and no nominee receives a majority of the votes cast for any one (1) place, or if there is a tie for any one (1) place, then arum-off election shall be held, with ballots made available to the members qualified to vote for that place no later than September 1 of the election year, and in the same manner as prescribed for the first election. Only the names of candidates who tied for the highest number of votes cast for that place in the first election, or the two (2) candidates who received the highest number of votes with neither having a majority of votes cast for that place, shall be printed on the ballot for the run-off election. All ballots for the second election must be cast by October 1 of the election year. Votes cast by written ballot must be returned by October 1. If a ballot is returned by mail, the envelope must be postmarked by October 1. The executive director or a designated third party shall tabulate the votes for the candidates in the run-off election. The candidate receiving the highest number of votes cast for that place in the run-off election shall be declared elected to the board of trustees. In the event of a tie vote at the second election, the candidates who tie shall cast lots in the presence of the board of trustees to Page 8 of 16 determine which one (1) shall be declared elected. Following the tabulation of votes in the run-off election, and the casting of lots in case of ties, the executive director shall submit the results of same to the board of trustees at a meeting to be held before November 1 of said election year, at which time the board shall canvass the results of the run-off election and certify which nominees are elected to the board of trustees. If, at the time of canvassing the results of the run-off election, the nominee elected to serve on said board is no longer eligible to serve on the place to which he or she was elected, then the nominee finishing second in the election shall be certified by the board as elected to the board of trustees. (2) Trustees elected by retired members. Place 5. The trustee for Place 5 shall be elected by Retiree Group B, which shall consist of those retired members of the fund from Employee Group B. Only members of the fund who qualify for Retiree Group B shall be eligible to vote for a nominee for Place 5. Only members of the fund who qualify for Retiree Group B shall be eligible to serve on Place 5 of the board. Place 6. The trustee for Place 6 shall be elected by Retiree Group A, which shall consist of those retired members of the fund from Employee Group A. Only members of the fund who qualify for Retiree Group A shall be eligible to vote for a nominee for Place 6. Only members of the fund who qualify for Retiree Group A shall be eligible to serve on Place 6 of the board. Place 7. The trustee for Place 7 shall be elected by Retiree Group C, which shall consist of those retired members of the fund from Employee Groups C and D. Only members of the fund who qualify for Retiree Group C shall be eligible to vote for a nominee for Place 7. Only members of the fund who qualify for Retiree Group C shall be eligible to serve on Place 7 of the board. a. Term. In accordance with the nomination and election procedures prescribed in this section, a trustee shall be elected to Places 5, 6 and 7, and shall serve for atwo-year term. The Trustee for Place 6 shall be elected to serve a term from September 1, 2007 through August 31, 2008. Thereafter, the Trustee for Place 6 shall be elected every even number year and shall serve from September 1 of such even numbered year through August 31 of the next even numbered year. Trustees for Places 5 and 7 shall be elected every odd numbered year beginning in 2007, and shall serve from September 1 of such odd numbered year through Page 9 of 16 August 31 of the next odd numbered year. Should a trustee for Place 5, 6, or 7 return to city employment and again become an employee member of the fund, the trustee shall automatically forfeit the office of trustee for Place 5, 6, or 7. Should a vacancy occur in Places 5, 6 or 7, during the term thereof, then a majority of all trustees remaining on the board shall appoint to the board a retired member of Retiree Group A if the vacancy occurs in Place 5, a retired member of Retiree Group B if the vacancy occurs in Place 6, or a retired member of Retiree Group C if the vacancy occurs in Place 7, to serve the remainder of the unexpired term. b. Nomination of retiree members for election. Nomination of the retired members for election to the board shall be by letter of nomination only. Before May 31 of each election year, the executive director shall make available to retired members official letter of nomination forms with written instructions. Copies of the letter of nomination may be used. Completed letters of nomination shall be returned to the executive director prior to July 1 of each election year. Each returned letter of nomination shall identify the retired member being nominated for the place for which the retired member is being nominated and must contain the signature and the Social Security Number of the retired member making the nomination. Any member of Retiree Group A receiving at least twenty-five (25) letters of nomination from Retiree Group A shall be considered a nominee for election to Place 5 on the board. Any retired member of Retiree Group B receiving at least twenty-five (25) letters of nomination from Retiree Group B shall be considered a nominee .for election to Place 6 on the board. Any member of Retiree Group C receiving at least twenty-five (25) letters of nomination from Retiree Group C shall be considered a nominee for election to Place 7 on the board. No person shall be placed on the ballot as a nominee unless the person is a retired member who is nominated by letter of nomination. Only retired members may complete letters of nomination. c. Election of retiree board members. The executive director shall provide for an election procedure as authorized by the board, including but not limited to voting by mail, telephone, and electronic means, and which may be conducted by a third-party voting service. The executive director shall prepare official ballots for the election of the retiree board members, listing the nominees in alphabetical order by surname. Ballots for election of the retiree board members shall be made available to all retired members in Retiree Group A, B and C no later than July 20. If there is only one (1) nominee for Place 5, there shall be no election Page 10 of 16 for Place 5, and the one (1) nominee shall automatically be elected to the board of trustees. If there is only one (1) nominee for Place 6, there shall be no election for Place 6, and the one (1) nominee shall automatically be elected to the board of trustees. If there is only one (1) nominee for Place 7, there shall be no election for Place 7, and the one (1) nominee shall automatically be elected to the board of trustees. Only the names of those persons who are nominated by letters of nomination shall be placed on the official ballots. No person shall be elected as trustee whose name does not appear on the official ballot as a nominee. To be considered valid, a ballot must be cast no later than August 15 of the election year. Votes cast by written ballot must be returned no later than August 15 of the election year. If the ballot is returned by mail, the envelope must be postmarked by August 15 of the election year. Each retired member qualified to vote in the election shall vote for one (1) nominee only. Any ballot containing votes for two (2) or more persons, or for persons who are not nominees as provided herein, shall be declared invalid and shall not be counted. The executive director or a designated third party shall tabulate all votes for all nominees. The nominees for each place receiving a majority of votes cast shall be declared elected to the board of trustees. Following the tabulation of votes, the executive director shall submit the results of same to the board of trustees meeting to be held before September 1 of the election year, at which time the board shall canvass the results of the election and certify which nominees are elected to the board of trustees. If, at the time of canvassing the results, a nominee receiving the majority of votes is no longer eligible to serve, then a majority of the trustees remaining on the board ~ shall appoint to the board a retired member from the appropriate Retiree Group to fill Place 5, 6 or 7 on the board. The appointed member shall serve from September 1 of the election year through August 31 of the next election year for that Place. If there is more than one (1) nominee for a place and no nominee receives a majority of the votes cast, or if there is a tie, then a run- off election shall be held, with ballots made available to the retired members for that place no later than September 1 of the election year and in the same manner as prescribed for the first election. Only the names of candidates who tied for the highest number of votes cast for that place in the first election, or the two (2) candidates who received the highest number of votes with neither having a majority of votes cast, shall be printed on the ballot for the run-off election. All ballots for the second election must be cast by October 1 of the election year. Votes cast by written ballot must be returned by October 1 of the election year. If a ballot is Page 11 of 16 returned by mail, the envelope must be postmarked by October 1 of the election year. The executive director or a designated third party shall tabulate the votes for the candidates in the run-off election. The candidate receiving the highest number of votes cast in the run-off election shall be declared elected to the board of trustees. In the event of a tie vote at the second election, the candidates who tie shall cast lots in the presence of the board of trustees to determine which one (1) shall be declared elected. Following the tabulation of votes in the run-off election, and the casting of lots in case of ties, the executive director shall submit the results of same to the board of trustees at a meeting to be held before November 1 of said election year, at which time the board shall canvass the results of the run-off election and certify which nominees are elected to the board of trustees. If, at the time of canvassing the results of the run-off election, the nominee elected to serve on said board is no longer eligible to serve, then a majority of the trustees remaining on said board shall appoint to the board a retired member from the appropriate retiree Group to fill the unexpired term of Place 5, Place 6 or Place 7 on the board. (3) .Board members appointed by the City Council Place $. The trustee for Place 8 shall be a resident of the City of Fort Worth. A person appointed under this subsection may not be a member of the City Council. The trustee for Place 8 shall be appointed by a majority vote of the City Council to serve a term initially commencing September 1, 2007 and ending August 31, 2008. Thereafter, the individual appointed by City Council shall serve a term of two (2) years (unless removed sooner by a majority vote of the City Council) commencing on September 1 of every even numbered year and ending August 31 of the next even numbered year. Should a vacancy occur in Place 8, then City Council, by majority vote, shall appoint another eligible resident of the City of Fort Worth to serve the remainder of the unexpired term. Place 9. The trustee for Place 9 shall be a resident of the City of Fort Worth. A person appointed under this subsection may not be a member of the City Council. The trustee for Place 9 shall be appointed by a majority vote of the City Council to serve a term of two (2) years (unless removed sooner by a majority vote of the City Council) commencing on September 1 of every odd numbered year through August 31 of the next odd numbered year. Should a vacancy occur in Place 9, then City Council, by a majority vote, shall appoint another eligible resident of the City of Fort Worth to serve the remainder of the unexpired term. Page 12 of 16 Place 10. The trustee for Place 10 shall be a resident of the City of Fort Worth. A person appointed under this subsection may not be a member of the City Council. The trustee for Place 10 shall be appointed by a majority vote of the City Council to serve a term initially commencing on September 1, 2007, and ending August 31, 2008. Thereafter, the person appointed by City Council shall serve a term of two (2) years (unless removed sooner by a majority vote of the city council) commencing on September 1 of every even numbered year through August 31 of the next even numbered year. Should a vacancy occur in Place 10, then City Council, by a majority vote, shall appoint another eligible resident of the City of Fort Worth to serve the remainder of the unexpired term. Place 11. The trustee for Place 11 shall be a resident of the City of Fort Worth. A person appointed under this subsection may not be a member of the City Council. The trustee for Place 11 shall be appointed by a majority vote of the City Council to serve a term of two (2) years (unless removed sooner by a majority vote of the City Council) commencing on September 1 of every odd numbered year through August 31 of the next odd .numbered year. Should a vacancy occur in Place 11, then City Council, by a majority vote, shall appoint another eligible resident of the City of Fort Worth to serve the remainder of the unexpired term. Place 12. The trustee for Place 12 shall be a resident of the City of Fort Worth. A person appointed under this subsection may not be a member of the City Council. The trustee for Place 12 shall be appointed by a majority vote of the City Council to serve a term initially commencing September 1, 2007, and ending August 31, 2008. Thereafter, the person appointed by City Council shall serve a term of two (2) years (unless removed sooner by a majority vote of the city council) commencing on September 1 of every even numbered year and ending on August 31 of the next even numbered year. Should a vacancy occur in Place 12, then City Council, by a majority vote, shall appoint another eligible resident of the .City of Fort Worth to serve the remainder of the unexpired term. Place 13. The trustee for Place 13 shall be the Chief Financial Officer of the City of Fort Worth. Should a vacancy occur in Place 13, then City Council, by a majority vote, shall appoint a qualified person to serve until a new Chief Financial Officer is appointed. Page 13 of 16 SECTION 9. That Chapter 2, Article VI, Division 1, Section 2-214 "Administration" (b)(4) of the Retirement Ordinance is amended by deleting in its entirety and substituting the following language in lieu thereof: (b)(4) Seven (7) members of the board shall constitute a quorum to transact any business unless there are vacancies, in which event the quorum shall be reduced by the number of vacancies existing. Every matter before the board for vote shall require for final passage the affirmative vote of a majority of the trustees on the board (regardless of the number of Trustees present at the board meeting). SECTION 10. That Chapter 2, Article VI, Division 1, Section 2-214 "Administration" (f) "Trustee" of the Retirement Ordinance is amended by deleting in its entirety and substituting the following language in lieu thereof: f) Custodial Trustee. The custodial trustee of the fund shall be appointed, removed, and replaced in the sole discretion of the board. .Any custodial trustee may be removed, with or without cause, by the board on written notice of such removal to the custodial trustee. The board may appoint a successor custodial trustee by written designation or by authorizing the execution of a new trust agreement with the successor custodial trustee, a copy of which shall be delivered to the former custodial trustee. As a means of administering the assets of the fund, the board may enter into a trust agreement with the custodial trustee. The administration of the assets of the fund and the duties, powers, obligations and responsibilities of the custodial trustee shall be governed by this section and the trust agreement. The trust agreement may be amended from time to time as the board deems advisable in order to effectuate the purposes of this section. The board shall have the power to acquire, invest, reinvest, exchange, retain, sell, supervise and manage the assets of the fund. The Chair and the Vice- Chair shall execute all documents on behalf of the fund. The signature of the custodial trustee shall not be required to effectuate the transfer of plan assets. The board and the custodial trustee shall discharge their duties solely in the interest of the members and beneficiaries: (a) for the exclusive purpose of: (i) providing benefits to members and their beneficiaries; and (ii) defraying any reasonable expenses of administering the system; (b) with the care, skill, prudence, and diligence under the prevailing circumstances that a prudent person acting in a like capacity and familiar with matters of the type would use in the conduct of an enterprise with a like character and like aims; Page 14 of 16 (c) by diversifying the investments of the fund to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so; and (d) in accordance with the documents and instruments governing the fund to the extent that the documents and instruments are consistent with this section and applicable law. Within the limitations of the foregoing standard and subject to the trust agreement, the board is authorized to acquire and retain every kind of property, real, personal or mixed, and every kind of investment, specifically including but not by way of limitation, bonds, debentures and other corporate obligations, and stocks, preferred or common, which trustees of ordinary prudence, discretion and intelligence acquire or retain for trust accounts; provided, however, that each investment manager employed by the board shall not purchase or hold within the fund's investment portfolio under its management at any time more than five (S) percent of the outstanding securities of any one (1) corporation; and provided further, that the board is specifically prohibited from purchasing bonds, warrants, obligations or securities of the City of I+'ort Worth for the fund. SECTION 11. This ordinance shall be cumulative of all ordinances of the City of Fort Worth, which shall remain in full force and effect except to the extent that provisions of this Ordinance are in direct conflict with the provisions of such other ordinances, in which case the conflicting provisions of such other ordinances are hereby repealed. SECTION 12. If any provision, section, paragraph, sentence, clause or phrase of this ordinance be declared invalid or unconstitutional, the same shall not affect any other portion or provision hereof, and all other provisions shall remain valid and unaffected by any invalid portion if any, and the City Council now says that if it had known at the time of the passage of this ordinance that any portion of said ordinance was invalid, it would not have adopted such invalid ordinance. Page 15 of 16 SECTION 13. The City Council fords that all acts, conditions and things required by provisions of the Constitution of Texas and Charter and Ordinances of the City of Fort Worth precedent to and in the adoption of this Ordinance have been done, have happened and have been performed in proper and lawful time. SECTION 14. This ordinance shall be in full force and effect from and after its adoption. ADOPTED this 29`l' day of May 2007. ~~ ,,~ - Marty Hendrix City Secretary APPROVED AS TO FORM AND LEGALITY: a titia Coleman Brown Assistant City Attorney Page 16 of 16 City of Fort Worth, Texas Mayor and Council Communication COUNCIL ACTION: Approved on 5!29/2007 -Ordinance No. 17577-05-2007 ®ATE: Tuesday, May 29, 2007 LOG NAME: 12ADH000OLA REFERENCE NO.: G-15738 SUBJECT: Adopt an Ordinance to Amend Chapter 2, Article VI, Division 1 "Employees' Retirement Fund" RECOMMENDATION: It is recommended that the City Council adopt the attached Ordinance amending Chapter 2, Article VI, Division 1 "Employees Retirement Fund" by amending the following sections: 1. Section 2-201: Definitions; 2. Section 2-202: Membership In the Fund; 3. Section 2-203: Members' Contributions; 4. Section 2-204: City's Contributions; and 5. Section 2-214: Administration. DISCUSSION: In an effort to comply with Article 62431 of the Revised Civil Statutes, the staff recommends the passage of the attached ordinance which will provide for changes in the definitions of Actuary, Board, and Member. The additional ordinance changes will: a. change the requirements for membership in the fund; b. eliminate the contribution cap for member contributions; c. eliminate the requirement that the City match member contribution increases; d. change the Board composition and election process; e. increase the number of members required for a quorum to seven; and f. create a custodial trustee. On May 22, 2007, the proposed amendments were presented to the City Council along with other recommendations made by the City Manager and endorsed by the City Council's Audit and Finance Advisory Committee. The City Council elected to defer action on recommendations related to overtime, increases to city and employee contributions rates, an the implementation of our Ad Hoc COLA alternative until the fiscal year 2008 budget review process. The Council directed staff to bring forward the proposed amendments to Chapter 2 of the City Code, Article VI, Division I, "Employees Retirement Fund" as listed and recommended in this M&C. FISCAL INFORMATIONlCERTIFICATION: Logname: 12ADH000OLA Page 1 of 2 The Finance Director certifies that this ordinance will have no material effect on City funds. TO Fund/Account/Centers FROM Fund/Account/Centers Submitted for City Manager's Office b~ Karen Montgomery (6222) Originating Department Head: David Yett (7623) Additional Information Contact: Laetitia Brown (6639) Logname: 12ADH000OLA Page 2 of 2