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Miami

Cypen & Cypen
NEWSLETTER
for
August 15, 2013

Stephen H. Cypen, Esq., Editor

1.  CHAPTER 2013-227, LAWS OF FLORIDA, EFFECTIVE OCTOBER 1, 2013: On June 28, 2013, Florida Governor Scott signed Senate Bill 50, Chapter 2013-227, Laws of Florida, effective October 1, 2013.  This new law requires that members of the public be given a reasonable opportunity to be heard on a proposition before a board of a local government. The opportunity to speak on a proposition does not have to occur at the same meeting at which the official action is taken as long as the opportunity occurs at a meeting that is during the decision-making process and is within “a reasonable proximity in time before the meeting” at which the board takes the official action.
 
The opportunity to be heard does not apply to:

  • Official acts which must be taken to deal with an emergency situation affecting the public health, safety or welfare if compliance with the requirements of Ch. 2013-227 would cause unreasonable delay.  
     
  • An official act involving no more than a ministerial act, including but not limited to, approval of minutes and ceremonial proclamations.  
     
  • A meeting exempt from the “Sunshine Law,” Section 286.011, Florida Statutes.  
     
  • A meeting during which a board is acting in a quasi-judicial capacity such as a disability hearing or a forfeiture hearing.

 
The new law authorizes the circuit court to issue an injunction for the purpose of enforcing Ch. 2013-227. If an action is filed and the court determines that the board violated Ch. 2013-227, then the court isrequired to assess attorney fees against the board at both the trial and appellate levels. The court may also assess reasonable attorney fees against an individual filing such action if the court finds that the action was filed in bad faith or was frivolous. If a pension board adopts rules or policies in accordance with Ch. 2013-227 and follows such rules or policies when providing an opportunity for the public to be heard, then the board is deemed to be in compliance with Ch. 2013-227. We have prepared the proposed public comment rules below for consideration by our clients and other interested parties.
 
 
_____________________________________
(name of plan)
 
 
RULES OF PROCEDURE FOR
PUBLIC COMMENT AND PARTICIPATION
AT PENSION BOARD MEETINGS
 
Rule 1.  Purpose.  Meetings of the Board of Trustees (“Board”) shall be conducted in a business-like, yet open and cordial manner so as to allow the most efficient accomplishment of Board business without unnecessary formalities, while respecting the rights of each individual Trustee to express his or her opinion. Further, these procedures are intended to provide an opportunity for the public to observe the decision-making process of the Board, to participate on public items and to provide general comments under the "Public Comment" portion of the Board’s meeting Agenda.
 
Rule 2. Decorum. All persons addressing the Board shall speak in a respectful manner and shall avoid the use of offensive or abusive language or conduct so that the good order and decorum that is necessary for a governmental meeting shall at all times be maintained.
 
Rule 3.   Public Participation on Specific Items; Discussion.   
 
a.   Participation. Individuals wishing to speak on specific matters that appear on the Board’s meeting Agenda shall be recognized by the Chair after the Chair opens an item for public comment.
 
b.  Manner and Time.
 
     (1.)  Public discussion on any item listed on the Agenda shall be limited to three (3) minutes maximum per person; however, the Chair may, after due consideration for the importance of the subject, allow additional information to be presented by authorizing the speaker to continue for additional time.  Speakers shall confine their comments to matters that are relevant to the item under discussion. Once the three (3) minute time commences to run, it shall not be abated for questions or interchanges. 
 
     (2.)  Individuals may designate a representative to speak for him or her or his or her group on a proposition if he or she so chooses.
 
     (3.) Speakers may include written materials as part of their presentation by filing such materials with the Plan Administrator at the time of the speaker's oral presentation. 
 
     (4.)  Each person who addresses the Board shall give his or her name and address.
 
     (5.)  No person, other than the Board and the person recognized by the Chair as having the floor, shall be permitted to enter into discussion without the permission of the Chair.
 
     (6.)  All questions from the public to the Board shall be addressed through the Chair. The Board shall not be required to answer questions unless expressly required by applicable law.
 
Rule 4.  General Public Comments.
 
a.  Agenda.  Each regular Board meeting Agenda shall include "Public Comment."
 
b. Manner and Time. A total of thirty (30) minutes shall be allotted for public comment.
 
c.  Board Action.  On public comment matters, any person is entitled to be heard by the Board on any matter; however, no action shall be taken by the Board on a matter of Public Comment, unless the item is properly added to the Agenda by the Board.  This provision shall not preclude the Board from simply referring a public comment matter to Plan Administrator for such action as the Plan Administrator may deem appropriate under the Plan Administrator’s authority.
 
d.  Procedure for Public Comment.   
 
(1.) Individuals wishing to speak on matters not on the Agenda, but pertinent to the administration of the Plan, may do so by raising their hands when asked to do so by the Chair, at the start of the Public Comment portion of the Agenda. The Chair shall recognize those persons who raise their hands.
 
(2.) An individual may designate a representative to speak for him or her or his or her group on a proposition if he or she so chooses.
 
(3.) The individual time limit for Public Comment shall be limited to three (3) minutes maximum per person; however, the Chair may, after due consideration for the importance of the subject, allow additional information to be presented by authorizing the speaker to continue for additional time. Once the three (3) minute timer commences to run, it shall not be abated for questions or interchanges.
 
(4.) Speakers may include written materials as part of their presentation by filing such materials with the Plan Administrator at the time of the speaker's oral presentation.
 
(5.) Each person who addresses the Board shall give his or her name and address. No person, other than the Board and the person recognized by the Chair as having the floor, shall be permitted to enter into discussion without the permission of the Chair.
 
(6). All questions from the public to the Board shall be addressed through the Chair. The Board shall not be required to answer questions unless expressly required by applicable law. 
 
Rule 5.  Effect of Procedures.  Nothing in these procedures shall establish or support any private right of action for the benefit of any member of the public. Further, the Board may by majority vote, at any time, waive the provisions of these procedures for a particular matter or particular matters.
 
Rule 6. Quasi-Judicial Proceedings. Quasi-judicial proceedings, such as disability and forfeiture hearings, are exempt from these Rules of Procedure and shall be governed by procedures adopted by the Board for such proceedings.
 
                                       
Adoption                                                      
Date: _________________  
 
                                                            _________________________
                                                                                Chair
 
 
                                                            _________________________
                                                                                Secretary
 
 
2. THE REAL HISTORY OF PUBLIC PENSIONS IN BANKRUPTCY:  There appears to be a frenzy of comments lately that public retirees receive excessive pensions in the current economy, and that they need to be reduced. Reuters.com says that many in the media have taken a brief look at Detroit, and decided that costly pensions were the cause of the city’s bankruptcy. Nothing could be farther from the truth. Detroit pays a relatively modest median pension of $19,000 a year to general government retirees and $30,000 to police and fire retirees. Detroit’s general employees pension system was funded at 82% in 2011 (99% for police and fire). That level is higher than the national median of 74%. Public benefits make easy targets for critics.  Here is a little tour of pensions in bankruptcy through the years.

  • Prichard, Alabama, which experienced a population decline of approximately 50% over the past 50 years, filed for bankruptcy in 1999 after it was unable to pay approximately $3.9 million in delinquent bills. In addition to the unpaid bills, Prichard also admitted not making payments to its employees’ pension funds, and, even though the city had withheld taxes from employees’ paychecks, it failed to submit such withholdings to the state and federal governments.  Although the city successfully revised its budget, it was still unable to meet its pension obligations. So, in 2009, Prichard filed for bankruptcy again, to stay a pending suit brought by its pensioners after it failed to make pension payments for six months. Prichard had failed to make a $16.5 million payment to its pension fund under its previous plan of adjustment.  Prichard has not yet met the court’s eligibility requirements for the second bankruptcy, and pensions have not been paid, leaving retirees to struggle.  
     
  • Central Falls, Rhode Island’s bankruptcy began in August 2011, when the city of 18,000 declared bankruptcy. At the time, it had a debt of $21 million, an unfunded pension liability of $80 million and an annual budget deficit of $5 million.  Under the Chapter 9 bankruptcy filing, the state-appointed overseer, slashed the pensions of police and fire retirees by as much as 55%.  Retiree representatives say cuts to pensions were rammed through with no time to study the matter or offer to negotiate. There was a single meeting during which the cuts were spelled out. It turned out to be a take-it-or-leave-it proposition.  
     
  • In a very unusual case, Vallejo, California, exited bankruptcy after actually paying more for pensions. Vallejo recently received court approval to exit from bankruptcy with a plan that includes a sharp increase in pension payments to California Public Employees’ Retirees System, the opposite of what many expected when the city declared bankruptcy in May 2008.  Vallejo demonstrated that bankruptcy proceedings are not cookie cutter, and that their outcomes rely on many factors.  
     
  • Jefferson County, Alabama, the largest municipal bankruptcy until Detroit, actually did nothing to the city’s pensions, and never even listed them as creditors. Jefferson County pensions were funded at the approximate level of the Detroit Police and Fire Retirement System.  
     
  • Stockton, California, was recently ruled eligible to proceed into bankruptcy, but the pension issue is complex. The city manager and city council do not want to cut pensions after eliminating retiree health care benefits.  City officials believe that it is vital to retain full pensions to attract top-notch public employees. Meanwhile, bond insurers appear to have convinced the bankruptcy judge that Stockton pensions should suffer haircuts if bondholders have to also. Yet the real story has yet to unfold: it must still be determined whether the city’s creditors or its public employee retirement funds get paid off first.  Since this is the first Chapter 9 bankruptcy case challenging state pension obligations, the issue is whether the 10th Amendment to the United States Constitution preserving states’ rights trumps federal bankruptcy law. Thus, the case will likely end up before the U.S. Supreme Court.  
     
  • San Bernardino, California, filed for bankruptcy eligibility in 2012, but the city has numerous muddled issues related to pension obligations. The city stopped making pension payments to CalPERS last year, but it resumed these payments in July of this year. The city’s approach to its large pension liabilities is unknown. 

 
Detroit presents the only municipal bankruptcy case, other than Central Falls, where the bankruptcy manager has directly gone after the pension liabilities from the beginning of the proceedings. However, unlike Central Falls, Detroit’s pensions are well-funded by national standards. It may also likely present state and federal legal issues if Detroit’s pensions, enshrined in the state’s constitution, are given haircuts.  The treatment of public pensions is not as straightforward as many expect it to be. The show in Detroit is just beginning.
 
3. GIVEN A CHOICE, WORKERS STILL TAKE LUMP SUMS: Amid growing concerns about workers outliving their retirement savings, a key focus has been on ways to encourage retirees to consider a lifetime income option -- but research indicates that, given a choice, those individuals are opting for a lump sum distribution from their retirement plan, instead. According to research from the nonpartisan Employee Benefit Research Institute, between 2005 and 2010, only about 1 in 4 workers (27.3%) covered by a defined benefit pension plan who were between ages 50–75, had a minimum job tenure of five years, a minimum account balance of $5,000, and no restrictions on their payout decision, chose a lifetime income stream (annuity). The study found that differences in DB plan rules or features result in very different annuitization rates in pension plans. In fact, the results show that the rate of annuitization varies directly with the degree to which plan rules restrict the ability to choose a partial or lump sum distribution.  In 2010, the annuitization rate for traditional DB plans with no restrictions on lump sum distributions was 44.3%, while for cash balance plans with no restrictions on lump sum distributions, it was 22.3%.  As we keep saying, it is going to be a blood bath.  Employee Benefit Research Institute Fast Facts (August 8, 2013 # 241).
 
4.  HOW TO GET A JOB, HOW NOT TO GET ONE:  CareerBuilder conducted a survey of hiring managers and human resource professionals nationwide to share the most memorable methods candidates have used to stand out from the crowd, and whether their creativity got them hired. Techniques on the first list worked, those on the second list, not so much:

  • Candidate gave a resume on a chocolate bar.  
     
  • Candidate crafted the cover letter like an invitation to hire her rather than a request (similar to a wedding invitation).  
     
  • Candidate climbed on a roof the employer was repairing, and asked for a job.  
     
  • Candidate repaired a piece of company’s equipment during the first interview.  
     
  • Candidate sent a message in a bottle.
     
  • Candidate back-flipped into the room.  
     
  • Candidate did a tarot reading for the interviewer.   
     
  • Candidate wore a florescent suit.  
     
  • Candidate sent in a shoe to “get his foot in the door."  
     
  • Candidate brought items from interviewer’s online shopping wish list.

 
Employers are typically not looking for the most outrageous candidate, they are looking for the best fit.  Thinking outside the box is great, but the stunts that work best are the ones that showcase your relevant skills and abilities.  The focus of the interview should be why you would be a great addition to the team, and not what you are willing to do to get noticed.
 
5. RETIRED HEALTH MESSAGE: I finally got my head together, and now my body is falling apart.
 
6.  PONDERISMS: Healthy is merely the slowest possible rate at which one can die.
 
7.  TODAY IN HISTORY: In 1965, Beatles play to 55,000 at Shea Stadium.
 
8. KEEP THOSE CARDS AND LETTERS COMING: Several readers regularly supply us with suggestions or tips for newsletter items. Please feel free to send us or point us to matters you think would be of interest to our readers.  Subject to editorial discretion, we may print them.  Rest assured that we will not publish any names as referring sources. 
 
9. PLEASE SHARE OUR NEWSLETTER: Our newsletter readership is not limited to the number of people who choose to enter a free subscription.  Many pension board administrators provide hard copies in their meeting agenda. Other administrators forward the newsletter electronically to trustees. In any event, please tell those you feel may be interested that they can subscribe to their own free copy of the newsletter at http://www.cypen.com/subscribe.htm.

 

 

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Items in this Newsletter may be excerpts or summaries of original or secondary source material, and may have been reorganized for clarity and brevity. This Newsletter is general in nature and is not intended to provide specific legal or other advice.


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