01-17-2013 City Council Special Meeting Packet
City of Grand Island
Thursday, January 17, 2013
Special Meeting Packet
City Council:
Linna Dee Donaldson
Scott Dugan
John Gericke
Peg Gilbert
Chuck Haase
Julie Hehnke
Vaughn Minton
Mitchell Nickerson
Bob Niemann
Mike Paulick
Mayor:
Jay Vavricek
City Administrator:
Mary Lou Brown
City Clerk:
RaNae Edwards
7:00 PM
Council Chambers - City Hall
100 East 1st Street
Grand Island Special Meeting - 1/17/2013 Page 1 / 17
City of Grand Island Thursday, January 17, 2013
Call to Order
This is an open meeting of the Grand Island City Council. The City of Grand Island abides by the Open
Meetings Act in conducting business. A copy of the Open Meetings Act is displayed in the back of this room
as required by state law.
The City Council may vote to go into Closed Session on any agenda item as allowed by state law.
Invocation
Pledge of Allegiance
Roll Call
A - SUBMITTAL OF REQUESTS FOR FUTURE ITEMS
Individuals who have appropriate items for City Council consideration should complete the Request for
Future Agenda Items form located at the Information Booth. If the issue can be handled administratively
without Council action, notification will be provided. If the item is scheduled for a meeting or study
session, notification of the date will be given.
B - RESERVE TIME TO SPEAK ON AGENDA ITEMS
This is an opportunity for individuals wishing to provide input on any of tonight's agenda items to reserve
time to speak. Please come forward, state your name and address, and the Agenda topic on which you will
be speaking.
Grand Island Special Meeting - 1/17/2013 Page 2 / 17
City of Grand Island
Thursday, January 17, 2013
Special Meeting
Item G1
Approving Appointments to the Police Pension Committee
The Mayor has submitted the appointment of Jimmy Olson and the re-appointments of Michael Nelson,
Danny Dubbs, and Kelly Mossman to the Police Pension Committee. These appointments would become
effective immediately upon approval by the City Council and would expire on December 31, 2016.
The Mayor is also recommending the appointment of Finance Director Jaye Monter and
Councilmember Chuck Haase to the Police Pension Committee to become effective immediately.
Staff Contact: Mayor Vavricek
Grand Island Special Meeting - 1/17/2013 Page 3 / 17
City of Grand Island
Thursday, January 17, 2013
Special Meeting
Item G2
Approving Appointments to the Fire Pension Committee
The Mayor has submitted the appointment of Phil Thomas and the re-appointments of Tom Cox, Scott
Kuehl, and Todd Morgan to the Fire Pension Committee. These appointments would become effective
immediately upon approval by the City Council and would expire on December 31, 2016.
The Mayor is also recommending the appointments of Finance Director Jaye Monter and
Councilmember Chuck Haase to the Police Pension Committee to become effective immediately.
Staff Contact: Mayor Vavricek
Grand Island Special Meeting - 1/17/2013 Page 4 / 17
City of Grand Island
Thursday, January 17, 2013
Special Meeting
Item I1
#2013-16 (A) & #2013-16 (B) – Pre-84 Police Retirees – Remedy
Overpayment of Past Police Retirees
Staff Contact: Robert J. Sivick, City Attorney
Grand Island Special Meeting - 1/17/2013 Page 5 / 17
Council Agenda Memo
From:Robert J. Sivick, City Attorney
Meeting:January 17, 2013
Subject:Remedy for Past Overpayment of Police Retirement
Benefits and Calculation of Police Retirement Benefits
Item #’s:I-1 and I-2
Presenter(s): Robert J. Sivick, City Attorney
Background
In 1983 the Nebraska Legislature passed LB237 which contained the Police Officers
Retirement Act (Act), codified in Article 10(a) of Chapter 16, §§16-1001 - 1019 of the
Nebraska Revised Statutes. The Act and the resulting statutes addressed issues regarding
pensions for police officers employed by First Class Cities. Amongst those issues were:
1. §16-1007(1) which states in part, “the retiring police officer may elect to receive at his
or her retirement date a pension benefit either in the form of a straight life annuity or any
optional form of annuity benefit established by the retirement committee….”
2. §16-1007(2)(b) which states in part, “[i]f the minimum pension benefit is paid in a
form other than a straight life annuity, such benefit shall be the actuarial equivalent of the
straight life annuity that would otherwise be paid to the officer…”
3. §16-1007(2)(c) which states in part, “[i]f the police officer chooses the lump-sum
payment option, the officer can request that the actuarial equivalent be equal to the
average of the cost of three annuity contracts purchased on the open market.”
4. §16-1014 which states in part, “A retirement committee shall be established to
supervise the general operation of the retirement system established pursuant to the
Police Officers Retirement Act. The governing body of the city shall continue to be
responsible for the general administration of such retirement system unless specific
functions or all functions with regard to the administration of the retirement system are
delegated, by ordinance, to the retirement committee.”
The City of Grand Island (City) has a committee known as the Police Pension Committee
(Committee) in accordance with §16-1014. Prior to 2005 the Committee calculated
Grand Island Special Meeting - 1/17/2013 Page 6 / 17
police retirement benefits on a straight life annuity basis. Beginning in 2005 the
Committee began calculating benefits on a joint life annuity basis which resulted in a
greater monetary contribution from the City to fund such benefits.
A search of City records indicates the Grand Island City Council (Council) as the
governing body of the City never delegated any authority pursuant to §16-1014 to the
Police Pension Committee regarding the calculation of benefits or took official action
changing the straight life annuity calculation practice existing prior to 2005.
Accordingly, between 2005 and the present, any calculation of police retirement benefits
on a joint life annuity basis were incorrect and illegal as they were done without the
knowledge and consent of the Council, the authority to set or change this policy was not
delegated to the Committee by ordinance as required by §16-1014, and the Act required
the calculation of police retirement benefits be conducted on a straight life annuity basis.
Because Nebraska law generally limits suits to not more than four years after the event
that gave rise to the cause of action, the City is barred from pursuing reimbursement of
excess pension benefits resulting from an incorrect calculation of those benefits more
than four years ago. Presently, the City may pursue legal action against four Police
retirees, Rick Ressel, Dennis Osterman, Roger Philbeck, and Kerry Cole.
These issues were previously the subject of thorough discussion at Study Session,
regular, and Special meetings of the Council held on December 11 and 18, 2012 and
January 15, 2013.
Discussion
Tonight there are two action items on the agenda for Council consideration.
Item I-1 affords the Council two options for addressing the overpayment of pension
benefits to Messrs. Ressel, Osterman, Philbeck, and Cole. Resolution 2013-16(A) makes
the finding the above listed retirees received an overpayment of their pension benefits,
directs those benefits be recalculated, directs City staff demand reimbursement from the
retirees for the overpayment, and directs the City Legal Department to use all available
methods to insure the City receives reimbursement.
Resolution 2013-16(B) makes the finding the above listed retirees received an
overpayment of their pension benefits but unlike Resolution 2013-16(A), forgives that
overpayment. Resolution 2013-16(B) affords the Council the opportunity to avoid the
expense and uncertainty inherent in all litigation while not conceding the City’s policy
was ever to calculate police retirement benefits on a joint life annuity basis. It also
allows the City to resolve this issue immediately instead of engaging in litigation for
years.
Item I-2 addresses the calculation of police retirement benefits. Resolution 2013-17(A)
makes the finding the Council never authorized changing the calculation of police
retirement benefits from a straight to joint life annuity basis, any such benefits calculated
Grand Island Special Meeting - 1/17/2013 Page 7 / 17
on a joint life annuity basis were incorrect and illegal, and all pending and future police
retirement benefits shall be calculated on a straight life annuity basis.
Resolution 2013-17(B) allows the Council to direct all pending and future police
retirement benefits be calculated on a joint life annuity basis.
Alternatives
It appears the Council has the following alternatives concerning the issue at hand. The
Council may:
1.Move to approve
2.Refer the issue to a Committee
3.Postpone the issue to future date
4.Take no action on the issue
Recommendation
The City Administration has no recommendation regarding Resolutions 2013-16(A),
2013-16(B), and 2013-17(A), and 2013-17(B).
Grand Island Special Meeting - 1/17/2013 Page 8 / 17
Approved as to Form ¤ ___________
January 17, 2013 ¤ City Attorney
R E S O L U T I O N 2013-16(A)
WHEREAS, Article 10 of Chapter 16 of the Nebraska Revised Statutes sets forth
the laws governing the pensions of police officers of First Class Cities; and
WHEREAS, Section 16-1007(1) of the Nebraska Revised Statutes requires the
City of Grand Island to provide pension benefits to retired police officers “in the form of a
straight life annuity or any optional form of annuity benefit established by the retirement
committee”; and
WHEREAS, Section 16-1007(2)(b) of the Nebraska Revised Statutes states in
reference to police pension benefits, “[i]f the minimum pension benefit is paid in a form other
than a straight life annuity, such benefit shall be the actuarial equivalent of the straight life
annuity that would otherwise be paid to the officer…”
WHEREAS, beginning in 2005 the Police Pension Committee stopped calculating
police pension benefits based on a straight life annuity and began calculating said benefits based
on a joint life annuity; and
WHEREAS, Section 16-1014 of the Nebraska Revised Statutes states in reference
to police pension benefits, “[t]he governing body of the city shall continue to be responsible for
the general administration of such retirement system unless specific functions or all functions
with regard to the administration of the retirement system are delegated, by ordinance, to the
retirement committee.”; and
WHEREAS, the Grand Island City Council as the governing body of the City of
Grand Island never approved the calculation of police retirement benefits based on a joint life
annuity nor has delegated that authority or function to the Police Pension Committee; and
WHEREAS, Nebraska law generally limits the filing of a suit to four years from
the event that gave rise to the cause of action;
WHEREAS, within the last four years the City has paid police pension benefits to
Rick Ressel, Dennis Osterman, Roger Philbeck, and Kerry Cole based on a joint life annuity;
and
WHEREAS, the issue of police and fire pension benefits was the subject of a
Study Session meeting of the Council on December 11, 2012, a regular meeting of the Council
on December 18, 2012, and Study Session and Special meetings of the Council on January 15,
2013 ; and
WHEREAS, the Council has determined Messrs. Ressel, Osterman, Philbeck, and
Cole were overpaid for their respective police pension benefits and such overpayments should be
corrected,
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL
Grand Island Special Meeting - 1/17/2013 Page 9 / 17
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OF THE CITY OF GRAND ISLAND, NEBRASKA,
That by January 31, 2013, City staff, the Police Pension Committee, and Messrs. Ressel,
Osterman, Philbeck, and Cole are directed to recalculate the lump sum pension benefits of said
retirees using a straight life annuity pursuant to the procedure set forth in Section 16-1007(2)(c)
of the Nebraska Revised Statutes.
That once said recalculations for the individual retirees listed above are completed, City staff is
to make formal written demands upon the above listed retirees for reimbursement of the
difference between each retiree’s pension benefits determined by a joint life annuity and benefits
determined by a straight life annuity.
That the City Legal Department is to use all available methods to insure the City receive
reimbursement from each of the above listed retirees for the overpayment of their pension
benefits.
Adopted by the City Council of the City of Grand Island, Nebraska, January 17, 2013.
_______________________________________
Jay Vavricek, Mayor
Attest:
_______________________________________
RaNae Edwards, City Clerk
Grand Island Special Meeting - 1/17/2013 Page 10 / 17
Approved as to Form ¤ ___________
January 17, 2013 ¤ City Attorney
R E S O L U T I O N 2013-16(B)
WHEREAS, Article 10 of Chapter 16 of the Nebraska Revised Statutes sets forth
the laws governing the pensions of police officers of First Class Cities; and
WHEREAS, Section 16-1007(1) of the Nebraska Revised Statutes requires the
City of Grand Island to provide pension benefits to retired police officers “in the form of a
straight life annuity or any optional form of annuity benefit established by the retirement
committee”; and
WHEREAS, Section 16-1007(2)(b) of the Nebraska Revised Statutes states in
reference to police pension benefits, “[i]f the minimum pension benefit is paid in a form other
than a straight life annuity, such benefit shall be the actuarial equivalent of the straight life
annuity that would otherwise be paid to the officer…”
WHEREAS, beginning in 2005 the Police Pension Committee stopped calculating
police pension benefits based on a straight life annuity and began calculating said benefits based
on a joint life annuity; and
WHEREAS, Section 16-1014 of the Nebraska Revised Statutes states in reference
to police pension benefits, “[t]he governing body of the city shall continue to be responsible for
the general administration of such retirement system unless specific functions or all functions
with regard to the administration of the retirement system are delegated, by ordinance, to the
retirement committee.”; and
WHEREAS, the Grand Island City Council as the governing body of the City of
Grand Island never approved the calculation of police retirement benefits based on a joint life
annuity nor has delegated that authority or function to the Police Pension Committee; and
WHEREAS, Nebraska law generally limits the filing of a suit to four years from
the event that gave rise to the cause of action;
WHEREAS, within the last four years the City has paid police pension benefits to
Rick Ressel, Dennis Osterman, Roger Philbeck, and Kerry Cole based on a joint life annuity;
and
WHEREAS, the issue of police and fire pension benefits was the subject of a
Study Session meeting of the Council on December 11, 2012, a regular meeting of the Council
on December 18, 2012, and Study Session and Special meetings of the Council on January 15,
2013 ; and
WHEREAS, the Council has determined Messrs. Ressel, Osterman, Philbeck, and
Cole were overpaid for their respective police pension benefits and such overpayments should be
addressed,
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL
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OF THE CITY OF GRAND ISLAND, NEBRASKA,
That the City Legal Department is directed to send individual letters to Messrs. Ressel,
Osterman, Philbeck, and Cole informing them their pension benefits were calculated incorrectly
which resulted in an overpayment of those benefits. The letters are to also state the City is
within its legal rights to seek reimbursement for the overpayment but will not and instead forgive
the overpayment due to the expense and uncertainty of litigation and the City’s desire to resolve
this matter immediately.
Adopted by the City Council of the City of Grand Island, Nebraska, January 17, 2013.
_______________________________________
Jay Vavricek, Mayor
Attest:
_______________________________________
RaNae Edwards, City Clerk
Grand Island Special Meeting - 1/17/2013 Page 12 / 17
City of Grand Island
Thursday, January 17, 2013
Special Meeting
Item I2
#2013-17(A) & #2013-17(B) – Pre-84 Police Retirees – Calculation
of Police Retiree Benefits
Staff Contact: Robert J. Sivick, City Attorney
Grand Island Special Meeting - 1/17/2013 Page 13 / 17
Approved as to Form ¤ ___________
January 17, 2013 ¤ City Attorney
R E S O L U T I O N 2013-17(A)
WHEREAS, Article 10 of Chapter 16 of the Nebraska Revised Statutes sets forth
the laws governing the pensions of police officers of First Class Cities; and
WHEREAS, Section 16-1007(1) of the Nebraska Revised Statutes requires the
City of Grand Island to provide pension benefits to retired police officers “in the form of a
straight life annuity or any optional form of annuity benefit established by the retirement
committee”; and
WHEREAS, Section 16-1007(2)(b) of the Nebraska Revised Statutes states in
reference to police pension benefits, “[i]f the minimum pension benefit is paid in a form other
than a straight life annuity, such benefit shall be the actuarial equivalent of the straight life
annuity that would otherwise be paid to the officer…”
WHEREAS, beginning in 2005 the Police Pension Committee stopped calculating
police pension benefits based on a straight life annuity and began calculating said benefits based
on a joint life annuity; and
WHEREAS, Section 16-1014 of the Nebraska Revised Statutes states in reference
to police pension benefits, “[t]he governing body of the city shall continue to be responsible for
the general administration of such retirement system unless specific functions or all functions
with regard to the administration of the retirement system are delegated, by ordinance, to the
retirement committee.”; and
WHEREAS, the Grand Island City Council as the governing body of the City of
Grand Island never approved the calculation of police retirement benefits based on a joint life
annuity nor has delegated that authority or function to the Police Pension Committee; and
WHEREAS, absent any official action on the part of the Council changing the
method of calculating police retirement benefits, those benefits were and are to be calculated on
a straight life annuity basis and any deviation from that standard was incorrect and illegal,
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL
OF THE CITY OF GRAND ISLAND, NEBRASKA,
That the Police Pension Committee and City staff are to calculate all pending and future police
retirement benefits on a straight life annuity basis unless directed otherwise by an official action
of the Grand Island City Council.
Adopted by the City Council of the City of Grand Island, Nebraska, January 17, 2013.
_______________________________________
Jay Vavricek, Mayor
Grand Island Special Meeting - 1/17/2013 Page 14 / 17
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Attest:
_______________________________________
RaNae Edwards, City Clerk
Grand Island Special Meeting - 1/17/2013 Page 15 / 17
Approved as to Form ¤ ___________
January 17, 2013 ¤ City Attorney
R E S O L U T I O N 2013-17(B)
WHEREAS, Article 10 of Chapter 16 of the Nebraska Revised Statutes sets forth
the laws governing the pensions of police officers of First Class Cities; and
WHEREAS, Section 16-1007(1) of the Nebraska Revised Statutes requires the
City of Grand Island to provide pension benefits to retired police officers “in the form of a
straight life annuity or any optional form of annuity benefit established by the retirement
committee”; and
WHEREAS, beginning in 2005 the Police Pension Committee stopped calculating
police pension benefits based on a straight life annuity and began calculating said benefits based
on a joint life annuity; and
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL
OF THE CITY OF GRAND ISLAND, NEBRASKA,
That the Police Pension Committee and City staff are to calculate all pending and future police
retirement benefits on a joint life annuity basis.
Adopted by the City Council of the City of Grand Island, Nebraska, January 17, 2013.
_______________________________________
Jay Vavricek, Mayor
Attest:
_______________________________________
RaNae Edwards, City Clerk
Grand Island Special Meeting - 1/17/2013 Page 16 / 17
City of Grand Island
Thursday, January 17, 2013
Special Meeting
Item X1
Strategy Session with Respect to Possible Litigation
The City Council may hold a closed or Executive Session as permitted by Neb. Rev. Stat. Sec. 84-1410.
Closed sessions may be held for, but shall not be limited to such reasons as:
1. Protection of the public interest.
2. Needless injury to the reputation of an individual.
3. Strategy sessions with respect to
a. collective bargaining,
b. real estate purchases,
c. pending litigation, or
d. imminent or threatened litigation.
4. Discussion regarding deployment of security personnel or devices.
5. For the Community Trust created under Sec. 81-1801.02, discussion regarding the amounts to be
paid to individuals who have suffered from a tragedy of violence or natural disaster.
Staff Contact: Robert Sivick
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