OTTAWA POLICE SERVICE SERVICE DE POLICE D'OTTAWA

May 22, 2003

Yvonne Mongeon

Director, Compensation Benefits & Payroll

City of Ottawa

Dear Yvonne,

Re: OMERS Type III Surplus

I've been working with Christine St. Jean, along with representatives of the Ottawa Police Association, the Ottawa Police Senior Officers' Association, and the Ottawa Professional Firefighters Association to gain access to over $9.8 million in OMERS Type III surplus funds.

We have reached an agreement, therefore attached are the following documents for signature on behalf of the City:

· Memorandum of Agreement;

· Ottawa Option Election Form;

· Gloucester Option Election Form; and

· Nepean Option Election Form.

For your information, I've also attached a spreadsheet that provides an estimate of the surplus funds as of March 31, 2003. Prior to her current absence, Christine St. Jean advised me that all of the attached documentation was satisfactory from the City's perspective. I also understood that she was working with Brian McCuan, Kevin Gardner and' Carol Armstrong on bringing together the account to which the non-remitted employer pension contributions will be deposited.

While the Ottawa Police Association (OP A) has signed the three Option Election Forms, they have not yet signed the Memorandum of Agreement. The OPA is taking a lot of heat from its members for not having accessed the surplus in 1998 before the contribution holiday started, therefore they want to be the last to sign so that they can "control their own destiny" and look after getting the documents to OMERS as expeditiously as possible.

...2

Once all four documents have been signed by the City representative, please contact me at 236-1222 ext. 2015 and I will personally pick up the original signed copies and deliver them to the OPA.

Sincerely,

Paul Mulligan

c.c. Christine Roy, Director of Human Resources

Att: (5)

.

MEMORANDUM OF AGREEMENT

Between:

THE OTTAWA POLICE SERVICES BOARD;

and

THE CORPORATION OF THE CITY OF OTTAWA;

and

THE OTTAWA POLICE ASSOCIATION;

and

THE OTTAWA POLICE SENIOR OFFICERS' ASSOCIATION;

and

THE OTTAWA PROFESSIONAL FIREFIGHTERS ASSOCIATION

RE: OMERS TYPE III SURPLUS

PREFACE

WHEREAS prior to amalgamation in 1995, a surplus developed in the OMERS Type III Supplementary Accounts of the former Cities of Ottawa, Nepean and Gloucester which OMERS advised totaled $9,832,823 as at March 31, 2003, broken down as follows:

· former City of Ottawa: $8,668,224

· former City of Nepean: $ 787,822

· former City of Gloucester: $ 376,777

WHEREAS the signatories hereto are desirous of obtaining a payout of that surplus and dividing it amongst them as specified in Section 1 below;

WHEREAS OMERS will not provide a direct payout of the surplus, and the surplus can only be accessed by electing at least one of five options identified by OMERS;

WHEREAS the Ottawa Police Services Board has separate agreements with the Ottawa Police Association and with the Ottawa Police Senior Officers' Association providing that any OMERS Type III surplus monies received would be distributed as follows:

i) 50% to the Ottawa Police Services Board; and

ii) 50% to the employee members of the signatory Association to be paid to that Association for distribution to its members, less any proportionate payment owing to the other Association under a similar agreement;

WHEREAS those agreements provide that all funds so received by the Ottawa Police Services Board shall be utilized by the Board for matters relating to policing;

Draft Agreement - OMERS Type III Surplus 07-05-2003 Page 1 of 4

WHEREAS the Corporation of the City of Ottawa has an agreement with the Ottawa Professional Firefighters Association providing that any OMERS Type III surplus monies received would be distributed as follows:

i) 50% to the Corporation of the City of Ottawa; and

ii) 50% to the employee members of the signatory Association to be paid to the Association for distribution to its members;

WHEREAS that agreement provides that all funds so received by the Corporation of the City of Ottawa shall be utilized by the City for matters relating to the Ottawa Fire Service;

WHEREAS the Ottawa Police Services Board is the employer of members of the Ottawa Police Association and the Ottawa Police Senior Officers' Association, and the Corporation of the City of Ottawa is the employer of members of the Ottawa Professional Firefighters Association;

AND WHEREAS the Corporation of the City of Ottawa administers the OMERS pension plan on behalf of the Ottawa Police Services Board;

By this Memorandum of Agreement, the parties covenant and agree as follows:

TERMS & CONDITIONS

1) Distribution of Surplus Funds

(a) In that 84.32% of the surplus funds available from the former City of Ottawa Type III Supplementary Account are for Police and 15.68% are for Fire, and in that 100% of the surplus funds available from the former Cities of Nepean and Gloucester Type III Supplementary Accounts are for Police, it is agreed that the total surplus funds shall be distributed as follows:

· 42.16% of the former City of Ottawa surplus and 50.00% of the total of the former Cities of Nepean and Gloucester surpluses, to the Ottawa Police Services Board;

· 42.16% of the former City of Ottawa surplus and 50.00% of the total of the former Cities of Nepean and Gloucester surpluses, to the Ottawa Police Association and the Ottawa Police Senior Officers' Association, to be shared proportionately between the two Associations based on their mutual agreement;

· 7.84% of the former City of Ottawa surplus to the Corporation of the City of Ottawa; and

· 7.84% of the former City of Ottawa surplus to the Ottawa Professional Firefighters Association.

Draft Agreement - OMERS Type III Surplus 07-05-2003 Page 2 of 4

(b) The parties agree that the surplus funds will be distributed to the parties based on the percentages specified in 1 (a) above, and not the dollar amounts as the dollar amounts noted in the preface were as of a specific date (i.e. March 31, 2003) and the parties recognize that the dollar amounts will fluctuate based on investment gains or losses while the surplus is with OMERS, and that OMERS will advise of the exact amount of the surplus funds.

2) Option Election Forms

Option Election Forms covering surplus funds available from the Type III Supplementary Accounts of the former Cities of Ottawa, Gloucester and Nepean will be forwarded to OMERS with Option #3 (Offset to Employer Basic Plan Contributions) selected on each form. The Option Election Forms are attached as Appendices 1,2 & 3.

Signing officers representing the parties will approve Option Election Forms on the following basis:

a) The Option Election Form for the former City of Ottawa will be signed by:

· Ottawa Police Services Board (as the employer of Police employees);

· Corporation of the City of Ottawa (as the employer of Fire employees, and as the administrator of the OMERS pension plan on behalf of the Ottawa Police Services Board);

· Ottawa Police Association;

· Ottawa Police Senior Officers' Association; and

· Ottawa Professional Firefighters Association.

b) The Option Election Form for the former City of Nepean will be signed by:

· Ottawa Police Services Board (as the employer of Police employees);

· Corporation of the City of Ottawa (as the administrator of the OMERS pension plan on behalf of the Ottawa Police Services Board); and

· Ottawa Police Association;

· Ottawa Police Senior Officers' Association.

c) The Option Election Form for the former City of Gloucester will be signed by:

· Ottawa Police Services Board (as the employer of Police employees);

· Corporation of the City of Ottawa (as the administrator of the OMERS pension plan on behalf of the Ottawa Police Services Board); and

· Ottawa Police Association; and

· Ottawa Police Senior Officers' Association.

Draft Agreement - OMERS Type III Surplus 07-05-2003 Page 3 of 4

3) Method of Accessing and Payout of OMERS Surplus

a) Under Option #3, until the surplus with OMERS is exhausted, OMERS will apply the surplus funds to cover the cost of all employer basic plan contributions to the OMERS pension plan for all employees of the Ottawa Police Service and the City of Ottawa (that would otherwise be remitted monthly). The City of Ottawa will continue to collect all employer basic plan contributions that would normally be remitted to OMERS, but such money will be deposited into an interest bearing account established by the City of Ottawa until the surplus with OMERS is exhausted.

c) Unless otherwise agreed by all parties, the accumulated funds in the City of Ottawa account will be distributed to the parties on a monthly basis to an account authorized by each respective party, based on the percentages specified in 1 (a) above.

________________________________________________

for the OTAWA POLICE ASSOCIATION

OMERS

Plan for the Future

Option Election Form

Type III Supplementary Account- Funds Available for Use

Name of Employer: City of Ottawa

Group Number: . 429000 Agreement Number: 084

Employee Group Covered: Police Association / Senior Officers Association / Fire Association

Funds Available for Use: $8,668,224.02 as at March 31,2003

Please indicate your election by checking the appropriate box (es). Please specify the dollar value to be used for each option chosen. This election form must be acknowledged by OMERS before you exercise your option.

Options Specify Dollar

Value to be used

0 1. Use as an offset for: Type 1 Past Service Costs Optional Service Costs NRA Conversion Costs	$ $ ____________________ $
0 2. Use as an offset to member basic plan contributions	$
1 3. Use as an offset to employer basic plan contributions	$ 8,668,224.02
0 4. Leave in the Type III account (to pay for future permanent partial disability benefits)	$
0 5. Leave in the Type III account (in anticipation of possible OMERS supplementary benefits yet to be introduced)	$

Effective date of election: March 31, 2003

OMERS

Plan for the Future

Option Election Form

Type III Supplementary Account - Funds Available for Use

Name of Employer: City of Nepean

Group Number: 396000 Agreement Number: 58

Employee Group Covered: Police Association

Funds Available for Use: $787,821.72 as of March 31,2003

Please indicate your election by checking the appropriate box (es). Please specify the dollar value to be used for each option chosen. This election form must be acknowledged by OMERS before you exercise your option.

Options Specify Dollar

Value to be used

0 1. Use as an offset for: Type 1 Past Service Costs Optional Service Costs NRA Conversion Costs	$ $ ____________________ $
0 2. Use as an offset to member basic plan contributions	$
1 3. Use as an offset to employer basic plan contributions	$ 787,821.72
0 4. Leave in the Type III account (to pay for future permanent partial disability benefits)	$
0 5. Leave in the Type III account (in anticipation of possible OMERS supplementary benefits yet to be introduced)	$

Effective date of election: March 31, 2003

OMERS

Plan for the Future

Option Election Form

Type III Supplementary Account - Funds Available for Use

Name of Employer: City of Gloucester

Group Number: 226500 Agreement Number: 68

Employee Group Covered: Police

Funds Available for Use: $376,776.79 as of March 31,2003

Please indicate your election by checking the appropriate box (es). Please specify the dollar value to be used for each option chosen. This election form must be acknowledged by OMERS before you exercise your option.

Options Specify Dollar

Value to be used

0 1. Use as an offset for: Type 1 Past Service Costs Optional Service Costs NRA Conversion Costs	$ $ ____________________ $
0 2. Use as an offset to member basic plan contributions	$
1 3. Use as an offset to employer basic plan contributions	$ 376,776.79
0 4. Leave in the Type III account (to pay for future permanent partial disability benefits)	$
0 5. Leave in the Type III account (in anticipation of possible OMERS supplementary benefits yet to be introduced)	$

Effective date of election: March 31, 2003

LETTER OF UNDERSTANDING #15

OMERS TYPE III SURPLUS

WHEREAS members of the former Ottawa Professional Fire Fighters Association employed in the former City of Ottawa (pre-amalgamation) participated in the OMERS Type III plan;

WHEREAS a surplus developed from that OMERS Type III plan account;

AND WHEREAS the signatories hereto are desirous of obtaining a payout of that surplus and dividing it equitably between them;

By this Letter of Understanding, the parties covenant and agree that application will be made to OMERS for a payout of the Type III surplus and any monies so received shall be distributed as follows:

i) Fifty percent (50%) to the Corporation of the City of Ottawa.

ii) Fifty percent (50%) to the Employee members of the signatory Association to be paid to the Association for distribution to its members.

All funds so received by the Corporation of the City of Ottawa shall be utilized by the City for matters relating to the Ottawa Fire Service.

For: For :

The City of Ottawa Ottawa Professional Fire Fighters’ Association

________________________________ ___________________________________

President

________________________________ ___________________________________

Executive Vice-President

________________________________ ___________________________________

Secretary

Date: _________________________ 2003, in the City of Ottawa.

OMERS Type III Funds Available - Ottawa only (includes Police & Fire)
	Ottawa	Ottawa	Ottawa	Ottawa	Ottawa
	Police	Police	Fire	Fire	Total
Date	$ Surplus	% of $ Surplus	$ Surplus	% of $ Surplus	$ Surplus
30-Nov-91	$2,694,972.79	84.32%	$500,965.33	15.68%	$3,195,938.12
31-Mar-93	$2,913,584.26	84.32%	$541,617.94	15.68%	$3,455,202.20
31-Dec-02	$7,337,341.05	84.32%	$1,363,967.95	15.68%	$8,701,309.00
31-Mar-03	$7,309,046.49	84.32%	$1,359,177.53	15.68%	$8,668,224.02
Note: 1991 & 1993 figures are based on a May 21, 1992 letter signed by the City of Ottawa's Commissioner of Corporate Services.
Note: Dec 31, 2002 figures are based on a Jan. 13, 2003 email from Debby Preston, OMERS's Mgr Pension Policy.
Note: March 31, 2003 figures are based on an Option Election Form drafted by OMERS.
OMERS Type III Funds Available - Ottawa, Nepean & Gloucester (includes Police & Fire) - as at March 31, 2003
	Total Available	Police Only			Fire Only
	$ Surplus	Total Police	Police Board	OPA/SOA	Total Fire	City of Ottawa	Fire Assoc
Former Employer	at Mar 31, 2003	$ Surplus	$ Portion	$ Portion	$ Surplus	$ Portion	$ Portion
Ottawa (84.32% Police/15.68% Fire)	$8,668,224.02	$7,309,046.49	$3,654,523.25	$3,654,523.25	$1,359,177.53	$679,588.76	$679,588.76
Nepean (100% Police)	$787,821.72	$787,821.72	$393,910.86	$393,910.86
Gloucester (100% Police)	$376,776.79	$376,776.79	$188,388.40	$188,388.40
Total	$9,832,822.53	$8,473,645.00	$4,236,822.50	$4,236,822.50	$1,359,177.53	$679,588.76	$679,588.76
Note: These figures do not account for accumulated interest (or investment losses) on surplus funds that may occur after March 31, 2003.