Ord 42-11ORDINANCE NO. 42-11
AN ORDINANCE OF THE CITY COMMISSION OF THE
CITY OF DELRAY BEACH, FLORIDA, AMENDING
CHAPTER 33, "POLICE AND FIRE - RESCUE
DEPARTMENTS ", SECTION,. 33.61, "MEMBERSHIP;
CONDITIONS OF ELIGIBILITY; APPLICATION ",
SUBSECTION (B), "APPLICATION ", TO MODIFY
MEMBER CONTRIBUTIONS; SECTION, 33.64,
"CONTRIBUTIONS ", SUBSECTION (A), "MEMBER
CONTRIBUTIONS ", TO MODIFY MEMBER
CONTRIBUTIONS FOR POLICE OFFICERS; PROVIDING A
SAVING CLAUSE, A GENERAL REPEALER CLAUSE,
AND AN EFFECTIVE DATE.
BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY OF DELRAY
BEACH, FLORIDA, AS FOLLOWS:
Section 1. That Chapter 33, "Police and Fire - Rescue Departments ", Section 33.61,
Membership; Conditions of Eligibility; Application ", Subsection (B), "Application ", of the
Code of Ordinances of the City of Delray Beach is hereby amended to read as follows:
Sec. 33.61. - MEMBERSHIP; CONDITIONS OF ELIGIBILITY,
(B) Application. Each eligible employee shall complete an application form covering the
following points, as well as any other points or items as may be prescribed by the Board.
(1) The, employee's acceptance of the terms and conditions of the retirement
system, including an initialing of any declaration of ineligibility for
disability benefits;
(2) The employee's designation of a beneficiary; and
(3) Authorization of a member contribution in the amount specified in section
33.64(A), and section 33.62(B)(3) if applicable by—seven Ha thii4 � three
JV Y VL
as
:.,mdr-edths (7.33) pe-F payroll deduction payable to the system—,eetwe
Oe4eber-1, 1489.
Section 2. That Chapter 33, "Police and Fire - Rescue Departments ", Section 33.64,
"Contributions ", Subsection (A), "Member Contributions ", of the Code of Ordinances of the
City of Delray Beach is hereby amended to read as follows:
00038364 -1
Sec. 33.64. - CONTRIBUTIONS.
(A) Member Contributions.
(1) Effective the first pay period after September 1, 1999, members of the retirement
system shall make regular contributions to the Trust Fund at a rate equal to three (3)
percent of their respective annual earnings. Eligible employees, as a condition of
membership, shall agree in writing upon becoming a member to make the contribution
specified herein. These contributions shall be deducted from the earnings before the same
are paid, until the member has completed twenty -five (25) years of continuous service at
which time member contributions are no longer required.
(2) Effective the first pay period starting after May 3, 2011, members of the retirement
system employed as firefighters shall make regular contributions to the Trust Fund at a
rate equal to six (6) percent of their respective annual earnings. Eligible employees, as a
condition of membership, shall agree in writing upon becoming a member to make the
contribution . specified herein. These contributions shall be deducted from the earnings
before the same are paid, until the member has completed twenty -five (25) years of
continuous service at which time member contributions are no longer required.
(3) Effective the first pap y period starting after October 4 2011 members of the
retirement system employed as police officers shall make regular contributions to the
Trust Fund at a rate equal to six (6) percent of their respective annual earnings Eligible
employees, as a condition of membership shall agree in writing upon becoming a
member to make the contribution specified herein. These contributions shall be deducted
from the earnings before the same are paid until the member has completed twenty -five
(25) years of continuous service at which time member contributions are no longer
required.
fD(3) The City shall pick up the member contribution required by subsections (A)(1).,
and (A)(2) and WQ above. The contributions so picked up shall be treated as employer
contributions in determining tax treatment under the United States Internal Revenue
Code. The City shall pick up the member contributions from funds established and
available in the salaries account, which funds would have otherwise been designated as
member contributions and paid to the pension fund. Member contributions picked up by
the City pursuant to this subdivision shall be treated for purposes of making a refund of
member contributions, and for all other purposes of this and other laws, in the same
manner and to the same extent as member contributions made prior to the effective date
of this subdivision. The intent of this subdivision is to comply with Section 414(h)(2) of
the Internal Revenue Code.
Section 3. That should any section or provision of this ordinance or any portion
thereof, any paragraph, sentence, or word be declared by a court of competent jurisdiction to
be invalid, such decision shall not affect the validity of the remainder hereof as a whole or part
thereof other than the part declared to be invalid.
Fa
ORD NO. 42 -11
Section 4. That all ordinances or parts of ordinances in conflict herewith be, and the
same are hereby repealed.
Section 5. That this ordinance shall become effective immediately upon passage on
second and final reading.
\PASSED AND ADOPTED in regular session on second and final reading on this the
day of p , 2011.
ATTEST:
City Clerk ,
First Reading
Second Reading
D�2'164
MAYOR
W
ORD NO. 42-11
:BE::::.:F: , PaiiBeach. Rosf R81rfi &eachRast gain . (5fi1}; &2Q'= 4343;.:
Th �.
Coversheet
MEMORANDUM
TO: Mayor and City Commissioners
FROM: David T. Harden, City Manager
DATE: November 3, 2011
Page 1 of 1
SUBJECT: AGENDA ITEM 10.E. -REGULAR COMMISSION MEETING OF NOVEMBER 15, 2011
ORDINANCE NO. 42-11
ITEM BEFORE COMMISSION
This ordinance is before Commission for second reading to consider an amendment to Chapter 33,
"Police and Fire - Rescue Departments ", Section 33.64, "Contributions ", Subsection (A), "Member
Contributions ", to increase employee contributions by 3% for police officers in compliance with the
new terms of our Collective Bargaining Agreement.
BACKGROUND
At the first reading on November 1, 2011, the Commission passed Ordinance No. 42 -11.
RECOMMENDATION
Recommend approval of Ordinance No. 42 -11 on second and final reading.
http:// itwebapp/ Agendalntranet /Bluesheet.aspx ?ItemlD= 5099 &MeetingID =337 11/23/2011
ORDINANCE NO. 42-11
AN ORDINANCE OF THE CITY COMMISSION OF THE CITY
OF DELRAY BEACH, FLORIDA, AMENDING CHAPTER 33,
"POLICE AND FIRE - RESCUE DEPARTMENTS ", SECTION,.
33.61, "MEMBERSHIP; CONDITIONS OF ELIGIBILITY;
APPLICATION ", SUBSECTION (B), "APPLICATION ", TO
MODIFY MEMBER CONTRIBUTIONS; SECTION, 33.64,
"CONTRIBUTIONS ", SUBSECTION (A), "MEMBER
CONTRIBUTIONS ", TO MODIFY MEMBER
CONTRIBUTIONS FOR POLICE OFFICERS; PROVIDING A
SAVING CLAUSE, A GENERAL REPEALER CLAUSE, AND
AN EFFECTIVE DATE.
BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY OF DELRAY
BEACH, FLORIDA, AS FOLLOWS:
Section 1. That Chapter 33, "Police and Fire - Rescue Departments ", Section 33.61,
Membership; Conditions of Eligibility; Application ", Subsection (B), "Application ", of the Code
of Ordinances of the City of Delray Beach is hereby amended to read as follows:
Sec. 33.61. - MEMBERSHIP: CONDITIONS OF ELIGIBILITY, APPLICATION.
(B) Application. Each eligible employee shall complete an application form covering the
following points, as well as any other points or items as may be prescribed by the Board.
(1) The employee's acceptance of the terms and conditions of the retirement system,
including an initialing of any declaration of ineligibility for disability benefits;
(2) The employee's designation of a beneficiary; and
(3) Authorization of a member contribution in the amount specified in section
33.64(A), and section 33.62(B)(3) if a licable b
payroll deduction payable to the system, —ee4ve
9steler1 1-959.
Section 2. That Chapter 33, "Police and Fire - Rescue Departments ", Section 33.64,
"Contributions ", Subsection (A), "Member Contributions ", of the Code of Ordinances of the
City of Delray Beach is hereby amended to read as follows:
Sec. 33.64. - CONTRIBUTIONS.
(A) Member Contributions.
ORD. NO. 42-11
(1) Effective the first pay period after September 1, 1999, members of the retirement
system shall make regular contributions to the Trust Fund at a rate equal to three (3) percent
of their respective annual earnings. Eligible employees, as a condition of membership, shall
agree in writing upon becoming a member to make the contribution specified herein. These
contributions shall be deducted from the earnings before the same are paid, until the
member has completed twenty -five (25) years of continuous service at which time member
contributions are no longer required.
(2) Effective the first pay period starting after May 3, 2011, members of the retirement
system employed as firefighters shall make regular contributions to the Trust Fund at a rate
equal to six (6) percent of their respective annual earnings. Eligible employees, as a
condition of membership, shall agree in writing upon becoming a member to make the
contribution specified herein. These contributions shall be deducted from the earnings
before the same are paid, until the member has completed twenty -five (25) years of
continuous service at which time member contributions are no longer required.
(3) Effective the first pay period starting after October 4, 2011, members of the retirement
system employed as police officers shall make regular contributions to the Trust Fund at a
rate equal to six (6) percent of their respective annual earnings. Eligible employees, as a
condition of membership, shall agree in writing upon becoming a member to make the
contribution specified herein. These contributions shall be deducted from the earnings
before the same are paid, until the member has completed twenty -five (25) years of
continuous service at which time member contributions are no longer required.
Jj)(3) The City shall pick up the member contribution required by subsections (A)(1)2
and (A)(2) and (A)(3) above. The contributions so picked up shall be treated as employer
contributions in determining tax treatment under the United States Internal Revenue Code.
The City shall pick up the member contributions from funds established and available in the
salaries account, which funds would have otherwise been designated as member
contributions and paid to the pension fund. Member contributions picked up by the City
pursuant to this subdivision shall be treated for purposes of making a refund of member
contributions, and for all other purposes of this and other laws, in the same manner and to
the same extent as member contributions made prior to the effective date of this
subdivision. The intent of this subdivision is to comply with Section 414(h)(2) of the
Internal Revenue Code.
Section 3. That should any section or provision of this ordinance or any portion thereof,
any paragraph, sentence, or word be declared by a court of competent jurisdiction to be invalid,
such decision shall not affect the validity of the remainder hereof as a whole or part thereof
other than the part declared to be invalid.
Section 4. That all ordinances or parts of ordinances in conflict herewith be, and the
same are hereby repealed.
2 ORD. NO. 42-11
Section 5. That this ordinance shall become effective immediately upon passage on
second and final reading.
PASSED AND ADOPTED in regular session on second and final reading on this the
day of , 2011.
MAYOR
ATTEST:
City Clerk
First Reading
Second Reading
3 ORD. NO. 42-11
Coversheet
MEMORANDUM
TO: Mayor and City Commissioners
FROM: R. Brian Shutt, City Attorney
DATE: October 28, 2011
Page 1 of 1
SUBJECT: AGENDA ITEM 12.D. - REGULAR COMMISSION MEETING OF NOVEMBER 1. 2011
ORDINANCE NO. 42-11
ITEM BEFORE COMMISSION
The item before the City Commission is Ordinance No. 42 -11 which modifies the pension contribution
amount of police officer.
BACKGROUND
This ordinance implements the pension changes for police officers contained in the recently ratified
collective bargaining agreements between the City and the PBA for the officers, sergeants and
lieutenants. The ordinance provides for an increase in member contribution from 3% to 6% of earnings
and removes a reference to a previous member contribution amount.
RECOMMENDATION
The City Attorney recommends approval of Ordinance No. 42 -11.
http:// itwebapp/ AgendaIntranet /Bluesheet.aspx ?ItemlD= 5087 &MeetinglD =335 11/3/2011
CITY OF DELRAY BEACH
POLICE OFFICERS' AND FIREFIGHTERS' RETIREMENT PLAN
ACTUARIAL IMPACT STATEMENT
November 9, 2011
(Page 1)
Attached hereto is a comparison of the impact on the Total Required Contribution (per
Chapter 112, Florida Statutes), and the Required City Contributions, resulting from the
implementation of the following change:
Effective the first pay period after October 4, 2011, Police Officers will
contribute 6.0% of their respective annual earnings. (The Police Officers
contributing to the Enhanced Multiplier will have their Member Contributions
increased from 6.0% to 9.0 %.)
The cost impact, determined as of October 1, 2010, as applicable to the plan year
ending September 30, 2011 and the City's fiscal year ending September 30, 2012, is as
follows:
Current Proposed
Total Required Contribution
% of Total Annual Payroll 53.5% 53.5%
Less Expected Member Cont.
% of Total Annual Payroll 7.6% 9.0%
Equals Required City & State
% of Total Annual Payroll
45.9%
44.5%
Applicable State Contribution
504,922
504,922
% of Total Annual Payroll
2.7%
2.7%
Balance From City
% of Total Annual Payroll
43.2%
41.8%
CITY OF DELRAY BEACH
POLICE OFFICERS' AND FIREFIGHTERS' RETIREMENT PLAN
ACTUARIAL IMPACT STATEMENT
November 9, 2011
(Page 2)
The changes presented herein are in compliance with Part VII, Chapter 112,
Florida Statutes and Section 14, Article X of the State Constitution.
Bradley 4inric hs, FSA, EA, MAAA
Enrolled Actuary #11 -6901
STATEMENT OF PLAN ADMINISTRATOR
The prepared information presented herein reflects the estimated cost of the
proposed improvement.
Chairman, Board of Trustees
Comparative Summary of Principal Valuation Results
A. Participant Data
Number Included
Actives
Service Retirees
DROP Retirees
Beneficiaries
Terminated Vested
Disability Retirees
Total
Total Annual Payroll
Payroll Under Assumed Ret. Age
Annual Rate of Payments to:
Service Retirees*
DROP Retirees
Beneficiaries
Terminated Vested
Disability Retirees
B. Assets
Actuarial Value
Market Value
C. Liabilities
Present Value of Benefits
Active Members
Retirement Benefits
Disability Benefits
Death Benefits
Vested Benefits
Refund of Contributions
Service Retirees
DROP Retirees
Beneficiaries
Terminated Vested
Disability Retirees
Excess State Monies Reserve
COLA Account Balance
Total
New Benefit Old Benefit
10/1/2010 .10/1/2010
256
256
135
135
24
24
10
10
4
4
25
25
454
454
$19,165,228
$19,165,228
18,716,071
18,716,071
6,546,027
6,546,027
1,632,628
1,632,628
119,288
119,288
27,491
27,491
750,726
750,726
121,589,339 121,589,339
107,336,211 107,336,211
117,077,346
117,077,346
2,627,458
2,626,989
1,063,505
1,063,378
1,139,646
1,116,360
657,801
580,715
77,535,802
77,535,802
20,649,460
20,649,460
1,075,941
1,075,941
237,948
237,948
8,189,161
8,189,161
1,749,245
1,749,245
4,675,481
4,675,481
236,678,794 236,577,826
Liabilities shown represent present value of future payments. Assets in item B.,
above, do not include accumulated DROP account balances.
C. Liabilities - (Continued)
Present Value of Future Salaries
Present Value of Future Member Cont.
Normal Cost (Entry Age Normal)
Retirement Benefits
Disability Benefits
Death Benefits
Vested Benefits
Refund of Contributions
Total Normal Cost
Present Value of Future Normal Costs
Actuarial Accrued Liability (Entry Age Normal)
Retirement Benefits*
Disability Benefits
Death Benefits
Vested Benefits
Refund of Contributions
Inactives plus State Reserve
Total Actuarial Accrued Liability
Unfunded Actuarial Accrued Liab (UAAL)
D. Actuarial Present Value of Accrued Benefits
Vested Accrued Benefits
Inactives
Actives
Member Contributions
Total
Non - vested Accrued Benefits
Total Present Value Accrued Benefits
Increase (Decrease) in Present Value of
Accrued Benefits Attributable to:
Plan Amendments
Assumption Changes
New Accrued Benefits
Benefits Paid
Interest
Other
Total:
New Benefit Old Benefit
10/11/2010 10/1/2010
155, 015, 067 155, 015, 067
13,951,356 11,708,983
4,343,729
192,598
84,471
78,520
115,565
4,814,883
4,343,729
192,542
84,442
76,454
105,281
4,802,448
39,691,387 39,615,919
80,765,641
1,011,060
360,284
580,070
157,314
114,113,038
196,987,407
80,765,641
1,010,922
360,269
573,442
138,595
114,113, 038
196,961,907
75,398,068 75,372,569
107, 688, 312
107, 688, 312
34,683,123
34,683,123
7,969,968
7,969,968
150, 341,403
150, 341,403
5,057,244 5,057,244
155, 398, 647 155, 398, 647
•
•
•
•
•
•
N
New Benefit Old Benefit
Valuation Date 10/11/2010 10/1/2010
Applicable to Fiscal Year Ending 9/30/2012 9/30/2012
E. Pension Cost
Normal Cost (with interest)
% of Total Annual Payroll*
26.7
26.7
Administrative Expense (with interest)
% of Total Annual Payroll*
1.2
1.2
Payment Required to Amortize
Unfunded Actuarial Accrued
Liability over 30 years
(as of 10/1 /10)
% of Total Annual Payroll*
25.6
25.6
Total Required Contribution
% of Total Annual Payroll*
53.5
53.5
Expected Member Contributions
% of Total Annual Payroll*
9.0
7.6
Expected City & State Contrib.
% of Total Annual Payroll* 44.5 45.9
* Contributions developed as of 10/1/10 are expressed as a percentage of projected
annual payroll at 10/1/11 of $18,716,071.
** Frozen per Chapters 175 and 185, Florida Statutes, as amended.
ACTUARIAL ASSUMPTIONS AND FUNDING METHODS
Mortality Rate
Interest Rate
Retirement Age
Disability Rate
Termination Rate
Salary Increases
Early Retirement
Cost -of- Living Adjustment
Administrative Expenses
Assumptions
RP 2000 Combined Healthy Mortality with
no projection.
8.1 % per year compounded annually,
net of investment related expenses (8.2%
used in 2009).
25% retire on normal retirement date; 10%
retire each of the next two years; 25% retire
in each of the third and fourth years follow-
ing normal retirement date; and 100% retire
the fifth year following normal retirement
date..
See table below. Table updated since 2006
based on experience study.
See table below. Tables updated since
2006 based on experience study.
6.25% per year until the assumed
Retirement Age. See table below.
No Early. Retirement is assumed.
1 % per year for those that retire after
10/1/1993.
Expenses paid out of the fund other than
investment - related expenses are assumed
to be equal to the average of actual ex-
penses over the two previous years.
Payroll Growth Up to 4.0% per year.
Current Salary
as a % of Salary
Aqe at Age 53
20 13.5%
30 24.8%
40 45.5%
50 83.4%
Funding Method
Entry Age Normal Actuarial Cost Method.
ACTUARIAL ASSUMPTIONS AND FUNDING METHODS
Assumptions
Firefighters -
Police Officers -
% Terminating
% Terminating
% Becoming Disabled
Age
During the Year
During the Year
During the Year
20
8.0%
12.0%
0.07%
30
6.0
10.0
0.09
40
0.0
2.0
0.15
50
0.0
0.0
0.50
Current Salary
as a % of Salary
Aqe at Age 53
20 13.5%
30 24.8%
40 45.5%
50 83.4%
Funding Method
Entry Age Normal Actuarial Cost Method.
Vesting (Termination)
Less than 10 years
If five or more years of service, a $5,000 lump
sum, plus a monthly benefit to the spouse of
65% of the accrued pension as of the date of
death subject to a minimum of 20% of AFC,
plus, to the eligible children, a monthly benefit
determined in the same manner as the chil-
dren's service incurred death benefit. The total
monthly benefit is subject to a maximum of 50%
of AFC and 35% after death or remarriage of
the spouse.
Refund of Member Contributions.
10 or more years Either the accrued benefit payable at Normal
Retirement Date, provided contributions are not
withdrawn, or a refund of member contributions.
Board of Trustees The Board consists of the Mayor, the Fire Chief, the
Police Chief, two City residents appointed by the City
Commission, two Members of the Fire Department
elected by the Membership and two Members of the
Police Department elected by the Membership.
Deferred Retirement Option Plan
Eligibility Satisfaction of Normal Retirement requirements.
Participation Not to exceed 60 months.
Rate of Return Net rate of return on retirement fund assets dur-
ing the period the employee participates in the
DROP.
Form of Distribution Cash lump sum (options available) at termination
of employment.
Cost -of- Living Adjustment An annual increase equal to 1 % applies for
those who retire after October 1, 1993 com-
mencing on the 25th anniversary of the retiree's
hire date. Additional increases are available
when the revenue under Chapters 175 and 185
exceeds $504,922.
Contributions
Employee Police Officers: 3.0% of Salary
Firefighters: 6.0% of Salary
Members electing the Enhanced Multiplier
contribute an additional 3.0% of Salary.
Premium Tax Premium tax refunds.
City Remaining amount necessary for payment of
Normal (current year's) Cost and amortization
of the accrued past service liability over 30
years.
Disability Benefit
Eligibility Total and permanent as determined by
the Board of Trustees. Ten years of service
required for non - service connected disability.
Benefit Amount Police Officers: Accrued benefit, but not less
than 60% of AFC for service connected disabili-
ties. For non - service connected disabilities, a
benefit of 2% of AFC times years of service with
a minimum of 25% of AFC.
Firefighters: Same as above, except the mini-
mum is 61 % of AFC.
Pre - Retirement Death Benefit
Service Incurred 50% of AFC to the spouse, plus 5% to each
unmarried child under age 18 (age 22 if full -time
student), subject to an overall maximum of 60%
of AFC.
Non - Service Incurred A $2,500 lump sum if less than one year of ser-
vice. A $5,000 lump sum if more than one year
of service but less than five.
Original Effective Date
Latest Amendment Date
SUMMARY OF CURRENT PLAN
(Through Ordinance No. 15 -11)
April 22, 1974
May 3, 2011
Credited Service Years and fractional parts of years of service as
a sworn Police Officer or a regular or volunteer
Firefighter employed by the City.
Salary Basic compensation, excluding commissions,
overtime and bonuses. Lump sum payment of
unused leave is also excluded.
Average Final Compensation (AFC)
Normal Retirement
One twelfth of the average of the 3 highest
years of Salary.
Date The earlier of: 1) age 55 and 10 years of
Credited Service, or 2) 20 years of Credited
Service, regardless of age.
Benefit If less than 20 years of service, 2.5% of AFC
times years of service. With 20 or more years of
service, 3.5% of AFC times years of service,
with a maximum benefit of 87.5 %.
Form of Benefit For married retirees, an annuity payable for the
life of the Member; upon the death of the mem-
ber, 100% of the Member's benefit payable to
the spouse for one year and 60% payable
thereafter until death or remarriage. For unmar-
ried retirees, the normal form is a 10 Year Cer-
tain and Life Annuity.
Early Retirement
Date Age 50 and 10 years of Credited Service.
Benefit Accrued benefit, reduced 3.0% for each year
prior to Normal Retirement Date.