Ord 26-00ORDINANCE NO. 26-00
AN ORDINANCE OF THE CITY COMMISSION OF THE CITY OF
DELRAY BEACH, FLORIDA, AMENDING CHAPTER 33, "POLICE
AND FIRE DEPARTMENTS", SUBHEADING "PENSIONS", OF THE
CODE OF ORDINANCES OF THE CITY OF DELRAY BEACH,
FLORIDA, BY AMENDING SECTION 33.60, "DEFINITIONS",
REVISING THE DEFINITION OF AVERAGE MONTHLY EARNINGS;
AMENDING SECTION 33.61, "MEMBERSHIP; CONDITIONS OF
ELIGIBILITY; APPLICATION", PROVIDING FOR CHANGES IN
BENEFICIARIES BY RETIREES; AMENDING SECTION 33.62,
"BENEFIT AMOUNTS AND ELIGIBILITY", PROVIDING AN
ADDITIONAL NORMAL RETIREMENT DATE, PROVIDING FOR
EARLY RETIREMENT AND REVISING THE DISABILITY BENEFITS;
AMENDING SECTION 33.63, "OPTIONAL FORMS OF BENEFITS",
TO PROVIDE ADDITIONAL BENEFIT OPTIONS; AMENDING
SECTION 33.64, "CONTRIBUTIONS", TO PROVIDE FOR PAYMENT
OF CITY CONTRIBUTIONS IN QUARTERLY INSTALLMENTS;
AMENDING SECTION 33.65, "ADMINISTRATION", TO CLARIFY
THE COMPOSITION OF THE BOARD OF TRUSTEES; AMENDING
SECTION 33.66, "FINANCES AND FUND MANAGEMENT",
REVISING CERTAIN INVESTMENT POWERS OF THE BOARD OF
TRUSTEES, AND PROVIDING FOR THE EVALUATION OF MONEY
MANAGERS; CREATING A NEW SECTION 33.71, "SEPARATION
FROM EMPLOYMENT FOR MILITARY SERVICE"; PROVIDING A
VALIDITY CLAUSE; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, in 1999 the Florida Legislature enacted Chapter 99-1, Laws of
Florida, amending Chapters 175 and 185, Florida Statutes, to require that local ordinance pension
plans for police officers and firefighters meet certain minimum standards to be eligible for
continued receipt of insurance premium tax revenues; and
WHEREAS, Chapter 99-1 requires that premium taxes received in excess of the
1998 amount must be used to meet the minimum benefit requirements of Chapters 175 and 185,
and once the minimum benefits are satisfied all subsequent premium tax increases must be used
to provide "extra benefits" for police officers and firefighters; and
WHEREAS, in 1993 the City of Delray Beach, the Board of Trustees of the
Police and Firefighter Retirement Plan, and the unions representing City police officers and
firefighters entered into an agreement by which premium tax revenues received by the City in
excess of the amount received in 1993 were committed to be used to fund pension benefits for
police officers and firefighters that exceed the minimum benefits required by Chapter 99-1; and
WHEREAS, Article I, Section 10, of the Florida Constitution prohibits the
enforcement of a law that impairs the obligations of a contract; and
WHEREAS, requiring the City of Delray Beach to comply with the minimum
benefit provisions of Chapter 99-1 would effectively nullify provisions of the 1993 pension
agreement; and
WHEREAS, the City of Delray Beach intends to comply with certain provisions
of Chapter 99-1 to ensure the City's continued receipt of premium tax revenues for its police and
firefighter retirement plan, but the City does not waive its rights under the Florida Constitution to
enforce the provisions of the 1993 pension agreement.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF
THE CITY OF DELRAY BEACH, FLORIDA, AS FOLLOWS:
Section 1. That at Section 33.60, "Definitions", the definition of "average
monthly earnings" is amended to read as follows:
Section 33.60 DEFINITIONS.
For the purpose of this subchapter, the following definitions shall apply unless the
context clearly indicates or requires a different meaning.
"AVERAGE MONTHLY EARNINGS". One thirty-sixth of the arithmetical
average of earnings for the highest consecutive 36-month period preceding the actual retirement
or termination of a member; provided, however, the benefit derived shall not be less than the
benefit that would have been paid based on a definition of average monthly earnings of one
twenty-fourth of the arithmetical average for the highest consecutive 24-month period, as
calculated prior to August 17, 1999, or if greater, one sixtieth of the arithmetical average of the
highest 60 months of the last ten ',/ears of continuous service **'~ ,,cc~,~:.,~ ,~,,~ ^c,~,;~ ~,~: .....
Section 2. That Section 33.61, "Membership; Conditions of Eligibility;
Application", Subsection (C), "Change in designation of beneficiary", is amended to read as
follows:
2 Ord. No. 26-00
(C) Change in designation of beneficiary. A member, including a
member who has elected to participate in the Deferred Retirement Option Plan pursuant to
Section 33.685, shall designate the joint pensioner or beneficiary to receive the benefit, if any,
payable under the plan in the event of the member's death, on a form provided by the Board of
Trustees. The member may revoke or change the designation of a joint pensioner or beneficiary
at any time prior to the commencement of retirement income or benefits by submitting such
change in writing on a form provided by the Board of Trustees. A member, including a member
who retired prior to the effective date of this ordinance, may also change the designation of a
joint pensioner or beneficiary after the commencement of retirement income or benefits, subject
to approval by the Board of Trustees, and in accordance with the following:
(1) The member must pay the full cost of determining the
equivalent actuarial value of the benefit payable.
(2) The consent of a member's joint pensioner or beneficiary to
any change in such designation shall not be required.
(3) The amount of retirement income payable to the member
upon the designation of a new joint pensioner shall be acmarially redetermined, taking into
account the benefits already received by the member, and the age and sex of the former joint
pensioner, the new joint pensioner and the member.
(4) Each designation of a joint pensioner or beneficiary shall
'be made in writing on a form provided by the Board of Trustees.
(5) Upon a change in designation of joint pensioner or
beneficiary, the rights of all previously designated joint pensioner or beneficiaries to receive any
benefit under the system shall cease.
Section 3. That at Section 33.62, "Benefit Amounts and Eligibility", Subsection
(A) is amended, new Subsections (C) and (D) are created, Subsections (C), (D), (E), (F), (G) and
(H) are redesignated as Subsections (E), (F), (G), (H), (I) and (J), respectively, and Subsection
(E), paragraph (5) is amended to read as follows:
Section 33.62 BENEFIT AMOUNTS AND ELIGIBILITY.
(A) Normal retirement date. This term shall have the following meanings:
3 Ord. No. 26-00
(1) For employees who are eligible to become members of the system
as of its effective date, the normal retirement date shall be the date of their fifty-second birthday,
regardless of the number of years of continuous service.
(2) For employees who are members of the system and terminate
employment prior to October 1, 1989, the normal retirement date shall be the first day of the
month coincident with or subsequent to their fifty-second birthday and the completion of twenty
(20) years of continuous service.
(3) For employees who are members of the system and elect to retire
or terminate employment on or subsequent to October 1, 1989, the normal retirement date shall
be the first day of the month coincident with or subsequent to completion of twenty (20) years of
continuous service.
(4) For employees who are members of the system and retire or
terminate employment on or after December 31, 1999, the normal retirement date shall also be
the first day of the month coincident with or subsequent to age fifty-five and the completion of
ten (10) years of continuous service.
(B) Normal retirement benefit.
(1) Duration, survivor benefits. A member retiring on his normal
retirement date shall receive a monthly benefit which shall commence on his normal retirement
date and be continued thereafter during his lifetime. Upon his death the full retirement benefit
shall be continued to his spouse for one year and sixty percent (60%) of that amount continued
thereafter until the earlier of death or remarriage.
(2) Amount. Normal retirement benefits shall be in the amount of two
and one-half percent (2.5%) of average monthly earnings for each year of continuous service for
employees with more than ten (10) but less than twenty (20) years of continuous service.
Normal retirement benefits shall be in an amount of three percent (3%) of average monthly
earnings for each year of continuous service if an employee has attained twenty (20) or more
years of continuous service, subject to a maximum of seventy-five percent (75%) of average
monthly earnings. Provided, however, that in no event shall a member's total benefit be less
than two percent (2%) of average monthly earnings for each year of continuous service.
However, members as of the effective date shall receive at their normal retirement date (age 52
regardless of years of service) the greater of the benefit provided by the formula above or fifty
percent (50%) of average monthly earnings.
4 Ord. No. 26-00
(3) Upon becoming eligible for normal retirement, a member shall be
one hundred percent (100%) vested in his accrued benefit.
(C) Early retirement date.
On or after December 31, 1999, a member may retire on or after the early
retirement date, which shall be the first day of any month coincident with or next following the
attainment of age fifty (50) and the completion of ten (10) years of continuous service. Early
retirement is retirement from active employment with the City on or after the early retirement
date and prior to the normal retirement date.
(D) Early retirement benefit.
The amount of the early retirement benefit shall be determined in the same
manner as the normal retirement benefit, except that continuous service and average final
compensation shall be determined as of the early retirement date. The benefit payable shall be
reduced by three percent (3%) for each year by which the commencement of benefits precedes
the normal retirement date. The early retirement benefit provided in this subsection (D) shall
have no application to the early retirement incentive provided in Section 33.687.
Disability retirement provisions.
(5) Disability retirement benefits.
(a)
(b)
Eligibility. Each member shall be eligible for service
incurred disability benefits, regardless of length of
continuous service. Each member who completes ten (10)
years of continuous service prior to becoming disabled shall
be eligible for non-service incurred disability benefits.
Initial amount of service incurred disability benefit. The
greater of sixty percent (60%) of the member's average
monthly earnings in effect on the date of disability or the
member's accrued pension benefit.
(c)
Amount of non-service incurred disability benefit. Two
percent (2%) of average monthly earnings in effect on the
date of disability for each year of continuous service, ~
· --~-,---~"*~' ..... ~-----e~,; .... provided, however, ~e minim~ shall not
be less ~ twenty-five percent (25%) of average monthly
e~ngs.
5 Ord. No. 26-00
(d)
Terms of payments. Disability benefits shall commence on
or as of the first day of the month coincident with or next
following the date of disability, as established by the Board
of Trustees, and shall continue to be paid on the first day of
each subsequent month until the death or recovery of the
disability retiree. The same survivorship percentages which
apply to normal retirement benefits shall also apply to
disability retirement benefits.
(e)
Eligibility for other benefits. In the event that a member
applying for disability benefits is also eligible for either early
or normal retirement, the Board may, upon the request of the
member, pay the early or normal retirement benefit instead of
a disability retirement benefit.
[Redesignate subsections (F), (G) and (H) as subsections (H), (I) and (J),
respectively.]
as follows:
Section 4. That Section 33.63, "Optional Forms of Benefits", is amended to read
Section 33.63 OPTIONAL FORMS OF BENEFITS.
Each member entitled to a normal, early or disability retirement benefit shall have
the right at any time prior to his actual retirement to elect to have his benefit payable under any
one of the options hereinafter set forth in lieu of the benefits otherwise provided herein, and to
revoke any elections and make a new election at any time prior to actual retirement. The value
of optional benefits shall be actuarially equivalent to the value of benefits otherwise payable.
The member shall make an election by written request to the Board of Trustees, this request
being retained in the Board's files.
(A) Option 1. Joint and last survivor option. A retiring member may elect to
receive an actuarially adjusted retirement benefit during his lifetime and have such retirement
benefit (including 75%, 66.66% or 50% er a ~ez:.gnate~ 5act:.zn thereof) continued after his
death to and during the lifetime of tgs-spoase-~ a designated joint pensioner re!afire c?~er *A~n
his-spouse. The election of Option 1 shall be null and void if the designated joint pensioner
l~aefieia~ dies before the member's retirement, unless the member designates another ioint
pensioner in accordance with Section 33.61 (C).
6 Ord. No. 26-00
03) Option 2. Ten years certain and life thereafter. A retiring member may
elect to receive a retirement benefit with 120 monthly payments guaranteed. If, after retiring, the
member should die before the 120 monthly payments are made, payments are then continued to
his designated beneficiary until 120 payments in all have been made, at which time benefits
cease. After expiration of the 120 monthly payments guaranteed, should the retired member be
then alive, payments shall be continued during his remaining lifetime. Notwithstanding any
other provision of the plan to the contrary, this option (Option 2) shall be the normal form of
benefit for unmarried employees who retire from active service on or after December 31, 1999.
(C) Option 3. Other. In lieu of the other optional forms enumerated in this
section, retirement benefits may be paid in any form approved by the Board so long as actuarial
equivalence with the benefits otherwise payable is maintained.
Section 5. That Section 33.64, "Contributions", Subsection (C), is amended to
read as follows:
Section 33.64 CONTRIBUTIONS.
(C) City contributions. So long as this system is in effect, the City shall make
an annual contribution to the Trust Fund during the first quarter of the plan year or in quarterly
installments in an amount equal to the difference in each year as between the total of aggregate
member contributions for the year plus state contributions for the year and the total cost for the
year as shown by the most recent actuarial valuation and report for the system. The total cost for
any year shall be defined as the total of normal cost plus the additional amount sufficient to
amortize the unfunded accrued past service liability over a 40-year period commencing with the
effective date of this system.
Section 6. That Section 33.65, "Administration", Subsection (A), is amended to
read as follows:
Section 33.65 ADMINISTRATION.
(A) The general administration and responsibility for the proper operation of
the retirement system and for making effective the provisions of this subchapter are vested in a
Board of Trustees consisting of nine persons as follows:
(1) The Mayor.
(2)
hereinafter provided.
Two public members to be appointed by City Commission as
7 Ord. No. 26-00
(3) The Fire Chief or, in the event of the Fire Chief's termination of
participation in the system, a firefighter designated by the Fire Chieftds-desiga~.
(4) The Police Chief or, in the event of the Police Chief's termination
of participation in the system, a police officer designated by the Police Chief his--d~gae~.
(5) Two members of the Fire Department to be elected as hereinafter
provided.
(6) Two members of the Police Department to be elected as hereinafter
provided.
Section 7. That Section 33.66, "Finances and Fund Management", is amended to
read as follows:
Section 33.66 FINANCES AND FUND MANAGEMENT.
(A) As part of the system there is established the Trust Fund, into which shall
be deposited all of the contributions and assets whatsoever attributable to the system.
(B) The actual custody and supervision of the Fund (and assets thereof) shall
be vested in the Board of Trustees. Payments of benefits and disbursements from the Fund shall
be made by the disbursing agent on authorization from the Board.
(C) The Board may hire and appoint those persons, agents or entities
(including corporate fiduciaries) as in its discretion may be required or advisable to enable it to
perform custodial and investment duties hereunder. The Board may enter into agency,
investment advisory, and custodial agreements for the purpose of securing investment and
custodianship services for the system and Fund.
(D) (1) All funds and securities of the system may be commingled in the
Fund, provided that accurate records are maintained at all times reflecting the financial
composition of the Fund, including accurate current accounts and entries as regards the
following:
(a) Current amounts of accumulated contributions of members
on both an individual and aggregate account basis,
(b) Receipts and disbursements,
8 Ord. No. 26-00
(c) Benefit payments,
(d) Current amounts clearly reflecting all moneys, funds and
assets whatsoever attributable to contributions and deposits from the City,
(e)
All interest, dividends and gains (or losses) whatsoever,
and
(ir) Any other entries as may be properly required so as to
reflect a clear and complete financial report of the Fund.
(2) An annual report shall be made by the certified public accounting
firm performing the City's annual audit.
(E)
The Board of Trustees shall have the following investment powers and
authority:
(1) The Board of Trustees shall be vested with full legal title to the
Fund; subject however and in any event to the authority and power of the City Commission to
amend or terminate this Trust; provided that no amendment or Fund termination shall ever result
in the use of any assets of this Fund except for the payment of regular expenses and benefits
under this system. All contributions from time to time paid into the Fund, and the income
thereof, without distinction between principal and income, shall be held and administered by the
.Board or its agent in the Fund and the Board shall not be required to segregate or invest
separately any portion of the Fund.
(2) The Board of Trustees may invest and reinvest the assets of the
Trust Fund in bonds, stocks, or other evidences of indebtedness issued or guaranteed by a
corporation organized under the laws of the United States, any state, or organized territory of the
United States or the District of Columbia, or in foreign securities, in accordance with the
provisions of this section. ~
(3) The Board shall exercise its investment authority under this section
solely in the interest of plan members and beneficiaries, for the exclusive purpose of providing
benefits to members and their beneficiaries and defraying the reasonable expenses of
administering the plan. The Board shall exercise its investment authority with the care, skill,
prudence and diligence under the circumstances then prevailing that a prudent person in a like
capaciW and familiar with such matters would use in the conduct of an enterprise with like
character and like aims.
9 Ord. No. 26-00
(4) The Board shall adopt a written investment policy in accordance
with Section 112.661, Florida Statutes, incorporating the following requirements for specific
investments:
(a) Investments in U.S. stocks and bonds must be in Tlne
corporations that are is listed on any one or more of the recognized national stock exchanges or
on the National Market System of the NASDAQ Stock Market, and, in the case of bonds only,
holds a rating in one of the three highest classifications by a major rating service.
(b) The Board of Trustees shall not invest more than five
percent (5%) of its assets in the common or capital stock of any one issuing company, nor shall
the aggregate investment in common or capital stock in one company exceed five percent (5%)
of the outstanding common or capital stock of that company; nor shall the aggregate of the
Fund's investments in common or capital stock at cost exceed sixty percent (60%) of the Fund's
(c) The Board may invest and reinvest the assets of the Fund in
time or savings accounts of a national bank, a state bank insured by the Bank Insurance Fund, or
a savings, building, and loan association insured by the Savings Association Insurance Fund
which is administered by the Federal Deposit Insurance Corporation or a state or federal
chartered credit union whose share accounts are insured by the National Credit Union Share
. Insurance Fund.
(d) The Board may invest up to ten percent (10%) of Fund
assets, at cost, in foreign securities, and may also invest in bonds issued by the State of Israel.
(--3-) (5)The Board may retain in cash or unproductive of income an
amount of the Fund as it may deem advisable, having regard for the cash requirements of the
system.
(-4-) (6) Neither the Board nor any person or entity shall be liable for the
making, retention, or sale of any investment or reinvestment made as herein provided, nor for
any loss or diminishment of the Fund, except that due to his own negligence, willful misconduct,
or lack of good faith.
(-5-) (7) The Board may cause any investment in securities held by it to be
registered in or transferred into its name as trustee or into the name of the nominee as it may
direct, or it may retain them unregistered and in form permitting transferability, but the books
and records shall at all times show that all investments are part of the Fund.
10 Ord. No. 26-00
(49-(8) The Board is empowered, but is not required, to vote upon any
stocks, bonds or securities of any corporation, association or trust and to give general or specific
proxies or powers of attorney with or without power of substitution; to participate in mergers,
reorganizations, recapitalizations, consolidations and similar transactions with respect to those
securities; to deposit stock or other securities in any voting trust or any protective or like
committee or with the trustees or with depositaries designated thereby; to amortize or fail to
amortize any part or all of the premium or discount resulting from the acquisition or disposition
of assets; and generally, to exercise any of the powers of an owner with respect to stocks, bonds
or other investments, comprising the Fund which it may deem to be to the best interest of the
Fund to exercise.
(--7-) f~ The Board shall not be required to make any inventory or appraisal
or report to any court, nor to secure any order of court for the exercise of any power herein
contained.
(4) (10)Where any action which the Board is required to take or any duty
or function which it is required to perform either under the terms herein or under the general law
applicable to it as trustee under this subchapter, can reasonably be taken or performed only after
receipt by it from a member, the city or any other entity of specific information, certification,
direction or instructions, the Board shall be free of liability in failing to take any action or
perform any duty or function until that information, certification, direction or instruction has
been received by it.
(-93 (11)Any overpayments or underpayments from the Fund to a member
or beneficiary caused by errors of computation shall be adjusted with interest at a rate per annum
approved by the Board. Overpayments shall be charged against payments next succeeding the
correction. Underpayments shall be made up from the Trust Fund.
~.,,~ (12) The Board shall sustain no liability whatsoever for the sufficiency
of the Fund to meet the payments and benefits herein provided for and shall be under no
obligation to inquire into the sufficiency of the payments made into the Fund by the City.
"'x~ '.~x (13) In any application to or proceeding or action in the courts, only the
City and the Board shall be necessary parties, and no member or other person having an interest
in the Fund shall be entitled to any notice of service or process. Any judgment entered in that
proceeding or action shall be conclusive upon all persons.
(F) Any of the foregoing powers and functions reposed in the Board may be
performed or carried out by the Board through duly authorized agents, provided that the Board at
all times maintains continuous supervision over the acts of any agent; and that legal title to the
Fund shall always remain in the Board of Trustees.
11 Ord. No. 26-00
(G) At least once every three years, the Board shall retain a professionally
qualified independent consultant to evaluate the performance of any existing money manager and
make recommendations to the Board regarding the selection of money managers for the next
investment term, in accordance with Sections 175.071(6) and 185.06(5), Florida Statutes. No
change in any of the administrative provisions of the system shall be made without the approval
of a majority of the Board of Trustees.
Section 8. That a new Section 33.71, "Separation from Employment for Military
Service", is created to read as follows:
Section 33.71 SEPARATION FROM EMPLOYMENT FOR MILITARY SERVICE.
The years or parts of a year that a member serves in the military service of the
Armed Forces of the United States, the United States Merchant Marine or the United States
Coast Guard, voluntarily or involuntarily, after separation from City employment, shall be added
to his years of credited service for all purposes, including vesting, provided that:
(1) The member must return to City employment within one (1) year
from the earlier of the date of his military_ discharge or his release from service.
(2)
shall be five (5) years.
The maximum credit for military service pursuant to this section
(3) In order to qualify for credited service pursuant to this section, the
member must have been discharged or released from service under honorable conditions. This
section is intended to meet or exceed the minimum requirements of the Uniformed Services
Employment and Reemployment Rights Act ("USERRA", P.L. 103-353). To the extent that this
section does not meet the minimum standards of USERRA, as it may be amended from time to
time, the minimum standards of USERRA shall apply.
Section 9. That this ordinance is intended to comply with certain provisions of
Chapter 99-1, Laws of Florida, and is not intended to change in any way the 1993 Agreement on
pension matters, as amended, between the City, the Board of Trustees of the Delray Beach Police
Officers and Firefighters Retirement System, the Professional Firefighters of Delray Beach,
Local 1842, and the Police Benevolent Association; and by adopting this ordinance the City does
not waive any provision of the Agreement.
12 Ord. No. 26-00
Section 10. 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 operate to invalidate the remainder hereof.
Section 11. That this ordinance shall become effective immediately upon passage
on second and final reading, and upon taking effect, the provisions of this ordinance shall operate
retroactively to December 31, 1999.
PASSED AND ADOPTED on second and final reading in special session on this
the 26th day of September, 2000.
MAYOR
ATTEST:
_ __ cit~)c'ler~' - ~ ' !
First Reading. September 12, 2000
Second Reading September 26, 2000
13 Ord. No. 26-00
[ITY OF DELRIqY BEfl£H
CITY ATTORNEY'S OFFICE
DELRAY BEACH
F L 0 R I D A
Ali. America City
1993
DATE:
TO:
September 21, 2000
FROM:
SUBJECT:
200 NW 1st AVENUE · DELRAY BEACH, FLORIDA 33444
TELEPHONE 561/243-7090 · FACSIMILE 561/278-4755
Writer's D]rect Line: 561/243-7091
MEMORANDUM
City Commission
David Harden, City Manager
Susan A. Ruby, City Attorney
Ordinance 26-00 - Police Fire Pension Ordinance - Compliance with 99
Law
Ordinance No. 26-00 passed on first reading September 12, 2000 with a second reading
scheduled for September 26, 2000.
A Revised Ordinance No. 26-00 is submitted for second reading. The change is not a
substantive change and was suggested by the City's Pension lawyer, Jim Linn and agreed
to by the Pension Board.
The change is on Page 5, in Section E (5)(C). The previous language stated that the non-
service incurred disability pension would be calculated as the greater of 2% of the average
monthly eamings, subject to a 50% maximum or the member's accrued pension benefit.
The new language states the amount of a non-service incurred disability is 2% of the
average monthly earnings. The 50% cap was deleted because this cap would never be
reached. This is because the normal retirement benefit after 20 years is 3% of the average
monthly earnings and thus, any pension member with 20 years of service would choose
this normal retirement calculation instead of the 2% disability calculation, and the 50% cap
would never apply. The language change is made to clarify the section only. The effect,
with the change, is not substantive because the effect is the same, whether the 50%
language is in the ordinance or not.
Please call if you have any questions. By copy of this letter to Alison Harty, City Clerk,
please place the revised Ordinance 26-00 on the City Commission agenda for second
r~a;~2000.
Attachments
cc: Alison Harty, City Clerk
Joe Safford, Finance Director
ORDINANCE NO. 26-00
AN ORDINANCE OF THE CITY COMMISSION OF THE CITY OF
DELRAY BEACH, FLORIDA, AMENDING CHAPTER 33, "POLICE AND
FIRE DEPARTMENTS", SUBHEADING "PENSIONS", OF THE CODE
OF ORDINANCES OF THE CITY OF DELRAY BEACH, FLORIDA, BY
AMENDING SECTION 33.60, ~DEFINITIONS", REVISING THE
DEFINITION OF AVERAGE MONTHLY EARNINGS; AMENDING
SECTION 33.61, "MEMBERSHIP; CONDITIONS OF ELIGIBILITY;
APPLICATION", PROVIDING FOR CHANGES IN BENEFICIARIES BY
RETIREES; AMENDING SECTION 33.62, ~BENEFIT AMOUNTS AND
ELIGIBILITY", PROVIDING AN ADDITIONAL NORMAL RETIREMENT
DATE, PROVIDING FOR EARLY RETIREMENT AND REVISING THE
DISABILITY BENEFITS; AMENDING SECTION 33.63,"OPTIONAL
FORMS OF BENEFITS", TO PROVIDE ADDITIONAL BENEFIT
OPTIONS; AMENDING SECTION 33.64, "CONTRIBUTIONS", TO
PROVIDE FOR PAYMENT OF CITY CONTRIBUTIONS IN QUARTERLY
INSTALLMENTS; AMENDING SECTION 33.65, "ADMINISTRATION",
TO CLARIFY THE COMPOSITION OF THE BOARD OF TRUSTEES;
AMENDING SECTION 33.66, ~FINANCES AND FUND MANAGEMENT",
REVISING CERTAIN INVESTMENT POWERS OF THE BOARD OF
TRUSTEES, AND PROVIDING FOR THE EVALUATION OF MONEY
MANAGERS; CREATING A NEW SECTION 33.71, "SEPARATION
FROM EMPLOYMENT FOR MILITARY SERVICE"; PROVIDING A
VALIDITY CLAUSE; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, in 1999 the Florida Legislature enacted
Chapter 99-1, Laws of Florida, amending Chapters 175 and
185, Florida Statutes, to require that local ordinance
pension plans for police officers and firefighters meet
certain minimum standards to be eligible for continued
receipt of insurance premium tax revenues; and
WHEREAS, Chapter 99-1 requires that premium taxes
received in excess of the 1998 amount must be used to
meet the minimum benefit requirements of Chapters 175
and 185, and once the minimum benefits are satisfied all
subsequent premium tax increases must be used to provide
"extra benefits" for police officers and firefighters;
and
WHEREAS, in 1993 the City of Delray Beach, the
Board of Trustees of the Police and Firefighter
Retirement Plan, and the unions representing City police
officers and firefighters entered into an agreement by
which premium tax revenues received by the City in
excess of the amount received in 1993 were committed to
be used to fund pension benefits for police officers and
firefighters that exceed the minimum benefits required
by Chapter 99-1; and
WHERF2tS, Article I, Section 10, of the Florida
Constitution prohibits the enforcement of a law that
impairs the obligations of a contract; and
WHEREAS, requiring the City of Delray Beach to
comply with the minimum benefit provisions of Chapter
99-1 would effectively nullify provisions of the 1993
pension agreement; and
WHEREAS, the City of Delray Beach intends to
comply with certain provisions of Chapter 99-1 to ensure
the City's continued receipt of premium tax revenues for
its police and firefighter retirement plan, but the City
does not waive its rights under the Florida Constitution
to enforce the provisions of the 1993 pension agreement;
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE
CITY OF DELP~AY BEACH, FLORIDA, AS FOLLOWS:
Section 1. That at Section 33.60, "Definitions", the
definition of "average monthly earnings" is amended to read as
follows:
Section 33.60 DEFINITIONS.
For the purpose of this subchapter, the following
definitions shall apply unless the context clearly indicates
or requires a different meaning.
"AVERAGE MONTHLY EARNINGS". One thirty-sixth of
the arithmetical average of earnings for the highest
consecutive 36-month period preceding the actual retirement
or termination of a member; provided, however, the benefit
derived shall not be less than the benefit that would have
been paid based on a definition of average monthly earnings
of one twenty-fourth of the arithmetical average for the
highest consecutive 24-month period, as calculated prior to
August 17, 1999, or if qreater, one sixtieth of the
arithmetical average of the highest 60 months of the last ten
years of continuous service ~ ~~--^ ~ ^~ ~4~
Section 2. That at Section 33.61, "Membership; Conditions of
Eligibility; Application", subsection (C), "Change in designation
of beneficiary", is amended to read as follows:
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Section 33.61 MEMBERSHIP; CONDITIONS OF
APPLICATION.
ELIGIBILITY;
(C) Change in designation of beneficiary. A member,
including a member who has elected to participate in the Deferred
Retirement Option Plan pursuant to Section 33.685, shall designate
the joint pensioner or beneficiary to receive the benefit, if any,
payable under the plan in the event of the member's death, on a
form provided by the Board of Trustees. The member may revoke or
change the designation of a joint pensioner or beneficiary at any
time prior to the commencement of retirement income or benefits,
by submitting such change in writing on a form provided by the
Board of Trustees. A member, includinq a member who retired prior
to the effective date of this ordinance, may also change the
designation of a joint pensioner or beneficiary after the
commencement of retirement income or benefits, subject to approval
by the Board of Trustees, and in accordance with the following:
1. The member must pay the full cost of
determining the equivalent actuarial value of the benefit payable.
2. The consent of a member's joint pensioner or
beneficiary to any change in such designation shall not be
required.
3. The amount of retirement income payable to
the member upon the designation of a new joint pensioner shall be
actuarially redetermined, taking into account the benefits already
received by the member, and the age and sex of the former joint
pensioner, the new joint pensioner and the member.
4. Each designation of a joint pensioner or
beneficiary shall be made in writing on a form provided by the
Board of Trustees.
5. Upon a change in designation of joint pensioner
or beneficiary, the rights of all previously designated joint
pensioner or beneficiaries to receive any benefit under the system
shall cease.
Section 3. That at Section 33.62, "Benefit Amounts and
Eligibility", subsection (A) is amended, new subsections (C) and
(D) are created, subsections (C), (D), (E), (F), (G), and (H) are
redesignated as subsections (E), (F), (G), (H), (I) and (J),
respectively, and subsection (E), paragraph (5) is amended to read
as follows:
Section 33.62 BENEFIT AMOUNTS AND ELIGIBILITY.
(A) Normal retirement date.
following meanings:
This term shall have the
(1) For employees who are eligible to become
members of the system as of its effective date, the normal
retirement date shall be the date of their fifty-second
birthday, regardless of the number of years of continuous
service.
(2) For employees who are members of the system
and terminate employment prior to October 1, 1989, the
normal retirement date shall be the first day of the month
coincident with or subsequent to their fifty-second birthday
and the completion of twenty (20) years of continuous
service.
(3) For employees who are members of the system
and elect to retire or terminate employment on or subsequent
to October 1, 1989, the normal retirement date shall be the
first day of the month coincident with or subsequent to
completion of twenty (20) years of continuous service.
(4) For employees who are members of the system
and retire or terminate employment on or after December 31,
1999, the normal retirement date shall also be the first day
of the month coincident with or subsequent to aqe fifty-five
and the completion of ten (10) years of continuous service.
(B) Normal retirement benefit.
(1) Duration, survivor benefits. A member
retiring on his normal retirement date shall receive a
monthly benefit which shall commence on his normal retirement
date and be continued thereafter during his lifetime. Upon
his death the full retirement benefit shall be continued to
his spouse for one year and sixty percent (60%) of that
amount continued thereafter until the earlier of death or
remarriage.
(2) Amount. Normal retirement benefits shall be
in the amount of two and one-half percent (2.5%) of average
monthly earnings for each year of continuous service for
employees with more than ten (10) but less than twenty (20)
years of continuous service. Normal retirement benefits
shall be in an amount of three percent (3%) of average
monthly earnings for each year of continuous service if an
employee has attained twenty (20) or more years of continuous
service, subject to a maximum of seventy-five percent (75%)
of average monthly earnings; provided, however, that in no
event shall a member's total benefit be less than two percent
(2%) of average monthly earnings for each year of continuous
service. However, members as of the effective date shall
receive at their normal retirement date (age 52 regardless of
years of service) the greater of the benefit provided by the
formula above or fifty percent
earnings.
(50%)
of average monthly
(3) Upon becoming eligible for normal retirement,
a member shall be one hundred percent (100%) vested in his
accrued benefit.
(C) Early retirement date.
On or after December 31, 1999, a member may retire on or
after the early retirement date, which shall be the first
day of any month coincident with or next following the
attainment of age fifty (50) and the completion of ten (10)
years of continuous service. Early retirement is retirement
from active employment with the City on or after the early
retirement date and prior to the normal retirement date.
(D) Early retirement benefit.
The amount of the early retirement benefit shall be
determined in the same manner as the normal retirement
benefit, except that continuous service and average final
compensation shall be determined as of the early retirement
date. The benefit payable shall be reduced by three (3)
percent for each year by which the commencement of benefits
precedes the normal retirement date. The early retirement
benefit provided in this subsection (D) shall have no
application to the early retirement incentive provided in
section 33.687.
(E) Disability retirement provisions.
(5) Disability retirement benefits.
(a) Eligibility. Each member shall be
eligible for service incurred disability benefits, regardless
of length of continuous service. Each member who completes
ten (10) years of continuous service prior to becoming
disabled shall be eligible for nonservice incurred disability
benefits.
(b) Initial amount of service incurred
disability benefit. The greater of sixty percent (60%) of
the member's average monthly earnings in effect on the date
of disability or the member's accrued pension benefit.
(c) Amount of nonservice incurred disability
benefit. Two percent (2%) of average monthly earnings in
effect on the date of disability for each year of continuous
service ~'-~ ~ ...... v^n ....... ~
~ ^~ ............ ~ ...... ~ provided however the
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minimum shall not be less than twenty-five percent (25%) of
average monthly earnings.
(d) Terms of payments. Disability benefits
shall commence on or as of the first day of the month
coincident with or next following the date of disability, as
established by the Board of Trustees, and shall continue to
be paid on the first day of each subsequent month until the
death or recovery of the disability retiree. The same
survivorship percentages which apply to normal retirement
benefits shall also apply to disability retirement benefits.
(e) Eligibility for other benefits. In the
event that a member applying for disability benefits is also
eligible for either early or normal retirement, the Board
may, upon the request of the member, pay the early or normal
retirement benefit instead of a disability retirement
benefit.
[Redesignate subsections (F) , (G) ,
subsections (H), (I) and (J), respectively]
and (H) as
Section 4. That section 33.63, ~Optional Forms of Benefits",
is amended to read as follows:
Section 33.63 OPTIONAL FORMS OF BENEFITS.
Each member entitled to a normal, early or disability
retirement benefit shall have the right at any time prior to
his actual retirement to elect to have his benefit payable
under any one of the options hereinafter set forth in lieu of
the benefits otherwise provided herein, and to revoke any
elections and make a new election at any time prior to actual
retirement. The value of optional benefits shall be
actuarially equivalent to the value of benefits otherwise
payable. The member shall make an election by written
request to the Board of Trustees, this request being retained
in the Board's files.
(A) Option 1. Joint and last survivor option. A
retiring member may elect to receive an actuarially adjusted
retirement benefit during his lifetime and have such
retirement benefit (including 75%, 66.66% or 50% or a
~~ ~^~ thereof) continued after his death to and
during the lifetime of ~ ..........
..... ~ ...... a designated joint
pensioner ......................~ spou~c. The election of
Option 1 shall be null and void if the designated joint
pensioner~..~~=~~ .... dies before the member's retirement,
unless the member designates another joint pensioner in
accordance with section 33.61(C).
6
(B) Option 2. Ten years certain and life thereafter.
A retiring member may elect to receive a retirement benefit
with 120 monthly payments guaranteed. If, after retiring,
the member should die before the 120 monthly payments are
made, payments are then continued to his designated
beneficiary until 120 payments in all have been made, at
which time benefits cease. After expiration of the 120
monthly payments guaranteed, should the retired member be
then alive, payments shall be continued during his remaining
lifetime. Notwithstanding any other provision of the plan to
the contrary, this option (Option 2) shall be the normal form
of benefit for unmarried employees who retire from active
service on or after December 31, 1999.
(C) Option 3. Other. In lieu of the other optional
forms enumerated in this section, retirement benefits may be
paid in any form approved by the Board so long as actuarial
equivalence with the benefits otherwise payable is
maintained.
Section 5. That section 33.64, "Contributions", subsection
(C), is amended to read as follows:
Section 33.64 CONTRIBUTIONS.
(C) City contributions. So long as this system is in
effect, the city shall make an annual contribution to the
Trust Fund during the first quarter of the plan year or in
quarterly installments in an amount equal to the difference
in each year as between the total of aggregate member
contributions for the year plus state contributions for the
year and the total cost for the year as shown by the most
recent actuarial valuation and report for the system. The
total cost for any year shall be defined as the total of
normal cost plus the additional amount sufficient to amortize
the unfunded accrued past service liability over a 40-year
period commencing with the effective date of this system.
Section 6. That section 33.65, "Administration", subsection
(A), is amended to read as follows:
Section 33.65 ADMINISTRATION.
(A) The general administration and responsibility for
the proper operation of the retirement system and for making
effective the provisions of this subchapter are vested in a
Board of Trustees consisting of nine persons as follows:
The Mayor.
(2) Two public members to be appointed by City
Commission as hereinafter provided.
7
(3) The Fire Chief or, in the event of the Fire
Chief's termination of participation in the system, ~
firefiqhter desiqnated by the Fire Chief his ~^~ ....
(4) The Police Chief or, in the event of the
Police Chief's termination of participation in the system,
police officer desiqnated by the Police Chief his d~signcc.
(5) Two members of the Fire Department to be
elected as hereinafter provided.
(6) Two members of the Police Department to be
elected as hereinafter provided.
Section 7. That section 33.66,
Management", is amended to read as follows:
"Finances and Fund
Section 33.66 FINANCES AND FUND MANAGEMENT.
(A) As part of the system there is established the
Trust Fund, into which shall be deposited all of the
contributions and assets whatsoever attributable to the
system.
(B) The actual custody and supervision of the Fund
(and assets thereof) shall be vested in the Board of
Trustees. Payment of benefits and disbursements from the
Fund shall be made by the disbursing agent on authorization
from the Board.
(C) The Board may hire and appoint those persons,
agents or entities (including corporate fiduciaries) as in
its discretion may be required or advisable to enable it to
perform custodial and investment duties hereunder. The Board
may enter into agency, investment advisory, and custodial
agreements for the purpose of securing investment and
custodianship services for the system and Fund.
(D) (1) Ail funds and securities of the system may be
commingled in the Fund, provided that accurate records are
maintained at all times reflecting the financial composition
of the Fund, including accurate current accounts and entries
as regards the following:
(a) Current amounts of accumulated
contributions of members on both an individual and aggregate
account basis,
(b) Receipts and disbursements,
(c) Benefit payments,
(d) Current amounts clearly reflecting all
moneys, funds and assets whatsoever attributable to
contributions and deposits from the city,
(e) Ail interest, dividends and gains (or
losses) whatsoever, and
(f) Any other entries as may be properly
required so as to reflect a clear and complete financial
report of the Fund.
(2) An annual report shall be made by the
certified public accounting firm performing the city's annual
audit.
(E) The Board of Trustees shall have the following
investment powers and authority:
(1) The Board of Trustees shall be vested with
full legal title to the Fund; subject however and in any
event to the authority and power of the City Commission to
amend or terminate this Trust; provided that no amendment or
Fund termination shall ever result in the use of any assets
of this Fund except for the payment of regular expenses and
benefits under this system. All contributions from time to
time paid into the Fund, and the income thereof, without
distinction between principal and income, shall be held and
administered by the Board or its agent in the Fund and the
Board shall not be required to segregate or invest separately
any portion of the Fund.
(2) The Board of Trustees may invest and reinvest
the assets of the Trust Fund in bonds, stocks, or other
evidences of indebtedness issued or guaranteed by a
corporation organized under the laws of the United States,
any state, or organized territory of the United States or the
District of Columbia, or in foreign securities, in accordance
with the provisions of this section.~v~.~ .... ~^~i
(3) The Board shall exercise its investment
authority under this section solely in the interest of plan
members and beneficiaries, for the exclusive purpose of
providing benefits to members and beneficiaries and defra¥in~
the reasonable expenses of administering the plan. The Board
shall exercise its investment authority with the care, skill,
prudence and diligence under the circumstances then
prevailin~ that a prudent person in a like capacity and
familiar with such matters would use in the conduct of an
enterprise with like character and like aims.
9
(4) The Board shall adopt a written investment
policy in accordance with Section 112.661, Florida Statutes,
incorporating the
investments:
following
requirements for specific
(a) Investments in U.S. stocks and bonds
must be in Tkc corporations that are is listed on any one or
more of the recognized national stock exchanges or on the
National Market System of the NASDAQ Stock Market, and, in
the case of bonds only, hold~ a rating in one of the three
highest classifications by a major rating service.
(b) The Board of Trustees shall not invest
more than five percent (5%) of its assets in the common or
capital stock of any one issuing company, nor shall the
aggregate investment in common or capital stock in one
company exceed five percent (5%) of the outstanding common or
capital stock of that company; nor shall the aggregate of the
Fund's investments in common or capital stock at cost exceed
sixty percent (60%) of the Fund's assets ~s ~ ~m~ m"-~
(c) The Board may invest and reinvest the
assets of the Fund in time or savings accounts of a national
bank, a state bank insured by the Bank Insurance Fund, or a
savings, buildinq, and loan association insured by the
Savings Association Insurance Fund which is administered by
the Federal Deposit Insurance Corporation or a state or
federal chartered credit union whose share accounts are
insured by the National Credit Union Share Insurance Fund.
(d) The Board may invest up to ten percent
of Fund assets, at cost, in foreign securities, and may also
invest in bonds issued by the State of Israel.
(3) (5) The Board may retain in cash or
unproductive of income an amount of the Fund as it may deem
advisable, having regard for the cash requirements of the
system.
3c4~- (6) Neither the Board nor any person or
entity shall be liable for the making, retention, or sale of
any investment or reinvestment made as herein provided, nor
for any loss or diminishment of the Fund, except that due to
his own negligence, willful misconduct, or lack of good
faith.
,~,'~ (7) The Board may cause any investment in
securities held by it to be registered in or transferred
into its name as trustee or into the name of the nominee as
10
it may direct, or it may retain them unregistered and in
form permitting transferability, but the books and records
shall at all times show that all investments are part of the
Fund.
~ (8) The Board is empowered, but is not
required, to vote upon any stocks, bonds or securities of any
corporation, association or trust and to give general or
specific proxies or powers of attorney with or without power
of substitution; to participate in mergers, reorganizations,
recapitalizations, consolidations and similar transactions
with respect to those securities; to deposit stock or other
securities in any voting trust or any protective or like
committee or with the trustees or with depositories
designated thereby; to amortize or fail to amortize any part
or all of the premium or discount resulting from the
acquisition or disposition of assets; and generally, to
exercise any of the powers of an owner with respect to
stocks, bonds or other investments, comprising the Fund which
it may deem to be to the best interest of the Fund to
exercise.
(7) (9) The Board shall not be required to make
any inventory or appraisal or report to any court, nor to
secure any order of court for the exercise of any power
herein contained.
(S) (10) Where any action which the Board is
required to take or any duty or function which it is required
to perform either under the terms herein or under the general
law applicable to it as trustee under this subchapter, can
reasonably be taken or performed only after receipt by it
from a member, the city or any other entity of specific
information, certification, direction or instructions, the
Board shall be free of liability in failing to take any
action or perform any duty or function until that
information, certification, direction or instruction has been
received by it.
(9) (11) Any overpayments or underpayments from
the Fund to a member or beneficiary caused by errors of
computation shall be adjusted with interest at a rate per
annum approved by the Board. Overpayments shall be charged
against payments next succeeding the correction.
Underpayments shall be made up from the Trust Fund.
(i0) (12) The Board shall sustain no liability
whatsoever for the sufficiency of the Fund to meet the
payments and benefits herein provided for and shall be under
no obligation to inquire into the sufficiency of the
payments made into the Fund by the City.
11
(11) (13) In any application to or proceeding or
action in the courts, only the city and the Board shall be
necessary parties, and no member or other person having an
interest in the Fund shall be entitled to any notice of
service or process. Any judgment entered in that proceeding
or action shall be conclusive upon all persons.
(F) Any of the foregoing powers and functions reposed
in the Board may be performed or carried out by the Board
through duly authorized agents, provided that the Board at
all times maintains continuous supervision over the acts of
any agent; and that legal title to the Fund shall always
remain in the Board of Trustees.
(G) At least once every three years, the Board shall
retain a professionally qualified independent consultant to
evaluate the performance of any existing money manager and
make recommendations to the Board regarding the selection of
money managers for the next investment term, in accordance
with sections 175.071(6) and 185.06(5), Florida Statutes. No
change in any of the administrative provisions of the system
shall be made without the approval of a majority of the
Board of Trustees.
Section 8. That a new section 33.71, ~Separation from
employment for military service", is created to read as follows:
Sec. 33.71
SEPARATION FROM EMPLOYMENT FOR MILITARY
SERVICE.
The years or parts of a year that a member serves in the
military service of the Armed Forces of the United States, the
United States Merchant Marine or the United States Coast Guard,
voluntarily or involuntarily, after separation from city
employment, shall be added to his years of credited service for
all purposes, including vesting, provided that:
(1) The member must return to City employment within one
(1) year from the earlier of the date of his military discharge
or his release from service.
(2) The member deposits into the fund the same sum that the
member would have contributed if he had remained a member during
his absence, within a period equal to three (3) times the period
of military service, but not more than five (5) years, or he will
forfeit the right to receive credited service for his military
service pursuant to this section.
(3) The maximum credit for military service pursuant to
this section shall be five (5) years.
12
(4) In order to qualify for the purchase of credited
service pursuant to this section, the member must have been
discharged or released from service under honorable conditions.
This section is intended to meet or exceed the minimum
r~quirements of the Uniformed Services Employment and
Reemployment Rights Act ("USERRA," P.L. 103-353). To the extent
that this section does not meet the minimum standards of USERRA,
as it may be amended from time to time, the minimum standards of
USERRA shall apply.
Section 9. That this ordinance is intended to comply with
certain provisions of Chapter 99-1, Laws of Florida, and is not
intended to change in any way the 1993 Agreement on pension
matters, as amended, between the City, the Board of Trustees of
the Delray Beach Police Officers and Firefighters Retirement
System, the Professional Firefighters of Delray Beach, Local 1842,
and the Police Benevolent Association; and by adopting this
ordinance the City does not waive any provision of the Agreement.
Section 10. 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 operate to invalidate the remainder
hereof.
Section 12. That this ordinance shall become effective ten
(10) days after its passage on second and final reading, and upon
taking effect, the provisions of this ordinance shall operate
retroactively to December 31, 1999.
PASSED AND ADOPTED in regular session on second and final
reading this of , 2000.
ATTEST:
MAYOR
City Clerk
First Reading
Second Reading
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