Ord 29-99 ORDINANCE NO. 29-99
AN ORDINANCE OF THE CITY COMMISSION OF THE CITY OF DELRAY
BEACH, FLORIDA, AMENDING CHAPTER 33, "POLICE AND FIRE
DEPARTMENTSH, SUBHEADING "PENSIONS", OF THE CODE OF ORDINANCES
OF THE CITY OF DELRAY BEACH BY AMENDING SECTION 33.60,
"DEFINITIONS", TO PROVIDE CHANGES IN THE DEFINITION OF AVERAGE
MONTHLY EARNINGS; AMENDING SECTION 33.61, ~MEMBERSHIP;
CONDITIONS OF ELIGIBILITY; APPLICATION", SUBSECTION 33.61(C),
"CHANGE IN DESIGNATION OF BENEFICIARY", TO PROVIDE FOR CHANGES
IN BENEFICIARIES; AMENDING SECTION 33.62, "BENEFIT AMOUNTS AND
ELIGIBILITY", TO PROVIDE FOR A CHANGE IN THE MULTIPLIER FOR
NORMAL RETIREMENT BENEFITS, CHANGING THE PERCENTAGE FOR
DISABILITY RETIREMENTS AND ELIMINATING OFFSETS; AMENDING
SECTION 33.64, "CONTRIBUTIONS", TO PROVIDE FOR A DECREASE IN
PARTICIPANT CONTRIBUTIONS; AMENDING SECTION 33.687, "EARLY
RETIREMENT INCENTIVE", TO PROVIDE FOR A CHANGE IN THE
MULTIPLIER; AMENDING SECTION 33.689, "RETIREMENT BENEFIT
ENHANCEMENT", TO CLARIFY THE BENEFITS THEREUNDER; PROVIDING A
GENERAL REPEALER CLAUSE, A SAVING CLAUSE, AND AN EFFECTIVE
DATE.
WHEREAS, the City Commission of the City of Delray Beach desires to enhance certain
retirement benefits to participants of the Police and Firefighter's Retirement Plan by increasing certain
multipliers, by allowing changes in the beneficiary after the retirement date and eliminating offsets for
disability retirees.
NOW THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY OF
DELRAY BEACH AS FOLLOWS:
Section 1. That Chapter 33, "Police and Fire Departments", subheading, "Pensions", of the
Code of Ordinances of the City of Delray Beach is hereby amended by amending Section 33.60,
"Definitions", Definition of "Average Monthly Earnings" to read as follows:
Section 33.60 DEFINITIONS.
"AVERAGE MONTHLY EARNINGS". ru, o ~, .... ,., *',,,,Ak ,.*' ,k~ ~,~k,~,o~:,.~ ......... ~'
One thirty-sixth of the arithmetical average for the highest consecutive 36-month period precedin~
the actual retirement or termination of a member; provided however, the benefit derived shall not be les~
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 the effective date of this ordinance.
Section 2. That Chapter 33, "Police and Fire Departments", subheading, "Pensions", of the
Code of Ordinances of the City of Delray Beach is hereby amended by amending Section 33.61,
"Membership; Conditions of Eligibility; Application", Subsection 33.61(C), "Change in Designation of
Beneficiary", to read as follows:
Section 33.61 MEMBERSHIP, CONDITIONS OF ELIGIBILITY; APPLICATION.
(C) Change in designation of beneficiary.
member, including a member who has elected to pmticipate in the Deferred Retirement Option ?lan
pursuant to Section 33.685, shall designate the joint pensioner or beneficiar~y to receive the benefit, if any,
payable under the plan in the event of the members death, on a form provided by the Board of Trustees.
Thc 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 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.
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Section 3. That Chapter 33, ~Police and Fire Departments", ~ubheading, ~Pensions", of th~
Code of Ordinances of the City of Defray Beach is hereby amended by amending Section 33.62, "Benefit
Amounts and Eligibility", Paragraphs B, C, E and F to read as follows:
Section 33.62 BENEFIT AMOUNTS AND ELIGIBILITY.
(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
the 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.
(3) Upon becoming eligible for normal retirement, a member shall be one hundred
percent (100%) vested in his accrued benefit.
(C) 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) ~ aAmount of service incurred disability benefit, e ..... h,_c, ......... ,
(75?4) Sixty percent (60%) of the member's average monthly earnings in effect on the date of disability,
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(c) ~ _;~anount 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, subject
in any event to _a maximum fifty percent (50%) of average monthly earnings
e.ffse:z ':~'o.4 ....... ~prov]ded~ howeveq the 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
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.
................................................ J · .... J
.... ~g~ on ,h~ date of ~[~=b~Ety, ........................................................................
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(~(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.
(6) A.-'_-.,_'~_! ~Report by disability retiree.
(a) Each person currently receiving disability retirement benefits and each person
who first qualifies for disability retirement benefits shall be required to submit to the Board of Trustees~
upon a request by the Board of Trustees, .............................. nc, ,,,,o.- ,~,o., ~,~.~.,.k ~ ,,¢ o~,.k ..... ~--- a signed and notarized report
disability retiree's physician st-~ting whether the retiree is still totally incapacitat--ed to perform the regular
and continuous duties of a police officer or firefighter shall be submitted to the Board. The required
physician's statement must be dated within four months of the request.
(.b.) 2_ A statement to the effect that the disability retiree understands that if
the report is incomplete or incorrect, his disability benefits may be suspended or discontinued.
(.c,,.) (b) In the event that the required ammal report~_ i~ are not submitted to the Board
on a timely basis, or is incomplete or incorrect, the Board may, in its discretion, suspend or discontinue the
disability retirement benefits.
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....... J ~ .............. J ....................... J ----J .............................. r ..... J
~(7) Disability affidavit. No member o~e~ise eligible to receive disability benefits sh~l
be paid those benefits unless and until that member files a disability affidavit with the Bo~d on a fora
furnished by the Bo~d. By the disability affidavit, ~e prospective retire sh~l ~m ~at he is acquainted
~d fmili~ with ~e terms ~d conditions of his disability retirement. In pmicul~, he shall ac~owledge
the authority of the Bo~d to require him to ~dergo periodic h~e physic~ exminations in order to
determine whether he has recovered from disability.
~ Au~ority for reexmination. Each person who first qu~ifies for or is then receiving
disability retirement benefits on or a~er the effective date of ~s subchapter sh~l be subject to periodic
~eexamination by a medical bo~d selected by the Bo~d of Trustees to dete~ne if the disability h~
ceased to exist.
t ~ m(9] Recovery from disability.
(a) In the event a member who has been retired on a disability benefit regains his
health and is able to perform his duties in the Police Department or Fire Department, the Board shall
discontinue the pension; and further, the City shall, subject to budget and qualification of the member for
the position, offer the member a position with the city as a police officer or furefighter.
(b) If a member shall resume his employment with the city, as a police officer or
fire fighter, then he may pay into the fund an amount equal to the aggregate contributions plus interest at a
rate to be determined by the Board (computed upon his annual earnings at the time of his disability
retirement) he would have been required to make hereunder, as determined by the Board, during the period
of his disability retirement had he not been retired, and shall thereupon receive creditable service for the
period of the disability retirement. In any event, that member shall retain credit for the period of
continuous service to the date of disability.
,--/ ................... r-'r ................... , ...............................
(E) Vesting.
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(1) If a member terminates his employment with the Police or Fire Departments, either.
voluntarily or by lawful discharge, and is not eligible for any other benefits under this system, he shall be
entitled to the following:
(a) Effective September 1~ 1999, alZ_with less than ten years of continuous
service, refund of member contributions with a non-compounded simple interest rate of three (3%) percent
per year applied to the principal balance of the participant's contribution as accrued on December 31 of each
year, i~er year.
(b) With ten or more years of continuous service:
1. The pension benefit accrued to his date of termination, payable
commencing on the date which would have been his earliest normal retirement date had he remained in
employment, provided he does not elect to withdraw his member contributions, or
2. Effective September 1, 1999, g, refund of member contributions with
non-compounded simple interest rate of five (5%) percent per year applied to the principal balance of the
participant's contribution as accrued on December 31 of each year.
(F) Application of section. The provisions set forth herein shall be applicable to all current and
future members of the plan, except those members who retired, entered the DROP plan, or terminated
employment prior to the effective date of this ordinance. Members who retired~ entered the DROP plan, or
terminated employment prior to the effective date of this ordinance shall receive benefits in accordance
with the plan provisions in effect on the date of their retirement, entry into the DROP plan, or terminations
whichever is earliest.
....... O! ......... t' ..................
Section 4. That Chapter 33, "Police and Fire Departments", subheading, "Pensions", of the
Code of Ordinances of the City of De]ray Beach is hereby amended by amending Section 33.64,
"Contributions", Paragraphs A, B, C and D to read as follows:
Section 33.64 CONTRIBUTIONS.
(A) Member contributions.
(1) Effective the first pay period after September 1, 1999, M_m_embers ofthe retirement
system shall make regular contributions to the trust fund at a rate equal to
!9_~9) three percent (3%) of their respective annual earnings. Eligible employees, as a condition of
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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 ~,0 25 years of continuous service at which time t~*y.m~als-st,~ member contributions are no
longer required.
(2) Effective October 1, 1989, the City shall pick up the member contribution required
by division (A)(1) 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.
(B) State contributions. Any moneys received or receivable by reason of laws of the state, for
the express purpose of funding and paying for retirement benefits for police and firefighters of the city shall
be deposited in the Trust Fund comprising part of this system.
(C) City contributions. So long as this system is in effect, the city shall make an annual
contribution to the Trust Fund 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.
(D) Guaranteed refund of member contributions. All benefits payable under this system are in
lieu of a refund of member contributions. Effective September 1~ 1999~ employees who terminate
employment with less than ten (10) years of continuous serviee~ upon the election to receive a refund of
member contributions, shall receive a non-compounded simple interest rate of three percent (3%) per year
applied to the principal balance of the participant's contributions as accrued on December 31 of each year.
Effective September 1, 1999~ employees who terminate employment with ten (10) years or more of
continuous service~ upon the election to receive a refund of member contributions, shall receive a non-
compounded simple interest rate of five percent (5%) per year applied to the principal balance of the
participant's contribution as accrued on December 31 of each year. In any event, each member shall be
guaranteed the payment of benefits at least equal in total amount to his accumulated contributions plus
interest as provided herein.
Section 5. That Chapter 33, "Police and Fire Departments", subheading, "Pensions", of the
Code of Ordinances of the City of Delray Beach is hereby amended by amending Section 33.687, "Early
Retirement Incentive", to read as follows:
Section 33.687 EARLY RETIREMENT INCENTIVE.
(A) Effective January 1, 1994, an early retirement incentive shall be provided to employees in
accordance with this section. The availability of the early retirement incentive in any calendar year shall be
determined by the City.
(B) Employees with eighteen (18) and up to, but not including 20 ~ years of continuous
service shall be eligible for the early retirement incentive. In any calendar year in which the City
determines that the early retirement incentive will be offered, eligible employees shall be given an
opportunity to decide within a specified time period (30 to 90 days) whether they wish to receive the early
retirement incentive and retire from City employment. The City will provide at least sixty (60) days
advance notice to eligible employees of the early retirement incentive offering.
(C) Eligible employees who elect to receive the early retirement incentive shall receive two (2)
additional years of continuous service, under the System, and upon receiving such additional continuous
service shall immediately retire and terminate City employment. Effective the first pay period after
September 1, 1999, eligible employees who elect to receive the early retirement incentive shall receive
three percent (3%) of average monthly earnings for each year of continuous service if the employee
qualifies for the twenty (20) year (or more) normal retirement benefit. The early retirement incentive
program shall be voluntary for all eligible employees. The early retirement incentive shall not apply to sick
lc.ave, vacation or any other accruals or benefits.
(D) An employee who elects to receive the early retirement incentive under this Section cannot
also participate in the Deferred Retirement Option Plan under Section 33.685.
Section 6. That Chapter 33, "Police and Fire Departments", subheading, "Pensions", of the
Code of Ordinances of the City of Delray Beach is hereby amended by amending Section 33.689,
"Retirement Benefit Enhancement", to read as follows:
Section 33.689 RETIREMENT BENEFIT ENHANCEMENT.
Effective October 1, 1994, the benefits paid to eligible retirees or their beneficiaries shall be
adjusted as provided in this Section. For the purpose of this Section, "eligible retirees" are members who
retired or terminated employment after September 30, 1993, and whose date of hire as a City Police officer
or firefighter was twenty-five (25) or more years prior to the benefit adjustment date. The benefits payable
under the System to all eligible retirees or their beneficiaries shall be ~_~ju_~*_e~ e:,2~ O_-'~._,:ber ! based on the
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amom~t of insurance premium tax revenues received by the City for the preceding plan year pursuant to
Chapters 175 and 185, Florida Statutes. A minimum benefit increase of one percent (1%) per year will be
provided, regardless of the amount of premium tax revenues received by the City. To the extent total
annual premium tax revenues exceed $504,922, the annual one percent (1%) minimum adjustment will be
increased in increments of one-tenth of one percent, based on the actuary's determination that the amount
of the excess premium tax revenues is sufficient to fund the benefit increase on an actuarially sound basis.
The maximum amount of the total annual benefit increase shall not exceed four percent (4%), regardless of
the amount of premium tax revenues received by the City. The annual benefit adjustment provided under
this Section shall be compounded annually (i.e., the increase shall be based on the benefits received by plan
members and beneficiaries at the end of the preceding plan year). The benefits payable under the System to
all eligible retirees or their beneficiaries shall be adiusted annually on the anniversary of the retiree's first
benefit payment. Disability retirees and their beneficiaries are not eligible to receive the retirement benefit
enhancement.
Section 7. That all ordinances or parts of ordinances in conflict herewith be, and the same
are hereby repealed.
Section 8. 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 9. That this ordinance shall become effective immediately upon its passage on
second and final reading.
(~~D ADOPTED in regular session on second and f'mal reading on this the
/7' .t~ day of ,1999.
ATTEST:
~ ~ F~;sYt CRleeaX~ing ~.~e~ ,,.~, / ~,~ ~ Second Reading
!1
MEMORANDUM
TO: MAYOR AND CITY COMMISSIONERS
FROM: CITY MANAGER~
SUBJECT: AGENDA ITEM #/~'- REGULAR MEETING OF AUGUST 17, 1999
ORDINANCE NO. 29-99 (POLICE AND FIRE RETIREMENT PLAN)
DATE: AUGUST 12, 1999
This is second reading and a public hearing for Ordinance No. 29-99
which amends Chapter 33, ~Police and Fire Departments", Subheading
~Pensions", of the City Code to enhance certain retirement benefits to
participants of the Police and Firefighter's Retirement Plan by
increasing certain multipliers, by allowing changes in the beneficiary
after the retirement date and eliminating offsets for disability
retirees.
The following is a summary of the changes proposed:
1. Clarifies that the early retirement window option applies only to
pension benefits entitlement for those with at least 18 years to 20
years of service and provides that sick leave, vacation and other
accruals are not part of the benefit.
2. Clarifies that the retirement benefit enhancement will apply to
beneficiaries. The enhancement will be adjusted annually on the
retiree's anniversary date of hire and expressly eliminates
disability retiree's ability to receive the enhancement.
3. Reduces the percent for a disability pension to 60%.
4. Increases the multiplier from 2.5 to 3.0 for members with 20 years or
more of service.
5. Increases from 2 to 3 years the period used for determination of
average monthly earnings.
6. Reduces employee contributions from 7.33% to 3.00% of base
compensation.
7. Provides interest on withdrawn contributions.
8. Removes all offsets.
9. Provides for changes to beneficiaries after retirement.
At first reading on August 3, 1999, the City Commission passed the
ordinance by unanimous vote.
As an additional item, the Police/Fire Addendum to Agreement makes the
same clarifications to the early retirement incentive (window)
provisions and the retirement benefit enhancement.
Recommend approval of Ordinance No. 30-99 on Second and Final Reading,
and approval of the Addendum to Agreement (by separate motions).
Ref:Agmemo14.Ord.29-99.Police&FireRetirementPlan
ADDENDUM TO AGREEMENT
The City of Delray Beach (City), Board of Trustees of the City of Delray Beach
Police Officers and Firefighters Retirement System (Board), Professional Firefighters and
Paramedics of Delray Beach, Local 1842, IAFF (IAFF), and the Police Benevolent
Association (PBA), enter into this Addendum to the Agreement concerning pension
matters executed by the parties in October and November 1993. The parties recognize
that certain changes to the original agreement are necessary to implement the intent of the
parties with respect to the original agreement. A copy of the original agreement is
attached hereto.
1. The parties enter into this Addendum to amend the original Agreement in
the following respects:
A. Paragraph 2 (Early Retirement Incentive) of the Agreement is
amended to read as follows:
Early Retirement Incentive - The City, PBA and IAFF agree that the
police/firefighter pension plan will be amended to provide an early retirement incentive
for plan members with 18 and up to, but not including 20 years of credited service. The
incentive would be the addition of two years of credited service in the calculation of the
pension. The additional credited service provided to eligible members pursuant to this
section shall be for pension purposes only, and shall not affect the payment for accrued
vacation or sick leave upon termination of employment, or any other benefits provided by
the City. Eligible members would be given an opportunity to decide within a limited
time period (30 to 90 days) whether they wish to retire. The early retirement incentive
could be offered on a year-to-year basis as determined by the City, and may not be
1
offered every year. The City will provide at least 60 days advance notice of each
"window" option period. An employee who elects to exercise the "window" option
cannot also participate in the DROP.
B. Paragraph 3 of the Agreement (Retirement Benefit Enhancement)
is amended to read as follows:
Retirement Benefit Enhancement - - The City, IAFF and PBA agree that
effective January 1, 1994, the police/firefighter pension plan will be amended to provide
an annual increase in benefits for eligible retirees or their beneficiaries of between one
percent and four percent, payable the month following the anniversary date of the retiree's
date of hire, based on the amount of insurance premium tax revenues received by the City
for the preceding plan year pursuant to Chapters 175 and 185, Florida Statutes. Effective
the first pay period after September 1, 1999, "eligible retirees" are members or
beneficiaries of members who retired or terminated employment after September 30,
1993, receive normal retirement benefits, and whose date of hire as a City police officer
or firefighter is twenty-five (25) or more years prior to the benefits adjustment date. A
minimum benefit increase of one percent per year will be provided, regardless of the
amount of premium tax revenues received. To the extent annual premium tax revenues
exceed the current amount ($504,922), the annual one percent minimum adjustment will
be increased in increments of one-tenth of one percent, based on the actuary's
determination that the amount of the excess premium tax revenues is sufficient to fund
the benefit increases on an actuarially sound basis. The maximum amotmt of the total
annual benefit increase will not exceed four percent, regardless of the amount of premium
tax revenues received. The annual benefit increase provided under this paragraph shall
be compounded annually (i.e., the increase shall be based on the benefit received by plan
members at the end of the preceding plan year).
2. Except as expressly modified in this amendment, the terms of the original
Agreement remain in full force and effect. The parties warrant that by agreeing to this
amendment or by agreeing to implement other changes to the pension ordinance, the
parties have not waived, nor have they intended to waive the provisions of paragraph 5 of
the original agreement removing pension issues from collective bargaining now or in the
future.
3. Effective Date - - This Addendum shall take effect upon execution by all
parties, except as otherwise specifically provided herein.
4. Severability - - Should any provision or part of this Addendum be
declared illegal, invalid or unenforceable by a court of competent jurisdiction, the
remaining parts and provisions shall have no force and effect unless otherwise mutually
agreed by the parties.
CITY OF DELRAY BEACH
Date
ATTEST:
CITY CLERK
APPROVED AS TO LEGAL SUFFICIENCY
AND FORM
CITY ATTORNEY
BOARD OF TRUSTEES OF THE CITY OF
DELRAY BEACH POLICE OFFICERS AND
FIRFIGHTERS RETIREMENT SYSTEM
Date
PROFESSIONAL FIREFIGHTERS AND PARAMEDICS
OF DELRAY BEACH, LOCAL 1842, IAFF
Date
POLICE BENEVOLENT ASSOCIATION
Date
Approved by a majority of police/firefighter pension members on
I:ITY OF DELRI:iY BEI:II:H
CiTY ATTORNEY'S OFFICE .w
TELEPHONE 561/243-7090 · FACSIMILE 561/278-4755
DELRAY BEACH Wri~r's Direct Line: 561/243-7091
DATE: July 29, 1999
~99~ TO: City Co~ission ~~ ~~~ ~ ~ ~~
F~O~: Sus~ ~. ~y. ti, ~,o~y & ~ ~ ~'
SUBJECT: Ordin~ce No. 29-99 (Police ~d Fire Retirement PI~) ~d Ord~ce No.
30-99 (General Employees Retirement PI~)
The following is a summary of the changes proposed:
Ordinance No. 30-99 - General Employees Pension Changes
1. Changes the eligibility for a fully normal retirement benefit by adding a 30 years of
credited service threshold regardless of age to the age 60 with ten years of service
threshold for eligibility that currently exists.
2. Adds a DROP Plan.
3. Provides for interest of 3% with less than 10 years of service and 5% with 10 or more
years of continuous service on employee contributions when withdrawn.
4. Brings employee contributions into the retirement plan to zero.
5. These changes as drafted exclude union members who are currently operating under an
expired CBA or those that have not yet entered into a CBA.
6. Establishes a 1% matching program to a deferred compensation plan. This change is
not a part of the pension ordinance, but is outlined in an administrative policy.
Ordinance No. 29-99 - Police/Fire Pension Changes
1. Clarifies that the early retirement window option applies only to pension benefits
entitlement for those with at least 18 years to 20 years of service and provides that sick
leave, vacation and other accruals are not part of the benefit.
2. Clarifies that the retirement benefit enhancement will apply to beneficiaries. The
enhancement will be adjusted annually on the retiree's anniversary date of hire and
expressly eliminates retiree's ability to receive the enhancement.
3. Reduces the pement for a disability pension to 60%.
4. Increases the multiplier from 2.5 to 3.0 for members with 20 years or more of service.
/o7.//.
City Commission
July 29, 1999
Page 2
5. Increases from 2 to 3 years the determination of average monthly earnings.
6. Reduces employee contributions from 7.33% to 3.00% of base compensation.
7. Provides interest on withdrawn contributions.
8. Removes all offsets.
9. Provides for changes to beneficiaries after retirement.
Police/Fire Agreement Amendment
The police/fire addendum to agreement makes the same clarifications to the early
retirement incentive (window) provisions and the retirement benefit enhancement.
By copy of this memorandum to David Harden, City Manager, please place the General
Employees and Police and Fire ordinances on the City Commission for the August 3, 1999
agenda for first reading. The addendum to agreement should be placed on the August 17,
1999 agenda to be approved at second reading.
SAR:smk
Attachments
cc: David T. Harden, City Manager
Alison MacGregor Harty, City Clerk
James W. Linn, Esq.
TO: MAYOR AND CITY COMMISSIONERS
FROM: CITY MANAGER~
SUBJECT: AGENDA ITEM #/~.A. - REGULAR MEETING OF AUGUST 3, 1999
I.A.F.F. REQUEST RE ORDINANCE NO. 29-99 (ITEM 12.A)
DATE: AUGUST 2, 1999
Attached is a memorandum from the City Attorney to me concerning
materials received from the Finance Department regarding the
I.A.F.F.'s request to have the proposed ordinance revisions apply
to current DROP plan members.
I have also attached a copy of the applicable code cite (Section
33.685(D) which clearly states that an employee's accrued benefit
under the System shall be determined on the effective date of the
employee's election to participate in the DROP plan and that an
employee who elects to participate in the plan shall not accrue
any additional benefits under the System.
One reason the changes are being made to the Police and Fire
retirement plan is to serve as an incentive for the retention of
new hires. They were not necessarily intended to apply to those
employees who have already retired or opted to do so under the
DROP plan. The City has no legal obligation to extend the
proposed ordinance changes to these individuals.
This information is provided for your information. Commission
discretion is recommended.
Ref:Agmerao14.Ord29-99.IAFF request
RECEIVED
J U L 2 9 1999
[lTV DF DELRRV BERgH
CITY ATTORNEY'SOFFICE ~00 Nw ]st AVENUE. DELR^¥ BE~CH, FLOR[DA 33444
TELEPHONE 561/243-7090 · FACSIMILE 561/278-4755
DELRAY BEACH Writer's Direct Line: 561/243-7091
Ali.America City MEMORANDUM
1993
TO: David Harden, City Manager
FROM: Susan A. Ruby, City Attorney
SUBJECT: IAFF Request
I received a copy of the attached materials from Sherry Muehlberg today regarding the
request of the IAFF to have the proposed ordinance revisions apply to current DROP
plan members. I am providing this to you for your information.
Attachment
iaff-drop.doc
+40'724.~?166 ClIY OF' DELI(FlY BEACH '/11::1 P~i JUL :,-"-3
PROFESSIONAL FIRE FIGHTERS
& PARAMEDICS OF
DELRAY BEACH LOCAL 1842
INTERNATIONAL ASSOCIATION OF FIP,.EFIOHTERS
P.O. BOX 583, DELRAY BEACH, FL 33437
July 22, 1999
Jay Alprine, Mayor
City of Delray Beach
1 O0 NW 1 Avenue
Delray Beach, FL 33444
Dear Mayor Alprine,
As you are very much aware, several changes have been proposed to the Police and Fire
Pension Plan, Included in the changes is an increase in the multiplier for years of service
from 2.5% to 3% after 20 years of service.
The intent of this letter is to request that all Bargaining Unit Members, including DROP Plan
participants, be included in these changes. Currently, the 13 DROP Plan participants are not
being considered for this benefit change. These employees are apparently being excluded
because of their involvement in the DROP Plan although they are still active employees of the
City.
We did attempt to rectify this situation with members of the City Staff and were told that they
would not be included.
I have included a copy of the Pension Board Actuary's estimate of the cost to include these
employees. As you can see, this study was conducted in 1998 and there were 20 active
DROP plan participants at that time. Currently there are only 13 still employed with the City
which reduces this estimate significantly. The cost to fund including these employees could
also come from the pension plan itself as is proposed by the City for the cost of the other
changes. Additionally, I have affached a section of the City of West Palm Beach's pension
plan document clearly indicating that this type of action has recently been done for other active
employees who where participating in a DROP plan.
The Professional Fire Fighters and Paramedic of Delray Beach would truly appreciate your
support in this matter. We feel that including ell active employees in these proposed changes
is the right thing to do. Thank you for your time and effort.
Sincerely,
Richard M. Murphy"--"
Vice President
CC: Ned Gusty~ HR Director
Joe Safford, Finance Director
07/29/89 THU 13:15 [TX/RX NO 5959]
+4872437166 CITY OF DELRAY BEACH 718 P02 JUL 29 '99 12:14
GABRIEl. ROEDER. SMITH & O:)MPANY
C~nsult~nls & Ak~uirlel
Mr. Bill Adams, ,~ecmtary
Delray Beach Police and Firefighters
Pension Board
609 Homewood Boulevard
Delray Beech, Florida 33445
Dear Bill:
Last month you had asked us to determine the cos1 ,Impact of' allowing those in the DROP to be
subject to the pm~ol~ed 3% multiplier, We gave you figures over the phone on June 11"~. Rich
Murphy o! the Fireflghters union has esi[ed ue to put the figuree in writing.
At O=tober 1. 1998, there were 20 DROP pal~l~Ipants. IT all 20 were granted the 3% multiplier,
ll~e present value of their benefits would Inoreese by $1.396,775 which in turn would raise the
required annual contribution by $132,S~7.
Please co,tact ue if you have any questions.
Sincerely yours,
J. Stephen Pelmqulst
JSP/or
07/29/99 TflU 13:15 [TX/EX NO 5959]
+407243716~ CITY OF DELR~Y BEF~CH 71@ PO~ JUL 29 'gB 12:15
d. The Board shall be required to engage the service3 of
prolessional investrqent counsel to as;fisl a::~d ad~ise the Trustee in the
perlo[mance of their duties,
e. ~ least once eve~ [t~ree (3) ye.=rs, the ~rd shall retain an
independent consultant proiession~]Jly ,~u~fied lo e~luate the
perlorm~nce of its pro[essionol money manager or in~stment counsel.
. ~e independent cons~tant sh~ll m~ke ~eco~endations to the ~d
regarding the ~e]ection at money manager~ Jar the ne~ invest~nt term.
These reco~tendations sh~i[ be constde:ed by the Bo~d ~t its next
regularly scheduled meeting.
(c) M~mum o[ cash not in~sted. No more than ten ~rcent (10%) al the
assets c[ the Fund shall be held in cash or In noninterest-~aring de,sits.
Section 4. Paragraph ia) el subsection (5) al section [7 o[ Chapter 2498 l, Laws of
Rorida. 1947, as amended, is hereby ~ended as ~ollow:~:
(5) Se~ce pension.
(a) Norm~ retirement,
1. ~V member whose ent~ or re-ent~ in the emplo~ent al the
de~menl ~cura after Ap~l 3~, ]959, who has mtaln~ age lilly
(50) yems, ~d who has acq~red [iflesn (15) or more years of se~ce
credit shall, upon application fti~ with the boar~ be ret~ ~d
sh~[ be entitled to a mont~y ~nskm for the remainder al h~ i~e
equ~! to the greater al t~ IoJlo~ng .~:
a. Fpr a mem~r who ~$ ~cti~[y ~,m~ed bv ~e detriment on
or after October L 1998 ag who is D~ al ~ DROP'~or ~ter
Octp~r t. 199B..threq, (3) ~r,:enl al ~.iinol ~eraqe
multiplie~ by the number qi.y'~rs_ ~n5/r~ctt~n oi ~ ~eor_ al
~ce credit eam~from gD,~ olter Octo~r I. [982. D[~ Lwo
CODING: Words ~ are deletions; w~rds ~~ are additions.
07/29/99 THU 13:15 [TX/RX NO 5gsg]
Section 33.685(D)
(D) An employee's continuous service and accrued benefit
under the System shall be determined on the effective date of the
employee's election to participate in the Deferred Retirement
Option Plan. An employee who elects to participate in the
Deferred Retirement Option Plan shall not accrue any additional
continuous service or benefits under the System, except for
additional benefits provided under the retirement benefit
enhancement, if applicable, while participating in the Deferred
Retirement Option Plan. No amounts shall be paid to an employee
from the System while the employee is a participant in the
Deferred Retirement Option Plan.
(E) A Deferred Retirement Option Plan account shall be
established for each employee who elects to participate in the
Deferred Retirement Option Plan in accordance with this section.
During the period of the employee's participation in the Deferred
Retirement Option Plan, the employee's normal retirement benefit,
calculated in accordance with Section 33.62(B) based on average
monthly earnings and continuous service as of the effective date
of the employee's election to participate in the Deferred
Retirement Option Plan, shall be paid into the employee's
Deferred Retirement Option Plan account. The employee's Deferred
Retirement Option Plan account shall be invested by the Board of
Trustees and credited with interest equal to the overall net rate
of return on Retirement Fund assets during the period the
employee participates in the Deferred Retirement Option Plan.
(F) At the conclusion of the employee's participation in
the Deferred Retirement Option Plan, and as a condition of
participating in such Plan, the employee will retire and
terminate City employment. The employee will thereafter receive
a normal retirement benefit calculated in accordance with Section
33.62(B) based on average monthly earnings and continuous service
as of the effective date of the employee's election to
participate in the Deferred Retirement Option Plan. The
employee's Deferred Retirement Option Plan account will
thereafter be distributed to the employee in a cash lump sum,
unless the employee elects an alternative distribution as
described below:
(1) Payments in approximately equal quarterly or
annual installments over a period designated by the employee, not
to exceed the life expectancy of the employee or the joint life
expectancy of the employee and the employee's designated
beneficiary. In the event that the employee dies before all
installments have been paid, the remaining balance in the
employee's Deferred Retirement Option Plan account shall be paid
in an immediate cash lump sum to the employee's designated
beneficiary.
III.44.1 -
MEMORANDUM
TO: MAYOR AND CITY COMMISSIONERS
FROM: CITY MANAGER ~
SUBJECT: AGENDA ITEM #/~.A. - REGULAR MEETING OF AUGUST 3, 1999
I.A.F.F. REQUEST RE ORDINANCE NO. 29-99 (ITEM 12.A)
DATE: AUGUST 2, 1999
Attached is a memorandum from the City Attorney to me concerning
materials received from the Finance Department regarding the
I.A.F.F.'s request to have the proposed ordinance revisions apply
to current DROP plan members.
I have also attached a copy of the applicable code cite (Section
33.685(D) which clearly states that an employee's accrued benefit
under the System shall be determined on the effective date of the
employee's election to participate in the DROP plan and that an
employee who elects to participate in the plan shall not accrue
any additional benefits under the System.
One reason the changes are being made to the Police and Fire
retirement plan is to serve as an incentive for the retention of
new hires. They were not necessarily intended to apply to those
employees who have already retired or opted to do so under the
DROP plan. The City has no legal obligation to extend the
proposed ordinance changes to these individuals.
This information is provided for your information. Commission
discretion is recommended.
3w-99
Ref:Agmemo14.Ord29-99.IAFF request
RECEIVED
J u L 2 9 1999
CiTY ATTORNEY'S OFFICE
DELRAY BEAEH Wrist's Di~ct L~: 561/243-7~i
lll.lmefi~a C~
.~ DATE: July 29, 1999
1993
TO: David Harden, City Manger
FROM: Susan A. Ruby, City Attorney
SUBJECT: IAFF Request
I received a copy of the attached materials from Sherry Muehlberg today regarding the
request of the IAFF to have the proposed ordinance revisions apply to current DROP
plan members. I am providing this to you for your information.
Attachment
iaffqlrop.doc
+4072457166 CIIY OF DELRHY BE~CH '?1~ P~i JUL 2S 'S~ lZ:14
PROFESSIONAL FIGHTERS
& PARAMEDICS OF
DELRAY BEACH LOC 1842
INTE~ATION~ ASSOCIATION OF FI~FIGHTBRS
P.O, BOX 583, DEL~Y BEACH, ~ 33437
July 22, 1999
Jay Alprine, Mayor
City of Delray Beach
100 NW 1 Avenue
Delray Beach, FL 33444
Dear Mayor Alpdne,
As you are very much aware, several changes have been proposed to the Police and Fire
Pension Plan. Included in the changes is an increase in the multiplier for years of service
from 2.5% to 3% after 20 years of service.
The intent of this letter is to request that all Bargaining Unit Members, including DROP Plan
participants, be included In these changes. Currently, the 13 DROP Plan participants are not
being considered for this benefit change. These employees are apparently being excluded
because of their involvement in the DROP Plan although they are still active employees of the
City.
We did attempt to rectify this situation with members of the City Staff and were told that they
would not be included.
I have included a copy of the Pension Board Actuary's estimate of the cost to include these
employees. As you can see, this study was conducted in 1998 and there were 20 active
DROP plan participants at that time. Currently there are only 13 still employed with the City
which reduces this estimate significantly. The cost to fund including these employees could
also come from the pension plan Itself as is proposed by the City for the cost of the other
changes. Additionally, I have affached a section of the City of West Palm Beach's pension
plan document clearly indicating that this type of action has recently been done for other active
employees who where participating in a DROP plan.
The Professional Fire Fighters end Paramedic of Delmy Beach would truly appreciate your
support in this matter. We feel that including all active employees in these proposed changes
is the right thing to do. Thank you for your time and effort.
Sincerely,
Richard M, Murphy'"--"
Vice President
CC: Ned Gus[y, HR Director
Joe Safford, FSnance Director
07/29/99 THU 13:15 [TX/EX NO 5959]
+~072437166 CITY OF DELRAY BEACH 718 P02 JUL 29 '99 12:14
GABRIEL., IICIECIEIq, SMITH & ~MPANY
Mr. Bill Aelame, Secretary
Delray Beach Police and F[refighters
Pension Board
609 Homewood Boulevard
Delrey Beach, Florida 33445
Dear Bill:
Last month you had asked us lo determine the coat .Impact of' allowing those In the DROP to be
subject to ~he prOl~osed 3% multiplier. We gave you figure,, over the phone on June 11~. Rich
Murphy oi the Fireflghters union has asked us to put the figures in writing.
At et=lobar 1.1998, there were 20 DROP participants. If ell 20 were granted the 3% multiplier,
tl~e present value of their benefits would Increase by $1,395,775 which in turn would raise the
required annual contribution by $1:32,567.
Please co~taet us if you have ar~y questions.
Sincerely yours,
J. Stephen Palmqulst
JSP/or
07/29/99 THU 13:15 (TX/RX NO 5959]
+407P437168 CITY ~ DELRRY BEI::ICH 718 P03 JUL 29 "99 12:15
d. The Board shall be required to engage the service3 of
prolessionai invesirqen! counsel to os~ist ~:~d ~d,4~e the Trustee In the
perfo~ance of their dulies,
e. ~ least once eve~ ~hree (3) ye~rs, t~e ~rd shall ~etain an
~depmndent cons~tant proiession~lly .aua~fied Ia e~luate the
perJorma~ce al its pro[easional money rummager or ifl~stment counsel.
~e independent cons~tant shall make reco~endations to the ~d
regarding the oelection at money m~nager~ lot the ne~ invest~nt term.
These reea~endatio~ shall be conside:ed by lhe Bo~d at Its next
regularly scheduled meeting.
(c) M~mum of c~sh not in~sted. No more than ten ~rcent (i0%) at the
assets al ~he Fund shall be held in cash or In noninterest-~aring de.sits.
Section 4. Paragraph (al al subsection (5) al section 17 o~ Chapter 24981. L~s
~ortda, i 947, as amended, is hereby ~ended as
(5) Se~ce pension.
Norm~ retirement,
I. ~y member whose ent~ or re~nl~ in the emplo~enl al the
de~ment ~curs ~ter Ap~I 30, 1 ~59, who has returned age
(50) ye~s. ~d who has acq~red [iftean (IS) or mote years of se~ce
credit shall, upon application filed with the b~rd be rmt~ ~d
· ~l be entlUed m ~ mont~y ~nalon lot the remainder al h~ i~e
equal to the greater of t~ follo~ng ~:
a. ~or a m~m~r ~9 is aefl~ly eme~ved bv ~m dm~ment on
or after October 1, 199B ~ who is O~ of ~ DROP'~or ~ter
Octo~r L 1998..three. (3) ~roent al .ht~.ttn~l ~era~e
mullioli~ bv the number of v'ears~ and ~rqcflo~ of a veer al
~ce credit eam~ ~rom and after Octo~r 1. 1982. pl~
CODING: Words ~ are deletions; w~rds ~~ecl czr,e addilions.
07/29/99 THU 13:15 [TX/RX NO 5959]
Section 33.685(D)
(D) An employee's continuous service and accrued benefit
under the System shall be determined on the effective date of the
employee's election to participate in the Deferred Retirement
Option Plan. An employee who elects to participate in the
Deferred Retirement Option Plan shall not accrue any additional
continuous service or benefits under the System, except for
additional benefits provided under the retirement benefit
enhancement, if applicable, while participating in the Deferred
Retirement Option Plan. No amounts shall be paid to an employee
from the System while the employee is a participant in the
Deferred Retirement Option Plan.
(E) A Deferred Retirement Option Plan account shall be
established for each employee who elects to participate in the
Deferred Retirement Option Plan in accordance with this section.
During the period of the employee's participation in the Deferred
Retirement Option Plan, the employee's normal retirement benefit,
calculated in accordance with Section 33.62(B) based on average
monthly earnings and continuous service as of the effective date
of the employee's election to participate in the Deferred
Retirement Option Plan, shall be paid into the employee's
Deferred Retirement Option Plan account. The employee's Deferred
Retirement Option Plan account shall be invested by the Board of
Trustees and credited with interest equal to the overall net rate
of return on Retirement Fund assets during the period the
employee participates in the Deferred Retirement Option Plan.
(F) At the conclusion of the employee's participation in
the Deferred Retirement Option Plan, and as a condition of
participating in such Plan, the employee will retire and
terminate City employment. The employee will thereafter receive
a normal retirement benefit calculated in accordance with Section
33.62(B) based on average monthly earnings and continuous service
as of the effective date of the employee's election to
participate in the Deferred Retirement Option Plan. The
employee's Deferred Retirement Option Plan account will
thereafter be distributed to the employee in a cash lump sum,
unless the employee elects an alternative distribution as
described below:
(1) Payments in approximately equal quarterly or
annual installments over a period designated by the employee, not
to exceed the life expectancy of the employee or the joint life
expectancy of the employee and the employee's designated
beneficiary. In the event that the employee dies before all
installments have been paid, the remaining balance in the
employee's Deferred Retirement Option Plan account shall be paid
in an immediate cash lump sum to the employee's designated
beneficiary.
III.44.1 -
[ITY OF OELRI:I'F BEI:IEH
CITY ATTORNEY'S OFFICE ~0,, ,,,w ,~, ^,,,~,~,,~. ~,,,,.,,^.,. ,,,,^~.. ,~,o,,,,~^
TELEPHONE 561/243-7090 · FACSIMILE 561/278-4755
DELRAY BEACH Writer's Direct Line: 561/243-7091
® DATE: August 11, 1999
TO: City Commission /
FROM: Brian Shutt, Assistant City Attorney
SUBJECT: Ordinance No. 32-99 (Police and Fire Drop Plan)
At the Commission meeting of August 3, 1999, the Commission discussed the issue of
whether current members of the DROP plan should be eligible for the 3 % multiplier.
Our office has drafted Ordinance No. 32-99 which provides for inclusion of current
DROP plan members.
By copy of this memorandum to David Harden, City Manager, our office requests that
this ordinance be placed on the City Commission agenda of August 17, 1999 for first
reading. Please call if you have any questions.
Attachments
cc: David T. Harden, City Manager
Alison MacGregor Harty, City Clerk
James W. Linn, Esq.
ORDINANCE NO. 32-99
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 BY AMENDING
SECTION 33.62, "BENEFIT AMOUNTS AND ELIGIBILITY", TO
PROVIDE THAT CURRENT EMPLOYEES WHO ARE ENROLLED IN THE
DEFERRED RETIREMENT OPTION PLAN AS OF THE EFFECTIVE
DATE OF THIS ORDINANCE SHALL BE ENTITILED TO THE 3%
MULTIPLIER STARTING WITH THOSE MONTHLY RETIREMENT
PAYMENTS ISSUED AFTER OCTOBER 1, 1999; PROVIDING A
GENERAL REPEALER CLAUSE, A SAVING CLAUSE, AND AN
EFFECTIVE DATE.
WHEREAS, the City Commission of the City of Delray Beach desires to allow
employees who are currently enrolled in the Deferred Retirement Option Plan, ("DROP plan")
to be entitled to the 3 % multiplier.
NOW THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE
CITY OF DELRAY BEACH AS FOLLOWS:
Section 1. That Chapter 33, "Police and Fire Departments", subheading, "Pensions",
of the Code of Ordinances of the City of Delray Beach is hereby amended by amending
Section 33.62, "Benefit Amounts and Eligibility", Paragraph F, "Application of section", to
read as follows:
Section 33.62 BENEFIT AMOUNTS AND ELIGIBILITY.
(F) Application of section. The provisions set forth herein shall be applicable to all
current and future members of the plan, except those members who retired, entered the DROP
plan, or terminated employment prior to the effective date of this ordinance. Members who
retired, entered the DROP plan, or terminated employment prior to the effective date of this
ordinance shall receive benefits in accordance with the plan provisions in effect on the date of
their retirement, entry into the DROP plan, or termination, whichever is earliest. However, a
member of the plan who is enrolled in the DROP plan as of the effective date of this ordinance
shall be entitled to the 3% multiplier as provided for by Section 33.62(B)(2). This multiplier
shall only be applied to those monthly retirement payments issued after October 1v 1999.
Section 2. That all ordinances or parts of ordinances in conflict herewith be,
and the same are hereby repealed.
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
Ord. No. 32-99
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 this ordinance shall become effective immediately upon its
passage on second and final reading.
PASSED AND ADOPTED in regular session on second and final reading on
this the ~ day of ,1999.
MAYOR
ATTEST:
City Clerk
First Reading
Second Reading
Ord. No. 32-99