22-020 1 ORDINANCE 22-020
2
3 AN ORDINANCE OF THE CITY OF BOYNTON BEACH FLORIDA
4 AMENDING ARTICLE III OF CHAPTER 18 OF THE BOYNTON
5 BEACH CODE OF ORDINANCES ENTITLED MUNICIPAL POLICE
6 OFFICERS' RETIREMENT TRUST FUND AMENDING SECTION 18-
7 164 TO PROVIDE FOR PENSION CONTRIBUTIONS BY DROP
8 MEMBERS; AMENDING SECTION 18-175 DEFERRED
9 RETIREMENT OPTION PLAN TO PROVIDE FOR 8 YEAR DROP;
10 PROVIDING FOR CODIFICATION CONFLICT, SEVERABILITY, AND
11 AN EFFECTIVE DATE.
12
13 WHEREAS, the City and the Palm Beach County Police Benevolent Association ("Union")
14 have agreed in collective bargaining to provide for an eight-year Deferred Retirement Option
15 Plan ("DROP") and to require contributions for DROP members; and
16
17 WHEREAS, the City Commission of the City of Boynton Beach Florida desires to so
18 amend the Boynton Beach Police Officers Pension Fund.
19
20 NOW, THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY OF
21 BOYNTON BEACH, FLORIDA:
22 Section 1. The foregoing "WHEREAS" clauses are hereby certified as being true and
23 correct and are incorporated herein by this reference.
24 Section 2. Section 18-164(b) of Article III of Chapter 18 of the Boynton Beach Code
25 of Ordinances is hereby amended as follows:
26 Sec. 18-164. Creation and maintenance of fund and retirement system.
27 ***
28 (b) The fund shall be maintained in the following manner:
29
30 (1) By payment to the fund of the net proceeds of the .85% excise tax which is
31 imposed by the City of Boynton Beach upon certain casualty insurance companies on
32 their gross receipts of premiums from holders of policies, which policies cover property
33 within the corporate limits of the City of Boynton Beach as authorized in F.S. Chapter 185,
34 amended. These amounts are to be deposited with the Board of Trustees within five days
35 of receipt by the municipality. F.S. Ch. 185. Beginning November of 2017 and ending
36 November of 2021, $30,000.00 of each year's distribution of the insurance premium
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37 excise tax provided for in this subsection will be used by the City to offset the unfunded
38 actuarial liability of the fund.The remainder of the insurance premium excise tax received
39 each year will be used as set forth in Section 18-169(f) of the plan, which provides for a
40 supplemental benefit as defined in F.S. Section 185.02(22).
41
42 (2) By the payment to the fund of 7% of the salary of each full-time police officer
43 duly appointed and enrolled as a member of the City of Boynton Beach Police
44 Department; which 7% shall be picked up, rather than deducted, by the City of Boynton
45 Beach from the compensation due to the Police Officer and paid over to the Board of
46 Trustees of the Boynton Beach Police Officers' Pension Fund on a bi-weekly basis. All
47 pickup contributions shall be treated as employer contributions for the purposes of
48 determining tax treatment under the Internal Revenue Code of 1986, as amended. All
49 such pick-up amounts shall be considered as employee contributions for purposes of
50 this plan. The percentage deducted from the police officers' salaries are to be deposited
51 with the Board of Trustees immediately. F.S. Ch.185, Boynton Beach Code of Ordinances
52 Sec. 18-170.
53 a. Effective the first full payroll period after October 1, 2019, the employee
54 contribution will increase to 7.5%.
55 b. Effective the first full payroll period after October 1, 2020, the employee
56 contribution will increase to 8.0%.
57 c. Effective the first full payroll period after October 1, 2021, the employee
58 contribution will increase to 8.5%.
59 d. The increase in employee contributions provided for in subsections a.- c. will
60 not reduce the City's contribution. The excess City contribution created by those
61 additional contributions will be used to offset the unfunded actuarial liability.
62 e. To fund the monthly supplemental benefit provided for in Sec. 18-169(f),
63 effective October 1, 2001, each police officer shall contribute an additional 1% of salary
64 through twenty years of service. This contribution is picked up rather than deducted
65 under the provisions of Code Sec. 414(h)(2).
66 f. Effective the first full payroll period after December 1, 2022, the
67 members participating in the DROP beyond five(5)years will contribute 3%of their
68 salary beginning with the sixty-first month of DROP participation.
69 (3) By all fines and forfeitures imposed and collected from any police officer because
70 of the violation of any rule and regulation adopted by the Board of Trustees. F.S. Ch. 185.
71 (4) By mandatory payment at least quarterly by the City of Boynton Beach a sum
72 equal to the normal cost and the amount required to fund any actuarial deficiency shown
73 by an actuarial valuation as provided in F.S. Chapter 112, Part VII. F.S. Ch. 185. On an
74 annual basis, the Board of Trustees will evaluate the actuarial assumptions used.
75 (5) By all gifts, bequests, and devises when donated to the fund. F.S. Ch. 185.
76 (6) By all accretions to the fund by way of interest or dividends on bank deposits, or
77 otherwise. F.S. Ch. 185.
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78 (7) By all other sources or income now or hereafter authorized by law for the
79 augmentation of the Boynton Beach Police Officers' Pension Fund. F.S. Ch. 185.
80
81 Section 3. Section 18-175 (a) Deferred retirement option plan of Article III of Chapter
82 18 of the Boynton Beach Code of Ordinances is hereby amended as follows:
83 Sec. 18-175. Deferred retirement option plan.
84 (a) A deferred retirement option plan ("DROP") is hereby created.
85 (1) Prior to October 1, 2022, the DROP was for a period of 5 years. Members
86 hired on and before September 30, 2019 who elect to participate in the DROP
87 are subject to the DROP terms as provided for in this Section 18 175.
88 (2) Members hired on and after October 1, 2019 who elect to participate in the
89 DROP arc subject to the DROP terms as provided for in Section 18 300 of the City of
90 Boynton Beach Code. Effective October 1, 2022, all Members are eligible to
91 participate in the DROP for eight (8) years. Members who are already participating
92 in the DROP on October 1, 2022 will have the option to elect into the eight (8) year
93 DROP by completing a form provided for that purpose. This election in the
94 extended eight (8)year DROP is a one-time opportunity.The election to participate
95 in the eight (8) year DROP must be made within 30 days of the second reading of
96 this Ordinance. The election will permit the Member to stay in the DROP for up to
97 eight (8)years, to elect the 7% rate of return, if not already elected, and require the
98 Member to make a 3% employee contribution while participating in the DROP
99 beyond sixty (60) months. Any change in the method of crediting earnings will be
100 effective the first of the month following the date of the election.
101 (b) Eligibility to participate in the DROP is based upon eligibility for normal service
102 retirement in the plan. Members shall elect to participate by applying to the Board of
103 Trustees on a form provided for that purpose.
104 (c) Participation in the DROP must be exercised within the first 25 years of combined
105 credited service.
106 (d) A member shall not participate in the DROP beyond the time of attaining 33 30
107 years of service and the total years of participation in the DROP shall not exceed eight
108 five years. For example:
109 (1) Members with 20 years of credited service at time of entry shall only participate
110 for five years.
111 (2) Members with 25 years of credited service at time of entry shall participate for
112 five years.
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113 (3) Members with 26 years of credited service at time of entry shall only participate
114 for four years.
115 (e) Upon a member's election to participate in the DROP, he or she shall cease to be
116 a member and is precluded from accruing any additional benefit under the Pension Fund.
117 For all fund purposes, the member becomes a retirant. The amount of credited service
118 and final average salary freeze as of the date of entry into the DROP. Accumulated,
119 unused sick and vacation leave shall be included in the compensation calculation;
120 provided however, that a minimum balance of 120 hours of sick leave and 120 hours of
121 vacation leave shall be maintained by the employee and excluded from this calculation.
122 The retained leave balance, including any additions, shall be distributed at the conclusion
123 of DROP participation and separation from service. DROP participants who remain in
124 the DROP beyond sixty (60) months will make a contribution of 3% during their
125 DROP participation beginning with the sixty-first (61) month of participation,
126 (f) Payment shall be made into the employee's DROP account as if the employee had
127 retired from the employ of the city. The amounts paid will be determined in accordance
128 with this Plan and the employee's selection of the payment option. Payments into the
129 DROP will be made monthly over the period the employee participates in the DROP, up
130 to a maximum of 96€0 months.
131 (g) Effective January 1, 2003, DROP participants have the option to select optional
132 methods to credit investment earnings to their account less any outstanding loan
133 balances. The method may be changed each year effective January 1, however, the
134 method must be selected prior to January 1 on a form provided by the Board of Trustees.
135 The methods are:
136 (1) Gains or losses at the same interest rate earned by the Pension Plan; or
137 (2) A guaranteed rate of 7%; or
138 (3) A percentage of the DROP account will be credited with interest gains or losses
139 at the same rate earned by the pension plan and the remaining percentage will be
140 credited with earnings at a guaranteed rate of 7%. The actual percentage shall be
141 selected by the member on a form provided by the Board of Trustees. The total of the
142 two percentages must equal 100%. Employee's DROP accounts will be assessed an
143 administrative fee that is based upon the ratio that the Employee's DROP account bears
144 to the fund as a whole.
145 (4) One-Time Interest Rate Changes;
146 a, Participants in the DROP, as of December 31, 2002, may change their method
147 for the crediting of earnings. This change in the crediting of earnings is a one=
148 time opportunity. The election to change the method for crediting must be
149 made during the month of January 2003. The method, if changed, will be
150 effective February 1, 2003.
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151 IL Participants in the DROP, as of October 1, 2022, may change their
152 method for the crediting of earnings. This mid-year change in the
153 crediting of earnings is a one-time opportunity. The election to change
154 the method for crediting must be made within 30 days of the second
155 reading of this Ordinance.The earnings method elected will be effective
156 the first of the month following the election.
157 (h) An employee's participation in the DROP shall terminate at the end of eig_hl five
158 years or 33 30 years of service, whichever comes first. Failure to end DROP participation
159 may result in penalties at the discretion of the Trustees, up to and including forfeiture of
160 the DROP account. Upon entering into the DROP, an employee shall file with the Board
161 a binding letter of resignation from city employment. The binding letter of resignation
162 shall establish a deferred termination date in accordance with the limitations of this
163 DROP, which may be amended.
164 (i) All interest shall be credited to the employee's DROP account less any outstanding
165 loan balances on a quarterly basis with quarterly statements provided. In the event that
166 a member dies while in the DROP, interest shall be pro-rated to the last business day of
167 the month preceding the death of the member.
168 (j) Upon termination of employment, participants in the DROP will receive the balance
169 of the DROP account in accordance with the following rules:
170 (1) Members may elect to begin to receive payment upon termination of
171 employment or defer payment of DROP until the latest day as provided under sub-
172 subparagraph (3).
173 (2) Payments may be made in the following ways:
174 a. Lump sum. The entire account balance will be paid to or on behalf of the retirant
175 upon approval of the Board of Trustees.
176 b. Installments. The account balance will be paid out to the retirant in five equal
177 annual payments paid over five years, the first payment to be made upon approval of
178 the Board of Trustees.
179 c. Monthly installments. The account balance will be paid out to the retirant on a
180 monthly basis until the account balance is paid out based on actuarial tables provided
181 by the actuary.
182 d. Partial lump sum withdrawals. Part of the account balance will be paid to or on
183 behalf of the retirant upon approval of the Trustees.
184 (3) Any form of payment selected by a police officer must comply with the minimum
185 distribution requirements of section 401(A)(9) of the Internal Revenue Code, and is
186 subject to the requirements of Section 18-174(f), e.g., payments must commence by age
187 72, unless the Member was age 70.5 before December 31, 2019.
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188 [THE REMAINDER OF SECTION 18-175 IS UNCHANGED]
189
190 Section 4. It is the intention of the City Commission of the City of Boynton Beach that
191 the provisions of this Ordinance shall become and be made a part of the Code of Ordinances of
192 the City of Boynton Beach Florida.The Sections of this ordinance may be renumbered re-lettered
193 and the word Ordinance may be changed to Section Article or such other word or phrase in
194 order to accomplish such intention.
195 Section 5. All Ordinances or parts of Ordinances Resolutions or parts of Resolutions in
196 conflict herewith be and the same are hereby repealed to the extent of such conflict.If any clause
197 section or other part or application of this Ordinance shall be held by any court of competent
198 jurisdiction to be unconstitutional or invalid such unconstitutional or invalid part or application
199 shall be considered as eliminated and so not effecting the validity of the remaining portions or
200 applications remaining in full force and effect.
201 Section 6. This Ordinance shall become effective immediately upon adoption provided
202 that the changes approved herein are effective nunc pro tunc to October 1, 2022.
203 FIRST READING THIS f DAY OFcodp_or , 2022.
204
205 SECOND, FINAL READING and PASSAGE THIS /`S� DAY OFAi)Venib-{, 2022.
206
207 CITY OF BOYNTON BEACH, FLORIDA
208 YES NO
209
210 Mayor—Ty Penserga
211
212 Vice Mayor—Angela Cruz ✓
213
214 Commissioner—Woodrow L. Hay
215
216 Commissioner—Thomas Turkin
217
218 Commissioner—Aimee Kelley c/
219
220 VOTE 5-0
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221
222
223
224 ATTEST:
225
226 1
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227 Maylee De :sus, MPA, ► MC Ty Pens ga
228 City Clerk May
229
230 APP OV D A T RM:
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I 231 (Corporate Seal) :k ;•• '••.. '► _ I
232 ; f:-.� SV,SIJ'I 'I
233 =� `NCnig 00`Vi Michael D. Cirullo, Jr.
234 1920: City Attorney
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