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ORDINANCE NO. 16 -020
AN ORDINANCE OF THE CITY OF BOYNTON BEACH
AMENDING CHAPTER 18, ARTICLE IV, PENSIONS
FOR FIREFIGHTERS; CREATING A NEW SECTION
18 -193 PROVIDING FOR A DROP LOAN PROGRAM;
PROVIDING FOR CONFLICTS, SEVERABILITY,
CODIFICATION AND AN EFFECTIVE DATE.
WHEREAS, Ordinance 00 -13 created a DROP program for Firefighters, which is
currently codified in Section 18 -222 of the City Code;
WHEREAS, the Internal Revenue Code permits the establishment of qualified DROP
loan programs;
WHEREAS, the Board of Trustees of the Boynton Beach Firefighter Pension Trust
Fund has recommended the creation of a DROP loan program;
WHEREAS, the membership would be required to defray the administrative costs of
the DROP loan program;
WHEREAS, the City Commission of the City of Boynton Beach, desires to amend
Chapter 18 of the Code of Ordinances of the City to provide for DROP loan program for
firefighters;
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF
THE CITY OF BOYNTON BEACH, FLORIDA:
Section 1 : The foregoing "Whereas" clauses are true and correct and incorporated
herein by this reference.
Section 2: Section 18 -193, DROP Loan Program, is hereby created to read as
follows:
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Section 18 -193 - Firefighter DROP Loan Program
A DROP Loan program is hereby established for firefighters.
Availability of loans.
a. Loans are available to members only after termination of employ
provided the member had participated in the DROP for a period of 12 months.
b. Loans may only be made from a member's own account.
c. There may be no more than one loan at a time.
Amount of loan.
a. Loans may be made up to a maximum of 50% of account balance.
b. The maximum dollar amount of a loan is $50,000, reduced by the highest
outstanding loan balance during the last 12 months.
C. The minimum loan is $5,000.
Limitations on loans shall be made from the amounts paid into the DROP and the
earnings thereon.
Term of loan.
a. The loan must be for at least one year.
b. The loan shall be no longer than five years.
Loan interest rate.
a. The interest rate shall be fixed at time the loan is originated for the entire term
ref I nan
b. The interest rate shall be equal to the prime rate published by an established
local bank on the last day of each calendar quarter preceding the date of loan
application.
Defaults on loans.
a. Loans shall be in default if two consecutive months' repayments are missed or
if a total of four months' repayments are missed.
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b. Upon default, the entire balance becomes due and payable immediately.
C. If a loan in default is not repaid in full immediately, the loan may be canceled
and the outstanding balance treated as a distribution, which may be taxable.
d. Upon default of a loan, a member will not be eligible for additional loans.
Miscellaneous provisions.
a. All loans must be evidenced by a written loan agreement signed y the
member and the Board of Trustees. The agreement shall contain a promissory
note.
b. Notice of a loan shall be provided to a member's spouse, including a copy f
the promissory note.
C. Loans shall be considered a general asset of the fund.
d. Loans shall be subject to administrative fees to be set by the Board of Trustees.
e. Outstanding loan balances shall not be credited with earnings or losses. As the
outstanding balance is repaid with interest, earnings and losses shall be applied
to the payments and interest on a quarterly basis.
Section 3 : That all ordinances or parts of ordinances in conflict herewith be and
the same are hereby repealed.
Section 4 : Should any section or provision of this ordinance or portion hereof, any
paragraph, any sentence, or word be declared by a court of competent jurisdiction to be
invalid, such decision shall not affect the remainder of this ordinance.
Section 5 : Authority is hereby granted to codify this ordinance.
Section 6 : This ordinance shall become effective immediately upon passage.
FIRST READING this
day of , 2016.
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SECOND, FINAL READING AND PASSAGE this day of
2016.
CITY OF BOYNTON BEACH, FLORIDA
YES NO
Mayor --- Steven B. Grant
Vice Mayor — Mack McCray
Commissioner — Justin Katz
Commissioner — Christina L. Romelus
Commissioner — Joe Casello
VOTE
ATTEST:
J e ith A. Pyle, CMC
City Clerk
(Corporate Seal)
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