HomeMy WebLinkAbout2002-03-25 02-159 ORDERCOUNCIL
Item No. 02-159
Date: March 25, 2002
Item/Subject: ORDER -Establishing a Designated Fund Balance Reserve Entitled: "Pension Obligation
Bond Savings Reserve" and Transferring Unexpended Funds from the Fixed Maine State Retirement
Division
Responsible Department: Finance
Commentary:
As you are aware, the City of Bangor recently issued Pension Obligation Bonds in order to pay off its and
the Ubary's Maine State Retirement System Initial Unfunded Unpooled Actuarial Liability. Through the
issuance of Pension Obligation Bonds, the City will realize $8.2 million In savings over the life of the issue.
Due to the structure of the Pension Obligation Bonds, in H02 the C5ry will forgo $961,800 In payments to
the Maine State Retirement System. The General Fund's portion of this amounts to $678,261.
This order would establish a designated Fund balance to house the $678,261. The funds will be
appropriated annually to equalize the amount of savings realizetl during the first seven was of the
Pension Obligation Boners repayment schedule. Savings beyond year seven increase significantly and
remain stable throughout the life of the debt.
Department Head
Managers Commer
Recommend Approval &//MLYn&( caw /
Gityy'M�annaager
Associated Information: Order, Amendment 4
Budget Approval:
This order has been reviewed and recommended for passage by Me Finance Committee.
Director
iry Solicitor
ntroduced for
X Passage
_ First Reading Page_ a_
Referral
o2-159
AssigredmCvamilor Trouble March 25, 2002
CITY OF BANGOR
(TOLE.) Order, Establishing a Designated Fund Balance Reserve Entitled: "pension
Obligation Bond Savings Reserve" and Transferring Unexpended Funds from
the Fixed Maine State Retirement Division
ORDERED, TX T in accordance vrith Article VI, Section 19 of the Qty Charter and the
guidelines set forth in CwWl Order 96-247, "Designated antl Undesignatetl Fund Balance,"Me
attatlted amendment to the aforeneitioned policy for Me establishment of a Designated
Pension Obligation Bond Reserve is hereby adopted.
02-159
AMENDMENT4
DESIGNATED AND UNDESIGNATED FUND BALANCE
12. Pension Obligation Bond Savings Reserve
12.1 Purpose. The Pension Obligation Bond Savings Reserve Is
established to provide a source of funding to stabilize the annual
savings to the General Fund during the first seven years of the
pension obligation bond's repayment schedule.
12.2 Funding. The Pension Obligation Bond Savings Reserve will be
funded by a one- time transfer of unexpended fixed Maine State
Retirement System payments available in FY02.
12.3 Authority to Use and Withdraw. The (Sty Council must authorize
the expenditure of these funds as an element of the annual
operating budget.
12.4 Amounts and Limits. The Pension Obligation Bond Savings Reserve
shall not exceed the General Fund's portion of FY02 savings due to
the issuance of Pension Obligation Bonds.
IN CITY COUNCIL q
March 25, 2002 i
Motion Made sora Seconded 'i 02-159
for Passage
Passed i ORDER
1 OY11� % �� Title, establishing a Designated Fund
DEPUTY CITT CLERK Malars Reserve Entitled:" and Trans -
ferning Uneapeded Porde from the Pined
Maine State Retirement Division
Assigned to