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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