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HomeMy WebLinkAbout1999-06-14 99-228 ORDERCOUNCILAMON Item No. 99-228 Date: lune 28, 1999 Item/Bubject: Order, Establishing a Designated! Formal Balance Reserve Entitled: -M8R9 Consolidated Plan Reserve." Responsible Department Gly Manage Commending: As mmyofyou ere awme, the Clry afBa garjoim! what is cogMtbe wnsoiideted reiiremenisymon several now ago,. grotto the formation of 8l w mmums, me City was a separately rued group with iu reNement mus end untended liability determined solely on she City's convent and retired employees. Under the cenaolidued sysmm, me City is a member of nowembmgroup repreemtln8numecum public on this ensu the bcellwel tivoughoutthe uue. lheretirementsyalem now essbliahq"nwmei"retitaneot coati based on this loge gaup. Over the past several yam, the consolidated plan we parfamed very well fiv Mo primary morons. FM Roup inveumenn have signihcan0youlperf ud As ecmunal assumpion of an M annual mom. Second, wage immee hwe been below normal smoulders due to due b sout low um ofio0mim Net we me currently eaperieuciog. Consewoewly, Ne wnwlimmul plan is currently overfimded, end Ne seminally msublished «Nement Ntw have. been Mmoxi 0 recupve this pwfosmm , Thefollowing table commum the vmome retitemact rates her our diN !employee groups RMREMENT RATES AS A PERC6Nl'AGE OF PAYROLL As yam can see Rom Nis bbl"e pmPomd mors; fm FYN are sigoilcantly lower than me morel coos projected by acbucial nadir Nu we bored on los"rou assunmtions and brads. We must Ncugnize Not it is unlikely that Nem Nes can continue W remam at the pmjeuei FYN level and Oma Noy may rc0unto@e normal emu predined by azWaziea m mypoimin Nefunue. 3Tis castes a significant wceneirry. The proprsedWdgdr mmdsesmblisbingac ePondwhichisintendedNnle trt iallyof iPoMereai=mt wst Resource; which appem W be inevimble. TO Nis mod, $20,000 is included in Ne budget to begin or fund this mums. Thin, of me $450,000 savings to m Gemsal Ford, $210,000 has hewn wed to reduce) o wgeodawo budget wbiIs the reuNmder has bran wW W emblish Nis Nsesne. Regulus Employee Special 20yr Special 25yr NmmelCmm 9W, 17.5% IRM FY99 Rues 5 9 I4,7% 90% FY00 Rum 3.3% 7.7% 4.7% As yam can see Rom Nis bbl"e pmPomd mors; fm FYN are sigoilcantly lower than me morel coos projected by acbucial nadir Nu we bored on los"rou assunmtions and brads. We must Ncugnize Not it is unlikely that Nem Nes can continue W remam at the pmjeuei FYN level and Oma Noy may rc0unto@e normal emu predined by azWaziea m mypoimin Nefunue. 3Tis castes a significant wceneirry. The proprsedWdgdr mmdsesmblisbingac ePondwhichisintendedNnle trt iallyof iPoMereai=mt wst Resource; which appem W be inevimble. TO Nis mod, $20,000 is included in Ne budget to begin or fund this mums. Thin, of me $450,000 savings to m Gemsal Ford, $210,000 has hewn wed to reduce) o wgeodawo budget wbiIs the reuNmder has bran wW W emblish Nis Nsesne. Department Mesad Manage'r's Corm" �//(seM1t4 -i'�.••--\ AmAen: A.'jlV lawy,ryaq,Ju..an W" a w'J sic." OOAssociated CIN Manager Information: Order, Amendment Budget Approval: - Finance phletur Legal Approval: Ci Iicecr IntoEucedfor ' Passage �Fint Reading Page_of Referral %i-v� CSM Assignedto Coawilw Blanchette June 14. 1999 CITY OF BANGOR (TITLE.) Order, Establishing a Design a ed FUM Balance Reserve Entitled: "MSRS Consolidated Plan Reserve" dytlre Oly CWmY of bp* OWot9arg n. ORDERED, MAT in accordance with Article VI, 6ection 19 of the City Charter and the quidelines set forth in Counal Order 96-247, "Designated and Undesignated Fund Balanm," the attached amendment to the aforementioned policy for the establishment of a Designated MSR6 Consolidated Plan Reserve is hereby adopted. Ii CIT[ COUNCIL love 16, 1999 First Heading Referred to the Finance Committee 6_o7 an 6LPA IN CITY COUNCIL tum 28, 1999 Motion for Passage Made and Seconded Petite to Table and Refer to Finance committee Made sed Secomed Tabled :1R \ � TY MMCIL July 25, 1999 motion for Passage Made and Seconded Notice to dated (Amendment i2) by Substitution Made sad Seconded Passed As Amended by Substitution CLW 99-228 ONNEN Tide, Establishing a Designated food Retests Reserve Retitled: ^NSRS Can - solids Plan ReC�ep-rrv�e'�"/� AMENDMEPfTR DESIGNATED AND UNDESIGNATED FUND BALANCE 10. MSRS ConsolPdatet Plan Reserve MSRS Consolidates! Plan Purpose. The MSRS (Maine State Retirement System) Reserre a established M inmate a poteMal source of funding for the fluGwticns In die annual employer contributions required under the MSRS Consolidated Man. Funding. The MSRS Reserve may be funded by directannual appropriation in the City" operating budget and Nmugh troofers from undesignated fund balance or otter designated AudpHry, M Use and Withdraw. The City Cuunc l must Immunize the expenditure of Mae funds either as an element of Me annual operating budget or through a separate appropriation rhe Funds may be transferred from MIs reemal to other Imaginal reserves or release! to uMaignate ! fund balance by Councll Order. Amounts and Limits. Nm limitations are placed on the amount, which may b s carnet In this hearse. MST1Tp[B eOPY AMENDMENT2 DESIGNATED AND UNDESIGNATED FUND BALANCE 10. MSRS Consolidated Plan Reserve. 10.1 purpose. The MSRS (Maine State Retirement System) Reserve is established to provide a potential source for funding the fluctuations in the annual employer contributions required under the MSRS Consolidated Plan and for transition costs associated with establishing a new defined contribution retirement plan. 10.2 Funding. The MSRS Reserve may be funded by direct annual appropriation In the City's operating budget and through transfers from undesignated fund balance or other designated reserves. 10.3 Authority to Use and Withdraw. The City Council must authorize the expendkure of these funds ether as an element of the annual operating budget or through a separate appropriation resolve. Funds may be transferred from this reserve to other designated reserves or released to undesignated fund balance by Council Order. 10.4 Amounts and Limits. The MSRS Consolidated Plan Reserve shall not exceed the amount of the difference between the actuarially determined normal retirement costs under the consolidated plan and the amount actually charged by the retirement system in a given year for those employees of the General Fund and General Fund supported enterpirse funds who are members of the plan. Any excess may be used for other purposes in accordance with the principles outlined in Section 5.4.1 and 5.4.2 above.