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.