HomeMy WebLinkAbout(2022, 06/14) - F-2 - AmendedF-2
RESERVE POLICY
PURPOSE
To establish City Council policy for the administration of Reserves defined as
fund balances in governmental funds and net working capital in proprietary
funds.
BACKGROUND
Prudent financial management dictates that some portion of the funds available
to the City be reserved for future use.
As a general budget principle concerning the use of reserves, the City Council
decides whether to appropriate funds from Reserve accounts. Even though a
project or other expenditure qualifies as a proper use of Reserves, the Council
may decide that it is more beneficial to use current year operating revenues or
bond proceeds instead, thereby retaining the Reserve funds for future use.
Reserve funds will not be spent for any function other than the specific purpose
of the Reserve account from which they are drawn without specific direction in
the annual budget or by a separate City Council action. Information regarding
Annual Budget Adoption and Administration is contained in City Council Policy
F-3.
GOVERNMENTAL FUNDS AND FUND BALANCE DEFINED
Governmental Funds including the General Fund, Special Revenue Funds,
Capital Projects Funds, Debt Service Funds, and Permanent Funds have a short-
term or current flow of financial resources, measurement focus, and basis of
accounting, and therefore exclude long-term assets and long-term liabilities. The
term Fund Balance, used to describe the resources that accumulate in these funds,
is the difference between the fund assets and fund liabilities of these funds. Fund
Balance is similar to the measure of net working capital that is used in private
sector accounting. By definition, both Fund Balance and Net Working Capital
exclude long-term assets and long-term liabilities.
PROPRIETARY FUNDS AND NET WORKING CAPITAL DEFINED
Proprietary Funds including Enterprise Funds and Internal Service Funds have
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a long-term or economic resources measurement focus and basis of accounting,
and therefore include long-term assets and liabilities. This basis of accounting is
very similar to that used in private sector. However, instead of Retained
Earnings, the term Net Assets is used to describe the difference between fund
assets and fund liabilities. Since Net Assets include both long-term assets and
liabilities, the most comparable measure of proprietary fund financial resources
to governmental Fund Balance is Net Working Capital, which is the difference
between current assets and current liabilities. Net Working Capital, like Fund
Balance, excludes long-term assets and long-term liabilities.
GOVERNMENTAL FUND RESERVES (FUND BALANCE)
For Governmental Funds, the Governmental Accounting Standards Board
("GASB") Statement No. 54 defines five specific classifications of fund balance.
The five classifications are intended to identify whether the specific components
of fund balance are available for appropriation and are therefore "Spendable."
The classifications also are intended to identify the extent to which fund balance
is constrained by special restrictions, if any. Applicable only to governmental
funds, the five classifications of fund balance are as follows:
CLASSIFICATIONS NATURE OF RESTRICTION
Non -spendable Cannot be readily converted to cash
Restricted Externally imposed restrictions
Committed City Council imposed commitment
Assigned City Manager assigned purpose/intent
Unassigned Residual balance not otherwise
restricted
A. Non -spendable fund balance: That portion of fund balance that includes
amounts that are either (a) not in a spendable form, or (b) legally or
contractually required to be maintained intact. Examples of Non -spendable
fund balance include:
1. Reserve for Inventories: The value of inventories purchased by the City
but not yet issued to the operating Departments is reflected in this
account.
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2. Reserve for Lone Term Receivables and Advances: This Reserve is used
toidentify and segregate that portion of the City's financial assets which
are not due to be received for an extended period, so are not available
for appropriation during the budget year.
3. Reserve for Prepaid Assets: This reserve represents resources that have
been paid to another entity in advance of the accounting period in which
the resource is deducted from fund balance. A common example is an
insurance premium, which is typically payable in advance of the
coverage period.
Although prepaid assets have yet to be deducted from fund balance,
they are no longer available for appropriation.
4. Reserve for Permanent Endowment - Bay Dredging: The endowment
specifies that the principal amount will not be depleted and represents
the asset amounts to be held in the Bay Dredging Fund.
5. Reserve for Permanent Endowment - Ackerman Fund: The
endowment specifies that the principal amount will not be depleted and
represents the asset amount to be held in the Ackerman Fund.
B. Restricted fund balance: The portion of fund balance that reflects constraints
placed on the use of resources (other than non -spendable items) that are either
(a) externally imposed by creditors, grantors, contributors, or laws or
regulations of other governments; or (b) imposed by law through
constitutional provisions or enabling legislation. Examples of restricted fund
balance are:
1. Reserve for Debt Service: Funds are placed in this Reserve at the time
debt is issued. The provisions governing the Reserve, if established, are
in the Bond Indenture and the Reserve itself is typically controlled by the
Trustee.
2. Affordable Housing: A principal provision of the Newport Beach
Housing Element requires developers to provide housing units for lower
income households, the number of which is to be negotiated for each
development project. In lieu of constructing affordable housing,
developers have paid into this reserve which is used at the City Council's
discretion to provide alternate methods for the delivery of affordable
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housing for lower income households.
3. Park In Lieu: Per Newport Beach Municipal Code (NBMC) Chapter 19.52
and California Government Code Section 664777 (The 1975 "Quimby
Act"), a dedication of land or payment of fees for park or recreational
purposes in conjunction with residential development is required. The
fees collected can only be used for specific park or recreation purposes
as outlined in NBMC Sections 19.52.030 and 19.52.070.
4. Upper Newport Bay Restoration Reserve: This reserve is the repository
for funds mandated by SB573, as well as special fees charged to permit
holders as an alternative to meeting certain specified mitigation criteria.
In addition to the mitigation fees, ten percent (10%) of Beacon Bay lease
revenue is placed in this Reserve. Funds in the Reserve are restricted for
Upper Newport Bay restoration projects.
5. Permanent Endowment for Bay Dredging: The endowment also
specifies that the interest earnings on the principal amount can only be
used for dredging projects in the Newport Bay.
6. Permanent Endowment for Ackerman Fund: The endowment also
specifies that the interest earnings on the principal amount can only be
used for scholarships provided by the City and high-tech library
equipment.
7. Oceanfront Encroachment Reserve: In the early 1990's, it was discovered
by survey that improvements to several ocean front parcels were
encroaching onto the public beach. The encroachment was relatively
minor. The negotiated solution was for the property owners to pay a
permit fee each year to the City. Revenue thus generated may only be
used for ocean front restoration projects and incidental costs of
improvements and maintenance to enhance public access and use of
ocean beaches as approved by the City Council. This Reserve is the
repository for those funds. Appendix C of NBMC Title 21 (Local Coastal
Program Implementation Plan) contains additional background and
details about the encroachment issue. The external restriction on this
balance is imposed by the Local Coastal Program (LCP).
C. Committed fund balance: That portion of a fund balance that includes
amounts that can only be used for specific purposes pursuant to constraints
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imposed by formal action by the government's highest level of decision
making authority, and remain binding unless removed in the same manner.
The City considers a resolution to constitute a formal action for the purposes
of establishing committed fund balance. The action to constrain resources
must occur within the fiscal reporting period; however, the amount can be
determined subsequently. City Council imposed Commitments are as follows:
1. Facilities Financial Planning(FFP)Program: In conjunction with the City's
Facilities Financial Plan, a sinking fund has been established to amortize
the cost of critical City facilities such as, but not limited to, the Civic
Center, Police Department buildings, Fire Stations, Library Branches,
and otherFacility Improvement Projects.
The Facilities Financial Planning Program establishes a level charge to
the General Fund that will perpetually replenish the cash flows
necessary to finance the construction of critical City facilities. This plan
will be updated annually as part of the budget process, or as conditions
change. Specific requirements for annual funding and minimum reserve
balance for the FFP Program can be found in City Council Policy F-28.
The eligible uses of this reserve include the cash funding of public facility
improvements or the servicing of related debt.
2. Off Street Parkin: Per NBMC Section 12.44.025 the City Council may
direct revenues into the Off -Street Parking Facilities Fund for purposes
of the acquisition, development, and improvement of off street parking
facilities, and for any expenditures necessary or convenient to
accomplish such purposes.
3. In Lieu Parking: Per NBMC Section 12.44.125 the City requires
commercial businesses to provide adequate off-street parking or where
this is not possible, businesses are afforded the opportunity to pay an
annual fee and use parking spaces in a municipal lot, providing such a
lot is located within specified proximity to the business. These funds
can only be used to provide additional parking.
4. Neighborhood Enhancement - A: Funds previously accumulated to
Neighborhood Enhancement Area "A" pursuant to a prior version of
NBMC Section 12.44.027 shall continue to be used only for the purpose
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of enhancing and supplementing services to the West Newport area.
Both the nature of the supplemental services and the definition of the
area served are set forth in NBMC Section 12.44.027.
5. Neighborhood Enhancement - B: Funds previously accumulated to
Neighborhood Enhancement Area "B" pursuant to a prior version of
NBMC Section 12.44.027 shall continue to be used only for the purpose
of enhancing and supplementing services in the Balboa Peninsula. Both
the nature of the supplemental services and the definition of the area
served are set forth in NBMC Section 12.44.027.
6. Cable Franchise: Pursuant to the provisions of the Newport Beach
Municipal Code, Title 5, Business Licenses & Regulations, Chapter 5.44,
in return for the use of the City's streets and public ways for the purpose
of installing, operating, maintaining, or reconstructing a cable system to
provide cable service, fees are collected by the City from cable
providers. Those fees are to be used by the City for support of Public,
Education, and Government access programming only.
7. Oil and Gas Reserve: These funds generated by an annual amount being
set aside from oil and gas field production revenues are to be used to
fund abandonment of wells and facilities as they go out of service.
8. Capital Reappropriation: This reserve recognizes a portion of fund
balance that is not readily available to fund new appropriations because
it has been reappropriated through the budget adoption process or
amendment process for programs or projects authorized in a prior fiscal
year that are not yet complete.
D. Assigned fund balance: That portion of a fund balance that includes
amounts that are constrained by the City's intent to be used for specific
purposes but that are not restricted or committed. This policy hereby
delegates the authority to the City Manager or designee to modify or create
new assignments of fund balance. Constraints imposed on the use of
assigned amounts may be changed by the City Manager or his designee.
Appropriations of balances are subject to Council Policy F-3 concerning
budget adoption and administration.
E. Unassigned fund balance:
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1. Contingency Reserve: The Contingency Reserve shall have a target
balance of twenty five percent (25%) of General Fund "Operating
Budget" as originally adopted. Operating Budget for this purpose shall
include current expenditure appropriations and shall exclude Capital
Improvement Projects, Transfers Out, and additional discretionary
payments to the City's unfunded pension liability. Appropriation and/
or access to these funds are generally reserved for emergency or
unforeseen situations but may be accessed by Council by simple budget
appropriation. Examples may include but are not limited to the
following:
a. A catastrophic loss of critical infrastructure.
b. A State or Federally declared state of emergency.
c. Any settlement arising from a claim or judgment.
d. Deviation from budgeted revenue projections.
e. Any action by another government that eliminates or shifts
revenues from the City.
f. Inability of the City to meet its debt service obligations in any given
year.
g. Other circumstances deemed necessary by City Council to meet
the claims and obligations of the City.
Should the Contingency Reserve be used, the City Manager shall
present a plan to City Council to replenish the reserve within five
years.
2. Residual Fund Balance: The residual portion of available fund balance
that is not otherwise restricted, committed, or assigned and is above and
beyond the Contingency Reserve target reserve balance.
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PROPRIETARY FUND RESERVES (NET WORKING CAPITAL)
In the case of Proprietary Funds (Enterprise and Internal Service Funds),
Generally Accepted Accounting Principles ("GAAP") do not permit the reporting
of reserves on the face of City financial statements. However, this does not
preclude the City from setting policies to accumulate financial resources for
prudent financial management of its proprietary fund operations. Since
proprietary funds may include both long-term capital assets and long-term
liabilities, the most comparable measure of liquid financial resources that is
similar to fund balance in proprietary funds is net working capital, which is the
difference between current assets and current liabilities. For all further references
to reserves in Proprietary Funds, Net Working Capital is the intended meaning.
A. Water Enterprise Fund
1. Stabilization and Contingency Reserve: This Reserve is used to provide
sufficient funds to support seasonal variations in cash flows, and in more
extreme conditions to maintain operations for a reasonable period of
time so the City may reorganize in an orderly manner or effectuate a rate
increase to offset sustained cost increases. The intent of the Reserve is to
provide funds to offset cost increases that are projected to be short-lived,
thereby partially eliminating the volatility in annual rate adjustments. It
is not intended to offset ongoing, long-term pricing structure changes.
The target level of this reserve is fifty percent (50%) of the annual
operating budget. This reserve level is intended to provide a
reorganization period of 6 months with zero income or 24 months at a
twenty-five percent (25%) loss rate. The City Council must approve the
use of these funds, based on City Manager recommendation. Funds
collected in excess of the Stabilization reserve target would be available
to offset future rate adjustments, while extended reserve shortfalls
would be recovered from future rate increases. Should catastrophic
losses to the infrastructure system occur, the Stabilization and
Contingency Reserve may be called upon to avoid disruption to water
distribution.
2. Infrastructure Replacement Funding Policy: This funding policy is
intended to be a temporary repository for cash flows associated
with the funding of infrastructure replacement projects provided by the
Water Master Plan. The contribution rate is intended to level -
amortize the cost of infrastructure replacement projects over a long
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period. The annual funding rate of the Water Master Plan is targeted at
an amount that, when combined with prior or future year contributions,
is sufficient to provide for the eventual replacement of assets as
scheduled in the plan. This contribution policy is based on the funding
requirements of the most current Water Master Plan. There are no
minimum or maximum balances contemplated by this funding policy.
However, the contribution level should be reviewed periodically or as
major updates to the Water Master Plan occur. Annual funding is
contingent on many factors and may ultimately involve a combined
strategy of cash funding and debt issuance with the intent to normalize
the burden on Water customer rates.
B. Wastewater Enterprise Fund
1. Stabilization and Contingency Reserve: This Reserve is used to provide
sufficient funds to support seasonal variations in cash flows, and in more
extreme conditions to maintain operations for a reasonable period of
time so the City may reorganize in an orderly manner or effectuate a rate
increase to offset sustained cost increases. The intent of the Reserve is to
provide funds to offset cost increases that are projected to be short-lived,
thereby partially eliminating the volatility in annual rate adjustments. It
is not intended to offset ongoing, long-term pricing structure changes.
The target level of this reserve is fifty percent (50%) of the annual
operating budget. This reserve level is intended to provide a
reorganization period of 6 months with zero income or 24 months at a
twenty-five percent (25%) loss rate. The City Council must approve use
of these funds, based on City Manager recommendation. Funds collected
in excess of the Stabilization reserve target would be available to offset
future rate adjustments, while extended reserve shortfalls would be
recovered from future rate increases. Should catastrophic losses to the
infrastructure system occur, the Stabilization and Contingency Reserve
may be called upon to avoid disruption to wastewater service.
2. Infrastructure Replacement Funding Policy: This funding policy is
intended to be a temporary repository for cash flows associated with
the funding of infrastructure replacement projects provided by the
Wastewater Master Plan. The contribution rate is intended to level -
amortize the cost of infrastructure replacement projects over a long
period of time. The annual funding rate of the Wastewater Master Plan
is targeted at an amount that, when combined with prior or future year
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contributions, is sufficient to provide for the eventual replacement of
assets as scheduled in the plan. This contribution policy should be
updated periodically based on the most current Wastewater Master Plan.
There are no minimum or maximum balances contemplated by this
funding policy. However, the contribution level should be reviewed
periodically or as major updates to the Wastewater Master Plan occur.
Annual funding is contingent on many factors and may ultimately
involve a combined strategy of cash funding and debt issuance with the
intent to normalize the burden on Wastewater customer rates.
C. Internal Service Funds Background.
Internal Service Funds are used to centrally manage and account for specific
program activity in a centralized cost center. Their revenue generally comes
from internal charges to departmental operating budgets rather than external
revenue sources. They have several functions.
--They work well in normalizing departmental budgeting for programs that
have life -cycles greater than one year, thereby facilitating level budgeting for
expenditures that will, by their nature, be erratic from year to year. This also
facilitates easier identification of long term trends.
--They act as a strategic savings plan for long-term assets and liabilities.
--From an analytical standpoint, they enable appropriate distribution of city-
wide costs to individual departments, thereby more readily establishing true
costs of various operations.
Since departmental charges to the internal service fund duplicate the ultimate
expenditure from the internal service fund, they are eliminated when
consolidating entity -wide totals.
The measurement criteria, cash flow patterns, funding horizon and
acceptable funding levels are unique to each program being funded. Policy
regarding target balance and/ or contribution policy, gain/loss
amortization assumptions, source data, and governance for each of the
City's Internal Service Funds is set forth as follows:
1. For all Internal Service Funds: The Finance Director may transfer part or
all of any unencumbered fund balance between the Internal Service
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Funds provided that the withdrawal of funds from the transferred fund
would not cause insufficient reserve levels or insufficient resources to
carry out its intended purpose. This action is appropriate when the
decline in cash balance in any fund is precipitated by an off -trend non-
recurring event. The Finance Director will make such recommendations
as part of the annual budget adoption or through separate Council
action.
2. Equipment Maintenance Fund and Equipment Replacement Fund: The
Equipment Maintenance and Replacement Funds receive operating
money from the Departments to provide equipment maintenance and to
fund the regular replacement of major pieces of equipment (mostly
vehicles) at their economic obsolescence.
a. Equipment Maintenance Fund: The Equipment Maintenance Fund
acts solely as a cost allocation center (vs. a pre -funding center) and
is funded on a pay-as-you-go basis by departmental maintenance
charges by vehicle type and usage requirement. Because of this
limited function, the target year-end balance is zero.
Contribution rates (departmental charges) are set to include the
direct costs associated with maintaining the City vehicle fleet,
including fleet maintenance employee salaries and benefits,
operating expenses, and maintenance related capital outlay.
Administrative overhead and maintenance facility
improvements and replacement costs are to be provided outside
of this cost unit. Governance is achieved through annual
management adjustment of contribution rates on the basis of
maintenance cost by vehicle and distribution of costs based on
fleet use by department.
b. Equipment Replacement Fund: Operating Departments are
charged annual amounts sufficient to accumulate funds for the
replacement of vehicles, communications equipment, parking
equipment, and other equipment replacement determined to be
appropriate by the Finance Director. The City Manager
recommends annual rate adjustments as part of the budget
preparation process. These adjustments are based on pricing,
future replacement schedules, and other variables.
The age and needs of the equipment inventory vary from year to
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year. Therefore, the year-end fund balance will fluctuate in direct
correlation to accumulated depreciation. In general, it will increase
in the years preceding the scheduled replacement of relatively
large percentage of the equipment, on a dollar value basis.
However, rising equipment costs, dissimilar future needs,
replacing equipment faster than their expected life, or maintaining
equipment longer than its expected life all contribute to variation
from the projected schedule.
Target funding levels shall be determined by the Finance Director
after considering the age, expected life, and cash flow anticipated
by the replacement equipment being funded. If departmental
replacement charges for equipment prove to be excessive or
insufficient with regard to this target funding level, new rates
established during the next budget cycle will be adjusted with a
view toward bringing the balance back to the target level.
3. Insurance Reserve Funds: The Insurance Reserve funds account for the
activities of general liability, workers' compensation, property, and
other insurance claims. General liability and workers' compensation
claims are self -insured up to an established amount, with excess
insurance policies procured to address larger claims. Property and other
insurance policies are procured with appropriate deductibles, and
related claims payments are not funded from the City's self-insurance
program.
Background.
The City employs an actuary to estimate the liabilities associated with
the general liability and workers compensation activities. The costs
typically associated with these programs include claims
administration, legal defense, insurance premiums, self -insured
retention, and the establishment of appropriate loss reserves
including "incurred -but -not reported" (IBNR) claims. Ina prescribed
measurement methodology, the Actuary estimates the liabilities in
conformity with Generally Accepted Accounting Principles (GAAP).
The Actuary refers to this measurement level in their report as the
"Expected Level." However, because actuarial estimates are subject to
significant uncertainties, actuaries typically recommend that a target
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funding level be set at an amount in excess of expected liability as a
margin to cover contingencies. A typical target funding level would be
set to obtain a specified confidence level (the percent chance that
resources set -aside will be sufficient to cover existing claims).
Full funding of the Actuary's "Target Funding Level" establishes a
seventy-five percent (75%) confidence there will be sufficient resources
(including projected interest) to pay the full amount of existing claims
without future contributions. Funding at the "Expected Level" produces
a confidence level of only fifty percent to sixty-five percent (50%-65%).
Therefore, the target funding of insurance reserves should exceed the
"Expected Level" to account for adverse estimate deviation.
Policy & Practice.
The City should target funding of its risk management obligations at not
less than the Expected Level, described above; and not more than an
amount sufficient to establish an eighty percent (80%) Confidence Level.
Actuarial gains and losses should be amortized through rates over an
appropriate period of time. As part of the operating budget, each
department will be charged a rate equal to its proportionate share of the
total "revenue" required to fund the Insurance Reserve Fund at this level.
To lessen the impact of short-term annual rate change fluctuation, City
management may implement one-time fund transfers (rather than
department rate increases) when funding shortfalls appear to be due to
unusually sharp and non -recurring factors. Excess reserves in other
areas may be transferred to the internal service fund in these instances
but such transfers should not exceed the funding necessary to reach an
eighty percent (80%) confidence level interval.
4. Compensated Absences Fund:
Background.
The primary purpose of flex leave, vacation leave, and sick leave is to
provide compensated time off as appropriate and approved. However,
under certain circumstances, typically at separation from service, some
employees have the option of receiving cash -out payments for some
accumulated leave balances. The Compensated Absences Fund is
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utilized primarily as a budget smoothing technique for any such leave
bank liquidations. The primary purpose of the Compensated Absences
Fund is to maintain a balance sufficient to facilitate this smoothing.
Policv and Practice.
The contribution rate will be set to cover estimated annual cash flows
based on a three-year trailing average.
The minimum cash reserve should not fall below that three-year
average. The maximum cash reserve should not exceed fifty percent
(50%) of the long term liability. The target cash reserve shall be the
median difference between the minimum and maximum figures.
Each department will make contributions to the Compensated Absences
Fund through its operating budget as a specified percentage of salary.
The Finance Director will review and recommend adjustments to the
percentage of salary required during the annual budget development
process. This percentage will be set so as to maintain the reserve within
the parameters established above.
5. Post Retirement Funding Policies:
a. Pension Funding:
(i) California Public Employees Retirement System (Ca1PER5):
The City's principal Defined Benefit Pension program is
provided through contract with CalPERS. The City's
contributions to the plan include an actuarially determined
employer contribution that fluctuates each year based on an
annual actuarial plan valuation. This variable rate employer
contribution includes the normal cost of providing the
contracted benefits plus or minus an amortization of plan
changes and net actuarial gains and losses since the last
valuation period.
It is the City's policy to make contributions to the plan equaling
at least one hundred percent (100%) of the actuarially
determined contribution. Any unfunded actuarial liability
(UAL) is amortized and paid in accordance with the actuary's
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funding recommendations. The City will strive to maintain its
UAL within a range that is considered acceptable to actuarial
standards. The City Council shall consider increasing the
annual Ca1PERS contribution should the UAL status fall below
acceptable actuarial standards.
(ii) Laborer's International Union of North America (LIUNA): The
City provides a supplemental pension plan for some employee
associations through contract with LIUNA. This is funded via
employee contributions of a fixed percentage of total
compensation on a pay-as-you-go basis. The City is not
contractually required to guarantee the level of the ultimate
LIUNA benefit to retirees, nor does it do so. Therefore, the
City's liability for this program is fully funded each year.
b. Other Post Employment Benefits (OPEB Funding):
Background.
The City's OPEB funding obligations consists of two retiree medical
plans.
New Plan. Effective January 2006, the City and its employee
associations agreed to major changes to the Post Employment
Healthcare Plan. New employees and all current employees
participate in a program that requires certain defined employee
and employer contributions while the employee is in active
service. However, once the contributions have been made to the
employee's account, the City has transferred a substantial portion
of the funding risk to the employee.
Old Plan. Eligible employees who retired prior to the "New Plan"
and certain active employees were eligible to continue to receive
post -retirement medical benefits (a defined benefit plan). The cost
was divided among the City, current employees, and retirees. In
the past, this program was largely funded on a pay-as-you-go
basis, so there was a significant unfunded liability. Recognizing
this problem, the City began contributing to this obligation in 2001.
In 2008, these assets were placed in a pre -funding trust. The City's
intention is to amortize the remaining unfunded liability within 20
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years.
Policy & Practice.
New Plan. Consistent with agreements between the City and
Employee Associations, the new defined contribution plan will be
one hundred percent (100%) funded, on an ongoing basis, as part
of the annual budget process. Funds to cover this expenditure will
be contained within the salary section of each department's annual
operating budget.
Old Plan. The City's policy is to pre fund the explicit (cash
subsidy) portion of the Actuarial Accrued Liability (AAL) of the
remnants of the old plan over a 20-year amortization period, or
less. This amount will be based on the Annual Required
Contribution (ARC) determined by a biennial actuarial review,
subject to review and analysis by the City. The City will strive to
maintain a funded status that will be within a range that is
considered acceptable to actuarial standards. The City Council
shall consider increasing the annual OPEB contribution should the
funded status fall below acceptable actuarial standards.
Adopted - January 24,1994
Amended - April 10,1995
Amended - February 26,1996
Amended - April 27,1998
Amended - March 14, 2000
Amended - May 8, 2001
Amended - April 23, 2002
Amended - June 10, 2003
Amended - April 13, 2004
Amended - September 13, 2005
Amended - September 15, 2008
Amended - November 12, 2008
Amended - May 24, 2011
Amended - September 27, 2011
Amended - May 14, 2013
Amended - June 10, 2014
Amended - May 12, 2015
Amended - September 25, 2018
Amended - June 14, 2022
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