HomeMy WebLinkAboutItem 14 - Public Agencies Retirement Services (PARS)MEMOTO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: BRUNO RUMBELOW, CITY MANAGER
MEETING DATE: OCTOBER 15, 2019
SUBJECT: RETIREE HEALTH CARE PLAN TRUST TRANSFER OF FUNDS AND
APPROPRIATION ORDINANCE
RECOMMENDATION: City Council to consider the appropriation and transfer of funds to Public
Agencies Retirement Services (PARS) for the purpose of funding retiree
healthcare through the City's Other Post Employment Benefits (OPEB)
Trust.
FUNDING SOURCE: Upon approval of the attached appropriation ordinance, funding for this
program will be available from the fund balance assigned in the General
Fund for the purpose of funding the OPEB trust in the amount of
$500,000.
BACKGROUND: Government Accounting Standards Board Statement 75 (GASB 75),
requires the City to account for its OPEB costs, which include the City's
retiree healthcare and death related benefits. In order to establish a
funding source for the future costs, an OPEB trust was established as part
of the City's program of benefits. This not only provides a funding source
for retiree health care benefits, it also strengthens the City's overall
financial position by helping to offset the liability. The stronger financial
position has had a positive impact on the bond program by enhancing the
City's credit worthiness and bond rating.
The City has access to the trust funds at any point in time to pay for
retiree healthcare costs. This action increases the formal reserve fund for
retiree health care, and it provides a positive balance to offset the long-
term reportable liability required by GASB.
On October 18, 2016, the City Council approved a resolution to adopt the
PARS Post -Retirement Health Care Plan Trust, and funded the first
$500,000 contribution. Since then, additional contributions of $500,000
were made in FY 2017 and FY 2018. If approved, this will be the fourth
appropriation and transfer.
This action will have no impact on the General Fund's unassigned fund
balance. During the FY18 audit, funds previously designated for this
purpose were recorded and restricted in the General Fund reserve
specifically for this purpose, and therefore there is no impact on the
unrestricted fund balance. The accounting change was done in
collaboration with the external auditor and is best practice.
Staff recommends approval.
MH/GJ
ORDINANCE NO. 2019-065
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
GRAPEVINE, TEXAS, APPROPRIATING $500,000.00
FROM THE FUND BALANCE ASSIGNED IN THE GENERAL
FUND FOR THE PURPOSE OF FUNDING THE OPEB
TRUST; DECLARING AN EMERGENCY AND PROVIDING
AN EFFECTIVE DATE
WHEREAS, the City Council of the City of Grapevine desires to participate in the
PARS Public Agencies Post -Retirement Health Care Plan Trust (the "Program") to fund
post -employment benefits for its employees; and
WHEREAS, the City is eligible to participate in the Program, a tax-exempt trust
and plan performing an essential governmental function within the meaning of Section
115 of the Internal Revenue Code; and
WHEREAS, the City's adoption and operation of the Program has no effect on any
current or former employee's entitlement to post -employment benefits; and
WHEREAS, the City's funding of the Program does not, and is not intended to,
create any new vested right to any benefit nor strengthen any existing vested right; and
WHEREAS, the City desires to appropriate and transfer $500,000.00 to PARS for
the purpose of funding the Trust; and
WHEREAS, all constitutional and statutory prerequisites for the approval of this
ordinance have been met, including but not limited to the Open Meetings Act; and
WHEREAS, the City Council deems the adoption of this ordinance to be in the best
interests of the health, safety, and welfare of the public.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF GRAPEVINE, TEXAS:
Section 1. That all matters stated herein above are true and correct and are
incorporated herein by reference, as if copied in their entirety.
Section 2. That the City Council hereby appropriates the funding.
Section 3. That the City Council hereby authorizes an amount of $500,000.00
to be appropriated.
Section 4. The fact that the present ordinances and regulations of the City of
Grapevine, Texas are inadequate to properly safeguard the health, safety, morals, peace
and general welfare of the public creates an emergency which requires that this ordinance
become effective from and after the date of its passage, and it is accordingly so ordained.
PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF
GRAPEVINE, TEXAS on this the 15th day of October, 2019.
APPROVED:
William D. Tate
Mayor
ATTEST:
Shawna Barnes
Assistant City Secretary
APPROVED AS TO FORM:
City Attorney
Ordinance No. 2019-065 2