HomeMy WebLinkAboutItem 07 - Maximum Contribution Rate Limit ITEM
MEMO TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: BRUNO RUMBELOW, CITY MANAGER
MEETING DATE: DECEMBER 2, 2008
SUBJECT: ORDINANCE REMOVING TEXAS MUNICIPAL RETIREMENT
SYSTEM STATUTORY MAXIMUM CONTRIBUTION RATE LIMIT
RECOMMENDATION:
Staff recommends consideration of an ordinance to remove the Texas Municipal Retirement
System (TMRS) statutory maximum contribution rate limit.
FUNDING SOURCE:
The funding for this item was discussed and approved during consideration of the FY 09
budget. Funds for the City's contribution to the Texas Municipal Retirement System are
available in the FY 09 Operating Budget in account 41236 in each departmental operating
budget.
BACKGROUND:
The FY 09 Operating Budget approved by the City Council on September 16, 2008 includes
appropriations for contributions to the Texas Municipal Retirement System. Included in the
appropriations is funding to adopt the actuarially determined rate of 14.22% for FY 2009.
The TMRS Act provides a maximum rate that a city can be required to contribute to its
retirement plan, based on the employee deposit rate and the City's matching ratio.
Grapevine's statutory maximum is 13.50%. As you know from previous workshops and the
'09 budget discussions, the TMRS rate is at 14.22% due to a seven year funding to fully fund
retiree annual cost of living adjustments. With adoption of this ordinance, the TMRS actuary
will continue to perform valuation studies of Grapevine's plan each year as in the past, and
will forward the rate to the City during the budget preparation process for consideration for the
following year.
If the City does not adopt this ordinance, Grapevine will not be fully funding its plan of benefits
under the TMRS System for 2009. Staff recommends approval.
CV/bc
ORDINANCE NO.
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF GRAPEVINE, TEXAS, ELECTING FOR THE CITY TO
MAKE CURRENT SERVICE AND PRIOR SERVICE
CONTRIBUTIONS TO THE CITY'S ACCOUNT IN THE
MUNICIPAL ACCUMULATION FUND OF THE TEXAS
MUNICIPAL RETIREMENT SYSTEM AT THE
ACTUARIALLY DETERMINED RATE OF TOTAL
EMPLOYEE COMPENSATION AND PROVIDING AN
EFFECTIVE DATE
WHEREAS, the City of Grapevine (the "City"), is a participating municipality in
the Texas Municipal Retirement System (the "System"), and has undertaken to provide
certain retirement, death and disability benefits to its employees pursuant to Subtitle G,
Title 8, Government Code, (hereinafter, the "TMRS Act"); and
WHEREAS, the City Council desires to authorize funding of such benefits as
herein provided.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF GRAPEVINE, TEXAS:
Section 1. That pursuant to Section 855.407(g) of the TMRS Act, the City
hereby elects to make future normal and prior service contributions to its account in the
municipal accumulation fund of the System at such combined rate of the total
compensation paid by the City to employees who are members of the System, as the
System's actuary shall annually determine as the rate necessary to fund, within the
amortization period determined as applicable to the City under the TMRS Act, the costs
of all benefits which are or may become chargeable to or are to be paid out of the City's
account in said accumulation fund, regardless of other provisions of the TMRS Act
limiting the combined rate of City contributions.
Section 2. That 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 inhabitants of the City of Grapevine, Texas, creates
an emergency for the immediate preservation of the public business, property, health,
safety and general welfare of the public which requires that this ordinance shall become
effective from and after the date of its final passage, and it is accordingly so ordained.
PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF
GRAPEVINE, TEXAS on this the 2nd day of December, 2008.
APPROVED:
ATTEST:
APPROVED AS TO FORM:
ORD. NO. 2