HomeMy WebLinkAboutCC Resolution 14395 (Retiree Healthcare Reporting & Funding)RESOLUTION NO. 14395
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF SAN RAFAEL ADOPTING A RETIREE
HEALTHCARE (OPEB) FUNDING POLICY
WHEREAS, the City of San Rafael is committed to adopting best fiscal practices, in
order to fully use the knowledge, resources and experience available throughout the industry; and
WHEREAS, Public agencies that offer retiree health care benefits (Other Post -
employment Benefits, or "OPEB") to their employees should fund the cost of those benefits in an
equitable and sustainable manner; and
WHEREAS, the City desires to demonstrate accountability and transparency by
communicating all of the information necessary for assessing the City's progress toward meeting
its retiree health care funding objectives.
NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of San
Rafael does hereby approve and adopt the following Retiree Healthcare Funding Policy:
Purpose: The purpose of this policy is to provide assurance that the costs of the City's retiree
healthcare will be funded in an equitable and sustainable manner, and that the City will comply
with all relevant federal and state laws and applicable regulatory requirements in the
administration of its plans. It codifies the City's commitment to fund these benefits based on
regular actuarial valuations, and to measure and report them in accordance with generally
accepted accounting principles (GAAP). Adhering to a funding policy that embodies these
funding and accounting principles is a prudent governance practice, and helps achieve
intergenerational equity among those who financially support the plan. It also ensures that
resources are available to fulfill the City's contractual promises to its employees, and minimizes
the chance that funding of these benefits will interfere with the City's ability to provide essential
services to the public.
In order to achieve the purpose of thisop licy, the City will take the following actions:
1.) The City's goal is to fully fund the amount of the ADC (Actuarially Determined
Contribution*) each year. In the event the City is unable to fund the full amount of the ADC in a
given year without borrowing, the Finance Director and City Manager will identify a timeframe
under which to return to full funding.
2.) The Pension-OPEB Subcommittee will review the ADC each fiscal year, and recommend the
level of funding to be considered by the full City Council for adoption in the budget.
* - Under GASB 45, the actuary calculated an "Actuarially Required Contribution," or "ARC." Under
GASB 75, the actuary now calculates an "Actuarially Determined Contribution," or "ADC."
3.) The City supports an ADC that is calculated in a manner that fully funds the long-term costs
of retiree medical benefits, while balancing the goals of:
a) keeping contributions relatively stable; and
b) equitably allocating the costs over the employees' period of active service.
4.) The City will demonstrate accountability and transparency by communicating all of the
information necessary for assessing the City's progress toward meeting its retiree medical
funding objectives. As part of the annual budget adoption process, the Finance Director and City
Manager will report to the City Council on the following:
a) most recent actuarially determined OPEB contribution (ADC)
b) relationship between ADC and budgeted OPEB contribution
c) projected ADC for next three years
d) impact of funding full ADC over the three-year planning horizon
e) any other significant issues associated with funding retiree medical benefits in a
stable and equitable manner as described in #2 above.
5.) The City will implement Governmental Accounting Standards Board Statement No. 75 -
Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions
beginning with the fiscal year ended June 30, 2016.
6.) Staff will monitor changes to and expansions of OPEB funding best practices, as well as any
additional guidance provided by the Government Finance Officer's Association that relate to the
funding retiree medical benefits. Staff will return to City Council with modifications to this
policy as needed.
7.) The City Manager will ensure that any recommended changes to the plans are fully consistent
with the requirements of the Public Employees' Medical & Hospital Care Act (PEMHCA) and
any and all other applicable federal and state regulations, and that the City Attorney's Office be
assigned or other qualified legal counsel be retained to ensure that all public notice, legal and
procedural requirements are fulfilled.
I, ESTHER C. BEIRNE, Clerk of the City of San Rafael, hereby certify that the
foregoing resolution was duly and regularly introduced and adopted at a regular meeting of the
Council of said City on 18th day of September 2017, by the following vote, to wit:
AYES: COUNCILMEMBERS: Bushey, Colin, Gamblin, McCullough & Mayor Phillips
NOES: COUNCILMEMBERS: None
ABSENT: COUNCILMEMBERS: None
. F "t rem
ESTHER C. BEIRNE, City Clerk