07-0213R                                                          REPLACEMENT



     The city council finds:

     (a)  The funding of city retiree health care has been, and will continue to be, a major financial consideration for the city; and

     (b)  The council, the city staff, and interested elements of the community have devoted time and resources to develop long term programs to address the financial obligations involved in maintaining a feasible retiree health care benefit; and

     (c)  Although the elements of a long term program must be implemented by separate council actions over time, adoption of an integrated long term plan and policy is useful and needed as a guide for action.

     THEREFORE, BE IT RESOLVED, that the long term plan and policy for funding city retiree health care consists of the following elements:

     (1)  The council expects that the cost savings related to concessions, administrative efficiency, and other cost saving measures be fully implemented in a timely manner.

     (2)  The city will commit to undertaking the following actions to transfer $11 million for OPEB funding to an irrevocable trust fund authorized by the legislature.

           (A)  Transfer at least $1 million from current health care fund balance;

           (B)  Transfer up to $10 million from CIF, funds will be committed to upon final approval of contracts of each unit (by percentage of their percentage of the workforce) and state authorization of SBI investment. The council will commit $2.3 million (of that $10 million) based upon 23% of the city’s work force having approved contracts at this time.

     (3)  The city will commit to transfer of at least $4.6 million in annual revenue to the OPEB fund by taking the following actions:

           (A)  $2.3 million of utility fund revenue (and as determined by an actuarial report).

           (B)  $1.2 million of general fund revenue from property tax increases, LGA increases, or cuts in city expenditures committed - starting January 2008.

           (C)  $1.1 million of revenue captured by retiring TIF districts which expire in 2007 and 2009.

           (D)  The council will commit to transfer additional revenue, if necessary, to meet funding goals.

     (4)  The council will not commit general fund revenue to OPEB until all city collective bargaining agreements are approved. If contracts are not all approved by September 1st, the council will temporarily roll back utility rate increases until such time as all contracts for the current term are approved.

     (5)  Additional policy decisions related to the funding amount necessary to adequately fund OPEB liability, future administration of health care benefit, and controls upon the use and purpose of the fund will be determined by the council following the next actuarial report due in 2007. It is the council’s intent to seek a fully funded OPEB liability in 2008.

     (6)  This policy will expire on December 31, 2007, unless all city collective bargaining agreements are approved by that date.

STATEMENT OF PURPOSE:  This resolution sets out the city’s plan to successfully fund the retiree health care benefit over a period of several decades.