HomeMy WebLinkAboutOrdinance 21766-06-2015 Ordinance No. 21766-06-2015
AN ORDINANCE INCREASING RECEIPTS AND APPROPRIATIONS IN THE GROUP
HEALTH AND LIFE INSURANCE FUND IN THE AMOUNT OF $10,632,231.00, AND
DECREASING THE AVAILABLE FUND BALANCE BY THE SAME AMOUNT, FOR THE
PURPOSE OF TRANSFERRING EXCESS RESERVES TO THE OPEB TRUST; MAKING
THIS ORDINANCE CUMULATIVE OF PRIOR ORDINANCES; REPEALING ALL
ORDINANCES IN CONFLICT HEREWITH;AND PROVIDING AN EFFECTIVE DATE.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH, TEXAS:
SECTION 1.
That in addition to those amounts allocated to the various City departments for Fiscal Year 2014-2015 in the
Budget of the City Manager, there shall also be increased estimated receipts and appropriations in the
Group Health and Life Insurance Fund in the amount of $10,632,231.00 and a decrease in the available
fund balance by the same amount, for the purpose of transferring excess reserves to the OPEB Trust.
SECTION 2.
That should any portion, section or part of a section of this ordinance be declared invalid, inoperative or void
for any reason by a court of competent jurisdiction, such decision, opinion or judgment shall in no way
impair the remaining portions, sections, or parts of sections of this ordinance, which said remaining
provisions shall be and remain in full force and effect.
SECTION 3.
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That this ordinance shall be cumulative of Ordinance No. 21457-09-2014 and all other ordinances and
appropriations amending the same except in those instances where the provisions of this ordinance are in
direct conflict with such other ordinances and appropriations, in which instance said conflicting provisions of
said prior ordinances and appropriations are hereby expressly repealed.
SECTION 4.
This ordinance shall take effect upon adoption.
APPROVED TO FORM AND LEGALITY: CITY SECRETARY
s
Dens McElr ssistant City Attorney Mary/J. Kayse
ADOPTED AND EFFECTIVE: 06/02/2015
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Resolution
NO. 4464-06-2015
ADOPTING REVISED FUNDING PLAN FOR RETIREE HEALTHCARE
BENEFITS FOR ELIGIBLE RETIREES AND DEPENDENTS
WHEREAS, on August 18, 2009, the Fort Worth City Council adopted Resolution
No. 3779-08-2009 (M&C C-23730), which adopted a trust as part of the City's plan of
benefits with the trust to serve as a funding source for retiree healthcare benefits
associated with employees hired before January 1, 2009, who are eligible to receive
some form of subsidy for retiree healthcare from the City; and
WHEREAS, in 2010 and 2013, the City Council adopted resolutions revising the
funding plan (Resolution Nos. 3921-09-2010 and 4247-09-2013); and
WHEREAS, since adoption of the last resolution, the City has made substantial
progress in containing and reducing healthcare costs and the City's unfunded actuarial
accrued liability (UAAL) for other post-employment benefits (OPEB); and
WHEREAS, as of January 1, 2015, the City's UAAL is $774,736,000.00 which
represents a decrease of $163,091,000.00, or almost 20%, from the UAAL at the time
Resolution 4247-09-2013 was adopted; and
WHEREAS, City Council and staff are committed to continuing efforts to contain
and reduce healthcare costs and OPEB liabilities; and
WHEREAS, the City's Group Health and Life Insurance Fund, which consists of
City and plan-participant contributions that may only be expended for healthcare
purposes, periodically has net position (fund balance) that exceeds the Fund's designated
reserve requirements; and
WHEREAS, in light of past and anticipated future success in containing and reducing healthcare
costs and OPEB UAAL, investment-based growth in the OPEB Trust, and other pressing needs for the
City's limited resources, the City Council wishes to revise the funding plan to discontinue further _'
transfers into the trust from the City's operating budgets and instead designate surplus net position (fund
balance) in the Group Health and Life Insurance Fund be periodically transferred to the OPEB Trust
with City Council approval.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF FORT WORTH, TEXAS:
1. That the funding plan for the OPEB Trust, as most recently modified by
ORT 0RT
Resolution 4247-09-2013, is hereby suspended, with no further transfers to be
made to the Trust from the City's operating budgets;
2. That net position (fund balance) in the Group Health and Life Insurance Fund
that exceeds the Fund's designated reserve requirement should periodically be
transferred to the OPEB Trust, which is a use consistent with the authorized
purposes of the Fund, with City Council approval;
3. That in connection with the City's annual budget process, staff is directed to
present options for funding the annual pay-as-you-go expense for retiree health
benefits from current revenues, Trust assets and proceeds, and other available
resources; and
4. That the City Manager or his designee is charged with continuing to monitor
the City's unfunded actuarial accrued liability for other post-employment
benefits and to advise City Council of the status of such liability on a periodic
basis of no less than once per year.
ADOPTED this 2nd day of June 2015.
ATTEST:
By: ---------------------------------
Mary Kayser, City Secretary
ORT ORT
City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 6/2/2015 - Ordinance No. 21766-06-2015 & Resolution No.
4464-06-2015
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DATE: Tuesday, June 02, 2015 REFERENCE NO.: G-18494
LOG NAME: 130PEB TRUST CONTRIBUTION
SUBJECT:
Adopt Resolution Establishing Revised Funding Plan for Retiree Healthcare, Authorize Transfer of Excess
Reserves from the Group Health and Life Insurance Fund to the Other Post-Employment Benefits Trust
and Adopt Appropriation Ordinance (ALL COUNCIL DISTRICTS)
RECOMMENDATION:
It is recommended that the City Council:
1. Adopt the attached resolution establishing a revised funding plan for retiree healthcare, which includes
suspending the previously adopted contribution schedule to the Other Post-Employment Benefits Trust
from operating budgets, designating excess reserves in the Group Health and Life Insurance Fund for
periodic transfer to the Other Post-Employment Benefits Trust with City Council approval, directing funding
recommendations for annual pay-as-you-go requirements for retiree healthcare be included as part of the
annual budget and continuing to monitor and report on the City's Other Post-Employment Benefits liability;
2. Adopt the attached supplemental appropriation ordinance, increasing estimated receipts and
appropriations in the Group Health and Life Insurance Fund in the amount of$10,632,231.00 and
decreasing Net Position by the same amount for the purpose of transferring to the Other Post-
Employment Benefits Trust amounts that exceed the fund's newly adopted reserve requirement; and !%
3. Authorize the transfer of$10,632,231.00 in excess reserves from the Group Health and Life Insurance
Fund to the Other Post-Employment Benefits Trust.
DISCUSSION:
On August 18, 2009, the City Council approved an Other Post-Employment Benefits (OPEB) Trust as part
of the City's program of benefits in order to provide a contributing funding source for retiree healthcare
benefits (M&C C-23730). After an initial installment in Fiscal Year 2009, the City adopted a 20-year
funding strategy with Resolution No. 3921-09-2010 on September 21, 2010. On September 24, 2013, the
City Council approved Resolution No. 4247-09-2013 to further revise this funding strategy, modifying the
overall funding target and extending the funding period to allow for more manageable annual contributions
from operating budgets beginning in Fiscal Year 2014.
Approval of this Mayor and Council Communication (M&C) will revise the previously adopted funding
strategy. In particular, the attached resolution discontinues future contributions to the OPEB Trust from
the City's annual operating budgets and designates net position (fund balance) in the Group Health and
Life Insurance Fund for transfer to the OPEB trust when the fund's net position exceeds its reserve
requirements. In addition, Staff would be required to include options in each year's proposed budget for
the required annual pay-as-you-go amount for retiree health benefits. Finally, Staff would be charged with
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continuing to monitor the City's Unfunded Accrued Actuarial Liability (UAAL) for retiree healthcare and to
report the UAAL to the City Council at least annually.
Approval of this M&C will also appropriate the current excess reserves in the Group Health and Life
Insurance Fund for transfer to the OPEB Trust and authorize that transfer. On April 21, 2015, Staff
recommended that the reserve requirement for the Group Health and Life Insurance Fund be reduced.
An M&C approving the new reserve requirement was included on today's agenda. Money in the Group
Health and Life Insurance Fund includes contributions from both the City and plan participants that were
made for the purpose of paying healthcare costs. Because the money in this fund was intended to be
used for healthcare, Staff recommends that the $10,632,231.00 in the fund that is in excess of the newly
adopted reserve requirement be appropriated and transferred to the OPEB Trust, which is limited to
healthcare expenditures.
FISCAL INFORMATION /CERTIFICATION:
The Financial Management Services Director certifies that upon approval of-this Mayor and Council
Communication, funds will be available in the current operating budget of the Group Health Fund.
FUND CENTERS:
TO Fund/Account/Centers FROM Fund/Account/Centers
3) FE85 539120 0148500 $10,632,231.00 3) FE85 539120 0148500 $10,632,231.00
CERTIFICATIONS:
Susan Alanis 8180
Submitted for City Manager's Office �: ( )
Originating Department Head: Aaron Bovos (8517)
Additional Information Contact: Kristin Navarro (8334)
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