HomeMy WebLinkAboutRes2004-048
Sponsored by: Shealy
CITY OF SEWARD, ALASKA
RESOLUTION 2004-48
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SEWARD, ALASKA, AUTHORIZING PAYMENT IN THE AMOUNT OF
$350,000 TO THE STATE OF ALASKA DEPARTMENT OF
ADMINISTRATION, REPRESENTING 16% OF THE TOTAL AMOUNT
DUE OF $2,129,884 FOR THE 1996 TERMINATION OF SEWARD
GENERAL HOSPITAL FROM COVERAGE UNDER THE STATE OF
ALASKA PUBLIC EMPLOYEES RETIREMENT SYSTEM
WHEREAS, the City of Seward (the "City") began participation in the State of Alaska
Public Employees' Retirement System (PERS) on January 10, 1979, as approved in Resolution
78-43; and
WHEREAS, Amendment No.1 to the PERS Participation Agreement (the "Agreement")
approved in Resolution 86-2, amended the Agreement to recognize Seward General Hospital
employees as participants in PERS effective January 1, 1986 and included purchasing all eligible
past service credit for hospital employees employed on or after January 1, 1986; and
WHEREAS, effective July 1, 1992, Seward General Hospital began operating under a PERS
Participation Agreement separate from the City as approved in Resolution 92-160, with said
Agreement being terminated as of June 30, 1996, based on the City's decision to cease operating
Seward General Hospital and lease the facility to Providence Health System Alaska; and
WHEREAS, at the time of the termination of Seward General Hospital from the PERS
system in July, 1996, the City requested written confirmation of the final termination liability
associated with hospital employees under the PERS plan, and the City received official notification
from PERS in a letter dated March 30, 2004 of the final liability of$2,129,884; and
WHEREAS, PERS has given the City until May 1, 2004 to satisfy the liability or incur
interest of 8.25% effective May 1, 2004 until the unfunded termination liability of $2,129,884 is
completely paid; and
WHEREAS, at the time ofthe closure of Seward General Hospital, the Seward City Council
approved Resolution 96-082 earmarking $122,284 toward payment ofthe hospital PERS debt, with
said funds being set aside in the Hospital Debt Service Fund pending final determination of the
termination liability by PERS; and
WHEREAS, since 1996, the Hospital Debt Service Fund has accumulated $811,246 in
surplus fund balance as a result of the $122,284 earmark, plus annual sales tax revenues exceeding
annual hospital debt service payments, with such fund balance being earmarked for three purposes:
1) repayment of hospital capital construction debt; 2) repayment of hospital PERS liability; and 3)
contributions toward capital equipment needs of the hospital facility; and
CITY OF SEWARD, ALASKA
RESOLUTION 2004-48
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WHEREAS, in the interest of maintaining an adequate level offund balance in the Hospital
Debt Service Fund to repay hospital bond debt service, while balancing the need to repay the hospital
PERS liability to reduce the high cost of interest accruing on said debt, the administration
recommends paying 16% of the total termination liability at this time, and budgeting to pay
approximately $210,000 per year over each of the next 15 years or until such time as said termination
liability is paid in full.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF SEWARD, ALASKA, that:
Section 1. The city manager is authorized to negotiate a repayment schedule with the
State of Alaska Division of Retirement and Benefits for the remaining outstanding PERS liability
of$I,779,884.
Section 2. Funds in the amount of $350,000 are hereby appropriated from the Hospital
Debt Service Fund fund balance account no. 801-0000-3050 to the Hospital Debt Service Fund
principal account number 801-8010-5810, and the city manager is authorized to submit payment
of $350,000 to the State of Alaska Division of Retirement & Benefits.
Section 3. This resolution shall take effect immediately.
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PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this
26th day of April, 2004.
THE CITY OF SEWARD, ALASKA
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Vanta Shafer, May r
AYES:
NOES:
ABSENT:
ABSTAIN:
Branson, Dunham, Valdatta, Clark, Amberg, Shafer
None'
None
None
ATTEST:
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(City Seal)