HomeMy WebLinkAboutRes2018-016CITY OF SEWARD, ALASKA Sponsored by: Hunt
RESOLUTION 2018-016
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, RETROACTIVELY AMENDING THE 2017 BUDGET TO
RECORD EXPENDITURES OF $77,780.02 PAID BY THE STATE OF
ALASKA ON BEHALF OF THE CITY TOWARD THE CITY'S PUBLIC
EMPLOYEES RETIREMENT SYSTEM LIABILITY FOR THE PERIOD
JULY THROUGH DECEMBER, 2017, AND APPROPRIATING FUNDS
WHEREAS, in accordance with the 2017 Alaska State Legislature's passage of House
Bill 57, the State of Alaska Department of Administration, Division of Retirement & Benefits
("DRB") contributed $77,780.02 on behalf of the City of Seward from July through December,
2017 on the City of Seward's behalf. The Alaska Retirement Management Board set the
actuarially required rate at 25.01% for the State's fiscal year 2018. The State's contribution was
3.01 %, reflecting the difference between the legislative on -behalf rate of 25.01 % and the 22%
employer "capped" rate; and
WHEREAS, this contribution represents $77,780.02 toward pension costs and $0 toward
healthcare costs, on behalf of the City; and
WHEREAS, in accordance with generally accepted accounting principles, the City must
record payments made on its behalf, and must, therefore, amend the 2017 Budget to account for
both the expenditures paid on behalf of the City, and the corresponding revenues paid by the
State of Alaska Department of Administration; and
WHEREAS, failure to amend the budget to reflect the State's payments on -behalf of the
City, will result in an imbalance between the actual and budgeted revenues and expenditures,
giving the appearance of revenues and expenditures exceeding the annual budget as approved by
the Seward City Council.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF SEWARD, ALASKA, that:
Section 1. The 2017 Operating Budget shall be retroactively amended to appropriate
$77,780.02 as follows: 1) $56,050.57 from State PERS On -Behalf Grant Revenues account
01000-0000-4201 to General Fund/department expense accounts 01000-1 xxx-6201 allocated on
a pro-rata basis; 2) State PERS On -Behalf Grant Revenue account 11000-2000-5920 totaling
$7,846.84 for Harbor Fund; 3) account 15000-0000-5920 totaling $8,733.81 for Electric Fund; 4)
17000-0000-5920 totaling $3,040.42 for Water Fund; and 18000-0000-5920 totaling $2,108.38
for Wastewater Fund.
Section 2. This resolution shall take effect immediately upon adoption.
CITY OF SEWARD, ALASKA
RESOLUTION 2018-016
PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 26tn
day of February, 2018.
THE CITY OF SEWARD, ALASKA
David Squires, May
AYES: Casagranda, Keil, McClure, Slater, Towsley, Horn, Squires
NOES: None
ABSENT: None
ABSTAIN: None
ATTEST:
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City Clerk
(City Seal)
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COUNCIL AGENDA STATEMENT
Meeting Date: February 26, 2018
Through: James Hunt, City Man er
From: Kristin Erchinger, Finance Director h"
Agenda Item: State of Alaska PERS on -behalf contributions of $77,780.02 for July
through December 2017
BACKGROUND & JUSTIFICATION:
The 2017 State legislature passed House Bill 57, appropriating $72,571,000 directly to PERS on
behalf of Alaska municipalities and PERS employers, to help offset retirement liability costs to
local taxpayers. The City of Seward's portion of this appropriation (for the period July 1 through
December 31, 2017) is $77,780.02. These amounts are paid directly to the City's PERS account
with the State of Alaska Division of Retirement & Benefits. While the funds did not come
directly through the City, we are required to account for the State's contribution as both revenue
and an expense/expenditure on the City's financial statements.
In 2008, Senate Bill 125 was passed, capping the annual PERS contribution rates for employers
at 22%, and creating a cost -sharing plan in which all employers pay the same employer
contribution rate. This was a departure from the previous plan, in which every employer was
assigned a different employer cost rate, depending on their individual experience.
The attached spreadsheet lists the PERS employer contribution rates as established by the Alaska
Retirement Management Board, itemizing the portion of the overall rate covered by the State of
Alaska on -behalf of municipal employers, as well as a history of the amount paid by the State on
behalf of the City of Seward since 2006. Municipal governments in Alaska have benefited
significantly by the State's coverage of PERS costs in excess of 22%. However, it is important
to note that the legislature may, at any time, modify the amount of subsidy provided by the State
toward PERS contributions. Any future reduction in the State's current practice of covering
contribution rates exceeding 22%, will equate to equivalent additional required contributions by
the City.
INTENT: The intent of this action is to retroactively amend the 2017 budget to account for State
contributions on behalf of the City for contributions to the public employee's retirement system
for the period July through December, 2017.
CONSISTENCY CHECKLIST:
Yes
No
N/A
I.
Comprehensive Plan (document source here):
X
2.
Strategic Plan (document source here):
X
3
Other (list): February 1, 2018 letter from SOA DOA; State of Alaska
2017 legislative session, House Bill HB57.
X
CITY OF SEWARD
RESOLUTION 2018-
FISCAL NOTE:
The State's contribution of $77,780.02 is considered a State grant award and is recognized as
such on the City's financial statements, with an equivalent amount recorded as retirement
expense/expenditure, allocated on a pro-rata basis, to each department's operating budget.
Approved by Finance Department 1
ATTORNEY REVIEW: Yes No X
RECOMMENDATION:
Council approve Resolution 2017- retroactively amending the 2017 Operating Budget by
appropriating $77,780.02 from State grant revenues, to various fund retirement expense accounts,
on a pro-rata basis.
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