HomeMy WebLinkAboutRes2020-021 Sponsored by: Meszaros
CITY OF SEWARD,ALASKA
RESOLUTION 2020-021
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, RETROACTIVELY AMENDING THE 2019 BUDGET TO
RECORD EXPENDITURES OF $315,712.36 PAID BY THE STATE OF
ALASKA ON BEHALF OF THE CITY TOWARD THE CITY'S PUBLIC
EMPLOYEES RETIREMENT SYSTEM LIABILITY FOR THE PERIOD
JANUARY THROUGH DECEMBER, 2019, AND APPROPRIATING
FUNDS
WHEREAS, in accordance with the 2018 Alaska State Legislature's passage of House
Bill 286, the State of Alaska Department of Administration, Division of Retirement & Benefits
contributed $150,671.01 on behalf of the City of Seward from January through June, 2019. The
Alaska Retirement Management Board set the actuarially required rate at 27.58% for the State's
fiscal year 2019. The State's contribution was 5.58%, reflecting the difference between the
legislative on-behalf rate of 27.58% and the 22% employer "capped" rate with the contribution
representing $150,671.01 toward pension costs and $0 toward healthcare costs, on behalf of the
City; and
WHEREAS, in accordance with the 2019 Alaska State Legislature's passage of House
Bill 39, the State of Alaska Department of Administration, Division of Retirement & Benefits
contributed $165,041.36 on behalf of the City of Seward from July through December, 2019.
The Alaska Retirement Management Board set the actuarially required rate at 28.62% for the
State's fiscal year 2020. The State's contribution was 6.62%, reflecting the difference between
the legislative on-behalf rate of 28.62% and the 22% employer "capped" rate with the
contribution representing $165,041.36 toward pension costs and $0 toward healthcare costs, on
behalf of the City; and
WHEREAS, in accordance with Generally Accepted Accounting Principles (GAAP), the
City must record payments made on its behalf, and must therefore amend the 2019 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 a variance 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:
I
CITY OF SEWARD,ALASKA
RESOLUTION 2020-021
Section 1. The 2019 Operating Budget shall hereby be retroactively amended to
appropriate State Public Employees' Retirement System (PERS) On Behalf Grant Revenues on a
pro-rata basis to departments within each fund, in the total amount of$315,712.36 as follows:
I. $249,434.80 from grant revenue account 01000-0000-4201 to General
Fund/department expense accounts 01000-1xxx-6201; and
2. $19,110.29 from grant revenue account 11000-2000-5920 to Harbor Fund retirement
expense accounts I 1000-X-6201; and
3. $34,877.96 from grant revenue account 15000-0000-5920 to Electric Fund retirement
expense accounts 15000-X-6201; and
4. $8,268.84 from grant revenue account 17000-0000-5920 to Water Fund retirement
expense accounts 17000-X-6201; and
5. $4,020.47 from grant revenue account 18000-0000-5920 to Wastewater Fund
retirement expense accounts 18000-X-6201.
Section 2. This resolution shall be retroactive to December 31, 2019.
Section 3. This resolution shall take effect immediately upon adoption.
PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this J
23rd day of March, 2020.
THE CITY O%SEWARD,ALASKA
7)
i�I1—
Christy Terry, M or
AYES: Osenga, McClure, Butts, Crites, Seese, Baclaan, Terry
NOES: None
ABSENT: None
ABSTAIN: None
ATTEST:
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JJ�� `�'
Brenda J. Ballou, OF s@lyq.,
City Clerk 4 0 400 T,.'to„
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(City Seal) SEAL ems :
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Council Agenda Statement
Meeting Date: March 23, 2020
Through: Scott Meszaros, City Manager
From: Tammy Stromberg, Finance Director
Agenda Item: State of Alaska PERS on-behalf contributions of$315,712.37 for January
through December 2019
BACKGROUND &JUSTIFICATION:
The 2018 State legislature passed House Bill 286, appropriating $135,219,000 directly to PERS on
behalf of AIaska 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 January 1 through June 30,
2019) is $150,671.01.
The 2019 State Legislature passed House Bill 39 appropriating $159,055,000 directly to PERS on
behalf of Alaska municipalities and PERS employers, with the City of Seward's portion of this
appropriation (for the period July 1,2019 through December 31, 2019 is $165,041.36.
The total amount paid directly to the City's PERS account with the State of Alaska Division of
Retirement&Benefits for 2019 is$315,712.37.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 form the previous plan,in which every employer was assigned a different employer cost
rate, depending on their individual experience.
The attached spreadsheet lists PERS employer contribution rates established by the AIaska Retirement
Management Board, itemizing the portion of the overall rate paid 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 ($6.2 million). Municipalities in Alaska have benefited significantly by the State's
coverage of PERS costs in excess of 22%. However, 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 2019 budget to account for State contribution on
behalf of the City for contributions to the public employee's retirement system for the period January
through December, 2019.
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CONSISTENCY CHECKLIST: Yes No NIA
1. Comprehensive Plan (document source here): j X
2 Strategic Plan (document source here): X
Other(list): July 24, 2019 and February 3, 2020 letters from SOA DOA;
3. State of Alaska 2018 legislative session, House Bill 286 and 2019 X
legislative session, House Bill 39.
ATTORNEY REVIEW: Yes X No
FISCAL NOTE:
The State's contribution of$315,712.37 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 dep ent's operating budget.
Approved by Finance Department:
RECOMMENDATION:
Council approve Resolution 2020-021 retroactively amending the 2019 Operating Budget by
appropriating $315,712.37 from State grant revenues, to various fund retirement expense accounts,
on a pro-rata basis.
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Pars On-Behalf Allocation for tst half&2nd half of 2079
On-behalf On-behalf PERSOn-
July-Dec Jan-Jun behalf Total
Account Coda Total Subtotal %of Total 2019 2019 2019
010000900 62010000 OD000 Retirement Benefits 329398.15 329,398.15 32.1% 52,978.57 48,365.67 101,344.24
01000 111162010000 01313110 Retirement Benefits 1937.28 1,937.28 0.2% 311.58 294.45 596.03
010001113 6201000000000 Retirement Benefits 20,650.62 20,650.62 2.0% 3,321.33 3,032.14 6,353.47
01000 2120 62010000 00000 Retirement Benefits 37,253.14 37,253.14 3.6% 5,991.59 5,469.89 11,461.48
010DO 112162DI 0007 00000 Retirement Benefits 232.78 27,032.22 2.6% 4,347.71 3,969.15 8,316.86
030001122 62010000 00000 Retirement Benefits 20,374.24 20,374.24 2.0% 3,276.88 2,991.56 6,26844
020001140 52010038 00000 Retirement Benefits 0.00 58,760.94 5.7% 9,450.78 8,627.89 18,078,68
010001210 62010005 00000 Retirement Benefits 0.00 139,991.77 13.6% 22,515.50 20,555.05 43,070,55
0100012116201 ODDD 00000 Retirement Benefits 30,892.11 30,892.11 3.0% 4,96B.52 4,535.90 9,504.42
010001212 62010000 OODOO Retirement Benefits 11,088.85 11,088.85 1.1% 1,783.47 1,628.18 3,411.65
0100D 1220 62010000 OOD00 Retirement Benefits 21,777.50 21,777.50 2.1% 3,502.57 3,197.60 6,700.17
010001250 62010000 DODDO Retirement Benefits 7,645.80 7,645.80 0.7% 1,229.72 1,122.64 2,352.34
010001310 62010038 00000 Retirement Benefits 20,374.06 20,374.06 2.0% 3,276.85 2,991.53 6.268.38
010001311620100000000D Retirement Benefits 517.12 517.12 0.1% 93.17 75,93 159.11)
010DO 1312 62010000 00000 Retirement Benefits 8,542.36 8,542.36 0.8% 1,373.91 1,254.28 2,62818
020001350 62010000 00000 Retirement Benefits 6,567.18 6,567.18 0.5% 1,D56.23 964.26 2,020,49
010001400 62019545 00000 Retirement Benefits 14,177.88 14,177.88 1.4% 2,280.29 2,081.74 4,362.04
01000 1410 6201 954D ODODD Retirement Benefits 3,274.24 3,274.24 0.3% 526.61 480.76 1,007.37
01000 14116201 ODDO 00000 Retirement Benefits 7,889.03 7,889.03 0.8% 1,268.83 1,158.35 2,427.19
010001420 62019542 OOOOO Retirement Benefits 9,285.06 9,285.06 0.9% 1,493.36 1,353.33 2,856.69
010001430 62019532 00000 Retirement Benefits 3,794.26 3,784.26 0.4% 608.64 555.64 1,164.28
01000143162019526 00000 Retirement Benefits 5,341.09 5,341.09 0.5% 859.03 794.23 1,643.27
010DO 1500 62010000 ODOM Retirement Benefits 24,180.49 24,180.49 2.4% 3,889,06 3,550.43 7,43949 249,434.80
11000 2000 6201 OQQO 00000 Retirement Benefits 15,653.42 15,553.42 1.5% 2,517.61 2,298,40 4,91601
12ODD 200162010000 00000 Retirement Benefits 19,223.89 19,223.89 1.9% 3,091.86 2,822.65 5,914.52
12000 2002 52010000 00000 Retirement Benefits 17,991.23 17,991.23 1.8% 2,893.61 2,642.66 5,535.27
11000 2003 6201000000000 Retirement Benefits 1,189.92 1,189.92 0.1% 191.38 174.72 366.10
11000 2004 62010000 000DO Retirement Benefits 5,244.14 5,244.14 0.5% 843.44 770.00 1,613.44
11000 2005 6201 ODDO ODOM Retirement Benefits 2,811.39 2,811.39 0.3% 452.17 422.80 864.97 19,130 29
15ODQ 3000 6201 0000 00DOG Retirement Benefits 86,794.48 86,794.48 8.5% 13,957,94 12,742.60 26,700.54
15000 3001 6201 0000 00D00 Retirement Benefits 26,579.01 26,579.01 2.6% 4,274.82 3,902.61 8,177.43 34877.96
17000 400D 62010000 00000 Retirement Benefits 26,964.59 26,864.59 2.6% 4,320.75 3,944.54 8,265,29
17DOO 4002 62010000 00000 Retirement Benefits 11.55 11.55 0.0% 1.86 1.70 3.55 8268.84
180004500 62010000 00000 Retirement Benefits 13,067.69 13,067.69 1.3% 2,101.73 11918.73 4,020.47 4Q20.47
1,026,156.70 165,041,36 150,671.011 315,712.37 315,712.37
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