12/08/2008 - City Council SpecialAGENDA
SPECIAL CITY COUNCIL MEETING
MONDAY, DECEMBER 8, 2008
5:30 P.M.
EAGAN ROOM-EAGAN MUNICIPAL CENTER
I. ROLL CALL AND ADOPTION OF THE AGENDA
Q I II. 2009 E-TV BUDGET
f ? ~ III. PRESENTATION ON EAGAN RAIN GARDENS
g IV. FUNDING OF OTHER POST EMPLOYMENT BENEFITS (OPEB)
V. OTHER BUSINESS
VI. VISITORS TO BE HEARD
VII. ADJOURNMENT
Agenda Memo
Special City Council Meeting
Monday, December 8, 2008
II. 2009 E-TV BUDGET
ACTION TO BE CONSIDERED:
Review 2009 Eagan Television budget and direct formal action to the December 16, 2008
Regular City Council Meeting
FACTS:
• On May 13, 2008, the Eagan City Council gave direction on a desired location for
anew community television studio because its joint lease with the City of
Burnsville on the previous studio was set to expire at the end of December, 2008.
• The City of Burnsville elected to open its own studio at Burnsville High School.
• On July 15, 2008 the Eagan City Council approved a Memorandum of
Understanding (MOU) with Thomson Reuters Corporation to build a new Eagan
Television (E-TV) public access studio on their corporate campus and a separate
MOU with Burnsville to govern the sharing of a mobile production van, and the
division of equipment from the old facility.
• The previous joint operation had 8 FTE positions.
• On November 18, 2008 the Eagan City Council authorized the hiring of four full-
time positions.
• E-TV funding is not from property taxes. Rather, operations are paid for by a
combination of franchise fees paid for by Comcast for using the public rights of
way and nominal PEG fees paid for by subscribers to support public access
facilities which carry community programming, government meetings and local
educational programming.
• In the previous combined operation the total budget was $980,731. The Eagan-
only requested budget is $443,200 and that includes at approximately $20,000 in
one-time start-up costs.
• Communications Director Garrison and E-TV Supervisor Jeff Ongstad will
present the proposed budget and answer any questions the City Council may have.
ATTACHMENTS:
• 2009 Proposed E-TV Budget on pages ~ to J
r'~
~. ~~~_ ~ City o~ ~a~a~
2009 Proposed Budget Operating Budget
E-TV
Responsible Manager: Tom Garrison, Director of Communications
PURPOSE He DESCRIPTION
Eagan Television (E-TV) creates public, educational, and government cable TV
programming through a partnership of volunteers and professional staff. E-TV also
provides television production equipment facilities, and channel time to televise
locally-produced programming. It is cable programming by the community, for the
community.
PERFORMANCE INDICATORS
2009 Goals for Output:
• Host a Grand Opening and at least four open houses targeted to current and potential users and
volunteers of~ Eagan Television.
• Establish a baseline of current Eagan users and increase its volunteer base at least 15%.
• Double the number of outside paying clients from 2008
• Launch a new E-TV channel aimed at youth and community-driven programming and introduce at
least one new show with real time interactive participation.
• Launch a new E-TV Web site and increase online Web-streamed video (on demand) and increase
community produced and submitted video content.
.., ~
~..";' ~ ~1~~ 0~ ~8~~11
2009 Proposed Budget Operating Budget
Expend_itur__ es-b~Category
~~~~ Parts and
`' ~~'~ Supplies
~
~, 6%
f t
r
Personal I l
Services and
Services Capital Other
73% Outlay Charges
1% 20%
E-TV
Responsible Manager: Tom Garrison, Director of
Communications
HIGHLIGHTS & CHANGES
Overview: The Eagan Television (E-TV) comes before the City
council for the first time following the decision by the cities of
Burnsville and Eagan to move in different directions and
suspend the operation of the former Burnsville Eagan
Community Television effective December 19, 2008.
Effective December 15, 2008 Eagan assumes responsibility for programming its own channels from a new master
control at Eagan City Hall and a new public access studio located on the Thomson Reuters corporate campus.
The E-TV budget is funded- by non-taxpayer dollars. The sources of funding are franchise fees paid by Comcast
and a small fee on local subscriber bills which supports capital equipment for Public, Educational and
Governmental (PEG) public access facilities.
The 2009 E-TV budget request is $443,200. The budget has been carefully reviewed by Director Garrison and the
E-TV Supervisor, but also recognizes that there may be some unknown start-up costs in the first year of operation
separate from Burnsville and new opportunities for efficiencies in collaboration with its new partner.
Highlight 1: Rent and Utilities
Financial Impact: $12,000
Service Level Impact: Previously in the former BECT facility Eagan's share of rent was $65,000 and share of
utilities was $9,000. In the new partnership with Thomson Reuters, Eagan will pay $12,000 in utilities and no rent.
However, in lieu of that arrangement, Eagan will provide a negotiated number of hours of video services. The
savings allow Eagan to provide significantly more direct dollars to public access operations in the new E-TV
studio.
Highliqht 2: Start-Up Costs
Financial Impact: $20,000
Service Level Impact: Approximately $20,000 in start-up or one-time costs are included in this budget for such
things as a new E-TV Web site, E-TV branded clothing for personnel, support vehicle decals, required
contributions for maintaining the mobile studio vehicle still shared with Burnsville, grand opening ads, new
letterhead, and a network switch required to operate the studio.
Highliqht 3: E-TV personnel
Financial Impact: $320,900
Service Level Impact: Nearly 73% of the E-TV budget represents personnel and benefit costs for the four E-TV
full-time staff, and hourly pay for technicians who help cablecast and Web stream all of Eagan's local government
meetings
Highliqht 4: Computer Software
Financial Impact: $8,500
Service Level Impact: New studio equipment will be furnished with state-of-the-art graphics software and a
public domain music library to facilitate quality productions and outside revenue generating opportunities.
~,
~:`~;:k.. ~ .
:~~ ~l~~ 0~~0~10l1 2009 Proposed Budget Operating Budget
E-TV
Responsible Manager: Tom Garrison, Director of Communications
REVENUE SUMMARY
Actual
....... Actual Budget Budget
....._
iRevenue 2006 2007 2008
2009
PEG fees ~ $ 391,000
City contribution -from Cable Franchise Fees fund
_ 315,900.
'Class fees
.
. 500
..
.
Dub/Rental/Paid production 10,000
Community programming sponsorship 6,700 ':
`Total Revenues -all sources $ 724,100
Less: PEG fees available for capital equipment (280,900)'
'.Total Operating Revenues $ 443,200
EXPENDITURE SUMMARY
Actual Actual Budget Budget
-.Expenditure 2006 2007 2008 2009
Personal Services $ 320,900
Parts and Supplies 25,700
Services and Other Charges 90,200
Capital Outlay 6,400
Total $ - $ - $ - $ 443,200
POSITION INVENTORY
Personnel 2006 2007 2008 2009 Hours
Studio Supervisor - - - 1 2,080
Client Services Coordinator - - - 1 2,080
Govmt Prog Coordinator - - - 1 2,080
Field Coord/Video Specialist - - - 1 2,080
Total - - - 4 8,320
~.
,,
`~ ~~~ City of Ba~a~t
2009 Proposed Budget
Operating Budget
E-TV
Responsible Manager: Tom Garrison, Director of Communications
LINE ITEM DETAIL
4cct PERSONAL SERVICES
6110 SALARIES AND WAGES-REGULAR
6112 OVERTIME -REGULAR
6130 SALARIES AND WAGES-TEMPORARY
6142 PERA-COORDINATED
6144 FICA
6151 HEALTH INSURANCE/VEBA
6152 LIFE
6154 DISABILITY -LONG TERM
6155 WORKERS COMPENSATION
TOTAL PERSONAL SERVICES
PARTS & SUPPLIES
6210 OFFICE SUPPLIES
6212 OFFICE SMALL EQUIPMENT
6215 REFERENCE MATERIALS
6220 OPERATING SUPPLIES -GENERAL
6224 CLOTHING/PERSONAL EQUIPMENT
6231 MOBILE EQUIPMENT REPAIR -PARTS
6232 SMALL EQUIPMENT REPAIR -PARTS
6235 FUEL, LUBRICANTS, ADDITIVES
6270 COMPUTER SOFTWARE
TOTAL PARTS & SUPPLIES
SERVICES & OTHER CHARGES
6310 PROFESSIONAL SERVICES-GENERAL
6346 POSTAGE
6347 TELEPHONE SERVICE & LINE CHARGES
6353 PERSONAL AUTO/PARKING
6355 CELLULAR TELEPHONE SERVICE
6357 GENERAL ADVERTISING
6359 LEGAL NOTICE PUBLICATION
6370 GENERAL PRINTING AND BINDING
6385 INSURANCE
6405 ELECTRICITY
6425 MOBILE EQUIPMENT REPAIR -LABOR
6426 SMALL EQUIPMENT REPAIR -LABOR
6457 MACHINERY & EQUIPMENT RENTAL
6475 MISCELLANEOUS
6476 CONFERENCES AND SCHOOLS
6477 LOCAL MEETING EXPENSES
6479 DUES AND SUBSCRIPTIONS
6535 OTHER CONTRACTUAL SERVICES
6569 MAINTENANCE CONTRACTS
OTHER SERVICES AND CHARGES
CAPITAL OUTLAY
6640 MACHINERY/EQUIPMENT
6660 OFFICE FURNISHINGS/EQUIPMENT
CAPITAL OUTLAY
TOTAL E-TV
Actual Actual Budget Budget
2006 2007 2008 2009
$ - $ - $ -
$ 235,400
2, 000
14,000
15, 800
17,900
34, 600
1, 200
320, 900
1, 300
500
300
3, 500
1, 200
4, 000
5, 000
1,400
8, 500
25,700
9,200
800
200
.1,600
2,700
2,200
300
3,200
7,300
12, 000
2, 500
5,000
2,000
2,400
5, 300
1, 000
4,700
5,400
22,400
$ 90,200
$ 5,400
1, 000
6,400
$ - $ - $ - $ 443,200
#DIV/0!
Agenda Memo
December 8, 2008 Special City Council meeting
III. WATER QUALITY CIP UPDATE
RAIN GARDENS & MORE
DIRECTION TO BE CONSH)ERED: Receive update on implementation of Water Quality
Capital Improvement Plan for 2008 and proposed future enhancements.
FACTS:
• On June 19, 2007, the City Council approved the 2008-2012 Capital Improvement Plan
(CIP) for Public Works Infrastructure, Part III. This was the first CIP that included water
quality improvements as part of the five year program that typically addresses street and
utility improvements.
• Accordingly, 2008 was the first year of implementation of a variety of capital
improvements focusing on water quality enhancements benefitting the ponds and lakes
throughout the City.
• Contracts 08-03 and 08-04 incorporated 15 street revitalization projects constructed this
past summer and included the installation of 10 rain gardens as water quality components
of the CIP.
• An additional 11 rain gardens were constructed in the neighborhood adjacent to Coventry
Parkway, east of Dodd Road, this past fall. The neighborhood residents were labeled as
Community Champions in the 2008 State of the City in recognition of their efforts to
clean up their neighborhood pond with their personal efforts and finances. The City
Council approved re-naming City Pond JP-23 to "Coventry Pond" at the request of said
residents.
• The use of rain gardens was initiated as a Water Quality enhancement to assist the
process of meeting the Non-Degradation standards mandated by the Minnesota Pollution
Control Agency (MPCA) for removal of Phosphorus and Total Suspended Solids while
reducing the total volume of storm water discharged to City lakes and ultimately the
Minnesota River.
• The rain gardens constructed to date were selected for their higher potential benefit to the
storm water system, mainly due to soil conditions and direct drainage areas, and the
willingness of the property owners. The locations of the 21 rain gardens are indicated on
the enclosed map (page ~).
• There is a steady annual increase of rain gardens indicated in the current Water Quality
Capital Improvement Program (CIP), 2009-2013. The CIP indicates an annual increase
of about a dozen gardens.
• The CIP includes additional special projects related to Total Maximum Daily Load
(TMDL) reduction projects for MPCA designated lakes such as Fish Lake and Schwanz
Lake, as well as similar enhancements to LeMay Lake.
• Staff already has resident consensus on a dozen rain gardens to be constructed in 2009
and is preparing a preliminary study for public rain gardens on Cliff Lake Road.
• The design consultant for the rain gardens installed to date, Barr Engineering Company,
will provide the City Council with a presentation of the completed rain gardens, including
the public relations experience, and update the City Council on future opportunities
within the City of Eagan.
ATTACHMENTS:
• Rain Garden Location Map, page
City of Eagan
Rain Garden Interest Locations
City of Eagan
- -® ii/ I-asa ~
_ _ _. -
`~ ~ ~
Legend ~~~~ ~ - \
,
~.
' 2008 Rain Gardens I' N~I'1-
s,
0
P ~P,P~, DPW >~ <P~~ ~~~
S II LONE OAI<RD. _
A ^ \o
P Mof Eagan
~ r
~
,
8 D 6H
F L\E 9'ntere ztmxtl
rangaNen ~ `
\ -
~ x
Z ,.
~ H(~
J
~ \ O
Z
~i
~ A
~ G.
~
~
~~
\\
, ~
_..
\
I
~
-__._...
_
~
~
YANKEE DOODLE RD.
-
,a: o,F
- L
:
k
, .
s
s
Y -°~
L~
~ - - i 'vim. n
_~
Agenda Information Memo
December 8, 2008 Special Eagan City Council Meeting
TI N T 1
To review background information, public policy considerations, and staff
funding recommendations and direct formal action to the December 16, 2003
regular City Council Meeting.
i4 T
Beginning with the audit for the year ended December 31, 2003, and
continuing with all subsequent audits the City's independent auditors have
been informing the City Council and staff about the Government Accounting
Standard Board's (GASB) work on development and implementation of new
accounting standards related to the reporting of Other Post Employment
Benefits (OPEB). In working with the auditors and through various
professional organizations and literature staff has continued to learn more
about the options to meet the requirements and about the implications for the
presentation of the City's financial position in the annual financial reports.
In late 2005 staff was directed by the City Council to review debt service and
capital needs for possible use of fund balance and to provide options to the
Council in increments of the available fund balance. At a Special meeting on
February 13, 2006 the Council directed that the proposed General Fund fund
balance policy and authorization to transfer $1,575,000 to the Benefit Accrual
Fund to provide funding toward the City's Post Retirement Health Insurance
Liability be placed on the Consent Agenda for the February 21, 2006 Regular
City Council meeting.
• Public awareness ofi OPEB liabilities has continued to increase across the
country as governmental jurisdictions continue their review and
implementation of the new accounting standards.
The City Council approved negotiations and the resulting contracts to
eliminate the benefit for Eagan Police Officers hired after January 1, 2005.
State action effectively eliminated the program for all other Eagan employees
first hired after July 1, 1939. Gonsequently, the Eagan liability changes due
to actuarial assumptions and premium cost and cost sharing and not through
an increased number of participants.
8
• In July of 2008 the Council approved the summary restatement of Post
Retirement Health Insurance Benefits and implementation of same for City of
Eagan Employees. That action made no policy changes, but brought all prior
approvals and actions into one summary document allowing for better
understanding of what is in place and for more efficient implementation.
• The first of the required biennial actuarial valuations to determine liability and
funding obligations has been completed with a valuation date of January 1,
2007. The valuation numbers were subsequently updated to provide funding
requirements as of December 31, 2008.
State law was changed in 2008 allowing governmental subdivisions to
establish trusts providing additional benefit to advance funding of the
Actuarial Accrued Liability, thereby reducing annual contribution
requirements.
Staff has reviewed the options available to comply with the new standards,
prepared public policy questions and a proposed funding plan for
consideration by the City Council. Staff recommendations are intended to be
consistent with previous direction and actions of the City Council in dealing
with these standards and with the financial management of the City.
• The attached memo provides a great deal of additional information, which
unfortunately might be difficult to follow without explanation. Director of
Administrative Services VanOverbeke will be at the meeting on Monday to
walk through the information and to respond to City Council questions.
d4TTACHM NS:
• Enclosed on pages ~ ~ through ~ is a copy of a memo from
Director of Administrative Services VanOverbeke proving summarized
background information, public policy questions, and staff funding
recommendations.
• Copies of the GASB 45 Actuarial Report as produced by the Stanton Group
are available from the City Administrator's Office if any member of the City
Council would like to review the entire document.
9
/.,~
"z s 'City of Eagan ~cmo
1°0: i inistrator He s
ro : it ctor of inisr iv rvic Van ver
ate: cem r , 2000
u jcct: Cher ost loymen nei ( ) un in
ack round
In April and July of 2004, the Governmental Accounting Standards Board (GASB)
issued two statements providing guidance on financial reporting for OPEB Plans.
Per the standards, the implementation date for Eagan is the year ending
December 31, 2008. In general the new standards require that retiree benefits
(other than pensions) such as medical, dental, vision, life, hearing, and long-term
care must be funded while the employee is providing services to the employer,
not at the time of retirement. Eagan's benefit has been limited to medical and
preventative dental insurance and remains in effect-only until Medicare eligibility
is reached. Further, the City's benefits accrue only to the former employee's
period of eligibility, not extending beyond that period for the benefit of
dependents. Historically, most cities have made payments for the benefit costs
on a "pay-as-you-go" basis, meaning the expense was recognized when the
premium payments were actually made (after retirement), not when the benefit
was earned (working years). In Eagan's situation "pay-as-you-go" has worked
reasonably well from a cash flow perspective per the City Council policy ofi
requiring positions to remain vacant until enough payroll savings had been
accumulated to fund future City premium obligations on an employee by
employee basis.
However, even before the implementation of these new standards, as health care
costs rose over the years, the City determined that the growing future liability
even on a "pay-as-you-go" basis was becoming problematic. Required
vacancies combined with more and more employees reaching the eligibility age,
and single incumbent positions (e.g, a payroll clerk) had the potential to cause
problems with service delivery in future years. Consequently, in negotiations with
the two unions in the Police Department, the benefit was eliminated for all
officers hired after January 1, 2005. An additional hourly wage was added that
the officers can invest in a health care savings plan to be used later to provide
their own coverage. The State also changed the "Rule of 90" retirement benefit
for non Police and Fire PERA members essentially meaning that no employees
first hired after July 1, 1989 could meet the City's requirement for post retirement
health insurance benefits, effectively ending the program for that group of
!~
employees as well. Those two actions taken together effectively cap the
participation in a post retirement health insurance benefit for Eagan to the
number of employees who were eligible at the time of the changes.
However, further complicating the situation, per the GASB standards the OPEB
liability is created in two ways; first, by the employer making contributions to the
premiums for retiree coverage (Eagan plan), and second, through allowing
retirees to participate in the group plan even if they are paying the entire
premium. The second notion creates what is known as an "implicit rate subsidy"
in that participation in the group by retirees raises the group premiums for
everyone because retirees are more expensive to insure. Since Minnesota
requires that retirees be allowed to participate in the city group plans, every city
providing medical coverage is subject to this component of the liability.
r®c®ss t® Date
GASB 45 requires local governments to obtain actuarial valuations for the OPEB
benefits; consequently, in July of 2006 the Stanton Group was retained by the
City to provide a GASB 45 Actuarial Valuation. The approach was designed to
help determine the appropriate plan design, assumptions, and actuarial cost
method to apply to meet the objectives of the City and to meet GASB
requirements. As the City worked and negotiated to change its health/dental
coverage plans for 2007 from those in place for 2006, the process of completing
the actuarial study was delayed to allow more up to date information to be
incorporated. The draft actuarial report was completed and reviewed in August
of 2007 and the final report was completed as of January 1, 2007, although dated
October 17, 2007.
The Actuarial Valuation is based on numerous assumptions including:
A Summary of Plan Provisions:
• Eligibility Requirements
• Medical Contributions
• Eligibility Requirements for City Contributions
o Police and Firefighters
o Other Employees
• Dental Contributions
• Length of Coverage
• Medical Benefits: Co-pay Plan
• Medical Benefits: HRA High Deductible Plan
Actuarial Assertions and Methods
• Valuation Date
The assumptions that were used in the study were basically arrived at in one of
three ways: first, established actuarial standards; second, actual City experience
and/or practice; and third, assumed to be the same as used by PERA in their
plans. In addition to the assumptions participant data is used. This process
allows for the inclusion of conservative, realistic, and generally accepted
assumptions to be used as the basis for the valuation.
GASB 45 allows the employer the choice among six different actuarial cost
methods. The three primary methods are known as Entry Age Normal, Projected
Unit Credit, and Aggregate. The other three methods are variations of the
primary methods. The Stanton Actuarial dated October 17, 2007 provides
January 1, 20-07 results using the three primary actuarial cost methods. In
addition to the actuarial methods each of those methods as presented provides
results using 4.0% and 8.5% discount rates and per cent of pay and level dollar
options. The 4.0% discount rate represents no prefunding (pay-as-you-go) and
is the assumed rate of return on the City's general assets. The 8.5% discount
rate represents prefunding and. is the assumed rate of return on the assets in a
trust
In general, the different actuarial methods and the payment process allocate a
portion of the actuarial present value of benefits to past service and to future
service. That allocation drives funding obligations into the amortization of the
unfunded liability and/or to the normal cost. Ultimately, all methods result in
getting to the same point over time as the overall liability cannot change; the
timing and impact of required payments change depending on the methods
chosen.
The City Council has previously given direction to meet the GASB requirements
by funding the Unfunded Actuarial Accrued Liability to the extent possible and by
meeting annual Normal Cost obligations. Therefore, staff in consultation with the
Stanton consultants determined that use of the Entry Age Normal actuarial
method best meets the City's objectives.
In addition, using a discount rate of either 4.0% or 8.5% has a tremendous
impact on the calculations and the results of the valuation study. Again,
consistent with previous direction and past City practice of funding future
o ~,
liabilities, staff in consultation with the Stanton consultants determined that
meeting the requirements to allow use of the 8.5°/® discount rate was in the City's
best interest.
However, the use of an 8.5% discount rate to gain the full advantage of
prefunding requires the creation of an irrevocable trust and the trust must meet
all the requirements of both GASB and IRS. Although some Minnesota
jurisdictions had already created these trusts, it became clear that they were not
authorized in Minnesota Statutes until the law was changed in the 2008 session.
~'he legislation now allows a political subdivision or other public entity that
creates or has created an actuarial liability to pay postemployment benefits to
employees or officers after their termination of service to establish a trust to pay
those benefits. The assets of the trust may be administered by PERA, a bank, or
an insurance company or agency. If PERA is chosen as the trust administrator,
all money in the trust account will be invested by the State Board of Investments
(SBl) per State Statutes and SBI policies and procedures.
Again, given past direction and the City's overall objectives, staff has begun
working with the law firm of Hitesman and Associates, P.A., specialists in
benefits law, to provide the necessary consulting and for preparation of the
appropriate trust documents to allow implementation of the City's plan.
Since the City could not take the desired action until State Law was changed in
the 2008 Session, the Valuation was updated by Stanton to advance the
obligations from January 1, 2007 to January 1, 2008. The proposed funding plan
outlined in the subsequent section of this memo is based on the City taking
action in 2008. It is important to note that the GASB Standards require actuarial
valuations at least biennially for GPEB plans such as Eagan's; therefore, the
funding numbers will change as the circumstances change and the assumptions
are updated:
#aff uneiin~, ccon~rnene#ations
To fully fund both the Actuarial Accrued Liability through December 31, 2008
($4,766,441) and the 2008 Normal Cost ($161,591) requires assets of
$4,928,032. It would also be advantageous to fund the 2009 Normal Cost of
$161,591 and to make that payment into the trust at the end of 2008, raising the
total to $5,089,623.
Staff is recommending the following overall process:
1. Set up a trust using PERA as the Administrator and the SBI for investing
the trust assets. Take the necessary steps internally to use the trust to
process premium payments and to retain the necessary consulting
services to meet the GASB Statement requirements.
2. Use City resources to finance the Unfunded Actuarial Accrued Liability
and to pay the 2008 and 2009 Normal Costs.
~~
In general this process outlines the most fiscally conservative approach to this
liability and the funding obligation and positions the City in the best possible light
in regard to financial management and credit ratings.
Based on this process, staff is recommending the following financing plan:
Total Funding Uses:
Resources:
Actuarial Accrued Liability $ 4,766,441
2008 Normal Cost 161,591
2009 Normal Cost 161,591
Total $ 5,089,623
Advanced From General Fund $ 1,778,473
Benefit Accrual Fund 2,311,150
Risk Management Fund 1,000,000
$ 5,089,623
* In February of 2006 the City Council authorized the transfer of $1,575,000 from the City's General
Fund to be set aside in the Benefit Accrual Fund for the purpose of being applied to the unfunded
liability for postretirement benfits. Interest through 12-31-08 has been added to the original transfer
amount.
Both the Benefit Accrual Fund and the Risk Management Fund have been
created and used over a long period of time to aggregate resources to meet
funding obligations such as the postretirement benefit liability now before the
City. Benefit Accrual Fund revenues are derived from direct labor charges to
other City funds. All benefits are accrued and paid by the Benefit Accrual Fund.
14
Use of these funds in this manner does not jeopardize the future operations of
either fund.
For reference I have attached the following exhibits that provide additional
background for discussion and/or demonstrate the calculations used in
determining the numbers referenced in this memo:
1. Exhibit 1: Graphical representation of the various components of
the actuarial valuation.
2. Exhibit 2: Numerical summary of actuarial valuation results
advanced to January 1, 2008.
3. Exhibit 3: Numerical summary of actuarial valuation results by
employee components at January 1, 2008.
4. Exhibit 4: Summary of Normal Costs by department.
ua
1 have tried to summarize some very complicated information from a process that
has been underway for over two years and has significant implications for the
financial position of the City. I believe the appropriate public policy decisions and
implications are included. 1 would be happy to meet and discuss the memo and
to provide any additional information that might be helpful.
(;' ~\~.
®_
Direct of ~~dministrative Services VanOverbeke
cc: Chief Financial Officer Pepper
e
1
A
z
0
H~
o~
~~
W
Q ~
°z
v~
7~
G
W
E--~
d'
b
o~
~ .o
~ U
zo
~x
~~
F" ~
O
C/1 ,~/
R+
o~
~ U
aQ
~
,
~
~
~ ~ '-' '~ ~ ~ ~ 'O-+ vi
~ ~ ~ .~ ~ P
~ b
N ~ N ~
"
~
cd +~-~ O G~ ~ 'd ~' ^~
a
s ~.~ ~ ~ o o ~ ~~
H~ a b e b b ~ .~ °~
ExH'. 6',t 1
°
b ~_ a~ o
N p +~ 'd
~ rn N cad .~ N
~
• cV+
'N N N
v~ U ~ "d
O
~
~ N
~ ~ ~ ~
~ ~ ~ ~ '~
~
~ o .~
'~ ~ N ~ ¢i ' ~ ~
~ ~ U
m U 4
AJ
~ ~
~
Q1 +~
~ ~ ,.a
+O-~ • ~ cn ~
H ' ~ N
~
a '~ O ~+ ~~ U O
~ •~
~ ~ ~ o
~ ~~
a~ a~
~
H ~ ~ °J.~ H ~ ~
~~
GJ ~
~" ~ N
°~
a~
~ ~ U
~ a i°'+
~ x ;~
.a~
H
~~
~ O N
.d
~ ~ .~ ~
AJ
~ ~ N ~
~ •~ b
,b ~' p ~
.~ ~ ~
~ ~
.~ ~ ~
~ o
~ ~
.~ ~ ~
H ~ ~ ;-.,
Z~
J
O ,~
~~
0
M
Annual Required Contribution (ARC)
Beginning of Year
Normal Cost
Amortization of UAAL
Interest to Beginning of Year
Annual Required Contribution at Beginning of Year
'~ Middle of Year
Normal Cost
Amortization of UAAL
Interest to Middle of Year
Annual Required Contribution at Middle of Year
End of Year
Normal Cost
Amortization of UAAL
Interest to End of Year
Annual Required Contribution at End of Year
Amortize UAAL
Over 30 Years
$ 5,922,755
$ 4,380,374
0
$ 4,380,374
$ 1,542,381
$ 161,591
200,623
0
$ 362,214
$ 161,591
200,623
15,394
$ 377,608
$ 161,591
200,623
30,788
$ 393,002
immediately
Recognize UAAL
$ 5,922,755
$ 4,380,374
0
$ 4,380,374
$ 1,542,381
$
161,591
4,380,374
0
4,541, 965
161,591
4,380,374
193,034
4,734,999
161,591
4,380,374
386,067
4,928,032
~~
CITY OF EAAN, MINNS®TA
GASB N0.45 ACTUARIAL PRESENT VALUE OF BENEFITS AS OF JANUARY 1, 2000
®iscount Rafe 8.5%~
Actuarial Present Value of ene~ts (PV) ($ 5,922,755
Inactive Members
Implicit Rate Subsidy $ 103,953
City Cost Sharing 190,383
Total $ 294,336
Non-PolicelFirefighters PV ~ $ 1,820,225
Police/Firefighters
Active Members
Implicit Rate Subsidy $ 1,055,200
City Cost Sharing 2,248,840
Total $ 3,304,040
Inactive Members
Implicit Rate Subsidy $ 195;045
City Cost Sharing 603,445
Total $ 798,490
Police/Firefighters PVB $ 4,102,530
1~
r e''
3-®eC-0$
Surttntary of N®nYtai Cs y ®eprtn~~nt
nd ®f 2008 ginnin g ®f Year
®et Fund Fund
~®. epart®nt Am®unt Summary Am®unt Summary
1 City Council 995.35 917.37
2 Administration 956.97 882.00
3 IT 291.30 268.48
4 City Clerk 1,130.93 1,042.33
5 .Finance 3,023.14 2,786.30
7 Planning 1,274.22 1,174.40
8 Inspections 4, 532.28 4,177.22
9 Communications 696.52 641.95
10 HR 299.02 275.59
11 Police Coord 2,539.37 2,340.43
11 Police Admin 3,323.40 3,063.04
11 Police Officers 130,960.96 120,701.35
12 Fire Coord 483.52 445.64
12 FireP~F - -
21 PW Engineering 3,439.39 3,169.94
22 Streets 4,129.48 3,805.97
24 Central Services 1,147.40 1,057.51
30 Park & Rec 1,609.45 1,483.36
31 Park Maintenance 3,971.93 3,660.76
32 Parks Forestry 532.35 490.65
33 Government Bldgs 1,406.51 1,296.32
166,743.49 153,680.64
61 Utilities 5,072.01 4,674.66
64 Water Quality 952.81 878.17
70 Civic Arena 131.82 121.49
80 Cascade Bay 23.93 22.06
90 Community Center 2,401.94 2,213.77
8,582.51 7,910.15
175, 326.00 175, 326.00 161, 590.78 161, 590.78