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Special Meeting of the City <br />Council <br /> August 23, 2004 <br /> Page 2 <br />said that happens when Council mandates something, like a cost of living raise <br />for the retirees, but does not fully funded them on the front end, so the cost is <br />amortized over a 25 year period. Mayor Fendley asked if the updates were done <br />automatically or by contract. Mr. Davis said because the updates had been <br />adopted every year since 1987, the Council adopted an automatic update that <br />became effective January 1, 2003. <br />Mr. Davis explained that the actuarially accrued liability is the cost of all the <br />benefits that have been adopted by the City and that is split into two things, the <br />assets held and the difference between the liability and the assets. He said this <br />is the unfunded actuarial liability. <br />He said this would impact employee benefits by 20% less for the 5% 2 to 1 <br />match, by 25% less for the 6% 1½ to 1 match and by 50% less for the 6% 1 to <br />1 match. He said the impact would also vary with respect to how long before <br />they retire, such as an employee nearing retirement in the next 2 to 3 years. He <br />said this would affect new hires the most. It was calculated that a 6% 1 to 1 <br />match would equal a total savings of $416,000.00. <br />On a question from Councilman Wilson about the amount of the unfunded <br />liability, Mr. Davis said it was $7,521,827.00. Councilman Wilson stated his <br />concern was that this unfunded liability was automatically renewed every year. <br />He said he felt is this continues to grow, it would put a burden on future <br />employees and future Councils. Mayor Fendley suggested putting this on a <br />future agenda. <br />Mayor Fendley called for consideration of, discussion of, possible action on or <br />direction to staff regarding the position of Interim City Manager. He said he <br />had spoken with outside consulting firms, who would provide that for a fee of <br />$55.00 an hour. Although Mayor Fendley thought that was too much with the <br />recent budget constraints, but Councilwoman Fisher felt that wasn’t too <br />expensive, that the travel expenses are what would make it expensive. It was <br />agreed that the number of hours could be set. There was discussion of in-house <br /> <br />