G-09-08-27-8A1 - 8/27/2009ORDINANCE NO. %-U1(-0 -'13- -g \1
AN ORDINANCE ADOPTING A BUDGET FOR THE SELF-FUNDED
HEALTH INSURANCE FUND FOR THE 2008-2009 FISCAL YEAR.
WHEREAS, the Finance Department has submitted a proposed
budget for the Self -Funded Health Insurance Fund for fiscal year
2008-2009, Now Therefore
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ROUND
ROCK, TEXAS:
That the budget submitted by the Finance Department for the
Self Funded Health Insurance Fund for fiscal year 2008-2009,
attached hereto as Exhibit "A", is hereby approved.
The City Council hereby finds and declares that written
notice of the date, hour, place and subject of the meeting at
which this Ordinance was adoptedwas posted and that such
meeting was open to the public as required by law at all times
during which this Ordinance and the subject matter hereof were
discussed, considered and formally acted upon, all as required
by the Open Meetings Act, Chapter 551, Texas Government Code, as
amended.
READ and APPROVED on first reading this the day of
T_A(1Y� , 2009.
READ, APPROVED and ADOPTED on second reading this the
(EA dayof 4'1, 1,-T
1 t'
ATTEST:
,
. • N
SARA L. WHITE, City Secretary
, 2009.
ALAN MCGRAW, Mayor
City of Round Rock, Texas
City of Round Rock
Self -Funded Health Insurance Fund
2008-2009 Proposed Budget
Description of Item
08-09
07-08 Proposed
Actuals Budget
Fund Balance 10/1/08
Less: Restricted for GASB 45 Funding
Less: 20% Reserves
REVENUES:
Reinsurance Proeeds
COBRA/Retiree Contributions
Interest Income
Miscellaneous Revenue
City/Employee Contributions - General Fund
City/Employee Contributions - Utility Fund
City/Employee Contributions - Hotel Fund
9,204,900 $9,959,725
(4,000,000)
(1,991,945)
7,363,920 3,967,780
(1,840,980)
154,547
148,587
281,484
26,640
5,155,664
913,364
26,919
125,000
145,000
250,000
15,000
6,810,512
1,283,371
28,356
Total Revenues 6,707,205 8,657,239
Total Funds Available 14,071,126 12,625,018
EXPENDITURES:
Race Across Texas
Professional Services
Administratvie Fees
Stop Loss/Reinsurance Fees
Health Claims
Dental Claims
Vision Claims
Prescription Claims
Total Expenditures
3,650
80,865
352,230
782,746
3,291,128
317,308
62,619
1,061,836
3,750
90,000
420,000
1,040,000
4,000,000
385,000
80,000
1,275,000
5,952,381 7,293,750
Transfer to General Fund 0 1,020,000
Transfer to Utility Fund 180,000
Total Transfers 0 1,200,000
Estimated Unreserved Fund Balance 9/30/09
$8,118,744 $4,131,268
DATE: August 19, 2009
SUBJECT: City Council Meeting — August 27, 2009
ITEM: *8A1. Consider an ordinance adopting a budget for the Self -Funded Health Insurance
Fund for FY2008-2009. (Second Reading)
Department:
Staff Person:
Finance
Cheryl Delaney, Finance Director
Justification:
This fund accounts for the activities of the City's health insurance needs. It will restrict fund related to
GASB 45 (retired health insurance benefits) and allocate funds to the operating departments for the
City's retirement program (TMRS).
GASB 45: Restricts $4M in fund balance to fund the retiree health insurance benefit liability.
Texas Municipal Retirement System (TMRS): Allocates $1.2M of available funds to the operating budget
to fund the City's portion of retirement contributions.
Funding:
Cost: N/A
Source of funds: N/A
Outside Resources: N/A
Background Information:
GASB 45: requires governmental employers to calculate and report the funding status of
postemployment benefits other than pensions (OPEB). Currently retired health care coverage is
provided on a pay-as-you-go basis. GASB 44 does not require employer funding, however it will be
required for the City to calculate and publish the costs of these benefits, which will show up as a liability
on the City's financial statements. Bond rating agencies will take any unfunded liability into account
when assessing the financial condition of the city. With national health care legislation being
considered, the best action for the City is to restrict the actuarial valuation amount. We currently have
funds available in the health fund to finance this liability. This action will satisfy the bond rating
agencies and provide flexibility to re-evaluate the use of funds in the future.
TMRS: IN 2008, TMRS elected to change the actuarial cost method which has caused the City's
contribution rate to significantly increase. The City has a choice to phase in over several years or
contribute at the full rate. IF the City chooses not to pay at the full rate, it will be required to report this
liability in the City's financial statements. We currently have the funds available in the health fund to
allow for the City to contribute at the full rate. The $1.2M used from the health fund will be the
variance between our current contribution rate and full rate. We plan to transfer funds at a reduced
amount over a four year period. By 2012 operating budgets will be able to fully fund the required
contribution.
Public Comment: N/A