Title
Recommendation to Amend the General Fund Fiscal Year 2015-16 Budget by Appropriating $3,000,000 from the General Fund Committed Fund Balance to Pay for the City's Other Post Employment Benefits (OPEB) Obligation as Stated in the Safety Bargaining Groups Memoranda of Understanding. (Finance 2410)
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To: Honorable Mayor and Members of the City Council
From: Elizabeth D. Warmerdam, Interim City Manager
Re: Recommendation to Amend the General Fund Fiscal Year 2015-16 Budget by Appropriating $3,000,000 from the General Fund Committed Fund Balance to Pay for the City's OPEB Obligation as Stated in the Safety Bargaining Groups Memoranda of Understanding
BACKGROUND
In December 2014, the City Council approved a $3 million commitment for funding the City's long term liabilities. Later on April 29, 2015, the City Council approved memoranda of understanding (MOUs) for the International Association of Fire Fighters (IAFF), Alameda Fire Chiefs Association (AFCA), Alameda Police Officers Association (APOA) and Alameda Police Management Association (APMA) (collectively the safety bargaining groups). All four MOUs contain an Other Post-Employment Benefits (OPEB) section that stipulates that a one-time City contribution of $5 million be made in January 2016 to an irrevocable OPEB Trust. Of the $5 million, $3 million was to come from the General Fund committed fund balance that was approved by the City Council in December 2014.
DISCUSSION
The City is in the process of setting up a separate account with an existing PARS OPEB Trust (Trust) for the purpose of setting aside and accumulating funds to be used toward the payment of OPEB benefits for those sworn employees in the City's Fire and Police Departments who pay into the Trust and retire after January 1, 2019. The January 2019 date was established to ensure at least 3 years of contributions were made before benefits could be drawn upon. It also allows the Trust to earn interest for an addit...
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