HomeMy WebLinkAboutA001 - Council Action Form dated March 19, 1996 ITEM # a
DATE March 19, 1996
COUNCIL ACTION FORM
SUBJECT: ESTABLISHING AN EMPLOYER PICK-UP OF EMPLOYEE CON-
TRIBUTIONS TO THE UTILITY RETIREMENT SYSTEM
BACKGROUND:
In August 1995, the Utility Retirement Board contracted with the accounting firm of
Deloitte and Touche to prepare documentation requesting a letter ruling from IRS that
would allow an "employer pick-up" of employee contributions. A favorable ruling was
received in February and the Board voted to recommend implementation effective July
1 , 1996.
"Employer pick-up" means the employees' gross compensation will be reduced by the
amount of the employee contribution (currently 5.99%). The City then contributes both
the employer share and the employee share to the system. The amount of the employee
contribution is then no longer subject to federal or state income tax.
The relevant ordinance changes have been prepared by the City Attorney.
ALTERNATIVES:
1. Authorize the change to employer pick-up of employee contributions, effective July 1 ,
1996, and approve on first reading the required ordinance changes.
2. Deny the request to change to employer pick-up of employee contributions.
MANAGER'S RECOMMENDED ACTION:
It is the recommendation of the City Manager that the City Council adopt Alternative #1 ,
authorizing the change to employer pick-up of employee contributions, effective July 1 ,
1996, and approving on first reading the required ordinance changes.
COUNCIL ACTION: