HomeMy WebLinkAboutA001 - Council Action Form dated February 26, 2002 �b
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ITEM # Q'
DATE February 26, 2002
COUNCIL ACTION FORM
SUBJECT: CHANGE IN MAKE-UP OF UTILITY RETIREMENT SYSTEM
PARTICIPANT REVIEW BOARD
Executive Summary: Mayor Tedesco recently raised a question regarding whether or
not two Council Members still need to serve as members of the Utility Retirement
System's Participant Review Board. After considering this issue at its February 13
meeting, the Board is recommending that only one Council Member serve on the Board
at this time. Further, after the Board resolves a situation concerning distribution of
assets from the demutualization of the Principal Insurance Company, it is recommended
that Council Members no longer serve as members of the Review Board.
BACKGROUND:
Section 28 of the City Code lays out the duties and composition of a Participant Review
Board to monitor, review, and evaluate the performance of the municipal utility retirement
plan. The Code currently provides that the Board is comprised of six members elected to
represent various departmental employee groups, one retired member of the system, the
City Treasurer, the City Finance Director, and two members of the City Council.
Prior to 1997, the Board played a stronger role in administering certain elements of the
system and in making recommendations to the City Council regarding cost sharing and
benefits of the system. Since the conversion from a defined benefit plan to a defined
contribution plan, the Board basically plays a monitoring role. On rare occasions, the
Board might also make a recommendation to the City Council regarding third party
administration of the plan.
In light of the lower profile now played by this Board, it no longer seems necessary to have
Council members serving in this capacity. The Board concurs with the Mayor's suggestion
that City Council members no longer need to serve on the Board.
However, there is one caveat. The Board is currently developing a recommendation for the
City Council concerning distribution of assets from the demutualization of the Principal
Insurance Company. Until that issue is resolved, the Board recommends that Council
Member Quirmbach continue to serve on the Board. Mr. Quirmbach has participated in the
Board's deliberations throughout the conversion process, and the other Board members
feel that he is uniquely qualified to continue serving until the distribution of the Principal
assets is resolved. After that time, the Board recommends that Council members no
longer serve on the Board.
ALTERNATIVES:
1. Direct the City Attorney to prepare a change to Section 28.403(2)0) of the City Code
reducing the number of Council Members serving on the Utility Retirement Plan's
Participant Review Board from two to one. Furthermore, after the distribution of
Principal assets is completed, a second ordinance change will be prepared that
entirely eliminates the appointment of City Council members to this Board.
2. Direct the City Attorney to prepare a change to Section 28.403(2)0) of the City Code
eliminating two Council Members from serving on the Utility Retirement Plan's
Participant Review Board. The ordinance would not go into effect until the distribution
of the Principal assets is completed. In the interim, Councilperson Quirmbach would
continue to serve on the Board while one Council position could remain vacant.
3. Maintain the present composition of the Utility Retirement Plan Participant Review
Board with two City Council members serving as board members.
MANAGER'S RECOMMENDED ACTION:
In accordance with a recommendation from the Participant Review Board, It is the
recommendation of the City Manager that the City Council approve Alternative # 1 and
direct the City Attorney to prepare a change to Section 28.403(2)0) of the City Code. This
ordinance change will reduce the number of Council Members serving on the Utility
Retirement Plan's Participant Review Board from two to one. Furthermore, after the
distribution of Principal assets is completed, a second ordinance change will be prepared
that entirely eliminates the appointment of City Council members to this Board.
The revised ordinance would provide for a nine-member Participant Review Board: six
current employees who are members of the system, one retired employee who is a
member of the system, the City Treasurer, and the Director of Finance.
COUNCIL ACTION: