07-246 Resolution No. 07-246
RESOLUTION
ADOPTING AND AUTHORIZING EXECUTION OF THE CITY OF ELGIN
RETIREE HEALTH INSURANCE TRUST AGREEMENT
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN,ILLINOIS,that
the City of Elgin Retiree Health Insurance Trust Agreement is hereby adopted and approved by the
City Council.
BE IT FURTHER RESOLVED that Olufemi Folarin, City Manager,and Diane Robertson,
City Clerk,be and are hereby authorized and directed to execute the trust agreement,a copy of which
is attached hereto and made a part hereof by reference.
s/Ed Schock
Ed Schock, Mayor
Presented: October 10, 2007
Adopted: October 10, 2007
Omnibus Vote: Yeas: 7 Nays: 0
Attest:
s/Diane Robertson
Diane Robertson, City Clerk
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CITY OF ELGIN RETIREE HEALTH INSURANCE TRUST AGREEMENT
THIS TRUST AGREEMENT is hereby made and entered into effective as of November
30, 2007, by and between the City of Elgin, Kane and Cook Counties, Illinois, a municipal
corporation (hereinafter referred to as the "City") and the Board of Trustees of the City of Elgin
Retiree Health Insurance Trust Agreement (hereinafter referred to collectively as the"Trustees").
WITNESSETH:
WHEREAS, the City has heretofore adopted an insured medical plan (hereinafter
sometimes referred to as the "Plan"), the purpose of which is to provide medical benefits for
those retired employees of the City and their eligible dependents covered by the Plan who are in
need of medical care after meeting the service and other requirements described in the Plan; and
WHEREAS, the City's Human Resources and Purchasing Director (hereinafter called the
"Plan Administrator")has been appointed to administer the Plan and the claims thereunder; and
WHEREAS, the City funds which will be contributed to the Trustees, as and when
received by the Trustees, will constitute a trust fund (hereinafter called the "Trust Fund") to be
held for the benefit of those retired employees and their dependents under an in accordance with
the Plan; and
WHEREAS, the City desires the Trustees to hold and administer the Trust Fund, and
the Trustees are willing to hold and administer such Trust Fund, Pursuant to the terms of this
Trust Agreement.
NOW, THEREFORE, in consideration of the promises and covenants contained herein,
the sufficiency of which are hereby mutually acknowledged, the parties hereto hereby agree as
follows:
ARTICLE I—BOARD OF TRUSTEES
1.1 Board Created. A Board of five (5) members shall constitute the Board of Trustees.
The Trustees shall administer the City of Elgin Retiree Health Insurance Trust Agreement.
Three (3) individuals shall be ex officio voting members of the Board of Trustees,
namely, the City's Fiscal Services Group Director, the City's Human Resource and Purchasing
Director and the City's Assistant Finance Director.
The forth and fifth members of the Board of Trustees shall be elected exclusively from
those retired employees of the City who are actively participating in the City's Retiree Health
Insurance Plan. All beneficiaries of the Plan who are of legal age and currently receiving health
benefits under the said Plan may vote for the elected members of the Board of Trustees.
The election for the fourth and fifth members of the Board of Trustees shall be held
biannually on the third Monday in January at such place or places in the City and under the
Australian ballot system and such other regulations as shall be prescribed by the City; provided,
however, that the first election for the fqh and fifth members of the Board of Trustees may be
held any time prior to December 14, 2007, as designated in writing by the City.
The beneficiaries of the Plan who are eligible to vote for the elected members of the
Board of Trustees shall be entitled to vote only for the elected members of the Board of Trustees.
No such beneficiary shall be entitled to cast more than one vote for each candidate for whom
such beneficiary is eligible to vote.
The City shall canvass the ballots and declare which persons have been elected and for
what term or terms respectively. In case of a tie vote between two or more candidates, the City
shall determine by lot which candidate or candidates have been elected and for what term or
terms respectively.
One of the members of the Board of Trustee selected in 2007 shall serve for a term of two
(2) years, and the other elected member shall serve for a term of four (4) years; and their
successors shall serve for a term of four (4) years or until their successors are elected or
appointed (in accord with the following paragraph).
In the event that no retired employee of the City who is actively participating in the City
Retiree Health Insurance Plan is willing to serve on the Board of Trustees, then the Mayor shall
appoint one individual to the Board of in lieu of any retiree who would otherwise be elected.
Upon the death, resignation, removal, vacancy or inability to act of any elected member
of the Board of Trustees, his or her successor shall be elected for the unexpired term at a special
election to be called by the City and conducted in the same manner as the regular biennial
election.
Each Trustee shall be entitled to vote on any and all actions before the Board of Trustees.
At least three (3) concurring votes shall be necessary for every decision or action by the Board of
Trustees. No decision or action of the Board of Trustees shall be effective unless presented and
so approved at a regular or duly called special meeting of the Board of Trustees.
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Notwithstanding anything to the contrary, the City is empowered to remove any Trustee
from time to time as the City deems necessary for the proper administration of the Retiree Health
Insurance Trust Fund Agreement as set forth in Section 7.2 below.
1.2 Board Meetings and Officers. The Board of Trustees shall hold annually regular
quarterly meetings not later than sixty five (65) days after the end of each calendar quarter, and
special meetings as called by the President. At least five (5) days notice of each meeting shall be
given to each Trustee. All meetings of the Board of Trustees shall be open to the public and
shall be held in the offices of the Board of Trustees or in any other place specifically designated
in the notice of any meeting.
At its first quarterly meeting each year, the Board of Trustees shall elect from its
members a President, Vice President, Secretary and Assistant Secretary to serve for one (1) year
and until their respective successors are elected and qualified. The President and the Secretary
shall be selected from the ex officio members of the Board of Trustees.
The Vice President shall perform the duties of the President during any vacancy in that
office or during the President's absence or if the President by reason of illness or other causes is
unable to perform the duties of office.
The Assistant Secretary shall act for the Secretary whenever necessary to discharge the
functions of such office.
1.3 Electronic Attendance at Board Meetings. Any member of the Board of Trustees may
attend any quarterly or special meeting via electronic means (such as by telephone, video or
interne connections) provided that such electronic attendance complies with all applicable laws
and also with the City's policy for electronic attendance at such Board of Trustees meetings, as
amended from time to time.
ARTICLE II— CONTRIBUTIONS
2.1 Receipt of Contributions. The Trustees shall receive any contributions paid to the
Trustees in cash or in the form of such other property as they may from time to time deem
acceptable and which shall have been delivered to them. All contributions so received, together
with the income therefore and any other increment thereon shall be held, invested, reinvested and
administered by the Trustees pursuant to the terms of this Trust Agreement. The Trustees shall
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not be responsible for the calculations or collection of any contribution under the Plan, but shall
be responsible only for property received by them pursuant to this Trust Agreement.
2.2 Compliance with Laws. The Plan, this Trust Agreement and the Trust Fund thereunder
are intended to meet all applicable requirements of the Internal Revenue Code of 1986 and the
Illinois Municipal Code, as the same may be amended from time to time.
ARTICLE III—PAYMENTS FROM TRUST FUND
3.1 Payments Directed by Plan Administrator. The Trustees shall from time to time at the
direction of the Plan Administrator make payments out of the Trust Fund to the Plan
Administrator in such amounts and for such purposes as may be specified in the direction of the
Plan Administrator. To the extent permitted by law, the Trustees shall be under no liability for
any payment made pursuant to the direction of the Plan Administrator. Any direction of the Plan
Administrator shall constitute a certification that the distribution or payment so directed is one
which the Plan Administrator is authorized to direct.
3.2 Impossibility of Diversion. It shall be impossible at any time for any part of the Trust
Fund to be used for or diverted to purposes other than for the exclusive benefit of the retired
employees and their dependents covered under the Plan, except that payment of taxes and
administration expensed may be made from the Trust Fund as provided for herein.
ARTICLE IV—INVESTMENTS
4.1 General. The Trustees shall invest and reinvest the principal and income of the Trust
Fund and keep the Trust Fund invested, without distinction between principal and income, in
such securities or in such property, tangible or intangible, as the Trustees shall deem advisable,
including but not limited to insurance policies, stocks, common or preferred, trust and
participation certificates, interest in investment companies whether so-called "open-end mutual
funds" or "closed-end mutual funds", leaseholds, bonds, or notes and mortgages, and other
evidences of indebtedness or ownership, Treasury Bills and other forms of United States
Government obligations, and federally insured savings accounts or certificates of deposit in
banks or savings and loan associations bearing a reasonable rate of interest, irrespective of
whether such securities or such property shall be of the character authorized by Illinois law from
time to time for trust investments; provided however, that investments shall be so diversified as
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to minimize the risk of large losses unless under the circumstances in the sole judgment of the
Trustees it is clearly prudent not to do so. Except as hereinafter expressly authorized, the
Trustees are prohibited from selling or purchasing stock options or call options.
4.2 Establishment of Funding Policy. The City's Fiscal Services Group Director shall
establish and carry out a funding policy consistent with the purposes of the Plan and the
requirements of applicable law, as may be appropriate from time to time. As part of such
funding policy,the Fiscal Services Group Director shall from time to time request the Trustees to
exercise their investment discretion so as to provide sufficient cash assets in an amount
determined by the Plan Administrator under the funding policy then in effect, as necessary to
meet the liquidity requirements for the administration of the Plan.
4.3 Trustees' Adherence to Funding Policy. The Discretion of the Trustees in investing
and reinvesting the principal and income of the Trust Fund shall be subject to the funding policy,
and any changes thereof as the Fiscal Services Group Director may adopt from time to time and
communicate to the Trustees in writing. It shall be the duty of the Trustees to act strictly in
accordance with such funding policy and any changes therein as so communicated to the trustees
from time to time in writing.
ARTICLE V—POWERS OF TRUSTEES
5.1 Powers. The Trustees, in addition to all powers and authorities under common law,
statutory authority, and other provisions of this Trust Agreement, shall have the following
powers and authorities, to be exercised in the Trustee's sole discretion.
A. To purchase, or subscribe for, any securities or other property and to retain the same in
trust;
B. To sell, exchange, convey, transfer, grant options to purchase, or otherwise dispose of
any securities or other property held by the Trustees, by private contract or at public
auction, and any sale may be made for cash or upon credit, or partly for cash and partly
upon credit. No person dealing with the Trustees shall be bound to see to the application
of the purchase money or to inquire into the validity, expedience, or propriety of any such
sale or other disposition;
C. To vote upon any stocks, bonds, or other securities; to give general or special proxies or
powers of attorney with or without power of substitution; to exercise any conversion
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privileges, subscriptions rights, or other options, and to make any payments incidental
thereto; to oppose, or to consent to, or otherwise participate in, corporate reorganizations
or other changes affecting corporate securities, and to delegate discretionary or other
changes affecting corporate securities, and to delegate discretionary powers, and to pay
any assessments or charges in connection therewith; and generally to exercise any of the
powers of an owner with respect to stock, bonds, securities or other property held as part
of the Trust Fund;
D. To cause any securities or other property held as part of the Trust Fund to be registered in
the Trustees' own names or in the name of one or more of the Trustees' nominees, and to
hold any investments in bearer form, but the books and records of the Trustees shall at all
times show that all such investments are part of the Trust Fund;
E. To keep such portion of the Trust Fund in cash or cash balances as the Trustees may from
time to time deem to be in the best interest of the Trust created hereby, without liability
for interest thereon;
F. To accept and retain, for such time as the Trustees may deem advisable, any securities or
other property received or acquired by the Trustees hereunder, whether or not such
securities or other property would normally be purchased as investments hereunder;
G. To make, execute, acknowledge, and deliver any and all documents of transfer and
conveyance and any and all other instruments that may be necessary or appropriate to
carry out the powers herein granted;
H. To settle, compromise, or submit to arbitration any claims, debs or damages to or owing
to or from the Trust Fund; to commence or defend suits or legal or administrative
proceedings, and to represent the Trust Fund in all suits an legal and administrative
proceedings;
I. To employ suitable agents and counsel, including, but not limited to, investment
consultants and investment managers, and to pay their reasonable expenses and
compensation, and such agents or counsel may or may not be agents or counsel for the
City;
J. To monitor the performance of Trust assets, and to instruct investment managers and
investment management consultants and to make changes as appropriate.
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K. To do all such acts, take all such proceedings, and exercise all such rights and privileges,
although not specifically mentioned herein, as the Trustees may deem necessary to
administer the Trust Fund and to carry out the purpose of this Trust Agreement and of the
Plan.
5.2 More than One Trustee. So long as there shall be more than one Trustee, they shall act
by a majority of their number but may authorize any one or more of them to sign papers and
instruments on their behalf.
5.3 Compensation and Expenses. The Trustees and the Officers shall serve without
compensation, but shall be reimbursed for any reasonable expenses incurred in attending
meetings of the Board of Trustees and in performing their duties on behalf of the Trust,
including, but not limited to, reasonable counsel and accounting fees, and expenses actually
incurred by the Trustees in the Administration of the Trust Fund. Such expenses shall be paid
from the Trust Fund. All taxes of any kind and all kinds whatsoever that may be levied or
assessed under existing or future laws upon or in respect of the Trust Fund, or the income
thereof, shall be paid by the Trustees from the Trust Fund.
5.4 Allocation and Delegation of Fiduciary Duties. The Trustees may allocate duties
among themselves and designate others as fiduciaries to carry out specific fiduciary activities
under this Trust Agreement because the Trustees have the power to manage, acquire or dispose
of assets of the Trust Fund. The investment consultant and investment manager must be a
person, firm or corporation registered as an investment adviser under the Federal Investment
Advisers Act of 1940 or a bank or insurance company qualified to perform services in the State
of Illinois.
5.5 No Powers or Duties with Respect to the Planning. The City, through its Human
Resources and Purchasing Director shall administer the City's Plan which provides retiree health
insurance benefits. Consequently, the Trustees have no power or authority to administer the
Plan, to interpret or construe the terms of the Plan, to change benefit levels, establish required
contribution amounts, adjudicate claims or to determine any questions arising in connection with
the administration interpretation or application of the Plan. Any such determination by the City
and/or the City's Human Resource and Purchasing Director shall be conclusive and binding upon
the Trustees.
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ARTICLE VI—TRUSTEES' DUTIES
6.1 General. The Trustees shall, consistent with the funding policy and methods determined
by the City's Fiscal Services Group Director, invest, manage and control the Trust Fund and, at
the direction of the Plan Administrator, shall pay benefits required under the Plan to participant
entitled thereto or, as appropriate, to their beneficiaries. The Trustees shall discharge their duties
under this Trust Agreement solely in the interests of the retired employees covered under the
Plan and their dependents and for the exclusive purpose of providing benefits to such persons
and defraying reasonable expenses of administering the Trust Agreement, with the care, skill,
prudence and diligence under the circumstances then prevailing that a prudent man acting in a
like capacity and familiar with such matters would use in the conduct of an enterprise of a like
character and with like aims, and by diversifying the investments of the Trust Fund so as to
minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do
so, all in accordance with the provision of this Trust Agreement, as this Trust Agreement may be
from time to time amended; but the duties and obligations of the Trustees as such shall be limited
to those expressly imposed upon the Trustees by this Trust Agreement notwithstanding any
reference herein to the Plan, or the provisions thereof, it being hereby expressly agreed that the
Trustees are not a party to the Plan.
6.2 Consultation and Indemnification. The Trustees may consult with counsel and the
Trustees shall not be deemed imprudent by reason of its taking or refraining from taking any
action in accordance with the opinion of counsel. City shall, to the fullest extent permitted by
law, to indemnify and hold the Trustees harmless from and against any liability that the Trustees
may incur in the administration of the Trust Fund unless arising from the Trustees' own willful
breach of the provisions of this Trust Agreement. The Trustees shall not be required to give any
bond or any other security for the faithful performance of their duties under this Trust
Agreement, except such as may be required by a law which prohibits the waiver thereof
6.3 Accounts and Records. The Trustees shall keep accurate and detailed accounts of all
investments, receipts, disbursements and other transactions hereunder and all such accounts and
other records relating thereto shall be open to inspection and audit at all reasonable times by any
person designated by the Fiscal Services Group Director, by the Plan Administrator or by the
City. The Trustees shall furnish to a designated representative of the City a written statement of
account within one hundred eighty (180) days after the end of the Plan's December 31st year
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end, setting forth all receipts and disbursements, additions, deductions, assets, liabilities and net
assets of the Trust Fund in accordance with Statement No. 43 of the Governmental Accounting
Standards Board, as such Statement No. 43 may be amended from time to time. The City's
designated representative shall acknowledge receipts thereof in writing and advise the Trustees
of his approval or disapproval thereof. Failure by the City's designated representative to
disapprove any such statement of account within thirty (30) days after receipt thereof shall be
deemed approval thereof. The approval or deemed approval by the City's designated
representative of the statement of account shall serve to release and discharge the Trustees from
any liability or accountability to the City as respects the propriety of the Trustees' acts or
transactions shown in the Trustees' statement of account, except with respect to any acts or
transactions as to which the City's designated representative shall file written objections with the
Trustees within the thirty(30) day time period prescribed above.
6.4 Limitation on Trustees' Liability. The Plan Administrator shall administer the Plan as
provided therein, and the Trustees shall not be responsible for the adequacy of the City's
contributions to the Trust Fund to meet or discharge any payments or liabilities under the Plan.
The Trustees shall be entitled conclusively to rely upon any notice, instruction, direction or other
communication of the Plan Administrator.
ARTICLE VII—RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE
7.1 Resignation. A trustee may resign his or her position as Trustee (without resigning his
or her employment with the City) at any time by giving ninety (90) days' notice in writing to the
City and the other Trustee(s).
7.2 Removal. The Mayor of the City, with the approval of the City Council, may remove a
Trustee at any time in a manner generally similar to that provided in Section 3.1-3.5-10 of the
Illinois Municipal Code (65 ILCS 5/3.1-35-10).
7.3 Successor Trustees. Upon the resignation or removal of an ex officio Trustee, the
Mayor, with the approval of the City Council, shall appoint a successor Trustee who shall have
the same powers and duties as those conferred upon the resigning or removal Trustee hereunder.
Upon acceptance of such appointment by the successor Trustee, the resigning or removed
Trustee shall assign, transfer and pay over to such successor Trustee the funds and properties
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then constituting the Trust Fund. The Trustees are authorized to pay or reserve for payment any
expenses of the resigned or removed Trustee upon appropriate proof thereof.
7.4 Report by Trustees. Within sixty (60) days after the resignation or removal of a
Trustee, the remaining Trustees may furnish to a designated representative of the City a written
statement of account with respect to the portion of the year for which the removed or resigned
Trustee served. The City's designated representative forthwith upon his receipt of such
statement of account, shall acknowledge receipt thereof in writing and advise the remaining
Trustees of his approval or disapproval thereof. Failure by the City's designated representative
to disapprove any such statement of account within thirty (30) days after his receipt thereof shall
be deemed approval thereof. The approval or deemed approval of the statement of account by
the City's designated representative shall serve to release and discharge the remaining Trustees
from any liability or accountability to the City as respects the propriety of the Trustees' acts or
transactions shown in the statement of account, except with respect to any acts or transactions to
which the City's designated representative shall file written objections with the Trustees within
the thirty(30) day time period prescribed.
7.5 Waiver of Notice. In the event of any resignation or removal of a Trustee, the remaining
Trustees and the City may in writing waive any notice of resignation or removal as may be
provided hereunder.
ARTICLE VIII—AMENDMENT AND TERMINATION OF TRUST AGREEMENT
8.1 Amendment. Any or all of the provisions of this Trust Agreement may be amended at
any time an from time to time, in whole or in part, by an instrument in writing. However, no
such amendment shall authorize or permit any part of the Trust Fund (other than such part as is
require to pay taxes and administration expenses) to be used for or diverted to purposes other
than for the exclusive benefit of the retired employees and their dependents; no such amendment
shall cause or permit any portion of the Trust Fund to revert to or become the property of the
City prior to complete satisfaction of all liabilities of the Plan with respect to benefits to retired
employees and their eligible dependents; and no such amendment which affects the rights or
duties of the Trustees may be made without the Trustees' written consent.
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8.2 Termination. This Trust Agreement may be terminated at any time by the City and upon
such termination, or upon the dissolution or liquidation of the City, the Trust Fund shall be paid
out by the Trustees as and when directed by the Plan Administrator or the City, in accordance
with the provisions of Article II hereof and the terms of the Plan.
ARTICLE IX—GENERAL
9.1 Source of Funds. The Trust Fund shall constitute the primary source of funds which
may be used to pay the medical benefits awarded under the Plan, and the City shall not be liable
in any way or in any manner for the payment of any such medical benefits to the extent that
monies are available from the Trust Fund.
9.2 Limited Effect of Plan and Trust Agreement. Neither the establishment of the Plan
nor this Trust Agreement nor any modification thereof, nor the creation of any fund or account,
nor the payment of any medical benefits, shall be construed as giving to any person covered
under the Plan or other person any legal or equitable right against the Trustees, the City, or any
officer or employee thereof, except as may otherwise be specifically provided in the Plan or in
this Trust Agreement. Under no circumstances shall the terms of employment of any employee
be modified or in any way affected by the Plan or this Trust Agreement.
9.3 Protective Clause. Neither the City, the Plan Administrator, nor the Trustees shall be
responsible for the validity of any contract of insurance issued in connection with the Plan or this
Trust Agreement or for the failure on the part of the insurer to make payments provided by such
contract, or for the action of any person which may delay payment or render an insurance
contract null and void or unenforceable in whole or in part.
9.4 Construction of Trust Agreement. This Trust Agreement shall be construed and
enforced according to the laws of Illinois and all provision hereof shall be administered
according to the laws of such State. If any provisions of this Trust Agreement shall be held
illegal or invalid for any reason, such determination shall not affect the remaining provisions of
the Trust Agreement.
9.5 Gender and Number. Whenever any words are used herein in the masculine, feminine
or neuter, they shall be construed as though they were also used in another gender in all cases
where they would so apply, and whenever any words are used herein the singular or plural form,
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they shall be construed as though they were also used in the other form in all cases where they
would also apply.
9.6 Headings. The headings and subheadings of this Trust Agreement have been inserted for
convenience of reference and are to be ignored in any construction of the provisions hereof.
IN WITNESS WHEREOF, this Trust Agreement has been executed on the day and year
first above written.
CITY OF ELGIN
LU■ 11111111%
By
City Manag-
ATTEST:
By .• __
City Clerk
F:\Legal Dept\Agreement\Retiree Health Ins Trust 10-2-07.doc
12
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Date September 21, 2007 G u r 101
090 001
TO Mayor and Members of the City Council N giti
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FROM: Olufemi Folarin, City Manager FWANCIALLY STABLE CITY GOYERNME NT
RVK
James R. Nowicki, Fiscal Services Director AND OFF FICIFN7FRASTRS,
11ALITY INFRASTRUCTURE
SUBJECT: City of Elgin Retiree Health Insurance Trust Agreement
PURPOSE
The purpose of this memorandum is to provide the Mayor and members of the City
Council with information to consider adopting the City of Elgin Retiree Health Insurance
Trust Agreement.
RECOMMENDATION
It is recommended that the City Council adopt the City of Elgin Retiree Health Insurance
Trust Agreement which is required to implement Governmental Accounting Standards
Board ("GASB") #43 requiring that a trust be established to hold Other Post Retirement
Benefit contributions.
BACKGROUND
The City of Elgin provides healthcare for its retired employees and their dependents. As
a result of providing this benefit, the City was required to implement GASB
Pronouncement #45, Accounting and Financial Reporting by Employers for Post-
Employment Benefits Other Than Pensions ("OPEB"). In summary, GASB #45
mandates that the City record an expense equivalent to the annual required contribution
that must be made in order to fund these future healthcare benefits.
For the fiscal year ended December 31, 2006, an actuarial valuation was performed to
determine the cost of providing future healthcare benefits to retirees. The valuation
ascertained that the annual required contribution ("ARC") to fund the City of Elgin's
OPEB liability is $2,838,000 for each of the next thirty (30) years. Along with other
assumptions, the actuarial valuation assumes a 5.0% annual discount rate presuming that
the City of Elgin will fund the retirement benefit on a pay-as-you-go basis. However, if
the City establishes a trust and funds the plan on a consistent basis, an 8.0% discount rate
may be used to calculate the ARC. Applying an 8.0% discount factor reduces the annual
payment and liability by $625,000 to $2,213,000 for each of the next thirty (30) years,
assuming no changes to the health insurance plan.
I.
City of Elgin Retiree Health Insurance Trust Agreement
September 21, 2007
Page 2
The trust will be administered by a board of five members including the Fiscal Services
Group Director, Human Resource and Purchasing Director, Assistant Finance Director
and two retired employees of the City who are actively participating in the City's Retiree
Health Insurance Plan. Duties of the trustees include asset management, monitoring
investment performance, accounting and reporting for trust assets and conducting
quarterly and annual meetings.
COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED
None
FINANCIAL IMPACT
Implementing and administering the trust would involve a time commitment from the
Fiscal Services Group Director, Human Resource and Purchasing Director and Assistant
Finance Director in addition to their current duties. The City's liability would decrease
from $2.838 million to $2.213 million resulting in a savings of$625,000.
LEGAL IMPACT
The Legal Department reviewed the trust agreement and determined that it is in
compliance with Section 115(1) of the Internal Revenue Code which qualifies the trust
for tax exempt status.
ALTERNATIVES
1. The City Council may choose to adopt the City of Elgin Retiree Health Insurance
Trust Agreement.
2. The City Council may choose not to adopt the City of Elgin Retiree Health
Insurance Trust Agreement.
Respectfully submitted for Council consideration.
JRN/CL
Attachments