HomeMy WebLinkAbout4 Post retirement Health Insurance Agenda Item #
DONNER
Public Utility District 0
Memorandum
To: Board of Directors
From: Kim Szczurek, Finance & Accounting Manager
Through: Mary Chapman, Administrative Services Manager
Peter Holzmeister, General Manager
Date: January 9, 2007
Subject: ACCOUNTING FOR POST RETIREMENT HEALTH INSURANCE -RESOLUTION
1. WHY THIS MATTER IS BEFORE THE BOARD
The Governmental Accounting Standards Board (GASB) has issued Statement No. 45 which
addresses the accounting and reporting for certain "other" post retirement employee benefits
(OPEB's). After a workshop and agendized action item, the Board took action on this item at
its January 3, 2007 meeting as follows:
Director Hemig moved and Director Aguera seconded, a motion to adopt the
requirements of Governmental Accounting Standards Board pronouncement #45,
"Accounting and Financial Reporting by Employers for Postemployment Benefits Other
Than Pensions"; the Board authorize staff to create and make monthly deposits to a
Board-designated account for the accumulation of funds towards the future payments of
these benefits; and that those funds be invested in the California Local Agency
Investment Fund (LAIF) until such time that the Board determines the method of creating
an irrevocable trust fund for these monies.
ROLL CALL: All Directors, aye. SO MOVED.
Director Sutton indicated that she felt that this was the type of item that should be
memorialized in the form of a resolution. As such, we have attached the proposed resolution.
4. RECOMMENDATION
That the Board adopt the attached resolution.
�Y
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Public Utility District
Resolution No. 2007 - XX
ADOPTING GOVERNMENTAL ACCOUNTING
STANDARDS BOARD No. 45:
ACCOUNTING AND FINANCIAL REPORTING BY
EMPLOYERS FOR POSTEMPLOYEMENT BENEFITS
OTHER THAN PENSIONS
WHEREAS, Governmental Accounting Standards Board (GASB) has issued Statement No. 45
which addresses the accounting and reporting for certain 'other" post retirement employee
benefits (OPEB's); and
WHEREAS, the District provides for certain payments towards retiree's health insurance; and
WHEREAS, GASB requires that the District recognize, in its financial statements, the cost for
the future health insurance premiums for current employees earned during their employment
and/or an accrued liability for any unfunded costs.
WHEREAS, the Board of Directors needs to comply with the new GASB No. 45 ruling no later
than 2008; and
WHEREAS, the Board of Directors needs to establish an irrevocable trust fund to accumulate
funds for future costs for this benefit and that these funds be invested in a longer-term
instrument in order to maximize interest earnings;
WHEREAS, the Board of Directors has included and will continue to include an amount in the
annual District budget designated for the post retirement employee benefits (OPEB's) fund;
NOW, THEREFORE, the Board of the District does hereby resolve as follows:
1. The Board of Directors does hereby adopt GASB NO. 45- Accounting and Financial
Reporting by Employers for Post employment benefits other than pension; and instruct staff to
accumulate funds in a designated fund toward this purpose in the actuarially determined
amount.
2. That during 2007, the Board will establish an irrevocable trust fund for the investment of the
funds for future costs for post retirement employee benefits (OPEB's).
1 Resolution 2007-XX, GASB 45
PASSED AND ADOPTED by the Board of Directors of the Truckee Donner Public Utility District
in a meeting duly called and held within said District on the 17'h day of January, 2007 by the
following roll call vote:
AYES:
ABSTAIN:
NOES:
ABSENT:
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
By
Tim F. Taylor, President
ATTEST:
Peter L. Holzmeister, Clerk of the Board
2 Resolution 2007-XX, GASB 45