CITY OF HOMER

HOMER, ALASKA

Wythe/Heimbuch

ORDINANCE 06-55

AN ORDINANCE OF THE CITY COUNCIL OF HOMER, ALASKA ESTABLISHING A NEW PERS FUND IN WHICH TO DEPOSIT AND RETAIN FUNDS THAT HAVE BEEN BUDGETED AND APPROPRIATED BY THE COUNCIL FOR ANNUAL PERS PAYMENT INCREASES THAT ARE ULTIMATELY NOT NEEDED DUE TO STATE REIMBURSEMENT OR OTHER STATE APPROPRIATIONS INTENDED TO ASSIST MUNICIPALITIES WITH ANNUAL PERS PAYMENTS AND THE UNFUNDED LIABILITY.

WHEREAS, The Citizens of Homer recently approved an increase in the sales tax levy in part, to assist with rapidly increasing PERS rates resulting from a growing unfunded liability, and

WHEREAS, In recent years, the State of Alaska has provided financial assistance to municipalities to help them cope with rapidly rising PERS payments, and

WHEREAS, The City has benefited by this assistance because the money it budgeted for anticipated increases in PERS payments was not needed for that purpose, and

WHEREAS, There appears to be a high degree of probability that the State will continue to assist municipalities with rapidly increasing PERS payments and the unfunded liability in the future, and

WHEREAS, It is in the City’s long term financial interest to begin setting money aside to pay down the unfunded liability that will continue to grow and burden future taxpayers if not addressed.

NOW THEREFORE THE CITY OF HOMER ORDAINS:

Section 1: The City Council authorizes the City Manager to prepare General Fund Operating Budgets under the assumption that the City would pay the full amount of the required PERS annual payment. A new reserve account shall be established into which the Council can make deposits for the purpose of paying down the PERS unfunded liability. Funds budgeted for PERS payment increases for Fiscal Years 2005 and 2006 that were reimbursed by the State and therefore, not used for that purpose, shall be placed into this new reserve account. If the State provides PERS assistance in future years to help municipalities with required PERS payments, the budgeted amount equal to that State assistance shall be placed in the new reserve account and shall not be re-appropriated or permitted to lapse into the General Fund balance.

Page Two

Ordinance 06-55

City of Homer

Section 2: This ordinance is a budget amendment only and is intended to provide guidance and direction to the City Manager with respect to future budgets and PERS payments. It is not of a permanent nature and is a non code ordinance.

PASSED AND ENACTED by the Homer City Council this _____ day of _____, 2006.

CITY OF HOMER

JAMES C. HORNADAY, MAYOR

ATTEST:

MARY L. CALHOUN, CMC, CITY CLERK

Introduction:

Public Hearing:

Second Reading:

Effective Date:

Ayes:

Noes:

Abstain:

Absent:

Reviewed and approved as to form and content:

Walt Wrede, City Manager Gordon Tans, City Attorney

Date: Date:

Fiscal Note: