City Council moves employee retirement fund reserve into trust
Published 8:40 am Friday, October 9, 2015
At Thursday’s City Council meeting, councilmen unanimously approved a trust investment policy regarding Other Post Employment Benefits (OPEB) as well as approving a service agreement with CBIZ Retirement Plan Services for an OPEB funds custodian.
“It’s one of the most impressive things Elizabethton does because a lot of cities recognize the cost but have not funded it,” said City Manager Jerome Kitchens.
OPEB are benefits that city employees receive after retirement other than from pension plans.
According to Kitchens, these funds have, in the past, been placed in a reserve account. When people retire, they receive their benefits from that reserve.
He said that the Government Accounting Standards Board says that they must recognize these costs as a liability.
“For many years we had paid, and nobody counted what we would have to pay in the future,” said Kitchens. “Now, the state says we must have those estimates in the budget, or they will be considered a liability. The only way we can say this asset offsets this liability is if it is in a trust.”
To accomplish this, the city is moving the money from a reserve account into a trust. Kitchens said part of the requirement to set up the trust is to have an investment policy, and that this is consistent with Tennessee state laws. The account will be managed by CBIZ for $8,000 per year.
This is a step towards ensuring that people’s benefits will be available when they retire, and Kitchens said the money will be invested safely.
In other news, the council unanimously approved the ratification of a recycling grant application.
Danny Hilbert, street and sanitation manager, said that after attending a workshop in July about a recycling equipment grant, he began the application process for the $25,000 grant.
Without the grant, the sanitation department is budgeted $14,550, which buys two cardboard recycling containers and two compartmentalized containers. The grant would make it possible to purchase eight additional cardboard recycling containers, eight paper recycling containers and three compartmentalized containers which would be set up throughout the city
This would divert recyclable materials being dumped into the Iris Glen landfill and will save on landfill fees, on top of being a more environmentally friendly decision.
“The new recycling center is now open and we’ve gotten really good feedback on that,” said Hilbert. “Hopefully, if awarded the grant, we can expand our facilities.”
He said they hope to hear back by the first of the year.
During the meeting, the council also approved the addition of another instrument to the existing contract with Tennessee Department of Transportation to use their Global Navigation Satellite System (GNSS) Reference Network for 32 months. This will assist in the very precise mapping of the water and sewer systems.
“Part of the problem is that we do not have maps, so we can’t improve our systems,” said Johann Coetzee, director of engineering. He said that by using this system, everything will be logged highly accurately into a system which, in the future, will make problem solving and engineering projects easier to asses and resolve.
“It pulls all of our service information together into one place so we can see what a specific street costs us and what it will cost to repair,” said Coetzee. “You always want to spend the next dollar where it is most efficient, and right now, we don’t have the tools to do that, but we are putting those tools into place.”
In this respect, Coetzee said Elizabethton is far behind Johnson City, Kingsport and Bristol and that this is part of an integration project to significantly improve our water and sewer systems.
Additionally, the council approved an amendment to municipal code Title 12, Chapter 10 to remove minimum permit requirements for certain local government projects.
In May 2015, the council passed a revision, which adopted new building codes, and set minimum requirements for issuing building permits for projects that cost $3,000 or more. Councilmen realized that
The new amendment raises the minimum cost from $3,000 to $10,000 so that for small projects, the city does not have to hire a licensed contractor or meet other minimum licensing requirements.
Director of Planning and Development Jon Hartman said the city will still have to get building permits, and that the city employs building inspectors who can go out to the sites.
“Instead of having to get additional training and certification, we thought we would raise it from $3,000 to $10,000,” said Hartman. “Everything will still be subject to routine inspection.”
This makes it easier for the city to complete projects like the Twins baseball stadium dugouts or certain park pavilions.
In other news, Treadway stepped down as a member of the Planning Commission, and the council voted Councilman Wes Frazier to take his place.