TOWN OF SIMSBURY
BOARD OF SELECTMEN / BOARD OF FINANCE JOINT SPECIAL MEETING
BOARD OF EDUCATION CONFERENCE ROOM
DECEMBER 14, 2006
The Special Joint Meeting of the Board of Selectmen and Board of Finance was held in the Board of Education Conference Room of the Simsbury Town Offices. Present were: First Selectman Thomas Vincent; Board Members Joel Mandell, Moira Wertheimer, John Romano, John Hampton and David Ryan. Others in attendance included Becky Sielman from Milliman and Bruce Barth from Robinson and Cole, David Holden, Kevin Kane, Richard Mason, Kevin North, Peter Askham, Donna Parker, and other interested parties.
CALL TO ORDER
The First Selectman called the meeting to order at 6:05 p.m. The Pledge of Allegiance was recited and the First Selectman asked if there was any public audience. There was no public audience.
ADJOURN TO EXECUTIVE SESSION
The First Selectman requested a motion to adjourn to executive session to discuss pending claims before the State of Connecticut Worker’s Compensation Commission. Present in the Executive Session was the Board of Selectmen and the following members of the Board of Finance: Anita Mielert, Kevin North, Peter Askham and Nick Mason. Attorney Joseph McQuade was present in the executive. Brandon Robertson, Director of Administrative Services, and Kevin Kane, Finance Director, were also present.
The executive session adjourned at 7:05 p.m. by unanimous consent. No action was taken.
Mr. Vincent again called the meeting to order at 7:20 p.m.
PRESENTATION
Mr. Kane said last year the Board of Finance drove behind the point of the GASB 43/45 program. This is a program that has you fund ahead for post health employment benefits. Right now Simsbury is using an accrued basis. The liability will keep growing larger and larger unless you put the money aside each year. He feels the program makes sense as you would be funding for the past and future.
Ms. Sielman made a presentation showing the choice of the discount rate. The benefits are going to be paid some this year and some next year, but many benefits won’t be paid for many years down the road. The future payments were shown in today’s’ dollars. The expected return is a 8% return in the investments trust. The discount rate is about 4% if you keep paying as you go.
TOWN OF SIMSBURY
BOARD OF SELECTMEN/BOARD OF FINANCE SPECIAL JOINT MEETING
DECEMBER 14, 2006
Page 2:
Ms. Sielman showed the benefits to Town Hall employees. These benefits change from union group to union group and there is a little life insurance also. For Town Hall employees, the Town pays 100% for ages 62-65, then 75% of premium thereafter. The Police Dept. is paid 75% until age 65, with 50% of spouse costs. This is for officers that
retired prior to 2000. The Board of Education has variations from union to union. The teachers, by State statute, stay on benefits until they turn age 65. They also need to measure the implicit rate subsidy.
Ms. Sielman said that with GASB you need to reflect the true economic costs of having someone on the Town’s benefits. She showed the Boards different evaluation contribution costs. There are still a few years left before the Town has to implement GASB 43/45.
After some discussion, Mr. North said the Finance Board set aside $600,000 last year which should be air-marked to this program.
Ms. Sielman said they could re-evaluate the figures and give them to the Board of Finance within the next couple of weeks for the 06/07 and 07/08 budgets.
After further discussion, Mr. Barth said if the money was set in trust this year, it must be reported this year. He said there are terms to put in the trust, one of which is that once the liability is paid the leftover goes back to the Town. In Section 115 of the Connecticut State Statutes, the trust must have separate assets from the Town. The plan assets must be dedicated to provide benefits to retirees and beneficiaries. Also, plan assets are legally protected from creditors of a governmental entity.
Mr. Barth said CT law, Section 7-450(a)(b) the Town needs to have an ordinance to approve the trust, provide how trust is to be managed, who is responsible for the trust.
The ordinance required to create the trust must show an investment policy, appoint governing bodies, and have agreements with providers.
Mr. Kane said the Board of Finance and David Holden will get started, before going to the Board of Selectmen, but the cost to get this going will be approximately $50,000.
After further discussion, Ms. Wertheimer made motion that the GASB 43/45 be referred to the Board of Finance and Finance Department and Board of Education Finance Department for purposes of determining structure and logistics of the trust. Mr. Ryan seconded the motion. All were in favor and the motion passed.
TOWN OF SIMSBURY
BOARD OF SELECTMEN/BOARD OF FINANCE SPECIAL JOINT MEETING
DECEMBER 14, 2006
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ADJOURNMENT
Mr. Ryan made motion to adjourn at 8:20 p.m. Mr. Mandell seconded the motion. All were in favor and the motion passed.
Respectfully submitted,
Thomas E. Vincent
First Selectman
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