03-14-06 Worksession
CITY COUNCIL MINUTES
Richfield, Minnesota
Special Worksession
March 14, 2006
The meeting was called to order by Mayor Pro Tempore Rosenberg at 6:01 p.m.
Members Present:
Susan Rosenberg, Mayor Pro Tempore; Bill Kilian; Sue Sandahl; and Fred
Wroge.
Members
Not Present:
Staff Present:
Martin Kirsch, Mayor.
Steven Devich, City Manager; Mike Eastling, Public Works Director; Pam
Dmytrenko, Assistant to City Manager; and Cheryl Krumholz, Recording
Secretary.. .
Item#1
City Manager Devich stated the proposed Health Care Savings Plan (HCSP) is before the City
Council for discussion and review tonight at their request.
Assistant to the City Manager Dmytrenko explained in 2001, the Minnesota Legislature
granted authority to the Minnesota State Retirement System (MSRS) to offer a Post Retirement
Health Care Savings Plan (HSCP) to eligible employees of the State of Minnesota and other
governmental subdivisions. A HCSP is an employer-sponsored program that allows employees,
including elected officials, to save money to contribute towards medical expenses and/or health
insurance premiums after termination of public service. Employees are able to choose among
different investment options provided by the State Board of Investment. Assets contributed into the
program are tax-free, accumulate tax free, and if used for medical expenses, remain tax-free.
Council Member Wroge asked about using the funds while still serving on the City Council.
City Manager Devich stated public service must be terminated before funds can be used.
Council Member Sandahl asked about spouses using the funds after the HCSP participant
died.
City Manager Devich stated dependent expenses are covered. He continued that all City
employee groups have implemented the plan but it was not an easy decision. Some felt strongly
about not having a choice in participating. They needed to get comfortable with the plan.
Council Member Kilian asked about all City Council being required to contribute the same
amount.
Special Worksession Minutes
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March 14, 2006
City Manager Devich said yes, it must be the same amount or percentage.
Council Member Wroge asked about the history behind the HCSP and the drawbacks
because if it's that good, why did some employee groups have issues with it. He also asked about
the employee groups having no choices in participation.
City Manager Devich explained the legal authority to establish such plans is provided through
Minnesota Statute 352.98 and the IRS rulings. There were people in the employee groups with
strong opinions on both sides of the issue and they needed to agree on all aspects of the plan.
Council Member Kilian suggested $25 a pay period be the City Council contribution to the
HCSP.
The City Council consensus was to move forward with the HSPC with a $25 per pay period
contribution and have it formally presented to the City Council for action at a future meeting.
Council Member Sandahl stated if the Mayor wished to make a larger contribution because his
salary is higher than the other City Council, a percentage could be determined.
The meeting was adjourned by unanimous consent at 6:20 p.m.
Date Approved: March 28, 2006
~~
Cheryl Krumholz
Recording Secretary