PURPOSE

The purpose of this report is to request City Council approval of a proposed resolution that would amend Resolution No. 21,732 to allow two eligible Executives to participate in the Voluntary Employee Beneficiary Association (VEBA).

BACKGROUND

In 1997, as part of the Burbank Police Officers� Association labor negotiations, the City agreed to the establishment of the VEBA.  The VEBA, an employer-sponsored welfare benefit plan, is authorized under Section 501 (c)(9) of the Internal Revenue Code.  This type of IRS approved trust allows employees on a collective basis to accumulate funds in a tax-deferred account for the purpose of paying for retiree medical benefits, life insurance, and employee or dependent education benefits.

In October of 1998, the Council approved the participation of the Executives in the VEBA.  Subsequently on December 8, 1998, the Council approved a resolution amending Resolution No. 21,732 to allow a few of the Executives to participate in the VEBA upon their retirement.  Also, in November 2000, several more eligible Executives were approved for participation in the VEBA.

The VEBA contributions consist of one-half of the dollar value of sick leave and the dollar amount of all other accrued leave time at the time of retirement.  The eligible participants must be 50 years of age and have a minimum of five years of service with the City of Burbank.

DISCUSSION

At the present time there are two eligible Executives that would like to be included as participants in the VEBA, the former City Manager and the Fire Chief.  Adoption of this proposed resolution by the Council will enable the participants to deposit one-half of the dollar value of their sick leave and the dollar amount of all other accrued leave time at the time of their retirement.

FISCAL IMPACT

Due to the fact that all employee accrued leave is handled as an unfunded liability for the City, there will be a financial impact to the General Fund to pay the dollar value of the accrued leave of these participants at the time of their retirement.  However, regardless of what a retiring employee chooses to do with their accrued leave, the City is responsible to pay them the actual dollar value.   

RECOMMENDATION

Staff recommends that the Council adopt the proposed resolution which would allow two eligible Executives to participate in the Voluntary Employee Beneficiary Association (VEBA) upon their retirement from the City.

Respectfully Submitted,

Judie Sarquiz

Management Services Director

go to the top