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April 10, 2018 <br /> <br /> <br /> As a result, many government entities have established interest-earning trust funds <br /> <br />to set aside funding for future OPEB liabilities. <br /> <br /> The City’s OPEB is the Retired Employee Health Care Program, which offers <br />certain specified medical, dental, and vision insurance benefits as well as a legal services <br />plan for eligible retirees and their families. <br /> <br /> While the City took steps to limit the scope of benefits in 2014 and 2015, the <br />Program nevertheless represented a liability of approximately $75,000,000 as of June 30, <br /> <br />2017. <br /> <br />Discussion: <br /> <br /> To address GASB requirements and OPEB liabilities, several other Virginia <br />governmental entities have joined a Pooled OPEB Trust Fund administered through the <br />Virginia Municipal League and the Virginia Association of Counties. Members from the <br />region include the Cities of Virginia Beach and Suffolk and their School Boards, York <br />County and its School Board, the Chesapeake and Newport News School Boards, and <br /> <br />the Newport News Redevelopment & Housing Authority. <br /> <br /> For the City, the benefits of joining the Pooled OPEB Trust Fund rather than <br />establishing its own trust include shared (and therefore lower) administrative costs, <br />access to top tier investment advisors, a broader range of investment choices, and a <br /> <br />higher expected return on investment. <br /> <br /> At the March 12, 2018 Work Session, City Council directed staff to take the <br /> <br />necessary measures for the City to join the Pooled OPEB Trust Fund. <br /> <br /> To formally join the Fund, City Council must adopt a Resolution authorizing joinder <br />and appointing a local finance board to serve as trustee of the City’s investment with the <br /> <br />Fund. <br /> <br /> As the Board of Trustees of the Portsmouth Supplemental Retirement System (the <br />“Retirement Board”) is an existing body, staff proposes to name that Board as Trustee <br /> <br />rather than creating a new entity. <br /> <br />Financial Impact: <br /> <br /> The City’s participation in an OPEB Trust Fund will help address future liabilities <br />and improve the City’s financial statements and future financial outlook. <br /> <br />Recommended Action: <br /> <br /> Adoption of the resolution. <br /> <br />Next Steps Following Council Action: <br /> <br /> The Retirement Board will enter into a Trust Joinder Agreement with the Pooled <br />OPEB Trust Fund and, with the advice of City staff and financial advisors, select an <br /> <br />investment portfolio. <br /> <br />Motion by Ms. Lucas-Burke, and seconded by Mr. Moody, to adopt the following <br />resolution, and was adopted by the following vote: <br /> <br />“RESOLUTION TO ADOPT A TRUST FOR OTHER POST-EMPLOYMENT BENEFITS. <br /> <br /> WHEREAS, <br />Section 15.2-1500 of the Virginia Code provides, in part, that every <br />locality shall provide for all governmental functions of the locality, including without <br />limitation, the organization of all departments, offices, boards, commissions and agencies <br />of government, and the organizational structure thereof, which are necessary and the <br />employment of the officers and other employees needed to carry out the functions of <br />government; and <br /> <br />WHEREAS, <br /> in connection with the employment of the officers and other <br />employees needed to carry out the functions of government, the City of Portsmouth has <br />established certain plans to provide post-employment benefits other than pensions <br />(herein “Other Post-Employment Benefits”), as defined in Section 15.2-1545 of the <br />Virginia Code, to individuals who have terminated their service to the City of Portsmouth <br />and to the beneficiaries of such individuals; and <br /> <br /> <br /> <br /> <br /> <br /> <br />