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elected at the time of their retirement to deposit their sick leave balance with the City and <br />have 65% of the value of the sick leave placed in an account that would be used to <br />continue to pay the premiums for them to continue in the employee group health insurance <br />policy. <br /> <br />The legal experts at ICMA have agreed that this may be allowed with certain conditions. <br />Normally, no contributions to the RHS are allowed after an employee separates from <br />employment. In order for the past employees to be allowed to contribute, the contribution <br />must be treated as an employer contribution, not an employee contribution. Also, all past <br />employees with balances remaining in their accounts must switch to the RHS. <br /> <br />Four past employees still have remaining balances in their accounts to pay for continued <br />health insurance premiums. Their balances as of January 14, 2005 are as follows: <br /> <br /> Tim Ramacher $580.30 <br /> Bill Hanson $8,380.74 <br /> David Brick $12,594.46 <br /> Reed Krogh $32,746.06 <br /> <br />Mr. Ramacher’s balance will be used up before any change could be made. <br /> <br />The other three will be affected by this conversion to RHS, if it is approved by the City <br />Council. Before going further with the idea, I would like to contact the three individuals and <br />make sure that at least two of them are in favor. I would like to able to tell them the <br />conditions under which the conversion to RHS would be made. <br /> <br />Recommendation: <br />The issues that need a decision by the City Council include the following: <br />1. Is the Council willing to allow the past retirees to convert to RHS? <br />2. The balances above are the remainders from a conversion at the rate of 65% of sick <br />time. Is the Council willing to allow those balances (minus any premiums paid <br />before the conversion) to go into RHS or must the balances be recalculated on the <br />basis of 50% of sick leave? <br />3. If one of the retirees isn’t interested, is the Council willing to consider means to <br />compel these employees to convert since the ICMA has determined that it must be <br />the entire group or no one? <br /> <br />If the City Council and the past retirees are in favor of converting to the RHS, I will bring a <br />resolution to a future City Council meeting to officially approve it. <br /> <br />___________________________ <br />Charles Hansen, Finance Director