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can start with a limited set of contributions and add others at the City’s choice without <br />having to amend the RHS plan documents. <br /> <br />Examples of other possible contributions: <br />Employee pre-tax contributions: An employee may elect to contribute a percentage <br />of their annual pay to the plan. Once this election is made, it can never be changed. <br />ICMA only recommends this for employees who are near to retirement. The City <br />would save social security tax on these contributions. <br /> <br />Unused leave: The City could allow employees to contribute a portion of their <br />next year’s vacation or sick leave to the plan. The employee could make this election <br />each year for the next year’s contribution. This would result in the City paying out <br />cash that it otherwise might not pay out until several years later. The City would save <br />its share of the social security tax and this could be a solution to the situation of <br />employees who have more than 960 hours of sick time on the books. There could be <br />a formula where X hours of sick time converts into one hour of contribution into RHS. <br /> <br />Matching contributions: The City could make a direct employer contribution to <br />match employee contributions. This is more common in the private sector. <br /> <br />Recommendation: <br />It is recommended that the City Council adopt the attached Resolution 6228 to <br />implement the RHS plan. The effective date could be June 1st or July 1st, depending <br />upon consultations with ICMA and the time needed to execute and exchange <br />documents. <br /> <br />Addendums to the labor contracts will need to be negotiated and the personnel <br />manual amended to define the contributions that will be allowed. <br /> <br /> <br />Respectfully Submitted, <br /> <br /> <br /> <br /> <br />Charles Hansen