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Mounds View City Council March 8, 1999 Regular Meeting Page 13 City Administrator Whiting stated he would discuss this with Finance Director Kessel, to determine exactly how this would be done, in terms of the budget. He explained however, he would assume they would make an amendment to the budget, and bring that amount forward from the Reserve Fund, where it is accounted for as a liability. He pointed out that his interpretation of accumulated sick leave differs from that of Finance Director Kessel, in light of the two union contracts, therefore, they would have to research this matter to determine exactly what the City’s liability is. He explained that this is a liability, however, the monies are there, no matter what the amount. Council Member Quick inquired if City employees do not utilize their sick leave, and begin to accumulate these hours, was this money set aside to cover sick leave, in the event that it is drawn upon at some point. City Administrator Whiting stated this was correct. Council Member Quick stated therefore, if this money was set aside, drawing interest. City Administrator Whiting stated this was correct. He indicated that in his understanding, businesses that would go bankrupt and owe sick leave and vacation leave to employees would simply wipe that obligation out. He advised that rules were changed, which applied to cities as well. He stated cities do not go out of business, and very rarely, if ever, find themselves in such a situation, however, they are required to make an accounting of their liability on the books. He pointed out that if, for example, all the employees left at one time, and they were entitled to their vacation time, and perhaps some severance, the City would have funds available to pay them. City Administrator Whiting explained that if the health insurance premium payment option was not chosen that date, he would suspect the City’s only obligation on the books would be the 480 hours that employees in general are entitled to, assuming they have accumulated 960 hours. He stated he was not quite certain that he understood what his Assistant was stating, in that this rule does not apply to the Police Chief. He indicated that the City Attorney has advised him in this regard, however, he is also aware that they have been accounting for the Police Chief’s sick leave, and is certain that some policy must apply to him. City Administrator Whiting stated he would assume that the severance provision applies to the Police Chief, however, the health insurance premium provision does not. He reiterated that rather than come before the Council and attempt to determine a policy for all non-union employees, recognizing that the Chief’s situation would be coming forward in the near future, it seemed prudent to address this individual situation separately. He stated that if the Council desired to deal with the policy concern, this could be done at a later date. He noted that while this option that applies to the union employees has existed in the last two contracts, it has not been utilized by anyone, to date. City Administrator Whiting indicated that the initial rationale for this policy was threefold. He explained that an employee working for the City only for health benefits, later in their career, in a situation where it may benefit both the employee and the City to have that employee separate from employment, this would be an attractive option, particularly if they had accumulated sick leave. Council Member Quick inquired which employees City Administrator Whiting was referring to.