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HomeMy WebLinkAboutMinutes - City Council - 12/21/1981CITY COUNCIL DECEMBER 21, 1981 The South Burlington City Council held a regular meeting on Monday, December 21, 1981 at 7:30 pm in the Conference Room, City Hall, 575 Dorset Street. Members Present Paul Farrar, Chairman; Michael Flaherty, Hugh Marvin, William Burgess Member Absent Martin Paulsen Others Present William Szymanski, City Manager; David Minnich, Assistant City Manager; James Goddette, Fire Chief; Albert Audette, Street Department; Donald Whitten, Pollution Control Department; Jodie Peck, Free Press; Brad Wright and Jay Farquhar, WCAX; Paul Wamsganz, Ray Unsworth, Don Duell, David Gove, Fred Bessette Agenda additions Mr. Farrar commented that the Council might wish to go into executive session on the item concerning the firemen's petition for election of a collective bargaining representative. Minutes of December 7, 1981 The December 7, 1981 minutes were approved on a motion by Mr. Flaherty, a second by Mr. Burgess and a unanimous vote. Mr. Marvin arrived at this point. Disbursement orders Disbursement orders were signed. Public information meeting for phosphorous reduction at Bartletts Bay sewage treatment plant Mr. Dave Gove said this meeting was to comply with federal regulations dealing with facilities planning involving federal funds. This project deals with phosphorus reduction at the Bartletts Bay plant. The first public meeting on it was held in February of 1980 and the second in June of 1980. The recommended method of reducing phosphorus is to feel alum into the waste water, and full-scale pilot plant work was done in the fall of 1980. The results of that were contained in the report given to the Council in July of this year. The report was also submitted to the state for its review, but they have not yet commented on it. Mr. Gove noted that interest seemed to have been lost in the project, and he felt this was because of the way funding is now, and also because some people had objected to the purpose of the study. Mr. Gove said that right now funding for this project was some time after 1986. Mr. Whitten said that he expected construction to start in 1986 for the Airport Parkway treatment plant, so Bartletts Bay would be after that. Mr. Gove was asked when the state would respond to the study, but he did not know. He said the study was almost complete, but they needed a response. Mr. Marvin asked if this treatment would eliminate scum on top of the water in the bay and was told it would help. Mr. Farrar said he expected to hear from Webster-Martin again after the study was completed and he felt that the sooner the study could be finished, the sooner it could be put on the shelf until construction could start. Public hearing on request of Ray Unsworth to construct an automotive repair shop on Airport Drive near Lime Kiln bridge Mr. Farrar explained that the reason this was on the agenda was that under the Planning and Development Act, when there is a zoning change under consideration in an area, any specific proposal has to be reviewed by the Council under interim zoning. Mr. Wamsganz said he represented Mr. Unsworth. Proposed is a 50' x 72' auto repair shop building to be located on the east side of Airport Parkway, near the Lime Kiln bridge. The present zoning on the land is Airport Industrial, and the parcel contains 8.3 acres. Mr. Farrar asked if a subdivision was proposed and was told it was not. The building is positioned, however, so that such a subdivision could take place in the future. Mr. Farrar asked whether this proposal conformed to the zone change as proposed by the Planning Commission and was told it would be a conditional use under the proposed zone. Mr. Szymanski noted that the warning was for a 50' x 60' building. Mr. Unsworth said he had several customers looking at the building - the auto repair shop, a truck repair shop, and a distribution warehouse. When the plan goes to the Planning Commission for site-plan review, the building will be 50' x 72', he said. Mr. Farrar noted that the 3 uses mentioned were all conditional uses under the proposed new zoning. Mr. Marvin moved that the Council approve the proposed uses as outlined in the presentation, which are auto repair, truck repair or warehousing, in this area in a building no larger than 50' x 72'. Mr. Burgess seconded the motion and all voted for it. Mr. Audette noted that the bridge had a restricted wieght limit. Consider New England Telephone Co. petition for installation of buried cable on Spear Street Mr. Szymanski said there were two petitions. One is for installation of buried cable starting just west of Stonehedge and running south on Spear Street for 2200'. There is no overhead wire there, just some additional buried cable. The second petition is to replace 3 poles and install another one at the intersection of Swift and Spear Streets. The reason for the extra pole is that the span is too large between two poles and the clearance isn't enough. They will not need to cut the road for this work, and it is off the road quite a distance. Work will start in the spring. Mr. Flaherty moved to approve the New England Telephone Co. petitions for the installation of buried cable on Spear Street and for addition of a pole at Swift and Spear Streets. Mr. Burgess seconded the motion and it passed unanimously. Report on City Employee Supplemental Income Retirement Plan Mr. Minnich noted that before he started work for the city, there had been a request from some employees that the city look into a deferred compensation or an IRA (individual retirement account) plan to supplement their current pensions. Various options were reviewed by a committee consisting of representatives from each department. Mr. Minnich said that the city would not be asked to pay any contribution, nor would it be asked to pay administrative costs of the program. The committee looked at deferred compensation and IRAs and Mr. Minnich went over the differences between the two programs. The committee felt the best IRA was the one offered by the Howard Bank and the best deferred compensation plan was the one offered by the International City Management Association Retirement Corporation (ICMARC). Mr. Farrar said the only cost the city would incur right now would be the cost of sending the checks off and keeping track of how much went where. Mr. Marvin noted that the Council was being told there would be no cost to the city right now, but he noted that could change later on. Mr. Farrar noted that this Council or its successor might be asked or wish to change it later. Mr. Farrar asked whether, with deferred compensation, social security was deducted from it. Mr. Goddette said that was paid on the full amount before deferment. Mr. Marvin asked how much the plan would cost employees and was told the deferred compensation plan would cost $1 per month, plus 1% of the balance in the account at the end of the year, including interest. Mr. Marvin noted that with at least 70 employees, that could amount to a sizeable figure, and a future City Council might be asked to pick up the cost. Mr. Minnich felt that as the fund grew, the fee structure would decline. Mr. Marvin asked why two options were being recommended. He was told that some employees might feel more secure with an IRA than with the ICMARC plan. Some employees may want to take more of a risk with their money than others. Mr. Audette said he was the one who had wanted to have two options. He felt that some city employees would rather have a choice than be told what fund to contribute to. Mr. Marvin also was concerned that a future City Council might throw this plan out. Mr. Audette said that could happen with anything, but Mr. Marvin said he just wanted employees to know that this could be cancelled later. Mr. Farrar said that even if it were, the employees would not lose anything they had put in. Mr. Flaherty moved to accept David Minnich's report, implement the plans as presented, also sign the resolution as presented, and empower the Chairman to sign the deferred compensation plan. Mr. Burgess seconded the motion and all voted for it. Consider appointment of an auditor for 1981-82 fiscal year Mr. Szymanski said this had been discussed at the Steering Committee meeting on December 17 and that there had been no strong feelings either way. Mr. Minnich felt the goods and services purchased by the city should be the best for the money, and he felt the city should go to the market to be sure they were getting the quality they wanted for the best price. He suggested retaining an auditing firm for 1 year with a conditional option to extend that contract for one year, two times. He suggested giving some of the firms in the area until February 19 to respond to a proposal, and on March 1 having them come in to speak to the Council. During the period of February 19 to March 1 he would prepare a summary of the differences between them and a list of questions. By common consent the Council decided to proceed in this direction. Discuss city highway needs Mr. Marvin noted that the 10 year capital budget showed an allocation of $260,000 in 1985-86 for the Southern Connector. He did not feel that road would be built until 4-5 years after that and he suggested considering some immediate problems in other areas. He agreed that Dorset Street should be made 4 lanes soon, but he also felt that Kennedy Drive, which connects what will be two 4 lane roads should also be a 4 lane road. He noted that there would be increased traffic on Kennedy Drive due to Digital and Mitel and he did not want to wait until that road was in the same mess Williston and Shelburne Roads were until it was fixed. He felt that construction of Burlington's Southern Connector would relieve a lot of the traffic on Williston Road going into Burlington now. Mr. Farrar personally did not feel that Kennedy Drive needed to be 4 lanes its entire length yet. He felt some upgrading at the intersections was needed, but he said the Council could get some data on Kennedy Drive's capacity. Mr. Farrar agreed with Mr. Marvin on the need to work on Dorset Street, and he felt there were areas of Williston Road which needed improvement. He thought that in those areas the city would have to proceed without any federal or state funding. He felt that from a traffic point of view, Williston Road had a very high priority but from the physical condition of the road, Dorset Street had high priority. He saw those two together as the highest priority. Mr. Flaherty felt a fifth lane near Gaynes on Williston Road was needed, and should have top priority of any area on Williston Road. Mr. Farrar felt the city should find out when the appropriate time was to have the bond issue vote on the Southern Connector. If it is now, he suggested a bond issue vote to do the Connector, Dorset Street, Williston Road, and Kennedy Drive if the traffic figures said improvement was needed. He said the Council should find out the capacity of that road. Mr. Flaherty felt the Council should go to the voters in May for a bond issue for highway improvements, and the Council agreed. Mr. Marvin felt the capital budget items should be changed, and Mr. Burgess agreed the budget needed to be revised. Mr. Marvin felt some of the roads in the city were in serious enough condition that sidewalks should be considered after some of the highways were done. Act on firemen's petition for election of collective bargaining representative Mr. Farrar said the Council had received a letter from the City Attorney on this issue. Mr. Flaherty asked whether everyone in the fire department wanted to be part of the bargaining unit and was told they did. Mr. Farrar said two issues were involved here. The Council has been presented with a petition by firefighters, drivers and captains that they be represented by an association. The other issue is that they have asked to designate the police department; association as part of that. Mr. Burgess moved that since there appears to be a question of determination of what the bargaining unit is and which members should be represented, that the Council file the answer to this petition and let the Labor Relations Board set a hearing. Mr. Marvin seconded the motion. Mr. Flaherty asked what problems Mr. Burgess saw and was told that he saw two: 1) is there enough similarity to have one bargaining unit, and 2) are captains members of management? Mr. Flaherty had no problem with accepting them as the bargaining unit and he felt the question of whether captains were management could be settled here by the city. Mr. Farrar felt there was no objection to the motion as long as it was understood that if the Council could come to an agreement with the people making the request on who should be represented, the Labor Relations Board could disregard the filing at the city's request. Mr. Burgess had no problem with that. Mr. Bessette said he was a captain in the fire department and he did not receive management wages. He is one grade lower than a lieutenant in the police department. Mr. Goddette felt captains were management because in the Rules and Regulations it is stated that they run the fire station. They are shift leaders and leaders at fires and the only difference between his job and theirs is that they do not make up the budget. Mr. Bessette said the firemen were asking for a separate agreement with the police. Their contract would have nothing to do with the fire department, but the representative would be the same. The motion passed unanimously. Review Planning agenda There were no comments. Old business There was none. The meeting was adjourned at 9:10 pm. Clerk Published by ClerkBase ©2019 by Clerkbase. No Claim to Original Government Works. TO: The South Burlington City Council FROM: David Minnich, Assistant City Manager DATE: December 18, 1981 SUBJECT: Supplemental Reti rement Program This past Fall the City has been approached by several insurance and investment firms encouraging us to review their proposals for supplementing our enlployees ' retirement income. The City administration has taken the position that contributions will be voluntary and paid by the employee. We began the review process by having those firms that approached the City to speak directly with employee groups. When the number of fi rms grew and the investment options became more varied we formed a cmi ttee comprising a representative from each department. All fi ms were invited back to present their proposals. The cornittee's charge was two fold: I 1. To inform members of their department. as to the firms presentation 2. To recommend to City Council no more than two firms which the City would send payroll deductioa, The firm would be chosen on the basis of what we believed would give the greatest return on investment for an acceptable level of risk. 0 Members of the committee met in early Ddgember 19811with representati~ves from: . r) 1. The Equitable Insurance Company 2, Connecticut General Insurance Company 3. Massachusetts Mutual Life Insurance Company 4. New York Life Insurdnee Company 5. Mutual Of Omaha Insurance Company 6. The Howard Bank 7. The International City Management Association Retirement Corporation There were two types of supplemental retirement income dicussed at these meetings; - deferred compensation and Individual Retirement Account ( IRA). Both are regulated by Federal law because of their impact on deferring taxes until the money is actually received. The basic difference between them are: 1. Deferred compensation continues to be owned by the employer, until it is actually paid (at retirement, etc.) to the employee. IRA'S are owned by the employee at the time of payroll deductions. 2. Money withdrawn from IRA'S before age 59% (except in cases of disability or death) would have a 10% penalty on the funds withdrawn. Deferred compensation plans only permits withdrawals at time of termination, disability, death, normal retirement age as defined by the employer, and unforeseen emergencies as defined by the Internal Revenue Service. There are no penalties on these I withdrawals. 3. IRA regulations allow annual tax deferred contributions up to $2.000 for each individual earning income. If a spouse does not have earned income the maximum joint contribution is $2,250. Taxes would be paid when funds are wi thdraen. Deferred compensation plans permit annual contributions up to the lesser of 25% of salary or $7,500. You may have both an IRA and deferred compensation and realize the tax advantageous of each. It is recommended that the City Counci 1 adopt the deferred compensation plan pro- vi ded by the International C i ty Management Assocati on Reti rement Corporati on ( ICMA-RC) and to send payroll deductions for Individual Retirement Accounts held by the Howard Bank. There is no financial or legal obligation required of the City for Howard' Bank IRA'S other than promptly forwarding these to the bank. ICMA-RC and Federal 1 aw requires empl ~yers to adopt a formal deferred compensation plan (reference Appendix 1 and deferred compensation resolution). This protects employees, who legally do not own this money, from a change in policy by local legislatures which might repeal support for deferring compensation, thus leaving the employee with no guarantee of money promised. The formal plan adoption would commit the City to uthorizing ICMA-RC to pay our employees the sum of money deferred. 1he Clty Council kula withdraw support tor future aedcnose to do so by repealling support for the plan. ICMA-RC acts as a fiduciary for the City, placing the employer's contribution into tFe funds chosen by the ern~loyee. (reference Fpendl x Z-g CO~~~~O employees when they become eligible for receiving compensation. This service is done with no financial cost to the City and with the only legal restriction that funds deferred must be promptly sent to ICMA-RC. The Howard Bank and ICMA-RC are recommended because they wi 11 give our employees the option of having a deferred compensation plan or an IRA at the least administrative cost with the greatest investment flexibility and return on investment, given the level of investment risk the employee chooses. These two plans are recommended to be available to a1 1 full-time CSty employees; are to be ccppletely voluqtary with all contributions made by the employee including any admin~strative service fees imposed by the ICMA-RC and the Howard Bank; and deductions from gross salary may only be made in specified whole dollar increments and not as a percentage of gross salary. Appendix 1 e INTERNATIONAL CITY MANAGEMENT ASSOCIATION RETIREMENT CORPORATION DEFERRED COMPENSATION PLAN Amended a8 of June 28,1874 md March 23,lQfe I( k hereby agreed that tMs DEFERRED COMPENSATION PLAN shall be in effect on the date won which the Employer has ~~usbd k to be executed by an official affi~ing his mture on behalf of the Gweming Body tn the spac8 pFwided beW. However, the OEFERREO COMPENSATDN PLAN wiH not be legally bmding upon the lnternat~onal City Management Association Retirement Corporation until a Notice of Plan Acceptance has been suppl16d by it. CITY OF SOUTH BURLINGTON Legal Name of the Employer Attest for the Gn@oysr: For the Employer: I By: Signature of Authorized Onlcial Signature of Authorized Otricial Margaret A. Picard City Clerk DECEMBER 21. 1981 Date of S~gnature PAUL A. FARRAR, CHAIRMAN CITY Print Name and Title COUNCIL SEE INSTRUCTIONS FOR IMPLEMENTATION PRIOR TO COMPLETING THIS SECTION Complete the follown(l prw to mruling thls Agreement to the Retirement Corporat~on FUII ~ame (city of, county of, etc.1 -CITY_-OF-SOUTH - -- BURL1 NGTON , -. VERMONT -- THb of Ofllclal to whom correepandencs and reports are to be malled. ("0'"rne) C-ER 1 Address: (include zipc,de) 5 7 5 DORSET STREET, SOUTH BURLINGTON, VERMONT O 5 4 0 1 Employers' Federal Tax Identification Number: fl3 - 1 3 How often will you make contrbutwm? What is the date of first connlbut losRY 8 . 198 Total Nwnber of Employees: 75 Number of employees di@M tO WttCipate: 75 PRELIMINARY STATEMENT ESTABLISHMENT OF WE PUIN AMENDMENTS The Memstlonal City Management Association Retirement Corpore Han, hereinafter the Retirement Corporatin or ICMA-RC. is a nonwofit Delaware COrporation. It has been classified as a tax-exempt organization under the provisions of Section 501 (cH3) of the Internal Revenue Code. As an aid in the improvement of state and municipal administration in general, the Retirement Corporation is organized for the purpose of receiving and investing deferred compensation funds of state and local governments and their related and controlled public interest organizations which are tax-exempt under Section 501 Of the Internal Revenue Code, hereinafter referred to as"Employers"; tcj act as trustee and/or agent for thecollection and reinvestment of the Income therefrom; and to act as agent for such Employers and at their explicrt direction forthedistributionof the funds and assets of their accounts tta their participating Employees (including independent contractors) in accordance with options provided in this International City Management Association Retirement Corporation Deferred Compensation Plan, hereinafter referred to as the "Plan." or the "ICMA-RC Plan." The ICMA-RC Phn is set out below in two parts: I. The Deferred Compensation Employment Agreement; and II. The Master Trust Agree ment. As set out below. the Faployer adopts this Plan as its Agreement with the participating Employees and ICMA-RC, and the Employees shall participate in the Plan through the execution of a Joinder Agreement, which by its terms incorporates all of the provisions of the Plan. A copy of the Plan shall be supplied to each Employee for his study and under- standin0 prior to hls execution of the Joinder Agreement. The Employers, through their participation in the Plan, express their desire to have the benefit of the continued loyalty, sewice and counsel ot their Employees and to assist them in providing for the contingencies of old age dependency, disability, and death. This Plan may be amended from time to time for mses of assuring its conformance to the requirements of any applicable law or rule or regula- tin pursuant thereto. and to presewe the tax-exempt status of the Plan and the Retirement Corporation. No amendment may either directly or indirectly operate to derive any participating Employer of its beneficial interest in the Trust as it is then constituted. The Retirement Corporation will notify the participating Employers of any amendment to this Plan no later than sixty days prior to its effective date. Any such amendment will become effecttve after the expiration of that pertod of lime, except as to mose Employers as may file an objection. No amendment proposed by participating Employers shall be effective unless agreed to by the ICMA Retirement Corporation over the signature of an Officer. PART I. DEFERRED COMPENSATION EMPLOYMENT AGREEMENT 1. (kfwed Compensation-Initial Decision-Future Changes-Lirnib 1 .l For the purpose of this Plan the following definitions apply: a "lotd compensatlon" is the total of compensation to be paid by the Employer for the Sewices of the Employee, regardless of the terms used for its components, as, for example, "base pay." "in addition to base pay," "employer's contributions." etc.; b. "Deferred cornpensatlon" IS that amount or percentage of the total compensatlon of the Employee wh~ch the Employer currently defers from the payment to the Employee, and. tnstead, deposits aame Into a Deferred Compensat~on Account w~th the Retlrement Corporat~on under the terms of thls Plan. Deferred compensahon may tnclude amounts from or percentages of both "base pay" and "employer's contributions" or it may ~nclude amounts from or percentages of only lane of these components. c "Current compensatlon" IS that port~on of the Employee's total compensatron wh~ch 1s not deferred compensatton as deferred compensatlon IS def~ned herem; and d. "Base pay" 18 the stated salary of the Employee. 1.2 ~immaybeMsrrsdlorlsnytcllendwmon~only~a Joinder Agreement for such deferral has been entwed into befm the beginning of such month. The detemination of the initial amount or percentage and of any future change in amount or percentage of deferred compensation must be made before the beginning of the calendar month tor which the cornpensallon IS payable. Such future changes may be made more frequently than once per calendar year only at the express dtrectton of the Employer 1.3 The amount of total corndensahon may be adjusted from tme to ttme wtthout altertng the terms of this Plan However, the per- centage or amount of defetredcompensat~onrnay be adjustedonly In accordance w~th 1 2 above Any such adjustment of the per. centage or amount of deterred compensdt~on shall be com- munlcated to the Employer's agent. the Retlrement Corporatlon, and the depostts In the adjusted percentages or amounts. ~f changed from the prlor exlstrng percentages or amounts, shall thereafter be made by the Employer Into ~ts Ret~rement Corpora- tton Account 1.4 Compensat~on delened under the Plan for any Employee's taxable year beglnn~ng anbr Oecember31.1978. shall not exceed the lesser of (1) $7.500, or (2) 33-113 percent of the difference between an Employee's total compensatlon and h~s deferred compensatlon. except as prwded tn 1 5 below 1 .S For one or more of the Employee's last three taxable years endrng before he attalns normal retirement age under the Wan, the ce~llng set forth m Paragraph 1 4 above shall be the lesser of - a f 15.000, or b the sum of - (1 j the Plancelllng establ~shed for purposes of Paragraph 1 4 for the taxable year (determined w~thout regard to this Paragraph), plus (2) so much of the Plan ce~ltng establ~shed lor purposes of Paragraph 1 4 for taxable years before the taxable year as has not theretofore been used under Paragraph 1 4 or this Paragraph The amount of compensatron deferred under ths Parawaph shall not exceed an Employee'4lotal compensatlon The words "normal ret~rement age." as used rn thts Paragraph, shall mean the "destgnated age, as deflned In Paragraph 6 below 2. Deferred Cornpensalton Account Under th~s Plan, deferred compen- sat1011 shall be cred~ted and pa~d Into the Trust establ~shed and maintained w~th the Internallonat Ccty Management Assoc~al~on Re- ttrernent Corporat~on as Trustee. The Retlrement Corporatlon IS a nonprof~t corporation formed for the spec~f~c purpose of lnvestlng and otherwise admlnlslerlng the fundsof sa~d Trust The Trust may be revoked at any ttme by the Employer, and upon revocat~on of sa~d Trust, all of the assets thereof shall return to and revert to the Employer The Employer shall keep accurate books and records wlth respect to the Employee's total Cornpensallon or other earned mcome and with respect to amounts pa~d Into sa~d Trust 3 Ownersh~p of Funds Netther the Employee nor any benef~c~ary thereof shall have any Interest whatsoever In the funds paid Into the Deferred Compensat~on Account. In the property or rlghts purchased wcth such funds, or In the tncome attrtbutable to such funds, property, or r~ghts. whtch shall at all tlmes reman as assets of the Employer, subject to 11s absolute dom~n~on. control and r~ght of w~thdrawal unttl such ltme as the funds or assets of the Account are d~str~buted to the Employee In accordance w~th the provlslons of thls Plan The obllgatlon 01 the Employer to pay deferred compensatton 13 contractual only, the Employee hav~ng no preferred or specla1 ~nterest or cla~m. by way 01 trust, annuity, or othetwlse. In and to the speclflc funds and assets held In the Deferred Compensat~on Accoutlt The contractual obllgat~on of the Employer to pay the funds and assets n ~ts Deferred Cornpensallon Account to the Employee or hts benef~clary on the applicable dlstrtbullon date shga be a con- digatton upon the m, Md ahan not be relreved by any agreement between the Employer and any other party, except as pw~ded In Sect14n 2 of Paragraph 13 of this Ran, and shafl not be affected In any mannet by amendment or revacatnm of the Trust referred tom Paraqaph 2 herern or by reversron of the T~st Funds to the Employer The provlslons cY thrs Paragraph shall supersede and control any otherprovtslon of tks dan wh~ch could be ~nterpeted to be In confl~ct therew~th 4 Admrnrstratron of Furldr The funds depos~ted In the Deferred Compensat~on Account shell be ~nvested and re~nvested by the Rehre ment Corporat~on, as pw~led for In the Trust Fund descrtbed In Part II of th~s Plan, n any manner whlch In 11s sole d~scret~on ~t deems desirable. without regard at any t~me to any legal lrmltat~on governrng the ~nvestmenl of such funds The Accourbl shall also reflect the galn or loss resultrng from the investment and relnvestment thereof Th~s Trust Fund may be comm~ngled w~th others established by the Trustee wlth other Employers under thrs Plan 5. Designatron of Investments. Each participating Employer, being advised of the preferences of, and for the benefit of each of its participating Employees, shall desrgnate the percentage of the deferred cornpensallon involved which shall be invested in the respective types of investment tunds (accounts) of the Ret~rement Corporation, such as the Equity (Variable) Fund or the Fixed-Income Fund, unless the laws of the applicable state or local government require otherwise, in which case those laws shall govern. Future elections to change the percentage to be invested in each type of Fund may only bemade prior to and for the next succeeding annual period of service for which the compensation is payable by ftling wrltten notice thereof wlth the Retirement Corporation. Such not~ce w~ll not be etfective until received by the Ret~rement COrporat~on 8. Payment of Deferred Compensation. The words "designated age." as used in this Paragraph and tn Paragraph 10 of th~s Plan, shall mean the desrgnated age wh~ch appears in the Joinder Agreement executed by the participating Employee. Tllese words, as used in this Paragraph, in Paragraph 10, and in the Jo~nder Agreement, shall also include the following, w~thout repelltior1 thereln: "or later, in the sole discretion of the Employer, at the end of h~s employment agreement, rf Emb~oyee continues in the employ of the Employer after he attarns the designated age." Except as provlded irl Paragraph 9 (unforeseeable emergency), no . . payments of deferred compensation shall be made prlor to an Employee's separatlon from servrce wrth the Employer At such time as the Employee reaches the desrgnated aqe, becomes permanently disabled, or dres. whichever occurs frrst, he, Or h~s benef~c~ary or benef~c~ar~es, nom~nee or estate rslare entrtled to recerve payment from the Deferred Compensa- tron Account autstandlng on the date on whlch one of the forego~ng occurs Payments occasroned by the Employee hav~ng reached the des~gnated age, becomlng permanently drsabled, or by hts death shall be made In accordance wlth the provlslons of Paragraph 7 hereof as follows. a Payments In monthlk, quarterly, semi-annual, or annual payments over the per~od of Ilfe expectancy of the Employee In accordance wrth the follow~ng proceduro: Upon reachlng the designated age, or becom~ng permanently disabled trom perrrlanent full-time employment, whichever first occurs, the Employbe's life expectancy shall be determined by reference to standard U.S. Mortality Tables; the amounts of assets and accumulatrons in the Deferred Compensation Account shall be computed together with a reasonable rate of return on said assets, less the amount of expected monthly distribution, over the 11f6 expectancy of the Employee; and a monthly amount shell then be mathefnatlcally determined. the payment of which, in equal monthly installments over the per~od of the life expectancy of ye Employee, shall completely deplete the said Account at the end of the last year of Ilfe expectancy; or b. Payments In monthly, quarterly, seml-annual, or annual payments in accordance w~th the follow~ng procedure: Unless the Employee's employment termrnates prior tothe t~me he attains the designeted age, amcnmta equal to tb bmMl8 received by the Em~loyer, under retirement annutly polkbb shall be paid to Me Employee, at such the as he attains thedesignated age; or, in the case of death, payment to hla benefklary or beneficiar~es, nominee or estate pursuant to the procedures pwrded In said policies and Paragraphs 7 and 8 of this Plan; or c. Payments m monthly, quarterly, semi-annual. or annual Install- ments over a perlod of not exceed~nQ ten (lo) years. sad payments to include a reesonabte return on the tunds, assets and accumulations in the Deferred Compensat~on Accwnt, lesa the amount of expected monthly, quarterly, semi-annual, or annual drstrrbut~m. wer the mid ten (10) year perrod, or d. One lumpsum payment. 7. Select~on of Method of Payment The method of payment shell be selected by the Employer, act~ng through the Ret~rement Corporat~on. a9 its duly author~zed agent, due cons~derat~on be~ng gwen to health. f~nanc~al circumstances and famrly oblrgatrons of the Employee In thls regard. the Employee may be consulted, however, he shall have no volce In the dec~s~on reached 8. Payments m the Event of Death. a During the Period of Distribution. In the event of the Employee's death durrng the period of distrrbution, the Employee's beneficiary shall be entitled to receive payments in accordance with the payment method being employed at the tlme of the Employee's death. W~th the consent of the Employer, act~ng through the Retrrement Corporatmn as 11s duly authorized agent, satd benef~ctary may elect to recelve a lump sum tn l~eu of Installment payments b Prlor to Dlslr~bulron In thd event of the death of the Employee prw to the d~strtbutlon, the lunds and assets of the Deferred Compensa- tmn Account shall be pard m accordance wrth one of the methods descr~bed m Subparagraphs a, b, c, or d of Paragrmh 6 hereof The selection of satd method shall be made by the Employer actlng through the Rettrement Corwrat~on as 11s duly authorized agent. 9. Payments In the Event of Unforeseeable Emergency In the event that a part~c~pat~ng Employee IS faced w~th an unforeseeable emergency (de tenn~ned rn the manner prescribed by Federal regulation). the Employer may d~rect the Retrrement Corporation as agent to make d~sbursements from the Deferred Compensat~on Account of amounts reasonably neces- sary to satrsfy the emergency needs of the Employee 10 Payment Dates Payments shall commence on the first day of the month. follow~ng the attarnment of the des~gnated age, or later, on the fast day of the month after the end of hrs employment agreement. 11 Employes contrnues rn the employ of the Employer after he atta~ns the desrgnated age, or llkew~se follow~ng permanent dlsablllty, or death, and. a the case of installment payments. shall be made cont~nuously thereafter on the hrst bay of each succeedlng month, or. In the event quarterly, sem~-annual. or annual payment rnstallment periods are ap~lled, then contrnuously thereafter on the 11rsl day of each succeedlng month whlchbeg~ns the llme perrod (Quarterly, etc ) ~nvolvedunt~l such ltme as the Deterred Cornpens& tan Account IS depleted rn 11s ent~rety 11. bswrs~ng Agent. The Retirement Corporation shell ect as agent of - - the Employer for purposes of disbursing payments. The ultimateob#gat'i for making such payments. however, shall remain with the Emp!oyer. 12. Accumulation During the Distribution Period. During the wrod of distribution, the Employee or his beneficiary or beneficiaries. nominee or estate, as the case may be, shall continue to be credited w~th all the interest. accumulat~ons, and increments on the undistributed funds and assets In the Deferred Compensatlm Account, unttl such Accwnt is depleted In its entirety. 13 Section 1 Termrnatlon of Employment Upon termrnatron of the Employee's sewlces. for any reason other than death. the funds, assets. and accumulatrons In the Deferred Cornpensallon Accwnt shall not be transferred to an account w~th a new employer of the Employee, and. instead, they shall remarn In the or~g~nal Account as esaets of the old ~m~-wthsy~dtsMbutdkrscoordrncewittl~ Dcovlslcns al this Rm, except am prwtded in Saction 2 ofthis Paragraph. Section 2. Trmsta of Employment with Consideration Between Empbym-Tripartite Agreement. h the event the Employee accepts emptayment wlth a new employer participating m the ICMA-RC Deferred Compensation Plan, then, if the past Employer finds that it has no present 01 Mure need of the funds, assets, and accumulations in the said Account tor the payment of its general creditors or for any other purpose what- eoewr, In consideration of its desire to avoid the continuing expense of malntalning records, and recedng. examining. verifying and filing annual rsgorts d the Retirement Corporation, and in consideration of avoiding the poasible future expenses of litigation of Employee's continuing con- tractual rights to payment d deferred compensation on his retirement as herein prwlded in the went of any possible future revocation and withdrawal by the past Employer ot the funds, assets, and accumulations In the mid Account. the past Employer may, at ~ts discrehon, authorize the Retlrernent Cornation, as it9 agent, to propose to the new Employer that the tunds, =sets, and accumUlationsof the said Account be transferred to the owmship, control, and rifjht of withdrawal of the new Employer, and to do 80 in the event the new Emplgyer, in consideration of the increased valuo of the Emdoyee's services by reason of the experiencegained while h past employment, agree$ to accept same, and the respective Employers and the Employecl sign an appropriate form of Agreement in which the new Employer alsotigrees to assume the continuing contractual Ilabilib to Day deferred comfbnsation so transferred upon retirement of the Employee and the Emoltwee releases the past Employer from said continuing crbligation to do srme. Sect- 3. Payment of Defbbrred Compensation after Termination of Employment. In the event iL participating Employee separates from mke with the Employer pric* to the designated age which appears in the Jdnder Agreement. the Employer may dtrect the Retirement Corporation. M agent, to distribute the funds and assetsof the DeferredCompensation kcaunt to Me Employee h on lumpsum myment. 14. Losses. The Employer shall not be respons~ble tor any loss due to Investment or failure of investment of funds and assets in said Deferred Compensation Account nor shall the Employer be reguired to replace any loss whatsoever which may result from said investments. 15. Nonaasignability of Deferred Compensation. The Employee duriw his lifetime shall not be entitled to commute, encumber, sell or otherwise dispose of his rights to receive deferredcompensation payments provided lor herein, end the right thereto shall be nonassignable and nontrans- ferable. In the event of any attempted assignment or transkr thereof, the Employsr shall have no further liability under this Agreement. 16. Participation in Other Employee Benefit Plans. Nothing herein con- tamed shall in any manner modify. impair, or affect the existing or future rights or interest of the Employee (a) to receive any employee benefits to whlch he would otherwise be entitled, or (b) as a participant in any future pension plan, it being understood that the rights and interests of the Employee to any employee benef~ts w as a partic~pant or beneficiary In or under any or all such plans resoectively shall conttnue in full force and enect unimpaired, and the Employee shall have the right at any time hereafter to become a beneficiary under or pursuant to any and all such plans. 17. Definitions. The meanirlg of any term or terms, phrase, clause, w sentence used In this Agreement, which is also used in the By-Laws of the Retirement Corporation, shall be defined as these are defined in ARTICLE II, Section 2 of the By-Laws. Masculine pronouns, whenever used herein. Include the femtnlne pronou~ls, and the stngular includes the plural unless Me context requlres another meanlng PART It. MASTER TRUST AGREEMENT AQREEMENT made by and between the atorenamed Emplayer end the International City Management Association Retirement Corporation (hereinafter the "Trustee" or "Retirement Corporatron"). a nonprofit corporation organized and existing under the laws of the State of Delaware. for the wroose of Investing and otherwise administering the funds set aside by Employers in connection with Deferred Compensat~on Agreements with Employees. WHEREAS, the Employer desires to enter into agreements with 11s Employees whereby its Employees agree to defer payments of swcilted percentages of or amounts from their total compensation as "deferred cotnoensation" is dellned in said agreements until the occurrence of certain events; WHEREAS. In order that there wtll be sunlcrent funds ava~lable to dtscharge the foregoing contractual oblrgations, the Employer desrres to set as~de periodically amounts equal to the amount of compensat~an deferred. WHEREAS, the funds set as~de, together wlth any and all investments thereto, are to be exclus~vely w~thlh the dominion, control, and ownersh~p of the Employer. and subject to the Employer's absolute rlght of with- drawal, the Employee havlng no Interest whatsoever theretn, NOW, THEREFORE, thls Agreement witnesseth that (a) the Employer will pay montes ta the Trustee to be placed in Deferred Compensation Accounts for the Employer; (b). the Trustee covenants that ~t wtll hold sald sums, and any other funds whlch 11 may recelve hereunder. In trust for the uses and purposes and upon the terms and cond~tions heremafter stated; and (c) the partles hereto agree as follows: ARTICLE I. Gemral Dutles of the Partler. . Section 1.1. General Duty of the Employer. The Employer shall make regular periodic payments equal to the amounts of its Employees' compensation which are deferred in accordance with the terms and conditions of Deferred Compensation Employment Agreements with such Employees. or with any subsequent modification thereof. Sect~on 1 2 General Dut~es ot the Trustee The Trustee shall hold all fundsrecelved by 11 hereunder, whtch, together w~th the Income therefrom. shall consl~lute the Trust Funds It shall admtn~ster the Trust Funds. colloct the Income thereof and make payments therefrom, all as heremafter provided The Trustee shall also hold all Trust Ftrnds whlch are transferred to ~t as successor Trustee by the Employer from exlstcng deterred compensat~on arrangements wlth ~ts Employees whlch meet the same Internal Revenue Code requ~rements which govern the ICMA-RC Deterred Cornpensallon Plan Such Trust Funds shall be subject to allot tho terms and provtstons of th~s Agreement ARTICLE 11. Powers and Duti.8 of the Trustee In Investment. Admlntstration, and Dlsbursement of the Trust Funds. Sect~on 2 1 Investment Powers and Dutles ot the Trustee The Trustee shall have the power In ~ts dlscretlon to Invest and retnvest the ptnclpal and Income of the Trust Funds and keep the Trust Funds invested, w~thout d~stlnctlon between prlnclpal and Income. In such securttres or In other property, real or personal, wherever sttuated, as the Trustee shall deem advisable. ~ncludlng, but not l~m~ted to, stocks, common or preferred, bonds, rettrement annurty and rnsurance pol~c~es. mwtgages, and other ev~dences of Indebtedness or ownersh~p, and In common trust tunds of approved flnanclal or ~nvestment ~nst~tutlons, wrth wch instltutlons actlng as Trustee of such common trust funds, or reperate and drlferent types of funds (accoonts) ~ncludmp equity, t~xed- income, and those whtch ful!$ll requ~rements of stale and local govern- mental laws, establ~shed w~th such approved financ~al or lnvestmunt 18 Veltdi?y of Agreemnt This Agreement shall not be valtd or err lnstrtut~ons For these purposes, these Trust Funds may be commrngled forceable unless srgned b)' an officer of Employer, authorized by the wrth others eslabllshed by the Trustee under th~s form of agreement wtth QovernlnQ body of the Employer, as, for example. the City Counc~l, and other Employers In maklng such tnveslments. the Trustee shall not be unless thts Agreement IS inwlemenled by the executton of the Joinder sublect at any tlme to any legal I~m~tat~on governtng the lnveslment of such Agreement funds Investment powers and ~nvestment d~scret~onvested ~n thefrustee by this Section may be dew11ed by the Trustee to any barm. urswance or trust company. or any wtmstrrrent advisor, manageror agent selected by it. Section 2.2. Administrative Powers of the Trustee. The Trustee shall have the Dower in its discretion: (a) To purchase, or siibscribe for, any secur~ties or other property and to retaln the same in trust. (b) To sell, exchange, convey, transfer wothetwise dispose of any recurlt~es or other property held by it, by private contract, or at Section 2.4. Valuation of Trust Funds. At leaal once a yew a8 d Valuation Dates designated by the Trustee, the Trustee shall detmlne the value of the Trust Funds. Assets of the Trust Funds shall be valued at their market values atthe close of businesson theValuationDate.or, Inthe absence of readily ascertainable market values as the Trustee shall determine. in accordance with methods consistently followed end unk formly applied. ARTICLE Ill. For Pfotuth 01 Trurtee. gubllc auctlon No person deallng with the Trustee shall be bound to see the appllcatlon of the purchase money or to lnqulre Into the Sectlon 3 1 Ev~dence of Action by Employer The Trustee may rdy valldlty, expediency, or propriety of any such sale or other upon any cert~f~cate, not~ce or d~rectlon purporting to have been slgr~ed on d~sposrt~on behalf of the Employer whlch the Trustee believes to have been signed by. duly des~gnated offlc~al of the Employer. No comrnun~catlon shall be (c) To vote upon any stock, bonds, or Other SeCurltles; to gwe b~ndtng upon any of the Trust Funds or Trustee until they are received by general or speclal prcbxles or powers of attOmey wlth or wW'm~t the Trustee power of substitutioh to exercise any conversion privileges. subscription rights, d other options, and to make any payments Section 3.2. Advice of Counsel. The Trustee may consult with any incidental thereto; td oppose, or to consent to, or otherwise legal counsel with respect to the construction of this Agreement its dutir participate in, corporate reorganizations or other changes ef- hereunder, or any act, which it Proposes to take or omit, and shall not be fectingcorporate sectrrities, and to delegate discretionary powers. liable for any action taken or omitted in good faith pursuant to such advice. and to pay any assesbments or charges in connection therewith; and generally to exercise any of the powers of an owner with respect to stocks, bonds, securities or other property held as part of the Trust Funds. (d) To cause any securities or other property held as part of the Trust Funds to be registered in its own name, and to hold any investments in bearer form, but the books and records of the lrustee shall at all timusshowthat all such investmentsare a part of the Trust Funds. (a) To borrow or raise money for the purpose of the Trust in such amount. and upon such terms and conditions, as the Trustee shall deem advisable; and, for any sum so borrowed, to issue its promissory note as Trustee, and to secure the repayment thereof by pledging ail, or any part, of the Trust Funds. No person lending money to the Trustee shall be bound to see the application of the money lent or to inquire into its validity, expediency or propriety of any such borrowing. (f) To keep such portion of the Trust Funds in cash or cash balances as the Trustee, from time to time, may deem to be in the best interest of the Trust created hereby, without liability for interest thereon. (g) To accept and retain for such time as it may deem advisable any securit~es or other prclperty received or acquired by it as Trustee hereunder, whether oc not such securities or other property would normally be purchased as investments hereunder. (h) To make, executb, acknowledge, and dellver any and all documents of transftlr and conveyance and any and all other Instruments that may I)e necessary or appropriate to carry out the powers hereln grantecj. Section 3.3. Miscellaneous. The Trustee shall use ordinary care and reasonable diligence, but shall not be liable for any mistake of judgment or other action taken in good faith. The Trustee shall not be llable for any loss sustained by the Trust Funds by reason of any investment made In good faith and in accordance with the provisions of this Agreement. The Trustee's duties and obligations shall be llmited to those expressly imposed upon it by this Agreement, notwithstanding any reference of the Plan. ARTICLE IV. Taxer, Expanse8 and Comp.ns8tlon of Tryat-. Section 4.1, Taxes. The Trustee shall deduct fromandchargeagalost the Trust Funds any taxes on the Trust Funds or the income thereof or which the Trustee is required to pay with respect to the interest of any person therein. Section 4.2. Expenses. The Trustee shall deduct from and charge against the Trust Funds all reasonable expenses incurred by the Trusteein the administrat~on of Me Trust Funds, including counsel, agency andother necessaw fees. ARTICLE V. Settlement of Accounts. The Trustee shall keep ac- curate and detailed accounts of all investments, receipts, disbursements. and other transactions hereunder. Within ninety (90) days after the close of each fiscal year. the Trustee shall render in duplicate to the Employer an account of it!, acts and transactions as Trustee hereunder. lt any part or the Trust Fund shall be ~nvestea rnrougn rne medlum of any common, collective or comm~ngled Trust Funds, the last annual report of such Trust Funds shall be submitted with and incorporated in the account. If w~thln n~nety (90) days after the mailing of the account or any amended account the Employer has not flled w~th the Trustee notlce of any objection to any act or transact~on of the Trustee, the account or amended account (i) To settle, comprcknise, or submit to arbitration any claims. shall become an account stated. If any objection has been filed, and if the debts, or damages d~e or owing to or from the Trust Funds; to Employer is satisfied that it should be withdrawn or if the account is commence or defend Buits or legal or administrative proceedings; adjusted to the Employer's satisfaction, the Employer shall in wrlting filed and to represent thd Trust Funds in all suits and legal and with the Trustee signify approval of the account and it shall become an administrative proceedings. account stated. (I) To do all such actd. take all such proceedings, and exercise all When an account becomes an account stated, such account shall be such rights and privileges, although not specifically mentioned finally settled, and the Trustee shall be completely discharged and herein, as the Trustee may deem necessary toadminister the Trust released, as if such account had beensettledandallowed by ajudgment or Funds and to carry art the purposes of this Trust. decree of a court of competent jurisdict~on In an action or proceeding in Se~t~on 2 3 thstr~but~ons l1rom the Trust Funds The Employer hereby which the Trustee and the were parties a appo~nts the Trustee as ~ts agient for purposes of selecting the method by The Trustee shall have the rlght to apply at any t~me to a court of which d~strlbutlons from the trust Funds are lo be made, as well as for competent jur~sd~ct~on for the jud~c~al settlement of its account. purposes ot mak~ng such ~'lstr~bullons In thls regard the terms and condltlons set forth In the agreements to be executed between the ARTICLE Vt. Reslgnatlon and Removal of Trustee. Employer and ~ts Employees, and any subsequent modlf~catlons thereof. Sect~on 6 1 Reslgnahon of Trustee The Trustee may resign at any I ,, 6 thne by filing wH)I the ~rn~hyer its wmtm resignation. Such resignation shall take effect sixty (80) days trOm the date of such fillng and upon appointmemt of a successot pursuant to Section6.3., wh~chever shall first OCCUT. Section 6.2. Removal cf Trustee. The Employer may remove the Trustee at any time by delivering to the Trustee a written notice of its removal and an appwintnlent of a successor pursuant to Section 6.3. Such removal shall not take effect prior to sixty (60) days from such delivery unless the Trustesl agrees to an earlier effective date. Section 6.3. Appointment of Successor Trustee. The apointment of a successor to the Trustee stlall take effect upon the delivery to the Trustee of (a) an instrument in writirlg executed by the Employer appointing such successw. and exoneratin!) such successor from liability for the acts and Missions of its predecessbr, and (b) an acceptance in writing, executed by such successor. All at the provisions set 'hh herein with respect to the Trustee shall relate to each successor with the same force and effect as if such successor had been originally named as Trustee hereunder. ll a successor is not appointed within sixty (60) days after the Trustee gives notice of its resignation pursuant to Section 6.1 .. the Trustee may apply to any cart of competent jurisdiction for appointment of a successor. Section 8.4. Transfer ot Funds to Successor. Upon the resignation or removal of the Trustee and appointment of a successor, and after the final account of the Trustee has been properly settled, the Trustee shall transfer and deliver any of the Trust Funds involved to such successor. ARTICLE VII. Duratlon and Revocation of Trust Agreement. Section 7.1. Duration and Revocation. This Trust shall continue for wch time as may be necessary to accomplish the purpose for which it was created but may be tenlnatedor revoked at anytime by the Employer as It relates to any andlor all related parficipating Employees. Written nqtice at such termination or revocation shall be given to the Trustee by the Employer. Upon termination or revocation of th~s Trust, all of the assets thereof shall return to and revert to the Employer. Term~nattonof this Trust shall not, however, relieve the Employer of the Employets cont~nuing obligation to pay deferred compensation upon the applicable distribution date to any and/or each Employee with whom the Employer has entered into a Deferred Compensation Employment Agreement. Section 7.2. Amendment. The Employer shall have the right to amend this Agreement in whole and in part but only with the Trustee's wr~tten consent. Any such amendment shall become effective upon (a) delivery to the Trustee of a written instrument of amendment, and@) the endorsement by the Trustee on such instrument of its consent thereto. ARTICLE VIII. Miscellaneous. Section 8. I. Laws of the State of Delaware to Govern. This Agreement and the Trust hereby created shall be construed and regulated by the law8 of the State of Delaware. Section 8.2. Successor Employers. The term "Employer" shall include any person who succeeds the Employer and who adopts the Deferred Compensation Plan of the Retirement Corporation and becomes aparty to this Agreement with the consent of the Trustee. Section 8.3. Withdrawals. The Employer may, at any time, and from time to time, withdraw a portion or all of the Trust Funds created by thls Agreement and relaled Deferred Compensatton Employment Agreements. Section 8.4. Definitions. Definitions in the By-Laws or terms, phrases, etc., used herein apply to the same herein. The masculine includes the feminine and the singular includes the plural unless the context requlre3 another meaning. You Ppv-Jy/ hasethe The ICMA Retirement Corpo- ration deferred compensation plan: Is the only plan that provides portable benefits offers you the widest range of investment options administers more local gov- ernment deferred compensa- tion plans than any other . agency is a nonprofit service organi- zation that returns to you the benefits of its growth is endorsed and sponsored by the 15 major public service associations serving local government C3articipation in the ICMA Retirement Corporation will allow you to: pay no income tax this year on up to 25% of your salary . pay no current tax on the earnings from the investment of your deferred compensa- tion funds continue building retirement income even when you change jobs choose from a wider range of investment options A DEFERRED COMPENSA- TlON PLAN IS an agreement between you and your employer providing for a specific amount of your salary to be paid to you at a later date (payment of part of your salary is deferred). This deferred income is deposited into your RC account and in- vested through RC's retirement funds. You qualify to receive payments at retirement (age 55 or later), or if you are disabled. Your benefi- ciaries will receive both contri- butions and earnings from your account in the event of your death. The law also permits pay- ment upon termination of employment or in the event of an unforeseeable emergency, sub- ject to the rules of the U.S. Internal Revenue Service. YOU DO NOT PAY INCOME TAXES ON MONEY YOU DEFER. As a result, you pay less tax each year and the money you would have paid in taxes is invested for your future I security. When you receive benefits, usually during retire- ment, you will pay income taxes only on the amount you receive each year, generally at lower tax rates since most retired persons are in a lower tax bracket. (See "How Deferral Effects Your Taxes," Table 1 .) TAXES ARE NOT PAID ON EARNINGS. Your employer continues to be the owner of the deferred income until it is paid to you. Since your public employer is exempt from taxes, no tax is charged on the investment earn- ings while they are owned by your employer. There is no "double taxation," and the money not paid in taxes con- tinues to work for you. NO EFFECT ON SOCIAL SECURITY BENEFITS. You will recetve full Social Security bene fits during retirement since all required Social Secur~ty taxes continue to be paid each year. This means that you will receive full Social Securlty benef~ts dur~ng retirement wlthout any interruptions caused by the payment of your deferred compensation. DEFER UP TO 25%OR $7,500 UNDER CURRENT LAW. You may defer up to 25% of your total income or $7,500, whichever is less. The RC plan does not require a minimum amount for deferral although some em- ployers may choose to impose a min~mum requirement. LOWER COSTS. RC fees are lower than any similar nationally available deferred compensation plan. They are: 1. Contract Maintenance Fee: A $1 .OO per month account maintenance fee. This fee replaces the old 1.5 percent administrative fee formerly charged on all con- tributions. 2. Annual Management Fee: An annual fee of 1 percent charged against the total fund balance for the Balanced, Bond, and Gov- emment Securities Funds. This fee is prorated monthly; it does not apply to the Guaranteed Interest Fund. The RC Plan costs less because: # We are a nonprofit tax- exempt agency of the governments we serve; and we have no stockholders to pay-surpluses are returned to our partici- pants by lowering admin- istrative and manage- ment fees. HOW DEFERRAL Em Table 1 illustrates the short term effect on your paycheck of defer- ring compensation. This exam ple compares two employees, each earning $20,000 annually. Each employee has decided to set aside 1O0/0 of annual salary, or $2,000 this year, for retire ment. John Doe is a participant in the RC deferred compensation plan so he defers income and the subsequent taxes until he actually receives these monies during retirement. Mary Smith is saving for retirement through a conventional savings plan, she pays most of the tax on the savings now. Over the short term, John Doe and Mary Smith set aside the same amount for savings, BUT m John pays $20 less in fed- eral income taxes out of each paycheck, a a total of $480 a year. As a result, he has $480 more each year than Mary to either use as spendable income or to apply to additional savings. It only costs John $1,520 this year toset aside$2,000 tor retirement. Table 1. The Short Term: Participant's Paycheck' Mary Srnlth John Doe Conventlonal RC Plan Savings Semi-Monthly Paycheck ................ $833.00 $833.00 10% of paycheck In savings through RC's deferred .................... compensationplan $83.00 NONE 10% of paycheck In savings through conventional channels ............................... NONE $ 83.00 Amount of paycheck subject to current income taxes ............... $750.00 $833.00 Spendable or net income per seml-monthly paycheck ............... $656.00 $636.00 'This ~lluslratlon, based on 1979 federal tax tables, assumes that both John Doe and Mary Smnh are mariled and cla~mlng three (3) exempt~ons State and local taxes are not Included In thls ~llustrat~on but In some cases there would be further savtngs result~ng from lower state and local tax A SPECIAL NOTE ON EARN WITHDRAWALS. Participants may withdraw the balance of their deferred compensation ac- counts upon termination of em- ployment. In the event of an unforeseeable emergency the portion of your deferred compensation account needed to pay for the emergency may be withdrawn. The Internal Revenue Service defines condi- tions for early withdrawal and their regulations are subject to change. Although this flexibility may be beneficial to some participants, keep in mind that a deferred compensation plan is best used tor accumulating retirement benefits, not emergency savings. Here's why: The advantages of a deferred compensation plan are maxi- mized when a participant receives payments during retire- ment, when most will be in a lower tax bracket. Income taxes are due in the year the funds are withdrawn. When you receive a lump-sum payment upon termi- nation of employment or for an unforseeable emergency, rather than in periodic payments during retirement, you could pay taxes at a much higher rate than if you had paid taxes on the compen- sation when it was earned. This financial trap could be more detrimental if you withdraw funds while you are still drawing your salary as both will be reported as taxable income in the year received. WHEN YOU CHANGE JOBS RC allows complete portability. Our plan is available to public employers nationwide. When you change employers within the public sector you may continue to accumulate benefits under one plan, if your second em- ployer agrees. Upon retirement, you will receive one payment and deal with only one organization. If you go to work for a private company the funds you have contributed up to that time may continue to accrue tax-free earn- ings in our Trust Funds until you qualify for payment at retirement age. Upon returning to work for a public employer, you may resume participation in our plan without penalty. NO LOAN PRIVILEGES OR CLAIMS BY YOUR CRED- ITORS. Since the deferred com- pensation funds remain an asset of your employer until you are eligible to receive benefits, you may not borrow against the account nor may you use deferred compensation as col- lateral of any kind. For the same reason, your creditors may not place a cla~m against your ac- count. As with all deferred com- pensation arrangements, the ." account must legally be subject to claims of the employer's creditors. RC REPORTS TO YOU. At the end of each year, you will receive a report detailing your account's activity. You will also receive our corporate annual report which shows exactly how RC invests your money. BEFORE YOU JOIN RC eval- uate your financial condition. First, if you are spending every- thing you earn, you cannot afford to participate. Second, you need accessible savings which you can use to cover an emergency. The most common vehicle for accumulating savings is through a savings account at your bank or credit union. Also, if you are trying to save money for a car, a home, or some other major pur- chase, another type of savings plan is necessary. The RC plan is a retirement planning tool. Short- term participation may not be to your advantage. YOU WILL BECOME ELIGI- BLE TO RECEIVE BENEFIT PAYMENTS AT RETIREMENT (AGE 55 OR LATER) OR IN THE EVENT OF DISABILITY. Your beneficiary is eligible for benefits in the event of your death. RETIREMENT OR DISABILITY PAYMENTS MAY BE MADE BY ANYONEOFSEVERAL OPTIONS: a lump-sum payment; monthly, quarterly, semi- annual, or annual pay- ments for a specified number of years; or monthly, quarterly, semi- annual, or annual pay- ments for I~fe. YOUR BENEFIT PAYMENTS ARE BASED ON the entire amount of income you have deferred dur~ng the years of employment together with all of the earnings accrued from the investment and reinvestment of your funds. Table 2 is an example of how much an employee might re- ceive after contributing $1,000 each year for different numbers of years assuming the Fund's earnings average 8%. These examples show payments under the options for (1) a lumpsum payment; (2) monthly payments for 10 years; and (3) monthly payments for I~fe. The calcula- tions are based on the receipt of monthly payments, earnings on which are compounded monthly The anticipation of an average earnings rate af 8% is merely an assumption for the purposes of this illustration. Pdyments for life are based on currently available annuity rates. You will pay in- come tax on these payments as you receive them, the amount depending on your individual tax situation. Table 2. Approximate Benefit Payments If you defer $1,000 each 10 20 25 30 year tor: Years Years Years Yean Your total contrlbutlon will be: $10,000 $20,000 $25,000 ~,OOo At the end of the period an average 8% annual growth will result In total earnlngs of: $5,246 $29,085 $54,252 $94,197 The amounts that would be available to you at the end of the period would be: (1) a lump-sum equal to: $15,246 $49,085 $79 f 52 $124,197 (2) monthly payments for 10 years each equal to: $1 85 $596 $962 $1,507 (3) monthly payments for the rest of the partlclpant's llfe each equal to *(a) If the participant Is 60 years old at the tlme payments begin: $141.48 W5.43 $735.33 $1,152.35 *(b) If the partlcipant is 65 year6 old at the time payments begin: $1 59.58 $51 3.79 $829.55 $1,300.01 *Note: The actuarialy determined monthly payments for life shown in this table refer only to men. Because of the increased life expectancy of women, monthly payments for women are reduced from the examples of payments given for men by 9% at age 60, and by 1 1.5% at age 65 Currently, debate cont~nues regard~ng whether or not retirement benel~t payment calculat~ons may d~fferent~ate between sexes. These annuity rates, wh~ch are examples only. are of course subject to change to comply with any changes In law. YDUR CHOICE OF Experience has taught us that our participants base investment decisions on several factors in- cluding age, degree of risk, and other financial obligations, and require several fund choices. Also, some governments are restricted by law as to the types of investments in which deferred compensation can be placed. When joining, you should consult with your employer on possible local restrictions. To meet your diverse needs we offer four investment choices, summarized below. (Alsosee the information contained in the Employee Enrollment Form before making your choices.) THE BALANCED FUND allows you to participate in a full range of economic activity. The holdings emphasize higher risk common stocks, but also include corporate and government securities which provide a balance of investments to protect against current market con- ditions and potential losses. On a year-to-year basis, you should expect significant fluctuations in earnings. In any given year a loss may be experienced. However, the investment strategy is long-term, and over two-to-three market cycles, Balanced Fund earnings should exceed those of other funds. 2. THE BOND FUND takes advantage of the significant earnings which can be made by investing in high quality corporate bonds. Offering less risk than the Balanced Fund, the Bond Fund should provide steady gains over one or two market cycles. Year-to- year fluctuations of earn- ings -will alsg occur in this fund, but losses are un- likely. 3. THE GOVERNMENT SECURITIES FUND is in- vested only in securities of the U.S. Government and those guaranteed by the U.S. Government. When compared to the Balanced and the Bond Funds, it offers even less risk, and over the long-term its re- turns are likely to be lower than these two funds. Some year-to-year fluctua- tions in earnings are to be expected. The Government Securities Fund allows par- ticipation by employees who work for governments that restrict the amounts that can be invested in commercial securities. 4. THE GUARANTEED IN- TEREST FUND is the newest RC investment option. It offers a guarantee of principal plus a premium on the interest rates avail- able in the public sector deferred compensation market-place at any time. As of October I, 1981, the Guaranteed Interest Fund will return 14 percent on all contr~butions received be- tween September 1 981 and September 1982, for a period of six years. In summarizing each Fund, we have pointed out that all invest- ments have a degree of risk. As a general rule you may assume that greater risk usually core sponds with a possibility for a higher long-term return. On the other hand, all of RC's funds are for retirement planning and represent conservative invest- ment policies when compared to the complete range of pos- sibilities. The Retirement Corporation does not recommend invest- ment vehicles appropriate for you. Likewise, your employer has no responsibility to advise you on this decision. If your employer does offer guidelines or suggestions, they are not to be construed, in any way, as actions for which your employer as- sumes liability or ethical re- sponsibility. YOUR CHOICE OF INVEST- ING IN MORE MAN ONE RC FUND offers you the opportunity to effect the long-term growth of your retirement benefits in rela- tion to your personal preferences and needs. You may allocate all of your deferred compensation to a single fund or you may split it among funds in any way you choose. ICMA RETIREMENT CORPORATION 1101 Area Code 202 Connecticut 293-271 6 Avenue Toll free 800 Northwest 424-9249 Washington DC 20036 SPONSORS: lnternational City Management Association Municipal Finance Officers Association lnternational Persohnel Management Association National Institute of Municipal Law Off ices National League of Cities American Society for Public Administration American Planning Association American Public Works Association American Public Power Association Building Officials and Code Administrators lnternational American Association of Airport Execut lves lnternational Institute of Municipal Clerks American Public Gas Association lnternational Association of Assessing Officers i RESOLUTION OF THE CITY OF SOUTH BURLINGTON, VERMONT ' 0 In the matter of: ESTABLISHING A DEFERRED CONPENSATION PLAN I I, Margaret Picard, Clerk of the City of South Burlington, Vermont, do hereby certify that the following resolution, proposed by Council Member s and seconded by Council Member , ' , was duly passed and adopted by the Council of the City of South Burlington, Vermont at a regular meeting thereof 1 1 assembled this 21st day of December, 1981, by the'following vote: Ayes : I I Nays : Absent: . Margaret Pi card City Clerk WHEREAS, The City of South Burlington has in its employ full-time personel; and WHEREAS, said employees are and wi 11 be rendering valaable services to the City; and WHEREAS, The City has considered the establishment of a Deferred Compensation Plan for the said employees made available to the City and to said employees by the International City Management Association Retirement Corporation; and WHEREAS, said employees often are unable to acquire adequate retirement security, under other existing and available retirement plans; and WHEREAS, the City receives benefits under said plans by being able to assure reasonable retirement security to paid employees by being more able to attract competent personnel to its personnel management through elimination of the need for continued employment for the sole purpose of allowing an employee to qua1 i fy for retirement benefits. NOW, THEREFORE, BE IT RESOLVED THAT the City of South Burlington, Vermont i establ ish said Deferred Compensation Plan for said employees and hereby authorize the chairman of the City Council to execute the Deferred Compensation Plan with i the International City Management Association Retirement Corporation, attached hereto as Appendix 1; and J IT IS FURTHER RESOLVED, the the City Manager may on behalf of the City, execute a 3 1: a all Joinder Agreements with said employees and other eligible officials and officers, which are necessary for said persons participation in the Plan, except that any Joinder Agreement for said designated official shall be executed by the Chairman of the City Counci 1. Paul A. Farrar, Council Chairman Michael Fl aherty , Counci 1 Member William Burgess, Council Member Martin Paulsen, Council Member Hugh Marvin, Counci 1 Member