The URL can be used to link to this page

Home My WebLink About6.j. Transfer/Loan – Flexible Spending Account 9ROSEN1OUI'.I' f EXECUTIVE SUMMARY CITY COUNCIL City Council Meeting Date: January 7, 2014 AGENDA ITEM: Transfer/Loan — Flexible Spending AGENDA SECTION: Account Consent PREPARED BY: Jeff May, Finance Director AGENDA NO. (p•,(• ATTACHMENTS: None APPROVED BY: ((JJ d DJ RECOMMENDED ACTION: Motion to approve a transfer of$62,054.00 from the General Fund to the Flexible Spending Account on a temporary basis, to be paid back through employee withholdings as the withholdings occur. ISSUE The City must fund the Flexible Spending Account at the beginning of the plan year to ensure that as draws occur that there are funds to cover those draws. This funding is done on a short-term basis and is repaid with employee withholdings during the year. BACKGROUND For Council consideration this evening is a request for funds to be paid to the Flexible Spending Account for the City of Rosemount employees for the plan year 1/1/14 to 12/31/14. These funds will be used to cover potential overages in that account. Once again, entering a new plan year,we are facing the same federal law that requires the employer to set aside a sufficient amount of dollars to cover all claimed expenses throughout the plan year, even though the amounts may not have been withheld from an employee at the time that the claims are made. The amount being requested is the total amount that will be required to cover all deposits made by employees during the upcoming plan year. Any additional amounts to cover the 2013 final year-end adjustment necessary to balance out the account for the calendar year (to cover the new hires and employees who left the City) will be administered internally as our year- end process is completed. Also, any new hires and terminations will be handled internally during the year to cover any potential overages or underages as they occur. As we have done in the past,when the money is withheld from the employee's payroll checks,it will be deposited into the General Checking Account to reimburse that account for the funds that were advanced to the Flexible Spending Checking Account. We have done this since 1990 and the process has worked very well in handling the Flex Account. SUMMARY Recommend the above motion.