HomeMy WebLinkAbout6.g. Transfer/Loan-Flexible Spending AccountAGENDA ITEM: Transfer /Loan Flexible Spending
Account
AGENDA SECTION:
Consent
PREPARED BY: Jeff May, Finance Director
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ATTACHMENTS: None
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APPROVED BY:
RECOMMENDED ACTION: Motion to approve a transfer of $102,922.00 from the General
Fund to the Flexible Spending Account on a temporary basis, to be paid back through
employee withholdings as the withholdings occur.
ACTION:
City Council Meeting Date' January 4, 2005
CITY OF ROSEMOUNT
EXECUTIVE SUMMARY FOR ACTION
ISSUE Funding 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 1/1/05
to 12/31/05 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
thin plan year, avian th thin amnia unts may not have keen withheld from an empinyee at
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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 2004 final year -end adjustment necessary to balance out the
account for that 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.