HomeMy WebLinkAbout6.i. Transfer/Loan - Flexible Spending AccountCITY OF ROSEMOUNT
EXECUTIVE SUMMARY FOR ACTION
CITY COUNCIL MEETING DATE: January 6, 2004
AGENDA ITEM: Transfer /Loan - Flexible Spending Account AGENDA SECTION:
Consent
PREPARED BY: Jeff May, Finance Director AGENDA NO. °
�o• 1-
ATTACHMENTS: None
APPROVED BY:
For your 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 1/1/04 to 12/31/04. 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 2003 final year -end
adjustment necessary to balance out the account for that calendar year (to cover the many 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.
RECOMMENDED ACTION:
Motion to approve a transfer of $100,244.96 from the General Fund to the Flexible Spending
Account on a temporary basis, to be paid back through employee withholdings as the withholdings
occurs.
COUNCIL ACTION: