204921ORIGINAL TO CITY CLERK
PRESENTED BY
COMMISSIONE
CITY OF ST. PAUL O NCIL N(? 4921
> > OFFICE OF THE CITY CLERK
_COUNCIL RESOLUTION — GENERAL FORM
RESOLVED, That the Council of the City of Saint Paul
hereby authorizes and directs the Purchasing Agent of the City
of Saint Paul, in cooperation with Mr. Charles H. Stevenson,
Insurance Consultant of the City of Saint Paul, and the office
of the Corporation Counsel, to draft specifications for submission
to this Council for formal approval and authorization to seek
competitive bids for an insured program for payment of the known
severance pay obligations due to be paid by the City in the year
1962 to living persons who separated from City'service in the years
1959, 1960 and 1961, which program may possibly be funded,if the
Council so deems, by prepayment of one single premium.
COUNCILMEN
Yeas Nays
DeCourcy
Loss
In Favor
Mortinson
Peterson
Against
Rosen
Mr. President, Vavoulis
ism 6-61
Council File No. 204921 By Severin A.
Mortinson-
Resolved, That the Council of the'
City of Saint Paul hereby authorizes
and directs the Purchasing Agent of
the City of Saint Paul, in cooperation
with Mr. Charles H. Stevenson, Insur -'
ance Consultant of the City of " Saint
Paul, and the office of the Corporation
Counsel, to draft specifications for sub-
mission to this Council for formal
approval and authorization to seek
competitive bids for an insured pro-
gram for payment of the known sever-
ance pay obligations due to be paid
by the City in the year 1962 to living
persons who separated from City perv-
, ice in the years 1959, 1960 and f1961,
which program may possibly be funded, I
if the Council so deems, by prepayment
of one single premium.
Adopted by the Council November
24, 1961. `
Approved November 24, 1961.
(December 2, 1961)
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�IOV 419LA
Adopted by the Council_ 19—
Approved 19
Mayor
•' � 0?
November 8, 1961 \
A
Honorable Mayor and
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Members of the City Council
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City of Saint Paul, Minnesota
ITIN 11
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Gentlemen and Madam:
Re: City of Saint Paul
Severance Pay
Program
i
The total known obligations of
the City of Saint Paui under its
Severance Pay Program to living
separated employees
as of
Septem-
ber 30. 1961, broken down as to
Public Schools, Water Department,
-�
and Other City Services, are as
follows:
1959
1960
1961
Total
Public Schools 38,997.15
72,263.63
86,302.16
197,562.94
Water Department
5,928.41
2,754.00
8,682.41
Other City Services 15,239.81
36,342.35
42,555.41
94,137.57
Totals 54,236.96 114,534.39 131,611.57 300,382.92
This tabulation does not include Death Claims, some or perhaps all
of which are in probate.
A study aiming at the effecting of economies or savings in the
disposition of the obligations without jeopardy to any obligee has
been conducted. The possibility of funding such known obligations
through the purchase of a prepaid single premium annuity contract
from an admitted carrier in this state has been investigated and
the City Corporation Counsel's Office has been consulted concerning
the legal aspects.
It has been determined that such coverage not only is obtainable,
but that a savings of over $8,000 to the City will result from
an insured program, as well as effect economies in the administra-
tion of the program. The City Corporation Counsel's Office has
given verbal opinion that such a contract may be purchased through !
competitive bidding.
Because of the shortage in "earmarked" funds, it was established
by Council Resolution (Council File No. 195302) adopted January 8,
1960, that severance pay due to be paid in 1960 be paid upon a
deferred annual installment plan not in excess of $600.00, without
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ITIN 11
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Totals 54,236.96 114,534.39 131,611.57 300,382.92
This tabulation does not include Death Claims, some or perhaps all
of which are in probate.
A study aiming at the effecting of economies or savings in the
disposition of the obligations without jeopardy to any obligee has
been conducted. The possibility of funding such known obligations
through the purchase of a prepaid single premium annuity contract
from an admitted carrier in this state has been investigated and
the City Corporation Counsel's Office has been consulted concerning
the legal aspects.
It has been determined that such coverage not only is obtainable,
but that a savings of over $8,000 to the City will result from
an insured program, as well as effect economies in the administra-
tion of the program. The City Corporation Counsel's Office has
given verbal opinion that such a contract may be purchased through !
competitive bidding.
Because of the shortage in "earmarked" funds, it was established
by Council Resolution (Council File No. 195302) adopted January 8,
1960, that severance pay due to be paid in 1960 be paid upon a
deferred annual installment plan not in excess of $600.00, without
Honorable Mayor and
Members of the City Council 2. November 8J961
interest, on the 20th day of January and that not in excess
Of a similar amount be paid in each succeeding year until the
total amount due an individual was aid in full. A similar
resolution CCouncil File No. 200356 affecting payments due
to begin in 1961 was adopted January 10, 1961.
A special one time tax levy was authorized by the 1961 state
legislature to provide the required funds so that the City
Mal in full, early in 1962, its known severance pay
obligations to employees separated from City service in 1959,
1960 and 1961. To do so would effect neither an economy nor
a savings, nor would it assist in any way toward establishing
a funded program to cover the presently active employees,
actuarily predetermined, properly amortized and reasonably
free from future skepticism as to soundness.
An annuity contract would provide for the payment of $50.00
on a given date in each month to each annuitant, without
interest, until the total amount of severance pay due him
was paid in full. Should an annuitant's demise occur before
the f ull amount due him was paid, the monthly payments would
be made to his named beneficiary who, also, would be requested
to name a beneficiary.
The Health and Welfare Insurance 'Committee, by motion unanimously
adopted, recommends to your honorable body that you authorize
by resolution the drafting of specifications for submission to
You for formal approval and authorization to seek competitive
bids for an annuity contract under which the known severance
pay obligations due to be paid in the year 1962 to living
MOwho separated from City service in the years 1959,
1960 and 1961 may be funded by prepayment of one single premium,
such annuity contract, if purchased, to be effective from
February 1, 1962, on which date the first monthly payment
to each annuitant would be made.
The Committee is desirous of extending the study so as to
include the accumulated severance pay obligations of the
City of Saint Paul to its currently active employees and
requests this Council to direct, by resolution, the Civil
Honorable Mayor and
Members of the City Council 3. November 8, 1961
Service Bureau and the Board of Education to provide the
data essential thereto.
Respectfully,
HEALTH AND WELFARE AND
INSURANCE COMMITTEE
By
Secretary