RESOLUTION NO. 2023-31
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HESPERIA, CALIFORNIA, APPROVING THE ADOPTION OF THE MULTIPLE EMPLOYER OPEB/PENSION 115 TRUST
ADMINISTERED BY SHUSTER ADVISORY GROUP, LLC
WHEREAS, the Governmental Accounting Standards Board ( “GASB”) revised its accounting rules, referred to as GASB 75, to require local governments to recognize, cost , and disclose future obligations for providing Other Post-Employment Benefits (“OPEB”); and
WHEREAS, the City of Hesperia ( “City”) provides OPEB to eligible employees and retirees in the form of retiree health care coverage as defined in applicable memorandums of understanding and pay plans; and
WHEREAS, the City provides pension benefits to eligible employees and retirees as a participant in the California Public Employees Retirement System ( “CalPERS”) as defined in applicable memorandums of understanding and pay plans; and
WHEREAS, Shuster Advisory Group, LLC (“Shuster”) has made available the Multiple Employer OPEB/Pension 115 Trust (“Trust”) for the purpose of pre -funding pension obligations and/or OPEB obligations; and
WHEREAS, the City is eligible to participate in a tax -exempt trust performing an essential governmental function within the meaning of Section 115 of the Internal Reven ue Code, as amended, and the Regulations issued thereunder, and the Trust is a tax -exempt trust under the relevant statutory provisions of the State of California; and
WHEREAS, Alta Trust Company satisfies the Trustee requirements under IRC section 115; and
WHEREAS, all qualified assets held in the Trust will be irrevocably dedicated to prefunding the City’s OPEB and pension obligations; and
WHEREAS, the City’s adoption and operation of the Multiple Employer OPEB/Pension 115 Trust has no effect on any cu rrent or former employee’s entitlement to post -employment benefits; and
WHEREAS, the terms and conditions of post -employment benefit entitlement, if any, are governed by contracts separate from and independent of the Section 115 Trust; and
WHEREAS, the City Council has prudently set aside funds for prefunding pension and OPEB obligations; and
WHEREAS, the City’s funding of the Section 115 Trust does not, and is not intended to, create any new vested right to any benefit nor strengthen any existing vested right; and
WHEREAS, the City reserves the right to make contributions, if any, to the Section 115 Trust; and
WHEREAS, Shuster will set forth an Investment Policy Statement for the Section 115 Trust to ensure fiduciaries involved in the plan take prudent and careful action to maintain the investment portfolios, goals and objectives while maintaining liquidity and risk tolerance.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF HESPERIA AS FOLLOWS:
Section 1. That the recitals above are true and correct and adopted as findings.
Section 2. The City Council hereby adopts the Multiple Employer OPEB/Pension 115 Trust available through Shuster, effective May 16, 2023.
Section 3. The City Council hereby authorizes the appointment of A lta Trust Company as Trustee and Charles Schwab Trust Bank as custodian of the assets.
Section 4. The City Council hereby appoints the City Manager, or his/her successor or his/her designee as the City’s Plan Administrator for the Section 115 Trust.
Section 5. The City’s Plan Administrator is hereby authorized to execute the legal and administrative documents on behalf of the City and to take whatever additional actions are necessary to maintain the City’s participation in the Section 115 Trust and to mai ntain compliance of any relevant regulation issued or as may be issued; therefore, authorizing him/her to take whatever additional actions are required to administer the City’s Section 115 Trust.
Section 6. That said action was taken during a regular meeting of the Hesperia City Council.
Section 7. That the City Clerk shall certify to the passage and adoption of this resolution and enter it into the book of original resolutions.
ADOPTED AND APPROVED this 16th day of May 2023.
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Brigit Bennington, Mayor
ATTEST:
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Erin Baum, Assistant City Clerk