To: Ron Long, Assembly President
Members of the Kenai Peninsula Borough Assembly
Thru: John Williams, Mayor
From: Craig Chapman, Finance Director
Date: June 28, 2006
Re: Ordinance 2006-19-03, Increasing the FY2007 budget to reflect payments received by the Department of Administration, Division of Retirement & Benefits on behalf of the Borough, from the State of Alaska for PERS
As part of last year’s legislative session, the Alaska legislature passed SB 231 which appropriated $702,515 to the Department of Administration, Division of Retirement & Benefits on behalf of the Borough to reduce the liability of political subdivisions to the Public Employees Retirement System (PERS). The purpose of this legislation was to give political subdivisions a one-year reprieve from the increased employer cost resulting from an increase in fiscal year 2007 PERS employer contribution rates. Municipalities may also apply the amount to their unfunded liability.
In lieu of reducing the FY2007 payments, the administration is requesting that these funds be applied to the Borough’s unfunded liability. By applying these funds to the unfunded liability, future year’s PERS rates will show a slight decrease.