HomeMy WebLinkAboutResolutions - 2013.10.02 - 21042REPORT (MISC. #13253)
October 2, 2013
BY: Human Resources Committee, John Scott, Chairperson
IN RE: RESOLUTION APPROVING AN AMENDMENT TO THE 2007 OAKLAND COUNTY
INTERMEDIATE RETIREE MEDICAL BENEFITS TRUST AGREEMENT BETWEEN THE
COUNTY AND THE TRUSTEES DESCRIBED THEREIN, ESTABLISHING THE 2007
OAKLAND COUNTY INTERMEDIATE RETIREE MEDICAL BENEFITS TRUST
To the Finance Committee and Oakland County Board of Commissioners
Chairperson, Ladies and Gentlemen:
The Human Resources Committee, having reviewed the above referenced resolution on
September 25, 2013, reports with the recommendation the resolution be adopted.
Chairperson, on behalf of the Human Resources Committee, I move the acceptance of the
foregoing report.
HUMAN RESOURCES COMMITTEE
HUMAN RESOURCES COMMITTEE
Motion carried unanimously on a roll call vote with Hatchett absent.
MISCELLANEOUS RESOLUTION #13253 October 2, 2013
BY: FINANCE COMMITTEE - Thomas Middleton, Chairperson
IN RE: RESOLUTION APPROVING AN AMENDMENT TO THE 2007 OAKLAND
COUNTY INTERMEDIATE RETIREE MEDICAL BENEFITS TRUST AGREEMENT
BETWEEN THE COUNTY AND THE TRUSTEES DESCRIBED THEREIN,
ESTABLISHING THE 2007 OAKLAND COUNTY INTERMEDIATE RETIREE
MEDICAL BENEFITS TRUST
TO THE OAKLAND COUNTY BOARD OF COMMISSIONERS
Chairperson, Ladies and Gentlemen:
WHEREAS the County of Oakland, Michigan (the "County"), as
an exercise of its essential government function of providing
benefits for its employees and/or their spouses and eligible
dependents, provides post-retirement medical benefits to
eligible retirees and/or their spouses and eligible dependents,
as provided by the Oakland County Merit System and its policies
and County-sponsored retiree medical benefit plans (the "Retiree
Medical Benefits"); and
WHEREAS, as permitted by Federal and State laws the County
established the Oakland County VEBA (the "VEBA Trust") as
documented by the Oakland County VEBA Trust Agreement effective
as of October 1, 2000, as amended as of July 1, 2007, between
the County and the Trustees described therein (or their
successors) (the "VEBA Trustees"), for the purposes of
accumulating the funds needed to provide Retiree Medical
Benefits and receiving contributions for that purpose from the
County and its employees; and
WHEREAS, pursuant to an enabling ordinance enacted by the
Oakland County Board of Commissioners on June 14, 2007 (the
"Funding Ordinance") authorizing an alternate funding mechanism
for the County to fulfill its obligations to provide for funding
a specified amount of the County's estimated unfunded accrued
actuarial liabilities for Retiree Medical Benefits (the
"Designated Liabilities") over a period ending April 1, 2027
(the "Funding Period"), the County has established an
intermediate trust to irrevocably receive a certain amount of
the net proceeds (the "Funding Proceeds") from the sale by the
2007 Oakland County Retiree Medical Benefits Funding Trust (the
"Funding Trust") of its Taxable Certificates of Participation,
Series 2007 (the "Certificates") and to hold, invest and
distribute the Intermediate Trust (as defined below) assets, all
in accordance with the 2007 Oakland County Intermediate Retiree
Medical Benefits Trust Agreement, as it may be amended in
accordance with its terms; and
WHEREAS, it is the intent of the County to amend the
provisions of the 2007 Oakland County Intermediate Retiree
Medical Benefits Trust Agreement as is permitted by Section 7 of
such Trust Agreement.
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD 0 7
COMMISSIONERS OF THE COUNTY OF OAKLAND, MICHIGAN, AS FOLLOWS:
1. The amendment to the 2007 Oakland County Intermediate
Retiree Medical Benefits Trust Agreement (the "2007 Intermediate
FINANCE COMMITTEE VOTE:
Motion carried unanimousiy on a roll call vote with Crawford absent.
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Trust Agreement") adopted by the Board of Commissioners on
November 28, 2012 in Miscellaneous Resolution #12288 is hereby
rescinded.
2. The 2007 Intermediate Trust Agreement is hereby
amended as follows:
(a) Section 3 of the 2007 Intermediate Trust Agreement is
amended to provide as follows:
"3. Contributions to the Intermediate Trust. The County,
as Grantor, shall cause the Funding Proceeds to be irrevocably
transferred to the Intermediate Trustees on the date of delivery
of the Certificates to the initial purchasers thereof. The
Intermediate Trustees shall receive such contributions made to
them on behalf of the County from the Funding Trust and shall
hold such funds as a separate trust designated as the
Intermediate Trust, and shall hold and administer such funds,
invest and reinvest such funds, and make distributions from such
funds only in accordance with the provisions of this Agreement.
The Intermediate Trustees shall receive, hold, invest and
administer as part of the Intermediate Trust, subject to the
terms of this Agreement, all income earned by the corpus of the
Intermediate Trust held by the Intermediate Trustees (and all
losses in the value of the corpus of the Intermediate Trust
shall be charged to the corpus of the Intermediate Trust), but
no other contributions to the Intermediate Trust from any source
except the County shall be made to or accepted by the
Intermediate Trustees."
(b) A new Section 3A is added into the 2007 Intermediate
Trust Agreement to provide as follows:
"3A. Exchange of Assets Between the County and the
Intermediate Trust. Any time after October 2, 2013,
(1) The Intermediate Trust, if and as directed in writing
by the County, shall: (i) receive and hold in trust any cash or
direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United
States of America ("US Government Securities") that are both (A)
transferred to the Intermediate Trust by the County or an Escrow
Agent (appointed by the County) on behalf of the County and (B)
expressly identified by the County or such Escrow Agent as,
collectively, the (the "Incoming Exchanged Assets"); and (ii) in
exchange for such Incoming Exchanged Assets, transfer to the
County or its designee other assets of the Intermediate Trust
having an aggregate fair market value as of such transfer date
equal to the aggregate amount of the Incoming Exchanged Assets.
The Intermediate Trust shall continue to hold the Incoming
Exchanged Assets as received, without reinvestment, until the
County instructs otherwise.
(2) The Intermediate Trust, if and as requested by the
County, shall (1) convert any specified assets of the
Intermediate Trust into cash or U.S. Government Securities and
(ii) hold such cash or U.S. Government Securities in trust,
without reinvestment, until instructed otherwise by the County."
The foregoing amendments to the 2007 Intermediate Trust
Agreement shall be in the form attached hereto as Appendix A
(the "Amendment Document") and shall take effect immediately
upon signing by all parties thereto.
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Chairperson, on behalf of the Finance Committee,
of the foregoing Resolution.
move adoption
FINANCE COMMITTEE
4. The Oakland County Executive or any Deputy County
Executive, acting on behalf of the County Executive, or any one
or more of them, and each of them is, at any time hereafter and
without further action by or authority or direction from the
Board of Commissioners of the •County, authorized to execute and
deliver the Amendment Document in substantially the form
attached hereto as Appendix A, including such changes in or
additions to such form (including, but not limited to,
completing any blanks therein) as the officials executing the
same may determine to be necessary or advisable, and that the
execution of the Amendment Document by such officials on behalf
of this County shall be conclusive evidence of their
determination in that respect.
5. The Oakland County Executive or any Deputy County
Executive, acting on behalf of the County Executive, or any one
or more of them, and each of them is, at any time hereafter and
without further action by or authority or direction from the
Board of Commissioners of the County, authorized to execute and
deliver or cause to be executed and delivered all such other and
further agreements, requests, statements, instruments and
documents and to do or cause to be done all such other and
further acts and things as any such official, attorney or agent
may determine to be necessary or advisable under or in
connection with the 2007 Intermediate Trust Agreement or this
resolution, and that the execution by any such official,
attorney or agent of any such agreement, request, statement,
instrument or document or the doing of any such act or thing
shall be conclusive evidence of his/her or their determination
in that respect.
6. This resolution shall take effect upon its adoption
and the signature of the Oakland County Executive indicating his
approval and shall be recorded in the minutes of the County as
soon as practicable after adoption.
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APPENDIX A
2013 AMENDMENT TO 2007 OAKLAND COUNTY INTERMEDIATE RETIREE
MEDICAL BENEFITS TRUST AGREEMENT
This Amendment to Trust Agreement ("this Amendment") is made, effective as of
October 3, 2013, by and between the County of Oakland, Michigan (the "County" or the
"Grantor") and the Intermediate Trustees described in Section 2 of the 2007 Oakland
County Intermediate Retiree Medical Benefits Trust Agreement (the "2007 Intermediate
Trust Agreement"), or their successors.
RECITALS:
WHEREAS, the Oakland County VEBA (the "VEBA Trust") is a trust established
by the Oakland County VEBA Trust Agreement effective as of October 1, 2000 between
the County and the Trustees described therein (or their successors, the "VEBA
Trustees"), as amended, for the purposes of (i) accumulating the funds needed to pay
for Retiree Medical Benefits (as defined below) and (ii) receiving contributions for that
purpose from the County.
WHEREAS, the County currently pays for the benefits available to eligible
retirees and their eligible dependents under County-sponsored retiree medical benefit
plans ("Retiree Medical Benefits") by making contributions to the VEBA Trust;
WHEREAS, the Oakland County Board of Commissioners on June 14, 2007
enacted an enabling ordinance (the "Funding Ordinance') authorizing an alternate
funding mechanism for the County to amortize its estimated unfunded accrued actuarial
liabilities for Retiree Medical Benefits for certain retirees and certain active employees
of the County, and their eligible dependents, as of October 1, 2006 (the "Designated
Liabilities") over a period ending April 1, 2027 (the "Funding Period");
WHEREAS, thereafter on June 14, 2007 the Oakland County Board of
Commissioners approved a resolution authorizing the execution of the 2007
Intermediate Trust Agreement:
WHEREAS, the County has authorized and entered into the 2007 Oakland
County Retiree Medical Benefits Contract (the "Contract") with the 2007 Oakland
County Retiree Medical Benefits Funding Trust (the "Funding Trust") to assist the
County in satisfying its contractual obiigations to provide for Retiree Medical Benefits
and the County is making Contract Payments to the Funding Trust pursuant to the
Contract in order to satisfy its obligations to the Funding Trust;
WHEREAS, effective on July 1, 2007 the County established an intermediate
trust to irrevocably receive a certain amount of the net proceeds (the "Funding
Proceeds') from the sale by the Funding Trust of its Taxable Certificates of
Participation, Series 2007 (the "Certificates") and to hold, invest and distribute the
Intermediate Trust assets, all in accordance with this Trust Agreement, as it may be
amended in accordance with its terms (the "Agreement"); and
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WHEREAS, on , 2013 the Oakland County Board of Commissioners
approved a resolution authorizing amendments to the 2007 Intermediate Trust
Agreement as set forth below.
NOW, THEREFORE, the County and the Intermediate Trustees agree as follows:
1. Section 3 of the 2007 Intermediate Trust Agreement is amended to
provide as follows:
"3. Contributions to the Intermediate Trust. The County, as Grantor, shall
cause the Funding Proceeds to be irrevocably transferred to the Intermediate Trustees
on the date of delivery of the Certificates to the initial purchasers thereof. The
Intermediate Trustees shall receive such contributions made to them on behalf of the
County from the Funding Trust and shall hold such funds as a separate trust designated
as the Intermediate Trust, and shall hold and administer such funds, invest and reinvest
such funds, and make distributions from such funds only in accordance with the
provisions of this Agreement. The Intermediate Trustees shall receive, hold, invest and
administer as part of the Intermediate Trust, subject to the terms of this Agreement, all
income earned by the corpus of the Intermediate Trust held by the intermediate
Trustees (and all losses in the value of the corpus of the Intermediate Trust shall be
charged to the corpus of the Intermediate Trust), but no other contributions to the
Intermediate Trust from any source except the County shall be made to or accepted by
the Intermediate Trustees ."
2. A new Section 3A is added into the 2007 Intermediate Trust
Agreement to provide as follows:
"3A. Exchange of Assets Between the County and the Intermediate Trust.
Any time after October 2, 2013,
(1) The Intermediate Trust, if and as directed in writing by the County, shall:
(i) receive and hold in trust any cash or direct obligations of, or obligations the principal
of and interest on which are unconditionally guaranteed by, the United States of
America ("US Government Securities") that are both (A) transferred to the
Intermediate Trust by the County or an Escrow Agent (appointed by the County) on
behalf of the County and (B) expressly identified by the County or such Escrow Agent
as, collectively, the (the "incoming Exchanged Assets"); and (ii) in exchange for such
Incoming Exchanged Assets, transfer to the County or its designee other assets of the
Intermediate Trust having an aggregate fair market value as of such transfer date equal
to the aggregate amount of the Incoming Exchanged Assets. The Intermediate Trust
shall continue to hold the Incoming Exchanged Assets as received, without
reinvestment, until the County instructs otherwise.
(2) The Intermediate Trust, if and as requested by the County, shall (i) convert
any specified assets of the Intermediate Trust into cash or U.S. Government Securities
and (ii) hold such cash or U.S. Government Securities in trust, without reinvestment,
until instructed otherwise by the County."
3. Applicable Law. This Amendment shall be construed under the laws of
the State of Michigan. Any provision of this Amendment prohibited by law shall be
ineffective to the extent of any such prohibition, without invalidating the remaining
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provisions of this Amendment.
IN WITNESS WHEREOF, the County and the Intermediate Trustees have
caused this Amendment, which constitutes an irrevocable grantor trust agreement, to be
executed effective as of the date first written above.
THE COUNTY OF OAKLAND, MICHIGAN
By:
Its:
TRUSTEES OF THE 2007 OAKLAND
COUNTY INTERMEDIATE RETIREE
MEDICAL BENEFITS TRUST
By:
James VanLeuven
By:
Joseph Rozell
By:
Jeffrey Phelps
By:
D'Arcy Gonzales
BY:
Curtis Childs
By:
Andrew Meisner
By:
Thomas Middleton
By:
Kathleen Crawford
By:
Laurie Van Pelt
Las.r9-oak248
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Resolution #13253 October 2, 2013
Moved by Hoffman Supported by Zack the resolutions (with fiscal notes attached) on the amended
Consent Agenda be adopted (with accompanying reports being accepted).
AYES: Dwyer, Gershenson, Gingell, Gosselin, Hatchett, Hoffman, Jackson, Long, Matis,
McGillivray, Middlet;)n, Runestad, Scott, Spisz, Taub, Weipert, Woodward, Zack, Bosnic,
Crawford. (20)
NAYS: None. (0)
A sufficient majority having voted in favor, the resolutions (with fiscal notes attached) on the amended
Consent Agenda be adopted (with accompanying reports being accepted).
STATE OF MICHIGAN)
COUNTY OF OAKLAND)
I, Lisa Brown, Clerk of the County of Oakland, do hereby certify that the foregoing resolution is a true and
accurate copy of a resolution adopted by the Oakland County Board of Commissioners on October 2,
2013, with the original record thereof now remaining in my office.
In Testimony Whereof, have hereunto set my hand and affixed the seal of the County of Oakland at
Pontiac, Michigan this 2 nd day of October 2013.
Lisa Brown, Oakland County