Ordinance No. 10,777ORDINANCE NO. 10,777
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS,
REPEALING ORDINANCE NO. 9897, ADOPTED ON SEPTEMBER 23, 2004, TO RESCIND
THE RETIREE HEALTH SAVINGS PLAN, PROVIDED THAT ELECTIVE CONTRIBUTIONS
MAY CONTINUE THROUGH DECEMBER 31, 2007; AND PROVIDING FOR THE
EFFECTIVE DATE THEREOF.
WHEREAS, on September 23, 2004, Council authorized participation in a retiree health savings program
for City employees, which allowed City employees to make voluntary contributions; and
WHEREAS, the Internal Revenue Service (IRS) has subsequently ruled that Retiree Health Savings Plans
may not be voluntary; and
WHEREAS, since ICMA -RC Retirement Corporation no longer offers elective contributions of
participants in the new Retirement Health Savings Account based on the Internal Revenue Service ruling, the City
of Baytown must end the current program; and
WHEREAS, ICMA -RC reached resolution with the IRS which:
> preserves existing favorable tax treatment for RHS contributions made pursuant to elections in
place as of December 31, 2006;
> provides the elective contributions may continue through December 31, 2007;
> provides that ICMA-RC agreed to stop accepting elective contributions after December 31, 2007;
> resolves all outstanding audits on RHS plans with elective features; and
> provides that the IRS agreed not to pursue the issue of elective contributions in future audits; NOW
THEREFORE
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS:
Section 1: That the City Council of the City of Baytown hereby repeals Ordinance No. 9897, adopted
on September 23, 2004, to rescind the Retiree Health Savings Plan; provided that elective contributions may
continue through December 31, 2007.
Section 2: This ordinance shall lake effect immediately from and aft^its passage by the City Council
of the City of Baytown.
and PASSED by the affirmative vote of theJjtt^ Council of the City of Baytown this the 13.'-!-d«<of bVc"emlier, 2007.
LORRI CQOQYrCrtv Cierk
STEPHEN H. DONCARLOS, Mayo
APPROVED AS TO-RORM
JACIO RAMIREZ, SR., (Jh> Attorney
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