3.3. SR 11-10-2003River
MEMORANDUM
Item# 3.3
TO:
Mayor and City Council
FROM:
Lori Johnson, Finance Director
DATE:
November I 0, 2003
SUBJECT: Consider Amendment to City of Elk River's Flexible Spending Plan
The City of Elk River maintains a Flexible Spending Plan (Plan) for its employees in accordance
with Federal regulations. The Plan allows employees to pre-tax certain eligible expenses. The city's
Plan is periodically updated to ensure that it complies with all legal requirements and that new laws
are incorporated. The schedule originally called for the Plan to be updated in late 2002, but since
there was at least one pending change for 2003, the update was delayed. The Plan is currently
undergoing review by The Stanton Group so the revised Plan will be ready by January 1, 2004. In
the meantime, there is one amendment that should be approved so that employees may take
advantage a recent law change.
On September 3, 2003, Revenue Ruling 2003-102 was issued allowing certain over-the-counter drugs
as eligible medical reimbursement expenses under certain circumstances. In order for employees to
be able to take advantage of this change, the city's Plan needs to be amended. Attached is an
Amendment to the Plan that allows for the implementation of Revenue Ruling 2003-102.
Further, the Amendment also designates the authority to make Plan changes to the Finance
Director. Although this delegation was made at the time the Plan was originally implemented, it is
being restated so there is current action approving the delegation. As I stated above, generally the
Plan document is only amended if there are law changes or rulings that need to be addressed. This
would allow for administrative amendments to the Plan to address any mandated changes. The only
other probable change to the Plan would be to adjust the amount employees are allowed to pre-tax
for medical reimbursement. Any material discretionary changes would still be taken to the Council
for consideration.
Action Requested
City Council is asked to approve the amendment to the City of Elk River's flexible spending plan as
attached.
S:\Council\Lori\2003\flexspending. doc
City of Elk River
(Employer Name)
AMENDMENT TO
Flexible Spending Plan ("Plan")
WHEREAS, the City of Elk River (the "Employer") provides employees with an
opportunity to pay for certain employee welfare benefits on a pre-tax basis through the above
mentioned Plan (the "Plan"); and
WHEREAS, the Employer considers it desirable and in the best interests of the Plan to
make the following amendment to the Plan;
NOW, THEREFORE, pursuant to the authority reserved in the Plan to allow amendments
to the Plan, the Plan is amended as follows:
Effective, November 11, 2003, the provisions of the Plan referencing the
eligibility of certain health care expenses shall be amended to include
over-the-counter drugs. This amendment to the Plan is intended to comply
with Revenue Ruling 2003-102 issued September 3, 2003.
BE IT FURTHER RESOLVED, that appropriate officers of this Employer are hereby
authorized and directed to execute and deliver all documents necessary for the proper
implementation of the Amendment to the Plan to ensure that the Amendments are hereby
approved and in effect by the above stated dates;
BE IT FURTHER RESOLVED, that the City Council hereby authorizes future Plan
changes to be made by the Finance Director.
Passed and adopted by the City Council of the City of Elk River this 10th day of November,
2003.
City of Elk River
By
Stephanie Klinzing, Mayor Joan Schmidt, City Clerk