Agenda - Council - 06/23/1998 - Laserfiche WebLink

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I I I I I I I I I I I I I I I I I I I ACCOUNTING AND REPORTING COMMENTS BROKER NOTIFICATION Minnesota Statute § 118A. tM requires the City to provide brokers with a written statement of investment restrictions each year prior to investing with that broker. The broker is required to acknowledge in writing the receipt of the restrictions and agree to handle the City's account in accordance with them. For one broker used by the City in 1997, the restrictions were provided by the City, but no written acknowledgment was received from the broker. The City had only one investment with this broker that was purchased in a prior year. This investment matures in 1998 and the City has not reinvested with this broker. ELIMINATION OF DEFERRED COMPENSATION AGENCY FUNDS In previous years, the City has reported the assets of its deferred compensation (IRS Code § 457) plans in six Agency Funds. The plans assets were solely the property of the City, subject to the claims of its general creditors. The participants rights were equal to those of the City's general creditors in an amount equal to the fair market value of the participants deferred account. The laws governing these plans were changed in 1996 to require that all assets of the plans be held in trust for the exclusive benefit of the participants and their beneficiaries. Existing plans such as yours were required to comply with this requirement by January 1, 1999. As of December 31, 1997, two of the six plan administrators have become compliant with this requirement. These two plans have been shown in the financial statements as complete withdrawals of these assets. The remaining four administrators will become compliant during 1998. -13-