The fund
shall be established with a transfer of $1,750,000 from the General
Fund, unassigned fund balance, and shall therefore be funded as provided
for below.
On an annual
basis the Town will allocate any amounts of tax revenue collected
during the fiscal year for all the preceding tax years which exceed
the amounts budgeted for that year. These excess receipts will be
allocated to the Compensated Absence Retirement Escrow Fund up to
a maximum amount of $250,000 annually. If the positive budgetary variance
of these tax collections exceeds $250,000, then the amounts collected
in excess of the $250,000 variance shall remain in the General Fund.
Those funds
shall continue to accumulate in the Compensated Absence Retirement
Escrow Fund and shall only be utilized to help cover the payment of
compensation which is paid out to employees upon their separation
of service from the Town of Johnston and in accordance with the terms
of the respective collective bargaining agreements.
Utilization of the fund balance accumulated in the Compensated Absence Retirement Escrow Fund in accordance with Subsection D above, shall only be completed if the General Fund incurred a deficit during the fiscal year, and that deficit was caused in part as a result of the expenditures for compensation exceeding the amount budgeted for the fiscal year due to the separation from service payments made to employees separating from employment with the Town in accordance with the collective bargaining agreements. The amount to be utilized may not exceed the lessor of the General Fund's operating deficit or the amount of separation from service compensation which was paid during the fiscal year that was in excess of the amount budgeted for said expenditure.
The funding
of the Compensated Absence Retirement Escrow Fund shall be completed
annually up until such time as the accumulated fund balance of this
Fund is equal to 125% of the accumulated benefit obligation of the
Town, including the applicable payroll taxes. At no time should the
accumulated fund balance of this Compensated Absence Retirement Escrow
Fund exceed 125% of the accumulated benefit obligation of the Town,
not including the School Department. The Fund balance level will be
determined annually in the annual audit.