Contingency Funds

Statement of Financial Position

Contingency Funds and Pension Funds Discussion

Mr. McKay outlined his proposed restructuring of the contingency funds, as follows:

Separate the operating and reserve funds, and fund the operating fund at one month of expenses for smoothing purposes (approximately $1.25 million)
Eliminate the operating reserves fund
Fund the reserve fund at three months of expenses (approximately $3.75 million).
Expand scope of the litigation fund to include any type of litigation in which the SLA finds itself, not just defense.
Set the pension and post-retirement liability fund as a fixed number to fill the gap between an off-book account (currently at $8.7 million) and the expected market cost of paying off the pension ($15 million), which comes to $6.3 million. The fund’s goal would be to fill the gap between the off-book fund and the market price for annuitizing the pension fund, plus the cost of post-retirement benefits.
Eliminate the computer system fund, because the project it was created to fund has been completed.

Hank Haldeman moved to accept the proposal, and Janet Beaver seconded. The motion carried.