City Council

COOKEVILLE CITY COUNCIL SPECIAL CALLED MEETING JUNE 25r 2O2L 9:OO AM The Cookeville City Council met in special called session on Friday, June 25, 2O2t, at 9:00 d.ffi., in the Municipal Building, 45 E. Broad Street. CALL TO ORDER AND ROLL CALL Mayor Shelton called the meeting to order. Present and answering roll call were: Councilman Mark Miller: present Mayor Ricky Shelton: present Councilman Eric Walker: present Vice-Mayor Laurin Wheaton : present Councilman Charles Womack: absent Also present: James Mills, City Manager, Darian Coons, City Clerk and Dan Rader, City Attorney. INVOCATION AND PLEDGE OF ALLEGIANCE City Manager James Mills gave the invocation. Mayor Shelton led the Pledge of Allegiance. CONSIDER APPROVAL OF AGENDA AS PRESENTED Councilman Eric Walker made a motion to approve the agenda as presented The motion was seconded by Vice-Mayor Wheaton. Upon call for a vote, the motion carried with the following voting: Councilman Mark Miller: aye Mayor Ricky Shelton: aye Councilman Eric Walker: aye Vice-Mayor Laurin Wheaton : aye Councilman Charles Womack: absent NEW BUSTNESS - PUBLIC HEARINGS AND ACTION ITEMS Consider Resolution #R21-06-18, authorization of the transfer of Tennessee Consolidated Retirement System assets and liabilities from the City of Cookeville to the Cookeville Regional Medical Center. Additional information: Appendix 44  Cookeville City Council Minutes June 25, 202t City Manager James Mills presented the following: This Resolution was provided by the Depaftment of the Treasury and its adoption is required to complete the transfer of Tennessee Consolidated Retirement System assets and liabilities as approved by the City Council at the meeting on June 17, 2O2L. It requests that TCRS transfer $27,586,3L7 from the City of Cookeville's TCRS account to the Cookeville Regional Medical Center's TCRS account, and transfer the TCRS liabilities with respect to service rendered through employment with Cookeville General Hospital prior to December L, L999, from the City's TCRS account to CRMC's TCRS account. This is as specified in Scenario 3 of June t4, 2O2L, Actuarial Study, A similar Resolution was approved by the CRMC Board of Trustees last night. Vice-Mayor Wheaton made a motion to adopt Resolution #R21-06-18 as recommended. The motion was seconded by Councilman Mark Miller. Upon call for a vote, the motion passed with the following voting: Councilman Mark Miller: aye Mayor Ricky Shelton: abstain Councilman Eric Walker: aye Vice-Mayor Laurin Wheaton : aye Councilman Charles Womack: absent Consider Resolution #R21-O6-19, approval of an agreement regarding annual in lieu of tax payments from the Cookeville Regional Medical Center to the City of Cookeville. Additional information: Appendix 4B City Manager James Mills presented the following: This Resolution was prepared by the City Attorney and myself. It agrees to freeze the Cookeville Regional Medical Center's in lieu of tax payment at $700,000 through July 1, 2028. Approval of the freeze is contingent on the CRMC Board of Trustees approving the TCRS transfer of assets and liabilities as specified in Scenario 3 of the June L4, 202L, Actuarial Study. The Board approved this transfer last night. Vice-Mayor Wheaton made a motion to adopt Resolution #R21-06-19 as recommended. The motion was seconded by Councilman Eric Walker. Upon call for a vote, the motion passed with the following voting: 2  Cookeville City Council Minutes June 25, 2O2L Councilman Mark Miller: aye Mayor Ricky Shelton: abstain Councilman Eric Walker: aye Vice-Mayor Laurin Wheaton : aye Councilman Charles Womack : absent City Manager James Mills made the following statement: The action approved last night by the CRMC Board of Trustees and today by the Council will have a significant long term positive impact for the City. The potential to reduce the City's annual TCRS contribution by almost half will save us literally millions of dollars. The process to complete the transfer started more than three years ago and was truly a team effort. I want to recognize those that have assisted in getting this done. First, thanks to the previous City Manager, Mike Davidson for determining that there was an issue. Thanks to the Depaftment of the Treasury for acknowledging that there was an issue and for providing us with a path to correct it. I very much appreciate CRMC CEO Paul Korth for working with us from staft to finish. I want to stress that the Medical Center had no knowledge that the City was making TCRS contributions for hospital employees. Once he was made aware, Mr. Korth agreed completely that this was something that needed to be fixed. Thanks to our attorneys Dan and Danny Rader. We have sought their Council many times during this process. I particularly want to thank them for assisting us in drafting the required legislation to amend the state statutes so we could complete the transfer. Also, thanks to Representative Ryan Williams and Senator Paul Bailey for shepherding the legislation through the General Assembly. Special thanks to Finance Director Brenda Imel for her advice and assistance. Finally, thanks to the CRMC Board of Trustees for agreeing to complete the transfer, City Attorney Dan Rader requested that the following be entered into the record: Mr. Mills picked up the ball from former City Manager Mike Davidson and ran with it full speed ahead. If he had not taken the initiative by putting on the finishing touches and keeping the process on track, we would not be where we are today. This is going to have a significant financial impact on the future of the City. J  Cookeville City Council Minutes June 25, 202L ADJOURNMENT There being no further business, Mayor Shelton declared the meeting adjourned at 9:07 a.m. ATTEST: Darian Coons, City Clerk cky S Iton, ayor 4  APPENDIX 4A RESOLUTION A RESOLUTION TO REQUEST A RESOLUTION NUMBER: R21-06-18 TRANSFER OF TENNESSEE REQUESTED BY: CITY COIJNCIL CONSOLIDATED RETIREMENT PREPARED BY: CITY MANAGER APPROVED AS TO FORM & SYSTEM ASSETS ANI) CORRECTNESS: ASSOCIATED LIABILITIES RELATTVE TO A DEPARTMENT, (City Attorney) AGENCY OR INSTRUMENTALITY ADOPTED: OF A POLITICAL SUBDIVISION BECOMING A SEPARATE GOVERNMENTAL ENTITY, MINUTE BOOK PAGf, PURSUANT TO CHAPTER 156 OF' THE PUBLIC ACTS OF 2021. WHEREAS, Tennessee Code Annotated, Section 8-35-248, provides that except as otherwise expressly provided by law, should any department, agency, or instrumentality of a political subdivision participating in the Tennessee Consolidated Retirement System ("TCRS") become a separate local governmental entity from the political subdivision, the employees of suclr entity are not entitled to future membership in the retirement system on account of continued service with the entity unless the chief governing body of the entity elects to become a participaiing employer in TCRS; WHEREAS, Chapter 156 of the Public Acts of 2021 authorizes the governing body of a political subdivision participating in TCRS to request that TCRS have an actuarial study conducted, at the political subdivision's expense, to determine the share of the assets of TCRS and associated liabilities attributable to the new political subdivision for the time period before or aftet a department, agency, or instrumentality of the political subdivision became a separate governmental entity participating in the retirement system; WHEREAS, Chapter 156 of the Public Acts of 2021 also provides that such an actuarial study must calculate the political subdivision's pension liability for this period of time based on the following factors: review of assets and liabilities; member creditable service; demographics and salaries; required and optional plan provisions; contributions made; investment earnings; and any other factors that will assist in determining the political subdivision's pension obligations before a part of it became a separate entity; WHEREAS, Chapter 156 of the Public Acts of 2021 further provides that upon receipt of the actuarial study, the chief governing bodies of the political subdivision and the entity have the authority to pass and file with TCRS resolutions, acceptable to TCRS in both form and substance, requesting that all or a portion of the assets and the liabilities associated thereto contributed by the political subdivision to fund the pension liability that was accrued while the entity was a part of the political subdivision to the TCRS account of the new entity, which transfer must include some or all of the assets with the associated liabilities which may include, without lim itation, employer contributions or investrnent earnings; RESOLUTION NO. R2T.06.18  WHEREAS, prior to the transfer of some or all of the assets and the associated liabilities from the political subdivision to the new governmental entity, the State Treasurer may approve such a request if the political subdivision demonstrates that such a transfer would not negatively impact the long-term solvency of the entity, and the State Treasurer may require the political subdivision and the entity to provide documentation, including, but not limited to, financial statements, actuarial assessments, and an opinion of an independent actuary; WHEREAS, the City of Cookeville became a participating employer in TCRS on July l, 1972, and Cookeville General Hospital employees participated in TCRS as a department or instrumentality of the City of Cookeville until December 1 , 1999; WHEREAS, Cookeville General Hospital reorganized and became the Cookeville Regional Medical Center ("CRMC"); WHEREAS, effective December 1, 1999, CRMC became a separate participating employer in TCRS; WHEREAS, pulsuant to Chapter 156 of the Public Acts of 2021, the City of Cookeville requested that TCRS coordinate an actuarial study, at the City's expense, to determine the share of the assets of TCRS and associated liabilities attributable to CRMC for the time period before December l, 1999; and WHEREAS, based on the results of the study and subject to the State Treasurer's approval, the City of Cookeville desires to request a transfer pursuant to the terms and conditions of this resolution. NOW' THEREFORE, tsE rT RESOLVED, THAT THE CITY COUNCIL OF TIIE CITY OF COOKEVILLB, TENNISSEE, hereby requests that TCRS transfer $27,586,317.00 from the City's TCRS account to CRMC's TCRS account, and transfer the TCRS liabilities with respect to service rendered through employment with Cookeville General Flospital prior to December 1,1999, from the City's TCRS accountto CRMC's TCRS account, provided thatthe funds will consist only of employer contributions and that any associated employee contributions will be transfered separately as member records are changed from the City and CRMC; BE IT FURTIIER RESOLVED, that the City acknowledges that such transfer cannot be made unless CRMC's chief governing body also authorizes the transfer pursuant to a resolution duly filed with TCRS; BE IT FURTHER RESOLVED, that the City hereby requests the approval of the State Treasurer ofthe proposed transfer, pursuantto Chapter 156 ofthe Public Acts of202l; and BE IT FURTHER RESOLVED, upon TCRS's receipt of appropriate resolutions trom the City and CRMC as well as the State Treasurer's approval of the transfer, the City directs TCRS to make the transfer in accordance with the terms of this resolution RESOLUTION NO. R21-05.18 Approved and adopted this 25tl' day of June, 2021 Laurin Wheaton, Vice-Mayor ATTEST: Darian Coons, City Clerk RESOLUTION NO. R21-06-18 Tennessee Consolidated Retirement System A RESOLUTION to request a transfer ofthe Tennessee Consolidated Retirement System assets and associated liabilities relative to a department, agency or instrumentality of a political subdivision beoming a separate governmental entity, pursuant to Chapter 156 of the Public Acts of 2021. WHEREAS, Tennessee Code Annotated, Section 8-35-248 provides that except as otherwise expressly provided by law, should any department, agency, or instrumentality of a political subdivision participating in the Tennessee Consolidated Retirement System ("TCRS") become a separate local governmental entity from the political subdivision, the employees of such entity are not entitled to future membership in the retirement system on account of continued service with the entity unless the chief governing body of the entity elects to become a participating employer in TCRS; WHEREAS, Chapter I 56 of the Public Acts of 2021 authorizes the goveming body of a political subdivision participating in TCRS to request that TCRS have an actuarial study conducted, at the political subdivision's expense, to determine the share of the assets of TCRS and associated liabilities attributable to the new political subdivision for the time period before or after a department, agency, or instrumentality of the political subdivision became a separate governmental entity participating in the retirement system; WHEREAS, Chapter 156 of the Public Acts of 2021 also provides that such an actuarial study must calculate the political subdivision's pension liability for this period of time based on the following factors: review of assets and liabilities; member creditable service; demographics and salaries; required and optional plan provisions; contributions made; investment eamings; and any other factors that will assist in determining the political subdivision's pension obligations before a part of it became a separate entity; WHEREAS, Chapter 156 of the Public Acts of 2021 further provides that upon receipt of the actuarial study, the chief goveming bodies of the political subdivision and the entity have the authority to pass and file with TCRS resolutions, acceptable to TCRS in both form and substance, requesting that all or a portion ofthe assets and the liabilities associated thereto contributed by the political subdivision to fund the pension liability that was accrued while the entity was a part of the politicial subdivision to the TCRS account of the new entity. Such transfer must include some or all of the assets with the associated liabilities which may include, without limitation, employer contributions or investment earnings; WHEREAS, prior to the transfer of some or all of the assets and the associated liabilities from the political subdivision to the new governmental entity, the State Treasurer may approve such a request ifthe political subdivision demonstrates that such a transfer would not negatively impact the long-term solvency of the entity, and the State Treasurer may require the political subdivision and the entity to provide documentation, including, but not limited to, financial statements, actuarial assessments, and an opinion of an independent actuary; WHEREAS, the City of Cookeville (the "City") became a participating employer in TCRS on July 1, 1972, and Cookeville General Hospital employees participated in TCRS as a department or instrumentality of the City of Cookeville until December l, 1999; WHEREAS, Cookeville General Hospital reorganized and became the Cookeville Regional Medical Center ("CRMC"); WHEREAS, effective December 1,1999, CRMC became a separate participating employer in TCRS; WHEREAS, pursuant to Chapter 156 of the Public Acts of 2021, the City requested that TCRS coordinate an actuarial study, at the City's expense, to determine the share of the assets of TCRS and associated liabilities attributable to CRMC for the time period before December l, 1999; and WHEREAS, based on the results of the study and subject to the State Treasurer's approval, CRMC desires to request a transfer pursuant to the terms and conditions of this resolution. NOW, THEREFORE, BE lT RESOLVED, that the Cookeville Regional Medical Center Board of Trustees of Cookeville Regional Medical Center hereby requests that TCRS transfer $27,586,3t7.00 from the City's TCRS account to CRMC's TCRS account, and transfer the TCRS liabilities with respect to service rendered through employment with Cookeville General Hospital prior to December L, !999, from the City's TCRS account to CRMC's TCRS account, provided that the funds will consist only of employer contributions and that any associated employee contributions will be transferred separately as member records are changed from the City to CRMC; BE lT FURTHER RESOLVED, that CRMC acknowledges that such transfer cannot be made unless the City's chief governing body also authorizes the transfer pursuant to a resolution duly filed with TCRS; BE lT FURTHER RESOLVED, that CRMC hereby requests the approval of the State Treasurer of the proposed transfer, pursuant to Chapter 156 of the Public Acts of 2O2t; and BE lT FURTHER RESOLVED, upon TCRS's receipt of appropriate resolutions from the City and CRMC as well as the State Treasurer's approval of the transfer, CRMC directs TCRS to make the transfer in accordance with the terms of this resolution. Cookeville Regional Medical Authority Allen Ray, Chairman of the Board STATE OF TENNESSEE COUNTY OF PUTNAM l, Carl Owens, Secretary of the CRMC Authority Board of Trustees of Cookeville Regional Medical Center Authority, Cookeville, Putnam County Tennessee, do hereby certify that this is a true and exact copy ofthe foregoing Resolution that was approved and adopted in accordance with applicable law at a meeting held on the 24th day of June,202L,Ihe original of which is on file in this office. lN WITNESS WHEREOF, I have hereunto set my hand at Cookeville, Putnam County Tennessee CarlOwens ()- tu) As Secretary of the Board, as aforesaid STATE OF TENNESSEE COUNTY OF PUTNAM Sworn and subscribed before me this 25th day of June,2O2L t Mindy Youngbl o , Notary Public My commission expires eoaj  APPENDIX 48 RESOLUTION A RESOLUTION APPROVING AN RESOLUTION NUMBER: R21-06-19 AGREEMENT REGARDING RNQUESTED BY: CITY COUNCIL ANNUAL IN LIEU OF TAX PREPARED BY: CITY MANAGER APPROVED AS TO FORM & PAYMENTS F'ROM THE CORRECTNESS: COOKEVILLE REGIONAL MEDICAL CENTER TO THE CITY (City Attorney) OF COOKEVILLE. ADOPTED: MINUTE BOOK PAGE WHEREAS, Cookeville Regional Medical Center has paid $700,000.00 per year in lieu of tax payments to the City of Cookeville for the last 15 years; and WHEREAS, a joint effort between the City of Cookeville and Cookeville Regional Medical Center Authority has been made so that former employees of Cookeville General Hospital/the City of Cookeville that were mistakenly not carried forward on the rolls of the Tennessee Consolidated Retirement System (TCRS) retirement plan for the State of Tennessee for the Cookeville Regional Medical Center (CRMC) Authority when the CRMC Authority was created as a private act hospital (assuming control of the former Cookeville General Hospital operation); and WHEREAS, through the joint effort of both the City of Cookeville and the CRMC Autl,ority, these employees will be transferred to the CRMC Authority pursuant to Scenario 3 in an Actuarial Analysis dated June 14, 2021 prepared by Findley, Inc. on behalf of the City of Cookeville and CRMC (attached and made a part hereof by reference) whereby the CRMC Authority assumes full responsibility for the retirement of said individuals, and the personnel at TCRS will make an adjustment in the segregated retirement funds from the City of Cookeville to CRMC to fund said retirement plans; and WHEREAS, this will result in a substantial savings to the City of Cookeville with respect to its mandatory retirement contributions pursuant to TCRS guidelines. NOW, THEREFORB, for and in consideration of the mutual agreements by and between the parties, and the agreement by Cookeville Regional Medical Center Authority's Board of Trustees to adopt and implernent Scenario 3 in the attached Actuarial Analysis, it is THEREFORf, AGRAED by and between the parties that Cookeville Regional Medical Center Authority will continue to make in lieu of tax payments at the rate of $700,000.00 per year through July 1, 2028. At that time, the Cookeville City Council, the Cookeville City Manager, the CEO of Cookeville Regional Medical Center Authority and the Board of Trustees of Cookeville Regional Medical Center Authority will have a discussion to determine what the amount of future in lieu of tax payments will be, based upon the financial conditions existing at that time. RESOLUTION NO. R21-06-I9  This agreement is binding on the City of Cookeville to the extent permified by law. It is the intent of the City Councilthat future City Councils honor this agreement, in the event this is not a legally binding agreement, after the August 2022 City of Cookeville elections, to foster cooperation with the management of Cookeville Regional Medical Center Authority. This Resolution adopted this _ day of 202r CITY OF COOKEVILLE By VICE-MAYOR By CITY MANAGER This Resolution adopted this _ day of 2021. COOKEVILLE REGIONAL MEDICAL CENTER AUTHORITY By: CHAIRMAN OF THE COOKEVILLE REGIONAL MEDICAL CENTER TRUSTEES By: PAUL KORTH, CEO COOKEVILLE REGIONAL MEDICAL CENTER AUTHORITY RESOLUTION NO. KI1.06.19  FINDLEY Ratir€m€nt . Bdn€trt8 ' Hudrsn CaFltal . M&A Justin C. Thacker, F.S.A. Direct Line: (615) 665-5387 Email: Justi n.Thacker@fi ndley.com USI 6 June L4,2021" James Mills City Manager City of Cookeville 45 East Broad Street Cookeville, TN 38501 Re: Transfer of TCRS Assets and Liabilities from the City to the Cookeville Regional Medical Center Dear James: As requested, we have performed an actuarial analysis to assist the City of Cookeville (830.00) (the "City") and the Cookeville Regional Medical Center (895.30) (the "Hospital) in their desire to transfer a portion of the TCRS assets and liabilities from the City to the Hospital. This transfer pertains to TCRS assets and liabilities associated with plan members that are currently included in the City's actuarial valuation but were part of the Hospital prior to the Hospital becoming a separate entity within TCRS. We have calculated the effect this transfer would have on the Actuarially Determined Contribution (ADC) rates for the City and the Hospital. This letter provides a summary of the background and assumptions and then presents the results under three different scenarios. Background and Assumptions During the plan year ending June 30, 2000, the Hospital became a separate entity within TCRS. Prior to that time, the Hospital employees participated in the City's plan within TCRS. The City currently retains the TCRS assets and liabilities related to the prior years of service that Hospital employees earned while participating in the City's plan. Out of the total headcount of 1,,594 members in the City's plan as of June 30,2O2O,753 were identified as current or former employees of the Hospital based on data records provided by TCRS and the City Below is a breakdown of the results as of June 30,2O2O: Total Accrued Headcount Liability Hospital Records (based on files from TCRS and the City) 753 $45,739,985 Other Emplovee Records 841" LO7.526.840 Total for City of Cookeville !,594 $153,266,825 We have not audited the data records provided by TCRS and the City for identifying the Hospital records. Obviously, any changes in this data could significantly affect the results shown in this letter. 53Ol Vlrgtnts w.y, $ulto 4OO . Brentwood. TN 3?027' wsw-findlsy.cofli James Mills June L4,2021- Page Two of $45,739,985 related Based on the information above, our analysis assumes that the entire Accrued Liability "Normal Cost" (cost of to the Hospital records is transferred from the City to the Hospital along with any future benefits growing due to future salary increases). The next determination is the amount of assets that are assumed to be transferred from the City to the Hospital. Since the City and Hospital were both contributing to the City's plan prior to June 30, 2000, a portion of the $45.7 million Accrued Liability above was alreadyfunded by contributions made bythe Hospital during Hospital have not been tracked thetime period the service was beingearned. These contributions made bythe benefit separately within TCRS (which would also have required the separate tracking of Hospital-related payments and investment earnings since June 30, 2OOO), so a method of estimating the appropriate asset as described in transfer must be used. We have included results underthree different asset transfer amounts the three scenarios below. Other estimation methods could also be considered' actuarial valuation The contribution rates and results contained in this letter are based on the June 30,2O2O to June (the most recent valuation available for TCRS), but we have rolled forward the asset transfer amounts gO,2121,to provide a more accurate estimate of the current transfer amount. This roll forward adjustment 2O2O Io reflects the estimated investment and transaction experience over the period from June 30, provided by TCRS based June 30, 2O2L as provided by TCRS. The estimated investment return of 21-99% was return or loss assumed on actual investment performance through May 7, 2O21with no further investment methodology will vary from after that date. While the results as of a different date or under different estimation the results provided within this letter, we believe the estimates in this letter provide a reasonable basisfor analyzing the potential effect of the transfer. scenario 1 - No ffiset for city contributions (Asset Transfer = $45,567'269) value of assets and the The City's entire ptan was 88.73% funded as of June 30,2O2O (based on the actuarial records within Accrued Liability). For this scenario, we have assumed that the Accrued Liability for the Hospital the the City's plan is also 88.73% funded as of June 30,2O2O with no further adjustments to reflect contributions made by the City on behalf of the Hospital from June 30, 2OOO to June 30, 2020' Effect on ADC Rate (ADC) rates for this As of the June 30, 2O20 valuation, the effect on the Actuarially Determined Contribution scenario is shown below: ADC Rate Prior ADC Rate After to Transfer Transfer Change 21-.55o/o L 18.35% (3.2O%) City Plan Hospital Plan 3.05% 6.53o/o 3.48% James Mills June 1,4,2O2t Page Three Amount of Asset Transfer For this scenario, we estimate the City would transfer $45,567,269 (on a market value of assets basis) to the Hospital as of June 30,2021-as shown below: l-. Accrued Liabilityfor Hospital Records in the City Plan as of June 30,2O2O 45,739,985 2. City Plan's Funded Ratio on an Actuarial Value of Assets Basis as of June 30,2O2O 88.729056y" 3. Actuarial Value of Assets for Hospital Records in the City Plan as of June 30,2O2O (7 x 2) 40,584,657 4. TCRS Ratio of Actuarial Value of Assets to Market Value of Assets as of June 30,2A2O 100.609841% 5. Market Value of Assets for Hospital Records in the City Plan as of June 30,2A2O G / 4) 40,338,655 6. Estimated Benefit Payments for Hospital Records in the City Plan during 2O2O-2O21' 3,281,O99 7. Estimated TCRS lnvestment Rate of Return for 2O2O-2O21- 21".99o/o 8. lnvestment Earnings for Hospital Records in the City Plan during 2020-202L 8,509,713 ([5x7] - [50%x6x7]) 9. Market Value of Assets for Hospital Records in the City Plan as of June 30,2021" (5 - 6 + 8) 45,567,269 Scenario 2 - Offset City Contributions after June 30, 2000 (Asset Transfer = $35,178,069) For this scenario, we have used the same methods as outlined in Scenario 1, except we have offset the asset transfer to reflect the contributions made by the City on behalf of the Hospital after June 30, 2000. The actual history of contributlons made by the City on behalf of the Hospital is not available, but we have an estimated history that TCRS provided. One of the key assumptions used in this estimated history is that the percentage of the Accrued Liability attributed to the Hospital records was assumed to always be equal to the current June 30, 2020 percentage. That is, the Hospital records were assumed to always represent 29.84o/o of Ihe City's Accrued Liability (29.84% = $45,739,985 / $153,266,825 from the Background section of this letteO' Effect on ADC Rate As of the June 30, 2O2O valuation, the effect on the Actuarially Determined Contribution (ADC) rates for this scenario is shown below: ADC Rate Prior ADC RatE AftEr to Transfer Transfer Change City Plan 2t.55o/o L 1"4.!lo/o (7.44Vo) Hospital Plan 3.05% 1"L.t4% 8.O9% James Mills June L4,2O2L Page Four Amount of Asset Transfer For this scenario, we estimate the City would transfer $35,178,069 (on a market value of assets basis) to the Hospital as of June 30,2O2t as shown below: 1. Accrued Liability for Hospital Records in the City Plan as of June 30,2O2O 45,739,985 2. City Plan's Funded Ratio on an Actuarial Value of Assets Basis as of June 30,2O2O 88.7290560/0 3. Estimated City Contributions for Hospital Records from June 30, 2000 to June 30,2O2O 8,568,373 4. Actuarial Value of Assets for Hospital Records in the City Plan as of June 30' 2O2O 32,OL6,284 (7x2-3) 5. TCRS Ratio of Actuarial Value of Assets to Market Value of Assets as of June 30,2O2O 100.609841% 6. Market Value of Assets for Hospital Records in the City Plan as of June 30,2O2O (4 / 5) 31",822,21,9 7. Estimated Benefit Payments for Hospital Records in the City Plan during 2O2O'242L 3,281,O99 21-.99o/o 8. Estimated TCRS lnvestment Rate of Return for 2020-202L 9. lnvestment Earnings for Hospital Records in the City Plan during 2O2O-2O27 6,636,949 ([6x8] - [50o/ox7 x8]) 10. MarketValue of Assetsfor Hospital Records in the City Plan as of June 30,2O2t 35,178,069 (6-7+9) Scenario 3 - Offset City Contributions with lnvestment Earnings after June 30, 2000 (Asset Transfer = $27,586,317) For this scenario, we have used the same methods as outlined in Scenario 2, except we have adjusted the offsetfor contributions made bythe City on behalf of the Hospital to also include the estimated investment earnings on those contributions from the date the contributions were made up until the transfer date. The investment earnings were calculated based on the historical rates of investment return provided by TCRS. James Mills June 14,2021- Page Five Effect on ADC Rate As of the June 30, 2020 valuation, the effect on the Actuarially Determined Contribution (ADC) rates for this scenario is shown below: Prior ADC Rate ADC Rate After toTransfer Transfer Change Plan City 2L.55o/oL L1-.Oto/o (10.54%) Hospital Plan 3.05% I4.5OYo tt.45o/o Amount of Asset Transfer For this scenario, we estimate the City would transfer $27,586,317 (on a market value of assets basis) to the Hospital as of June 30,2027 as shown below: 1. Accrued Liability for Hospital Records in the City Plan as of June 30,2O2O 45,739,985 2. City Plan's Funded Ratio on an Actuarial Value of Assets Basis as of June 30,2O2O 88.729056%o 3. Estimated City Contributions for Hospital Records from June 30, 2000 to June 30,2O2O 8,568,373 4. Estimated lnvestment Earnings on Contributions up through June 30, 2020 6,261-,2t0 5. Actuarial Value of Assets for Hospital Records in the City Plan as of June 30,2O2O 25,755,O74 (7x2-3-4) 6. TCRS Ratio of Actuarial Value of Assets to Market Value of Assets as of June 30,2O2O 100.609841% 7. Market Value of Assets for Hospital Records in the City Plan as of June 30,2O2O (5 / 6) 25,598,961 8. Estimated Benefit Payments for Hospital Records in the City Plan during 2O2O-2O2L 3,281,O99 9. Estimated TCRS lnvestment Rate of Return for 2O2O-2O21- 27.99yo 10. lnvestment Earnings for Hospital Records in the City Plan during 2O2O-2O21- 5,268,455 ([7x9]-[50o/ox8x9]) 11. Market Value of Assets for Hospital Records in the City Plan as of June 30,2027 27,586,3L7 (7-8+70) Footnotes 1 The ADC rate shown for the City is an aggregate rate. ln practice, separate rates are applied to general employees and public safety officers. James Mills June L4,202L Page Six Please let us know if we may be of any fufther assistance in this matter Sincerely, J 6r'l- C. Thacker, F.S.A. r, cc: Jamie Wayman (TCRS) \ \bpnwbnaO5 \client\ t --- \6-- \00 \pv 1 8 \poli 18 \830OO-cookeville study \120200 1 1 S-cookeville-83000.docx