City Council Agenda and Packet 1997 01 14

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6 Clinton affect federal devolution to the states? Will there be additional man- dates or greater flexibility? Less federal aid or more? What will be the impact on the state budget, and how will state law- makers look at the temptation to cut back the surplus in the form of tax relief, versus investing in ongoing state and local programs? League legislative agenda sets, the stage for effective action The 1997 legislative session promises to be a full one for municipal interests, with several key proposals already being tracked by CML staff. In response, CML has developed its initial 1997 leg- islative agenda. This program was reviewed by the CML Policy Com- mittee, chaired by Alamosa Mayor Farris Bervig, on Nov. 15, and ratified by the CML Executive Board on Nov. 20. Following is a brief rundown of the leg- islative agenda, with League staff con- tacts noted. Fire and police pension plan investments (Steve Smithers) —The Fire and Police Pension Association (FPPA) has drafted legislation to remove the current restric- tions for investments by the FPPA statewide pension plan and most local fire and police pension plans. These pension investment restrictions would be replaced with the requirements set forth in the "Colorado Uniform Prudent Investor Act." Current law sets requirements on invest- ments for police and fire pensions plans, including provisions relating to trustee investment of plan and fund assets (including limitations on equity invest- ments), delegation of investment authority, and employment of invest- ment counselors. The bill would also replace the specified CML Statehouse Report investment options under the FPPA money purchase plan with a require- ment that the FPPA Board select at least three investment alternatives from which members may choose. The "Colorado Uniform Prudent Investor Act" is generally broader than current fire and police pension law in terms of the investment flexibility it provides. The act contains no specific limits on investments; however, it does set forth a new series of responsibilities and obligations on the trustees of a plan. No position Use of excess funds from old hire fire and police pension plans (Steve Smithers) —FPPA has drafted legislation in response to a situation that has developed in the City of Cortez with excess funds in its old -hire pension plan. The legislation authorizes employers to use the excess balance in the old -hire pension plan under certain circum- stances for contributions —for certain new hire pension plans, for social secu- rity, for law enforcement- related pur- poses, or for any other use as deter- mined by the governing body of the employer. Employers are required to maintain a balance in the pension fund equal to twice the benefit liabilities of any persons receiving benefits from the fund. This legislation will benefit any munici- pality that reaches a point where it no longer has any active old -hire police or fire members and has more than twice the funds in its old -hire fund balance required to fund its old -hire retirees. Support (and support annuity option amendment) Statewide public health insur- ance purchasing cooperative (Steve Smithers) CML was contacted in August 1996 by a consultant hired by the Public Employees Retirement Asso- ciation and the state to put together leg- islation establishing a statewide public healthcare purchasing cooperative. CML was asked to be a part of the tran- December 6, 1996