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<br />VII. OLD BUSINESS <br /> <br />1. Deferred Compo Report - Abdo. Abdo. Eick & Mever <br /> <br />Ms. Moore-Sykes indicated that Abdo, Abdo, Eick & Meyer was asked to look at the <br />City's deferred compensation plan from 1996 to present and has provided a report for <br />Council consideration. <br /> <br />Ms. Moore-Sykes indicated there were two issues. The first issue is that FICA and <br />Medicare were not paid due to a misunderstanding of the requirements. She then <br />indicated that the City would need to remit the shortage to FICA and Medicare and the <br />participating employees W2 forms would need to be amended to reflect the deduction of <br />those two amounts. She further indicated that, because most of the employees that are <br />involved no longer work for the City, the auditor has recommended that the City pay both <br />sides as soon as possible and attempt to collect from the employees later. <br /> <br />Ms. Moore-Sykes indicated the second issue is that the City may be required to convert <br />its contribution to the state deferred compensation plan. She then indicated that Mr. <br />McDonald is attempting to find an absolute determination on that matter and has <br />contacted the attorney general's office for an interpretation of the statute as to whether it <br />is a wage or benefit. <br /> <br />Council Member Capra commented that when Council received a copy of her initial <br />report a copy of that statute was attached. <br /> <br />Ms. Moore-Sykes indicated that the auditor recommends that Council send a letter to the <br />Attorney General's Office to ask for an interpretation of the statute. <br /> <br />Council Member Capra asked if this would be something City Attorney Hoeft would look <br />into for the City. <br /> <br />City Attorney Hoeft indicated he had dealt with this issue in another jurisdiction and, as <br />Mr. McDonald indicates in his report, the initial information received is that it would be <br />considered wages and that is how it was handled in the other jurisdiction. He then <br />indicated he felt it would be appropriate to ask for the Attorney General's Opinion. <br /> <br />Council Member Capra commented that the City has no cafeteria plan in place and it <br />needs to have one. <br /> <br />Mayor Swedberg commented that this is an eligible plan but not a qualified plan in the <br />pension world. He then indicated the City needs to determine whether this is the proper <br />pension vehicle to be in because there are better instruments of qualified plans available. <br />He further noted the matter would need to be researched and could not be solved in one <br />night. <br /> <br />Page 11 of 28 <br />