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HomeMy WebLinkAboutOCSD 98-04 (REPEALED)RESOLUTION NO.OCSD 98-4 APPROVING PROVISIONS FOR SATISFACTION OF PAYMENT OF FICA TAXES FOR DIRECTOR-EMPLOYEES MANDATED BY FEDERAL OMNIBUS BUDGET RECONCILIATION ACT OF 1990 A RESOLUTION OF THE BOARD OF DIRECTORS OF ORANGE COUNTY SANITATION DISTRICT,APPROVING PAYMENT BY THE DISTRICT TO THE DISTRICT’S DEFERRED COMPENSATION PLAN FUND ON BEHALF OF DISTRICT DIRECTOR-EMPLOYEES IN LIEU OF CONTRIBUTIONS PURSUANT TO THE FEDERAL INSURANCE CONTRIBUTIONS ACT (“FICA”),AS MANDATED BY THE FEDERAL OMNIBUS BUDGET RECONCILIATION ACT OF 1990 WHEREAS,the Orange County Board of Supervisors,by approval on April 14, 1998 of County Resolution No.98-1 40,has ordered the consolidation of County Sanitation Districts Nos.1,2,3,5,6,7,11,13 and 14 of Orange County,California (the “Predecessor Districts”),into a single new district to be known as the Orange County Sanitation District (the “District”);and, WHEREAS,pursuant to Government Code Section 57500,the District succeeds to all of the powers,rights,duties,obligations,functions,and properties of the Predecessor Districts;and, WHEREAS,the United States Congress enacted the Federal Omnibus Budget Reconciliation Act of 1990 (“OBRA”),changing several provisions of the Federal Social Security Act,as applied to local government entity employees;and, WHEREAS,OBRA amended the prior law by adding a new Section 31 21 (b)(7)(F)to the Internal Revenue Code,by expanding the definition of “employment”for Federal Insurance Contribution Act (“FICA”)tax purposes,to include service performed after July 1,1991,as an employee for a local government entity, unless the employee is a member of a retirement system of such entity;and, WHEREAS,the provisions of OBRA require compliance with the requirement to make FICA contributions on behalf of local government agency employees by not later than December 31,1991;and, 2090-300 649141 1 WHEREAS,the Internal Revenue Service has adopted final regulations under Section 312 1(b)(7)(F)of the Internal Revenue Code,containing rules relating to local government entity employees and determination of membership in the local entity retirement system;and, WHEREAS,the District’s Director-Employees are not eligible for participation in the District’s Retirement Plan,to wit:County of Orange Employees Retirement System; and, WHEREAS,the Internal Revenue Service regulations allow a contribution into an Internal Revenue Code Section 457 Deferred Compensation Plan,as meeting the requirements for retirement system contribution,in lieu of making the contributions to FICA;and, WHEREAS,the Predecessor Districts enacted Resolution No.81-166,effective October 14,1981,authorizing Directors to participate in the Districts’Deferred Compensation Plan;and, WHEREAS,the Directors have determined that they can satisfy the legal requirements of Internal Revenue Code Section 3121(b)(7)(F)in the most cost effective manner,by having the District contribute the minimum sum authorized by Internal Revenue Service regulation,to wit:7.5%of the employee’s compensation to the District’s Deferred Compensation Plan Fund. NOW,THEREFORE,the Board of Directors of Orange County Sanitation District, DOES HEREBY RESOLVE,DETERMINE AND ORDER: Section 1 Pursuant to Internal Revenue Code Section 312 1(b)(7)(F),the District approves the payment of the sum equal to 7.5%of the compensation payable to each Director into the District’s Deferred Compensation Plan account.Said contributions will be made in accordance with the District’s Internal Revenue Code Section 457 Plan,and shall be made on behalf of each District Director-Employee. Section 2 Upon payment of the sums set forth above,no payments are required,nor shall be made on behalf of,any of the District’s Director-Employees pursuant to the Federal Insurance Contributions Act (‘FICA”),except the health insurance portion (currently 1.45%)of the FICA tax for those Director-Employees who commenced service with the District on or after April 1,1986. 2O9O~3OQ 649141 2 Section 3 Section 4.2 of the District’s Deferred Compensation Plan,providing for a minimum annual contribution of $300.00 per year,is hereby ordered waived on behalf of the contributions to be made on behalf of each District Director-Employee. Section 4 That the contributions provided for in Section 1 hereof shall commence with payment of any compensation after July 1,1998. PASSED AND ADOPTED at a Special Meeting held July 1,1998. ‘—--~- ~‘ Chair ATTEST~ Board Secri3~ry ~7’ 2090-300 64914_i 3