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River <br /> <br />MEMORANDUM <br /> <br />Item# 3.3 <br /> <br />TO: <br /> <br />Mayor and City Council <br /> <br />FROM: <br /> <br />Lori Johnson, Finance Director <br /> <br />DATE: <br /> <br />November I 0, 2003 <br /> <br />SUBJECT: Consider Amendment to City of Elk River's Flexible Spending Plan <br /> <br />The City of Elk River maintains a Flexible Spending Plan (Plan) for its employees in accordance <br />with Federal regulations. The Plan allows employees to pre-tax certain eligible expenses. The city's <br />Plan is periodically updated to ensure that it complies with all legal requirements and that new laws <br />are incorporated. The schedule originally called for the Plan to be updated in late 2002, but since <br />there was at least one pending change for 2003, the update was delayed. The Plan is currently <br />undergoing review by The Stanton Group so the revised Plan will be ready by January 1, 2004. In <br />the meantime, there is one amendment that should be approved so that employees may take <br />advantage a recent law change. <br /> <br />On September 3, 2003, Revenue Ruling 2003-102 was issued allowing certain over-the-counter drugs <br />as eligible medical reimbursement expenses under certain circumstances. In order for employees to <br />be able to take advantage of this change, the city's Plan needs to be amended. Attached is an <br />Amendment to the Plan that allows for the implementation of Revenue Ruling 2003-102. <br /> <br />Further, the Amendment also designates the authority to make Plan changes to the Finance <br />Director. Although this delegation was made at the time the Plan was originally implemented, it is <br />being restated so there is current action approving the delegation. As I stated above, generally the <br />Plan document is only amended if there are law changes or rulings that need to be addressed. This <br />would allow for administrative amendments to the Plan to address any mandated changes. The only <br />other probable change to the Plan would be to adjust the amount employees are allowed to pre-tax <br />for medical reimbursement. Any material discretionary changes would still be taken to the Council <br />for consideration. <br /> <br />Action Requested <br />City Council is asked to approve the amendment to the City of Elk River's flexible spending plan as <br />attached. <br /> <br />S:\Council\Lori\2003\flexspending. doc <br /> <br /> <br />