HomeMy WebLinkAbout3.b. Fire Relief Association Benefit Request
EXECUTIVE SUMMARY
City Council Work Session: April 11, 2016
AGENDA ITEM: Fire Relief Association benefit request AGENDA SECTION:
Updates
PREPARED BY: Dwight Johnson, City Administrator AGENDA NO. 3.b.
ATTACHMENTS: Memo from Fire Relief Association APPROVED BY: ddj
RECOMMENDED ACTION: Consider Fire Relief Association benefit request and next steps.
BACKGROUND
Last year, a five year plan was established with the Fire Relief Association which led to major changes in
the funding of the retirement benefits for the Fire Relief Association. The plan showed that a surplus in
the Fire Relief fund had been established which led to a large reduction in the need for City property tax
levy dollars. The levy has been reduced from a high of $171,000 in 2014 to $30,000 in 2016. An increase
in the benefit was approved in 2015 from $6900 per year of service to $7,000. A minimum of 20 years of
service is required to be fully vested. The five year plan showed $100 increases over the next several years
until the benefit reaches $7,500; a goal that has been discussed for more than a decade. The attached
memo requests that the Council approve the next $100 increase to bring the benefit up to $7,100 this year.
Staff review indicates that the five year plan appears to be within the estimated parameters established last
year. As such, we believe that the Council can approve the request without an increase in taxes for the
pension levy.
RECOMMENDATION
Council should consider whether or not a meeting with the Fire Pension Relief Committee is desired or
any other next steps needed to consider the request.
Rosemount Relief Association Benefit Increase Request of $100 per year of service
The Rosemount Relief Association would like to submit a request to the city council for a $100 per year of service
increase to the retirement benefit level. The past year we worked with the city to complete a five year plan to aid in
reducing the city contribution amount to the relief association funds as well as implement a better target goal for the
funds funding ratio.
In the five year plan that was created, the goal was set at a 120% funding ratio. This means that the assets over
liabilities ratio will be maintained above 120%. With the updated numbers shown below in the plan for the 2015 actual
numbers, the projections for 2016 and beyond are being maintained above the 120% ratio with the proposed $100
increase to the benefit level each year. Also in the 5 year plan, the contribution amount by the city will be down to the
targeted amount of $30,000 and will remain there for the future without any increase unless required by the actual year
end schedule.
By increasing the benefit level $100 and continuing to work with the city each year to review the 5 year projections and
maintaining the funding ratio over the 120% target, we feel we are working towards the goal of trying to provide
incentive to retain firefighters through their 20 year mark and beyond along with keeping the city’s contribution to a
minimum.
If there are any questions or if more information is needed please reach out to Ryan Slipka and he will gather the
required information. Thanks
Updated 5 Year projection (Bold numbers are actual reported numbers).
Following Year
Year
Proposed
Increase
Proposed
Benefit
Beginning
Balance
Est. State
Aid
Municipal
Contribution
Est.
Inter
est
Est. Net
Appreciati
on
%
Appreciat
ion
Est
Expens
es
Benefits
Paid
Projected
Assests
Accrued
Liability Surplus
Required
Municipal
Contribution
Normal
Cost # Active FF
Funding
Ratio
2 2013 0 6900 2,504,979 124,632 171,000 ##287,784 11.49%13,101 214,900 2,874,130 2,468,808 381,903 0 262,753 41 116%
3 2014 0 6900 2,874,130 125,595 171,000 178,051 6.19%13,763 - 3,348,776 2,626,681 722,095 0 260,585 40 127%
4 2015 100 7000 3,348,776 128,627 109,100 (45,543) -1.36%15,525 93,712 3,447,248 2,813,154 634,094 0 289,930 45 123%
5 2016 100 7100 3,447,248 107,806 30,000 172,362 5.00%16,309 482,800 3,274,615 2,525,786 748,829 0 300,011 45 130%
6 2017 100 7200 3,274,615 111,579 30,000 163,731 5.00%17,133 566,705 3,013,220 2,294,856 718,364 0 286,272 45 131%
7 2018 100 7300 3,013,220 115,484 30,000 150,661 5.00%17,999 197,100 3,112,265 2,421,888 690,377 0 300,906 45 129%
8 2019 100 7400 3,112,265 119,526 30,000 155,613 5.00%18,908 177,600 3,239,804 2,584,596 655,208 0 311,984 45 125%
9 2020 100 7500 3,239,804 123,709 30,000 161,990 5.00%19,863 286,764 3,268,739 2,651,154 617,585 903 329,250 45 123%