HomeMy WebLinkAbout2.a. Fire Relief Fund Benefit Proposal
EXECUTIVE SUMMARY
City Council Work Session: August 5, 2019
AGENDA ITEM: Fire Relief Fund Benefit Proposal AGENDA SECTION:
Discussion
PREPARED BY: Logan Martin, City Administrator
Jeff May, Finance Director AGENDA NO.: 2.a.
ATTACHMENTS: None APPROVED BY: LJM
RECOMMENDED ACTION: Discuss Fire Relief funding proposal and provide direction
BACKGROUND
The Fire Relief Association, which manages the pension funds for our firefighters, has recommended a
$100 increase to the retirement benefit from $7,300 to $7,400 per year of service. Representatives from
the Relief Association provided staff with updated financial projections reflecting this proposal, which
indicate that the Relief Fund will be 131% funded after accounting for the proposed increase. This item is
on the regular Council agenda for consideration on August 5.
As the Council will recall, the City worked with the Relief Association in 2015 to reduce the City’s annual
contribution to the Relief Fund from $171,000 annually to $30,000. This allowed the City to reduce its
levy, and also led to the development of a five-year plan whereby an annual retirement benefit increase of
$100 per year would be considered, up to the Relief Association’s goal of $7,500 per year. A fund balance
requirement of at least 120% coverage was also an agreed upon component of this plan, as the fund needs
to be able to support its future liabilities.
Representatives from the Relief Association will be present to discuss a new proposal going forward,
which would be more directly tied to the performance of their investments and their funding ratio. The
below table reflects the initial proposal that was shared with staff.
Funding Ratio Increase Hourly Increase
Less than 120% $0 $0
120% - 124% $100 $0.25
<124% - 128% $175 $0.43
<128% - 132% $250 $0.62
<132% - 136% $325 $0.81
136% or greater $400 $1.00
Staff has a few questions and ideas regarding modifications to this proposal, and we intend to treat this as
the beginning of a longer-term conversation. No decision is pending on this in the near term, and this
does not affect the current $100 proposal.
RECOMMENDATION
Discuss proposal and provide direction.