10-13-2004 Council Workshop Minutes

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MiNUTtiS CITY COUNCIL, OCTOI3UR 13, 2004 Fahey noted Table V which is a ranking based on total number of runs. It was noted that the table breaks out fire runs and other runs from the total. Vitale noted that departments making EMS calls are likely generating revenue from these calls. Blesener felt that an important factor in pension benefit levels is the number of fire fighters. The more fire fighters the thinner the pension fund is spread. The Administrator again commented on the plan that was put in place for determining pension benefit levels and the need to revise the plan for 2005 and forward. The Administrator noted that under the current plan there would have been pension benefit increases if it had not been for stock market losses. The Administrator indicated that he was not sure that the 6.5% investment earnings projection used in the present plan was practical. The Administrator suggested that a 5% earnings projection might be more realistic. The Administrator noted the spreadsheets prepared by the City Auditor that compares $7 5,000, $25,000, and $40,000 City contribution levels asstinming bot1~ 5% and 6.5% investment earnings. He noted that these spreadsheets are conservative given they project no increases in State Aid and retirements. Vitale agreed that anticipated investment earnings should be lowered to 5%. Vitale also suggested that projections should be based on 2 anticipated retirements per year rather than L Fahey suggested that Z anticipated retirements was a worst-case scenario. Vitale indicated that in the last 4 years, the Department Irad 6 retirements. Fahey suggested that projected retirements be projected at 2 one year and then 1 the next- Fahey felt that given today's environment, he would anticipate that fre fghters would not serve the typical 30 to 35 years that they have in the past, but closer to 20 years. "Therefore, retirements will occur at a faster rate. Vitale indicated Chat the Fire Department currently has 1 I or 12 fire fighters with 20 years of'service. Those present discussed the Pension Funds current financia( advisor and the issue of financial broker versus money manager. It was the consensus that the financial advisor be invited to the next meeting to discuss 3'~`' quarter performance and answer any other investment questions that the members might have related to the fund's Fnancial performance, mix of investments, etc. Based on those discussions, the Board may visit the issue of whether or not there is a need to make a change. DeBace pointed out that the Pension Fund would have done better if it had been more into bonds Chan stocks. There was some disagreement ou that issue, but the general consensus was that bonds would have performed better. Vitale indicated that the Fund currently has $120,000 that needs to be reinvested, and the Board will have to make a decision on how to place that investment. 3