08-11-2021 Council Packet - Laserfiche WebLink

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STAFF REPORT TO: Mayor Keis and Members of the City Council FROM: Chris Heineman, City Administrator Brenda Malinowski, Finance Director DATE: August 11, 2021 RE: Fire Relief Benefit Increase ACTION TO BE CONSIDERED Consideration of a request from the Little Canada Fire Department to increase to the benefit level for the Little Canada Fire Relief Association by $485 pursuant to our contractual provisions. BACKGROUND Attached is a request from Fire Chief Don Smiley on behalf of the Little Canada Fire Department (LCFD) Board of Directors requesting an increase of $485 to the benefit amount for the Little Canada Fire Relief Association (LCFRA). If approved, this would increase the LCFRA benefit level from $4,195 to $4,680 per year of service. Attachment A of the City contract with the LCDF states that benefit level increases can only be requested once per year, and the funding level ratio must be at or above 110% on December 31 of the previous year. According to the Little Canada Fire Relief Association annual audit, the funded ratio of the investment account on December 31, 2020 was 119.50 %. The following table demonstrates this basic formula. Benefit per year of Service $4,195 Ending Assets $2,143,214 (as of 12/31/2020) Pension Liability $1,793,644 (Unfunded)/Overfunded $349,570 Percent Funded 119.50% All benefit increases must be approved by the City Council. According to the contract, if the percent funded is at 110% or above, the increase will be granted. If this request is approved, the funding level would be at 110%. The goal of this formula is to provide sustainable benefit increases to the Little Canada Fire Relief Association while avoiding volatility in the levy requirements for the City. Both parties acknowledge that the investment performance is beyond their control and poor investment performance will likely result in no benefit increases.