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<br /> <br /> STAFF REPORT <br /> <br /> <br />TO: Mayor Keis and Members of the City Council <br /> <br />FROM: Chris Heineman, City Administrator <br /> <br />DATE: June 8, 2022 <br /> <br />RE: Fire Relief Benefit Increase <br /> <br /> <br />ACTION TO BE CONSIDERED <br />Consideration of a request from the Little Canada Fire Department to increase to the benefit level for <br />the Little Canada Fire Relief Association by $710 per year pursuant to contractual provisions. <br /> <br />BACKGROUND <br />The City of Little Canada has a contract with the Little Canada Fire Department which includes a <br />formula for determining increases to the Fire Relief benefit level. The last time this benefit level was <br />increased was August 11, 2021. A request from Fire Chief Don Smiley on behalf of the Little Canada <br />Fire Department (LCFD) Board of Directors requesting an increase of $485 to the benefit amount for <br />the Little Canada Fire Relief Association (LCFRA) is attached for your consideration. If approved, <br />this would increase the LCFRA benefit level from $4,680 to $5,390 per year of service. <br /> <br />According to Attachment A of the City contract with the LCFD, the benefit level increases can only be <br />requested once per year and the funding level ratio must be at or above 110% on December 31 of the <br />previous year. Based on the LCFRA annual audit, the funded ratio of the investment account on <br />December 31, 2021 was 124.4 %. The following table demonstrates the basic formula. <br /> <br />Benefit per year of Service $4,680 (current benefit) <br /> <br />Ending Assets $2,163,734 (as of 12/31/2021) <br />Pension Liability $1,738,925 <br />(Unfunded)/Overfunded $424,809 <br />Percent Funded 124.4% <br /> <br />All benefit increases must be approved by the City Council. According to the contract, if the percent <br />funded is at 110% or above, the increase will be granted. If the requested increase is approved, the <br />funding level would be brought to 110.4%. The goal of this formula is to provide sustainable benefit <br />increases to the Little Canada Fire Relief Association while avoiding potential the levy requirements <br />for the City due to investment volatility or account losses.