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MINUTES <br />CITY COUNCIL <br />MAY 26, 1993 <br />Bob DeBace agreed that a lot of work has been done on <br />this matter. DeBace reported that he did not dispute <br />the comments made by the City Administrator, but felt <br />that using market value was overly conservative. <br />DeBace stated that at a$2,100 pension level, there <br />will still be an overfundedness at the end of 1993. <br />DeBace reported that the Relief Association is <br />satisfied based on past experience that there will be <br />no problem with a$2,100 pension level. <br />The City Administrator pointed out that the State does <br />allow the use of current market values plus unrealized <br />gains and losses in completinq Schedules I, II, and <br />III. However, this does expose the City to a greater <br />risk since the gains and losses are dependent on when <br />assets are sold. <br />DeBace pointed out that using market value versus asset <br />value, the Relief Association Pension Fund would still <br />end up 98% funded at the 80 level for the years 1994, <br />1995, 1996, and 1997 with a contribution of $67 due <br />from the City. DeBace reported that Piper Jaffrey has <br />indicated that the fund should have an 8 to 10 percent <br />income without any problem. <br />The City Administrator recommended that the City and <br />Relief Association work out some parameters that must <br />be met before future increases are granted. The <br />Administrator felt that the detailed analysis that has <br />been done has been good since both the City and Relief <br />Association are in tune with the situation and working <br />toward the best situation for both members of the <br />Relief Association and the taxpayers. <br />LaValle suggested that the City budget $10,000 as the <br />maximum City contribution to the Fund for 1994. <br />The City Administrator pointed out that $10,000 would <br />not provide the statutory requirement on the Schedule <br />I, II, and III calculation which would be between <br />$18,000 and $21,000. <br />DeBace pointed out that the actual value of the City's <br />contribution for 1994 would not be known until the end <br />of 1993. DeBace felt that based on past experience the <br />fund will generate enough interest earnings to minimize <br />the City's required contribution. DeBace pointed out <br />that last year the City was required to contribute <br />$2,200 and the year before about $1,000. <br />Scalze pointed out that in reality the City contributed <br />$16,500 toward the fund in 1993. <br />Page 19 <br />