02-23-11 Council Agenda - Laserfiche WebLink

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W ay 4 1414 ganaha 515 Little Canada Road, Little Canada, MN 55117 -1600 (651) 7664029 FAX: (651) 766 -4048 www.ci.little-canada.mn.us TO: Mayor Blesener and Members of the City Council FROM: Shelly Rueckert, Finance Director Joel Hanson, City Administrator DATE: February 15, 2011 RE: Fire Relief Benefit Increase MEMORANDUM On February 14 the Board of Trustees of the Little Canada Fire Relief Association voted to recommend the City Council approve a $50 per year of service pension benefit increase. This increase would bring the pension benefit per year of service to $3,150. The last increase occurred in 2007. The Relief Association pension liability was 100.77% funded as of 12/31/10 (based on a 2010 benefit of $3,100). With a $3,150 benefit, the Relief Association's 12/31/10 pension funding is projected to be 101.55% assuming no active retirements or 101.26% with two active retirements (see attached). Additionally, the City's contribution requirement' for 2012 will be limited to the voluntary contribution of $1.5,000 since the 2011 Schedules I and II filed will use the prior year's fund balance and allowable earnings rates. Please note that the prior deficit has been eliminated and will not be a factor in the calculation of the 2012 required City contribution. Retiring the prior deficit was a major factor in the 2010 and 2011 calculations. Calculated City contributions fbr 2010 and 2011 were $37,006 and $36,952, respectively. Therefore, on the basis of an improved fund performance, a funding ratio in excess of 100% and the ability to reduce the 2012 contribution requirement to $15,000, participating Council Members and staff indicated their support of a $50 benefit increase at the recent Relief Association Board Meeting. Staff is therefore recommending that the Council approve the $50 benefit increase as requested by the Relief Association. MAYOR Bill Blesencr COUNCIL Rick Montour John Keis Michael McGraw Shelly I3oss ADMINISTRATOR Joel R. Hanson