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e�t�le <br />uanada <br />MAYOR <br />6111 Blesener <br />COUNCIL <br />Rick Montour <br />John Keis <br />Michael McGraw <br />Shelly Boss <br />515 Little Canada Road, Little Canada, MN 55117 -1600 <br />(651) 766 -4029 / FAX: (651) 766 -4048 ADMINISTRATOR <br />www.ci.little- canada.mn.us Joel R. Manson <br />MEMORANDUM <br />TO: Mayor Blesener & Members of the City Council <br />FROM: Joel Hanson, City Administrator <br />Sharon Provos, Finance Director <br />DATE: April 5, 2013 <br />RE: Fire Relief Benefit Increase <br />The Little Canada Fire Relief Association is requesting a benefit increase of $150 per <br />year of service. To assist in your review, we have prepared some spread sheets that are <br />based on the Schedules I & II used to calculate fund performance and the need for <br />"required contributions" on the part of the City. <br />Here is a summary of the key info contained in the spreadsheets: <br />• The top left corner shows where the Percentage of Funding was at the end of the <br />preceding calendar year, i.e. 12/31/xx <br />• The middle area shows the funding projections at various benefit levels (current <br />level is $3,150 per year of service at full vesting). <br />• The right columns show the actual asset base at various points in time and then <br />projects continued income at 5% for the balance of the year plus the receipt of <br />Fire State Aid and the City Contribution less administrative costs and any certain <br />retirements. <br />• At the bottom of the page, I've hand written some of the key assumptions to make <br />it quicker to review. <br />• The spreadsheets are highlighted in different colors to make it easier to segregate <br />the differences. <br />The Relief Association Board reviewed the sheet highlighted in blue. The asset balance <br />was as of 3/14/13. As you know, the stock market has performed very well since the last <br />quarter of 2012 and has taken the slight deficit as of 12/31/12 (98.49 %) and increased it <br />to a surplus of 104.78% projected out for the balance of 2013 assuming a 5% continued <br />growth in the asset base for the balance of the year. Based on this sheet, the Relief <br />Association felt an increase of $150 was supportable. <br />During this discussion, the issue of volatility in the markets and the impact a downturn <br />can have on the fund balance and ultimately the amount of the City's "required <br />1 <br />