05-22-2013 Council Minutes - Laserfiche WebLink

Home Browse Search

MINUTES CITY COUNCIL MAY 22, 2013 LITTLE CANADA FIRE RELIEF ASSOCIATION BENEFIT INCREASE The City Administrator reported that the Little Canada Fire Relief Association is requesting a $50 benefit increasing, increasing the benefit of $3,150 per year of service to $3,200 per year of service. The Administrator noted that this benefit level has not been increased for a few years. The Administrator reviewed the financial analysis which shows that the increase is supportable barring a significant market downturn. He noted that this analysis shows that a City contribution is not needed to support the increase, but pointed out the City's commitment to contribute $15,000 per year to the Fire Relief Association. It was noted that Mayor Blesener and Council Member Keis serve on the Little Canada Fire Relief Association Board. Keis agreed that it has been a while since the last increase. He also noted that there are guidelines that were drafted by the Relief Association and the City for managing when increases would occur. These guidelines will be reviewed and updated. McGraw asked when the guidelines were drafted. The Administrator estimated in the late 1990's to possibly 2001. He indicated that a revision was drafted in 2004, but was never implemented. McGraw asked how the $3,200 Fire Relief benefit level is funded. The City Administrator reported that a portion of the funding comes from Fire State Aid, which is collected as part of insurance premiums. Fire State Aid must be used for the purpose of funding pension benefits. Another source is the $15,000 contribution by the City. The largest piece is the Fire Relief Fund's investment income. The Administrator indicated that the Fire Relief Association has a financial advisor which assists with investment management, and noted that performance has been good for the past couple of years. McGraw asked who was responsible to make up the difference in pension funding if investment performance is under what is needed. The City Administrator reported that the City must make up the difference, and can do so over a 10 -year period. If additional deficits occur in subsequent years, the City would have to stack the reimbursements. Blesener pointed out that this is why approval for benefit increases must come from the City Council as the City is responsible to make up any shortfalls. Montour again noted that the City has representation on the Fire Relief Board. McGraw also pointed out that the Little Canada Fire Department is an independent corporation and consists of part -time fire fighters. Therefore, the pension for this organization is different from other public pension programs. Blesener introduced the following resolution and moved its adoption: RESOLUTION NO. 2013 -5 -94 — APPROVING AN INCREASE IN THE LITTLE CANADA FIRE RELIEF PENSION BENEFIT LEVEL FROM $3,150 PER YEAR OF SERVICE TO $3,200 PER YEAR OF SERVICE 3