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Ciroa J cKtrana is <br />r% 99.17 <br />515 Little Canada Road, Little Canada, MN 55117 -1600 <br />(612) 484 -2177 / FAX: (612) 484 -4538 <br />MEMORANDUM <br />TO: Mayor Hanson & City Council <br />FROM: Joel Hanson, City Administrator <br />DATE: May 7, 1993 <br />RE: Fire Relief Benefit Increase <br />MAYOR <br />Raymond G. Hanson <br />COUNCIL <br />Beverly Scalze <br />Jim LaValle <br />Steve Morelan <br />Bob Pedersen <br />ADMINISTRATOR <br />Joel R. Hanson <br />As you know, the Relief Association is asking to have the <br />benefit level increased to the $2,100 per year of service <br />level after 20 years of service. I. have been meeting with <br />Bob DeBace and Dan Peterson to discuss this matter. I have <br />indicated to them that from my standpoint, a benefit <br />increase is possible so long as the funding ratio does not <br />fall too far below one (1.00) and that the City Council is <br />comfortable with the level of Municipal support that will <br />be required on an annual basis. <br />To further evaluate these factors, some projections have <br />been put together by the Relief Association showing various <br />benefit levels and the level of City support required. (A <br />copy of this report prepared by Tautges, Redpath & Company <br />is attached for your information.) You will note that at <br />the current benefit level of $2,000 per year of service <br />with assumed roster changes of two retirements per year for <br />the next number of years, the City support required is <br />approximately $13,000 to $14,000. In reviewing these <br />assumptions, you will note that in the year 1993 an eight <br />percent (8 %) investment earnings rate is used. Also, State <br />Aid amounts have been projected to increase at five percent <br />(5 %) per year which is not likely based on the recent past. <br />I am attempting to make some revisions to these projections <br />which will indicate a flat State Aid amount. They will <br />also indicate varying levels showing future investment <br />earnings of five percent (5 %) as well as higher interest <br />earnings indicative of past history. The contentions of <br />the Relief Association is that given their actual <br />investment earnings, they will be over 100% funded and <br />therefore a benefit level increase should be made. Not <br />doing so would be penalizing members at or near <br />Page 15 <br />