Laserfiche WebLink
MINUTES <br />CITY COUNCIL <br />DECEMBER 11, 2013 <br />Administrator indicated that it is the goal of the City to provide for Fire <br />Relief benefit increases while controlling the cost for taxpayers. <br />Steve Morelan pointed out that the fund liability calculation is based on <br />the State's formula, and that the calculation for each fire fighter is back - <br />end weighted so that as the years move forward, the liability number <br />increases exponentially. The Administrator agreed, noting that the <br />calculation is a statutory calculation and is part of the "normal cost" <br />calculation. <br />Smiley reported that the Fire Department's preference is that the relief <br />benefit level be tied to the rate of inflation. This would provide for steady <br />increases and protect the benefit level from inflationary impacts. Smiley <br />indicated that the Fire Department is not focusing on the amount of the <br />City's contribution to the fund. Bob Liebel stated that while the $31,000 <br />City contribution Looks better, basing increases on inflation may result in <br />there being no City contribution in some years depending on investment <br />performance. <br />Blesener noted that the benefit for a fully vested fire fighter is currently <br />$3,200 per year of service. Morelan replied that that was correct. He <br />indicated that the Fire Department is comfortable with that benefit level, <br />and the goal would be to protect it from inflationary impacts. Morelan <br />explained that the pension benefit is both a recruitment and retention tool. <br />Blesener noted that in years where the rate of inflation is 2 %, increasing <br />the benefit level by that percentage may not be a big problem as long as <br />there are not deep losses in investments. He also noted that large rates of <br />inflation may be a problem, however. Morelan again stated that the Fire <br />Department's goal is to protect the $3,200 benefit level from the impacts <br />of inflation. <br />Smiley stated that a goal of the Department is to get a plan in place so that <br />the issue of benefit levels does not have to be discussed each year. With <br />regard to the defined contribution plan mentioned by the City <br />Administrator, Smiley indicated that the Department and the Relief <br />Association has not discussed this, therefore, could not comment on it at <br />this time. <br />The Administrator pointed out that tying benefit increases to the rate of <br />inflation results in the City providing a guarantee and accepting any <br />unfunded liability that may result if investment performance is poor. Bob <br />Liebe] noted that for 2014 the result would be that the City's contribution <br />would not have to be much. Blesener pointed out past market downturns <br />2 <br />