12-11-2013 Council Workshop Minutes

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MINUTES CITY COUNCIL DECEMBER 11, 2013 plan. Keis asked if it made a difference whether the money was included in the Fire Department's 2014 Budget or not. The City Administrator noted the City's contribution to the pension fund has typically been made in September or October when State Aid funds are disbursed. Morelan noted that with the clarification in State Law, these funds now go to the Fire Department and not the Fire Relief Fund. Morelan indicated that, hopefully, these funds will be disbursed as part of the quarterly payment to the Fire Department. McGraw felt that the defined contribution plan merited discussion along with the Fire Department's proposal that benefit levels be increased based on rates of inflation. Vitale questioned why basing increases on the rate of inflation would be viewed as detrimental. The Administrator noted that there are too many unknowns, i.e. the rate of inflation each year as well as investment returns. The Administrator felt this would be a blind commitment on the part of the City, and noted that there could be times of hyper - inflation. Vitale felt that if the circumstances warranted it, adjustments could be made. The Administrator noted that while the City has committed to a $15,000 voluntary contribution for the past several years, the average required City contribution over the past 15 years has been $22,000. The Administrator suggested that he could run some projections assuming various rates of inflation as well as market performance. He noted, however, that the defined contribution plan will provide for benefit increases. Morelan felt that more thought was needed relative to a defined contribution plan. He noted that the City is now dealing with benefit levels with the Fire Department rather than the Relief Association as a result of the State Law clarification. Morelan indicated that the goals of each group is somewhat different in that the Relief Association is interested in getting the most dollars for its members and the Fire Department is interested in maintaining the current benefit level utilizing inflationary adjustments as this benefit is both a recruitment and retention tool. Montour suggested that additional information be provided. This information should include some scenarios for adjustments based on rates of inflation as well as additional information /projections on a defined contribution plan. Montour noted the City's goal of maintaining some consistency so that property taxes are not fluctuating. He also pointed out the Council's solution a few years ago to tying liquor license increases to the increase in the City's annual gross levy. He suggested that a similar approach might work. Blesener felt the two issues were too different. 4