10-08-2014 Council Agenda - Laserfiche WebLink

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inflationary adjustment to the benefit level is applied to every year of service for each fire fighter unlike a COLA on wages that only apply to the current year). • Fire State Aid will be based on the most recent past year's receipt. We will need to ensure that the supplemental aid that we are to start receiving this year continues beyond the 10 year sunset provision (this may be only 9 years in our case due to a legislative snafu). • We need to agree on an assumed rate of return for investments. State law allows a 5% assumption. However, our Relief Association has earned 2.4% over the last five years, 5.2% over the last 10 years, and 4.2% over the last 15 years. The Fire Department thinks we should use the 5% assumption and we felt we should adjust it annually based on the most recent 15 -year return as calculated by the State Auditor's Office with a cap of 5%. • The calculation for future benefit increases would only be done once per year at an agreed upon date. Discussion focused on October 1 S` but that could change. • Past formulas have also provided for the most senior two members retiring in the first year of the projections and then the most senior person remaining each year after. The projections have looked out five years. This item was not discussed in great detail. • Past formulas have used administrative costs for the projections based on the most current year's actual numbers. This was not discussed. (Note: I have attached a projection sheet that we have used in these discussions.) • There would need to be "outs" for both parties if the agreement was not producing the desired results. For us that would be levies greater than what we had agreed to or a financial crisis that forced us to look at all expenditures. There are many more variables at play that we can talk about Wednesday night. However, the above bullet points seem to be the focal points of current discussions and the Committee wanted the input of the full Council before proceeding. One other item of note is the Council Member McGraw has been substituting for Mayor Blesener at the Mayor's request. He has done an excellent job getting up to speed on this difficult issue. 2