10-08-2014 Council Workshop Minutes

Home Browse Search

MINUTES CITY COUNCIL OCTOBER 8, 2014 The Administrator then reviewed how Fire Relief benefits are funded which are through investment earnings, State Aid, and the City's voluntary contribution. The Administrator indicated that the State is providing supplemental aid over a 10 -year period, and the amount of that aid to Little Canada Fire Relief brings our Fire State Aid to just over $54,000 a year. This is an increase of about $11,000 per year. The Administrator then reviewed the Little Canada Fire Relief investment performance noting that the 5 -year average is 2.40%, 10 -year 5.20%, and 15 -year 4.20%. The Administrator noted that the Department's Financial Advisor has recommended that a 10% surplus be utilized in the Fire Relief investment balance when determining the benefit level. The Administrator reported that the Fire Department is requesting an annual City contribution of $31,000 toward Relief Benefits. He noted that the current voluntary contribution is $15,000; however, given that the City is required to make up any deficits in the fund, the City has been averaging about $22,000 per year. The Administrator suggested that the City's liability to resolve deficits won't likely be a problem if the benefit level is determined while maintaining the investment balance at no less than 110% funded. The Administrator then reviewed the history of previous agreements relative to Fire Relief benefit levels noting that the intension was to provide $50 to $100 in annual increases. He pointed out the market pull- backs that occurred and their impact on investments which then resulted in no increases in several years. The Administrator also pointed out that while the City provides a voluntary contribution of $15,000 annually toward Fire Relief benefits, many cities provide no contribution. This is likely because other departments receive higher levels of State Fire Aid given the population levels that they serve. The Administrator then discussed the $15,000 annual City contribution versus the $31,000 requested by the Fire Department. The Department's rational for the $31,000 is based on $1,000 per fire fighter. The suggestion is also that this $31,000 level be increased annually based on the percentage of salary increase for City employees. The Administrator noted that considerations need to be made relative to whether the $31,000 is based on the $1,000 per fire fighter given the Department could increase the number of fire fighters. Another consideration would be when the inflationary increases would initially begin given the request is to increase the voluntary contribution level from $15,000 to $31,000. Keis noted that the Department's Investment Advisor discussed benefit levels that retained investment levels at 110%, but suggested that that percentage should be 111.7%. McGraw pointed out that the Advisor indicated that the City's contribution to a Defined Contribution Plan 2