HomeMy WebLinkAboutCC 11.4.15 GASB 67 & 68 Actuarial Study ContractMAYOR AND COUNCIL COMMUNICATION
DATE: 11/4/15
CONSENT
ITEM: #4
AGENDA ITEM: Approval for GASB 67 and 68 Valuation – Actuarial Services Contract
SUBMITTED BY: Cathy Bendel, Finance Director
THROUGH: Cathy Bendel, Finance Director
REVIEWED BY: Steve Rutkowski, Lake Elmo Fire Relief President
SUGGESTED ORDER OF BUSINESS:
- Introduction of Item ................................................................................ Finance Director - Report/Presentation ................................................................................ Finance Director - Questions from Council to Staff ............................................................ Mayor Facilitates - Public Input, if Appropriate ................................................................... Mayor Facilitates - Call for Motion .............................................................................. Mayor & City Council - Discussion ..................................................................................... Mayor & City Council - Action on Motion .................................................................................. Mayor Facilitates
FINANCIAL IMPACT: 2015 = No impact to General Fund; Future years TBD.
BACKGROUND AND STAFF REPORT:
In 2014, a new GASB requirement was put into place requiring an actuarial study to be done on the Fire
Relief pension funds. This new requirement was effective 1/1/2015 and a full study is required every two
years, with a partial study required in the off year. In order for the City to receive a clean audit opinion,
this actuarial study will need to be done each year beginning with 2015.
The City Auditors, Smith and Shafer, provided cost information based on other Cities they work with.
The costs ranged from $2,500-$4,800 for the full study and $500-$1,500 for the off year study.
At the October 5, 2015 Fire Relief meeting, Finance Director Bendel presented this information to the
Fire Relief Board and proposed that in the years where the Fire Relief receives supplemental state aid
funds from the State, above the annual base state aid, that the Fire Relief would fund this cost. In the
years where supplemental funds are not received, there would be a follow up discussion as to the specific
funding. This is how many other Cities are handling the funding.
Finance Director Bendel specifically recommended Hildi, Inc. as their cost range was the lowest; $2,500 -
$3,000 for the full year and $500-$1,500 for the off year.
The Fire Relief Board unanimously agreed that this was a fair and reasonable approach and directed the
Finance Director to obtain a specific quote from Hildi, Inc. and to move forward with scheduling the
study for 2015. Since the Fire Relief received $11,434.03 in supplemental aid in September 2015, the
Fire Relief will be funding of the 2015 Actuarial study.
RECOMMENDATIONS:
Approve entering into a contract with Hildi, Inc to provide an actuarial study of the Fire Relief pension
fund beginning in 2015 at a cost of $2,400.00 to be paid for by the Lake Elmo Fire Relief.
ATTACHMENTS:
1. Actuarial Services Proposal/Overview from Hildi, Inc.
2. Agreement for Consulting Services from Hildi, Inc.