2023.12.04 Packet - Laserfiche WebLink

Home

14669 Fitzgerald Avenue North, Hugo, MN 55038 • (651) 762‐6300 • www.ci.hugo.mn.us TO: Honorable Mayor Tom Weidt and Members of the City Council FROM: Anna Wobse, Finance Director SUBJECT: Firefighter’s Relief Association Bylaws Language Update DATE: For the City Council Meeting of December 4, 2023 DESIRED COUNCIL ACTION Motion to ratify a language update to the Hugo Firefighter’s Relief Association Bylaws to specify the deferred interest credit method. BACKGROUND After reviewing the current and historical bylaws of the Hugo Firefighter’s Relief Association the Office of the State Auditor noted that the deferred interest credit method was not specified in the bylaws and had requested that the Relief Association update their bylaws to specify the deferred interest credit method. Historically, deferred interest had been based on full calendar years and the Relief Association had voted on June 27, 2023 to update the language in their bylaws to specify the full calendar year method and City Council ratified this language update on July 10, 2023. Since the initial language update there has been ongoing discussions with the Office of the State Auditor and it was determined that the updated language would mean that the Relief Association would now have two different interest calculations for deferred members. Minnesota State Statutes were revised in 2013 and those revisions mandated that if a deferred interest credit method was not specified in an associations bylaws that it would default to the interest credit method being based on full calendar months. Members that are on the deferred list from January 1, 2013 through June 26, 2023, when the bylaw language was updated to reflect full calendar years, would by default have their pension interest calculated on the full calendar month basis. The discrepancy in the Associations bylaws was first highlighted by the Office of the State Auditor last year and because of the time between the updated statutes and notification from the Office of the State Auditor that the bylaws did not meet their requirements, the Relief Association asked for leniency in honoring the historically reported yearly interest calculation method. The Office of the State Auditor is unwilling to work with the Relief Association on honoring what their intentions have always been and in order to have the majority of deferred members on the same interest calculation method, the Relief Association has voted to now update the language in their bylaws to specify that deferred interest will be calculated on full calendar months. There will be three deferred members who retired before 2013 that will remain at the full calendar year interest calculation method, the other ten deferred members and all future deferred members will have their interested calculated at the full calendar month method. The Relief Association is asking that the City Council ratify this new language update.