CR 2000-169 Fire Relief Association Pension Increase
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. October 17,2000 ..y "" Council Report 00-169
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FIRE RELIEF ASSOCIATION PENSION INCREASE
Proposed Action
Staffrecommends adoption of the following: Move that the pension for the Fire Relief Association
be increased from $5,300 per year of service to $5,500 per year of service begimling January 1 ,
2001.
Adoption of this motion will result in an increase to the pension benefits and to maintain the
previously approved long tenn strategy for managing pension costs.
Overview
In September of 1999 the City Council approved a Fire Relief pension amount of $5,300 per year of
servIce.
Additionally, the Council approved the concept of annually considering an inflationary increase to the
city's pension contribution to the Fire Relief Association.
. The Relief Association has conducted an analysis of its cun-ent funding and has determined that a
benefit increase of $200 per year of service would be allowable and still stay within financial
gui de Ii nes.
Primary Issues to Consider
. What is the funding strategy?
. What cost is projected for 2001 ?
Supportin2 Information
. Staff analysis of primary issues
. Resolution 00-077
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Lori Yager
Finance Director
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. Staff analysis of issues
. What is the funding strategy?
The Fire Department and City Council have been operating under an agreement wherein the
City Council annually adjusts the amount contributed to the Relief Association based on an
inflationary factor similar to that which is approved for other departments' spending amounts.
This is based upon an agreement with the Relief Association that has the following basic
tenants:
1. The city contribution to the Relief Association is based upon a set dollar amount
which will go up or down at a rate consistent with other departments operating
increases or decreases.
2. Benefit levels to the association membership may go up or down depending on the
amount of funds available within the association fund balance.
3. The purpose of this program is to allow the maximum benefit allowable with the
moneys available to the association.
4. The city will benefit by having the knowledge of what it will contribute each year,
which allows for easier long range planning.
5. This agreement allows the association to know that the more profitable the
association is in its fund management, the higher the return, and therefore, the
higher the benefit level, which can be obtained.
6. Increased benefits will entice firefighters to stay with the department longer, which
. will, over time, allow for savings on training, and will entice good firefighters to the
department.
7. The benefit level should be reviewed annually, or about July 1 of each year.
. What cost is projected for 2001?
The City's contribution for the Fire Relief Association is $29,000 in 2000. This is in comparison
to the projected 2001 budget of $29,580, an increase of $580. The increase is based on
projected cost increases of 2%.
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. CITY OF HOPKINS
HENNEPIN COUNTY, MINNESOTA
RESOLUTION 00-077
RESOLUTION APPROVING AN INCREASE
IN THE FIRE RELIEF PENSION
WHEREAS, The Hopkins City Council has, in the past, approved the concept
of annually considering an inflationary increase to the City's pension contribution to
the Fire Relief Association, and;
WHEREAS, increased benefits will entice firefighters to stay with the
department longer and;
WHEREAS, the Relief Association has conducted an analysis of its current
funding and has determined that a benefit increase of $200 per year of service
would be allowable and still stay within financial guidelines
. NOW, THEREFORE BE IT RESOLVED, that the City Council of the City of Hopkins,
Minnesota, approves an increase in the pension for the Fire Relief Association of
Hopkins from $5,300 per year of service to $5,500 per member per year of service
beginning January 1, 2001.
Adopted by the City Council of the City of Hopkins this seventeenth Day of
October, 2000.
By
Eugene Maxwell, Mayor
ATTEST:
Terry Obermaier, City Clerk
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