CR 97-183 Fire Relief Association Pension•
October 6, 1997
Proposed Action
Overview
Steven C. Mielke
City Manager
FIRE RELIEF ASSOCIATION PENSION INCREASE
Council Report 97 -183
Staff recommends adoption of the following motion: Move that the pension for the Fire Relief
Association be increased from $3,000 per year of service to $3,750 per year of service
beginning January 1, 1998.
The effect of this motion will be to increase the pension benefits and to maintain the previously
approved long term strategy for managing pension costs.
In November of 1990 the City Council approved a Fire Relief pension amount of $3,000 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 current funding and has determined
that a benefit increase of $750 per year of service would be allowable and still stay within
financial guidelines.
Primary Issues to Consider
• What is the inflationary increase strategy?
• How much is budgeted for the 1998 payment to the association?
Supporting Information
Staff analysis of primary issues
Council Report 97 -183
Page 2
Staff analysis of issues
What is the inflationary increase 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 the 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.
How much is budgeted for 1998?
The city's contribution for the Fire Relief Association is $27,500 for 1998. This is in
comparison to the 1997 amount of $26,700, and represents a three percent increase in the
city's contribution.