HomeMy WebLinkAbout5K - 2010 City Contribution to Prior Lake Fire Relief Association
MEETING DATE:
AGENDA #:
PREPARED BY:
AGENDA ITEM:
DISCUSSION:
4646 Dakota Street S.E.
Prior Lake, MN 55372-1714
CITY COUNCIL AGENDA REPORT
August 17,2009
5K
Frank Boyles, City Manager
CONSIDER APPROVAL OF A REPORT IDENTIFYING THE 2010 REQUIRED
CONTRIBUTION FOR THE PRIOR LAKE FIRE RELIEF ASSOCIATION
Introduction
The purpose of this item is to advise the City Council of a required change in the
contribution for the Prior Lake Fire Relief Association (PLFRA) for 2010.
Historv
The Office of the State Auditor requires the PLFRA to file Form SC-09 Lump
Sum Pension Plans Reporting on an annual basis to determine the plan liabilities
and required municipal contribution for the following year (attached).
The City receives Fire Aid from the State of Minnesota and passes this through
to the PLFRA. The City makes an additional $20,000 voluntary contribution each
year.
In recent years, there has not been an additional contribution required to fund the
PLFRA pension plan. Investment returns, State Fire Aid, and municipal
contributions have been sufficient to fund the additional liability incurred each
year.
The PLFRA has 40 active members and 6 inactive members. The current
pension benefit level is $6,500 for each year of service. An increase from $5,900
to $6,500 was approved by resolution 07-202 on 12/17/2007, effective January 1,
2008. The maximum lump sum pension under State Statute is $9,100 per year
of service. A copy of this resolution has been included for your reference.
Current Circumstances
Due to a significant decline in the value of the PLFRA's investment portfolio
(primarily in 2008) and the increasing liability for pension plan, a deficit has been
projected for year ending December 31, 2009. The required contribution as
indicated on the attached Form SC-09 is $97,912. This contribution amount
reflects the expected growth in liability and 10% of the projected deficit, offset by
State Fire Aid, member dues, and projected growth in net assets.
Taking into account the $20,000 voluntary contribution, the required contribution
for 2010 would be adjusted to $77,912.
www.cityofpriorlake.com
Phone 952,447. 980QjFax.9~2i<il47.4245
Conclusion
The $97,912 contribution is a "required" contribution and must be made during
2010. This amount is set unless changes are made to the factors that have an
impact on the level of the deficit.
ISSUES:
The primary factors impacting the projected deficit are:
1. Market valuation of investment portfolio
2. Level of pension benefit
3. Number of vested members and their years of service
FINANCIAL
IMPACT:
The required contribution for the PLFRA will increase the 2010 General Fund
expenditure budget by $77,912.
ALTERNATIVES:
The following alternatives are available to the City Council:
1. Approve the report and recommend staff to include the required
contribution in the 2010 budget;
2. Approve the report and provide direction to staff to consider an alternative
2010 budget option;
3. Reject the report for a specific reason.
RECOMMENDED
MOTION:
Alternative 1 or 2.
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4646 Dakota Street S.E.
Prior Lake, MN 55372-1714
RESOLUTION 07-202
RESOLUTION APPROVING A PENSION INCREASE FOR
THE PRIOR LAKE FIRE DEPARTMENT FIREFIGHTERS RELIEF
AND PENSION ASSOCIATION
Motion By: LeMair
Second By: Millar
WHEREAS, The bylaws of the Prior Lake Volunteer Firefighters Relief and Pension Association
provides for a defined contribution benefit; and
WHEREAS, The present annual benefit level in effect is $5,900.00 in 2007 for volunteer fire fighters
that are eligible under the existing vesting schedule; and
WHEREAS, The City Council understands that the insurance premium tax payment increase
received from the State of Minnesota is sufficient to fund a benefit increase to
$6,500.00 per year of service now and in the future without the need for additional city
contribution; and
WHEREAS, It is in the best interest of the City of Prior Lake to provide a pension level that is
comparable with other volunteer fire departments in order for the City to continue to
recruit and retain qualified volunteer firefighters.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCil OF PRIOR LAKE, that:
1) The recitals set forth above are incorporated herein.
2) A $6,500.00 per year of service credit for pension, disability and death benefit purposes
within the Bylaws of the Prior Lake Fire Department Firefighters Relief and Pension
Association is hereby approved effective January 1, 2008.
PASSED AND ADOPTED THIS 3rd DAY OF DECEMBER, 2007.
Haugen
Erickson
Hedberg
leMair
Millar
YES
X
X
X
X
X
NO
Haugen
Erickson
Hedberg
leMair
Millar
rwJr!---
Frank Bo.S1e's,' City Manager
wwW.cityofpriorlake.com
Phone 952.447.9800 / Fax 952.447.4245
Form SC-09 Page 1
Schedule Form for Lump Sum Pension Plans
Reporting Year 2009
Determination of Plan Liabilities and Required Municipal Contribution for 2010
Relief Association: Prior Lake Fire Relief Association County/ Scott
Counties:
Enter Annual benefit level in effect for 2009: 6,500
(If you change your benefit level before 12/31/2009, the SC must be recalculated at the new level.)
2009 2010
Subtotal ofPa2e 1 Liability - Active Members 2,388,360 2,641,470
Active Member Information Please Enter Dates in this format: 07/27/09
Fire Dept Leaves To end of2009 To end of201O
Date of Entry of Years Years
Birth Date Absence of Accrued of Accrued
Name Status (months) Service Liability Service Liability
1 Weber, James Active 05/01/1969 41 266,500 42 273,000
2 Schommer, Larry Active 01/01/1988 22 143,000 23 149,500
3 Freidrich, Mark Active 07/27/1989 20 130,000 21 136,500
4 Larson, James Jr Active 07/27/1989 20 130,000 21 136,500
5 Hartman, Doug Active 07/25/1990 19 119,860 20 130,000
6 Oreskovich, Victor Active 07/25/1990 4 19. 119,860 20 130,000
7 Steinhaus, Eric Active 10/29/1992 30 15 84,760 16 92,820
8 Kline, James Active 03/01/1994 16 92,820 17 101,400
9 Hennen, Tony Active OS/25/1995 15 84,760 16 92,820
10 Nelson, Doug Active OS/25/1995 15 84,760 16 92,820
11 Ziesk~ Joe Active OS/25/1995 15 84,760 16 92,820
12 Klimers, Mike Active 09/26/1996 13 69,550 14 76,960
13 Barta, Terry Active 04/24/1997 13 69,550 14 76,960
14 Burfeind, Scott Active 04/24/1997 13 69,550 14 76,960
15 Kathan, Richard Active 04/24/1997 13 69,550 14 76,960
16 Reigert, John Active 04/24/1997 4 12 62,530 13 69,550
17 Ruzika, Jim Active 04/24/1997 3 12 62,530 13 69,550
18 Chard, Dale Active OS/28/1998 12 62,530 13 69,550
19 Kleist, Kevin Active OS/28/1998 12 62,530 13 69,550
20 Zipoy, Bryan Active OS/28/1998 6 11 55,770 12 62,530
21 Prekker, Randy Active 10/21/1999 10 49,400 11 55,770
22 Kruse, Jarod Active 08/29/2002 7 31,980 8 37,440
23 Zimmennan, Eric Active 08/29/2002 7 31,980 8 37,440
24 Weigel, Greg Active 09/26/2002 7 31,980 8 37,440
25 Yttreness, Paul Active 03/27/2003 7 31,980 8 37,440
26 Bradford, Justin Active 04/03/2003 7 31,980 8 37,440
27 Blade, Chris Active 01/29/2004 6 26,650 7 31,980
28 Truso, Neal Active 01/29/2004 6 26,650 7 31,980
Form SC-09
Prior Lake Fire Relief Association
Page 2
Deferred Member Information (fully or partially vested)
See separate instructions regarding completion of the fields below.
Please enter dates in this format:
07/29/09
Total Deferred Member Liabilities 2009
Total Deferred Member Liabilities 2010
188,353
197,770
Enter all information as it pertains to this member.
Benefit Level
Clemens, John at Separation:
1
Member Name:
10 DOB:
Service Dates:
Entry:
Minimum Years Required to Vest:
05/01/1982 Separation: 03/01/1994
LOAs (in months):
Total Service: Years: 11
2009 Estimated Liability:
2010 Estimated Liability:
Vesting Percent:
Months (if paid):
22,565
23,693
64 %
Months of
1,800 Service Are Paid
Deferred Interest Paid
Jo ,
'0 I
Status: Deferred
(Check if offered.)
If Interest is Paid, Choose Type:
ReliefROR up to 5%
Period Interest is Paid:
Full Years
For ReliefROR up to 5%, OSA ROR up to 5% or Board Set ROR up to 5% enter interest rates below.
1981: % 1986: % 1991: % 1996: 5.00 % 2001: 0.00 % 2006: 5.00 %
1982: % 1987: % 1992: % 1997: 5.00 % 2002: 0.00 % 2007: 5.00 %
1983: % 1988: % 1993: % 1998: 5.00 % 2003: 5.00 % 2008: 0.00 %
1984: % 1989: % 1994: 5.00 % 1999: 4.10 % 2004: 5.00 % 2009: 5.00 % +
1985: % 1990: % 1995: 5.00 % 2000: 5.00 % 2005: 5.00 %
+This rate ofretum is calculated using the earnings projected on Page 4 ofthe Schedule.
Enter all information as it pertains to this member.
Benefit Level
Davis, Brian at Separation:
2
Member Name:
10 DOB:
Service Dates:
Entry:
Minimum Years Required to Vest:
09/26/1996 Separation: 01/06/2007
LOAs (in months):
Total Service: Years: 10
2009 Estimated Liability:
2010 Estimated Liability:
Vesting Percent:
Months (if paid):
40,004
42,004
60 %
Months of
5,900 Service Are Paid
Deferred Interest Paid
(Check ifoffered.)
'0 'I
'0 I
3
Status: Deferred
If Interest is Paid, Choose Type:
Straight 5%
Period Interest is Paid:
Full Years
For ReliefROR up to 5%, OSA ROR up to 5% or Board Set ROR up to 5% enter interest rates below.
1981: % 1986: % 1991: % 1996: % 2001: % 2006: %
1982: % 1987: % 1992: % 1997: % 2002: % 2007: %
1983: % 1988: % 1993: % 1998: % 2003: % 2008: %
1984: % 1989: % 1994: % 1999: % 2004: % 2009: %+
1985: % 1990: % 1995: % 2000: % 2005: %
+ This rate of return is calculated using the earnings prqjected on Page 4 of the Schedule.
Form SC-09
3
Member Name:
Prior Lake Fire Relief Association
Enter all information as it pertains to this member.
Benefit Level
Stier, Larry at Separation:
10 DOB:
Minimum Years Required to Vest:
07/27/1989 Separation: 02/27/2003
Service Dates: Entry:
LOAs (in months):
Total Service: Years:
60 %
38 Vesting Percent:
10 Months (if paid):
23,739
24,926
2009 Estimated Liability:
2010 Estimated Liability:
Status: Deferred
Page 2 - Cont.
Months of
3,100 Service Are Paid
Deferred Interest Paid
(Check ifoffered.)
JD l
'0 I
If Interest is Paid, Choose Type:
ReliefROR up to 5%
Period Interest is Paid:
Full Years
For ReliefROR up to 5%, OSA ROR up to 5% or Board Set ROR up to 5% enter interest rates below.
1981: % 1986: % 1991: % 1996: % 2001: % 2006: 5.00 %
1982: % 1987: % 1992: % 1997: % 2002: % 2007: 5.00 %
1983: % 1988: % 1993: % 1998: % 2003: % 2008: 0.00 %
1984: % 1989: % 1994: % 1999: % 2004: 5.00 % 2009: 5.00 % +
1985: % 1990: % 1995: % 2000: % 2005: 5.00 %
+This rate of return is calculated using the earnings pr~iected on Page 4 ofthe Schedule.
4
Member Name:
Enter all information as it pertains to this member.
Benefit Level
Buss, Joe at Separation:
Service Dates:
Minimum Years Required to Vest:
Entry:
08/21/1991
10 DOB:
Separation: 02/27/2005
LOAs (in months):
Total Service: Years: 13
2009 Estimated Liability:
2010 Estimated Liability:
Vesting Percent:
Months (if paid):
51,984
54,583
72%
6
Status: Deferred
Months of
4,400 Service Are Paid
Deferred Interest Paid
(Check if offered.)
10 l
10 I
If Interest is Paid, Choose Type:
Straight 5%
Period Interest is Paid:
Full Years
For ReliefROR up to 5%, OSA ROR up to 5% or Board Set ROR up to 5% enter interest rates below.
1981: % 1986: % 1991: % 1996: % 2001: % 2006: %
1982: % 1987: % 1992: % 1997: % 2002: % 2007: %
1983: % 1988: % 1993: % 1998: % 2003: % 2008: %+
1984: % 1989: % 1994: % 1999: % 2004: % 2009: %+
1985: % 1990: % 1995: % 2000: % 2005: %
Form SC-09
+This rate ofretum is calculated using the earnings pr~jected on Page 4 ofthe Schedule.
Page 2 - Cont.
5
Member Name:
Prior Lake Fire Relief Association
Enter all information as it pertains to this member.
Benefit Level
Chelgren. Kurt at Separation:
Service Dates:
Minimum Years Required to Vest:
Entry:
OS/27/1993
10 DOB: 05/19/1965
Separation: 06/27/2003
Months of
3,100 Service Are Paid
Deferred Interest Paid
(Check if offered.)
10 ,
10 I
LOAs (in months): Vesting Percent: 60 % If Interest is Paid, Choose Type:
Total Service: Years: 10 Months (if paid): 1 Straight 5%
2009 Estimated Liability: 25,135 Period Interest is Paid:
2010 Estimated Liability: 26,392 Status: Deferred Full Years
For ReliefROR up to 5%, OSA ROR up to 5% or Board Set ROR up to 5% enter interest rates below.
1981: % 1986: % 1991: % 1996: % 2001: % 2006: %
1982: % 1987: % 1992: % 1997: % 2002: % 2007: %
1983: % 1988: % 1993: % 1998: % 2003: % 2008: %
1984: % 1989: % 1994: % 1999: % 2004: % 2009: %+
1985: % 1990: % 1995: % 2000: % 2005: %
+ This rate of return is calculated using the earnings projected on Page 4 of the Schedule.
6
Enter all information as it pertains to this member.
Benefit Level
Peterson, Stacy at Separation:
Member Name:
Minimum Years Required to Vest:
10 DOB:
Service Dates: Entry:
LOAs (in months): 3
TotalSenrice: Years: 10
2009 Estimated Liability:
2010 Estimated Liability:
OS/27/1993 Separation: 09/01/2003
Vesting Percent: 60 %
Months (ifpaid): 0
24,926
26,172 Status: Deferred
Months of
3,100 Service Are Paid
Deferred Interest Paid
(Check if offered.)
10 'I
J0 1
If Interest is Paid, Choose Type:
Straight 5%
Period Interest is Paid:
Full Years
For ReliefROR up to 5%, OSA ROR up to 5% or Board Set ROR up to 5% enter interest rates below.
1981: % 1986: % 1991: % 1996: % 2001: % 2006: %
1982: % 1987: % 1992: % 1997: % 2002: % 2007: %
1983: % 1988: % 1993: % 1998: % 2003: % 2008: %
1984: % 1989: % 1994: % 1999: % 2004: % 2009: %+
1985: % 1990: % 1995: % 2000: % 2005: %
+ This rate of return is calculated using the earnings projected on Page 4 of the Schedule.
Form SC-09
Prior Lake Fire Relief Association
Calculation of Normal Cost
Total Active Member Liabilities
Total Deferred Member Liabilities
Total Unpaid Installments
Grand Total Special Fund Liability
Normal Cost (Cell B minus Cell A)
2009
2,388,360
188,353
o
2,576,713 B.
A.
Projection of Net Assets for Year Ending December 31, 2009
Special Fund Assets at December 31, 2008 (RF-08 ending assets)
Projected Income for 2009
State Fire Aid (2008 aid may be increased by up to 3.5%)
Municipal! Independent Fire Dept. Contributions
Interest! Dividends
Appreciation! (Depreciation)
Member Dues
Other Revenues
Total Projected Income for 2009 (Add Lines D through I)
Projected Expenses for 2009
Service Pensions
Member Names: IBruce Sames
I
I
I
I
Other Benefits
Administrative Expenses
2010
2,641,470
197,770
o
2,839,240
D.
E.
F.
G.
H.
I.
145,194
20,000
1,233
150,000
25
1,000
J. I
153,273 I
K.I
L.l
4,000
Total Projected Expenses for 2009 (Add Lines J through L)
Projected Net Assets at December 31, 2009 (Add Lines 1 and 2, subtract Line 3)
Projection of Surplus or (Deficit) as of December 31, 2009
Projected Assets (Line 4)
2009 Accrued Liability (page 4, cell A)
Surplus or (Deficit) (Line 5 minus Line 6)
5
6
7
1,847,112
2,576,713
(729,601)
c.
Page 4
262,527 I
II
1,686,933 I
21
317,452 I
3 I
41
157,273 I
1,847,112 I
Form SC-09
Prior Lake Fire Relief Association
Calculation of Required Contribution
Deficit Information - Adjusted
Amount Retired Amount Left
Original Amount as ofl2/31/2009 to Retire 1/1/2010
Deficit Information - Original
Amount Retired
Year Incurred Original Amount as of 12/31/2008
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Totals
729,601
729,601
Normal Cost (page 4, cell C)
Projected Administrative Expense Enter 2008 Admin Exp here: 91
Amortization of Deficit (Total of Original Amount column x 0.10)
10% of Surplus (Line 7 x 0.1 0)
State Fire Aid
Member Dues
5% of Projected Assets at December 31,2009 (Line 4 x 0.05)
Required Contribution (Add Lines 8, 9 and 10, subtract Lines 11, 12, 13 and 14)
The required contribution must be made during 2010.
729,601
729,601
Page 4 - Cont.
8
262,527
o
72,960
o
145,194
25
92,356
97,912
10
11
12
13
14
15
Form SC-09
Prior Lake Fire Relief Association
Page 5
This Schedule must be fully completed, certified by the relief association officers, fonvarded to the municipal clerk/independent secretary on or before August 1,
2009 and submitted to the Office of the State Auditor to be eligible for state fire aid.
Officer Certification
We, the officers of the Prior Lake Fire Relief Association, certify that this Schedule was prepared under Minn. Stat. ~ 69.772 and that the annual benefit level was
established according to the average amount of available financing.
We further certify that based on the financial requirements of the Relief Association's Special Fund for the 2009 calendar year, the required 2010 contribution is $97,912.
If the bylaws of the Relief Association changed in 2009, we have attached a copy of the amendment or updated bylaws. We have also enclosed a copy ofthe
municipallboard ratification of this amendment if required under Minn. Stat. ~ 69.772, subd. 6.
~ VV\ / ^ L,L Doug
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Signaturerf Se~etal:y Name
Si.-NjL;lo~ ~':n,
Nelson
07/28/09
Date
Prekker
07/28/09
Date
Zieska
07/28/09
Date
Municipal Clerk I Independent Secretary Certification
I ~ the nunicipal clerk of t\-..c... (!:' l ~ t) r y.,. \ ~~~ of the
'1 \ ~D 0 ~._, the completed Schedul~ from the Prior Lake Fire Relief Association.
I have reviewed~ 15 of the Sched e. If Line 15 shows a required contribution, I certify that I will advise the governing municipal body or the independent nonprofit
frrefi~fmg ""'f~ ui, d contribution at its next regulady ,,",<dul~ D ) ~ ~ /'3 u
s_orM '.pm , Nmno i DZ I~
nonprofit frrefi g co
independent nonprofit firefighting corporation. I received on
~
Business Telephone
Please provide the telephone numbers for the work location(s) at which you conduct relief association business.
TillS INFORMATION IS PUBLIC; IT WILL BE AVAILABLE TO ANYONE ON REQUEST.
Please retain a copy of the Schedule for your records, upload the form to the Office of the State Auditor's website, and submit the signature page to: Office of the State Auditor, Pension
Division, 525 Park Street, Suite 500, Saint Paul, MN 55103. Fax: 651-282-5298. Telephone: 651-282-6110.