HomeMy WebLinkAbout7A - Fire Dept. Monthly Pension
AGENDA #:
PREPARED BY:
SUBJECT:
DATE:
BACKGROUND:
DISCUSSION:
STAFF AGENDA REPORT
7A I 1\
FRANK BOYLES, CITY MANAGER
CONSIDER FIRE DEPARTMENT RE ST TO INCREASE MONTHLY
PENSION BENEFIT FROM $1750 ER ACTIVE YEAR TO $1900 PER
ACTIVE YEAR
DECEMBER 6, 1993
The City's fire fighters receive two forms of remuneration from the
City. The first is hourly pay received for fire, rescue and ambulance
runs. The second is a lump sum pension benefit program funded by
the City and reimbursements made from insurance premium
returned to the City from the State. The Fire Department is seeking
an increase in their pension benefit program from $1750 per active
year of service to $1900 per active year of service.
Attached is a survey completed by the Finance Department which
shows the fire fighter and pension program compared to other
metropolitan area communities. Prior Lake residents are getting a
reasonable value for their tax dollar from our volunteer fire
department members. Also attached is a financial statement which
shows the actuarial impact of raising the benefit amount to $1900
as proposed.
The Fire Department's last requested an increase in pension
benefit amounts from the Council on January 6, 1992 from $1650
per active year of service to $1750 per active year of service. The
current request is to increase the amount per active year of service
to $1900 as proposed.
By way of comparison, the table below shows the total pension
amounts which a fire fighter receives if he/she worked for ten years
(minimum vesting period), twenty years and thirty years. A fire
fighter retiring after ten years service receives 60% of the pension
benefit (Le. $1750 x 10 x .60).
-1-
4629 Dakota St. S.E., Prior Lake, Minnesota 55372 / Ph. (612) 447-4230 / Fax (612) 447-4245
AN EQUAL OPPORTUNITY EMPI.DYER
Benefit Amount:
Ten years. 20 years 30 years
service service service
Current ($1750) $10,500 $35,000 $52,500
Proposed ($1900) $11,400 $38,000 $57,000
ISSUES:
In 1993, the cost to the City to fund a pension benefit program
based upon $1750 per active year was $10,870. If the Council
elects to increase the pension benefit amount, the City's
contribution for 1994 would be $16,950. Part of this increase is due
to the increased pension amount, and remainder attributable to five
new departmental employees. The remainder of the financial
support for the program is provided by an annual insurance
reimbursement administered by the state in the approximate annual
amount of $40,000.
I believe that it is important for the City to maintain its pension
benefit amounts at a level which will attract and retain members of
the volunteer fire department. I believe our experience in both
respects has been satisfactory. The proposed increase, while
requiring an additional City contribution provides for a pension
benefit level which compares positively to other communities.
ALTERNATIVES: 1.
Adopt a motion which would authorize the increase in
pension benefit levels effective January 1, 1994.
2. Take no action which would continue the existing pension
benefit level.
3. Defer action pending additional information.
RECOMMENDATION: I recommend Alternative #1
FINANCIAL IMPACT The City's 1994 budget contains the amount of $16,950 necessary
to fund the pension program for 1994 at the levels requested by the
fire fighters.
ACTION REQUIRED: Motion and a second to authorize an increase in the Prior Lake
Volunteer Department Pension Benefit Program to $1900 per
active year of service.
FBAGN7.WRT
-2-
4. PENSION. $ ANNUAL, PER YEAR OR LUMP SUM
City
Anoka/Champlin***
Apple Valley
Chanhassen
Chaska***
Eagan
Eden Prairie
Minnetonka
Plymouth
,
..
Savage
]
J
J
]
J
Shakopee
~;~
*** DID NOT RESPOND
1:'
Minimum Years
Vested
5 Yrs.
10 Yrs.
5 Yrs.
10 Yrs./50%
20 Yrs./loo%
10 Yrs./loo%
10 Yrs.
10 Yrs.
8 Yrs.
l_.__.. ... ........ ...._.....
I
I
I
I
Pension Level
Per Year of
Service
$17 JXJ/mo/yr
$3375.00 Lump
Sum
$ 13.oo/mo/yr
$1950.00 Lump
Sum
$22.50/mo/yr
$3375.00 Lump
Sum
$30.oo/mo/yr
$30.oo/mo/yr
Oump sum also)
Will be
following new
state guidelinesl
I
I
$12.oo/mo/yr I
I
I
$2263.00 Lump I
--^-'-' '. . . Sum I
....:~
I Sum I /
I ~
CALCULATION OF SPECIAL FUND LIABILITY FOR ALL MEMBERS AT
PENSION LEVEL OF $1.900 PER YEAR OF ACTIVE SERVICE
ENTRY TO END OF 1993 TO END OF 1994
NO NAME DATE YRS LIAB YRS LIAB
f=====j=C=wg9RR========R~~=S9=======24====45~600=========25======47=500=============
2 W SLIPHER Nov-69 24 45.600 25 47:500
3 G TANG Jan-74 20 38,000 21 39 900
4 K KLINGBERG Jun-76 18 32.262 19 35:036
5 W WEBER III Jun-76 18 32.262 19 35 036
6 A BORCHARDT Jun-76 18 32.262 19 35:036
7 D RADANKE Apr-78 16 27.132 17 29.640
8 J MUELKEN Dec-78 15 24.776 16 27 132
9 J O'KEEFE Mar-79 15 24.776 16 27;132
10 J PERCAL Mar-79 15 24.776 16 27 132
11 T BOTHOF Mar-79 15 24,776 16 27:132
12 J MAHONEY Jun-82 12 18.278 13 20.330
13 M LYRENMANN Jun-82 12 18.278 13 20.330
14 B SAMES Jun-82 12 18,278 13 20 330
15 J CLEMENS Jun-82 12 18.278 13 20;330
16 B JOHNSON JUQ-82 12 18,278 13 20.330
17 J KLEIN ~85 8 10.944 9 12,654
18 L SCHOMMER Jan-88 6 7.790 7 9.348
19 D CHROMY Jan-88 6 7,790 7 9 348
20 M FRIEDRICH Jul-89 4 4.940 5 6:346
21 J LARSON Jr Jul-89 4 4.940 5 6.346
22 GOLSON Jul-89 4 4 940 5 6 346
23 C JOHNSON Jul-89 4 4;940 5 6:346
24 L STIER Jul-89 4 4.940 5 6.346
25 D HARTMAN Jul-90 3 3.610 4 4.940
26 P HANSON Jul-90 3 3.610 4 4 940
27 V ORESKOVICH Jul-90 3 3.610 4 4:940
28 S JOHNSON Jul-90 3 3.610 4 4.940
29 J BUSS Oct-91 2 2,356 3 3.610
30 S MURPHY Oct-91 2 2 356 3 3 610
31 B PATCH Oct-91 2 2:356 3 3'610
32 M UNDERFERTH Apr-92 2 2.356 3 3'610
33 R STEINHAUS Sep-92 1 1.140 2 2;356
34 C ANDERSON May-93 1 1.140 2 2 356
35 D JENSEN May-93 1 1.140 2 2:356
36 S PETERSON May-93 1 1,140 2 2.356
37 P VINSAND May-93 1 1.140 2 2,356
38 K CHELGREN May-93 1 1.140 2 2,356
39 F KEEL May-93 1 1,140 2 2,356
40
41
42
43
44
45
46
47
48
49
50
ACCRUED LIAB FOR ACTIVE MEMBERS
ACCRUED LIAB FOR DEFERRED MEMBERS
ACCRUED LIAB FOR EARLY VESTED MBRS
ACCRUED LIAB FOR UNPD INSTALLMENTS
A~ ACCRUED LIABILITY THROUGH 1994
B ACCRUED LIABILITY THROUGH 1993 575.115
C L.A - L.B; NORMAL COST FOR 1994
PRIOR LAKE
FIREFIGHTERS' RELIEF ASSOCIATION
Report of financial condition to end of 1993
and requirements for 1994
SClffiDULE I
DEF
E. V.
D ERNEWEIN .64 X 1400 X 11
E PETERSON .84 X 1650 X 16
C SCHMIDT .64 X 1750 X 11
11. 409
24 449
12:577
526.680
o
48.435
11. 979
25,671
13,206
593,598
o
50.857
644 455
575: 115
69.340
SCHEDULE II
---------------------------------------------------------.-----------------.-----------
-----------------------------------------------------------------------..--------------
Sect ion 1.
Calculat ion of Minimum Municipal Contribut ion
PROJECTION OF SPECIAL FUND ASSETS TO DECEMBER 31,
ASSETS AT JAMJARY I, 1993 (12/31/92)-------
EXPECTED INCOME TO DECEMBER 31, 1993
A Minn. State Aid $ 39,966
B City- Contribution 10,000
C Funaraisers, etc. 0
D Interest, Inv. Income 34,658
E Realized Gains (losses) 0
F Unrealized " (losses) 0
G Other income 0
TOTAL OF LINES A THROUGH G-----------------
BEGINNING ASSETS PLUS EXPECTED INCOME------
EXPECTED EXPENSE TO DECEMBER 311 1993
H~ Pensions ~ 0
I Other benefits 0
J Administrative 650
TOTAL OF LINES H-I-J-----------------------
PROJECTED ASSETS AT 12/31/93 (L.3 - L.4)
1993
1. $
407,747
2. $
3. $
84,624
------------
492,371
4. $
5. $
650
------------
491,721
====================================================================================
Section 2. Determination of projected SURPLUS or DEFICIT @ 12/31/93.
Projected Assets (Line 5) 6. $ 491,721
Accrued Liability (Line B, Schedule 1) 7. $ 575,115
-----------------
If L.6 > L.7, enter difference: SURPLUS 8a. $ 0
If L.7 > L.6, enter difference: DEFICIT 8b. $ 83,394
**Go to Section 3 if SURPLUS *** To Section 4 if DEFICIT**
------------------------------------------------------------------------------------
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Section 3. Determination of 1994 Municipal Contribution
Normal Cost (line C, Schedule 1) -9. $
Administrative Expense (1.035 X L. J) 10. $
Less:
K~ Minn. State Aid
L 5% of Line 5
M 10% of Line 8a
Total Subtractions
(if SURPLUS)
o
o
i
$
o
o
o
1994 City Contribution if SURPLUS exists (L. 8a)
11. $ 0
------------------
12. $ 0
====================================================================================
Section 4. Determination of Municipal Contribution (if DEFICIT)
Normal Cost (Line C, Sch. 1) 13. $ 69,340
Amortization of deficit(s) incurred
prior to end of 1993
YR ORIGIN. AMT RET AMT LEFT
INCUR. AMOUNT PRE V TO RETIRE
1989 ~~~2l2 3f7~19 27,~~~
19 0
19 0
Totals 59,212 31,519 27,693
TOT ORIG DEF 59,212 ----------- X .10 =------14.
Deduct col (3) total from L. Bb.
If col 3 ( L.eb, difference is a
NEW DEFICIT. $ 55,701 X .10 =---------15.
Calculated Administrative Expense ------------------16.
Total Costs
LESS:
N) Minn. State Aid -------$ 39,966
0) 5% of Line 5-----------$ 24 586
Total Subtractions ------------~--------------------17.
1994 City Contribution, if DEFICIT exists (L.Bb) 18.
$ 5,921
$ 5,570'
$ 673
------------
$ 81 ,504
$ 64 , 552
----------
$ 16,952
AVERAGE SPECIAL FUND INCOME (non-investment)
FOR PREVIOUS THREE YEAR PERIOD.
ACTV STATE LOCAL 1/10
FF AID TAXES SUR}lLUS
PER MEMBER
36 1992 39,966
36 1991 39,600
34 1990 29,396
35
3YR TOT/3/#MBR 39,321
Max pension (Avg. X 1.85)
o
o
9,000
35 =
ANNUAL
TOTAL
39,966
39,600
38,396
$1,113 AVG
$2,059
3YR
TOTAL
117, 962
PER MaR
====================================================================================
CERTIFICATION OF SPECIAL FUND REQUIREMENTS
This information must be certified to the clerk of the municipality or
to the independent nOD-profit firefighting corporation by 08/01/93.
We, the officers of the Prior Lake Firefighters' Relief Association,
state that the accompanying schedules have been prepared in accordance
with the provisions of the Min. Stat. Ch. 69.772, subd 4. The average
amount of available financing per active member for the past three years was
1,113 Further, benefit levels have been established in accordance
with the average amount of available financing, as required by law.
The mi m city contribution for 1994 is: $16,952
, President Date__~~~~~______
Secretary Date I) - <;' -:9' J
Treasurer Date==~~~=========
These Schedules were ~repared
from information provIded by
Officers of the Relief Association.
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Calculated as 12/31/93
Prepared by:
Gus Welter, consultant
1901 Meadowview Road
Bloomington, MN 55425
(612) 854-8856
====================================================================================
CLERK'S CERTIFICATION
I am the clerk (or other designated official) of the city of Prior Lake.
I have received the completed OFFICE OF THE STATE AUDITOR SCHEDULES I & II
from the Prior Lake Firefighters Relief Association on , 1993.
I have reviewed Section 2, lines 8, 12 and 18. If line~2-or-line 18
reflects a required muniCIpal contribution, I certify that I will
so advise the municipal governing body at Its next regularly scheduled
meeting. If the Certification of the Officers discloses that the Bylaws
have been amended to provide a benefit increase, I certify that the
municipal governing body has passed a resolution which approves the change
in the bylaws. A copy of the resolution is attached (if required).
Date________________,l993 Signature ____________________________
Phone # _________________ Title ____________________________
(Note: Failure to file this document in a timely manner, whether or not
a municipal contribution is required, will result in loss of state aid.)