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CITY OF NEW BRIGHTON REQUEST FOR COUNCIL CONSIDERATION Agenda Section: ~ Report Number: () G- 0 1 G1 Report Date: March 15,2006 ITEM DESCRIPTION: Resolution Authorizing Amendment to the Retirement Benefit Level to the Firefighter's Relief Association Bylaws DEPT. HEAD'S APPROVAL: Matthew S. Fulton, City Manager MANAGER'S REVIEWIRECOMMENDA TION: No comments to supplement this reoort Comments attached EXPLANATION: The New Brighton Fire Relief Association, the City Manager, and the Finance Director have worked together to craft an agreement of mutual benefit to the City and to the City's Firefighters for pension benefits. These benefits are provided through the City of New Brighton Fire Relief Association. The goal of this agreement was to establish a predictable and stable strategy for retirement benefits and funding levels over the next several years. A 10 year benefit level schedule was original1y planned in 2003 including a scheduled increase of $ I 00 per year of service until a benefit level of $5,200 was reached in 2012. The plan was made subject to various conditions to ensure that retirement fund conditions met acceptable standards and benchmarks. The originally approved plan provided for a 3% annual increase in the levied city contribution. The plan also cal1s for an annual review where appropriate adjustments can be discussed and proposed. This plan was adopted by the City Council at its December 9,2003 meeting. In accordance with the schedule, the retirement benefit level for 2005 was adjusted by the City Council at its January 11, 2005 meeting to $4,500 per year of service. On January 30, 2006, a meeting with the Fire Relief Association, Finance Director Dan Maiers, and City Manager Fulton was held to review the retirement fund conditions and to discuss a proposed modification to the strategic retirement benefit schedule. Based on the current and projected performance of the relief fund, and after review of the contribution levels of other relief funds of comparable fire operations, an adjustment of the relief benefit levels is deemed warranted. An adjustment of$300/year or service is being recommended, effective January 1,2006. Future annual adjustments of $ IOO/year of service, until the benefit levels reach $5,200/year of service in 2010 are also proposed, although City Council approval will continue to be required with each annual adjustment. The relief fund balance, after al1 current and proposed adjustments, is stil1 anticipated to remain at 100% funding levels. As part of this adjustment, the local tax levy contribution is proposed to be maintained at the 2006 level of $45,000 during the course of this planned strategy. The plan also provides that, in the event the fund is unable to maintain an 85% funding level, the planned scheduled benefit increase may be deferred. The plan cal1s for and anticipates that annual meetings between the City and the Relief Association will continue where al1 conditions wil1 be reviewed and considered. The recommended benefit level for retirees is comparable with other area fire relief associations. RECOMMENDATION: Motion to waive the reading and adopt the attached resolution authorizing amendments to the funding levels for the Firefighter's Relief Association to a level of $4,800 per year of service starting in 2006. Ma~!l: City Manager I :\COUNCIL \REPORTS\2006IAdministration\FireReliefAssociationBenefitChange. doc