3.8. SR 07-15-2002Item~
3.8.
MEMORANDUM
TO: Mayor and City Council
FROM: Lori Johnson, Finance Director
DATE: July 15, 2002
SUBJECT: Consider 2003 Benefit Level for Elk River Fire Relief Association
Attached is a memo from Mark Richardson, treasurer of the Elk River Fire Relief Association,
discussing the Relief Association's 2003 per year of service pension benefit amount. The
Relief Association is required to certify to the city by August 1 of each year the minimum
required contribution and any request for an increase in the benefit level. The Relief
Association is not asking for an increase; the 2003 benefit will remain at $3,575 per year of
service. This is the second consecutive year that the Relief Association has not requested an
increase.
The Relief Association has calculated its pension liability and projected assets and has
determined that an increase in the per year benefit is not appropriate at this time due to
pension payouts and the performance of the investment portfolio. As you know, each year
the city voluntarily contributes funds to the Relief Association pension even though a
contribution has not been required (with the exception of one year when a minimum
contribution of approximately $600 was required). In 2003 there will be a mandatory city
contribution of $3,888 to support the current $3,575 benefit. This contribution is required
because the 2002 accrued liability exceeds projected assets. The required contribution is well
under the voluntary contribution of $24,100 included in the proposed 2003 budget.
No action on the benefit level is requested this year since the Relief Association is not asking
for an increase. The payable 2003 tax levy will include as part of the general fund levy the
required contribution of $3,888.
Action Requested
City Council is asked to authorize the budgeted 2002 pension contribution of $23,400 to the
Elk River Fire Relief Association.
s:\council\lori\ erfirereliefidoc
Elk River Fire Relief Association
415 Jackson Avenue
Elk River, MN 55330
June 29, 2002
RE: Per Year Pension Amount
Elk River City Council
13065 Orono Parkway
Elk River, MN 55330
Dear Elk River City Coundl,
The Elk River Fire Relief Association communicates each year with the Elk River City Council on the
status of the Relief Association funds. Often our funds are doing well enough that we ask for the
Council's permission to increase the per year pension amount, which is covered by our fund's
performance.
The current pension amount is $3575 per year of sen/ice. Because this year's performance was not as
dgorous as we had hoped, we will not be requesting an increase to the pension amount this year. We
are hopeful that the economy, and with it, our investments will soon rebound.
I thank you for your time and attention.
Mark Richardson
Treasurer
Elk River Fire Relief Association