7.2. SR 08-15-2005
Item # 1 . 2.
MEMORANDUM
TO: Mayor and City Council
FROM: Bruce A. West, Fire Chief
DATE: August 15, 2005
SUBJECT: Resolution Accepting Cliff Anderson as a Member of the Public
Employees Police and Fire Plan
The Public Employees Retirement Association (PERA) is accepting fire inspector's as eligible
participants in PERA's Police and Fire Pension Plan. I have been in contact with Scott McLeod
from the Public Employee Retirement Association to discuss the issue of what is needed from the
City of Elk River for Fire Inspector Cliff Anderson to be accepted as a member of the Public
Employees Police and Fire Plan.
There are many other communities, both metro and greater Minnesota, that are now switching their
fIre inspector and/ or fIre marshal employees from the PERA Coordinated Plan into the PERA
Police and Fire Pension Plan. Information received from PERA is that due to policy changes at
PERA, the City of Elk River must submit a resolution adopted by the City of Elk River City Council
and a letter formalizing the request to change Cliff Anderson from PERA Coordinated to PERA
Police and Fire.
I have met with both Human Resources Representative Lauren Wipper and Finance and
Administrative Services Director Lori Johnson to discuss this potential change and any fInancial
implications it may have. Attached is a memo from Ms. Johnson addressing this issue of changing
from PERA Coordinated to PERA Police and Fire Pension Plan and the short-term and long-term
budget implications.
If you have any questions please feel free to call me at the Elk River Fire Department, 763-635-1105.
Action Requested
Mayor and Council approval of the attached resolution accepting Cliff Anderson as a member of the
Public Employees Police and Fire Plan.
S,\OFFSITE\FlRE\StaffMemos\2005\Anderson - Police and Fire Plan. doc
Item # 7.2.
MEMORANDUM
TO: Mayor and City Council
FROM: Lori Johnson, Finance and Administrative Services Director
DATE: August IS, 2005
SUBJECT: Cliff Anderson PERA Financial Impact
Fire Chief Bruce West is requesting that Cliff Anderson change from PERA Coordinated to
PERA Police and Fire pension plan. Mr. West asked that I provide information on the
financial impact of this change.
Below is a table showing the employer contribution rates for both the PERA Coordinated
and Police and Fire pension plans. These rates were adopted as part of the pension bill
approved by the legislature this past special session. As you can see from the far right
column of the table, savings in the first two years offset the increases in the next three years
so there is no material change in the amount of the City's contribution over the first five
years. Thereafter, assuming the contribution rates do not change, there is a small increase in
the City's annual cost.
Employer Contribution Annual Cost Difference
Police & Social Coord. & Coordinated To Police &
Year Coordinated Fire Security S. S. Fire
2005 5.53% 9.30% 6.20% 11.73%
2006 6.00% 10.50% 6.20% 12.20% (1,037)
2007 6.25% 11.70% 6.20% 12.45% (458)
2008 6.50% 12.90% 6.20% 12.70% 122
2009 6.75% 14.10% 6.20% 12.95% 701
2010 7.00% 14.10% 6.20% 13.20% 549
Notes. 1. Cost difference based on 2006 estimated pay of 61,000; no COLA applied to
future years.
2. PERA may adjust the contribution rates beginning in 2011.
3. Social Security tax is not paid under the Police & Fire plan.
4. Medicare tax of 1.45% applies under Coordinated or Police & Fire pension
plan.
S:\Council\Lori\2005\PERA Cliff Anderson.doc
RESOLUTION #05-_
RESOLUTION OF THE CITY OF ELK RIVER
A RESOLUTION ACCEPTING CLIFF ANDERSON AS A MEMBER OF THE
PUBLIC EMPLOYEES POLICE AND FIRE PLAN
WHEREAS, the policy of the State of Minnesota as declared in Minnesota Statutes 353.63 is to
give special consideration to employees who perform hazardous work and devote their time and
skills to protecting the property and personal safety of others; and
WHEREAS, Minnesota Statutes Section 353.64 permits governmental subdivisions to request
coverage in the Public Employees Police and Fire plan for non-full-time fire fighter provided the fire
service position regularly engages the employee in the hazards of fire fighting.
NOW, THEREFORE, BE IT RESOLVED, the City Council of the City of Elk River hereby
declares that the position titled Fire Inspector/Fire Fighter, currently held by Cliff Anderson is, for
primary services provided, that of a firefighter engaged in the hazards of fire fighting.
NOW, THEREFORE, BE IT FURTHER RESOLVED, that this governing body hereby
requests that the above-named employee be accepted as a member of the Public Employee Police
and Fire Plan effective the date of this employee's initial Police and Fire salary deduction by the
governmental subdivision.
Passed and adopted by the City Council of the City of Elk River on this 15th day of August 2005.
Stephanie Klinzing, Mayor
ATTEST:
Joan Schmidt, City Clerk