4.2. SR 07-19-1993
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ITEM 4.2.
TO:
MAYOR AND CITY COUNCIL
River
FROM:
FIRE RELIEF BOARD OF TRUSTEES
DATE: JULY 16, 1993
SUBJECT: REQUEST FOR CITY CONTRIBUTION TO
RELIEF ASSOCIATION
.
This memo is to give a little background of the Relief
Association and also why the Trustees are requesting the
Council to make a contribution to the Fire Department
Retirement Fund. This money was held back from the Fire
Department budget proposed for 1993 and put into the
Contingency Fund to be revenue in July. The responsibility of
the Board of Trustees is to oversee and invest the funds
properly and to keep the benefit level at the maximum at all
times. This benefit is a compensation to the department
members' dedication and service to the community over a period
of years. This is the only compensation the members receive,
other than the $8.00 per hour for actually responding to
emergencies or for training required by State Statutes and the
By-laws and Duties. Over the years, this benefit has increased
along with inflation, respondibility and growth of the
community, but is a cost effective way to retain a well trained
and dedicated public safety department to serve the community.
One thing we have to keep in mind when we request and receive
equipment for the Department is that the jobs are performed as
a public safety with no personal gain to the firefighters.
This is one way the City can show its appreciation for this
service that is provided to the community.
Thank you for the consideration you will give this request and
feel free to contact any of the Board of Trustees for more
information.
Jim Nystrom, President
Randy Sykes, Treasurer
Bob Pearson, Secretary
Robert Dressig
Ken Dehn, Jr.
Paul LeFebvre (Resigned because of job conflict - to be replaced
July 29 at Regular Meeting night)
Hank Duitsman, ex officio
Lori Johnson, ex officio
Russ Anderson, ex officio
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P.O. Box 490 · 13065 Orono Parkway · Elk River, MN 55330 · (612) 441-7420 · Fax: (612) 441-7425
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ELK RIVER FIRE RELIEF ASSOCIATION
ELK RIVER, MINNEsOTA
SPECIAL PENSION TRUST FUND
ANNUAL FINANCIAL REPORT
YEARS ENDED
DECEMBER 31, 1992 AND 1991
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ELK RIVER FIRE RELIEF ASSOCIATION
SPECIAL PENSION TRUST FUND
TABLE OF CONTENTS
DECEMBER 31, 1992
Paqe
Independent Auditor's Report
Financial Statements
Balance Sheets
Statements of Revenue, Expenses and Changes in Fund Balance
2
Statements of Changes in Financial Position
3
Notes to Financial Statements
4
Independent Auditor's Report on Legal Compliance
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APIX)
CERTIFIED PUBLIC ACCOUNTANTS
AND CoNSULTANTS
INDEPENDENT AUDITOR'S REPORT
Board of Trustees
Elk River Fire Relief Association
Elk River, Minnesota
We have audited the accompanying balance sheets of the Elk River Fire Relief
Association Special Pension Trust Fund as of December 31, 1992 and 1991, and
the related statements of revenue, expenses and changes in fund balance and
changes in financial position for the years then ended. These financial
statements are the responsibility of the Association's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted Our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Elk River Fire Relief
Association Special Pension Trust Fund as of December 31, 1992 and 1991, and
the results of its operations and the changes in its financial position for
the years then ended in conformity with generally accepted accounting
principles.
April 19, 1993
Minneapolis, Minnesota
&, tU.lo!. ~
ABDO, ABDO & EICK
Certified Public Accountants
Member of American Institute of Certified Public Accountants Private Companies Practice Section
115 EAST HICKORY STREET, SUITE 302
1'0 BOX 1166
MANKA1Q MINNESOY, 56002.1166
(5()1) 625-2127
fA)( (5()1) JB8.91l9
lOl EAST PEARl. STREET
P.Q BOX H5
OWA1ONNA. MINNESOTA 5~H5
(5()71451-9116
fA)( (5()1) 45'-<)794
1060 NORTHlAND PL~ZA
l800 ~'EST 80TH STREET
MINNEAPOUs, MINNESOTA 55411
(6121 815-_
fAX (61l1 B96-16l0
CITY OF ELK RIVER FIRE RELIEF ASSOCIATION
SPECIAL PENSION TRUST FUND
BALANCE SHEETS
DECEMBER 31, 1992 AND 1991
. 1992 1991
1 ASSETS
Cash $182 944 $ 63 874
Investments _ lower of cost or market 475 681 504 750
1 TOTAL ASSETS $658 625 .$568 624
1 LIABILITIES AND FUND BALANCE
LIABILITIES $ $
FUND BALANCE
Required reserves 636 918 567 949
Unreserved
Undesignated 21 707 675
TOTAL FUND BALANCE 658 625 568 624
TOTAL LIABILITIES AND FUND BALANCE .$658 625 .s568 624
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~see Notes to Financial Statements.
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. 1991
Unfunded
Required Accrued
Total Reserves Liability
1 $ 19 000 $ 19 000 $
41 907 41 907
6 229 6 229
33 144 33 144
f (3 212) (3 212)
36 507 36 507
I 133 575 133 575
1 050 1 050
6 6
711 711
38 000 38 000
185 185
39 952 39 952
93 623 93 623
1 (78 713) 78 713
,- 475 001 553 039 (78 038)
$568 624 $567 949 S 675
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CITY OF ELK RIVER FIRE RELIEF ASSOCIATION
SPECIAL PENSION TRUST FUND
STATEMENTS OF CHANGES IN FINANCIAL POSITION
YEARS ENDED DECEMBER 31, 1992 AND 1991
Sources of working capital
Operations
Excess of revenue
1992
NET INCREASE IN WORKING CAPITAL
S 90 001
S 90 001
Elements of net increase in working capital
Cash
Investments
$119 070
(29 069)
$ 90 001
NET INCREASE IN WORKING CAPITAL
· See Notes to Financial Statements.
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1991
S 93 623
S 93 623
$ 60 073
33 550
$ 93 623
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CITY OF ELK RIVER FIRE RELIEF ASSOCIATION
NOTES ~O FINANCIAL STATEMENTS
DECEMBER 31, 1992
Note 1: FORM OF GOVERNMENT
The City of Elk River Fire Relief Association was incorporated in 1922. It
operates under the provisions of Minnesota Statutes Section 69. It is
governed by a board of nine members. Six of the board members are elected by
the members of the Association for three-year terms. The Mayor, Finance
Director and Fire Chief are ex-officio voting members of the board of
trustees.
Note 2: FINANCIAL REPORTING ENTITY
Note 3:
The City of Elk River Fire Relief Association has implemented the Governmental
Accounting Standards Board's Codification Section 2100 (GASB Cod. Sec. 2100),
Defininq the Governmental Reportinq Entity. For financial reporting purposes,
the Association's financial statements include all funds, account groups,
departments, agencies, boards, commissions and other organizations over which
the Association's officials exercise oversight responsibility.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Fund Accounting
The resources of the Association consist of the Special Fund, which
represents a pension trust fund for the accumulation of resources to be
used for retirement, dependency and disability annuity payments of
appropriate amounts and at appropriate times in the future. The revenue
received is from the City of Elk River property taxes, from the State of
Minnesota two-percent gross earnings tax on fire insurance premiums and
from investment activity of the Association.
The Association does not maintain a separate General Fund because all
resources are properly attributable to the Special Fund.
B. Basis of Accountinq
The accounting policies of the City of Elk River Fire Relief ASSOciation
conform to generally accepted accounting principles. The accrual method
of accounting is used for the Special Pension Trust Fund.
C. Investments
Investments, consisting of mutual funds and limited partnership interests,
are recorded at the lower of cost or market.
Interest income is recognized when earned and dividend income is
recognized when received.
Note 4: INVESTMENTS
The following is a summary of the Association's investments in the Special
Pension Trust Fund at December 31, 1992:
Cost
Market
Value
Mutual funds
Limited partnership
$464 276
11 405
$486 900
10 772
Total
$475 681
$497 672
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CITY OF ELK RIVER FIRE RELIEF ASSOCIATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1992
Note 5: PLAN DESCRIPTION AND UNFUNDED ACCRUED LIABILITY
A. Plan Description
The Elk River Fire Relief Association is the administrator of a single
employer public employee retirement system (PERS) established to provide
benefits for members of the Elk River Fire Department.
B.
The Fire Relief Association maintains a separate Special Fund to
accumulate assets to fund the retirement benefits earned by the Fire
Department's membership. Funding for the relief association is derived
primarily from a fire insurance premium tax in accordance with the
Volunteer Firefighter's Relief Association Financing Guidelines Act of
1971 (Chapter 261 as amended by Chapter 509 of Minnesota Statutes 1980.)
Contributions Required and Contributions Made
The financial requirements of the Special Fund are determined in
accordance with Section 69.772 of the Minnesota Statutes, which requires
the payment of pension benefits in a lump sum or optionally in annual
installments. The Association benefits are payable in a lump sum after
age 50, 20 years of service, or upon death. Benefits are accumulated at
$1,900 and $1,850 per year of active service for 1992 and 1991,
respectively. The accrued liability for these accumulated benefits is
computed using increasing percentages based on years of service in
accordance with subdivision 2 of Section 69.772. At 20 years of service,
the liability is equal to the number of years of service times benefits
per year. Association members are vested after 5 years.
The total contribution, which was not actuarially determined, in 1992
amounted to $58,590 of which $19,000 was contributed by a City tax levy
and $39,590 was from State of Minnesota Aid.
The accrued liability as of December 31, 1992 was $636,918. The fund
balance reserve on December 31, 1992 was $21,707. This is a increase of
$21,032 from the December 31, 1991 fund balance reserve of $675.
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CmnAED PuBUC Acmum-ANTS
;\NO <:::ot<SULTANTS
INDEPENDENT AUDITOR'S REPORT ON LEGAL COMPLIANCE
Board of Trustees
Elk River Fire Relief Association
Elk River, Minnesota
We have audited the financial statements of the Elk River Fire Relief
Association as of and for the year ended December 31, 1992. These statements
are the responsibility of the relief association's management. Our
responsibility is to express an opinion on the statements based on our audit.
Our audit was made in accordance with generally accepted auditing standards;
the provisions of the Minnesota Leqal Compliance Audit Guide for Local
Government promulgated by the Legal Compliance Task Force pursuant to
Minnesota Statutes 6.65. Accordingly, the audit included such tests of the
accounting records and such other auditing procedures as we considered
necessary in the circumstances.
The Minnesota Le al Com liance Audit Guide for Local Government covers three
categories of compliance to be tested in audits of relief associations:
deposits and investments, conflicts of interest and public relief
associations. Our study included all of the listed categories. The results
of our tests indicate that for the items tested, the Elk River Fire Relief
Association complied with the material terms and conditions of applicable
legal provisions. Further, for the items not tested, based on our audit and
the procedures referred to above, nothing came to our attention to indicate
that the Elk River Fire Relief Association had not complied with such legal
provisions.
This report is intended solely for the use of management and should not be
used for any other purpose. This restriction is not intended to limit the
distribution of this report, which is a matter of public record.
April 19, 1993
Minneapolis, Minnesota
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ABDO, ABDO & EICK
Certified Public Accountants
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