4.3. & 4.4. SR 07-06-1998 - Laserfiche WebLink

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JUL~ 2-98 THU 14~38 ORETE× FAX NO, 6124417626 P, 02 TO: Mayor and City Council FROM: Jim Nystrom, President of the Elk River Fire Relief Association Background o_£ the Assoclatiot~ The E_RFD Relief Association is made up of the active paid-on-call members of the ERFD. The purpose of the association is to provide retirement, disability and death benefits to the members or beneficiaries of members of the department. The State of Minnesota provides the basic funding for the'association through distribution of money collected from a gross earnings tax on fire insurance premiums sold in the state. The funds are allocated to the departments based on the population mad property values in the area served by that department. The ER.FD Relief Association is directed by six trustees eleCted by members of the ERFD, the fire chief, the city Finance Director, and the Mayor. A minimum of four meetings are held each year to oversee the management of the Association's funds. ~[De~£Pens~n Plan The members of the Relief Association are covered by a defined benefit plan.. Our plan is the same type as the Public Employees' Retirement Association (PERA) or the Teacher's Retirement Association (TRA). The yearly benefit level of the plan is determined by the number of members and their length of service, and the value of the relief fund. The actuarial studies are performed on an annual basis and presented to members of the Association ~.n. the City Council for their approval, and submitted to the State Auditor. Compensation Task Force A task force, made up of the Mayor, the City's Financial Director, along with four fn'e fighters, developed a long term compensation plan for the fire department. The plan included an hourly wage rate for paid on call firefighters based on education and responsibility. The plan also included a scheduled yearly contribution to the Relief Association. Prior to the compensation agreement, the City contributed to the Association on a year-to-year request. Investments The Association's state-aid allocation and city's contribution are invested in the Association's Special Fund. The Association has developed an investment policy providing maximum return consistent with preservation of principal that follows State Statutes. A copy of the Summary of Investment Policy is attached to this report.