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<br /> <br />July 12, 2005 <br /> <br />To: Mayor and City Council <br /> <br />From: Rob Dreissig, President of the Elk River Fire Department (ERFD) Relief Association <br /> <br />Backgound of the Association <br /> <br />The ERFD Relief Association is made up of the active paid-on-call members of the ERFD. <br />The purpose of the association is to provide retirement, disability and death benefits to the <br />members or beneficiaries of members of the department. <br /> <br />The State of Minnesota has provided the major share of funding for the association through <br />distribution of the money collected from a gross earnings tax on fire insurance premiums <br />sold in the state. The funds are allocated to the departments based on the population and <br />property values in the area served by that department. The Relief fund has benefited from <br />the growth in the Elk River area as evidence by an increase in contribution from $112,150 in <br />2003 to $147,589 for 2004. <br /> <br />The City has also shown continued support of the Relief Association as exampled by the <br />2004 contribution of $24,800, resulting from an annual increase rate of three percent. <br /> <br />The ERFD Relief Association is directed by six trustees elected by members of the ERFD, <br />the fire chief, the city Finance Director, and the Mayor. A minimum of four meetings are <br />held each year to oversee the management of the Association's funds. <br /> <br />Type of Pension Plan <br /> <br />The members of the Relief Association are covered by a defined benefit plan. The yearly <br />benefit level of the plan is determined by the number of members, their length of service, <br />and the value of the relief fund. The actuarial studies are performed on an annual basis and <br />presented to members of the Association and the City Council for their approval, and then <br />submitted to the State Auditor. <br /> <br />Investments <br /> <br />The Relief Association's state-aid allocation and city's contribution are invested in the <br />Association's Special Fund. The Relief Association has developed an investment policy <br />providing maximum return consistent with State Statutes. We have moved over 95% of the <br />Special Fund to investments managed by the State Board of Investing. <br />