Laserfiche WebLink
<br /> <br /> <br />July 9, 2024 <br /> <br />To: Mayor and City Council <br /> <br />From: Garrett Erdmann, President of the Elk River Fire Department (ERFD) Relief <br />Association <br /> <br />Background 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. The pension benefit is also one- <br />way to encourage volunteer or paid-on-call members to “stay on the job.” <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 back to the departments based on the population <br />and property values in the area served by that department. There is a strong relationship <br />between state fire aid and the number of fire-related calls a fire department responds each <br />year. The state fire aid was established in 1885 and has been the most stable source of <br />funding. According to the most recent state auditor’s report, Elk River is in the 98% in the <br />amount received and the 97% in pension amount. The relief association does benefit from <br />the population and valuation that comes from the areas of Otsego and Big Lake Township <br />that is served by ERFD. <br /> <br />The city has also shown continued support of the Relief Association as exampled by this <br />year’s budgeted contribution of $30,000. <br /> <br />State law requires that a nine-member board of trustees govern a relief association. The <br />ERFD Relief Association is directed by six trustees elected by members of the ERFD, the <br />fire chief, the city Finance Director, and the mayor. A minimum of four meetings are held <br />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 benefit <br />level of the plan is determined by the number of members, their length of service, and the <br />value of the relief fund. Benefit level studies are performed on an annual basis. When a <br />benefit level increase is warranted an approval request is made to the City Council. This year <br />the relief board approved a request to council for a 9.7% increase effective January 1, 2025. <br />The per year benefit level would go from $8,850 to $9,735. <br /> <br /> Page 370 of 389