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<br /> <br />City of <br />EI "-~ <br />River -""' <br />Fire Department <br /> <br />July 09, 2007 <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. 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 to the departments based on the population and <br />property values in the area served by that department. There is a strong relationship between <br />state fire aid and the number of fire-related calls a fire department responds each year. The <br />Relief fund has benefited from the growth in the Elk River area as evidenced by a 7.3 <br />percent increase for 2006 from the state fire aid. <br /> <br />The City has also shown continued support of the Relief Association as exampled by the <br />2006 contribution of $28,950. <br /> <br />State law requires that a relief association be governed by a nine-member board of trustees. <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 />