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ity of <br /> <br />iver <br /> <br />ITEM 5.1. <br /> <br />FROM: <br /> <br />DATE: <br /> <br />SUBJECT: <br /> <br />MEMORANDUM <br /> <br /> Mayor & City Council <br /> <br /> Lori Johnson, Assistant City Administrator <br /> <br /> July 22, 1996 <br /> <br /> Fire Relief Benefit Level <br /> <br />Introduction <br /> <br />Each year before August 1, the Fire Relief Association is required to report to <br />the City Council its minimum required municipal contribution. At that time <br />the Relief Association typically also requests an increase in the per year <br />benefit level. By statute, the Relief Association can't increase the per year <br />benefit without Council approval unless, with the increase, the Relief <br />Association would be 110 percent funded. <br /> <br />This year the Relief Association request includes increasing the per year <br />benefit to $2,500.00, up from $2,350.00. Last year the Council did not <br />approve an increase in the benefit level because the Fire Compensation Task <br />Force had not completed its work. The Council also did not contribute the <br />$17,500 requested in 1995 but chose instead to contribute only the minimum <br />required contribution which was $663.00. The remainder of the funds were <br />reserved with the intention that they be released to the Relief Association <br />after the Fire Compensation Task Force presented a total compensation <br />package which had been approved by the Council and the Relief Association <br />membership. The Relief Association is now requesting release of the 1995 <br />funds as well as a 1996 contribution of $17,500.00 <br /> <br />Background <br /> <br />As you are aware, the Fire Compensation Task Force was appointed several <br />years ago to address firefighter compensation, retirement benefits and to <br />facilitate a change from a defined benefit plan to a defined contribution plan. <br />With a defined contribution plan, there is no potential liability placed on the <br />City and there is no required contribution. Under the defined benefit plan, <br />the City guarantees a certain benefit to each firefighter. If for some reason <br />the Relief Association assets were not adequate to meet the required benefit <br />payments, the City would be required to make up the difference. In most <br />cases this is unlikely unless the investments decrease in value or there are <br />numerous benefits paid in a short time frame. However, the City must <br /> <br />13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 · (612) 441-7420 · Fax: (612) 441-7425 <br /> <br /> <br />