5.2. SR 07-11-2011 - Laserfiche WebLink

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Item # 5.2. City E 1~ver MEMORANDUM TO: Mayor and City Council FROM: Tim Simon, Finance Director DATE: July I I, 201 SUBJECT: Fire Relief Update Annually, the Elk River Fire Relief provides an .update to council on benefit levels, funding ratio's, and YTD investment returns. Several board members will be in attendance as well as an investment advisor from The Parr McKnight Wealth Management Group of Wells Fargo Advisors. The Elk River Fire Relief Association, prior to August 1 of each year, is required to certify to the City the required municipal contribution for the following year. Also, a request for an increase in per year of service pension amount for the next year must be acted on by the Council before August 1. Given the current market conditions and funding ratio, the Elk River Fire Relief Association has requested no increase in benefit level fox 2012. The Elk River Fire Relief Association has assumed a rate of return on investments of five (5) percent for 2011 in the form SC-11 which is certified to the State Auditor's office. The five (5) percent is the recommendation from the reliefls investment advisor -The Parr McKnight Wealth Management Group of Wells Fargo Advisors based on the 60% equities and 40% bond portfolio. As of June 30, 2011 the rate of return on investments is 4.3 percent. As you can see the funding levels are rebounding from the downturn in the markets in 2007 & 2008. Year 12/31/2010 12/31/2009 12/31/2008 12/31/2007 12/31/2006 Funded Rate 91.4% 87.2% 70.9% 114.7% 114.8% As you recall, the required City contribution was $38,500 for 2011, based on investment returns, the 2012 amount will be back under the $30,000 the City has contributed the past few years before 2011. The $30,000 is included in the Fire Administration budget for 2012. N:\Public Bodies\City Council\Council RCA\Agenda Packet\07-11-2011\Firereliefupdate.docx