3.8. SR 07-15-2002 - Laserfiche WebLink

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Item~ 3.8. MEMORANDUM TO: Mayor and City Council FROM: Lori Johnson, Finance Director DATE: July 15, 2002 SUBJECT: Consider 2003 Benefit Level for Elk River Fire Relief Association Attached is a memo from Mark Richardson, treasurer of the Elk River Fire Relief Association, discussing the Relief Association's 2003 per year of service pension benefit amount. The Relief Association is required to certify to the city by August 1 of each year the minimum required contribution and any request for an increase in the benefit level. The Relief Association is not asking for an increase; the 2003 benefit will remain at $3,575 per year of service. This is the second consecutive year that the Relief Association has not requested an increase. The Relief Association has calculated its pension liability and projected assets and has determined that an increase in the per year benefit is not appropriate at this time due to pension payouts and the performance of the investment portfolio. As you know, each year the city voluntarily contributes funds to the Relief Association pension even though a contribution has not been required (with the exception of one year when a minimum contribution of approximately $600 was required). In 2003 there will be a mandatory city contribution of $3,888 to support the current $3,575 benefit. This contribution is required because the 2002 accrued liability exceeds projected assets. The required contribution is well under the voluntary contribution of $24,100 included in the proposed 2003 budget. No action on the benefit level is requested this year since the Relief Association is not asking for an increase. The payable 2003 tax levy will include as part of the general fund levy the required contribution of $3,888. Action Requested City Council is asked to authorize the budgeted 2002 pension contribution of $23,400 to the Elk River Fire Relief Association. s:\council\lori\ erfirereliefidoc