HomeMy WebLinkAboutVIII-C-01 - FRA Pension Increase City Council Memorandum
To: Mayor Hicks & City Council Members
From: Alan Storlie, Hastings Fire Relief Association President
Date: November 28, 2018
Item: FRA pension Increase
Council Action Requested: The Firefighters Relief Association is requesting City Council action to
approve a pension increase of $300.00 per year of service to $6,400.00
Background Information: Currently, our annual lump sum amount is $6,100.00 for those serving 20
years or more. Statutory formulas and our funding level would support the increase. To remain
conservative and not offset these calculations in one calendar year, we have chosen a benefit level much
lower than what the surplus of our fund would support. In previous years, the Board of Trustees has
used maintaining a 10% surplus in our investments as the threshold for seeking a benefit increase.
Currently our surplus is approximately 38%. Approving this increase would reduce that surplus to
approximately 31%, still well above that 10% threshold.
The Fire Relief met with the Finance Managers in May and also had a FRA 101 presentation with the
Council on November 19, 2018.
Financial Impact: Although I cannot guarantee that this action will not require Municipal financial
support in the future, I can assure you that nothing obvious would indicate this need.
Advisory Commission Discussion:
Council Committee Discussion:
Attachments:
November 19, 2018 Fire Relief Association Workshop Minutes
VIII-C-01
Minutes
City Council Workshop: Fire Relief 101
November 19, 2018
Hastings City Hall: Volunteer Room
Members Present: Acting Mayor Vaughan
Councilmembers Balsanek, Braucks, Folch, Leifeld, Lund
Staff Present: City Administrator Melanie Mesko Lee
Administrative Services Director Julie Flaten
Finance Manger Melanie Lammers
Senior Accountant Ashley Parker
Fire & EMS Director/FRA Member Mike Schutt
Fire Relief Board Members Craig Latch, Alan Storlie, Angela Neuharth,
Robert Wargo III, Dave Janssen
POC Gary Stevens
Absent: Mayor Hicks
Acting Mayor Vaughan called the meeting to order at 6:00 p.m.
The City Council had requested an overview of how the paid, on-call Firefighters and the Fire
Relief Association relate to the full-time Firefighter/Paramedics and City employment. Melaie
Lammers and Colleen Hartmon-Bollom, the Financial Advisor of Hastings’ Fire Relief prepared a
presentation describing the relationship between the City of Hastings and the Fire Relief
Association (FRA).
The City of Hastings oversees the department, which employs paid-on call firefighter/EMTs,
who are also members of the FRA, which is a separate non-profit that uses state aid and
investment returns to provide a pension to vested FRA members. Benefits are disbursed in a
one-time lump sum benefit based on years of service. The FRA must receive City approval for
any increases in the pension amount. The City Council has asked that the pension increase
requests be aligned with the City’s annual budget process. The FRA is requesting a $300
increase to their pension to bring the annual benefit to $6,400.
Audit requirements mandate the parameters for reporting and compliance for the fund. If the
funds do not perform well and have a deficit, the City of Hastings is required to cover the
finding shortfall. Increases to pension amount, once approved, cannot be reduced.
The Council thanked staff for the explanation and requested future updates to ensure clear
communication between the FRA and the City staff and City Council.
Meeting was adjourned at 6:56 p.m.
VIII-C-01