Loading...
4 Fire Department PensionCITYOF CHANHASSEN 690 G9, Cemer D~ive, PO Box I47 Chadmse~, 3li~mesota 55317 Phoebe 612.937. I900 Ge;~o~d ~kv 612 937. 5739 Engineering Fax 612.937.9152 P~blic 5~0, Sa' 612. 934.2524 MEMORANDUM TO: FROM: DATE: SUB J: Mayor and City Council Don Ashworth, Economic Development Director January 13, 1999 Fire Department Relief Association Pension Hopefully the attached graph is self-explanatory. Although the Fire Department's "current requests" line appears to be dramatically steep, it should be remembered that the request is solely being made in an effort to get Chanhassen's Fire Department to a pension benefit level similar to surrounding communities (see previous report). The graph additionally supports the previous recommendation that adequate funding exists to meet the Fire Department's request for 1998, 1999, and 2000. Our current level of reserves would provide sufficient revenues to ensure that the 2001 request was additionally met. Similarly, should state aids continue to increase in the hyperbolical manner as occurred between 1989-1996, the city should be able to meet the Fire Department's requests for 2001. RECOMMENDATION Both Todd Gerhardt and I recommend a conservative position which would be to approve the Fire Department's requests for 1999 and 2000 (the increase for 1998 was previously approved). gSmgr\fdpension.doc The G0, of ETmnhmsen. ~1 $o'(~ci~ff ~'vm,mmiO, gvitL~ c/cm~ /,~>(:,, q,/,diO, scL, ods, ,~ chamdng downtown, 3rivi~g businesses, ~d beaut~d parks. A grcm pl~ce to live, ~vork, a~zd play. CITY OF CHANHASSEN 690 09, Ce,ret D~qve, PO Box 147 C/?a,hasse,, 3 li,~wsota 55317 Phone 612 937.1900 Ge, emi ~x 612.~37.5739 3tgi, eeri,g h~x 612.93Z ~152 ]h~b/ic 5~fi'O' ~m 612934.2524 MEMORANDUM TO: FROM: DATE: SUB J: Mayor and City Council Don Ashworth, City Manager December 10, 1998 Fire Relief Benefit Increase For many years we negotiated fire relief changes on a yearly basis. The process was too stressful and a decision was made that relief benefit changes should be phased in over a five year period. This will be the third five year contract and would more appropriately be labeled as a guaranteed four year benefit increase with the final year being a future action. This statement is made recognizing that I can guarantee both the department and the city council that funding is in place to fully fund the increases proposed for 1998, 1999, 2000, and 2001. Again, benefit increase proposed for 2003 needs to be further studied. The proposed increases have been prepared by the Wyatt Company - an actuarial firm specializing in calculating fire relief benefit costs. Hopefully, the attached analysis as to costs to be paid by the city under the new contract are self explanatory. I have also included a copy of benefit levels of neighboring/similar communities. RECOMMENDATION Approval of the benefit level adjustments for the years 1998, 1999, 2000, and 2001 is recommended. gSmgr\fire relief-e.doc REVENUE BY SOURCE FOR PAST 8 YEARS YEAR STATE AID (2%) CITY CONT. INVEST. INCOME %FUNDED 1997 57,786.00 14,214.00 152,702.00 89% 1996 56,262.00 17,614.00 39,162.00 87% 1995 41,111.00 14,789.00 128,762.00 90% 1994 37,080.00 18.820.00 (49,716.00) 80% 1993 34,094.00 23,106.00 48,464.00 93% 1992 36,699.00 22,501.00 69,323.00 91% 1991 33,227.00 23,973.00 50,038.00 84% 1990 24,270.00 11,310.00 53,026.00 100% 1989 23,508.00 12,072.00 47,415.00 100% REQUIRED CITY CONTRIBUTION FOR PROPOSED INCREASE ~ 5% RETURN ON INVEST. BENIFET LEVEL YFAR LUMP SUM ANNUITY REQ'D CONT.- STATE AID =CITY CONT. 1998 54,000 360.00 74,300.00 61,426.00 12,874.00 1999 60,500 400.00 95,400.00 65,111.00 30,289.00 2000 67,000 440.00 116,500.00 69,018.00 47,482.00 2001 73,500 480.00 137,600.00 73,159.00 64,441.00 2002 80,000 520.00 158,700.00 77,548.00 81,152.00 REQUIRED CITY CONTRIBUTION FOR PROPOSED INCREASE ~ 10% R.O.I. YEAR REQ'D CONT. - STATE AID - INV. INCOME = CITY CONT. 1998 74,300.00 61,426.00 53,384.00 (40,510.00) 1999 95,400.00 65,111.00 56,054.00 (25,765.00) 2000 116,500.00 69,018.00 58,856.00 (11,374.00) 2001 137,600.00 73,159.00 61,799.00 2,642.00 2002 158,700.00 77,548.00 64,889.00 16,263.00 ABOVE FIGURES ASSUME A 6% PER YEAR INCREASE IN STATE AID (STATE AID HAS INCREASED 70% IN THE PAST 4 YEARS). COMARISON OF BENEFIT LEVELS WITH OTHER COMMUNITIES CITY SHAKOPEE YEAR LUMP SUM BENEFIT 1997 53,760.00 1998 61240.00 YEARLY REVIEW OF BENEFIT LEVELS EDEN PRAIRIE 1997 90,000.00 1998 120,000.00 (600.00/MONTH ANNUITY) (800.00/MONTH ANNUITY) CHASKA 1998 57,000.00 YEARLY REVIEW OF BENEFIT LEVELS LAKEVILLE 1997 77,000.00 1999 80,000.00 M1NNETONKA 1999 108,000.00 MOUND 1997 69,000.00 1998 76,500.00 (380.00/MONTH ANNUITY) 720.00/MONTH ANNUITY 460.00/MONTH ANNUITY) 510.00/MONTH ANNUITY) . following are changes to the retirement/pension plan. etirement 1) General fund from $1/call to $1.25/ca1I" 2) Pension plan increased from $54k to $80k by 2002. I) 2) First change since early 1980's; to increase FF retention. To increase FF retention by matching or closing gap bet,.veen area FD's. S3-5,000 S0-S25,500 depending investment returns and State Aid * Assumptions: * 800 calls at 22 responders/ca[l 1999 Chanhasscn Fire Depar'rmc::t Proposed Budget 17 August 28, 1997 Randy Wahl Chanhassen Volunteer Fire Department Relief Association P.O. Box 97 7610 Laredo Drive Chanhassen, MN 55317 Dear Randy: As requested, you will find four copies of the 1/1/97 actuarial report for the Chanhassen Firefighters' Relief Association defined benefit pension plan. I faxed a copy to Reg Vorwick at the State Auditors office. Call me if you have any questions or need anything further. Sincerely, i Duane Hanf [ f Consulting Actuary" Chanhassen Volunteer Fire Department Relief Association Actuarial Valuation as of January 1, 1997 August 28, 1997 Hanf Actuarial Associates 2 Introduction We present in this report the results of the January l, 1997 actuarial valuation of the ChanhaSsen Fire Relief Association pension plan. This report is divided into sections which: Compare this years results with previous valuation results. Provide commentary on this years results and assumptions. Show the plan's current financial and actuarial stares. Develop the contribution requirement for 1997. Supply information required for financial statement disclosure Summarize the plan provision. Summarize the actuarial assumptions and methods utilized. Summarize the census information utilized Page 4 5 7 8 9 10 I1 12 This valuation is based on census data and asset information furnished by the Association. To the best of our knowledge, this report presents fairly the actuarial condition of the plan as of January 1, 1997 and is in compliance with Minnesota State Statutes. It is our opinion that the actuarial assumptions used herein are reasonable in aggregate. Hanf Actuarial Associates Duane F. Hanf / Fellow Society. of ~cmaries Enrolled Actuary No. 96-370 Date Summary and Comparison of Results Summarized below are the results of the 1/1/97 valuation compared to the previous valuation: 1/1/97 ($17) 1/1/93 ($13) Participants - Actives 39 43 - Retirees 10 10 - Beneficiaries 0 0 - Deferred 3 3 Total 52 56 Normal Cost $50,666 $39,432 Actuarial Liability $1,210,363 $818,225 Assets $973,712 $696,452 Funded Percentage 80% 85% Unfunded Actuarial Liability $236,651 $121,773 Required Contribution $75,574 $50,605 GASB # 5 Benefit Obligation Unfunded GASB # 5 Obligation $1,118,286 $736,988 $144,574 $40,536 4 Commentary The Unfunded Actuarial Liability increased by $114,878 from 1/1/93 to 1/1/97 because of the following: Plan improvements ($13 to $17) Contributions and actuarial experience Total $284,791 ($169,913) $114,878 The required contribution increased by $25,000 due to the improvements in the benefits. The Chanhassen Fire Relief Association plan is reasonably well funded. It is 80% funded on an ongoing funding basis and 87 % funded on a GASB # 5 basis. The actuarial assumptions utilized were changed from the 1/1/93 valuation to better reflect anticipated experience as follows: · Mortality table was changed from the 1971 GAM table projected to 1978 t__2o the 1994 GAM table. · Retirement age frorn the later of age 53 and 20 years of service to the later of age 50 and 20 years of service. · Form of benefit elected from 100% electing a monthly annuity to 100% electing a lump sum distribution at retirement. The plan is scheduled to improve the monthly benefit from $17 to $18 per year of service and the lump sum benefit from $2,550 to $2,700 per year of service effective 1/1/98. This increase, if it were reflected in the 1/i/97 valuation, would increase liabilities and costs as Normal Cost Actuarial Liability Funded Percentage Required Contribution $17 / $2,550 $18 / $2,700 follows: $50,666 $1,210,363 $53,646 80% $75,574 $81,287[ $1,281,5611 76% 5 Financial and Actuarial Status on 1/1/97 Assets Market value of plan assets as of i/1/97 as reported by the Association is as follows: Cash $0 Investments $970,718 Accrued Income $4,193 Liabilities , ($1,199) Total $973,712 Normal Cost as of 1/1/97 The breakdown of the normal cost as of 1/1/97 is as follows: Service Retirement $42,010 Disabili~ $4,819 Withdrawal $2,475 Preretirement Death $1,362 Total $50,666 Financial and Actuarial Status on 1/1/97 (continued) Actuarial Liability 1. Active Participant Liability 2. Inactive Participants Liability 3. Total Actuarial Liability: (1) + (2) 4. Assets 5. Funded Percentage: (4) / (3) x 100% 6. Unfunded Actuarial Liability: (3) - (4) 7. Expected benefit payouts during 1997 $. Normal Cost 9. Expected Actuarial Liability on i2/31/97 ((3) + ~8)- (7))x 1.05 $704,611 $505,752 1,210,363 $973,712 80% $236,651 $38,270 $50,666 $1,283,897 Contribution Requirement In accordance with Minnesota State Statues (Chapters 69 and 356), the contribution level for any given year is a combination of the Normal Cost for that year, a provision for anticipated administration expenses, and an amount to reduce the Unfunded Actuarial Liability. The minimum contribution requirement is shown below. 1. Normal Cost $50,666 2. Twenty year amortization of Unfunded Actuarial Liability 3. Expense allowance: (1996 expenses x 1.035) 4. Required Contribution as of 1/1/97: (1) + (2) + (3) 5. Required Contribution as of 12/31/97: (4) x 1.05 $18,085 $3,224 $71,975 $75,574 Participant Data As Of 1/1/97 The next three pages summarize the participant data used in the 1/1/97 actuarial valuation. 12 Actuarial Assumptions and Funding Method Investment Return 5 % per year after investment expenses. Mortality Rates 1994 Group Annuity Table Termination Rates 5.5 % at age 20 reducing uniformly to 0 % at age 48 and after. Disability Rates .03% at age 20, grading to .33% at age 50 Retirement Age Later of age 50 and 20 years of service. Lump Sum Election Rate 100% will elect a lump sum distribution. Asset Basis Market value Funding Method Entry. Age Normal Method: Normal Cost under this funding method is equal to the level annual dollar amount starting at entry age necessary, to fund the projected benefits. Actuarial Liability is accumulation of Normal Costs to date. Unfunded Actuarial Liability is amortized over 20 years from date of establishment of the liability. GASB Disclosure Method Projected Unit Credit Method: Normal Cost under this funding method is equal to the present value of the monthly pension accruing during the year. Actuarial Liability is accumulation of Normal Costs to date. 11 Summary of Plan Provisions as of 1/1/97 Normal Retirement Benefit Monthly 15 year certain and life benefit of $17 per year of service payable on retirement after attainment of age 50 and completion of 20 years of service. Maximum benefit of $510. Alternatively a member may elect a lump sum of $2,550 times years of service (up to 30) Deferred Vested Benefit On termination after completion of 10 years of service, the monthly Normal Retirement Benefit accrued is payable on attainment of age 50 subject to the following vesting schedule: Years of Service Nonforfeitable Percentage 10 60% I I 64 12 68 13 72 14 76 15 80 16 84 17 88 15 92 19 96 20+ 100 Disability Benefit Short Term Disability: Temporary benefit of $5 per day for up to 120 days. Long Term: $17 per month per year of service. $340 per month minimum benefit and $510 maximum benefit. Death Benefit 51,000 lump sum payable on the death of any retired member receiving a monthly benefit. $2,000 lump sum payable on the death of any active member. Survivor's Benefit On the death of any active member, 100% of the member's accrued benefit is payable to the named beneficiary commencing immediately. Benefit is either a monthly benefit for I5 years or a lump sum. 10 Financial Statement Disclosures In November of 1986, the Governmental Ackounting Standards Board (GASB) issued Statement No. 5, which established standards for disclosure of pension information by state and local governmental employers. It requires such employers to compute and disclose a standardized measure of accrued pension liability called "Pension Benefit Obligation". This measure is the actuarial present value of credited projected benefits, prorated on service. In other words, it is the value of all future expected benefits that can be attributed to service earned to date. This measure differs from the measure of accrued pension liability used to determine contribution requirements. The components of the Pension Benefit Obligation as of 1/1/97 and projected to 12/31/97 are as follows: 1. Active Participants - Vested - Non-vested Total 2. Inactive Participants - Retirees/Beneficiaries - Deferred Vested Total 3. Pension Benefit Obligation: (1) + (2) 4. Assets 5. Unfunded Pension Benefit Obligation as of 1/1/97: (3) - (4) 1/1/97 12/31/97 $372,911 $452,135 $239,623 $243,457 $612,534 $695,592 $450,350 $432,353 $55,402 $58,172 $505,752 $490,525 $1,118,286! $1,186,117 $973,712 $144,574 9 November 10, 1998 Bob Halverson Chanhassen Volunteer Fire Department Relief Association P.O. Box 97 7610 Laredo Drive Chanhassen, MN 55317 Dear Bob: Attached to this letter is a summary of the cost of exploratory benefit changes you requested for the Chanhassen Fire Relief Association defined benefit pension plan. The cost of exploratory benefit changes was calculated as of 1/i/99 using the 9/30/98 asset value of $1,036,665 as an estimate of the 1/1/99 asset value. The calculations were based upon the attached actuarial assumptions. A summary of my understanding of the plan provisions effective 1/1/99 is also attached. Call me if you have any questions or need anything further. Also attached is my invoice for services rendered. I appreciate the opportunity to be of service. Si,0, cerely, Consulting Actuary Cost of Exploratory Benefit Changes Valuation Date: 1/1/99 Estimated Assets: $1,036,665 Plan Provisions 1/1/99 Increase Due To: i) Lump sum retirement, vested termination and survivor's benefits increased from $2,700 to $3,025 per year of service. (1/4 of way to $4,000) 2) Monthly long-term disabili~, benefit increased from $18 to $20 per year of service. 3) Active death benefit increased from $2,000 to $5,000 4) Change current retirees' monthly benefit from a 15 year to a 20 year certain and life benefit. 5) Increase current retirees' monthly benefit from $18 to $20 per year of service. 6) Increase current deferred vestecls' monthly benefit from $18 to $20 per year of service. Required Actuarial Normal Contribution* Liability Cost $82,400 $1,427,600 $42,200 $14,000 $107,800 $5,100 $600 $800 $500 $200 $400 $2O0 $1,200 $15,000 $0 $4,0O0 $50,000 $0 $700 $8,400 $0 * Normal cost plus 20 year amortization of unfunded liability plus a $6,600 expense allowance (average of 1996 and 1997 expense allowance). Total is increased by 5 % to allow for delayed payment. Impact of Changing Interest Assumption on Funded Percentage Plan Provisions 1/1/99 5 % Interest Assumption 10% Interest Assumption Actuarial Funded Actuarial Funded Liabili _ty Percentage Liabili _ty Percentage. $1,427,600 73 % $1,098,800 94 % Plan improved as listed on previous page: items 1) through 6) $1.610,000 64% $1,238,000 84% Summary of Plan Provisions as of 1/1/99 Normal Retirement Benefit Lump sum of $2,700 per year of service payable on retirement after attainment of age 50 and completion of 20 years of service. Maximum benefit of $81,000. Deferred Vested Benefit On termination after completion of 10 years of service, the lump sum Normal Retirement Benefit accrued is payable on attainment of age 50 subject to the following vesting schedule: Years of Service Nonforfeitable Percentage 10 60% 11 64 12 68 13 72 14 76 15 80 16 84 17 88 18 92 19 96 20+ 100 Disability Benefit Short Term Disability: Temporary benefit of $5 per day for up to 120 days. Long Term: $18 per month per year of service. $360 per month minimum benefit and $540 maximum benefit. Death Benefit $1,000 lump sum payable on the death of any retired member receiving a monthly benefit. $2,000 lump sum payable on the death of any active member. Survivor's Benefit On the death of any active member, 100% of the member's accrued benefit is payable to the named beneficiary commencing immediately. Actuarial Assumptions and Funding Method Investment Return 5 % per year after investment expenses. Mortality Rates 1994 Group Annuity Table Termination Rates Age 25 13.6% 30 10.1% 35 7.9% 40 6.5% 45 5.5% 50 4.5% 55 0% Disability Rates .03 % at age 20, grading to .33 % at age 50 Retirement Age Later of age 50 and 20 years of service. Lump Sum Election Rate 100% will elect a lump sum distribution. Asset Basis Market value Funding Method Entry Age Normal Method: Normal Cost under this funding method is equal to the level annual dollar amount starting at entry age necessary to fund the projected benefits. Actuarial Liabili _ty is accumulation of Normal Costs to date. Unfunded Actuarial Liability is amortized over 20 years from date of establishment of the liabili~. Participant Data As Of 1/1/99 The next three pages summarize the participant data used in the 1/1/99 actuarial valuation. November 17, 1998 Bob Halverson Chanhassen Volunteer Fire Department Relief Association P.O. Box 97 7610 Laredo Drive Chanhassen, MN 55317 Dear Bob: Attached to this letter is a summary of the cost of exploratory benefit changes you requested for the Chanhassen Fire Relief Association defined benefit pension plan. The cost of exploratory benefit changes was calculated as of 1/1/99 using the 9/30/98 asset value of $1,108,665' as an estimate of the 1/i/99 asset value. The calculations were based upon the attached actuarial assumptions. A summary of my understanding of the plan provisions effective 1/1/99 is also attached. Call me if you have any questions or need anything further. Also attached is my invoice for services rendered. I appreciate the opportunity to be of service. Sincerely, ~uane nam I~ Consulting Actuary, * Includes a $72,000 contribution receivable. Cost of Exploratory Benefit Changes Valuation Date: 1 / 1/99 Estimated Assets: $1,108,665 Plan Provisions i/1/99 Increase Due To: I) Lump sum retirement, vested termination and survivor's benefits increased from $2,700 to $3,025 per year of service. (1/4 of way to $4,000) 2) Monthly long-term disability benefit increased from $18 to $20 per year of service. 3) Active death benefit increased from $2,000 to $5,000 4) Change current retirees' monthly benefit from a 15 year to a 20 year certain and life benefit. 5) Increase current retirees'monthly benefit from $18 to $20 per year of service. 6) Increase current deferred vesteds' monthl~ benefit from $18 to $20 per year of service. Required Actuarial Normal Contribution* Liability Cost $82,400 $1,427,600 $42,200 $14,000 $107,800 $5,100 $60O $8O0 $500 $200 $400 $200 $1,200 $15,000 $0 $4,000 $50,000 $0 $700 $8,40O $0 * Normal cost plus 20 year amortization of unfunded liability plus a $6,600 expense allowance (average of 1996 and 1997 expense allowance). Total is increased by 5% to allow for delayed payment. Impact of Changing Interest Assumption on Funded Percentage Plan Provisions 1/1/99 5 % Interest Assumption 10 % Interest Assumption Actuarial Funded Actuarial Funded Liabili _ty Percentage Liabili[y Percentage $1,427,600 78 % $1,098,800 101% Plan improved as listed on previous page: items 1) through 6) $1,610,000 69% $1,238,000 90% Summary of Plan Provisions as of 1/1/99 Normal Retirement Benefit Lump sum of $2,700 per year of service payable on retirement after attainment of age 50 and completion of 20 years of service. Maximum benefit of $81,000. Deferred Vested Benefit On termination after completion of 10 years of service, the lump sum Normal Retirement Benefit accrued is payable on attainment of age 50 subject to the following vesting schedule: Years of Service Nonforfeitable Percentage i0 60% 11 64 12 68 13 72 14 76 15 80 16 84 17 88 18 92 19 96 20+ 100 Disability Benefit Short Term Disabili _ty: Temporary benefit of $5 per day for up to 120 days. Long Term: $18 per month per year of service. $360 per month minimum benefit and $540 maximum benefit. Death Benefit $1,000 lump sum payable on the death of any retired member receiving a monthly benefit. $2,000 lump sum payable on the death of any active member. Survivor's Benefit On the death of any active member, 100% of the member's accrued benefit is payable to the named beneficiary commencing immediately. Actuarial Assumptions and Funding Method Investment Return 5 % per year after investment expenses. Mortality Rates 1994 Group Annuity Table Termination Rates Age 25 13.6% 30 10.1% 35 7.9% 40 6.5% 45 5.5% 50 4.5% 55 0% Disability Rates .03% at age 20, grading to .33% at age 50 Retirement Age Later of age 50 and 20 years of service. Lump Sum Election Rate 100% will elect a lump sum distribution. Asset Basis Market value Funding Method Entry Age Normal Method: Normal Cost under this funding method is equal to the level annual dollar amount starting at entry age necessary to fund the projected benefits. Actuarial Liability is accumulation of Normal Costs to date. Unfunded Actuarial Liability is amortized over 20 years from date of establishment of the liability. Participant Data As Of 1/1/99 The next three pages summarize the participant data used in the 1/1/99 actuarial valuation. ~~Z Z Z Z ~ ~ ~ ~ ~ Z Z ~ ~ 0 gL ~L 9L ~L ~L ~L ~L LL O! 6 8 ~ 9 S ~ [ ~ L ~t k CHANHASSEN FIRE DEPARTMENT P,O, BOX 97 7610 LARF. DO DRIVE BUS. PHONE 954-9101 MINNEWASF~TA STATION NO. :2 PHONE 474-?094 9'~7~ s-~ ~'? ._¢~u_,..A' , tA2~c p Cost of Exploratory Benefit Changes Valuation Date: 1/1/98 Estimated Assets: $1,064,600 Plan Provisions 1/i/98 (old termhmtion rates) Plan Provisions 1/1/98 (new termination rates) Increase Due To: 1) Lump sum retirement, vested termination and survivor's benefits increased frotn $2,700 to $3,025 per year of service. (1/4 of way to $4,000) 2) Monthly long-term disability benefit increased from $18 to $20 per year of service. 3) Active death benefit increased from $2,000 to $5,000 4) Change current retirees' monthly benefit from a 15 year to a 20 year certain and life benefit. 5) Increase current retirees' monthly benefit from $18 to $20 per year of service. 6) Increase current deferred vestedx' monthly benefit from $18 to $20 per year of service. 7) improve vesting schedule to t00'% after 10 years of service. Required Actuarial Normal Contribution Liability Cost $83,300 $1,360,000 $53,600 $74,300 $1,380,000 $43,500 $14,200 $102,700 $5,800 $700 $700 $600 ( $.200 ' $50o $2oo ($1,300" , $15,800 $0 $4,100 $51,400 $0 $600 $6,900 $0 Currently not N/A N/A pe ...nyfitted-. .............. 51_ CITYOF CHANHASSEN 690 CiO, Center Drive, PO Box 147 C/;anhasscn, il]innesota 5531.7 Pt,one 612.93Z I900 O,eml ~.x' 612.93Z 5739 Engineering Fax 612. 932 9152 &tblie ~g,fi,O, Fax 612. 93(2524 MEMORANDUM TO: Mayor and City Council FROM: Don Ashworth, Economic Development Director DATE: December 18, 1998 SUB J: Fire Relief Benefit Increase This item was tabled from the last agenda to obtain additional information. I have attached three actuarials which I continue to believe will generate more questions than answers. As can be seen, discussions with the Fire Depart~nent regarding benefit changes have taken over one year, i.e. first actuarial completed in November 1997. Reaching agreement with retirees, current members, and matching resources can be time consuming. Our traditional practice has been to make gradual increases in revenue anticipating the next plateau increase in expense. As stated in my previous memorandum, I can guarantee both fire fighters and the city council that funding is available for the increases currently being sought for 1998 through 2001. Accordingly, I would recommend approval of the increases as presented by the Fire Department for those years. During the next year, I would anticipate being in a position to recommend approval of their final fifth year increase scheduled for 2002. g:\mgr\firepension.doc the G0, of Cha,hasse,. ,'t~q°'°wi"~. a,,,m,i0' ,,//d~ ,'/~',,';.,/., ('~ '. q.',~/i,;l sd,od,; ,z ch,qmd,g dv~,ntow,, t/.:"',wz,~' o busmessev' ., a~. ~d bea,tzEO.d?:~,rks. A gre~tph~ce, to li~'e, ~cork.