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HomeMy WebLinkAboutResolution 71-06RESOLUTION CONCERNING THE AMENDMENT OF THE POLICE AND FIREMEN'S RELIEF ASSOCIATIONS GUIDELINES ACT OF 1969. For several years prior to 1969 there was a growing realization that the statutes governing the various paid police and firemen's relief associations were in need of substantial revision. Relief associations, acting unilaterally within rather broad statutory limits had established exceedingly generous benefits, while municipalities and the members of these associations contributed only the relatively modest sums required by law. As a result the actuarial deficits soared, jeopardizing the solvency of some of the relief associations. Responding to what was viewed as a potential crisis, the legislature passed t~e Guidelines Act of 1969 which requires the affected cities to assume, over the next decade, p~imary responsibility for financing the normal costs of pension and other benefits established by the relief associations. While we agree that responsible public policy demands that such benefits be adequately financed and that forthright action had to be taken to arrest the growing actuarial deficits, we believe that there are at least three other considerations which must be incorporated into the Guidelines Act if the public interest as well as the interests of the employees are to be safeguarded. The first is the need for substantial financial participation by employees as well as public employers in financing the benefits. The Guidelines Act which requires the affected cities to bear in the order of 90% or more of the total current cost of the Benefits is virtually without precedent in contributory public pension systems and makes it virtually impossible to negotiate any modification in the existing benefits with their employees. The second is the fact that public bodies, such as City Councils, must have effective control over the expenditure of the public funds for which they are responsible. Yet the Guidelines Act did not modify the statutes under which City Councils have no effective control over relief associations either on the level of benefits they adopt (or their cost) or the administration of those benefits. The third consideration is that City Councils need some options or alternatives to enable them to work out with the affected employees a level of benefits which is acceptable to the employees and at the same time constitutes a tolerable burden for the taxpayers. Since the Guidelines Act provides City Councils with no options or alternatives with respect to pension programs for future employees, they are greatly handicapped in trying to limit their financial obligations even on a long- term basis. The City Council of Columbia Heights strongly believes that these three considerations must be incorporated into the Guidelines Act of 1969 and urges the Legislative Retirement Commission and the t971 session of the legislature to enact the following specific amend- ments to this Act: The normal tevel cost of the benefits provided by these relief associations should be shared by the employees and public employers on the same 40-60 basis which applies to the P.E.R.A. Public Safety Pension fund and employees should be permitted the same ten-'year period (i.e., 1971 to 1980) as are municipalities to achieve this minimum financing standard. The Board of Directors of all such relief associations should be composed of five members, two of whom shoutd be elected by active members of the association, two appointed by the Mayor with the concurrence of the City Council, and a fi. fth member to act as chairman who would be appointed by unanimous agreement of the other four. Some appropriate device should also be included to resolve any impasse in the selection of a chairman. Alt future changes in the by-laws of relief associations affecting pension or other benefits should be subject to ratification by the appropriate City Council. The benefits by such relief associations should be limited to that normal level cost which can be met by a contribution by the public employer which does not exceed 35% of the regular salaries of the affected employees plus the contributions made by those employees. Public employers should have the option of placing all police- man and firemen hired in the future under P.E.R.A. public safety plan and should also have the option of making supplementary payments to such new employees not to exceed the differential in cost between the employer contributions to the relief association and the employer contributions to the P.E.R.A. public safety plan. However, those supplementary payments should not be considered to be a part of the employee base salary for pension purposes. IS Passed this 8th day of February, 197t. Offered by Heintz, seconded by Roll Call - All Ayes Secretary to the Council