HomeMy WebLinkAboutCity Council - 03/23/2010 - Workshop APPROVED MINUTES
CITY COUNCIL WORKSHOP & OPEN PODIUM
TUESDAY, MARCH 23, 2010 CITY CENTER
5:00—6:25 PM, HERITAGE ROOM II
6:30—7:00 PM, COUNCIL CHAMBER
CITY COUNCIL: Mayor Phil Young, Council Members Brad Aho, Ron Case, Jon Duckstad, and
Kathy Nelson
CITY STAFF: City Manager Scott Neal, Police Chief Rob Reynolds, Fire Chief George Esbensen,
Public Works Director Eugene Dietz, Community Development Director Janet Jeremiah, Parks and
Recreation Director Jay Lotthammer, Communications Manager Joyce Lorenz, City Attorney Ric
Rosow, and Recorder Lorene McWaters
GUESTS: Philip Jones, President of the Fire Relief Association; Aaron Casper, Vice President of the
Fire Relief Association
Heritage Room H
I. JOINT MEETING WITH THE FIRE RELIEF ASSOCIATION
Casper said the purpose of the workshop is to provide the City Council with a better
understanding of the purpose and function of the Eden Prairie Fire Relief Association. He
said a relief association is defined as a "separate governmental entity that receives and
manages public money to provide retirement benefits for individuals providing the
governmental services from the affiliated fire department, and is governed by its own board
of trustees." Under Minnesota statute, "firefighters from each voluntary fire department in
Minnesota have the ability to create a pension plan that is administered by a non-profit
corporation, known as a volunteer fire relief association . . . "
The Eden Prairie Fire Relief Association was incorporated in June of 1968, about a year
after the fire department was formed. Casper noted that while the fire department is a
department of the city, the relief association is an affiliated but separate entity. The City
Council approves the association's pension benefit level and is required to make
contributions to fund relief association pension benefits. Each relief association is governed
by a board of trustees, which includes three municipal representatives and six trustees
elected from the membership. The three municipal representatives of the Eden Prairie Fire
Relief Association are Mayor Phil Young, Council Member Ron Case and Fire Chief
George Esbensen.
A firefighter is fully vested in the pension plan after 10 years of service. Eden Prairie's plan
is classified as a monthly/lump sum combination defined benefit plan. The current monthly
benefit per year of service is $56. Under the lump sum option,retirees can elect a lump sum
payment equal to 100 x $56 x years of service. The majority choose the monthly option.
Jones reviewed how the city and state contributions to the fund are calculated and went over
a table summarizing actuarial studies and contributions from 2001 to 2009. Jones said the
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April 20, 2010
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shortfall in 2008 was due to a combination of factors, including a benefits increase, an
increase in the number of firefighters, and an investment shortfall.
Jones said the fund is professionally managed by a firm called Allodium and the City has
had the same investor for the past 10 years. Jones reviewed annualized returns for the Eden
Prairie Fire Relief Association from 1996 through 2009. He also compared these returns to
those of the State Board of Investments Income Share and all Minnesota Relief
Associations. The results are as follows:
Annualized Returns
1996-2007 1 2008 1 1998-2008 1 2009 1 1998-2009
EPFD Relief Association 7.8% -27.0%1 1.891ol 23.9% 3.3%
State Board of Investments Income Share 7.6% -24.4%1 1.891ol 20.3% 3.1%
Percentile Comparisons
1996-2007 1 2008 1 1998-2008 1 2009 1 1998-2009
All MN Relief Assoications 97% 29% 59%1 Not Available
Jones also reviewed the Eden Prairie Fire Relief Association's fund composition and
compared it to the State Board of Investments Income Share.
Fund Compositions 12/31/2008
US Stock Int. Bond Cash Other
EPFD Relief Association 28.5%1 26.8% 27.6% 8.49/ol 8.7%
State Board of Investments Income Share 60.0%1 0.0% 35.0% 5.09/ol 0.0%
Council Member Duckstad asked what types of plans other municipalities use and whether
those cities bear the risk for those types of plans. Jones said a number of metro cities use the
defined benefit plan. He said cities do bear risk in both types of defined benefit plans.
Council Member Case asked if the City or the Relief Association has looked at changing to
a lump sum option for future firefighters. Esbensen said that option has not been explored.
He said he believes Eden Prairie's recruitment program is highly successful in part because
of the benefit plan it offers.
Council Chamber
II. OPEN PODIUM
HENNEPIN VILLAGE SITE B
Eden Prairie resident Jane Plaza urged the Council to deny the Hennepin Village Site B
Land Alteration Permit. She said she is a resident of Hennepin Village and opposes the land
alteration permit because there is no approved development plan in place for the site. She is
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April 20, 2010
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concerned about the effects of hauling,particularly on the spring. She asked if the Mayor
and Council Members have received campaign contributions from Dan Herbst or Pemton.
A graduate student who said he is a resident of Eden Prairie urged the Council to look at
long term gains versus short term gains when considering further development in Hennepin
Village. He said the proposed road and bridge will be detrimental to Hennepin Village and
could adversely affect the spring.
III. ADJOURNMENT