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01/15/1973 PUB HEAR - 5601'� ' , ' � ' PUBLIC HEARING MEETIRG - JANUARY 15, 1973 Public Hearing on a Final Plat, P.S. q72-07, Jim Lund Acres, by James Lund Construction, Inc., Generally Located in the Southeast Corner of 75th Avenue and Central Avenue sna ' Public &earing on a Rezoning Request ZOA M72-1Q, by James Lund Construction Inc. to Rezone from C-18 (Local 8happing Areea) to A-1 (Single ' Fsmily Dwelliag Aresa)� 6enerally Located in th• 8outheaet Corner of TSth Avenue and Centrsl Aveaua N. E. Public Hearing on a Registered Land Survey P•S. N72-06, by Donovan A. Schultz, Generally Located.at 15 R3ce Cr�ek Way ' e j FAGE 2 2 - 2 C 3 4 - 4 E ';` PUBLIC AEARING MEETZNG - JANUARY 15, 1973 PAGE 3 Public Hearing on a Vacation Request, SAV N72-06, 5- 5 A by State Land & Develop�ent Company, Paul Burkholder. Generally Located Between Hwy, 100 on the North, 5�th Avenue on the South, 5th Street on the West and 6th Street on the East Receiving Report on Liaieon with State 6- 6 D Le¢islatiire • (COt�NT: Mayor Liebl attended the December meeting on tris eubject and ia femiltar with the proposal. I would like to get an indication of interest from the Council on whether ,you feel participation in this program 3s worthwh3le. No budgetary appropriation hes been made for participation and any tluida to sqpport the project would have to be appropriated from reserves. The reserve balance in the 1973 budget presently is $58,500) COMMUNCIATIOIdS: i Coon Rapids Mayor: North Suburban Youth 7 Services Center Meeting Minneaota Dept, of Public Service; Protecting Central Avenue crossing of Minnesota Transfer Railway ADJOURN: . 0 1 � , ' ' � , ' � OiICIAL PUBLICATZON CITY OF FRIDLEY , '(fiXHIBIT A) �iOTICE OF HEARING ON IliPROVEhfENTS ROVE:�fENT PROJECT ST. 1973�1 . 1973- . 1 WHEREAS, the City Council of the City of Fridley, Anoka County, Mfnnesota, has deemed it expedient to receive evidence pertaining to the impruvements hereinafter described. NOW THEREFORE, NOTICE IS HEREgy GIVEN THAT on the 15th day of mee[nat the City Hall in7saidtCity(,�and'willkat• aidhtimetand place hear all pazties interested in said improvements in whole or in part. The general nature of the improvements is the construction (in the lands and atreets noted below) of ehe following improvements, �o-c.it: CONSTRUCTION YTEM Streets Under Project 5T. 1973-1 Addendum �1 Gumwood Street from 77th Avenue to 78th Avenue Alley 117 feet Ivorth of 77th Avenue between Gunuood Street an3 Beech Street BSTII�fATED COST . . . . . . . . . . . . . . . . . . . . . .� 11,500.00 THAT TF� ARF.A PROPOSED TO BE ASSESSED FOR SAID L�IFROVEU�NT5 IS AS FOLLOt;S: For Construction Item above ______________________ All af the land abutting upon said streets named above and ail lands within, adjacent and abutting thereto. All of said land Eo be assessed proportionately according to the benefits received by such improvements. That should the Council proceed with said improver,.ents thep i;ill conside= each sepaxate i�provements, except as hereafter othenaise provided by the Council a11 under the £ollowing authority, Lo-wit: ;?inneso:a Statutes 1901, Chapter 429 and Iaws amendatory thereof, and in confor,nity w_th the City Charter. DATED T1iIS 18th DAy pg December COUtiCIL. , 1472, $Y OFi _'.R OF 1't{p, C�:y I�'�AYOR - 1'rw::i: G. L'_ „1 � Yublish: January 3, 1?73 January 10, 1973 ` ' l� ' ' � TO WHOM IT MAy CONCERN: OFFICIAL NOTiCE CITY OF FRIDLEY PUBLIC iiEABING BEFORE THB CITY COUNCIL Notice is hereby given that there will be a Public Hearing Iof the City Council of the Cfty of Fridley iu the City Aall at 6431 University Avenue Northeast on Monday, January 15, 1973 in _ the Council Chamber at 7:30 P.M, for the purpose of: � Coneideratioa of a Final Ftat, P,S, i72_p7, J1m Luad Acree, by Jamae Luad Conatsuctlon, Inc., being a replat of Lot 13, Auditor'a Subdiviaioa No. 129, all lyiag ia tha North Half of Section 12, T-30, &-24, City of Fridley, Couaty of Anoka, Minneaota, Generally located in the Southeast corner of 75th Aveaue N.&. and Central Avenue, Fridley, Mianeaota. Anyone desiring to be heard with reference to the above matter may be heard at this meeting. i FRANR G. LIEBL MAYOR Publish: December 27, 1972 Jaauary 3, 1973 � , :; r.�;' 4" �; . . 4 ° ' � ^� � I, aan I ' � I I � ,.-�oPMEnIT I ' .' i J e ' 'S y no o a vw� ' ..��J�� V^�'� ' � V � itl?' ✓� .�aa:ry,;.k �o ��z-�� -�� ' r�s.so) � ' ' _. . . _ _ 1 • 1 ' 'I� � ( � t t S vI.�I.�I/'/ Y�� O! ..,- � . .::" ' <'r vi,iv� ,�°.�,;. . .. , , .. . ---T-^--'_._ _ � :+. a �6 '� � ,� �r .� �c � 9 ':��i �'r'��^t��: . ; —vt-i � �f. . � :� ,r i -s �> i -� ' `� � � O , e.fl .tiYls — �` /�UI ,n ,v: JY - � . �n i� � .. � `1 p� l �__ Oc Y\ l"� W'. Z� Z 5� . � �) G r. W � . . � ;Ill y � b . t !I c Q ri.,,. � .. � ��. 14. � . . l.ta. Q ♦�' 6 . ' ~ :� . _ Q' ,'f °` iJFr' � � ° �'�'� " "� :� 9 . .- � z. � �,, � � � :; I ..14e. � . alJ^ � ° -' M . �:'L -Y . � �.• � �I•'?�-� ` � �, � 3 o / 'a i �,� " �,-s ,. " � . . , 7 � i. �d1rw ro ..�. > ^ . �m . i..�".— �� '� '• • � 9�J• :�f � )�' il I ;B-'�_" '_ �6-TH-- ,,;,,°. AVENUE , . N.E. Gx„•. ,. � � /6 '� �. �'��, . , � -.a�i+±s.-,;,.,.t �I; `.\ . W � �5 �nl 'Y � .:.,. rX _ . _". "'� �... - . . . _ N � ! � � . �� QU��TC R� .. .I � � ADD=� < :.Y (4�/J! ,� . .. j �+ � ��G1�F ,, 75 9 ! V � � � �f��.�.�� I: '- w • • . r . t . � � r�•1 /n h �I"! . I /� �q^ z '"_ {� � � I! . V ✓ ._ _"_. .� i ^� (9do1 i (9tf. . !9tv �,'TA'��e^��'.r�✓c.:. . � ;rf ° '' . . � _. � � i I .r�.�. �' ':.+ '• •( — ;; j .FlRESI��,..: _.;, DRIVE ''.H I �'�0 II � � �',.. ,`.. . : , .;, . ' � t , »„a • ;� '; � y,. , , ;,. � X . `I _u� ' 1 !` �f. 4 R}r L. l 'j I ' � _ . . • • ..� ' � , --�-�.--- :.:------ --:-.-j _ ¢ 1 >r � 3! • � � � ,:,.. � -. � � '' ,� � �4 �1 a. 1 y �^�� j '�{ , ...- f;� c" -�' '' ( I . ;a ,_ � �,��: z �� ,.o:,, � - .., .. , :�--=-- '. OP1ti^:iulai:: .. �y _G ' i��.. ;, (�, . � r : p.. �. ��._ �;�AL�'JiJ .T. ' � •� � �t I - . � .2� 3 � 4 � 5 < ,�,� �,�rJl.�}i(�11/IC - �1 �� .�� • . �i . . ' • ln'� �. . .. . ' • � �----- --- ;. _ ._.., Y�.; := i i � � ..- - , ' ' ' ' , : ' , X 2� Plannin� Commisslon MeetinA - Decem:>e- "_�;2 _,a�, � the service station sold the property what other kind of yeneral business could be using the site. Mr. Clark said that all the govermental bodies concerned wanted the ser- vice road changed. Chairman Erickson said we have two requests here, one for legalizing the zoning for a service station and one for a convenience store. Now we are talk- ing �bou[ [he loopback that was not mentioned in the requests. Mr. Clark said that he would assume that the Union Oi1 Corpany would dedicate the land for the loopback if they have a usable site for their station, but if the requests aren't granted, they would not want to dedicata Che road. Mr. Kenneth Fletcher, 5930 Polk Street: He asked what th_ reaso�ing was in creating the loppback. Mr. Clark answered that it was to :;a.�e more scack- room. It will brinR the trafffc closer to Mr. Hedlund's and Mr. Fletci,er's property. r Mrs. HedIund said that if the road was goia3 ko be move3, they wuuld want a copy of the survey to see now close their house va•<:d be Co tr.e :cre��. Mr. Clark said the closest corner would be 241� feat. Mr. tiedlund asked if the road ware put in, rrould they be requiceu ea ien>� it. Mr. Clark anawared that could be made a etipulatlon. Mr. Fletcher thought they could flnd an alternate plan. He ttiought the psopoeed plan would make the aituation worae. Mr. Minish asked at what stage the plan for the loopback was at ;.�w. Mr. Clark answered that the State Highmay Department will build th« rc:�_' i: the City furnishes the right oE ways. Mr. Schmedeke said hG didn't ihink the Planning Commissien could nake any reco�endations on this until all the people affected �ere notified. ��._.. Chairman Erickson said this intersection had been discussed for over a year. The City has to come up wlth a solution. Ae did agree with Mr. Schmedeke, however. MOTION by Zeglen, seconded by Fitzpatrick, that the ?la:,r.i�g C;r.�r::_s_::c, continue the kezoning Request, ZOA #72-11 and the re�;��est ;.r d Specia_ '�_,_ ?ermit, SP tf72-16, by [hlion Oil Company until ➢ecember 20, 157, :;� tt,a- �. . prop>rty owners affected by the loopback can be notified. t'For� a vcic� vc_:, all voting dye, the motion carried unanimously. 4. 5. Ls::�D ��ti.rp4c:�o:: ce.. -,• on 11129. (5.:.. corner of RY PLAT, P. ' Replat 75th Avenue S . li7 t Lot 13, Audit�c�� and Ce^ttal Ave:.ue. ) � nnwxLlvG: 1c��u�ltvG Rt;QU�S"1'. ZOA f!/2-11, BY JA*"'c I.WD CO'dSTEiCT[�:; I�C.: To rezone the West 250 feet of Lot i3, Au�•`or's S�.�div:.i; from C-1S (local shopping) tp F.-1 (single'iar..11y d::eilin;=.i. , ' 2C � Flannin¢ Commission Meeting - December 6 1972 d$�e 5 Chairman Erickson ataced that these two items would be considezed together. ' MOTION by Schmedeke, seconded by Zeglen, that the Planning Co:nmissicn wa:ve the reading of the Public Hearing Ivotice for the Proposed Preliminary Fla:, P•S. #72-07, Jim Lund Acres and *.h� Rezo:iing Request, ZOA 1i72-12 by James Lynd ' Constructioq Co., Incorpora�ed. �:pon a voice vote, ail voting aye, the mot�or, carried unan•imously. James Lund was present. Mr. Clark oaid thn Plata & Subdivisione-Sts•�te & Ueilities Sabcoms�tetea had recommendad approval of the Propoaed Prelimiaary P1aC, ,tim Lund Acres, subject to ihe Planning Comoission approval o£ ehe reaoaing of the West 250 laat of Lot 13 irom C-1S to R-1. .Chairman Erickson asked Hr. Lund if the enCire tract will be R-1. Mr. Lund sald it would. He eaid he couldn't find a co�aercial use for tha property. The special asaesamenta for the entire property •eemed to decer ' co�ercial development. Ae feels that the property w:ll be used when it is zoaed for zesidential use. Mr. Clark said the land zoned commercial around Mr. Lund's property is vacaat. Mr. Minish sald there might be some disappolnted property owners if the land around it develops. It was noted Chat Lher�e were other single :amily dwellings in the general area. Mr. Lund said he would iike to have the house that would be built on the corner of 75th pvenue aad Cen[ral Avenue face 75th Aveaue because of the ttaffic problem. MOTION by Schmedeke, seconded by Zeglen, that the Plannir,g Commiss�cn clo - the Fublic Hearing of the Proposed Preliminary Plat, P.S. N72-07, ,;in Lur,� � Ey .Tames Lund Construction Co., Inc. Upon a voice vote, all voting aye, !he�. motion carried unanimously. MOTION by Schmedeke, seconded by Zeglen, tfiat the Planning i o�.miss:.::. ; the Public Hearing of the Rezoning Request, LOA N72-12, by .:ames :.�ind re-s*r�c- tion Co., Inc. Upon a voice vote, all voting aye, the motion carr;ed u:,ar.i-�ca_.;�. MOTION by Schmedeke, seconded by Zeglen, that the Plannir.g Commissicn recommend to C.ouncil approval of the Proposed Prel±minary 'riat, .,�, �;?_;;�;� ' Jim Lcnd Acres, by James Lund Construction Co., Inc. beir.g a re��at c` :,�� '3 Auditor's Subdivision f1129, Upon a voice vote, all voting aye, c`:� moticr, carried unanimously. • MOTICN by Schmedeke, seconded by Zeglen, that the Planaing �ommissi�n recommen3 tq Council approval of the Rezoning Request, ZAA r,".2-12, py lames Lund Construcxion Co., Inc. to rezone the West 250 feet of Lot 13, A:.ditor's Subd_vision #129 from C-1S (lucal sho�ping) to R-1 (single 'arii,✓ :wei_'-,�-j, Upon a voice vote, a11 voting aye, the rsocion carried unar,irrously. � ' 1 - ' '� TO WkIOM Zx MAY CONCERN; OFFICIAL NOTICE CITY OF FRIDLEY PUBLIC HEARING BEFORE THE CITY COUNCIL Notice ia hereby given that there will be a Public Hearing of ehe City Council of the City of Fridley in the City Hall at 6431 Univere3ty Avenue Northeaet on Monday, Jaauary 15, 1913 in the Council Chamber at 7:30 P,M, for the purpoae of: Conaideration af a resoning request, ZOA #72-12, by James Lund Coastructioa, Inc „ to rezoae the West 250 feet of Lot 13, Auditor's Subdivision Ao. 129 frem C-1S (local shoppiag areas) to R-1 (single family dwelling areas), all lyiag in the North Half of Section 12, T-30, R-24, City of Fridley, County o: Anoka, Minnesota. Generally located in the Southeast corner of 75th Avenue N.E. and Central Avenue, Fridley, Minnesota Anyone desiring to be heard with reference to the above matter may be heard at this meeting. t i 1 FRANK G. LIEBL � MAYOR Publish: December 27, 1972 January 3, 1973 ' ' ' OFFICIAL NOTICE CITY OF FRIDLEY PIJBLIC HBARIN� BEFORE THB CITY COUNCIL TO WHOM IT MAY CONCERN: Notice is hereby given that there will be a Public Hearing of the City Council of the City of Fridley in the City Hall at 6431 University Avenue N,E, on Monday, ,7anuary 15, 1973 in the Coucil Chamber at 7:30 P.M. for the purpose of: Consideration of a Registered Land Survey, P.S. 872-06, by Donovan A. Schultz being described as: ' All of Lots 1 and 2, Block Edgewater Gardens toge[her with all that part of Lot 3, Revised Auditor's Subdivision Na. 23, excepC thae part thereof embraced in Lota 1 and 2, Block 1, Edgewatar Garden�, lying within the followiag describad boundaries: Beginaing at the •. moet Southerly corner of aaid Lot 1, Block l; thence on an assumed ' bearing of N74°30'W along the Southweaterly lince of said Lot 1 an3 said Lot 2, $lock 1, a diatance of 147.62 feet; thence along a tangential'circular curve to the right having a radius of 36 feet, delta angle 63012'16", for a distance of 39.71 feet; thence along a tangential circular curve to the left having a radius of 50 fee�, delta angle 34°42'16", for a distance of 30.29 feet; th'ence NO°48'47"W, along the Westerly line of said Lot 2 and its Northerl�• extension a distance of 393.10 feet; thence N71°12'13"� 2 distaace . of 62 feet; thence S83o47'47"E a distaace of 145 �ieet; ther.ce S64°47 k7 E a distance of 56 feet; thence S36°24'21"E a distance of 65 feet; thence S11°56'45"E a distance of 41.14 feet, ,::ore or iess. to a point on the Northeasterly extension of the Southeasterl�• i:ne of said Lot 1; thence 516°46'14"W along said �iortheasterly estension • and along said Southeasterly line a distance of 390.96 feet, more or less, to the point of�beginning. y 6 All lying in Section 15, T-30, R-24, City of Fridley, Coun[y oi Anoka, Minnesota. ; Geaerally located at IS Rice Creek Way, Fridley. Anyone desiring to be heard with reference to the above matter wili be heard at this meeting. Publish: December 27, 1972 January 3, 1973 FRANK G. LIEBL tMYOR 0 ' �,j:.,3 �P.S. 4i72-Ob (Reg. L-r_ ' i{ h - . Donald A. �c'�ultz ��i� ,�j � � 4 �,.,�,.r.,✓� rt�rRO � �c�n�rio;v � MC 5 { � 1 G .� . �r-� • :-: `� 'I ,. ! ' � . _v __�,�� =1.t ,U9'Thl N•Y:..� /^!.�...-.. ,�; ! i . —�- -'i,— /,�. Y � . � , �� , . � - r , �� _, � 1, `_-.-�` � . � . A ,k -� :� / °: . � , r ' ., �� `/ o_5�;� . "�� ?'�' ' ��' ! U r . G'• _ ' _', --, � ` j n.� 4 7 �d7 � � � J. J ; % ,` •, C� i il `} =�. `; �. . � " �.,,-.. \ � ` ,.� �j r � i - .._..1 � {z ` ,, �� : RSj� ��, , . 1 , , d . (.. ° v P p rf� r �� '� '� 'F�� `� -}�CV {�24L.'.� vU3. N0. 23 �. � � e n f �I ' (.i (C �� i , 'i � � I Z Ifzi�?�� l �� '�� 6EITH 1'uY �� , � � � ( { •. .. 7 ',___ `_.. !. � r%,� �� I�t�� ANS 4� C��7 9DD.%� l. 3 � i y `.. a: ! . � �� ',✓ i I � f '."-�� i ..�_. -"�`I,: r . ., . 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O ` f � . ��, ,, � Q- ; '; . i � _ .. . \,1 ` �� ; .� J ' ; � ��. � � - ,�;-��,�..., � - � �� ';, '' \ � , V �` \ �:; �r; I . \ , � �f � ,.�\ � - � l ! . � ., . . / , rn ; \ �....- . � 1 /. • . .. . �' , . I ,� ,� � . .� � �..� � � � � � ;� �: , �� - -� � [ � , / \ P.S. ii72-06: D.-A. Schultz � C%�. / , - Rey� Lan�ey , �� . �. � �; ,�' �' f; � �, } ; �'� �, . � , „ _ ,_, < , `\ ' ��__ , , ` � � , ✓ � x_.:.. , _� , , �µ` . �-�. � �' a'. Y , „i.. �""""- _� . ~`�'�' ' I! 1 '. ) ' .. . . r � �' ., �' 1 �`y 1.1 . �\ .� ' � ' i � .. ? . . _ . ' 1 �-.. • � �1 � y' r I- � ' . __... __ ._ ' -- - ---PbANAIZNG-COAi"�fLSSION- MEETING ' CALL TO ORDER: CITY OF FRIBLEY -- DECEDIDER 6, 1972 1 The meeting was called to order by Chaiiman Erickson at 8:00 °.M. _ _ _ _ --- -- _ _ _ - -- ROLL CALL: ' � � � �� ' � 4C Members Present: Erickson, Minish, Fi[zpatrick, Schmedeke, Zeglen Members Absent: None '' Others Present: Darrel Clark, Community Development AdMinistrator APPROVE PLANNING COMMISSION MINVfFS: NOVE!�ffiER 22 1972 I�OTION by hlinish, seconded by Schmedeke, that tbe P:ann�ng Ccmmission app.^ove tt:e Pranning Commissicr. minutes o_' Nevember '•2 1972, Upor. a voice vote, all votin a e r • `' _.. g y, he motion carr�ed unanimcusly. � PAGE 1' RECEIVE BOARD OF APPEAI,g p{INIITES: :IOVE.tiIDER 28 1972 MOTiorr Ly Minish, seconded �y Fitzpatrick, ^,hat the Pia:ir.i:,F +:ommi �si _n receive the minutes of the board of Appeals meeting of Ncve:nte: ��, ig^�, �;t,,._ a voice vote, all voting $ye, the motion carried uaanimously. --- - �.....,,,.-,��c.n ninuit5: NOVE�SBER 21 MOT_Oi3 rry Minish, seconded by Fztzpatrick, tha* the t:anning C•;,;,,,°_:,,;,-; receive the mir.utes of t;�e 2uilding �tandards-Le;i�,n �or.*roi �u�c�-;;�,_-r.-� tiauYes �i AJovember 21, 1972, lipon a voi-e vore, a�l voting a�e, t'�;e m-__.r carried unanimously. - 1• PUBLIC AEARIhG: PROPOSED REGISTERED LAND SLBVEY p.5. it72-06, 31' DONOVAN A. SCHLZiZ: Replat of Lots 1 and 2, Block l, iidgewater Gardens. MUTIOSJ by Schmedeke, secoadeQ by Zeglen, that the Pla::.*.ing Cemr..'.-, waive th� reading of the Public Hzaring ?Gotzce of P.S. ,�72-pF ty �.cr�:•a: �r.. SChultz. UFor. a voice vote, all voting aye, the motion carried unar.'_r,,_usi,. Mr. Harry Mlworth, attorney, was present to represent the peti[icner. �ir. Donovan Schultz was also present. Mr. Dilworth said he was not going to �ake a presenta:ion but was ¢e:e to answer any questians the Commission might nave. Mr. Darrel Clark said *tz. Schultz was in earlier this year on a lot s�iit. They [ouched cn this pro�leca with tha lake shore. At that ti�:e we e;;c.u;.;c - wqpld involve otne= peopie with lake shore property. Appa:zntly >ir. �_ir.l�_z��+` fqund it di,fficult to work with tha[ large of a group of people so he has decided to take care of his own problem on his own lot, ^".: chase agreement with Mr, Ottp Ostman subject to approval o� thehRegis[�r��+ �ur- 72 � I� � � rtannin Co�ssion � � ti � Meetin - Decemb�z �. io= 1 _.,�_ Land Surve �,; , � Y• This item was before the Plats & Subdivisions-Streets & L'tilitie ^ Subcommictee las[ evening and they recummended approval if Trac[ A and D one parcel and Tract B and C became o�e parcel. This was p:oblem of one of Lhe Tracts becane going tax forfeit. �o eliminate the Chairman Ericksor. asiced the purpose of this request. Mr• SMhultzawouldshavedtheat a private party oc�ms the lake and if [he lake recedes and the lake shore. Mr. Clarkbsamd��esh d�sent�jnotice to the kice Cr« K Wa[ershed aad g ProPerty becween his propercy had got nothing bac&. He also sent a no[ice [o th Waters and Resources and had a phune call yesterday from *fr. Rav said they had ❑0 2 Divisior cg [he vater. °bjection providzd they still had control of theslandCUadec Mr• Dilworth said the present legal descriptio❑ is suoje.c [� easemen[ to the City of St. Paul and its Water Commissioners, lower the lake accordin P2rpe[ual cated from [he � CO the needs of 5[. Paul, IF this were raitie 2C�d1- descriptian, Mr. Dilworth felt this Would lead'c Mr. FitzpBtrick asked how the North o majcr problem,, Clark said it was the center line PrOPerty line w has been the lo of Rice as esta� lished. DIr. t line since yt Creek before z'�n la'r,e was -ade, 1[ Edgewater Pla[. Mr. Dilmorth said asCthissisdtorrensVproper�,� of this proper[y cannot change. Y at the date of ;h� , Che bouncar:a5 Mr. Erickson said the City was asked to pay some of the expense uf c�• on the dam. G/ha[ would be the position if all the propert,v owners arou�� ; lake have ownerghip. Mr. Clark said p�� « Ostman or Mr. Schul[z whether [his is '� , it would be the same chiag, Pr1°ately owned by 51:. Mr� Schul[z said the dam permit was taken out b Ostman was rzfused a permit to build the dam, so the C' y Che City of Fridle;. �Ct; 1�}' ow:zs the dam. Mr• Ericksan asked if Mr. Schultz was prePered to allow Che lake to keep the water level up. Mr, Schultz �aid he i,ad moneY Co kee Ghe City co fl�od with Che Rice Creek W�e wet. Mr. D1lwozt}� gaid they had �'P��t a lot oE the lake from fillin atershed people and the bt`'n in concact 4 feet. 8 in. The lake Y aze hav„inB a bad problem ke.eping They have addressed the Riceae 10 to 14 feet dee atopped or reversed. y Cree P and now it is under The have a geologist'seestimate�thazWthere wilibbe no Locke Lake in five yea13, Mr. Ericksan said if this zequest is granted, the nents would not chaage for any public or reaerved as established. We are not O1i€�inal plat and easc- p;rivete water rigtts �r� they are eo the �8� would recede. allowing the petitioRer to fill tt:e land MpTION by Fitzoatrick, seconde3 by Minish, to close th_ - of the Pr000sed Registered Land Survey, p,g, ll�2_p6 �pon a voice vo r :''.�hlic iiear:;�c te, ali votir,g aye, r'r,e « ' v D°r.o;'an A, cc!;�.! _, mo.:on carried unaa':�cu;;l• ' ' � i 1 � � ' � 4E -- °��•� - uecember E 1972 PaQe Mr. Schmedeke said that the Plats 3 Subdivisioqs-StFee[s & Utili[ies Sub- � coc�ittee had approved thia request subject to the approyal of the Planning Conmission. Tqe lake shpre was merely changing owpership, and they were not �i wh�'ng 8nyone, mainly the CiCy. They all ynderstood what he was doing �d y. MOTION by Minish, seconded ty Sdimedeke, tnat the Plannin� Cor�missicr. r'�'�o:nmend �pproval to Counc:i of the proposed Registered La,ryd Survei, r,5, H72-06, by Donovar, A. Schultz being a replat of Lots 1 and 2, 31ock 1, • Edgewoter Gardens ;�iti� the stipulation that Tract A a�,� � �.��;;�,i� ��Q ��,a�� any waynchangc4t},� LockeeLakeashora+lir,eactU�onis not to b� eunytr;.�d Co i� the motion carried unaniirpusly. � a`rozce vete, a1: v��cin� d,�� t 2' � ( �. 3. -�... ncnrclltiV; RE UEST FOR RE20NI1 5695 Hackmann Avenue to tezone from (general businese). "`.. `'--- ��'�rn+v�Y: 5695 Hackmann ---•..' �"" `cn:�,^ continue Avenue [o construct a the service station. to � -12f . SY L:'i IO'( ence s[ora ni;c Chairman Erickson eaid the request fot the $exoning and Spec.iai �;_e 2,_ would be heard toge[her. rnit MOTZQN by Schmedeke, seconded by Fi±Zpatrick, that the F:ar.nin • waive the reading oF the Pub.lic Hearir,g Notice for rezonin �• the Special ��Q � ��"��-��=ion Permit request, SP #72-i1 � + �' `'�A ��`-1°, :-°� vote, all votiag dye, the motion carried unani��u�lyuil Compai�y, r;r�r �•;,,_�� Mr. Glen Hubbard, tinion 011 Real Est3[e Developer, aas presea[ to rerresc;r,, Union Oil Comaany, Mr• Clark sa�d Chis is a result of a traffic pattern study made by [he Cic,, County and SCaGe Highway Depa�tment yecause of the traffic hazard at th�; intersection. The =eason:for the study w$S ChaC all parties involved felt the presen� service drive is not a good traffic situation. We ha��e woriced with Un1on 011 to develop $ service drive around behind the siCe in�ludin islands to coqCroi Che [raffic flow. The.result of this is that Union i6 wo42d like to 4 ��'i°''s �elocate LheiT structuze op the site. We are st�ll with, ths Highway Department on th¢ utility Qase�qent$, No structures wuu.ld bp on Che ri h negetiating rezonin $ t�f �'8Y' The whole parcel is zoned C-iS. The reason for the g request ie tv have the proper Eoning claesification for a servi�� st�t�on. Chr, Eri.ckaoa said the C-15 zonin$ �18S8ification vould allow ehe convenience store. �e total site was 3/4 ac;e. Mz. Clark saLd the W, loaing one third of iX 'o iC would be some;h�.ng lesa Chan haif an acre. Y o' id be Mr• Lvu1s Hedlund, 930 Hackmann pve,F He said he owsted the L° th= ajl station. Tnere was a 10 foot planting strip and a fence �� • his prppe�[y and the station. ihe pu=e 0�1 � P1Opert;+ next he mainCains i mapany had b.� the etation �� e new gexyice rofld w' F�` ''�' `'�' �e�'=2 «._ atld hxe propert � ill elimina[e this Euifer betweer � Y• He didn t vant �t, He was also concerned iE �� I' OPFICIAL NOTICE CITY OF FRIDLEY PUBLIC HEpgZNG BEFORE T� CITy Cp[RVCII, � DO WHOM IT MAY CpNCERN: ' Notice is hereby given that there will be a Public Hearing of the City Council of the City of Fridley in the City Hall at 6431 Universitq Avenue :I.E. on Monday, January 15, 1973 � in the Council Chamber at 7:30 P.M. for the coaaidaration of the following maCter: ConalderaCion of a request for a Vacation, SAV li72-06, by State Land 6 Development Co. bY Paul Burkholder for the following sereet attd alley; SSth Avenue between Fifth and Sixth Streets, Al1 that part af the 12 foot alley located in Block 10, Hamilton's Add3tion to Mechanics- ville that is located between Highway /f100 on the Nprth and 54th Street on the South, A11 lpcated in the South Half of Section 23, T-30, R-24, City of Fridley, County of pnoka, Minnesota. The City of Fridley will retain the drainage aad utility easements. Generally located between Highv�y �100 on the North, 54th pvenue on the South, Sth Street on the West and 6th Street on the East. �Yone desizing tc be heard with reference to the above maCter will be heard at this meeting, PRANK G, LIEBL �YOR Pub7,ish; ,Tanuary 9, 1973 Januury 10, 1973 � �, y t ° ,. . _ __ j S"`�� .. - 4. -� , t � fN 3 � - - - � ' ?' r�' " ' S A 'I .t� � sr � �E � - /*. yJ co � ��r �: �+s �Jky?,��i � ��.. ` _ N� „ �- ;,: `` � �6 T.H,. AV E . ; .. . , , . ,.� , � , � :,.> ,� ,. ; r. ,,. - ••w 'S ; �� r � a x �_ � °_ -: � � �se SAV i172-06: State Land _ i T_ ' , `�� ; � L � � ° z �� ' and Development go, -- - - . . _ 'l,-+ - �.� ; Q;,,�� • Paul Burkholder) -- - r s � � � Vacate alley in Blocic.,10, �� .,r ' _ _ ii-- �` F -s � J ? &,SSthAve. bet. 5eh & �a '� - 'I �� - , 6th St. � ' ° ------ -- - : . � . t� ,ii � ; � ' i ls 'i' _�. i i . . .. . , ��_. . .. ` _ ""�.: � ° i . � � .- i,�. :I I� 1c/ i. �--,i_. � '.l+---r;r°.•^y' _i /� i � - �`� -r?^d .:i �r' �_B__ ; i !_� '� 'i.. �"' _. r : 7 .___ .-�-'- i � � 7 9 .� u ' ' y .•�►[ _. i. g � ' _ iai.: �•'- � ~.'� � � _ . . � � � � �� ; I�., :./_ � �, � b � I . �.. _ .; � .- ��Tn ""'"`"--�—�k_-� � � ; • . P ,.c'�"'��. J --�_ '_ _ -- i - ' r-- � = - - i . ' � �_ ,t �'� �'+�� _ r ' ' ' ' - - -- � -._ i-. . . _ _ , ' , � y � I N---=R S TA � _ --.�._ �_� ,� " _ , ,----- —,— __ � '1 , ,- — . . �_ _ . r _ _ _ � . 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Y.A / � � 4 r..�� 4 � "s— . G : . C rs lf _ r� _ YS _ 1� _. ,_„ P'� .. PT • tj _..... R� '_ �� " . i0 , /f '_'_ —t—.Y_ .y � _ �2/ y, '. NO .—. e� `'�, • ` � �� /� . —_�f__� _—�/1 y � '. /3 , /! 3 l[ �' . + '= N —_ �. � •L i 3 + 4 S c .... � ' --, • ^9 • + /I! � _._"__... _ � /d + _N : _ !� � F_<^s _i —�— � ti < 2J � I� � r� � 2t p/ __ � pp_ /! _ �� _ /f r i i i 1 / �S� �.�,,.�J N.E. 2 j 3 ___'s — S + �-- " 7 __ � � _'O _.._ - �� -- _� _ I = .�l i �"' �O Y � r i Z��J f_ is L Il as 1s 1I_ z3_ � I/ _ Ia /D is /1 . a= . . � 'i ' �.� ` ` � n. e `; i 0� X" ��. c .. . ., � � i t ^ ` '/ -- •:� t �� -` , � _ ' �, . . ! �� ,�,...�: ro.+ � ly�� ✓ ,{ � 4 4`. ' ' �c e. +1' i. '. ,�-� ga� a,r {} a.'.. 1' s 0� 1� � ,� 54 7H i.. X � /e ; ! ' I i� � a y a'{� a� �s i a �� 53 I/2� L .v r� y �i tl,r �r // _ 'i �Nj�-.. IS r'� , � �i A r i : u y d' / �g ' �j i ' 1 � �! �^ a w r� i ' � � � I > 5� PlanninR Commission Meet:ng -_:,,v�mber ?2, 1972 Ya�� ^ -- - - ----�_-----_ Mr. Palmquist said they wnald have to raise the grade so that the floor grade would be compatible with ehe stree[. A retaining wall would be along the North side approach to tne :.or[�� bay. There is aboue a 3;or 4 foot transition in the elevation ::ow�n to the service d:ive. Mr. Klaverkamp agreed [he cars would comE out wet aith this type of operation. MOTION by Fitzpatrick, seconded by Zeglen, that the alanninq Commission reCeive d copy of the letter dated November 14, 1972 and a cupy of the original. deed with Phillips Petroleum Co. sent by Mr. Klaverkamp to i�hillips Fetroieum Company. Upon a voice vote, all votinq aye, the motion carried unanimously. Mr. Dfinish sa;ld [hat recently the Commission has had a number cf similar requests for allowing different accessory Uses for gas s[ations. It is indica- tive we have [oo many gas stations in Fridley. He was �elu,.t.,z[ to see the Commission continue to cater Lo their problems to increase r;� business and therefore jusCify their demands iur more stations. There i� Ghe ooteatial here to allow the increase of traffic problem aiid already we have prohlemc kitn the shopping center, particularly cars waiting ka g<r. onto Mzssi�sippi an�. thie theseby would add more. He would be willing co .tUOk at [!�a sit� i.f Some- thing were puE in to prevent the lett turn ehrough the �:rrvi�;� drxvt g�,in�; Eas[ on Miseiselppi. Until th� problem oE backups is sulved, he did not wane to ene the eituatton aggravated in any way. td�TION by Miniah, aeconded by 2eqlen, tY,at the Planriang f:�mmission recommend approval to Council uE the reaueet for a Special Use !'ermit, SP M72 16 by Ph�llips Petroleum Company €qr_tjie pgr��}ag�yg� pf the Service Station per Code 45.101, B, 3, E, but the Planning Commission recommends to Council denial of the reauest to convert the North stall of the service sta tion to a car wash and install a car wash machine, per Code 45.101, B, 3 H, located on the South 120 feet of the F.ast 120 feet of Lot 18, Block 5, Rice Creek Plaza South Addition. Upon a voice vote, all voting aye, the motion carried unanimously. 2. VACATLUN REQUEST SAV N72-06 BY STATE LAND 6 DEVEI,OFMENT C0. (PAUL BURKHOLDER): To vaca[e 55[h pvenue between Sth and 6th S[ree[s and the 12 foot alley located in Bi�ck'10, Hamilton's Addition to ?7echenics- ville [hat is located between Highway Ii100 on Che t::;r[h and 54tii Stree[ on the Sout}� being [he property of the Sacred 8eart of Jesus Polish Catholic Church. • Chairman Erickgon explained that he received a le[[er Erom Mr. Burk- holder addressed to him stating he would be unable to attend the Planning Commission meeting this evening because of ihe marriage of his oldest daughter. He read the letter. MOTION by Zeqlen, secunded by 1!inish, t}:at. the ['lann�ny :,'ommission receive the let.ter dated November 22, 1972 from Paul Burkholder. Upon a voice vote, all voting aye, the motion carried nnanimously. � � i � I•. Planninz Commissi�n uee�ic� `_ _ _ 5D _ ''�f;e 5 MOTION by� Fitzpatrick, s�conded by t+,:n.ish, that the Planninq Cortvr�ission recommend to Council denial of that part of the vacaYio�; rey�,:est, SAV I{72-06, involving the vacation of Gia�;� 1�-;, Y,amilton's Additior �-� s � being SSth Avenue k�etween �� E=r.3r� -s�✓illc -� and ath :treets. �pc;:� a• =c� vote - � 311 VpCing aye, the motion carrir_.d wiat�imcu;ly. 3. CONFIRM PLTBLIC HEARING DATE OF DECEMBER 6 1972: Rezoring Request, ZOA N72-lI, by Un1on Oil Companp, 5695 Hackmann Avetive to rezone from C-1S {local shcpping) to C-2 �genezal bu,.uess). MOTSUN by Fitzpatrick, secun3ed k�y Zeglen, t.hai the Planning Commission , CoAfirm the Public Hearing dato cf Decem,6er E, 197.2 fox the Rezoniny Request, ZOA N72-11, by Gnion Oil Company. �pon a voice vote, all voi.ing aye, t'c�e motion carried unanimously. �J , 4• CONFIRM PUBLIC HEARING DATE OF DECEMBER ti, 197Z: Requr_st for a Special Use Perinit, SP �72-18, by P.nion Oil Compgn��, `695 Hackmann Avecaae to construct a convenience store and cor.ci.nue ��., service statiuu. . MOTIUN by Fitzpatri.ck, seconded by .:eqieu, that `. - i�la>�ning co:rtmission confirm the py►jlic Hearing date of December 6, 1972 for *_hc ;pecial use Permit, $p #72-18, by Ur.ion Oil Cct�¢any. Upon a voice vc*�-.-; all voting aye, the motion carried unanimous;y. 5• CANFIRM PUBLIC HEARING DATE OF DECEMi3E� 6 1972: Proposed RegisCered Land Survey, P.S. M72-06, by Donald A. Schulta being a replat of Lots 1 aztd 2, Block 1, Edgewater Garder.�. MO'I'ION by Fitzpatrick, seconded by Zeglen, that the Planning Commission confirm the Public Hearing date of Uecember 6, 1972 for the proposed Registezed I.3nd Survey, P.S, N72-U6, by Donald A. Schultz. Upon a voice vote, all votiny dye. the motion carrie3 ;u�animously. � 6. CONFIRM PUBLIC HEARING DATE OF DECEMBER 6 1972: Preposed Preliminary Plat, P.S. ll7i-07, ,)im Lund Acrea, by James Lund Cons[ruction Co., 1nc. � being a replat of Lot 13, auditor`s Subdivision iti�9. (Southeast corner of 75Ch pvenue and Ce^tral Avenue. MOTION by Fitzpatrick, seconded by Zeglen, that the f�ianning Commission COnfirin the Public Heariny date of December 6, 1972 for the proposed Pre- lilM1inary Plat, p,g, g7Z_��, ,7im Lund Acres by James Lund Cpnstruction Company, Ino. Upoq a voice vpte, all voting aye, the motion carried unanimously. �. CONF�RM PiTBLIC HEAftING DATE OE DECEMBER 6. 1972: Rezoqing Request, � '. y ames Lun Constructioq Co., Inc., to xezone the Weat Z4Q �'aQt oR Lpt 13, Auditor'a Subdlviaion N129 from G1 S(1oc81 $hop- piag) to �-1 (oingle family dwellings). , , l � i 1 � Z `. � r; ...' O ,. �� f� '� ,.»,r � .,.�.�. _ , CDON RAP1�`' THE CITY OF COON RAPIDS 1313 COON RAPIDS QGULEVARD COOfV RAPIDS, MINNFSOTq 55433 612 755-2880 January 5, 1973 TO: Mayors and City Councils of , Anoka, F3laine, Calumbia Heights, Coon Rapids, Fridley, and Sprtng Lake Park � SUBJECT: Liaison With State Legislature � During the month of DeCember Mayor Bruce Nawrocki of Columbia Heights called three meetings oP various Anoka County oPPicials to consider the way {n whtch communications with the State Legislative representatives of Anoka 1 Courrty might be imprwed over prior years. There are many problems of loGal government whieh in the past have not been made well k�own to the State Legisiature, particularly as they might directly aPfect municipal ' government and its ability to provide necessary services. [n past recent Sessions the ability oP the League of Minnesota Municipalities to corivey this kind of information has become tess and less. Most importantly ' however is the lack of time which legislators have to devote to locai problems and thetr need to have accurate information comprising the total picture pr{or to the time that they vote on an issue. For these reasons the mayprs present at the December meetings requested the City Managers to consider alternative ways of improving the liaison with the legislature. There appear to be at teast khree alternatives open to the cities of Anoka Courrty; 1• To corrtinue to depend upon 'the League of Minnesota Municipalities to represent overall irrterests, and to tndividually look owt for our own interests. It should be noted however that there may very well be t{mes when the ir�terests oP municipatities in A►�okd Couriky differ from those Of the rest oF the state. I� addition, the extremely large number of b�lls which the League staff must watch almost pre- cludes spectficalty looking out for Anoka Courrty municipal t�terests. TWIN CITIES FASTEST GROWING SUBURB C(�UNCIL�MANAGER GOVERNMENT 6 , , , , , , , ' -2 - January 5, 1973 2. To depend upon the services of the Anoka Courrty Administrator's office. For the past several legislative sessions the County Administrator and his assistants have devoted a large share of their time to closely shepparding various bills through tNe legislature. They have estabiished a rapport with legislators, have been fairly successful, and have been very cooperative in assisting municipalities on bills of municipal interest. However, they have their own problems to look out for, and there may be times when the interests of the County and its municipalities conflict with each other. 3, Th� third alternative is for the municipalities addressed in this memorandum to join together to provide a common front regarding our mutual interests. It is felt that the joining should be a format one, either through a joint powers agreement or using the existing Anoka County Association of Municipalities as the vehicle. It would appear that the latter of these twa would be the most practical'. Under the . auspices oF the Association an individual, on group of individuals, specifically knowledgeable in Anoka County municipal proble ms and having a conversant knowledge with the County legislators, would devote the equivalent of a full-time employee to th{s com- munications problem with the legislators. As an example, each oF the City Managers From our munici- palities might devote say one-halF day or one full day per week during the legisiative session to th{s com - munications problem and staying on top of �iils oi' particutar interest. Although this might be affective (which is questionable) it would probably mean that admi�istrative problems in our City Halls would increase. Therefore, perhaps a better alternative, although more costly, would be for the ,4noka County Association to employ a full-time Executive Director who could devote full-time to these activities and because of the persons expertise in this area do the job more ePfectively, The municipaliti'es addressed heretn have indicated that they could p�ide a total of $22,spp per year to support such an undertaking, 6 ii , , � , � ' I. �- Jarr,aary :, , � • The tentative commitments for funding are as follows: Anoka $ 7,p00 Blaine $ 1,000 Columbia Heights $ ��ppp Coon Rapids $ 5,000 Fridley � 2 � , $22,500 This amourit of money could provide for an annual salary for the {ndiv�dual of $17,000, fringe benefits of $2,000, an allowance for travel expenses of $1,000, postage, telephone and ofFice suppiy expenses oP $500 and other miscellaneous expenses of $2,Oq0, The Executive Director's functions and duties would include as a m{nimum the following: 1.. To inform himself and keep abreast of alt per�ding legislation and be knowledgeable oP the effect it will have on the participating municipalities. 2. To meet regularly, if nqt daily during legislative sessions, with representatives of the Anoka County legislative delegation and the chairman of important committees hearing proposed legislatian which would aPPeet our municipalitiss. 3, To meet and confer regularly w{th the City Managers and Gity Councils as required to determine the aPfect oP pendtng legislation on each municipality and to soticit the position of City Councils on various tegistation. 4, To testify to tegislative committees reyardiny the position and afPect of various legisiation on the part{��_ pating municipatities. 5. VVhare the opinions of partiCipattng municipattt{as differ, to attempt to reach a consensus position which can be agregd to in the best fnterests oP all cpncerned. 6. Tp �staqlish a close working relationship with representatives oF Anoka County, the League of Minnesola Muntcipalities, and ather common interest groups regarding pending legislation, :. ! ' ' �_ January 5, 1Eii:s � �„ 7. To p�rform such other duties relating to pending or pr�oposed legislation as requested by the Anoka County AssociaCion or individual participating municipaltties. , 8. To perPorm such reasonable services as may be r'eQuested by legislators from Anoka� County Prom time to time. , , Following is a list of spectfic legislative issues, as examples only and the Itst ts not irrtended to be alt inclusive, indicati�g the mutualtty oF ir�kerest that exists between aur municip�lities: Metropotitan Council Legisletive Program including '. Houstnc� Authorities, Open SpaGe, qirpor•k, anc! membership of Metropolitan Airports Commtssion. �I ' • Adjustmer�t oP the Federal Revenye Shar{ng distribution fprmula. ModiPicattOn of the Omnibug Tax Btll of 1971 , Revtsion oF �uidelines Act as {t relate5 to Police and Fire Pensions. A new brtdge aoross the Mtsaissippt R{ver. Proposed pccupationat safety and health ptan. Giving City employees the right to strike versus compulsory arbitration. , Unen'�ployment.compensatio� for Ci�y employees. Cha�nge in ben�Pits Por PERA. • ' r It is the consensus of he Ct Manag�r � tY s in the Cour�y that the Anvka Cow'ky Assoctation should smploy an xecutive Director at the earliest �p�Ortunity to pe�form the duties ltsted above and to provide specific attontion on the legislaiti�re issues listed above. So �hat your specific feeltnga a� Fhts matter rr�ey be krqw�� „�id you plea,sp discuss them wlth membars of your City Council at the earliest opportunity gtving spsctfiC attentton to the need ror a Putl�ime Executive DiroGtor, and ascondly your Pinancial ability to participate in the undertaking. �ti '5- January 5, 1g7. A dinn�r meeting has been scheduled to discuss this matter in greater deledlar�d to implement a plan of action at Aurrt ,1eriny's Pancake House, 4920 Central Avenue, Columbia Heights at 8:00 o'clock P,M. , Wednesday, Jmlxaary 17. Would you please phone Maicolm Watson at 788-9221 prior to that time so that he may know how marry to expect for dinner? i� . ' ,: , • . � Respectfutty submitted, / , � ./ �C � `�'!'l� � �-_-� f K. Cottingham ` �iCy Manyyer , ' , � �' � � 1 ' , TO; . _ `• �"*'`,�. , , `.. . ;, �'c,� ..,[;` :i;� TH� CITY OF COON RAPIpS. 1313 COON R?+PI�S 60VLE'JARD COON RAPIOS, tvtINNF.507A 55433 612 755-2880 January 4, 1973 Mayors of Anolca, f3laine, Fridley, Spring Lake Park and Golumbia Heights Dear Mayor Ltebl: 1 am sure you share my concern for the potenhial drug abuse problem in the North Suburban area. This can be a problem which does not respect municipal boundaries and requires the close Cooperation of alt erfaCted agencieg if a drug crisis is to be avotded. In recpgnition oP this, the City of Coon Rapids appiied for and was �o�tunrxte enough to receive a federat grant through the Gove�nor's rime Commission to establish the Narth Suburban Youth Services Cer�ter. This Center has been in operation for several months now pnd is atready attracting youth„from ali seetions of the metropolikan �rpa, but most notably from Coon Rapids, Anoka, Blaine, Fridley, Sprir►g Lake Park and Columbia Heights. For this reason we feel that you should have a direct interest in its operation. r� , The YoutR Cerrter has been dependent to a large exterrt upon volur�teers to provide medical services, counseling, etc. A clinic has been established and a phone line for crisis calts instailed. We would like to have an ,� opportunity to exp�sin the Center's operation to you in greater detait. Therefqre� I am inviting you or a representative from your City Council as wetl as your City Manager to attend a joint meeting with your Counterparts from the communities listed above at the Coon Rrapids City CoVncil Chambers qn Tuesday, Ja�uary 23, at 7:00 P.M. Would ya,� pleaBe phone the manager's secretary Jan McCown at 755-2880 to inform her iP you can be preserrt. jmm % Cc: City Mgrg. Very truly ya�rs, �wl:•,% 1°� r' �.�. , .. %, , ,, ;, ,� � ��:,.,,..,.;; �.,. .� : v Donald G. Erlandson Mayor TWIN C�TIES fASTEST GROWING SUBURB COUNC�I-MANAGER GOVERNM£NT ' , M1Ti ytay .�.�E� i � b�� ; �� , . y�i�< NryE�o ' , � ' �T1��,F: or, 1I1� 1` r�.�;o�t .E D1:PAL2TIIE\T OE' F'1723LIL` 532.1i�-lCF� BT4TE UFN'lO& DU1LUlti(3 Saz!��r Y��[,r. 5515:, danuary 11, 1973 ilr. Gerald R. Aavis, Cit� liaaagar 6431 thaiwreity Avenue N.B. Fridley, Hirinssota SSk2]. Re: Propoaed Additional Protectiaa► Central Avoaue N.B. Croasi.ug Fridley, Minnesota !(innesota Traztafer Railw�y Dear Mr. Davis: The Highwa,y Depaartment has besn assigned the railroad eng3neering f�etions of the Public Sex�rice Cosission. L-� that capacity, we are rep�iag to yaur Ietter of Biovember 27, 1472, about the above referettced snbject. We have field checked this crossing and make bhe folloxing recaan- mendations baaad on recogiized criteria: 1. At present the passive protection afforded by t1w en- place signing is adequate, basad on 2 trains per day and a hhicle volt�s of appraxiaate�y 30Q0 psr d�y. 2. The iaplace "IAOK FOR T9lII(3" warning si.gna should be aowd to positioas approodmate]y 275 Seet in advanca of ths cxoasing, to accamodate a 40 m;i.es per hou: vehicle epeed. 3. 'Using *�arious warrant foimulae to dete�ne t�? r_eces- sity of crossing si8tals, �re find this to be a bordar liae cass. With preaent conditioas, tire hasitate to reocm�end si�g].e ior this crossing. Aa the area developa, the crosaing should b� evalnated ��'►• E:3 Hrnnver, if you wish to petition for a hearin�� as is,axplained in Mr. K:ndTS letter of Aowaber 30, 197�, you may certa:�il� do ao. Sincerely, cc: Mr. Jake I,undhei.un; County Sngineer Anoka, Mian�sota 55303 �"� '•f . _D •'� � �✓ Kr. Jobn L. Jsnaen, Cnief �tgineer . W. Bolsta3 Minneaota �raaeter Fiai]a+�y Enginser of Railway Negotiations JWB:RdW 1[r. H. A. Kind, 5ecreta�y Pnblic 3ereice Comiasian ��/ t� � �'� CITY COUNCII. PUBLIG NEARING MEE7ING OF JANUARY 15, 1973 The Public Hearing meeting of January 15, 1973, of the Fridley City ccuncil was cafled to order at 7;42 p.m., by Mayor Liebl, PLEDGE OF ALLEGIANCE: Mayor Liebl led the Council and the audience in say�ng the Pledge of Allegiance to [ne Flag. ROLL CALL: MEMBERS PRESENT; �IEBL, UTTER, NEE, STARWA�T. MEMBERS ABSENT: BREIDER, ADOPTION OF AgENQA: MOTION by Councilman Nee to adopt the agenda as presented. Seconded by Councilman Utter, Upon a voice vote, all voting aye, Mayor Liebl declared the motion carried unanimously. PRESENTATION: Mayor Liebl called on the City Manager, Gerald Davis, to introduce Dr. Srnith. The City Manager said the purpose of Dr. Smith's presentation was to explain the Hewitt Plan and the Guidlines Act as they relate to the Fridley Police pension Association Retirement Fund. He introduced Dr. Smith of Stennes & Associates, Actuary for the �egislative Retirement Study Commission. Dr, Smith said he had read the minutes of the special meeting on the pulice Pension Purdiny Plan that had been senX him by Mr. Davis and he said these minutes seem to imply that the Police and Fire Guidlines Act of i969 was the first law thai had any provisions relative to financing of police and Fire Pension funds. He said these provisions were not new. He stated in the interim of 1955 to 1957 the State Legislature conducted an actuarial evaluation of first, the State wide funding and secondly the local fundiny of Police and Fire Pensian funds. At this time the Legislature found the state retirement funds were in terrible shape. He said that eight out o` nine plans were unable to meet pension obliyations az that time. He said the result of the actuarial evaluation was the adoption of certain principles to be applied to the funding of the Sta�e plan, which established a method to be used to determine the liability of these funds, or the establishmcnt of the factor and term referre� to as the unfunded accrued liability or defici L This figure ran into several millio� dollars for the State plans. The Legislature set a goal of forty years to retire the larga dificit of the State wide funds. At that time the s[ate appropriated money to retir@ the deficit and recommendea that municipalities do the same thing. He said the Legislature recornmended the PERA fund, as it had the same problem, follow the same principle, and reduce the deficit by Che same date or by 19g7, r� ' PUBLIC HEARING MEETING ' JANUARY 15, 1973 Page j ' method wouid be maintained qn a basfs whereby ;here will always be money available to pay for penslon when the need arises. In contrast to that proposal, he said, the methvd the State Legi5lature had wprked with [he State funds is ' that by t997 those funds wi)1 reBGh a point where, from that point forward when an employee comes up to retfrement, the contributlong will have completely funded the cost of thls benefits. With the Guidllnes and the Hewitt proposal, one never reaches that point. He said, under the Guidlines Act, the employees who ' are hired in the future, xheir beneflts will be fully paid for if you regard them as a separate group, but the deffciencies of the past are never paid up. He continued, under khe Hewitt plan the financing is eve� lower, and he said he ' thought the financing,at any given point should at least involve the pensions being pald during the c�Iven year, A150-prqmised., i�t addition, he said, ouer .. fifty years there will be a somewhat large"r sum contributed each year'and the ' fund will reach tha pofnt where there will be a back log of funds on hand at least equal to the estimated pension requirements of the next ten years. He added a further thought relative to the history by stating, it was implied by the minutas of the Specia� �e[ing that there are no funds in Minnesota ' or public funds maintatnsd on a level at least as good as required by the Guidlines Act. He said that statement wuld be correct if implied exclusively to Police and Fire Pensio� Funds, he added, there are no Police and Fire Pension ' funds that he kn6w of that are funded adequakely in accordance with the police and Fire Guidlines Act. He reminded those present that all [he State wide funds, the State system, the Public system, the highway patrol and teachers are main- tained at a level higher than the Police and fire Guidlines Act, in that it is ' provided that the actudrial deficit will be retired by the year 1997 and from that point forward, each employees benefits will be paid for during his active working lifetime. � , , , He referred to the memorandum he had drawn up for the Commission saying he �.�ouid like to cit� some ways the actuarial deficits may grow. He said he nad carried his figures out tor roughly fifty years and under the set of projections the accrued deficit couYd grpw three times its original'leuel. He added, in regard to the percentages of pdyroll, the figures were based on the assumption that the economy will grow over this fifty year period. Dr. Smith said in spite of this growth in economy the size of accrual deftcit will grow several times its present size, related to the payroll at that point and would �ot decrease its present level. � �2ating an imperfect analogy would be if one had a mortgage on their home, and with the growth in e�onorrry, one could get an additional amount on this mor[gaqe next year, fifty years from now this mortgage may be several times its presen[ size, He said, the amount of the mortgage related to the increased va)ue of the property at that time enables the ratiq to recline. Relating this analogy to the a�crual deficit, Dr, Srnikh added, it will yrow several times under the expanding economy, but related to [he increased payroll.at that time the ratio might have gone dpwr�, He said, whether on� feels they can !ive complacently with this sort of s(tuation or not is somewhat a personal reaction. PUBLIC HEARING MEETING JANUARY 15, 1973 / _ Mayor Liabt said he believed there was strengkh in the G1ty's pension plan as there was time to reach the regutred amount and bulld Interest because of tha especlally young force, pr, Smlth agreed. 9ruce Nawrpcki, Mayor, Golumbia�Heights, sald Cotumbia Heights is facing the samg prabl�m. Hp said h� had not ca�ne to get fnvolved w(th the City of Fridley, but had attendad iht meeqing with the hope of getting some answers. He mentioned the history and th� �stablishment of the huqe actuar�l deficit, and added hz belteved [he statutes and gufde)tines established to reduce these deficits are rather cruel. He added, the statutes gave the i�dividual retirement association the authority to set the penslon benefits eacalatlon. He said a numuer of associations revfew on an annual 6asis and set 'h�enefi; schedules. When the requirements of ,the plan.are not complJed wlth, the plan is In tro��le. He sa�j the benefits should be kapt cons(st�3nt with the funding of the plan with maximu�n benefit lavels Set. He said, (t can not be takan fur granted that so��eone� d�wn tlte i f ie Wj I I ,3K� care vF t�i3 pro�lei��. Ne added, �nder the Guidel lnes Act, the local;u�it of government would pick up khe casC, whatever the price may be. ,{e said '�e is a�aare Cher� �.�e nu ea;;• answers L� �•ia probl�m, b ir if ther� we„� any answars at all, he would like Xp hear them. Maypr Liebl said the taxpayer should be co�si��ered. NP did �r;C �ael the �i:y sh��uld pay a yraaCa• ampunt ea•�'i year. By 198k tti° Ci:� ��uld t�ave to pay 60%, he ad�ied. Ne quesCionad the,feasibility of payfiig the same amount as the City is paying now. Ha said he thuught this i5 '.V�13C C!ie �{ewi:t Pla�i ��u!i acc��nplish, Most of tl�� l�cal communftles wuuld be ta;e� �ff the hook if they followed tne pla,n. � Mayor Na�rucKi, agreed establidhi.ig a level vf payment would Se a desira�ie factor. Ha added, _iaro i•; su:na q•.ias:'�i oF equfr,,, ,3, ��., Jid iot Seliei:: !h: iewitt plji c:iaiga.l anythi�j. In his •�pinic�n it put the pay,.ieats for bene�its decided apon today, i�Xo the future for those comi�g after �s to "pay. He-questions what would happe:i if someqne .�� ::�e f.�rce sh�uld ;,a�� n ii;aoi�.ity beFore t:iis tine, wh� aaas :.� aay pc�r,;ir. .:a��a ,�° 'ii; Family� ,\uC��.�- f;;,_�,• to be �,>��;��.,-,>.� i; ,�hdk i, °a� • i;_� �ne group ��f p4ople shpuld be fair wit'i another group, he sai i. W'f l l the people who picK up the gart�age want _�i� .an� banefi:;, �: a;;�ed. Mayor Liebl sa(d they would have �o negotiate with the Police pension Associa- ' tlon and come to a decision. �He safd it must ba looked at from a tax stand- point, a financial standpoi�t and a conservative sta�dpoint. The present plan under the Guide](nes Act Is Impossibla and Impracttcal, he added, He . said it is neces5ary to work some�hing out that is fl�ancially feasible. Mr. Kennedy said everyone ta�ks as if the world Will go on forever when dis- cussing a pensian plan, he added, even if the world goes on forever and the City pays 21%, ft w(I1 cut the baneffts in half, Mayor L�iebl asked Dr, $m�th if there were any private firm� where the employer pald 21�. Dr. Smith answered> the top range fo� private employers to pay into a retirament fund ts IQ�-15°,G, �la added there arm soma reasons for thts, th� average age of retlrement Is aga 65. However, the Publlc $ervice employee has a greater physical ytress. The Policeman must be a61e to wrestle with �� ' ' ' , PUBLIC HEARING h£ETIN� JANUARY 15, 1973 PUBLIC HEARINGS: page 7 PUBLIC HEARING ON STREET IMPROUEMENT PROJECT ST, 1973-I, ADDENpUM al (GUMWOOD STREET FROM 77TH WAY TO 78TH WAY AND ALLEY BETWEEN GUMWOOD STREET & BEECH STREET) MOTION BY Councilman Utter to waive the public hearing notice. Seconded by Councilman Starwalt. Upvn a voice vote, ali voting aye, Mayor Liebl declared ihe nbtion carried. , The C�ty Engine8r bt"ie��'y' explained Che action pla�ned. He had talked with the people and-thay had agreed -to t'�dc�-care-o� the access on Gumwood & AI1ey paving themselves. MOTION by Gouncilma� Utter to close the public Hearing. Seconded by Cou��il- man Nee. Upo� a voi�e vote, all vqting aye, Mayor �ieble declared the motion carried unanimously and the public hearing ctosed at 9:10 p.m. � MOTION by Gouncilman Utker to waive the reading of the Public Hearing notice. Seconded by Councilman Starwalt, UpO� a voice vote, all voting aye, Mayor Liebl declared the motion earried. ' The C�ty Engineer expla)ned thak some of the property involved was zoned comm�rcial and some resldentlal, The proposal was to have the entire plat zoned residential, The City Engjneer added the planning Commission had recqmmended approval. Councllman Starwalt sa�d he had met with some pf the closest property owners and there was no pbjeGtion to this zoning. He asked if there was anyone in the audience who was opppsed to (t. There wera no objections. Mayor �iebl asked the C(ty,Engineer if the oyerall project would be better if the zoning were all Single family dwelling, The City Engineer said this Would improve the project. MOTION by Coun�ilman Starwalt to c�ose the public Hearing on khe final plat. Seconded by Caunctlman Utter. upon a voice vote, all voting aye, Mdyor �lebl der.lared khe motipn carrie�i, and the publiC hearing closed at 9:15 p.m. ' PUBLIC HEARING MEETING `�--Pa9e�" - JANUARY 15� 1973 � ' ' MOTION by Councilman Utter to close ihe Pu61ic Hearing. Seconded by Council- ' man Nee. Upon a voice vote, all voting aye, Mayor L1ebl declared the mot�on carried and the public H�ar)ng clased at 9:25 p.m. ' ' The City Engineer said the Planning Gomnission had recommended approval of va�ating the alley but nat the roadway. He said the builder was willing to go along with this stipulation. ' Mayor �iebl asked the members pf the Polish National Cemetary that were pre- sent if they agree to give proper aecess. They answerad yes. ' MOTION oy Councflman Utter to close the Public Hearfng, Seconded by Council- man Starwalt. Upon a voice vote, all voting aye, Mayor Liebl declared the motio� carried and the public Hearing closed at 9:3Q p,m. ' RECEIVING REpORT UN LIAISON WITH STATE LEGISLATURE Mayor Liebl ca��Qd on the City Manager to give a brief report. The City Mana- ' ger said there had bean a meeting W(th John Cottingham, City Manager of Coon Rapids, and members of other comnunities in Anpka County, including himself and Mayor Liebl. The purpose of ihefr meeting, according to the C�ty Manager, ' was to determine a method where the comnunities in Anoka county would have better contact with the legislators and enable them to express their viewpoints. He said they had decided upon three alternatives; ' 1) Continuation of dependence on the League of Minnesota Municipal- ities to represent overall interests in the state. He added this was very broad coverage as the League represents all the ' Communities in the State. Z) Spliting the work up between �ity Managers in the County, a�d ' they would do the lobbying. The �ity Manager said this would take away from their various duties and create a lack of con- tinuity as so many people would be sent as representatives. ' � 3) A joint powers agreement that would a�lav the communities to poal the(r resources and hire an individual with adequate know- ledge to do th)s for the �ommunities. The C�ty Manager said that the�e had been tentatfve funding commitments established. He �aid it.was the opinion of tha tommittee that the third alter- native was the most suitable. A full time man could be hired to have ciose communication with the legislators. Mayor �.iebl said Fridley'S cortmitment, $2,500; was a very conservative nn�+. He said he had npt wanted to commit the City to a cer[ain amount. He .� ci Fe had talked to many people about this proposal and they agree it is a sound ore �.. ' ' � 1 ' PUBLIG HEAkING MEETING JANUARY 15, 1973 CC,�(�OIl.`e� willing to attend the joint meetfng regarding the North Suburban Youth Ser- vices Center, Tuesday �dnuary 2j, 7;q0 p,m., i� the Cpon Rapids Council Chambers. MOTION by Councilman Utter t,o receive the corrmun(ca�ion from Donald G. Erlandson, Mayor of Coon Rapids Dates 1-4-73• Seconded by ��unc�lman Nee, Upon a voice vote, all votfng aye, Mayor Liebl declared the mqtion carried unanimously. MOTION by Councilman Nes tp recei�a the communication from J. W. Bolstad, Engineer of Railway Negotfations dated January Ij, 19]j, regarding the proposed additional protection at the Central Avenue N,E. CrosSing. Seconded by Council- man Utter. Upon a voice vote, all voting aye, Mayor �,iebl declared the motion carried. ' CONTINUED DISCUSSION OF FRIDLEY POLICE PENSION ASSOCIATION RETIREMENT FUND The City Manager asked the members of the Councll whaX their opinions were as , how to approach Lhe Pollce Pension Plan, as ic has become a major problem. He said the administration was seekfng reaff{rmation pr.direction. ' ' The Mayor expressed his desire for solid hard negotiation to meet the obligation. Councilman Nea asked if it would be possible to place the new men on pERA, Councilman Utter said his opinlon would be to raise the retirement age irom 50 to 55 and review the escalatfon clause every [hree years. The City Attorney sald the members of the Poli�e pension Association want ' the Council to approve the Hewitt Plan. Councilman ryee said the problem with the F{ewitt Plan would be getting the people thirty years from now to pay for the service done tq�lay, Councilman Nee said he was in favor of a pay as you ' go plan. He said he thou�ht it would be better to pay more today than to expect your children to pay for ix (n the tuture, The City Manager expressed con�ern aC whether a sensible plan could be reached. ' Mayor Liebl said the �ity had made a commitment in 1966 and in his opinion the City shou)d comp�y, ' 7he Clty Manager askad if zhe gQtectlon of new peaple should be delayed until some agreement Is made on their rezjrement plan? Councilman Starwalt asked it it would be possib�e tq hire them w(thout telling them what tha plan would be? ' The City Manager sa�d they would Ilke ko hlre tha new men soon to enable them to attend the rookla traintng schop�, which is only affered once a yea�, Gouncilma� Nee asked if ft wara poss�ble tp hire tha me� and place them un a PE►�A plan. The �Ity Attqrney �ugyested they xalk about dual p�ans as an alternative and see what the rea�;I4n ie, Tha �ity Manayer safd he would like son,e solid direction on a positlon of tha Launcil to determine the Cicy's obligaticns. ' i , � , , , ' ' ' , , ' ' ' ' i Pretiminary Assessment Estimate FUBLIC HEARING ON IMPROVEMENT STREET IMPROVEMENT PROJECT ST. 1973-1 (Addendien No. t} January t�, 197q r I , , ' . ' ' , ' ' ' , ' , ' , ' '' ' ' CITY OF FRIDLEY PRELIMINARY ASSESSMEPIT ROLL STREET IMPROVEMENT PROJECT ST, 1973-1 (ADDENDUM N0, 1) I N � E X PAGE N0. 1 Memorandum 2 ` Notice of Hearing 3 Map of Area Invoived 4 Preliminary Assessment Ro11 , 5 List of Names and Addresses of Property Owners to Whom Notices Nere Sent � ' t , '- � ' ' , ' , , ' ' ' 1 � I CITY OF FRIDLEY MEMORANDUM T0: GERALD R. DAVIS, CITY MANAGER, AND CITY COUNCIL FROM: MARVIN C. BRUHSELL, ASSISTANT CITY MANAGER/FINANCE DIRECTOR SUB.IECTc PRELIMINARY ASSESSMENT ROLL - ST. 1973-1, ADDENDUM N0. 1, STREET IMPROVEMENT PROJECT DA7E: JANUARY 4, 1973 The proposed improvement project involves the surfacing of�Gumwood Street from 77th Way to 78th Way and the alley between Gumwood Street artd Beech Street. The construction on Gumvood Street is not being done to normal street specifications but is being surfaced instead to a width of sixteen feet including the curbs. This street will serve more as an alley than as a street. The estimated cost of tf►e improvement is $7.87 per front foot for both the street and the alley. The side yard assessment is estimated at $4,47 per foot. � � ' ' ' �I ' , � , LI , � , OPFICIAL PUBLICATION CITY OF FRIDLEY iB7IitIBIT 6) , �OTICE OF AEARING UN IIMPItUVEPfENTS STREET IMPROVEhfENT PROJECT ST. 1973�1 F, ST. 1973-2 (hiSAS) ADD. 1 iiHEREAS, the City Council of the City of Fridley, Anoka County, Minnesota, has deemed it expedient to receive evidence pertaining to the imprwements hereinafter described. 1�1W THEREFORE, NOTICE IS HEgEgy GIVa7 T�AT on the 15th day of _ JanLarv , 1973 at •7.3� o'clock P,M. the City Council wi11 meet at the City Hall in said City, and will at said time and place hear all parties interested in said improvements ia whole or in part. The general nature of the improvements is the construction (in the Isads and streets noted below) of the following i.mprovements, to-wit: � CONSTRUCTION ITEM Streets_Under Proiect ST 1973-1 Addendum #1 Gumwood Street from 77th Avenue to 78th Avenue Alley 117 feet North of 77th Avenue between Gumwood Street and Beech Street ESTIFIATED COST . . . . . . . . . . . . . .$ 12,500.00 TBAT TNE ARF.A PROPOSED TO BE ASSESSED FOR SAiD II�ROV�ITS IS AS FOLLOWS: For Constructian Item abwe _____________________________________ AlI of the Iand abutting upon said streets named above and a11 lands within, adjacent and abutting thereto. All of said land to be assessed proportionately according to the benefits received by such improvements. , That should the Councii proceed with said i.mprovements they will consider each separate improvements, except as hereafter otherwise provided by the Council all under the following authority, to-wit: Minnesota Statutes 1961, ' Chapter 429 and laws amendatory thereof, and in confonnity with the City Charter. ' � ' �� DATED THIS 18th DAY OF December , 1972, By ORD�R OF THE CZTY COUNCZL. Publish: January 3, 1973 January 10, 1973 MAYOR - Fra:i�: G. L�.;�1 'a � ' / � �� ' ' ' , , . � ,, ��. � t � G J� l')�:' � i � _ cswc `M � _ �� t �_�� ' ' � . $�7 : / 9 %3 - i � pOfl�lOtO�: . CROSS SECTTONS � ALLEY 3 GUbfWOUD STREET * • � r� 16' 2 0� � --� _ � � � �'"� 14' -�--� : i . � . � . . � a�phoM Berm 2� Bit �1/oi 4" Stob Bacs 2" eit . . . 2" Gou Y � ' r . . PAVEhIENT IbiPROVEMENT LOCATION MAP % 60 i s � aL �. � � y . t ::- rL'•::- :t �, :, �I i''< <I:, r °: ; � --� J �. ��/�t\/ 1'r ♦ I�YI.��iYV.r. �1.� ! . - - • ,9,------, � ,---��--. : , r..� � � I r il=?�r �= 1 i.� / � �` �c �.: i �. ' � �.. / r`G �� r-�.��t'-. fc ..2 �.1 1 1 i Z �� :\�� — � kI 1�a 3. ..�� L � / � L'— �-1I s � y, r1 .J„� � ¢ I �y''F' . .. � _ _ t�i? y�Q t ^----i .. _ 1—_..--� f � -'t � —' 1. .; i ,i .S ; � � * , , f 1' I i: � t --� �: ': �i� � �# ? ` � � 5'j � t � ; ; :,�, " .-! �:rn ` ij,r. i' ��%�__' � — �._� �� , t�i' .+ � -.� 3 3 _ _ � ,�} � � - � ---� { � < <....5 -?. i � �e s � � �-. r �',_ %: . 7 _' � � - __ . J � i 1 . .� li �� • J.�1 � `-,� j C,_ ---� .-__, � ,_ F � �� .., �s ' __. - 1 ' ` ' - - � � � i '��. _.r -- ` •- K i. �• -_� s . -.0 `� I i . " � �� i= , a� s � `,' �� : ° /`'/3 � > >.. ' t " k � i _ f J '_: : 3." f� '?""?" -'-. . . ',1.;��; f�' :�.�_�� .�.G � i ��, � .� .. : � � i�a. � � ,. . . ", Gi � �! -' � � . � 1 i _Z�� . . `. � t : � _ �� ._i._._ y —�� _ � . :- PAVEAIE\T COST_ ALLEY: Between Gumwood St ,j f1 � �,1� reet �, Beech Stree*_ $1,;;�,�p GIJb:i1'OOD STREET: 77TH iv'ay To ?8TH i�ay 6 SOO.Oi. c , * Clearin� F� Storr�t Sei,er Cost ' SS,OOD.(i0 � � =�11,�0;1.:i�: ' l 1 ' GUMw00D ' LE6AL OE: LOT ' ONAWAY AI 1-5 ' 6-S • l-5 ' 6b7 859 10 il ' 12_t6 ' � CITY OF FRIDLEY ' PRELIMINARY ASSESSMENT ROLL STREET IMPROVEMENT PROJECT STe 1973-1 (ADDENDUM NOe 1) 'EET ANO ALLEY BETHEEN GUMWOOD AND BEECH STREETS IPTION FRONT ST. FRONT ST. SIDE ST, SIOE STa TOTAL ESTIMATED OCK FOOTAGE ASSESSMENT FOOTAGE ASSESSMENT COST TION 5 208 $ t,636.96 - - $ 1,636.96 5 280 2,2o3a60 244(Pt.6) $ I,o9oe68 3,294,28 6 208 1,636,96 - 1,636,96 6 80 629.bo 7(Pte7} 31029 b6o,89 6 80 629.60 80 357.60 987,20 6 �►0 314,80 4o T78,8o 493.60 6 109 (Fbl/3s) 857083 64 286,08 1,T43.91 6(L.12) 64 (F&1/3s))1,361.51 67 (12,13,) 299049 1,661v00 ) (L.13-163109 ) Pt.i4)) � ) 1,1� ft, 9,270, 502 ft. $,�2 ,9�+ i1,51 . 0 ' Totai Estimated Cost: $11,500.00 • 1,463 feet =$7.87 per front foot. 1�178 feet x$7,87 per foot =$9,270.86 285 feet x 57.87 per foot =$2,242.95 ' $Zs242.95 • 502 feet (footage side yards are spread over} _$4,47 per foot, t ' ' ' ' ' ' ' , � ' " ' GITY OF FRI �EY PRELINIMARY ASSESSltENT ROLL STREET TMPROVEMENT PROJECT ST. 1973-1 (ADOENOUM NO 1) ' LEGAL OESCRIPTION NAFlE AND RUDRESS LQT BLOCK ' ONAWAY AODITION 1- 5 5 Francis and Lois Mderso� � c% Edgar 11. Hauser 1401 - 46th Rvenue North Ninneapolis, Minnesota 55412 ' 6' 8 S Edwar W. Houser 1401 - 4bth Avenue North Hinneapolfs, Minnesota 55412 ' �- 5 6 Ronatd and Denise Smith 1785 eeech Street Northeast � ' . FridTey, Minnesota 5543z 6 b 7 6 George L. DahTberg 803 - 88th Lane Northwest tCoon Rapids� Minnesota 55433 8 5 9 6 ' �� t10 6 Arnold A. and Fiorianna Peterson 22 U Eillmore Street Northeast ' Minneapotis, Minnesota 55418 i i 6 �� ' „ ' 12 -(6 6 Donald and Myrtle M. Underwood 51 - 77th Way Northeast ' ' Fridleyt Minnesota 55432 ' ' ' ' 1 ' � � � � � � � ' ' ' , 1 , ' ' ' ' ' � 1 �� INFORMATION RELATING TO • FUNDING OF THE FRIDLEY POIICE PENSION ASSOCIATION RETIREMENT PLAN JANUARY 15� 1973 T A 8 L E 0 F C 0 N T E N T S LETTER TO DR. FRANKLIN SMITH, STENNES S ASSOCIATES REPORT ON "ACTUAL CONTRIBUTIONS TO POLICE PENSION ASSOCIATION COMPARED TO THOSE REQUIRED UNDER THE GUIDELINES ACT", DATED DECEMBER 22, 1972 LETTER DATED JULY 11, 1972 FROM POLICE PENSION ASSOCIATION ON SUBJECT OF FINANCING POLICE PENSION PLAN . PAGES 1 - 2 3-6 7 REPORT ON POLICE PENSION FUND DATED MARCH 26, 1971 ACTUARIAL VALUATION OF THE FRIDLEY POLICE PENSION ASSOCIATION AS OF JANUARY 1, 1969 COMPARISON OF FRIDLEY POLICE PENSION ASSOCIATION PLAN TO THE PUBLIC EMPLOYEE RETIREMENT ASSOCIATION , CPUBLIC SAFETY PLAN) MEMO FROM LEAGUE ON POLICE AND FIREMEN'S PROPOSAL FOR FINANCING LOCA� PENSION PLANS DATED APRIL 27, 1972 GVS MINNESOTA MEMO N0. 71-14, MARCH 24, 19T2, ON PROPOSAL FOR FUNDING POLICE AND FIRE EXCALATOR PLANS BACKGROUND MATERIAL ON HEWITT PLAN MINUTES OF SPECIAL COUNCIL MEETING OF NOVEMBER 27, 1972 COST COMPARISON OF PENSION PLANS FOR CITY -2- PAGES 8 - 14 . 15-23 24 - 25 26 - 34 35 - 42 �3 - 51 52 - 59 .� '_ �• 1 1 � , �I ' ' , � ' ' � ' ' �� 1 c�Ec� o� �Hi�lec� 6t31 UNIYERSITY AVENUE NE Dr. Frsaklin Smith, Associate Society of Actnaries George V. Stenaes & Associates lst Hational Bank Building Minneapolis, Minnes.ots Dear Dr. Smith: ANOKA COUNTY December 20, 1972 FRIDLEY, MINNESOTA 55421 , Pursuant to our telephone conversation, I wanted to verify ihat we plan to have you appesr bePore the Fridley City Council on idon3a- January 15 , 1973 a-c j� , 7:30 P. M., to discuss the reauirements o° iknding nnder the "Guidelines Act" with particular emphasis on the status of funding oP the Fridley Police Pension Association plan. As I indieated to you, we are trying to explore with the Fri3lef Council and the Fridley Police Pension Association the aliernatives ia order to reduce the i'inancing reouirements of the Cii� to 210 0_° Police payroll For the Police pension �lan. ➢uring last summers negotiatioas, i secured an aPr=ement from tkiz Police Pension Association indicating they would work wit?: us io reach our goal. On BTovenber 27, 1972, we had a special *�eetisg to discuss t'r.e '$e`ritt Plan" as requested by tne Police Pension Association. I am enclosing the minu�es :'rom that meeting as well as tne crritten m�terial uhich sras handed out to the Council concerning tiie 3ec�i+i Plan. I suggested to the Council, that bePore they take an;� action sucn as an endorsement of the Heaitt Plan, that �re invite you ost to di;cuss the funding reaniren_�nts of the Guidelines Act and •�rh�- tne Gui3elines Ac� �ras put into effect. I am sending �ou �u�Dlemea�ar? in_ormaiicn on ';ae Police pension glan which I ho�e you cr_'�1 find wili be .'�,e1Dfu1. I guess th� basic thing I s�iZl hav= a quest_c.^. or is'whether t!:e Hewitt Plan is a sound and conservative apnroa=h tc pensi;n iinaac'_:g, . �. r � : -2 1 ' Dr. Franklin Smith, Associate -2- December 20, 1972 � ' . The other thing, oP course, is to arrive at our goal of an employer's ' share oP 21�,there will have to be a reduction in benePits to accomplish this even under the Aewitt Plan. ' I will be inviting the Police Pension Assocation Board of Directors to be in attendance at your presentation a1so. F1e wi11 be inter�ste3 in hearing the reasons Por the Guidelines Act and a critique of the ' Hewitt Plan. S wi11 Purnish the written critique dated April 17, 1972 of the Hewitt Plan to the Council as well as the proposal for funding Police and Fire escalator plans which you furnished me. ' The £ee Por your services to attend this meeting should be sent to my attention. If you have any questions regarding the oresentation, � or �esire any Yurther information prior to the meeting on January 15th, ' please get in iouch wiLh me. Yery truly yours, ' , Gerald R. Davis City Manager GRD/ms ' Attachments ' P. S. The meeting on January 15th will be in the Gouncil Chambers, Civic Center, 6431 University Avenue N. E., Fridley, Minnesota ' GRD 1 , ' ' ' � , � [l � � � CITY OF fRIDLEY MEMORANDUM _ ti T0: ✓ferald R. Davis, City Manager FROM: Marvin C. Brunsell, Assistant City Manager/Finance Director SUBJECT: Actual Contributions to Police Pension Association compared to those required under the Guidelines Act. ' DATE: December 22, 1972 '. ' � You asked me to make a comparison of the cantributions required under the 6uidelines Act to the Police Pension fund, with the actual contributions to the fund. The amounts required for the years 1971 through 1973 and the actual contributions are as follows: Requirements under Year Guidelines Act 1971 $ 53,001 1972 71,460 1973 92,220 Total $216,681 , Actual Contributions $ 52,820 $21,764 Insurance + 56,396 taxes = $ 78,160 21,764 Insurance + 48,492 taxes =$ 70,756 $2a1,736 Also attached hereto and shown as Exhibit "A" you will find the amounts that wi71 be required under the Guidelines Act for years throuqh 1985. These figures are based on the present Guidelines Act and usina the Stennes Report for the r.ormai cost: This report shows that in the year 1974 the City will have to levy $117,388, in 1975 $157,382 and in 1976 �]87,101. This assunes there are no edditional personel added to the force. Exhibit "B" is a table showing what the unfunded liability arould accrue to if th� City kept levying 21/ of payroll as opposed to H�hat is required under the 6uideiines Act. This shows that by 1985 there would be a defic;t of $2,575,�83 in the fund. Shown in Exhibit "C' is a table of �,�hich displays the same information as Table "A" except that instead of using 51.6Y of salary for normal cost a figure of 47,6" is used. This fioure for normal cost comes from the Newitt Actu,irial R�port. N.�,;itt is assuming that the averaqe p�itrolman will v�ork untii �8 yaars of zge even thouqh he is eligible for retirement at aqe 50. ihis is ,my ine r�orrai cost is less usinc the iiewitt Actuarial Survey. Tne Ne�vitt Actuarial Report has no reiationshio to �n� Hewitt P7an, other than the fact that �•inen Hewitt is oiving out in�'ormation en Hewitt Plan he is using as the normal cost fioures developed in the Hewitt Actuari3l 5urvey. � � � . ' ' � OOOO i�to�Or� N100 O 4- C t0 �O d' N C7 :V N V W . ' � N�� 0000�0� N V cf 4" � Ol f� V tC1 N l0� N�. 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F.ridley, Minnesota 55432 7 , July 11, 72 Mr Gerald Davia , City Iianeger ,City of Fridley ' 6l�31 University Ave. N.E Fridley, Minnesota 55432 ' Dear Mr Davia: Persuant to your letter of June 29,"1972 the membership hsa authorised me to ' prepare and aubmit the following atetement to you and the city council: " The Fridley Police Pension Aasociation agrees that it xill negotiate pension 'benePits Por 1973. It Purther agrees to collaborate in tha deVelopment and aupport of legislation which xill have the effect of reducing the employera ahare of the aoat of tiafancing the penaion benePit p2an to 21� of base salary.� ,Pleeae fael free to contact the asaociation or myselP at any time regarding thia matter. ' , ' cc: 'fayor Liebl Couneilman Brieder Councilman Middleatadt Councilman IItter ' ' ' ' , ' �3inc re�y your"a��, G-�l.u"i � E/-!�"-�'t�- Richa7�d D. Huas Vice President � I MEMO T0: FROM: DATE: SUBJECT: . �it� o f �rid�e� 6r31 UNIVERSITY AVENUE NE THE CITY COUNCIL ACTING CITY MANAGER MARCH 26, 1971 POLICE PENSION FUND ANOKA COUNTY 56 8 FRIDLEY, MINNESOTA 55421 ' We have receiaed additional information from the actuary on the Police Pension Fund. We have received the information on the fund based on the present ' program and the condition of the fund if certain changes were made. We have also now received information from Stennes and Associates om a pension plan that would cost 28.5% of salary. The fund is in worse shape than we had been projecting it. We had been projecting a deficit of $541,200 as of December 31, 1970. According to the new Stennes report, the deficit in the fund as of December 31, 1970 is $692,029. This deficit will be $776,465 as of December 31, 1971. It wi11 continue to grow at a rather substantial rate for the next several years and will level off at $995,000, providing the City makes the payments required by the Guidelines Act. These payments will be a minimum of $72,571 by 1972, $166,671 by 1976, and $221,529 by 1981. The above figures are a minimum and could very well be higher, especially if salaries go up more than 5% per year, or if additional Policemen are added. On the attached cost comparison sheet, you will see the cost of the plan as it now is constituted, the cost of the present plan if the escalator were eliminated, the cost of the present plan if the retirement age were raised to age 55, and the cost of the present plan eliminating the escalator, age 55 retirement, and based on the last five years of salary rather than the ending salary. To pay the normal cost of [he present plan without paying anything on the , deficit would come to nearly three times the two mills we are now paying. (See projection of tax Levy requirements based on Guidelines Act.) Any increase in personnel, of course, would increase this. ' �� MCB/ms Enclosurer. 1. Cost comparison sheet 2. Projection of levies required under Guidelines Act 3. Latest actuarial report - George Stennes & Assoc. 4. Letter from Stennes & Assoc. ,: , _..- ' -nmvc�wn .. . . . . � • ,� ' �� .�nz-lao � rf H T�+ d J N Ai rt � N � . J . � . . . sv �rr�n "' y � �. � �, ' a � o o �* t-�s (� o �i m � \ c o � � 7� In ..�i. � N W .. . �. i-r cr n a z -�• v o �n ' � . . 3 N f) �-r j -h !D � {� y �.� � . N . N O -h � 3 'S � ' a -s -+, a v �c m o� m �n z -n m � -s +n � C N C f'1 'S N 3 n�m�w cn � � .+. fD a 3 fD O W . � 3 1n 0' 6. . , . � . � !L In 'S �. � p�j . 2 T N 7 c0 O O � G � � V � --+ O N rt -�.. �p y O 7 V , J � J w � �J � R O � �-. -s n ' � m m -"s v � �p fD f� � � �. 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(T CT Cn cn cn cn [n Cn cn cn cn tn [n A Ol Cn [n (.) l0 V cn W v o .. � � � �+ c� n n--�• T O -S � ro z ro v n, c+ t/� N m m K p N N w -n z -� n m �. �� d N rf FN v W < fi] C � m r .-� 0 T � O� � ' ACTUARIAL P.EPORT Prepared by: ll ' FRIDLEY POLICE PENSION ` George V. Stennes & Associate=_ tMARCH 23, 1971 I. PRESENT PLAN (Fu1l Escalation - Retirement Aqe 50} eA. Normal Cost $133,157* Accrued Liability $838,645 Assets 146,616 ' Minimum Support Unfunded Accrued Liability $692,029 $133,157 3% of Accrued Liability $ 20,761 20,761 ' $153.918 ' * Determined as a levei percentage of increasing payroll. The percentage is 133,757/258,060 = 51.6% (258,060 = 935 x-12 x 23 = Monthiy salary x 12 x No. of inen) � PRESENT PLAN - ELIMINATE ESCALATION AfTER RETIREMENT , ' (Based On �ina1 Saiarv - Aae 50) B. Normal Cost $TOO,OOT* Accrued Liability $629,382 ' Assets 146,616 Minimum Support Unfunded Accrued Liability $482,766 ' $100,007 3% of Accrued liability $ 74,483 14,483 $114,490 ' * See above 100,007/z58,060 = 38.8% ' PRESENT PLAPJ - MI�lIMUM AGE 55 - NO ESCALATION AFTER RETIREMENT ' (8ased On Final Salar ) C. Normal Cost $ gg,g44 Acsrued Liability $560,420 Assets 146,616 ' Minimum Support Unfunded Accrued Liability $413,804 $ 89,994 3% of Accrued Liability $ 12,414 ' 12,414 $702,408 ' * See above 89,994/258,060 = 34.9% , ' '' ' _ ALTERNATIVE N0. 3 � � D. 20 years and age 55 - 50% of 5 year average plus 2% for each year over 20 (Max.80%) , Normat Cost $ 97,233* Accrued Liability $596 881 Minimum Support $ 97,233 13,508 $110,741 * See page 1 97,233/258,060 = 37.7% Assets 146,616 Unfunded Accrued Liability $450,265 3% of Accrued Liability g 13,508 ALTERNATIVE N0. 1 ' PRESENT PLAN �iITH FOLLOWING CHANGES ' E. 20 years and age 55 50% of final 5-year averaqe pius ZZ for each year over 20 (Max.70%) � No escalation after retirement Normal Cost $ 89,867* Minimum Support $ 89,867 12,568 $102,435 * See page 1 89,867/258,06Q = 34.8% Accrued Liability $565,554 Assets 146,616 Unfunded Accrued Liability $41&,938 3% of Accrued Liability $ 12,568 � � � RuCT.nSiiRE NO_� JS � i , ° a ' �� ,. ACTVARIPS , CYARGE V. $[ENNE4, FSA. � FRANICLIN C. SMITH,A.S.A ]OHN H. FLIT[I6, F9.A. �1AN83 W. KEMeLE, F3.A. WI[.L7AM G. NORDSSROM, F3.A. C. D. SPANGLER, F.CA.P. � TIiONAS P. EASON. YSA ORLEN B. LUNDE, F3.A. .'� 6RNIEFRANKOVICN,ASA. . %HH7 Y. SIMMON3, ASA G%EORCiE V. STENNES `AND ASSOCIATE$ CO2iHIIL7INB ♦CSIIAHIBB svs msr wwnoru, usc smnn�ro .. . @l�.�WLlf.YO1S.60�01 ' �•»�.�if� � March 25, 19?1 Mr. Marvin C. Brunsell, City Manager City of Fridley 6431 University Avenue N. E. Fridley, Minnesota 55421 . � PALMERG.ROOT . .. . . PENSION ADIdIN13TRA'[OR ROSALYN BERNSTEM , . . CAROLYNRVCKER � � ASSR.ADMINLSTRAiORS Dear Marvin: , Re: Fridley Police Retirement Plan This letter will give you basic cost figures for the Lwo proposals discussed over the phone this afternoon. The first of the two proposals uses tLe benefit percentages of the present plan, but the benefit percentages are applied to the average salary of the last five years of service prior to retirement or other event for which a benefit is being paid; the requirements for a retirement benefit are the completion of 20 years oF service and the attainment of age 55. The normal cost under this proposal turned out to be $84, 932 which again has been determined as a level percentage of increasing payroll with a percentage of 32. 9%. The information about the unfunded accrued liability is as follows: Accrued Liability $ 528, 851 Assets 146, 616 Unfunded Accrued T_.iability 382, 235 Thus, the minimum support level becomes Normal Cost ' 3% of Unfunded Accrued Liability Total � � , $ 84, 932 11, 467 $ 96, 399 The second set of cost figures is related to an effort to bring the normal cost down to 27. 5%. We were able to do this by using the approach which has been labelled as Alternative No. 1 but with the retirement benefit 40% of the final average salary plus 2% for any service in excess of 20 years, with a DES MOINES MINNEAPOLIS .� LINCOL'V . ENCLOSL`RE N0. 4A. � ' � ' ' � � , ' ' 1 � GEOR(�E V. STENNES A1VD AS$DCIATES Mr. Marvin C. Brunsell - 2 March 25, 1971 disability benefit of 40% of final average salary and with a widow's benefit of 20%. In other words, all of the benefits except the orphan's benefit have been scaled down with a fraction of 4/5; also the increment for service beyond 20 years has been retained at the 2% leveL The normal cost for this set oE beneEits turned out to be $73, 550 which again has been determined as a level percentage of increasing payroll with a percentage of 28. 5%. The information relative to the accrued liabilitp is as follows: Accrued Liability $ 46U, 838 Assets 146, 616 Unfunded Accrued Liability 314, 222 � The minimum level of support thus becomes Normal Cost $ 73, 550 3% of Unfunded Accrued Liahility 9> 427 Total $ 82, 977 , As agreed over the phone, we will proceed to duplicate a report which covers the valuation of the present plan. The other proposals which have been discussed with you informally including the two which are the subject of this ' letter will be discussed in a letter separate from the report. , ' � � FCS:ml , ' � Sincerely yours, J� Franklin C. Smith _ �� ENCLOSURE N0, 4E ' � '� ' ' . � ' ' ' , , . ' �— ' ' , ' ' , , , ' � � � . ACTUARIAL VALUATION . - OF THE. FRIDLEY POLiCE PENSION ASSOCIATION AS OF _ _ JANUARY 1, I969 . • . Prepared ar,d submitted by George V. S[ennea and Associates Consulting Actuariae ' 1 � 1: . . INTRODUCTION , An aete�arixl va��,Yioa h�s becn r.+ade aa of January 1, IS'�9 of , the Fridi�y ��i�ce �,^�.�ic� Ag�usiatao�a. Th� ��a�4av�a cwz�YS 4he mtmisership of tha fund as showr_ i.z 4�.e cer.�us o? m�m�ess v'�i�� as , iaelud_d in thia ze�ort. Details of the heaefiEs under the pl?n, esti- malac of the asset� .off the fund, and m�rr_barehi� c�a?a w�re furnfaned by the lLsaoeia4ioza. ' T'�ia a��azt cov�sa ih.e falaoaa�� aB�r�ss: ' A. Beae�'iea c4 t3:e Plaaa. B. Asacmptio�� in ActasBranl 1r°alna¢ioa. , ' C. Resulta of Valnatioa. E1, Discussion o4 Results. , � • E. Cersus of Member�hip. ' F. Certification by Actssary. , ' ' , ' ' ' ' ' . -1- 16 U A. BENEFITS Or^ PLAN As•o[ January 1, ls�b9, the Plaa provided major benefita as ahown: • - l. Retiremen4 Seaef:t: a. Reqe�seaxs�n� for retirer�at: 50 yeara of age; 20 years of aervice. b. Monthly annuity when miaimum requiremeats are met: 46 2/3% of first grade patrolman'e salary. c. Ad3itional monthly annuity after minimum requirements are met: I 1/3�{0 of first grade patrolman's aalary for each year ot service beyond 20 years; maximum beneiit 56%. 2. Diaabilitv Benefit: s. Requirements (years of aezviee and age): (1) In line of duty: None (2) Not in line of duty: None b. Benefit: � (1) In Iine of duty: 48% of first grade patrolman's aalary. (2) Not in line of duty: � Same . 3. Withdrawal Benefit: � Member's contributions are returned withont interest. 4. Widow's Bene4it (Month2y Annnizy): 24 u o: first grade patrolman's .-alary. 5. Orphan's Benefit (Monthly Annuity}: , 8�/0 of first grade patrolman's salaryto age I8. 6. Escalation of Ben�fits • Benetits are adjusted each year to relate to the cnrsenk salary of a first grade patrolman. �y_' • , . f� ' , , � ' , � t � � . � z � r , , ' ' 1 , , 18 , 8. ASSUMPTIONS IN ACTUARIAL YALUATION � 1. Mortalit,: United�'�ees Life Tables, 1959-61 ( White Edalea and White Femalea) . Theae tablea were ueed for both aetive snci retired members, and ios aurvivora. t. Diaability: The ratea oi diaability were adapted irom esperi�nce of the New York Stste Employees' Retirement 5ystezn, g-a- duated a�l extrapolatad sa require3 tor this valuaiion. ' , 3. Withdsawal: A rate af withdrawal of . 030 at age 20 decreasing uaiformly to zero at age 5U �vith na withdrawals after that age. S. Salary Seale: Salaries were aasumed to increase 3% each year. 5. Retirement Age: The sennmed average age at retirement - for thie fund was Sb. a. 6. Iaterest: 3°�e compounded annually. It is felt that these assumptions are appropsiate for the valuation oi this fund on a rea2iatic basis. -3 - r � . . . : .: _ �� . C. .RESIILTS OF YALUATION , � .• R , I. Valuation. . , Normal Cost of Benefits a T9.641 ' ' Accrued Liability � 462, 727 Z. Current Deficit from Falt Fundin�. . ' `Accrued Liability � 462, 727 Assets in Fund * Sb.629 ' Unfunded Accrued Liability (Defieit} $ 406, 098 3. Annual Payment to Achieve Fu21 Fundin� by 2997. ' Annual Deposit to retire deficit by 1997 $ I 20, 5�1 , . Total Normal Cost . 79, 641 � Total Annual Payment � 100, I82 4. Minimum Contribution to Prevent Increase in Deficit. ,-' Interest on Deficit at 3% $ 22, 183 ' _ 'Total Normai Cost 79� 641 Minimum Contribution , $ 91, 824 ' . 5. Annua2 Payroll. • Payrol? on wiich Member Contributions ' . wiII be based � a 175, 560 , * Data furnished by Association. ' . ' , , � , , . _g_ � D. DISCUSSION OF RESULTS The v3luation was made by a me!hod knovm as t�� entr�a aga a�srra�l eoet method. Under thie method. tht ao:ma3 caa2 ia ��sm�,.-c,aa:t� ?�,:eci on the age at'ire of each member. Thia : armal cost is 2he axuxual depoait required (uaing the assumptiona outlinAd in Section B above) to pay for the cost of each member's pronpachvebenefits over the period irom his date of isire to hie date of retirement. This normal cost ia ex- preesed as a percentage ai payroll on which member contzibs2iona are based. Theretore, if the payroll inczeasen by a certain pereentage, the normal co�t in dollars �vill also increase by the sazne pereentaga. , The eZements of norznal ceet for this plan arc: TYpe of Benefit ' ,—_ � : , ' , ' ' ' r � Service Retiremen! Benafii Disability Benefit Withdrawal Benefit Survivor's Benest Total Nozmal Cost Normal Co�t ;155, 507 5. 979 t20 17. 935 S 79. 641 Thia total normal cost is 45. 35°Jo of tL�e gayro2l oa whic�x saa�a�z'��r eontributions wiII be baeed. � When a retirement plan ie fully funded, the fund sontains an amount equal to the aecumulation {under the actuariaY se�uar_��iars �*•:�.$) of th� aormal cost for each member from his date of hire to the date of the valaation. Thia accumuIation is eaIIed the accrued liability or the re- quired reaerve. The elementa of accraed liability for thia pl�a a. t: Tvpe of Benefit Active Members Retireznent Bene�t Dis:.�ility Benefit Withdrawai Benefit Survivor's Beneft Total Accrued L n.uility _5_ Accrued Liabilib� $ 362, 880 15.919 960 • . _ 82. 968 5 46a, 7a� A=etirement plan which ie fully funded requirea future contributions ao.larger than the "sum of the normal coet oi atl active members to pay 1os tise prospective,benefits (if the assumptions mado are realized exact2y). To the extent that aormal coste have not been paid in the paot, a plan is not fully fund�d. The amount by which tiie plan is ahort of full funding i: Called the unfunded accrued liability of the fund. Ia other worde, the un- funded accrued 2iability is the excesa of the accrued liability over the aetual aseeta of the fund. The amount of aanual contribution wh3ch wou2d be required to pay eaeh year's normal cosi aad e2iminate the deficit by 1997 ia the "total aanual gayment" ahown in Sectioa C of this report. The deficit in the fund will increase unless at leaat 3%a interest on the deficit ia paid each year in addition to the normal eoat. The sum of these two amouats shouid be regarded as the minimum annual contribution to the fund in order !o keep the deficit at its present eiza. This "minimum eontribution" is showa in Section C of il+ia seport. s6� 21 �, � . 1. � 1 , '. ' ' ' ' '— � , 1 ' ' ' ' , , � • ` E: CENSBS OF MEMBERSHIP . Foliowiag ie a summary of the membership as of Jaausry l, 1969: Status AeHve Members Defesred Annuiiante Sszvice Retirementa Disabled Members Widowe of Deceased Membera C�ildren of Deceased Members . 7 _ Number ti None None , None Hone None. 71 1•' . .. � � , ' � ' ' ' � � . ' ` , 1 ' 1 ' � ' ' F. CERTIFICATION BY ACTUARY . Fzidley Police Penaion Aeaociation Wt hereby tertify that thia actuarial valualion of thc above named Aesociation waa mada as of January 1, 19b9, on tha ba3iu of accegiad actua:ial methods and procedures. . . �"'"""��,,, "�"`"'�' ' C. F:�xi� c. s�rh ' Aeaociate, Society of Actuaries GEORGE Y. STENNES AND ASSOCIAi ES _g_. 23 f �... . - � . .. . 1 � Contribntioae: � • R�tirtneete: ' � , ' ' ' ' i '� �1 �� ' a• 10 �ra aervice b• 20 7ra aervice o. Over 20 9� FactQator: Manbilit�: x�e . 6.� Oi tOD DLZL{ wg_ pe None proTided 35/75the af t�p ptlme ealaa7 ai'ter 20 �re at a6e 50 1/`15th te be adied Por each additiena2 Tee,=• np to 7 additioaal peara Retire$snt eoa�gnt�+d anevally bT toP Ptla ealiary ot Feb ia prsceedina Te� tTnable to perfora dntlee atrictly becanse of apa vith o�er 10 yra bnt leas than 20 yra, 16/75ths af �P Ptls eaZarp viLh 2/�5 added for each yr o�er 10 but laae then 20 �ra. � L_ _., 24 .0 7� et t`ta aa 25� of a�g anlar7 after 10 � at aae 55 50% of aterage eainry after 20 yra at �ge 55 2� ts b� �dded for each additienal �ear Boa• provided - retir e- ment eta� at rate af iat• eS rstirea�at �1T ne provide� mr�ea� regtQar p�t,�r�mta A maeber becaeee a<_seaset a. M eability s,riaiz, or 1njm�e� xhich per�a- o�t �f �ct c,f ��;v ,ecas- entlp nnfite hia for polioe rin.3 before �„6 35 bni dut7 - 35/75th of top ptlm after eot Za-a�t!•ui 5�^s e41aT7 vhile e• iiaabled. eertice - r_�sailil y bG.,�gft ia 50� af avera=;e as,.��,.., plt�n 2� for eacb pe�r 1� � , anceae of 20. b. Maability a�t iaca,-;-e� ia line oP �?yt, eac�.ri.:» bafore �"a 55 �ai cttcr r_s; lsaa thaa 5 yo,�a senic e.. 25� af a�err4;s as3arp ��;,, �`� tor each ye.�s in C�c��, or io � z� �e7 ��n ,�.:5 fn ��s or zo. o. 3heuld recta�;ant ra.z�sc � �+xinfi�I t+cc :rszi::•� h tb I;e r? rst��i t� *� vhlc�a v?�en e,.,.f�:; �`•--.. ,._ �� ,, ,^ ' .., earntn,9 c?oew ��s �::�::_; °-_-=----'--._..._______ ns. �P1:rv at CO�T• U d �+-��ta n�---'-.'�.�_.1�: ' • n er pEE?A there ie no dieabi.lity henefita r.roe3dez3 iar as�?�c.r� wsder S yenra 9tT11CB er for thoae that 6a�e atie,ina� ths e.�a oP 55 ys�rr. �. - � � .' ' ' � � � � � ' � � i� � , , , ' � � ' � . 25 FPPA - pER� Tasperu'T DieaMlitY Maability fnmtrred dm- Aoi� �se�id ed io6 aut7 aa! havin6 ez- , basisted all �ick leave and - �ther benefits - eatitled to recei�e 36/75th of top ptls ealary nst to mcted beTond 6 aoeth peried . 3ta'�i�or Benefitas Whea a regnlar, disabled ilhen a iiaabled pensioaer or deferred pepaioner or oni� sr ective mmber die: actite m�ber dioe - � •. Spaiae recei�es 20� o_ a. Sponae recei�ea 18/'IS a�erage a4lery for li: th of top ptlm eatarT �r nntSl rem�nrriage. per moath fer life or nntil renarriage- b, Each ohild recoives 8` • bf averago aalarp v�� b• �ch child receivea attdnie�,g 18 �rs of a� , o/"�5th� per aoaih pins $20 par m�nth to nxrEil attdning lg dirfdsd eq�xelly s^an3 �ra et age ail the children, c. Total p�neione fe¢� e, Tota1 pen�iona for ►►idev and children wid�w aad childrea aei not to,exceed 36/`1ith. !o eaoesd "c200 pl,� ap�uee�e benafit. �03�1�'s IIuder PERA t200 ia meudmum paid to cMldr�n regardlesa ef hov mat►y� where nnder FppA henefft ie baaad npon perceate�e of aalar�. � � : �'�-� �� , � L E A G U E O F M I N N E 5 O T A MUNICIPALITIES 3300 Unirersi�y Aven�e $.E. Minneopolis, MiMeso�o 55<I< Pho�w: Areo 617.'3I3-9992 �o: Mayors, Managers and Clerks of Pension Plans April,27, I.972 Cities with Local Police and Firemen's �ubject: Police and Firemen's Proposal for Financing Loca1 Pension Plans �st year several organizations of police officers xnd firemen retained a firm of c[uaries, Iiewitt Associates, to develop a proposal for funding the so-called 'escalated" police and firemen`s pension plans which would reduce the financial �burden imposed upon the affected municipalitiesby the Guidelines Act of 1989. The nclosed mem�randum provides a thorough analysis of this proposal (hereinafter alled the Hewitt proposal) as well as the League proposals, and compares both of these approaches with the present policies of the Legislative Retirement Study Com- �ission. The analysis was developed by [he staff of the Co�ission in close consult- tien with Dr. Franklin C. Smith, the Co�ission actuary, and represents a factual and objective assessment of the Hewitt proposal. �or several months the employee organizations have been actively promoting the ewitt proposal as the "answer" to the very heavy financial burden which ceitain municipalities must bear in order to more adequately fund the escalaced police and iremen's pensios plans. They have also been attempting to obtain formal approval f this proposal by the affected city councils throughour the state. �Iost city councils have wisely refrained from taking any action on the Hewitt proposal until n au[horitative and objective assessment was available. I strongl� uree that o ies of this letter alon with the encZosed memorandum be made availebie to a11 members of vour city council before any fo mal action is taken on the Hewitc prop- sal. If a resolution of approval has already been oassed,you may caisn co reconsider tiis action after studving the enclosed memorand�. �he enclosed memocand�, along with a more technical analysis by Dr. Smi±h, was resented to t:�e Local Funds Subcommittee of Lhe Legislative Retirement Cor:n:ssion n Apri1 17. No specific action was taken because the members of the subco�mittee are still hopeful that tkie affected municipalities and their public safety person- el will arrive at some kind of a co�apromise, [hus xelieving tne subccmmittee oi he responsibility for making a difficult and unpopular decision. The ;ubco;nmit[ee did pass thz following motion oiiered by Representative. Calvin �2. Larson: � "I move that these two groups come up with a compromise plan by August 1, or else we will have to take the bu21 by the horns and do what we think is in the best interest of the pu6lic. I guess [hat is our xespcasibili[y." �'here will almost certainly be one or more meetings between Lhe parties prior to �ugust 1. Hewever, since the Hewitt proposal is comple[ely inconsistent with the policy dopted by the League Commitcee on Person�el Administration and Pensioas, >s weli as he present oolicy of the Legislative Retirecient Study Commission, and since the employee organizations have shown no willingness to seriously consider any of the �eague's p*oposals, it is difficult to be optimistic about the prospects for ag:eement. 26 , _Z ,; I �w of this, it is vital that councils of the affected cit3es consider what they can ,�hich would encourage the individual members of the Legislative Retirement S'tudy '� Commission to address this problem directly and forthrightly rather than avofd the issue or recommend some "compro,,ise" that would be a step backward. The most effective.way of doine this would be fot each citv council to carefully study the at[ached memorandum anQ then pass a resolution�in opposition to the�Hewitt proposal and in favor oi the , League proposed amendments to the Guidelines Act. I recognize that police and firemen's pensions is a highly sensitive subject.and that each city council must assess its own situation and ac[ accordingly. However, we must all recoqnize that if we want the individual members oi the Legislative Retiremenc �amendments [o the �uidelines Act, then the �ouncils must be willinQ to lead the way, � Sincerely, . ,��'0',�.,o� -;�' �-� � Dean A. Lund Executive Secretary � DAL:dma [ a . P.S. Please send copies of any resolutions passed on this subject to the Legislative � Retirement Study Commission and to the League. � � � � � � � � � r 0 �� 1: i�: t � � • . L � � � � � � r � � TO: � Local Funds Subcommittee Fire and Police Pension Financing - Hewitt Plan vs Guidelines L1ATE: Aprill7, 1972� .� � This subcommittee has heard the proposals for financing of police and fire pensions as presented by the League of Municipalities for the employers and the Hewitt _ Plan for the empioyee representatives. The P& F funds are presently governed by the P& F Guidelines Act of 1969 {M.S. Sec. 69.77)--an act that originated from this Commission. The employee and employer group programs are divergent tn approach and purpose--particularly, as they relate to the guidelines act and • Cc•mmission policy developed over the last 15 years. It is necessary to quickly rc view commission policy as reflected in the guideiines, and also the employer p-ogram before analyzing the Employees' Hewitt Plan. . L Commission Policv - � Yhis commission has recognized only one major difference between the 7,000 police and fire employees and the other 176,000+ public employees of this state as [elated to pensions--that there is some rationale for permiYting earlier retirement ior protective employees than is generally provided for the regular public emplcyee. This commission has consistently recognized the responsibility and need of providing financing sufficient to eventually fully f�.uzd the public pension funds-- including the police and fire funds. The commission has recognized that the P� F pensions may be more costly because of earlier retirement, but it has r.ot Tecognized any different financial suQport requirements of the resulting costs. IL is important to realize that if, in principle, the Hewitt plan proves appropriate for the P& F funds, it is also appropriate for all of the other public pension :unds. If the Hewitt Plan was adopted in principle, the said adoption would represent 'a major departure in commission philosophy, and could lead to similar application to the statewide funds! ' IL Guidelines of 1969 - represents a artial step to�vards the funding principal for paid police and fire funds which this commission has applied to the statewide funds. The guidelines act �vas a result of studies by several interims, and in particular of the actuarial valuation of the police and fire funds as of 12/31/67: �_._These surveys revealed that these funds were on the average only 04.II% funded, witH several of the funds in danger o: not having suificient assets to pay current benefit payments. Financing of these pensions had been orossly inadequat�! The guidelines was, admittedly, only a partial, probably temporary, step towards adequate financing. The guidelines act provides, after a IO year step up program, for financing sufficient to cover the normal cost of the oension plan olus interest on its deficit. � Theoretically, zhis provides for a"Frozen Deficit" level oi financir.g-- —the deficit tviil get nd lacger after l0 years if the actuarial assumptions are eorrect. The guidelines anticipute an increase in deficits up to 1980, and presumes a mainte^ur.ce c: dcficits at 2hat level. The guidelines act does net _ provide tor amoruzation of deficits! .. �N h. w .. . . .. . . � in� , ' � 1� � i � � , �. I� .' � : , i I � r � � � � 8y Commission standards, the guidelines requirements are minimal in theory. -In actual performance, th� guidelines may prove to be less than minimal. During the 3 year period of 1967 - 1970, the P& F funds reflected an increase in agr,regate deficits of $83 Million. Part of this increase (about 40%) was due to financing less than the fri�ien drfirit ?evel. Hovre�er; a�ou: f0°G of this ne:v deficit r;;�ulted from insufficient actuarial assumptions as to salary increases--and would have acerued even if all futids were financed at the frozen defici: levei. It salary trends continue, the guidelines will not perform its presumed purpose! The G�idell�ies nct places no direct restraini on pension �;osts, but rather detcrm[nr�s the level of financiol support relative to cost. 'fhe empt��y�•e �md em�,l��ygr prd9ram:; differ in their approach to support and cost. The League's plan calls for no reduction in support relative to cost, but would reduce future cost of the plans. The Hewitt Plan would not reduce costs of t1:e plans, but would reduce the financial support relative to pens.on costs. � ! � . � . League Hewitt no chanqe in 1969 guidel?:�es act; less support than 1969 guidelines act. Leaque Plan The League plan proposes no modificaYion of the 2969 guidelines. Although the employer presently pays most of the P& F pensicn costs, it is the League's expressed feeling that the guidelines requirements are the minimum for financial responsibility. Their plan, instead, provides for several measures to reduce the costs of the pension pians, and further to provide greater sharing in the cost by the employee. The more important features of the League plan are: 1) New P& F employees in PERA (mandatory or optional) ' � 2) Sharing of pension costs - 60°� employer - 40% employee. The League plan would not compromise existing commission philosophy on financing. N. Hewitt Plan � After the 1971 Session, the police and fire associations contracted with � Hewitt & Associates to develoo a less painful financial plan than the guidelines requirements. The Hewitt Plan 5as been presented to this subcommittee and has been analyzed by Dr, Smith. The plan proposes no modification of Yhe pension plans themselves to reduce their cost. Rather, the plan would provide for a reduction in the financial support of the pension costs, below +.he level oi the guidelines. The plan is currently being presented to the various city councils by the employee groups. " I , 1 30 Method ' ; The Hewitt plan proposes that the annual support would be the larqer of efther i) Nornial cost; OR " 2} Current payouts plus 8% of payroll, with the 8%dropping when assets t� reach 10 times current payouts. - � fievy�itt presents several fund calculatior.s to show that in each instance the support rate is less than the guidelines during the ffrst 10 years, and presumably thereafter. The Hewitt Plan, as in the guidelines, would be phased in over 10 years. , Hewitt rationalizes that the "10 times" reserve would be reached in about 50 years, and that a reserve of this size was "adeq�ate" . �'h � ' � � i� � r � � � Purpose - the purpnse of the P& F plan is described on page 1 of the Hewitt presentation: lj stable cests as a percent of pay for oresent and future 2) accumulate reasonable reserves; ' • 3j evaluate security needs; 4) appraise neel to fund deficits. The Cbmmission staff and Dr. Smith (memo) question the fulfillment of these purposes. 1) Stabl�s - the stability of costs which Hewitt predicts are based upon t��o concept�: (a) Tl�at the theory used :s correct; (b) That deficits, expandin9 or not, need never be considered. evea��oN,� �?fic,rs.� r,etc4scuss•ad r.or e•ren mencioned. iiewitt's calculations proJect support and cost but not deficit. tNe have already mentioned that the Purpose of the guideiines was to freeze deficits at their present (encrmous) level. Because the Hev�itt o�3n calls for less financing than the guidelines, the Hewitt plan re uires further S*ro�vth in deficit. If we do not consider new deficits occurrin9 from actuarial assumption losses, the annual groarth in deficit under the Hewitt plan will l��e exactiv the difference between the guidelines and Hewitt financing, This gro�vth presumabiy woulci be in perpetuity, and as Dr. Smith shows, into gargantuan proportions. This philosophy is contrary to commission policy. It is also co��ary to proposed provisions of federal legislation. The present aggregate defacit of these funds is $287;177,190. Depending upon thz - experiences of the fu�ds, Dr. Smi:h shows that these rieficits could grow 10 times or more as large! He:vitYs plan ignores this grocvth and assumes that said deficit need never be paid ann may grov� to any proportion without concern. ' � 1 Ii ' ' � 31 ' • 2) Reasonable Reserves - Hewitt's ascertation of reasonable reserves is based upo.^. theassumption that reserves should not be determined • on the basis oi accrued liability, but rather upon bases of cunent payouts with a contingency reserve., This type of philosophy camouflages pensfon costs and negates the concept that pensions are a fringe beneiit that are eamed and paid for as service is performed. Another assu�ption apparently made is: (a) Employer units will continue in perpetuity; (1� Employer units wili continue to be willing and able to pay costs in Perpetuity. 1 With these a�sumptions, the employee would not need to concern himself . whether or na* assets were being set aside as he earned pension credit. � Staff submiYS that there are sufiicient examples where this perpetuity assumption has not proven to be the case--that the assumption is not valid! ' ' The MankaYo Police &�ire funds are a good case in point. Both of these plans were terminated as to r_ew members. In additior., Mankato will be required over the years to pay off ev�ry cenY of the existing deiicits as the funds phase out. 3} � I I - � . Q) � � � - 1 1 Securitv neec�s - The Hewitt plan calls for less reserves than the guidelines would provide. His sample calculations show that after 10 years of operation, the reserve would be about 3 times cucrent payouts. Further, the plan recoc:lmends that reserves of 10 times the current payouts are ali that is necessary for security purposes. Dr. Smith snows that this build up to the factor 10 could take more than 100 years. This plan in effect states thaY 3 to 10 years payment guarantee is sufficient security for the employee if the pension plan were abolished. Under this system, an active emploree could not even get his contributions back unon final termfnation, �ad this is pension security? !t Seems StrdIIqi? Yi13L ihC employee reprs�sentatives are the ones promotir.y this pl�n. Fuudina Deficits - The Hewitt Pian argues that deficits are not a concern, that perpetuit;.� of the pension promi�is guaranteed, that current payout; are the ultima�e concern, This philoso�hy--to ful!y argue it-- would take a book-length memo, and many points ha.ve already becn alluded to. The I?e�r.�itt a�:p:o��h, if adop2ed, wou:d ra,:aca;iy chany<� the pension nhilo,ophy of thfs state from the funding principie io that of "pay-as-you-go^, � i � � • , � �� ' V. 32 +•+.: :.i iivl SLu:cil lt7 . � . the fourpc,ints. It ma.y be that the real purpose is -- (l�y�� j2��,��^A�� , � . i 1) fnject a shot of novocain, and �Y`��"�k-`'�'y^�'� =r� 2j "lock in" and protect the u b c nent enefit levels. � During the 1971 Sessiori, many"communities for the first time calculated the financial support necessary under the guide2ines--a rude awakening for many. The revealed costs and necessary support led to a rash of pension bills similar to the Mankato bi21 �vhich wouId have placei new members in PERA, The Hewitt Plan would lessen the support level resuiting from pension costs, hence'8ulliny the pain". This would perhaps result in a lessening of employer demands for pension reform; hence maintaining the presen� benefit program. It certainly can be aruged that employees have every right to try to protect their fringe benefits. Iiowever, it can be further argued that ;he costs of fringe benefits should not be hidden or camouflaged, but should be just as painful (costly) as they actualiy are. . � Theorv - Hewitt's Plan and resultinq calculations are based upon the following assumed model: '- 1) Assumed normai cost of 40% (1/2 final salary escalated); 2} Assumed interest is at same ra±e as assumed salary rate; 3) 1lssumptions equal experience; , 4) Model represents a mature fund. , I , Models such as the one described above are,a necessary tool for actuaries in predicting the future. The question is not on the use of models, but rather on the reasonableness ofthe model used. _� , ' r ' , , 1) The use of 40% as an assumption of ncrmal cost is questionable. Under present state standards (3% - int.; 3% sal. j, the 1970 surveys showed that 26 of the 57 funds exceed 40%. Secondly, the normal cost varies sharply if ir.terest percent does not equal salary percent. Thls is shown in Dr. Smith's .analysis (page 6j , 40% is hypotheticul, not actual. 2) Hewitt's entire theory as relzted on page S of his presentation is based upon the assuc:�ption that percent of interest eauals the precent of salary fncrease. The remainder of his theory is structured and de�eadent uoon this basic assumption. This equal percent assumption may be fine ior a theoretical tfiesis paper, but to base an entire fir.ancing scPieme for 57 per�sion funds on this basis--forreal--seems highly questionable. �i � i 1= I � I ' � �• , � I�� I ' i I .� , Ttue,-state standards presently do equate salary and interest percents; but.Yhis was admittedly only for the purpose of easin9 the actuarial tasks for these smaller funds. This eKu=_tion ::�as never preser.ted as a reflection experience, nor is there any rationale ior tnin'::ng thcy should or would be equal. :nterest and salary rcact to diiferinq stimuli in our economy and in no way are complimentary. Dr. Smith shows (paqe 6) thet if they are not equal, the normal cost of .• the pension plan varies greatly from 40:�. He shows that if i= 3.54� and s= 5.5%, a normal cost of 61.32% results :nstead of �OS�, 'C':±s divergence reflects how unstable the Ilewiti theory is and how questienable lt would be to risk the security of ihese funds on that'uosis. exp.enencQ of -�he fue:ci, iv�v:,t auuai�� Iu thls s.ncil proven wiong, and then correct tlie assumption. Most actuaries base their assumptioiis on the best judgements ihey can make. Staff submits that there is no judgment involved in saying interest % shall equal salary °�,. This is like saying the price of apples will equal the price of liver , Dr. Smith shows (page 5) that if the salary assumptionproves to be in�ccurate by only 2°� and not equal to interest, the funding levei of 10 times pa;ments is not reached in 170 years. � It is safe to state that actuariai assumptions must be periodically adjusted as experience dictates. Hewitt's plan assumes that levels of percent may vary, but that interest and salary should have the same percent. • . 4) The Hewitt model is based upon the assumption of a mature fund. Maturity means that the number oi active and re:ired lives will neve: vary. Hewitt in his verbal presentation stated .that this is a theoretical assumption. Staff suhmits that most of the funds are "youthful" instead mature. 1 1 , . VI. I � i ' I. 34 Dr. Smith Analvsis ` Dr. Smith's analysis of the Hewitt Plan is professional and complicaYed-- necessarily so. To examine the Hewitt method, he uses four basic models based upon varying degrees of initial funding {Zero; 33%; 10 times current payments; 100% . Staff submits that vaith a present average funding ratio of 5.8% for the P& F funds, that the first model - zero funding--most closely ' approaches the actual condition, and therefore should be given preference in study. In Dr. Smith's tables, he assumes no 10 year waiting period. Most of his results are listed as percents of the then current payroil. He also has carried his calculations out to 50 years to reflect a longer range of effect than HewitYs 10 year calculations. By considering only the one model most appropriate, Da'. Smtth's results can be tabulated as follows Contributions Assumed vs Exnerience 1st Yr. i= 3.5% 50 Yr , 50 Yr. Deficit / i= 3.5°� 48.0% -(H) 40.0% 3.1 x original s= 3.5% / s= 3.5% 70.43%- {G) 45s45� 1 x original 1 II. i = 5.5� s=5.5% ' In, i = 3.5'6 s =3.5% ' 1V. ' i � � ' , � � / i = S,S% / s=5.5% / i=3.5% / s = 5.5% i=3.5% / i=3.5% s='S. S°� / s= 5. 5°h 48.0 °;- (I-� 70.43°�- (G) 48. 0% - (Hj _ 70. 43�- IH) G� � 61.32°�- (gj 98._63%- (G) 42.09� 42.09% 48.0� 51.7� 61.32°,6 63.89% 8.1 x original 1. x original 10.4 x original 6.5 x original 5.6 x originzl 1 x original Cases I and II .`ollow the basic assumptions of i�ewitt--that int�rest %= salary �; The figures do show that the fIewitt method nrovides !ess annu�l suppert t!:..�?; t':ze guidelines, but it is interesting to note that this difference is much more mai�ked at the begir,ning of the 50 year period than at the end--the two methods actually approach each other in support requirements over ti:�e. The affect on the dcfic?t is also of vital concern. It becomes obvious that the savings in current contri- butions goes directly a9ainst the deficit and becomes the obliqations of thc futu:e t�xpayer. The Hewitt r^lar., clearly then, thre•:s some ef the past and pr�;e.-,t obligations into the future. .I - : �1 I ' �� . i'< ��- i f y ' `_ , �/; � '` 35 6VS Minnesota Memorandum No. 71-14. March 24, 19.72 PROPOSAL'FOR FUNDING POLICE AND FIRE ESCALATOR PLANS ' In a presentation to the Local Funds Subcommittee on February 15, 2972, Rodger Patrick of Hewitt Associates, the firm which has prepared most of the recent valuations of the Police and Fire Funds, described an alternative method of 1 funding the benefits of these plans. The written material which accompanied the presentation sta�ted four purposes: 1. To produce stable contributions as a percentage of pay for present and future taxpayers; � 2. To accumulate a reasonable amount of assets; 3. To evaluate security needs; 4. To appraise the necessity of funding deficits. Although two alternative methods were described in the written material, only one was emphasized in the presentation, and we will confine ourselves to this one. The method proposes that the annual support be the larger of (1) normal cost and (2) current benefits plus 8$ of payroll with the Sa portion cut off when the amount of the assets reaches 10 times the current benefits. The rationale behind the choice of the 8% figure is based upon the expectation that ultimately for most plans, the current benefits wi11 amount to 40% of payroll and 10 times this figure is 400�; at a rate of 8$ per year, 400o will be reached in 50 years which is suggested as a reasonable period. Several actual cases were given showing a comparison , of the level of supnort and the accumulation of assets over the next 10 years under both the guidelines and the above method. The projections are based on the assumption that the ' interest rate and the rate of pay increases will be 3%. In some cases, the fund appeared to be close to the ultimate mature stage, and in others this was not true. � ' � None of the projections included information about the growth of the deficit. �. ., • � .� 36 I, Figures for the first and the tenth years are shown below for certain selected cases (all figures are percentages of payroll): , ' , ' , . ' ' ' ' ' ' ' ' ' , , • Contributions Assets Year Benefits Guidelines Alternative Guidelines Alternative 1 25$ 35`� 35� 26$ 26 0 10 34$ 64$ 44$ 254$ 118$ 1 37$ 50$ 10 43$ 76$ 1 28$ � 37$ 10 37$ 65$ 50$ 51$ 37$ 45$ 29$ 29$ 271$ 1I3� 45$ 45$ 262$ 125� The second and third examples are the Minneapolis Fire Fund and the Minneapolis Police Fund, respectively. The Benefits for the Minneapolis Fire Fund leveled off at 43� in the seventh year while those for the Police Fund were still growing at the end of the tenth year. However, the Alternative Contribution for the Iatter appeared to be reaching a plateau. It appears that in the above cases, it will r2quire most oP the remainder of the 50-year period to bring the Assets up to 10 times the Benefits under the Alternative method. To test the effect of using the Alternative method, we have applied it to a model fund with a mature population. We set up the model so that only interest earnings and salary increases were involved. Ne also set up the model so that under the assumption that the interest rate equals the rate of pay increases, the normal cost turned out to be 400 of payroll. With a mature population, the benefit payout is also 40% of payroll as stated in Rodger Patrick's presentation. We actually studied 4 models with the following amounts of starting assets: 1. None 2. One-third the accrued liability 3. 10 times current benefits 4. 100% of the accrued liability. , _ 2 _ i �� I1 I ' I , � ' ' ' , " 37 On the first two models, we provided annual support by both the Guidelines (G) and the Alternative method (A). For the third, we provided support only by the Alternative method in all but one study. The assuriptions in the one study caused the assets to fall behind the init�al level of 10 times the current benefits, and we added sufficient contribution each year to maintain this level. On the fourth model which started out fully-funded, a contribution equal to the normal cost main- tained the full-funding in all but one study in which we again provided a supplemental contribution. Projections were made under four sets of assumptions: 1. Costs determined with assumed interest and pay increases at a rate of 3'�o each year; projections carried forward with these same rates. 2. Same-as No. 1 but with 5�� rates. ' 3. Costs determined as in No. 1; projections carried forward with interest earnings of 3�$ and pay increases of 5� a . 4. Costs determined with an assumed interest rate of 3'�`•k and assumed pay increases of 5�$; projections carried forward with these same rates. We were able to develop formulas for all of the basic ' quantities at any given point in the future. SJe wili summarize the results to show the long-range effects in each case. , ' , , Costs: Experience: Case 1 Interest = 3.5$; Pay Increases = 3.5$ Interest = 3.5�; Pay Increases = 3.5$ As stated in Rodger Patrick's presentation, the current benefits and the normal cost start out at 40% of payroll and remain at that level. Under the A method, Fund 1 and Fund 2 contribute 48% of ' payroll during the early years; Fund 2 drops to 40% of payroll in the 13th year and Fund l in the Slst year. LJ ' _ 3 �� ' �� ' . ' ' ' , 1 ' , ' ' ' : Onder the G method, Fund 1 is required to contribute T0.438 the first gear, and this has decreased to 45.45� by the 51st year; the correspon.ding figures for Fund 2 are 60.29� and 43.63%. In both cases, the limiting value of the contri- bution is 40$. In a period of 50 years, the payroll and benefits increase to about 5.6 times their original size. When the A method is used, the deficits for Fund 1, Fund 2 and Fund 3 grow to about the same number of dollars. For Fund l, the deficit starts out at 9 times payroll and is 5 times payroll at the end of SO years; since the contribution at this time drops to 40% of payroll, the multiple will remain S. For Fund 2, the deficit starts out at 6 times payroll and is about 5 times payroll from the 13th year on. For Fund 3, the multiple is 5 at all times. It is a characteristic of the G method that the deficit does not change. Therefore, it becomes a smaller multiple of payroll as time passes. For Fund l, the multiple drops from 9 to 1.6 in 50 years and for Fund 2 from 6 to 1.1. A summary follows: Contribution Fund Method Start 50-Years 1 1 2 2 3 4 A G A c A G Costs: Deficit ; Pa�roll 50-Year Deficit c Start 50-Years Orig. Deficit 48.00% 40.00$ 9 5.0 3.1 70.43$ 45.45$ 9 1.6 1.0 48.00$ 40.00% 6 �.0 4.7 60.29% 43.63% 6 1.1 1.0 40.00°s 40.00$ S 5.0 5.6 40.00� 40.00� No deficit . . . . . Case 2 Interest = S.Sg; Pay Increases = 5.5� Experience: Interest = 5.5g; Pay Increases = S.Sa As Rodger Patrick pointed out in his presentation, so long as the interest assumption and the assumed pay increases are at the same rate, the normal cost and the current benefits will remain the same as a percentage of. payroll. In the models, therefore, these are still 40a under the above assump- tions. ' - 4 - - ' � � � ' ' ' ' ' ' ' , ' , ' ' 39 The results in this case follow the same pattern as in Case l, but the numbers are larger on account of the higher assumed rates. In 50 years, the benefits and payroll increase ' to 14.5 times their original size. Far Fund 1, the contribution under the A metiiod still drops from 48% to 40% in the 51st year and for Fund 2, the drop still occurs in the 13th year. Under the G method, the contributions for Fund 1 and Fund 2 decrease more rapidly than in Case 1. The summary follows: ` Contribution Fund Method Start 1 A 1 G 2 A 2 G 3 A 4 G 48.00% 70.43% 48.00% �60.29% 40.00$ 40_00$ 50-Years 40.00� 42.09$ 40.00$ 41.40% 40.00g 40.00% Deficit : Payroll Start 5Q-Years 50-Year Deficit ; Orig. Deficit 9 5.0 8.1 9 0.6 , 1.0 6 5.0 12.1 6 0.4 1.0 5 5.0 14.5 . . No Deficit . . . Case 3 Costs: Interest = 3.5%; Pay Increases = 3.5� Experience: Interest = 3.5$; Pay Increases = S.So This case is included to show the effect of constant actuarial losses from the fact that pay increases occur at a higher rate than assur_�ed. As the loss occurs each year, it is revealed by the actuarial valuation, and the contri- butions are redetermined. For Fund 3, we have added to the normal cost each year an additional contribution to bring the assets up to 10 times the current benefit requirement. For Fund 4, we bring the assets up to the amount of the accrued liability each year. In this case, under the A method, the assets of Fund 1 and Fund 2 never reach the level of 10 times current benefits during the first 50 years. Our formulas- indicate that it would require over 170 years for Fund 1 to reach this level and over 100 years for Fund 2 to accomplish this. - 5 - ,, 1 ' I ' ' � ' ' 1 Fund 1 1 2 2 3 4 The summary follows: Method A G A G A G Contribution Deficit , Payroll Start 50-Years Start 50-Years 48.00$ 48.00$ 9 6.5 70.430 51.70$ 9 3,� 48.00$ 48.00$ 6 5.3 60.29� 51.17$ 6 3.5 40.00$ 47.58$ 5 5.1 R0.00$ 57.06$ 0 p,p 40 50-Year Deficit ;- Orig. Deficit 10.4 ' 6.5 12.9 8.4 14_8 The limiting value o� the contribution for both Fund 1 and Fund 2 under the G method is about 51.07�. The contri- bution levels of 47.58o for Fund 3 and of 57.06$ for,Fund 4 are reached in the second year and remain constant. The higher contribution for Fund 4 results from the maintenance of a higher level of funding (fuil-funding vs. 10 times benefits). Case 4 Costs: Interest = 3.5$; Pay Increases = 5.5$ Experience: Interest = 3.5;; Pay Increases = 5.5� This case was studied to observe the effect of taking ' the higher rate of pay increases into account in setting contribution rates. ' Since the assumed interest rate is no longer equal to the assumed rate of pay increases, the normal cost no longer equals the current benefit payout. It actually turns out to ' be 61.32% of payroll. With the normal cost at this 1ev21, the contribution under the A method is equal to the normal cost rather than to the 4�$ which is the benefit payout plus 8$ of payroll. The A method also requires that the contri- ' bution remain at the normal cost 2evel even after the assets reach 10 times the benefits. ' ' � The summary follows= � Contribution Fund Method Start 1 A 1 G 2 A 2 G 3 G 4 G 61.32$ 98.63$ 61.32% 86.19% 61.32$ 61.32� 50-Years 61.32$ 63.89$ 61. 323 63.03$ 61.32$ 61.32$ Deficit = Payroll Start 50-Years 11.0 11.0 7.4 . 7.4 7.0 . . . No 4.2 0.8 2.8 0.5 2.7 Deficit 41 50-Year Defiait = Orig. Deficit 5.6 1.0 5.6 1.0 5.6 The limiting value of the contrib+ltion for both Fund 1 and Fund 2 under the G method is 61.32%: The multiples in the last two columns above are smaller than the corresponding figures for Case 3 because a higher level of support has been provided. . Conclusions The study of the above models indicates the correctness of two basic statements in Rodger Patrick's presentation: 1. For a mature population, the normal cost percentage is equal to the benefit payout as a percentage of payroll if in the cost calculation we assume that the interest rate is the same as the rate of pay increases. 2. All contributions in excess of normal cost increase assets. Such contributions will never be used to pay benefits. Although the above basic statements are correct, the presentation did not address itself to the third and fourth items in the statement of purposes (which appear on page 1 of this memorandum). In all of the models studied above, the deficits under the A method at the end of 50 years are rather high mult�ples of the original deficits. Furthermore, as time passes beyond 50 years, tne rate of increase will grow larger and larger. £ven though the second basic statement above is essentially correct, we question whether participants will feel secure and whether municipalities can look with complacency on raPidly increasing deficits. - � - . ' .. �� ' , ' ' ' ' ' 1 ' � , ' ' � ' " 42 The second sentence of the second basic statement is based upon the tacit assumption that the system will continue in perpetuity, and some of the elements o€ security center around this assumption. Governmental units have been known to go out of existence. At the time of such an event, the less the deficit, �.he smaller the loss of pensian benefits. Another event which can upset the system is a reduction in the size of the active working force. All of the above models involved the replacement of each retiring participant by a new employee. If a retrenchment should occur, the base of support for the system would be reduced. At that point, the greater the deficit, the less the security provided for retirees and those nearing retirement. In summary, none of the conclusions set forth in the presentation is incorrect. The choice between the proposed method and those requiring a greater degree of prefunding depends upon the importance which is attached to security. The presentation implies that some security should be p-resent when the A method requires the accur.�ulation of assets up to the level of 10 times the benefit payout. This is still short of the level of security which has been the goal of the Minnesota funds for the past 15 years. Franklin C. Smith Associate, Society of Actuaries GEORGE V. STEIQIJES AND ASSOCIATES Commission Actuaries , - 8 - � � ;� � i, ' ' ' ' ' . , ' . . 1 � ' , 1 ' � ' rq-837-30 11%20/72 • • BACKGROUND d Police and Fire Guidelines Act of 1969 required substantial in- creases in pension contributions. — Prior to this Act pension plans were restricted by law to certain mir.imum asset accumulations. Police and I+ire Associations asked Hewitt Associates to try to develop an alternative funding approach. � — To reflect the differences in corporate pen- sion plans versus those plans supported by tax dollars. Pension contributions are needed to; — meet benefit payouts — build reserves. . � 43 Hewitt Associates M-837-30 11/20/?2 44 SOME PEA'SION TER1bYIATOLOGY 1. Normal cost is that percentage of pay required as a contribution from starting age to retirement age to fully fund all �xpected benefits. 2. If normal cost had always been contributed for each employee and the experience had been in accordance with assumptions, the plans would be fully funded. 3. Deficit represents extent to which past normal cosis have not been paid (accrued liability minus assets). 4. Private plans usually pay normal cost each year plus some amount towards reducing deficit. 'Z" Hewift Associates .' � � M-837-30 ,11/20I72 . . : � ` '; • ; � , , . . 45 � . .� .. .. : : , .. t . .. _ . ; .• . :, � . I�TORMAL COST ' � • ti ' . . . : ' Contribution - � • ' . . as % of Pay � ' �' , • ' . � , Plan started when employee ie � � � age 40 and has 1Q yeara of ser- ' ; I vice. - . , . :' ' . I . : , ' i ' ' ! � .. Accrued � ' • . , Liability � ' �. ' . • ' gp 4( ' Accrued Liability - Assets = Deficit ., : . . ' , • . , , ' • . � � ' . , '' . ' ; . , , . • . "' , -3- � • . Normal Cost • ;� . � .. ' . �� , � . Howiit Answc+bt=° M-837-30 11/20/72 _ � 46 ; - - CORPORATIONS VS. � PUBLIC ENIPLOYEE GROUPS s Question: ��Jhy are there differences between the two with respect to funding of pensions? Answer: Stability, or need for reserves. ., � _� ` , ' � ;� . . � ,' ,' _ -4- Hewitt Assnciaic�c 1 ■ M-837-30 11/20/72 NEED FOR RESERVES e 47 High ATeed Low Need Private Corporations Substantial need because of relatively high probability that corporation will go out of business at some point in time and because of limited ability to generate income. � s State and Loca1 Government Limited need beeause of low probability that govemment body �vill go out of existence and because of almost un- limited ability #o generate income. Federal Government Little need because of al- most zero probability the U. S. Government will go out of existence and be- cause of substantially unlimited ability to gen- erate income. � -5� Hewitt Associate M-837-30 11J20/72 1 I' i FUNDI;vTG APPROACHES 48 ,' High Funding Low Fnnding ' Full Funding (Private Corporations) , Annual contributions equal to normal cost plus 30-year amortization of ;' accrued liability. ; , : ' ' ' . ' . ' ' 1 ' ' ' , Partial Funding (State and Local Governments) Guidelines - Annuai eontribution equal to normal cost plus interest on unfunded accrued liability. . Alternative - Annual contribution equal to beneFit payouts plus 8% of payroll until reserve equals 10 times payout, but never less than normal cost. -s- � . No Funding (Social Security) Annual contributions equal to annual payouts. Reserve equal to six to nine months of payouts. Hewiit Assoc+ates . � � � M-837-30 11/20/72 • ALTERNATIVE FUNDING CONCEPT 1. Contribute from all sources that percentage of pay needed to: a. Meet the ultimate percentage of pay that benefit payme»ts will achieve. b. Plus, if necessary, that percentage of pay required to build over 50 years a reserve of 10 times the ultimate benefit rate. � i, j Maximum benefit payout percentage for most plans is about 40%. , (ii. � Paying 8% in excess of benefit payouts for 50 � years will develop a reserve of 10 times the benefit payouts. 2. Phase into the above program over the next 10 years, � -7 � 49 . M- 7-30 11 20/72 � . . , _50 ' CHARACTERISTICS OF ALTER:�TATIVE APPROACH , • Produces stable costs as a percentage of participant's pay for ' present and future taxpayers. , • Provides security of bene:it continuation for xetired, widows, etc. ' • Creates reasonable reserves which are not so large as to attract undue attention. (As long as the plan continues, these reserves probably will- never be paid out because the normal cost percentage under the actuarial method required under present legislation will equal the percentage of pay to ultimately be paid out in benefits. ) , . • Produces uniform build-up of costs during transition period. 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W CO Of �A W �lV W W� �- �M W � r r� �c ro 0 �M l, 51 , ,- . , . � 1 ' ' � , ' ' ' , ' �J � T� MINUTES OF THE SPECIAL COUNCIL MEETING OF NOVEMBER 27, 1972 , , Mayor Liebl called the Special Council Meeting of November 27, 1972 to order at 7;35 P.M., and said that this will be an informal discussion on the funding proposal for the Police Pension Association, specifically an explanation of the Hewitt plan for funding as opposed to the Guidelines Act of 1969. ROLL CALL: MEMBERS PRESENT: Mittelstadt, Breider, Starwalt, Liebl, Utter MEMBERS ABSENT: None FRIDLEY POLICE PENSION �SSOCIATION FUNDIN�; (�f� pLp,N� The City Manager said that he would Likz to bring Councilman Starwalt up to date, as he is the new member of tt2 Council. The City Staff has been mee[ing with the Police Pension Association for some time over the problem of financing the program. The reai bind came in 1969 when the SXate Legislature passed the Guidelines Act which required funding of the normal cost plus interest on the deficit within 10 years. Fridley is not funding the deficit nor paying all of the normal cost at the present time. There had been a considerable amount of discussion between the Police Pension Association and Marvin grunsell before he came on the scene. He said in January of this year he started meeting with the Police Pension Association to try to negotiate, or work out some solution. The Council has been paying 21% of the police payroll as the City share toward the Police Pension fund. This is not adequate to meet the Guidelines Act. There has been some thought given a reduction in benefits or some changes to get the City aad the Police Pension Association closer in regard to benefi[s versus money going into the iund. After several months, the City received a letter from the police Pension Association indicating they would work with the Ci[y in trying to get the 1oca1 employer share down to 21%. The Police Pension Association has asked their firm of actuaries to come to [he Cw ncil meeting to explain a proposal called the Hewitt Plan. He then turned the Meeting over to Ken Wilkinson. Mr. Kenneth Wilkinson, President of the Fridley Police Pension Association, said Lhat in 1969 the Guidelines Act overtaxec; the private pension plans throughout the State of Minnesota, and it has been a battle since then. It seems to them that one alternate rather than reduce the benefits would be to go the route of the Hewitt Plan or something similar. T4is plan would change the requirements of the Guidelines Act, and would not mean a reduction in benefits. Mr. Wi�icinsoa then introduced Mr. Ed Delahanty of Hewitt Associates, and said that [he Police Pension Association hopes that � after hearing the presentation, they will have a favorable resnonse and pass a resolution endorsing the Hewitt Plan, as was done by the ;�inneapoiis Ci[y Council. Mr. Ed Delahanty referred to the memorandum wnich ou*_lines the Hewitt Pi�n put out by Hewit: Associates dated 11-20-72 {Pf-837-3p), The f:rst poin� is that befere the Guidelines Act there was a law which restric[ed pension plans [o certain asset accumulations. This means t6at all pension plans had to function on a"pay as you go" basis, and there were no reserve funds. 52 � OF NOVEMBER 27� 1972 1 PAGE - 53 As s result of the requirement for advance funding, there is a substantial iacrease in costs, in the Citq of Fridley there is no one receiving benefits at this time. Mr. Delahanty continued that the second page of the outline gives some of � the terminology used in talking about pension fundfng. Normal cost is that percentage of pay required as a contribution from starting age to retirement age to fully fund all expected benefits. This is based on asumptions from experiences with past history being projected into the future, When the plan is looked at on an actuarial basis, if it was paid for every year the pension plan was in existence, it would be fully funded, however, in most cases, there would be a deficit brought about because the full amount was not paid, or because for instance, if a man were to start when he was 25 and the pension plan go into force when he was 35, this would be a 10 year deficit to be made up. Private pension plans pay the narmal cost plus a percentage of the deficit to amortize the deficit over a period of so many years. Mr. Delahanty said that Page ��3 shows a graph illustrating this point. On Page �k4 &�k5 are the differences between a private corporation pension and that funded with tax doLlars. The basic difference between these two is [he question of stability. The question must be asked: how stabie is the private corporation versus the stability of a governmental agency? The amoun[ of stabilitp would determine the amount of needed reserves. A private corporation is subject to the many whims of private enterprise and there is a much greater chance that it would fail and go out of business. That same chance of going out of business does not exist for the City of Fridley. The Federal, State and Loca1 Gooernments do not need as much reserves or collateral, because that would only be used if the business were to fail, and there is not much chance of that. Mayor Liebl commented that the Guidelines Act seems just reversed of that premise, the deficit is tremendous. Mr. Delahanty said yes, and as a taxpayer in the State of Minnesota, he felt it was an outrage. He continued that the Social Security program is an example - there is aimost zero reserves and if they were to stop collecting money, there would only be enough on hand to pay those people already receiving payments ior 6- 9 months, and there wouLd be no provision for those sti11 working. This is to be compared with a private company, if they were to go out of businesc, [here would be enough money to pay for everyone already retired pius those sti11 working, Loca1 governments would certainly lean more towards a Social Security plan than towards a private corporation plan. The City Manager said that he would have to disagree--a 1oca1 government does not have an unlimited ability to generate income. There has been a big taxpayers revolt across the country and the State Legislature has put a levy limita[ion of 6% on the local governments. There is an ultimate limit to what the [axpayers can, or will, bear. Most pension alans are based on the fact that reserves earn money and help defray the cost, the Hewitt Plan loses that. Mr. Delahanty said yes, 6ut the reserves wi11 not be touched unless you go out of business. The City Manager co:�.mented that he had done a thesis paper on this question, and he had found that most public pension plans are conceived on the basis of the private pians. He asked if there is any swing away from this and toward the Hewitt or000sal, or something Iike it? Mr. Delahanty replied yes, the concept to ��nd private pension funds is not appropriate ior public plans. lou must lo�k at the amount of money needed and compare it to the reserves needed. � ' r. _ , SPECIAL COUNCIL MEETING OF NO�EMBER•27, 1472 PAGE : Under the Hewitt Plan, the reserves are built up to a point 10 times greater thaa the ultimate benefit rate, then held at that level forever, with enough put ia to pay the benefits. Under the Guidelines Act, this continues to grow, Mayor Liebl asked i£ there was any city in the State of Minnesota that meets ' the Guidelines Act. Mr. Delahanty said that everybody has 10 years to reach [he maximum contribution, but as far as he knows they are meeting the payments currently required. Minneapolis has met their goal for the ' last two years, next year they are in [rouble. The City Manager asked if someone on the Police force in Minneapolis were to bring a Lawsuit re- quiring them to fund along the Guidelines Act, mouid Lhat lawsuit be suc- cessful? Mr. Delahanty said he believed it would be. Minneapolis has ' looked at the Hewitt Plan and agrees with the principle. ' , ' Mayor Lieb1 said that it seemed that the Guidelines Act was written so there would be money in case the whole Police Departmen[ was wiped out. Mr. Delahanty said no, it was written more on the basis of if the City were to go out of operation, they would still have to pay all the retired men plus a pension to those men sti11 working when they retired. He added that there are some d�ath benefits provided for in the plan also. Mayor Liebl said there are 23 men on the force now, and it wi11 go to 27 in 1973. Does the accrued liability increase or decrease? Mr. Delahanty said it would stay the same. To arrive at the percentage of payroll needed, some basic assumptions are made, such as the ultimate projection of quits, new hires, mortality, etc. and are all calculated to arrive at what the benefit cost would be. In the case of Fridley the cost level would be 48% of payroll. The maximum benefit payout is about 40°!, plus an 8% in excess of benefit payouts paid for SO years, which wculd develop a reserve of 10 times the benefit payouts. Mayor Liebl asked if these percentages in- cluded the escalator clause and the current age of retirement and Mr. Delahanty replied yes, but the percentage would not reach that 1eve1 antil the lOth year. He added that the City of Fridley will build up more in security than Minneapolis will, the [otal reserve wi11 build up very fast. The Fridley force is rather a young force. Mayor Lieb1 said that it seems [hat 217, (Fridley's current Fayment) would be sound and would amount to a considerable amount of money, but according ta the Guideiines Act, it is not. Councilman Breider asked for a hypo- thetical e�sample of how the accrued liability is arrived at. ,Ir. Dela- hanty said if, for instance, a man worked from [he time he was 35 until he was 65 for $1000 per year. After he is 65, if he would live for ano[her 15 years, and if he were to get a pension of $1000 a year, there would have to be on hand 15 X$1000 =$15,000. This wo�1d mean that $500 per year would have to be set aside for him in order for him to have the $15,000. The probiem in looking at these plans in 1970 is that some of the men have already been working for a company for some 10 - 15 years so this is a ready-nade deficit. He added that in their computations, the inter;:st rate is already built in. Counrilman Breider asked how much is in the fund now, �fr. ,Tohn Anderson replied about $280,000. Pfayor Lieb1 asked if it was agreed to change the retirement age from 50 to 55 or if the escalator clause was dr�pped, wouldn't that affect the Guidelines Act? Mr. Delahan[y replied �,es, the 54 ':, ! ' : ' ' , ' ' ' ' ' ' ' � ' , , ' SPECIAL COUNCIL MEETING OF NOVEMBER,2I, 1972 PAGf � � cost requirements for the pension plan would drop each year. He ex- plaiaed that the escalator clause means that if a man is retired at so much money, with every raise the rest of the active force gets, he would get that same percent�ge of raise in his retirement pay. The City Attorney raised the issue of the 6y, that was received in the form of State Aid. He said this was the first he was aware of that form of contribution into the fund. Mr. Delahanty said that a portion of the sutomobile insurance is turned back to the municipalities in the State, based on a uniform formula. The Finance Director said this is something new, and Fridley received the first check Last veek. It is about 6% & amounts to about $21,000. Councilman Breider asked if that amount is included in the 21% employer share. The Finance Director replied yes, this is how the budget had heen prepared. The budget has been approved by the Council for 1973 on this basis. Councilman greider said that Fridley has committed 21% of the payroll. If an officer earns $10,000 a year, 21% of that is $2100 plus the employee share of 6y, would amount to $2700; this amount over a 20 year period would mount up to quite a big chuck of money and would be earning interest besides. Mr. Delahanty said that would not be true, principally because that mans' salary would probably double over that 20 years. Councilman Breider said that there wouid also be those that terminate before they are eligible to draw any benefits. Mr. Delahanty then drew a graph on the blackboard illustrating the benefits of each plan and why Fridley would fall behind contributing only 21� of payroll. The City Manager asked what woald Fridley's obligation be under the Aewit[ Plan when built up to the final step. Mr. Delahanty replied at the lOth year it would be 48%, under the Guidelines Act it would 'oe 64%. The question was raised what was the Police payroll now, and OfficE�r Wilkinson said it was $269,500. Councilman Mittelstadt added that at a S�; raise every year� by 1980 it would amount to $398,000. 16� (the difference between Hewitt - 48% and 64% - Guidelines) of that amount is over $60,000 that would be saved. Mayor Liebl asked if the Hewitt formula is foliowed, would it meet the Guidelines Act. Mr. Delahanty replied no, if the Hewitt act is passed the Guidelines Act would be out. The City Manager said that the City share would actually be 36'/„ not 48% because 6% is an employee share and about 6% is received from State Aid. Officer Wilkinson said tha[ that check for $21,000 he thought should have gone directly to the Police Pension fund rather than the City oi Fridley. He asked if that amount was deducted fr�m the City's share of the percentage. The City Manager said that up until the check was received, it was somewhat of a mystery what the amount of the check would be. The City Council has not es[ablished a policy on how they wish to utilize this money. Officer Wilkinson said that he did not believe the purpose of the money was to be given to the City, but was to be used in fundin� for cities of the first h second class, and was to be used by the police agency and paid directly to the Police Pension fund, and should not have gone into the city ivads. It was pointed out that a11 monies received by the City mus[ be recorded on the City books. 55 � ' � ' ' ' ' , ' , ' � � ' ' ' , � f � SPECIAL COUNCIL MEETING OF NOVEMBER•27, 1972 PAGE` S. Mayor Liebl asked if there would have�to be additional tax money to im- plemen[ the Hewitt Plan, Mr. Delahanty said yes, and added that Minnea- polis and St. Paul have passed resolutions endorsing the plan, he did not know wha[ other citie's have. He said that under the Guidelines Act, todays taxpayer is further burdened by heavier payments in the future. The Hewitt Plan stays [he same ar 48%. He said that it seems to make sense to him for the [axpayers to pay the same today as in future years. The payment in 1980 would be the same as in the year 2000. Under the GuideLines Act the 1980 payment would be higher than in the year 2000. Councilman greider asked how they arrived at the 48% and what would happen if there were more men on retirement than working. Mr. Delahanty said that would never happen following the mortality rates as we know them. Council- man Breider asked how many there would be in the next 10 years. Officer Wilkinson replied 4 or 5. He added that even if a man pu[s in for 20 years, he cannot get any benefits until age 50. The City Attorney said that 10 years fzom now experience may show that the 487 may be higher or Lower than necessary so that amount could vary, based on actual experience. Mr. De1a- hanty said yes, the same is true of the Guidelines Act. The best estimate they have now is 48%, that could change in the event a cure is found for cancer & heart disease. If their basic assumptions are t-ue, then you will never pay out more than 48y, so the reserves would never be touched. The City Manager asked if Mr. Deiahanty felt that this plan would get through the Legislature. Pfr. Delahanty said yes, this, or a simitar p1an. The Legislature is taking the Hewitt plan seriously. It has been studied to see if it is technically correct and a memo has been wri[ten back stating that they found it valid. The basic question that must be answered is whether you feel the reserves are needed at the Level provided for under the Guidelines Act. They, at Hewitt, feel they are not. Councilman Utter asked how the Police agencies in the State of Minnesota feel about the Hewitt plan. Mr. Delahanty said that even though the plan would destroy some funding and there would not be as much in reserve, he has not found any police officer that has said they did not like the approach. Mayor Lieb1 said that Che City of Fridley would not be in a position to finance the 1969 Guidelines Act and he thought it was irresponsible of the Legislature to pu[ in force such a plan, then put a limit on the local tax structure. This would seem to be a conflict. Councilman Starwalt said that in 4f4 of [he memo from the League of Minnesota Municipalities, they point out that tfie whole intention of the Hewitt P1an is that the deficit need not be paid off, and as long as Fridlzy stays in existance no one need worry. The City Manager said that the basic theory of private pension funding is that when a man works for you, you put so much in the bank for him and when he retires, that money will oe waiting for him. He said he is not as sure of the government's ability to come up with the necessary funds as Hewitt Associates is. Councilman Starwalt asked what was his guess that the Hewitt Pian would be legislated into laca. Mr. Delahanty said that was difficult to predict, however, between this session and the next session there will be a lot of pressure to change the Guidelines Act both from the Police Pension Associations and also other s[ates as they realize that they do not need that kind of reserves. 56 , , , , ' ' ' ' . ' ' ' ' , SPECIAL COUNCIL MEETING OF NOVEMgER,27, 2972 PAGE 6 � Councilman Sxarwalt asked for an explanation of what happened in Mankato and Councilman Breider asked why the combined PERA and o1d plan would be more expensive than the Hewitt Plan. Mr. Delahanty explained that instead of paying interest on.the deficit, the entire deficit has to be paid off in about 25 years because those people will actually be going out of existence. They would be under the present plan and not PERp, so the whole deficit would have to be paid. Mayor Liebl added [hat there would be a morale problem between the men beyond control if some of the men have the present plan and some were under PERA. The City Attorney said that Mr. Delahanty said that if there was a conversion and the new members went under pERA the deficit would have to be retired, yet in the rest of the presen[ation he has said that the deficit can be,ignored; why? Mr. Delahanty said because the payroll for active people supports the group retired, so if ZO people retired there wouldn't be anybody paying into it. Mayor Liebl said that his ptan would make it fiscally possible for this community [o make a pension fund work. It would make the fund sound so the people bargaining would get their pension. The City Manager said t hat [here is still a problem with the Council's present policy. Undgr the $ewitt Plan, with 6% contribu[ion from the employee and 6% from the State Aid, then there is sti11 36% left for the City to fund. This Council has said [o date they will put in 21�, so there wi11 have to be more put in, or a reduction in benefits. Mayor Liebl said that a pension fund should not be negotiated annually. Officer Wilkinso❑ said no, it hasn't been. �y� Lieb1 said that it should be on a 3- 4 year basis to give the Administration a chance to fund it without overburdening the taxpayers. If it is done on an annual bas_s, there would be constant turmoil. He asked if the age of retirement was changed and the escalator clause dropped, would the plan fit the Guidelines Act? The Finance Director said yes, it would then be about 16% lower. Officer Wilkinson said tfiat he was afraid that if a person retires at, for instance, $500 a month, 10 years from now it would not be worth as much as it is now. ' Mayor Lie61 said that in aboat 1966 the City �ouncil gave the Policemen their pension p1an, and he did not think there was as good a plan in the country. This is money the Policemen propetly earned and they expect to ev2rytyearnbute[heeformulaHw u1d havettonbetchanged if�everything�elseegoes ' up. He said he has been in this country for 18 years, and his wages have not doubled. ' LJ ' ' ' The City Manager said that when he looks at negotiating, he thinks of it slightly diff_rently. He said he looks at a certain service, be it poiice, parks, fire etc., and finds ti�e total cost. He would take into account a man's salary, social security, sick leave, vacation and pension plan. These things are constantly being compared with other municipalities. There is nothing sacred about a pensian plan, it is a iact and has to be analyzed by making compa:isons. All these factors make up a total cost package for an employee. If this discussion were wi[n a priva[e company and a unior,, tlie pension plan would be a factor in a total cost package. �3% a� ¢ ' '. � ' , ' ' ' ' ' r_ _ �_ ' , ' , O ' ' , ' SPECIAL COUNCIL MEETING OF NOVEMgER 27, 1972 � PAGE " 58 Mr. Jim Hill, Assistant City Manager/Public Safety Director, said that Mr. Delahanty had spoken of Police and Fire PERA as only about � as beneficial. He said he did not think so and pointed out that there are many major Police Departments with 3- 4 pension plans in operation with PEgA being one of them. PERA does have certain advantages. I4r. Delahanty said ttiat the PERA con- tribution is 19%, the Hewitt plan is 487, and the Guidelines Act would be 64%, PERA pays 50% of average career salary, Hewitt would pay 46% of the final average salary escalated. Mr. Delahanty said [hat the assets under PggA would cover 96% of the liability, and under the present plan the deficit is about 85% of the plan, or about 157, funded. He then offered the following table on the blackboard; Benefit after 20 years Vesting Employee Con[ribution Total Cost Percent�ge Retirement Age FRIDLEY 46% of final pay esca- lated. 20 yrs,=L00% 6% 48% or 64% 50 PERA 50% of career average pay, 10 yrs. =100% 7% 19% r 55 The Police � Fire PERA fund has $26 Million in 2ssets for 2800 people and is 96� funded. The Fridley plan has $280,000 in assets to cover 21 people and is 157 funded. Mr. Hill said that there seems to be some confusion in the minds of the Policemen; they think that money shouid have been sent directly to their treasurer. The Finance Director said it will be, but it sti11 has to be shown on the City books, so there will be a record that the money was received. Mr. Hi11 said that it seemed that the 6% from the State has been figured into the 21% of employer contribution. There wi17. be another check for about $21,000 for 1973 and he wondered how that was going to be figured. The Finance Director said that i[ is the City's obligation.to turn the money over to the Treasurer of the Police Pension Association, but whether it will be figured as part of the City's 21% has not been answered as yet, so regardless the Pension �ssociation is assured of the employer's share of 21%: The City Manager added that he had received no direction to the con- trary. Officer,Wilkinson said that when the 21% was settied upon, it was assumed that anything over and above 21% would not be included in that 21�• MaYor Liebl said yes, this was so that the Council would know just how much they wouLd have to budget to pay in the fu[ure. Councilman Mitteistadt added [hat anything additional goes into their treasury. Officer Wilkinson said, as to negotiating the pension plan every four years as the Mayor mentioned, they would like to set up a long range p1an to bring it down to the 21% level, and that at some point in time there sneuld not be a need for further negotiations. The City ptanager said that on behalf of the Pension Association, they have been dearing in good faith in [rying [o reach a solution, they Yeel the iunding is unrealistic also. O�:icer Wil(cin- son said that if the Hewitt plan or one like it was passed in the next session of the Legislature, that would be a step in the rigtit direction, �fayor Liebl asked the Pension Association if they are asking the City Council to pass a resolution endorsing the Hewitt plan and Officer Wilkinson replied yes. 5PECIAL COUNCIL MEETING OF NOVEMBER 27, 1972 PAG I � , 59 The City Manager suggested that before the Council takes any action, perha s � they should hear from the Legislative Retirement Commission or Dr. Franklin Smith of Stennes & Associates. They could make.a presentation to both groups. Dr. Smith was unable to come to the Meeting tonight. The Mayor and Council thanked the Members of the Police Pension Association and Mr. Ed Delahanty of Hewitt Associates, for coming to the Council Meeting this evening to explain the Hewit[ Plan to the Council and for this informal discussion. AD70URNMBNT: MOTION by Councilman Mittelstadt to adjourn t6e Meeting, Seconded by Council- � Utter. Upon a voice vote, all ayes, Mayor Lieh1 declared the Special Council Meeting of November 27, 1972 adjourned at 10;00 P.M. � Bespectfully submitted, /7�LG� Q � i�� /j/ Juel A. Mercer Secretary to the City �ouncil � Frank G. Liebl Mayor -R COST COMPARISON OF PENSION PLAN FOR CITY II�IAyEES COST TO ER�PLOYEE FUND RETIRED�NT CONTRIBUTION NORMAL COST DEFICIT TOTAL COST AGE Regular City Employees on PERA, Exclusive of 6% 6� 2'� 8'-� of 65 Fire and Police Salary Regulax Employees on 8.85� up to �6 p to 1.5� Coordinated Plan $10,800--3� $10,800--3� PS�acj Sec. & Part over $10,800 over $10,800 Paid City Firemen 6� Present Police Plan PERA Police and Fire Plan 6% 7% * Hewitt Actuarial Survey ].1.4� 51.6$ or �7•55� * �-y; 10.79� 7.69% 1� io 3s °J'o � up to 65 $10,800--4.5� over $10,800 22.19� of s�a�• 59.3� or 55.24$ � 12� of Salary riy 50 55 .1