RES 1971-20 - 00008623.� fr
RESOLUTION NO. 20 -1971
RESOLUTION CONCERNING THE AMENDMENT OF THE POLICE AND
FIREMEN'S RELIEF ASSOCIATIONS GUIDELINES ACT OF 1969
WHEREAS, For several years prior to 1969 there was a growing realization
that the statutes governing the various paid police and firemen's relief associations
were in need of substantial revision. Relief associations, acting unilaterally
within rather broad statutory limits had established exceedingly generous benefits,
while municipalities and the members of these associations contributed only the
relatively modest sums required by law. As a result the actuarial deficits soared,
jeopardizing the solvency of some of the relief associations. Responding to what
was viewed as a potential crisis, the legislature passed the Guidelines Act of 1969
which requires the affected cities to assume, over the next decade, primary
responsibility for financing the normal costs of pension and other benefits
established by the relief associations.
WHEREAS, While we agree that responsible public policy demands that such
benefits be adequately financed and that forthright action had to be taken to
arrest the growing actuarial deficits, we believe that there are at least three
other considerations which must be incorporated into the Guidelines Act if the
public interest as well as the interests of the employees are to be safeguarded
1. The need for substantial financial participation by employees as
well as public employers in fancing the benefits. The Guidelines
Act which requires the affected cities to bear in the order of 90% or
more of the total current cost of the benefits is virtually without
precedent in contributory public pension systems and makes it virtually
impossible to negotiate any modification in the existing benefits with
their employees.
2. The fact that public bodies, such as
control over the expenditure of the
responsible. Yet the Guidelines Act
which city council have no effective
either on the level of benefits they
administration of those benefits.
city councils, must have effective
)ublic funds for which they are
did not modify the statutes under
control over relief associations
adopt (or their cost) or the
3. That city councils need some options or alternatives to enable them
to work our with the affected employees a level of benefits which
is acceptable to the employees and at the same time constitutes a
tolerable burden for the taxpayers. Since the Guidelines Act provides
city councils with no options or alternatives with respectto pension
programs for future employees, they are greatly handicapped in trying
to limit their financial obligations even on a lonq -term basis.
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NOW, THEREFORE, BE IT RESOLVED, The City Council of the City of Fridley
strongly believes that these three considerations must be incorporated into
the Guidelines Act of 1969 and urges the Legislative Retirement Commission and
the 1971 session of the Legislature to enact the following specific amendments
to this Act:
1. The normal level cost of the benefits provided by these relief
associations should be shared by the employees and public employers
on the same 40 -60 basis which applies to the P.E.R.A.. Public
Safety Pension fund and employees should be permitted the same
ten -year period (i.e., 1971 to 1980) as are municipalities to
achieve this minimum financing standard.
2. The Board of Directors of all such relief associations should be
composed of five members, two of whom should be elected by active
members of the associations, two appointed by the mayor with the
concurrence of the city council, and a fifth member to act as
chairman who would be appointed by unanimous agreement of the
other four. Some appropriate device should also be -included to
resolve any impasse in the selection of a chairman.
3. All future changes in the by -laws of relief associations affecting
pension or other benefits should be subject to ratification by the
appropriate city council.
4. The benefits by such relief associations should be limited to that
normal level cost which can be met by a contribution by the public
employer which does not exceed 35% of the regular salaries of the
affected employees plus the contributions made by those employees.
5. Public employers should have the option of placing all policemen
and firemen hired in the future under the P.E.R.A. ,public safety
plan and should also have the option of making supplementary
payments to such new employees not to exceed the differential in
cost bet"reen the employer contributions to the relief association
and the employer contribution-, to the P.E.P,.A. public safety plan.
However, those supplementary payments should riot be considered to
be a part of the employee's base salary for pension purposes.
PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF FRIDLEY
THIS 1ST DAY OF FEBRUARY, 1971.
ATTEST:
CITY CLERK -- "'ARVIN C. BrZ71SELL
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MAY'0k - JACK Y.iRY,H,Ah1
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