07/17/2009 - City Council Finance CommitteeCity of 8a , an demo
TO: CITY COUNCIL FINANCE COMMITTEE
MAYOR MAGUIRE AND COUNCILMEMBER BAKKEN
FROM: CITY ADMINISTRATOR HEDGES
DATE: JULY 17, 2009
SUBJECT: EAGAN FIREFIGHTERS RELIEF ASSOCIATION PENSION AGREEMENT
PROPOSAL
The Firefighters Relief Association Pension Committee has responded to a counter proposal by the
Finance Committee with a revised proposal for five (5) years. The Pension Committee is in
agreement with the City Council for the first two -years which, is at a rate of 2 percent; however, in
2012, it is increased to 3 percent, in 2013 to 4 percent, and in 2014 to 4 percent. A total annual
difference between the proposal by the Finance Committee and Pension Committee is $62,870.
The City Administrator and Director of Administrative Services would like an opportunity to visit
with the Finance Committee regarding the counter proposal by the Firefighters Relief Association
Pension Committee in hopes that final agreement can be reached so that the Relief Association
Committee can make their presentation to the Fire Relief Association membership scheduled for the
month of August.
Enclosed is a copy of the counter proposal and a second memo providing supporting rationale for
the proposed increases as offered by the Relief Association Pension Committee. Also attached is a
spread sheet prepared by the Director of Administrative Services that provides a cost breakdown
showing the Finance Committee proposal and the Relief Association Pension Committee counter
proposal. The annual difference is based on the assumption of 105 firefighters and, again, totals for
the five -years of $62,870. Mira will coordinate a time that either we can discuss this by conference
call or the opportunity to meet either prior to the Listening Session, following the Listening Session
or after the City Council meeting. The real issue is whether the Finance Committee would continue
a five-year proposal, lower the percentages again in 2012 through 2014, or look at a shorter
proposal given the state of the economy for 2010 through 2012 based on the 2 percent with a
possible 3 percent for 2012.
Thomas L. Hedges
City Administrator
Cc: Director of Administrative Services VanOverbeke
Fagan Y�'irefigbters `1�elief QAssociation
Date: June 30, 2009
To: City of Eagan Finance Committee
From: Eagan Firefighters Relief Association Pension Committee
Mark Sportelli, Tony Tiechert, Denny Mangan, Darrin Bramwell, Steve Plaschko, and
Kari Schuch
Re: Relief Association Pension Agreement with the City of Eagan
Supporting rationale for the proposed increases:
• Giving consideration to economic conditions, we are proposing a reduction in pension benefit
increases for the first 3 years and a reduction in administrative increases for the duration of the
agreement.
• We are proposing a 5% reduction in the pension benefit from what we originally proposed in the
initial letter to the City a few months ago. We are proposing increases that balance out over the
5 years of the agreement, with increases for the final two years at 4%. This is a midway point
between what we first proposed and the City's response to it.
• The difference between year 2 (a 2% increase) and year 3 (a 3% increase) is approximately
$62.00 per firefighter for that year. The difference between year 3 and year 4 would be only
slightly larger.
• The proposed increases are based on a starting pension contribution of approximately $6,146 in
2009. Increases are not comparable to full-time employee wages and benefits.
Respectfully submitted
Mark Sportelli
Pension Committee Chair
Cc: Fire Chief Scott
3795 Pilot Road * Eagan, Minnesota 55122 * 651.675.5916
Lagan `Firefighters `Relief association
Date: June 30, 2009
To: Mayor Maguire
City Administrator Hedges
Council Members Bakken, Hansen, Fields, and Tilley
From: Eagan Firefighters Relief Association Pension Committee
Mark Sportelli, Tony Tiechert, Denny Mangan, Darrin Bramwell, Steve Plaschko, and
Kari Schuch
Re: Relief Association Pension Agreement with the City of Eagan
The current pension, agreement between the Relief Association and the City of Eagan will expire on
December 31, 2009. The Pension Committee representing the Relief Association is proposing the
following for the next agreement:
• A 5 -year agreement that will begin on January 1, 2010 and end on December 31, 2014.
• Beginning with the 2009 agreed upon dollar amount, a 2% increase for each firefighter per year
for years 1 and 2, a 3% increase for each firefighter for year 3, a 4% increase for each firefighter
per year for years 4 and 5 and State Aid flowing through to offset the city's liability for the length
of the agreement.
• Beginning with the 2009 agreed upon dollar amount, a 2% increase for administrative costs per
year for the length of the agreement.
Respectfully submitted,
r
Mark Sportelli
Pension Committee Chair
Cc: Fire Chief Scott
3795 Pilot Road * Eagan, Minnesota 55122 * 651,675.5916
2 -Jul -09
Pension Admin
2009 6,146 28,480
Annual Difference Assuming 105 Firefighters
Finance
City Finance Committee Proposal -- May 29, 2009
Annual
Committee
Per
Annual w/105
2010
687,286
Total
-
Percent
Firefighter
Firefighters
Percent
Annual
Annual
2010
2%
6,269
658,237
2%
29,050
687,286-
2011
2%
6,394
671,401
2%
29,631
701,032
2012
2%
6,522
684,829
2%
30,223
715,053
2013
2%
6,653
698,526
2%
30,828
729,354
2014
2%
6,786
712,496
2%
31,444
743,941
3,576,665
Pension Committee Proposal -- July 1, 2009
Per
Annual w/105
Total
Percent
Firefighter
Firefighters
Percent
Annual
Annual
2010
2%
6,269
658,237
2%
29,050
687,286
2011
2%
6,394
671,401
2%
29,631
701,032
2012
3%
6,586
691,543
2%
30,223
721,767
2013
4%
6,850
719,205
2%
30,828
750,033
2014
4%
7,124
747,973
2%
31,444
779,418
3,639,535
Annual Difference Assuming 105 Firefighters
62,870
Finance
Pension
Annual
Committee
Committee
Difference
2010
687,286
687,286
-
2011
701,032
701,032
-
2012
715,053
721,767
6,714
2013
729,354
750,033
20,679
2014
743,941
779,418
35,477
3,576,665
3,639,535
62,870
62,870
