Poudre Valley Fire Protection District

Transcription

1 Poudre Valley Fire Protection District 102 Remington Street Fort Collins, CO Phone: (970) Fax: (970) Internet: Poudre Valley Fire Protection District Volunteer Firefighter Pension Board Meeting May 12, :30 a.m. 1. Minutes of the October 28, 2013 Volunteer Firefighter Pension Board Meeting 2. Volunteer Firefighter Pension and Alternatives Meetings are held in the conference room at 102 Remington Street unless otherwise noted_ Reasonable accommodations will be provided upon request for persons with disabilities. If you require an accommodation to participate in this meeting, please notify Poudre Valley Fire Protection District at (970) as soon as possible.

2 Poudre Valley Fire Protection District Volunteer Firefighter Pension Board Agenda Item Date: May 12, 2014 From: Tom DeMint Item: #1 Minutes of the October 28, 2013 Volunteer Firefighter Pension Board Meeting Recommendation: That the Board Approve the October 28, 2013 Meeting Minutes Attachments: October 28, 2013 Meeting Minutes The minutes from the October 28, 2013 regular meeting of the Volunteer Firefighter Pension Board meeting are attached.

3 Poudre Valley Fire Protection District 02 Remington Street Fort Collins, CO Phone: (970) Fax: (970) Internet: POUDRE VALLEY FIRE PROTECTION DISTRICT VOLUNTEER FIREFIGHTER PENSION BOARD MEETING October 28, 2013 The Volunteer Firefighter Pension Board of Directors met at 102 Remington Street, Fort Collins CO, at 10:05 a.m., Monday, October 28, Present were Board members: Dave Pusey, Mike DiTullio, Ed Rupert, Ron Anthony and Mike McBride. Absent Earlie Thomas (excused). Also present were: Fire Chief Tom DeMint, District Coordinator Bev McBride, and Recording Secretary Shawn Williams. Minutes of the April 22, 2013 Volunteer Firefighter Pension Board Meeting Mike McBride made a motion to approve the April 22, 2013 Volunteer Firefighter Pension Board Minutes. Ed Rupert seconded the motion. The motion passed by unanimous vote of the Board. Volunteer Firefighter Pension Tom DeMint said his goal for the Volunteer Pension Plan is to recognize years of service for the volunteers, He would like to give the volunteer firefighters a one-time payout after they have been with the department for so many years. The Pension Board received a memo from PVFPD Attorney Bob Cole that outlined options for the Pension Board to consider. In the memo the options were a Years of Service Payment, a Deferred Benefit Plan (commonly referred to as a Length of Service Award Plan), and an Hourly or Per-Call Stipend. All of these options have to follow the 20% Rule. The 20% Rule states so long as a volunteer is paid less than 20% of the wage one would expect to receive as a paid employee in the same or similar position and expending the same amount of hours, the payment is likely to be considered nominal under the FLSA. If the payment is too high, the volunteer can become an "employee" in the eyes of the IRS. Discussion followed by the Board on the different options that Bob Cole suggested. The Board talked about the volunteers eligible for the current pension plan and if they could choose to remain in the current plan or go to the new proposal. Mike McBride said that he would prefer to stay in the current pension plan. Ron Anthony suggested that the Board should revert back to the amount paid in the pre-1994 pension plan wherein a vested volunteer would receive a $300 per month payment, but this would only be for

4 PVFP Volunteer Firefighter Pension Board Minutes October the volunteers that are currently in the plan. This option would affect Mike Fleming (retired) and Mike McBride (active volunteer). Ed Rupert said it seems that there are two classes of volunteers. One is the long-term community-based volunteer and the other is the short-term volunteer looking to go in to a fire-service career. Dave Pusey stated he likes a lump-sum payment in recognition of years of service for the commitment to the PFA. Ron Anthony added that a lump-sum seems much cleaner. Ron Anthony stated there is a need to change the volunteer firefighter model to get community-based volunteers. Mike DiTullio said the volunteer program has issues that should be discussed and that this discussion seems premature. Mike Gress said that there will be a report to the Board in the first quarter of 2014 regarding the volunteer program. Tom DeMint recapped the discussion and said at the April 21, 2014 Pension Board meeting, staff will try to have a preliminary plan or the Board to review for rewarding volunteers for years of service. Mike McBride made a motion to adjourn the meeting. Ed Rupert seconded. The meeting was adjourned at 11:05 am. Page 2 of 2

5 Poudre Valley Fire Protection District Volunteer Firefighter Pension Board Agenda item Date: May 12, 2014 From: Tom DeMint Ann Turnquist Item: #2 Volunteer Firefighter Pension and Alternatives Recommendation: Items for Information and Discussion Attachments: Letters from Attorney Bob Cole on Alternatives, May 2013 and May 2014 Staff Memorandum: Options and Analysis: Volunteer Firefighter Years-of-Service Plan and Amendments to Volunteer Firefighter Pension Plan Potential Financial Liability for Years-of-Service Award Program At the April 22, 2013 Volunteer Firefighter Pension Board meeting, the Board discussed potential plans and alternatives for providing additional benefits to volunteer firefighters, including both long-term volunteers and new volunteers who join PFA. Three additional proposed plans were submitted to the Fire and Police Pension Association (FPPA) to gather information on the feasibility of returning the Volunteer Firefighter Pension to pre-1994 requirements. FPPA submitted the current plan and three additional proposals to an accounting firm for analysis and actuarial study. At the October 2013 Volunteer Firefighter Pension Board meeting, the Board discussed alternatives and directed staff to seek additional information from the District's Attorney Bob Cole regarding an option to provide lump sum payments to long-term volunteers upon separation. Attached is a letter from Bob Cole which addresses specific questions that PFA staff posed to him regarding a Years-of-Service Award program for PFA volunteers. Also attached is a staff analysis of alternatives which the Volunteer Firefighter Pension Board might consider in developing a recommendation for consideration by the PEA Board of Directors, Staff has also provided a brief summary of the option the Board wished to consider for changing provisions of the existing Volunteer Firefighter Pension Plan to increase the benefits for two members of the plan. These members have been participants since the 1994 plan changes were made.

6 Authority 102 Remington Street Fort Collins, CO Phone: (970) Fax: (970) Internet: Memorandum To: From: Re: Volunteer Firefighter Pension Board Tom DeMint, Fire Chief Ann Turnquist, Administrative Services Director Options and Analysis: Volunteer Firefighter Years-of-Service Plan and Amendments to Volunteer Firefighter Pension Plan Date: May 12, 2014 Volunteer Firefighter Years-of-Service Plan PVFPD's Attorney Bob Cole has provided the Volunteer Pension Board with responses to a variety of questions that the Board and Staff posed regarding the possibility of providing a Years-of-Service award program for existing and future PFA volunteers. Staff provided him with an example of a plan design based on a general suggestion by Chief DeMint. The initial proposal suggests the following payments be offered to volunteers upon retirement based on years of service: 10 years: $500 per year of service 15 years: $750 per year of service 20+ years: $1,000 per year of service COST ESTIMATES: Staff has completed an initial analysis of the cost of providing benefits based on this model, assuming that all existing volunteers are given credit for their past years of service. The attached spreadsheet illustrates the potential cost of providing this benefit. The Total line at the end of the spreadsheet illustrates the liability that would need to be funded each year to ensure that funds are available to make these payments. Beginning in 2014, $25,000 would need to be set aside in a reserve fund to ensure that payments could be made if a volunteer retired. In the spreadsheet, each year's accumulated liability is identified. With the proposed payment, if all volunteers stayed with PEA as a volunteer until they had reached 20 years of service, the accumulated liability would be $560,000 by It is highly unlikely that all volunteers would stay long enough to be eligible for the payment, but PFA would need to recalculate this liability each year to assure that funds are available for

7 potential payouts each year. New volunteers would also need to added to the projections as they join PFA. In the near term (next five years), funds would need to be set aside to pay the accrued liability for volunteers who would have earned service credits. The cumulative total by 2020 is $123,000. Some current volunteers have already earned significant years of service, so a significant portion of the short-term cumulative total is a certain expense that would need to be funded beginning in the 2015 budget. This funding analysis also includes an assumed payout for Mike McBride who already would qualify for the 20 years of service award, but is also currently part of the Pension Plan. He could be provided with the option to switch to the Years-of-Service Plan or choose to remain in the Pension Plan. This issue would need to be considered if a Years-of-Service Plan were to be created. Staff believes that this would be a significant budget concern in the next few years because it is a significant financial commitment ISSUES: In discussing the possibility of creating a Years-of-Service Plan for existing and future volunteers, Staff has identified several issues that the Volunteer Firefighter Pension Board may wish to discuss: 1. Though the Volunteer Firefighter Pension Board is associated with the District, staff believes that any decision related to a new proposed Years-of-Service Plan would likely be within the authority of the PFA Board of Directors. The existing volunteers are affiliated with PFA rather than the District and funding for any program would need to be appropriated from PFA funds. As the Pension Board considers this program, staff believes that it should be in the context of a recommendation for the PFA Board to establish and fund the plan. 2. Staff continues to be concerned about the financial commitment that would be required to implement a Years-of-Service Plan. Though not all volunteers will remain with PFA long enough to receive a payment, PFA would need to establish a reserve which is evaluated each year to ensure funds are available whenever a volunteer chooses to leave service, Providing credit for a significant number of past years of service accelerates the funding need, since some volunteers already have more than 10 years of service and some have already accumulated over 20 years of service. Some of these volunteers, who protect their own remote neighborhood in Redstone Canyon, had not expected to receive any payment for their services beyond their stipend and PFA did not budget with that expectation in mind. Station 11 was brought into the District, a station was constructed and service from PEA was

8 added with the agreement that volunteers would not expect to be compensated or included in the volunteer pension program. With the scope of service focused on protecting their own neighborhood, volunteers did not seek inclusion in the pension plan. Changing that commitment now would be at the cost of the time the PFA could have been accumulating funds to address the liability. 3. Changes in the program for volunteers, shifting the focus away from structural firefighting toward EMS response, community education and wildfire mitigation and response may have a significant effect on the number and the expectations of future volunteers. Staff does not know how to predict that impact and must therefore make conservative assumptions about the number of volunteers who would stay long enough to collect a payment under the Years-of-Service Plan. 4. In contrast, PFA has seen changes in the demographics and the expectations of volunteer firefighters which may also impact their likelihood of staying with PFA long enough to receive a Years-of- Service Plan payment. With some volunteers participating in the program in order to enhance their chances of securing paid employment with either PFA or another department, an additional element of uncertainty in the long-term program costs is introduced to the funding analysis_ The impact of this changing demographic may be unknown for many years. 5. If the Pension Board wishes to proceed with a recommendation to the PFA Board for establishing a Years-of-Service Plan, the Board may wish to consider some alternative payout levels which would reduce the cost of the program, but still provide some acknowledgement to volunteers with long tenure. Alternatives might include: a. A flat rate per year of service after 10 years (e.g. $500 per year of service with $5,000 after 10 years, $7500 by 15 years and capped at $10,000 for 20 or more years of service); b. A lower per-year dollar amount in the plan (e.g. $100 per year of service with $1,000 after 10 years, $250 per year between 10 and 15 years and capped at $500 per year for 20 or more years of service for a total of $10,000); c. Start the payout later than after 10 years; or d. Any other combination of rates and years which the Board would prefer to consider. Staffs understanding from Mr. Cole is that the structure of the plan would not be driven by legal limitations because it would not be considered to be a pension, but rather an awards plan.

9 PROCESS: If the Pension Board wishes to recommend the creation of a Volunteer Firefighter Years-of-Service Awards Program, PFA staff believes that the Pension Board would need to make a recommendation to the PFA Board of Directors to establish and fund the Plan. All PFA volunteers who are not part of the existing Volunteer Pension Plan are volunteers for the PFA organization, not the PVFPD. This recommendation could be in the form of a motion directing staff to develop a proposal with a specific benefit level, rules and funding estimates. It could then be presented to the PFA Board of Directors at a future meeting for its consideration. Amendments to Volunteer Firefighter Pension Plan At the October 2013 meeting, the Board also discussed in general terms whether the existing Volunteer Pension Plan should be amended to revert back to pre benefit amounts. This change would impact two volunteers, Mike McBride (active) and Mike Fleming (retired). The benefits would be changed to provide that, if a volunteer has 20 years of service and is 50 years of age, he would receive a $300 per month benefit upon retirement. This would be an $120 increase from the current plan benefit of $180 for Mike McBride. Mike Fleming had 13% years of service as a volunteer and would receive a $204 per month benefit under the proposed change. His current monthly benefit is $145. This plan has been closed to new volunteers since February 1, 1997, and any changes would only apply to Mr. Fleming and Mr. McBride_ COST: The 2013 Actuarial Study completed for the plan by the Fire and Police Pension Association (FPPA) considered the cost to the plan if the benefits for these two participants were changed to match those that were in place prior to The Actuarial Study concluded that the District's additional cost for this change would be as follows: An annual calculated contribution of $7,335 The District's share of the unfunded portion would be $4,035 The District would receive a matching grant from Department of Local Affairs (DOLA) of $3,300. PROCESS: If the Pension Board wishes to make this modification to the current Pension Plan, staff suggests that the Board consider making a motion directing staff and legal counsel to prepare the appropriate materials for consideration at the next Pension Board meeting. The increased cost for the plan could also then be included in the District's Budget and funds could be appropriated.

10 Potential Financial Liabilty for Years of Service Award Program Total Max cost over Anthony Christian - 10 years 2022 $ 5,000 Anthony Christian - 15 years 2027 $ 6,250 Anthony Christian - 20 years ,750 Brett Johnson - 10 years 2018 $ 5,000 Brett Johnson - 15 years 2023 $ 6,250 Brett Johnson - 20 years 2028 $ 8,750 Bruce Lobmeyer - 10 years 2017 $ 5,000 Bruce Lobmeyer - 15 years 2022 $ 6,250 Bruce Lobmeyer - 20 years 2027 $ 8,750 Christopher Hewitt - 10 years 2022 $ 5,000 Christopher Hewitt - 15 years 2027 $ 6,250 Christopher Hewitt - 20 years 2032 $ 8,750 Glen Liston - 10 years 2014 $ 5,000 Glen Liston - 15 years 2019 $ 6,250 Glen Liston - 20 years 2024 $ 8,750 Gregg Thomas - 10 years ,000 Gregg Thomas - 15 years 2027 $ 6,250 Gregg Thomas - 20 years 2032 $ 8,750 Jason Janus - 10 years 2022 $ 5,000 Jason Janus - 15 years 2027 $ 6,250 Jason Janus - 20 years 2032 $ 8,750 Jerry Ellinghuysen - 10 years 2019 $ 5,000 Jerry Ellinghuysen - 15 years 2024 $ 6,250 Jerry Ellinghuysen - 20 years 2029 $ 8,750 Joanna Ellinghuysen - 10 years 2018 S 5,000 Joanna Ellinghuysen - 15 years 2023 $ 6,250 Joanna Ellinghuysen - 20 years 2028 $ 8,750 Josh Olsen - 10 years 2022 $ 5,000 Josh Olsen - 15 years 2027 $ 6,250 Josh Olsen - 20 years 2032 $ 8,750 Joshua Moore - 10 years 2021 $ 5,000 Joshua Moore - 15 years 2026 $ 6,250 Joshua Moore - 20 years 2031 $ 8,750 Joshua Murphy - 10 years 2022 $ 5,000 Joshua Murphy - 15 years 2027 $ 6,250 Joshua Murphy - 20 years 2032 $ 8,750 Karl Schuemann - 10 years 2022 $ 5,000 Karl Schuemann - 15 years 2027 $ 6,250 Karl Schuemann - 20 years 2032 $ 8,750 Lee Lindholm - 10 years 2022 $ 5,000 Lee Lindholm - 15 years 2027 $ 6,250 Lee Lindholm - 20 years 2032 $ 8,750

11 Potential Financial Liabilty for Years of Service Award Program Luke Whitson - 10 years 2022 $ 5, Luke Whitson -15 years 2027 $ 6,250 Luke Whitson - 20 years 2032 $ 8,750 Mike Cowan - 10 years 2022 $ 5,000 Mike Cowan - 15 years 2027 $ 6,250 Mike Cowan - 20 years 2032 Mike McBride - 20 years 2006 $ 20,000 Nikolas Gartner - 10 years 2018 $ 5,000 Nikolas Gartner - 15 years 2023 $ 6,250 Nikolas Gartner - 20 years 2028 $ 8,750 Pete Taylor - 15 years 2016 $11,250 Pete Taylor - 20 years 2021 $ 8,750 Pete Wells - 20 years 2016 $20,000 Phil Kessler - 20 years 2015 $ 20,000 Ray Snyder - 10 years 2015 $ 5,000 Ray Snyder - 15 years 2020 $ 6,250 Ray Snyder - 20 years 2025 $ 8,750 Ryan Smith -10 years 2022 $ 5,000 Ryan Smith- 15 years 2027 $ 6,250 Ryan Smith - 20 years 2032 $ 8,750 Scott Thompson - 10 years 2022 $ 5,000 Scott Thompson - 15 years 2027 $ 6,250 Scott Thompson - 20 years 2032 $ 8,750 Theresa Schuemann - 10 years 2023 $ 5,000 Theresa Schuemann - 15 years 2028 $ 6,250 Theresa Schuemann - 20 years 2033 $ 8,750 Thomas Harr - 10 years 2019 $ 5,000 Thomas Harr - 15 years 2024 $ 6,250 Thomas Harr - 20 years 2029 $ 8,750 Zach Mamigonian - 10 years 2022 $ 5,000 Zach Mamigonian - 15 years 2027 $ 6,250 Zach Mamigonian - 20 years 2032 $ 8,750 Zak Hassler - 10 years 2022 $ 5,000 Zak Hassler - 15 years 2027 $ 6,250 Zak Hassler - 20 years 2032 $ 8,750 $ 8,750 Total Max cost over Funds Committed: $ 25,000 $ 25,000 $31,250 $ 5,000 $ 15,000 $16,250 $ 6,250 $13,750 $71,250 $28,750 $ 21,250 $ 8,750 $ 6,250 $ 96,250 $32,500 $17,500 $ - $ 8,750 $ 122,500 $ 8,750 $ 560,000 CUMMULATIVE LIABILTY $ 25,000 $ 50,000 $81,250 $86,250 $101,250 $117,500 $123,750 $137,500 $208,750 $237,500 $258,750 $267,500 $273,750 $370,000 $402,500 $420,000 $420,000 $428,750 $551,250 $560,000