HomeMy WebLinkAboutBudget/Finance Committee Minutes 06.11.1997MINUTES
BUDGET/FINANCE COMMITTEE
JUNE 11, 1997 6:30 P.M.
OLD COUNCIL CHAMBERS
MEMBERS PRESENT
OTHERS PRESENT:
Chairman- absent
Gay Easton
Gary Temple
Bud Johnson
Rick Musson
Dirk Kroll
Don Hackmann
Chuck Rodgers
The following 1997-98 preliminary budgets were reviewed again.
Police Department
FAP Complex
Swimming Pool
General Fund Revenue
Several cuts and adjustments were made in the net amount of
$60,481.
The sweeping district has sufficient cash reserves for a down
payment on a new sweeper,. which will be purchased in May or June of
next year. No rate increase is planned for this year, but one is
needed next year to make the principle and interest payment on a
proposed 5 year loan of $74,000.00
Estimated cost of new sweeper $ 130,000
Estimated trade in <30,000>
Down payment <26.000> ;
$ 74,000
Discussion regarding the Firemen's Relief tax levy. They are
currently receiving 2 mills and the fire department requested an
additional 2 mills, which is the maximum (4 mills). According to
the 1992 actuarial valuation the Firemen's Relief Association
pension fund is underfunded. (see attached) This is a catch "22"
situation, because the assessment is contrary to state law.
It was suggested that the Comprehensive Insurance and Employee
Health Insurance mill levies be reduced by one each and increase
the Firemen's Relief levy by two mills.
The meeting was adjourned at 8:00 p.m.
Respectfully submitted,
I.-~''O-v~-
Don Hackmann, City Clerk
Section II
Analysis of Valuation
Results of Valuation
An actuarial valuation has been conducted to determine the financial position of
the Laurel Volunteer Fire Department Relief Association as of June 30, 1492.
This valuation has determined that the annual contribution required to fund
benefits as they accrue in the future is 3507.77 for each member. With 35
current members, the annual contribution required for future benefits is 517,772.
The total liability far benefits which have already accrued is 5603,851. The
assets of 5403,440 are not sufficient to cover this liability, and there remains
an unfunded past service liability of 5200,411. The annual contribution required
to fund this remaining liability over a 30-year period is 514,908.
The recommended annual contribution to fund benefits as they are earned in the
future and to amortize the existing unfunded liability over a 30-year period is
$32,680.
Contributions
The disability and pension fund receives annual contributions from the city and
the state. For its contribution, the city can levy a special tax of between 1
and 4 mills of the taxable valuation of taxable property within the city limits.
This tax is to be levied when the fund contains less than 49> of this taxable
valuation. Laurel has been contributing the proceeds from a special Z mill levy
which was 512,713 during 1991-92e
The state contributes an amount equal to 1 i/Z mills of the city's taxable value
which is paid from premium taxes on fire insurance. The state`s contribution was
57,843 during 1991-92. ,
Actuarial Assumptions
The actuarial assumptions used in this valuation are described in Section IV.
The primary assumptions were mortality rates, disability rates, and investment
earnings. The annual rate of return was assumed to be 6.5Ye compounded annually.
The recommended period for funding the existing debt is 30 years. This is a
commonly accepted period which has been adapted by the Montana Public Employees`
Retirement Division. It is -also the maximum period allowed by government
regulation far the funding of private plans. This is only a recommended period
and it can be shortened or lengthened., If the debt were founded aver 20 years,
the annual contribution would be increased from 514,908 to 517,668. Similarly,
if it were lengthened to 40 years, the annual contribution would be reduced to
513,762.
Hendrickson, Miller
ACTUA 0.IAL CONSULTANTS