Poudre Valley Fire Protection District

Poudre Valley Fire Protection District
102 Remington Street • Fort Collins, CO 80524
Phone: (970) 416-2837 4 Fax: (970) 416-2809
Internet: www.PoudreValleyFireProtectionDistrict.org
Poudre Valley Fire Protection District
Volunteer Firefighters Pension Board Meeting
August 25, 2014
8:30 a.m.
1. Minutes of the May 12, 2014 Volunteer Firefighter Pension Board Meeting
2. Years-of-Service Lump Sum Payment Program Proposal
3. Amending the Volunteer Firefighters Pension Fund Board Bylaws
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) 416-2837 as soon as possible.
Poudre Valley Fire Protection District
Volunteer Firefighters Pension Board
Agenda Item
Date: August 25, 2014
From: Tom DeMint
Item: #1 Minutes of the May 12, 2014 Volunteer Firefighters Pension Board Fund Meeting
—
Recommendation: That the Board Approve the May 12, 2014 Meeting Minutes
Attachments:
May 12, 2014 Meeting Minutes
The minutes from the May 12, 2014 regular meeting of the Volunteer Firefighters
Pension Fund Board meeting are attached.
Poudre Valley Fire Protection District
102 Remington Street ♦ Fort Collins, CO 80524
Phone: (970) 416-2837 ♦ Fax: (970) 416-2809
Internet: www.PoudreValleyFireProtectionDistrict.org
POUDRE VALLEY FIRE PROTECTION DISTRICT
VOLUNTEER FIREFIGHTERS PENSION BOARD MEETING
May 12, 2014
The Volunteer Firefighters Pension Board of Directors met at 102 Remington Street,
Fort Collins CO, at 8:30 a.m., Monday, May 12, 2014. Present were Board members:
Earlie Thomas, Dave Pusey, Mike DiTullio, Ron Anthony and Mike McBride. Ed Rupert
was available via conference call. Also present were: Fire Chief Tom DeMint, Ann
Turnquist, and recording secretary Shawn Williams.
Earlie Thomas called the meeting to order at 8:30 a.m.
Minutes of the October 28, 2013 Volunteer Firefighter Pension Board Meeting
Ron Anthony made a motion to approve the October 28, 2013 Volunteer Firefighter
Pension Board Minutes. Dave Pusey asked for the call to order information be added to
the meeting minutes. Mike McBride seconded the motion as amended. The motion
passed by unanimous vote of the Board.
Volunteer Firefighter Pension and Alternatives
Tom DeMint advised there were discussions held on the volunteer firefighter pension
and alternatives presented. Tom introduced Ann Turnquist who provided a brief update
of discussions held with attorney Bob Cole and the alternatives discussed.
Ron Anthony made a motion for staff and legal to amend the bylaws to be presented at
the next board meeting to reinstate the plan as it was back in 1994 when the changes
were made to it so the two eligible volunteers (Mike Fleming and Mike McBride) would
receive the amount under the pre-1994 plan. Dave Pusey seconded the motion. The
motion passed by majority vote of the Board with Mike McBride abstaining from the
vote.
Ron Anthony made a motion for staff to develop a draft recommendation of a proposal
to be made to the PFA Board of Directors based on the 10, 15, or 20 years-of-service to
PFA by a firefighter or EMS provider in the PFA volunteer program with incentive
payouts up to $20,000. The recommendation should include a death benefit to the
spouse. The recommendation should include highlighting the benefit of the volunteer
program to PFA and compliance with volunteer requirements. Dave Pusey seconded
the motion. The motion passed by unanimous vote of the Board.
Mike McBride made a motion to adjourn the meeting. Mike DiTullio seconded. The
meeting was adjourned at 9:45 a.m.
Poudre Valley Fire Protection District
Volunteer Firefighters Pension Board
Agenda Item
Date: August 25, 2014
From: Tom DeMint
Ann Turnquist
Item: #2 Years-of-Service Lump Sum Payment Program Proposal
—
Recommendation: The Board Approve the Years-of-Service Lump Sum Payment
Program Proposal and Refer it to the Poudre Valley Fire Protection District Board
Attachments:
Years-of-Service Lump Sum Payment Program Proposal
PFA Board Agenda Item #12
At the May 12, 2014 Volunteer Firefighters Pension Fund Board meeting, the Board
discussed a years-of-service lump sum payment for volunteer firefighters that have
at least 10 years of service for the Poudre Fire Authority. The Board asked staff to
prepare a years-of-service proposal based on 10, 15, or 20 years of service and to
include a death benefit provision to the designated beneficiary. Since this proposal
is not funded by the volunteer firefighter pension (closed in July 1994), and the
current volunteer firefighters are part of Poudre Fire Authority, the Volunteer
Firefighters Pension Fund can make a recommendation to the Poudre Valley Fire
Protection District Board. The District Board can then make the recommendation to
the Poudre Fire Authority Board to have them consider funding the Years-of-Service
Lump Sum Payment Proposal. Attached is the staff proposal that is in the PFA
Board packet.
PFA VOLUNTEER FIREFIGHTERS YEARS-OF-SERVICE LUMP SUM
PAYMENT PROPOSED PROGRAM TERMS
ELIG1BILTY:
• Volunteer firefighters must have met service attendance requirements
(hours per month, months per year);
• Minimum years-of-service to receive an award will be ten years;
• Time accumulated under a leave of absence will not count toward yearsof-service;
• Breaks in service will not count toward accumulated years-of-service, but
cumulative breaks of one year or less may be bridged for accumulating
years-of-service;
• Volunteers who are eligible for benefits under the Volunteer Firefighters
Pension Plan will not be eligible to receive a Years-of-Service payment;
• Payments will only be made at the time the volunteer firefighter terminates
volunteer service.
BENEFIT:
Upon leaving PFA volunteer firefighter service, a one-time lump sum payment
will be made as follows:
a) Payments:
1) for 10 years of service up to 14 years, 11 months, the volunteer will
receive a lump sum of $5,000 or $500 for every year of completed
service;
2) for 15 years of service up to 19 years, 11 months, the payment will
be $11,250 or $750 for every year of completed service; and
3) for 20 years or more of service, the volunteer would receive
$20,000 or $1,000 for every year of completed service. There will
be no additional incentive for more than 20 years of service.
b) The benefit is retroactive for any current volunteer firefighter; volunteers
who are not currently active are not eligible for benefits based on previous
service.
c) If an active volunteer dies prior to terminating volunteer service, a
surviving spouse will be eligible to receive any earned lump sum payment.
d) Payment will be issued through PFA's vendor payment process, and may
have tax consequences to be determined by the individual seeking
payment.
COST PROJECTION:
By 2016, five volunteer firefighters will have earned payments under the Yearsof-Service plan. Two will have reached 10 years-of-service, one will have
reached 15 or more years-of-service, and two will have reached 20 or more
years-of-service. The accumulated liability to PEA for these first five employees
will total over $60,000. These benefits should be considered to be fairly certain,
and will need to be specifically budgeted in 2015 in order to have funds available
for payment.
If all current volunteer firefighters continued service long enough to receive
benefits, the cumulative liability to PFA over the next 20 years would be over
$550,000. It is unlikely that a majority of volunteer firefighters will continue
service long enough to accrue benefits, but if 20% of volunteers reached an
award level of service, a significant unfunded liability will be created. PFA should
either accumulate a reserve of approximately $100,000 to make payments, or be
prepared to make payments through one-time funding sources when future
expenses occur. Each year, the potential funding will need to be reevaluated to
ensure that reserves are in place to make payments, or to estimate the unfunded
liability to be paid from one-time sources.
DISCUSSION AGENDA ITEM SUMMARY
Prompt, Skillful, Caring
Item #:
Meeting Date:
PFA Staff:
12
8126/2014
Tom DeMint
Ann Turnquist
SUBJECT'
PFA Volunteer Firefighters Years-of-Service Lump Sum Payment Program
EXECUTIVE SUMMARY
In May 2014, the Volunteer Firefighters Pension Fund Board recommended that PEA
consider establishing a recognition program for PEA Volunteer Firefighters through a
Years-of-Service Lump Sum Payment Program. The proposed program would provide
a lump sum payment to volunteer firefighters upon termination. The amount of the
payment would be based upon the volunteer's years-of-service.
DISCUSSION/BACKGROUND
The Years-of-Service Lump Sum Payment Program has been discussed at a recent
Poudre Valley Fire Protection District Board meeting and a Volunteer Firefighter
Pension Fund Board meeting. The District Board members have encouraged PFA staff
to identify a method of financially rewarding volunteer firefighters who have a significant
number of years-of-service. The current Firefighter Pension Plan has been closed to
new participants since July 1, 1994. At that time, the Plan was closed with the
understanding that future volunteers would not receive any financial incentive for their
service, beyond quarterly stipends. After the Pension Plan had been closed, volunteers
in the Redstone Canyon area were specifically highlighted as being willing to serve as
volunteers within their neighborhood because of its remote location, without any
expectation of participation in the Volunteer Pension Plan.
Recent discussions at the PVFPD Board have focused on providing an ongoing
financial incentive for volunteer firefighters with long service. The Board reviewed the
option of reopening the Volunteer Pension Plan to existing and future volunteers, but
the projected costs were determined to be too high. The PVFPD's attorney suggested
that another alternative to consider would be a lump sum payment model based upon
years-of-service. The PVFPD Board and Volunteer Firefighter Pension Board have
supported this concept and asked staff to develop a specific proposal for consideration
of the PFA Board. Funding for the proposal would need to be included in the PFA
annual budget because current volunteers are part of the PFA, rather than the PVFPD.
Staff has developed the following proposed program for the PFA Board's consideration:
PFA VOLUNTEER FIREFIGHTERS YEARS-OF-SERVICE LUMP SUM
PAYMENT PROPOSED PROGRAM TERMS
ELIG I BILTY:
•
•
•
•
•
•
Volunteer firefighters must have met service attendance requirements
(hours per month, months per year);
Minimum years-of-service to receive an award will be ten years;
Time accumulated under a leave of absence will not count toward yearsof-service;
Breaks in service will not count toward accumulated years-of-service, but
cumulative breaks of one year or less may be bridged for accumulating
years-of-service;
Volunteers who are eligible for benefits under the Volunteer Firefighters
Pension Plan will not be eligible to receive a Years-of-Service payment;
Payments will only be made at the time the volunteer firefighter terminates
volunteer service.
BENEFIT:
Upon leaving PFA volunteer firefighter service, a one-time lump sum payment
will be made as follows:
a) Payments:
1) for 10 years of service up to 14 years, 11 months, the volunteer will
receive a lump sum of $5,000 or $500 for every year of completed
service;
2) for 15 years of service up to 19 years, 11 months, the payment will
be $11,250 or $750 for every year of completed service; and
3) for 20 years or more of service, the volunteer would receive
$20,000 or $1,000 for every year of completed service. There will
be no additional incentive for more than 20 years of service.
b) The benefit is retroactive for any current volunteer firefighter; volunteers
who are not currently active are not eligible for benefits based on previous
service.
c) If an active volunteer dies prior to terminating volunteer service, a
surviving spouse will be eligible to receive any earned lump sum payment.
d) Payment will be issued through PFA's vendor payment process, and may
have tax consequences to be determined by the individual seeking
payment.
COST PROJECTION:
By 2016, five volunteer firefighters will have earned payments under the Yearsof-Service plan. Two will have reached 10 years-of-service, one will have
reached 15 or more years-of-service, and two will have reached 20 or more
years-of-service. The accumulated liability to PEA for these first five employees
will total over $60,000. These benefits should be considered to be fairly certain,
and will need to be specifically budgeted in 2015 in order to have funds available
for payment.
If all current volunteer firefighters continued service long enough to receive
benefits, the cumulative liability to PFA over the next 20 years would be over
$550,000. It is unlikely that a majority of volunteer firefighters will continue
service long enough to accrue benefits, but if 20% of volunteers reached an
award level of service, a significant unfunded liability will be created. PFA should
either accumulate a reserve of approximately $100,000 to make payments, or be
prepared to make payments through one-time funding sources when future
expenses occur. Each year, the potential funding will need to be reevaluated to
ensure that reserves are in place to make payments, or to estimate the unfunded
liability to be paid from one-time sources.
VOLUNTEER FIREFIGHTERS PENSION FUND BOARD
RECOMMENDATION:
The Volunteer Pension Board will be asked to review the proposed program and offer a
final recommendation at its August 25 Pension Board meeting. The PFA Board will be
briefed on the outcome of that discussion at the August 26 PFA Board meeting.
STAFF RECOMMENDATION
PFA staff has concerns about the potential cost of the proposed program, both in the
near-term and in the long-term. Staff recommends that, if the Board is interested in
considering the proposal, that it be considered in the context of the 2015 Budget and
other unfunded priorities.
FINANCIAL / ECONOMIC IMPACTS
The short-term financial impact of the proposal is approximately $60,000 to $80,000 in
already-accrued benefits for current volunteers. By 2016, six volunteers will be eligible
for retroactive payment for volunteer service. In the future, PFA's unfunded liability will
need to be calculated each year to take into account years-of-service for volunteers
joining PFA and leaving service.
ASSOCIATED STRATEGIC GOALS
Goal 3 — "Minimize the costs of fire protection and emergency services."
ATTACHMENTS
PVFPD Volunteer Pension Board Agenda Item, May 2014
Poudre Valley Fire Protection District
Volunteer Firefighters Pension Board
Agenda Item
Date: August 25, 2014
From: Torn DeMint
Ann Turnquist
Item:
#3 Amending the Volunteer Firefighters Pension Fund Board Bylaws
—
Recommendation: Item for Information
Attachments:
None
At the May 12, 2014 meeting, the Board made a motion for the current Volunteer
Firefighters Pension Fund Bylaws to be amended to reinstate the plan as it was pre1994. This would affect the benefit for two individuals. Staff reviewed the Bylaws
and there were questions that arose from that review. The Bylaws and the review
were sent to Attorney Bob Cole and staff has not received his feedback. When the
proposed amendment to the Bylaws is finalized, staff will notify the Board and a
meeting will be called.