Volunteer Firefighter Relief Fund Committee

To: Members of the Volunteer Firefighter Relief Fund Committee From: Richard Benoit, Chairman of the Volunteer Firefighters’ Relief Fund Subject: Special Meeting Meeting Date: Monday, June 5, 2017 Meeting Time: 5:00 p.m. Meeting Location: Room 213, City Hall (PLEASE NOTE ROOM CHANGE) Agenda Items: 1. Call to order 2. Roll call 3. Determination of quorum 4. Reports a. Review of March 31, 2017 investment results by Art Meizner from Hooker & Holcombe Investment Advisors (to be distributed) b. HHIA Long Term Capital Market Assumptions and Asset Allocation Modeling (to be distributed) c. Treasurer’s report for the quarters ended December 31, 2016 and March 31, 2017 (attached) 5. Approval of minutes of preceding meeting a. Review of minutes from the Regular Meeting on November 21, 2016 (available on the website) 6. Communications 7. Unfinished business 8. New business a. Consideration of recommendations by Art Meizner for changes in investment policy statement, investment portfolio, if any. b. Discussion of proposed ordinance to make an additional contribution to the VFFRF from Town Consolidation District fund balance (attached) c. Approval of bills i. Projected revenues, expenditures, and transfers for FY2017-18 (attached two scenarios) d. New members i. Laurel Hill: Sarah Robert – paperwork received ii. Yantic: Christopher Colonair, Kaitlin O’Connell – paperwork received iii. Comment: importance of getting rosters and payments by 3rd week of January 2018 e. New applications for benefits i. Occum: Robert Riley – July 2017. 35 Years of Service. $770 monthly payment. Paperwork received. f. Refunds i. East Great Plain: James E. Fear, Sr. – 8 years of credited service (2009 – 2016). Refund of $1,836 contributions plus $192.43 interest paid on February 22, 2017. 9. Adjournment Please notify Richard Benoit (860) 886-1774 or Brigid Marks (860) 823-3786 if you are unable to attend the meeting. City of Norwich Volunteer Firefighters' Relief Fund Treasurer's Report For The Quarter Ended 12/31/2016 X:\Finance\Finance Public\Accounting\Audit & Fiscal YE files\YE 2017\G. Investments\[G-3 2017 VFFRF cash & investments.xlsx]2Q Hooker & Checking Holcombe Total Beginning Balance 276,152.26 2,343,687.45 2,619,839.71 Receipts: Annual City Appropriation - - - East Great Plain - - - Laurel Hill - - - Occum - - - Taftville - - - Yantic - - - Interest Income 212.06 - 212.06 Realized Gains/(Losses) - 6,278.22 6,278.22 Unrealized Gains/(Losses) - (50,621.91) (50,621.91) Dividends - 63,359.04 63,359.04 - Total Receipts 212.06 19,015.35 19,227.41 Transfers Between Accounts (12,000.00) 12,000.00 - Disbursements: Refunds - - - Pensions Paid 87,045.00 - 87,045.00 Actuary Fees 6,750.00 - 6,750.00 Postage/ Other - - - Investment Fees - 5,358.24 5,358.24 Total Disbursements 93,795.00 5,358.24 99,153.24 Ending Balance 170,569.32 2,369,344.56 2,539,913.88 Note: October pension run included retro payment to Paul Labrecque Actuary fees were for GASB 67/68 reporting City of Norwich Volunteer Firefighters' Relief Fund Treasurer's Report For The Quarter Ended 3/31/2017 X:\Finance\Finance Public\Accounting\Audit & Fiscal YE files\YE 2017\G. Investments\[G-3 2017 VFFRF cash & investments.xlsx]3Q Hooker & Checking Holcombe Total Beginning Balance 170,569.32 2,369,344.56 2,539,913.88 Receipts: Annual City Appropriation - - - East Great Plain 4,488.00 - 4,488.00 Laurel Hill 528.00 - 528.00 Occum 1,320.00 - 1,320.00 Taftville 1,584.00 - 1,584.00 Yantic 5,808.00 - 5,808.00 Interest Income 149.23 - 149.23 Realized Gains/(Losses) - 2,323.77 2,323.77 Unrealized Gains/(Losses) - 87,065.48 87,065.48 Dividends - 8,523.57 8,523.57 - Total Receipts 13,877.23 97,912.82 111,790.05 Transfers Between Accounts (12,000.00) 12,000.00 - Disbursements: Refunds 2,028.43 - 2,028.43 Pensions Paid 76,902.00 - 76,902.00 Actuary Fees - - - Postage/ Other - - - Investment Fees - 2,705.01 2,705.01 Total Disbursements 78,930.43 2,705.01 81,635.44 Ending Balance 93,516.12 2,476,552.37 2,570,068.49 Note: Refund was for EGP volunteer James Fear  Proposed Ordinance that is being introduced at the City Council Meeting on June 5, 2017. AN ORDINANCE APPROPRIATING ADDITIONAL FUNDS FROM THE UNRESTRICTED FUND BALANCE OF THE TOWN CONSOLIDATION DISTRICT WHEREAS, the cost of property tax credits for volunteer firefighters for fiscal year 2016-17 are $8,000 higher than anticipated compared to the adopted 2016-17 budget for the Town Consolidation District (“TCD”); and WHEREAS, the TCD has an unrestricted fund balance (“UFB”) which is projected to be $376,000, or 64% of the operating expenditures of the TCD as of June 30, 2017, including the impact of the $8,000 budget variance in property tax credits for volunteer firefighters; and WHEREAS, this UFB has accumulated as a result of greater-than-anticipated current and prior tax levy collections over the years; and WHEREAS, although the City does not have a formal policy for the UFB level of the TCD fund, because the expenditures in this fund do not vary greatly, the Comptroller and City Manager deem a UFB level of 5% of operating expenditures, or $30,000, to be adequate for this fund; and WHEREAS, the contribution to the Volunteer Firefighters’ Relief Fund is the largest expenditure of the TCD; and WHEREAS, as of the Volunteer Firefighters’ Relief Fund’s most recent actuarial valuation report dated January 1, 2016, the Volunteer Firefighters’ Relief Fund has an Unfunded Accrued Liability of $3,569,000 and a funded ratio of 39.27%; and WHEREAS, an additional contribution to the Volunteer Firefighters’ Relief Fund will have a long-term impact on mitigating property taxes for the taxpayers of the TCD. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF NORWICH THAT the sum of $8,000 be and hereby is appropriated from the UFB of the TCD to increase the fiscal year 2016-17 budget for TCD expenditure line item 80122 “VFF Tax Abatement.” BE IT FURTHER ORDAINED BY THE COUNCIL OF THE CITY OF NORWICH THAT the sum of $346,000 be and hereby is appropriated from the UFB of the TCD to increase the fiscal year 2016-17 budget for TCD expenditure line item 89270 “VFF Relief Fund Contribution.” John L. Salomone Purpose: To appropriate funds from the unrestricted fund balance of the Town Consolidation District fund for projected expenditures in excess of the adopted 2016-17 budget and for an additional contribution to the Volunteer Firefighters’ Relief Fund Plan. JOSHUA A. POTHIER, C.P.A. 100 Broadway Room 105 COMPTROLLER Norwich, CT 06360-4431 Phone: (860) 823-3720 www.norwichct.org/finance Fax: (860) 823-3812 jpothier@cityofnorwich.org May 30, 2017 To: Mayor Deberey Hinchey and Members of the Norwich City Council through City Manager John Salomone Explanation of Ordinances Appropriating Additional Funds from the CCD and TCD The purposes of these two ordinances are to: • perform some year-end accounting housekeeping to appropriate funds for budget variances and • put excess amounts of fund balance for these two fire districts into their respective pension funds which should lower the long term costs for both of the districts City Consolidation District This proposed ordinance would appropriate $330,000 from the City Consolidation District’s (CCD) Unrestricted Fund Balance (UFB) to cover the projected expenditure variances for fiscal year 2016-17. The 2016-17 adopted budget set very ambitious targets for overtime and replacement costs. In addition, the wage increases approved in the new Firefighters bargaining unit contract were not factored into 2016-17 budget. This proposed ordinance would also appropriate $311,000 from the CCD’s UFB for the purpose of making an additional contribution to the Firefighter’s portion of the City of Norwich Retirement Plan. I believe that the level of the CCD’s UFB is above what is necessary to absorb fluctuations in CCD cash flows and risks of annual operations. The appropriation of $311,000 of the CCD’s UFB would bring the UFB down to approximately 8% of annual operating expenditures – an adequate level for a fund with moderate levels of risk. In addition, the additional $311,000 contribution to the Pension Fund cause the 2018-19 Actuarial Determined Employer Contribution to be $29,400 lower than it otherwise would be. Town Consolidation District This proposed ordinance would appropriate $8,000 from the Town Consolidation District’s (TCD) UFB to cover the projected expenditure variances for fiscal year 2016-17. The 2016-17 adopted budget included a motor vehicle tax cap at 37 which made it difficult to predict how much the motor vehicle portion of the Volunteer Firefighter Tax Abatement was going to decrease. The 2016-17 adopted budget included an estimate of $64,062 for tax abatements and the actual amount of abatements was approximately $72,000. This proposed ordinance would also appropriate $346,000 from the TCD’s UFB for the purpose of making an additional contribution to the Volunteer Firefighters’ Relief Fund (VFFRF). I believe that the level of the TCD’s UFB is above what is necessary to absorb fluctuations in TCD cash flows and risks of annual operations. The appropriation of $346,000 of the TCD’s UFB would bring the UFB down to approximately 5% of annual operating expenditures – an adequate level for a fund with low levels of risk. In addition, the additional $346,000 contribution to the VFFRF would cause the 2018-19 Actuarial Determined Employer Contribution to be $31,000 lower than it otherwise would be. City of Norwich Volunteer Firefighters' Relief Fund ASSUMES NO ADDITIONAL CONTRIBUTIONS FROM THE TOWN CONSOLIDATION DISTRICT FUND BALANCE IN JUNE 2017 Projected Revenues, Expenditures, and Transfers Fiscal Year 2017-18 July August September October November December January February March April May June TOTAL Beginning balance 2,114 336,457 310,117 283,765 244,903 213,275 186,884 160,862 130,429 102,983 56,526 29,050 2,114 City Contribution 373,322 373,322 Volunteers' contributions 14,000 14,000 Interest Income 1 140 129 118 102 89 78 67 54 43 24 12 857 Pension payments (26,480) (26,480) (26,480) (26,480) (26,480) (26,480) (27,500) (27,500) (27,500) (27,500) (27,500) (27,500) (323,881) GASB 67/68 Actuarial Report (2,250) (2,250) Biennial Actuarial Valuation (6,500) (6,500) Refunds (3,000) (3,000) (6,000) Advertising/MuniCode Costs for Ordinance Change - Postage/tax forms (100) (100) Transfers to investment account (12,500) (12,500) (12,500) (12,500) (50,000) - Ending Balance 336,457 310,117 283,765 244,903 213,275 186,884 160,862 130,429 102,983 56,526 29,050 1,562 1,562 Notes and Assumptions: Actuarial valuation in 2017-18 and the GASB 67-68 report for the annual audit. Refunds have been averaging about $6,000 per year. Assumed interest rate 0.50% City of Norwich Volunteer Firefighters' Relief Fund ASSUMES $346K ADDITIONAL CONTRIBUTIONS FROM THE TOWN CONSOLIDATION DISTRICT FUND BALANCE IN JUNE 2017 Projected Revenues, Expenditures, and Transfers Fiscal Year 2017-18 July August September October November December January February March April May June TOTAL Beginning balance 348,114 409,440 383,131 356,810 231,479 199,845 173,448 247,581 217,184 189,774 56,853 29,377 348,114 City Contribution * 186,661 186,661 373,322 Volunteers' contributions 14,000 14,000 Interest Income 145 171 160 149 96 83 72 103 90 79 24 12 1,184 Pension payments (26,480) (26,480) (26,480) (26,480) (26,480) (26,480) (27,500) (27,500) (27,500) (27,500) (27,500) (27,500) (323,881) GASB 67/68 Actuarial Report (2,250) (2,250) Biennial Actuarial Valuation (6,500) (6,500) Refunds (3,000) (3,000) (6,000) Advertising/MuniCode Costs for Ordinance Change - Postage/tax forms (100) (100) Transfers to investment account (99,000) (99,000) (99,000) (99,000) (396,000) - Ending Balance 409,440 383,131 356,810 231,479 199,845 173,448 247,581 217,184 189,774 56,853 29,377 1,889 1,889 Notes and Assumptions: Actuarial valuation in 2017-18 and the GASB 67-68 report for the annual audit. Refunds have been averaging about $6,000 per year. Assumed interest rate 0.50% * With the proposed additional contribution of $346,000 in June 2017, the City's 2017-18 contribution would need to be split in July and January so that the TCD Fund doesn't have negative cash flows during the year.