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: Regular Meeting #138 Meeting Date: Monday, November 20, 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 June 30, 2017 and September 30, 2017 investment results by Art Meizner from Hooker & Holcombe Investment Advisors (to be distributed) b. Treasurer’s report for the quarters ended June 30, 2017 and September 30, 2017 (attached) 5. Approval of minutes of preceding meeting a. Review of minutes from the Special Meeting on June 5, 2017 (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 ordinance appropriating funds from Town Consolidation District fund balance (see attached memo) c. Approval of bills i. Revised projected revenues, expenditures, and transfers for FY2017-18 d. New members i. None at this time e. New applications for benefits i. None at this time – next new application may not be until 2019 f. Refunds i. Occum: Joseph A. Landry – 3 years of credited service (1994-1996). Refund of $228 contributions plus $200.99 interest paid on July 20, 2017. ii. Taftville: James R. West, Jr. – 12 years of credited service. Refund of $2,004 contributions plus $622.98 interest paid on November 2, 2017. g. Election of officers for 2018. h. Schedule of Regular Meetings for 2018. All meetings will take place at 5:00 p.m. in Room 213 of City Hall i. Tuesday, February 20, 2018 ii. Monday, May 21, 2018 iii. Monday, August 20, 2018 iv. Monday, November 19, 2018 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 6/30/2017 X:\Finance\Finance Public\Accounting\Audit & Fiscal YE files\YE 2017\G. Investments\[G-3 2017 VFFRF cash & investments.xlsx]4Q Hooker & Checking Holcombe Total Beginning Balance 93,516.12 2,476,552.37 2,570,068.49 Receipts: Annual City Appropriation - - - East Great Plain - - - Laurel Hill - - - Occum - - - Taftville - - - Yantic - - - Interest Income 62.26 0.78 63.04 Realized Gains/(Losses) - 23,305.88 23,305.88 Unrealized Gains/(Losses) - 34,317.85 34,317.85 Dividends - 9,201.40 9,201.40 - Total Receipts 62.26 66,825.91 66,888.17 Transfers Between Accounts (12,000.00) 12,000.00 - Disbursements: Refunds - - - Pensions Paid 79,440.66 - 79,440.66 Actuary Fees - - - Postage/ Other - - - Investment Fees - (368.30) (368.30) Total Disbursements 79,440.66 (368.30) 79,072.36 Ending Balance 2,137.72 2,555,746.58 2,557,884.30 City of Norwich Volunteer Firefighters' Relief Fund Treasurer's Report For The Quarter Ended 9/30/2017 X:\Finance\Finance Public\Accounting\Audit & Fiscal YE files\YE 2018\G. Investments\[G-3 2018 VFFRF cash & investments.xlsx]1Q Hooker & Checking Holcombe Total Beginning Balance 2,137.72 2,555,746.58 2,557,884.30 Receipts: Annual City Appropriation 186,661.00 - 186,661.00 East Great Plain - - - Laurel Hill - - - Occum - - - Taftville - - - Yantic - - - Interest Income 126.92 40.39 167.31 Realized Gains/(Losses) - 2,467.71 2,467.71 Unrealized Gains/(Losses) - 85,093.85 85,093.85 Dividends - 9,889.82 9,889.82 - Total Receipts 186,787.92 97,491.77 284,279.69 Transfers Between Accounts (12,500.00) 12,500.00 - Disbursements: Refunds 428.99 - 428.99 Pensions Paid 81,750.66 - 81,750.66 Actuary Fees - - - Postage/ Other - - - Investment Fees - 3,043.37 3,043.37 Total Disbursements 82,179.65 3,043.37 85,223.02 Ending Balance 94,245.99 2,662,694.98 2,756,940.97 Refund of Contributions was for Joseph Landry 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 August 16, 2017 To: Members of the Volunteer Firefighters’ Relief Fund Committee Explanation of Ordinances Appropriating Additional Funds from TCD At the June 5, 2017 Special Meeting of the Volunteer Firefighters’ Relief Fund (VFFRF) Committee, I shared the proposed ordinance to make an additional $346,000 contribution to the VFFRF from Town Consolidation District’s (TCD) fund balance which was introduced by the City Council later that night. I also presented the “Projected revenues, expenditures, and transfers for FY2017-18” using both the assumptions that the City Council adopted this proposed ordinance or defeated the proposed ordinance. The City Council ultimately used the $346,000 of TCD fund balance to decrease 2017-18 TCD taxes. I’ve described what happened in the sequence of events below. June 5, 2017 The City Council introduced an ordinance entitled “AN ORDINANCE APPROPRIATING ADDITIONAL FUNDS FROM THE UNRESTRICTED FUND BALANCE OF THE TOWN CONSOLIDATION DISTRICT” This proposed ordinance would appropriate $8,000 from the TCD’s unrestricted fund balance (“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). 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. 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 have been. June 12, 2017 The City Council adopted the 2017-18 budget which included the appropriation of $346,000 of UFB of the TCD for the purpose of lowering fiscal year 2017-18 TCD taxes. June 19, 2017 The City Council adopted the ordinance which had been introduced on June 5, 2017 as ordinance #1750. I did not attend this meeting because I had assumed that this ordinance was going to be withdrawn since it was in conflict with the $346,000 appropriation of TCD UFB for lowering TCD taxes. Upon the appropriation of this $346,000 of UFB of the TCD, there was no longer an adequate amount of UFB available for purposes of making an additional contribution to the VFFRF. July 5, 2017 The City Council introduced an ordinance to correct ordinance #1750. July 17, 2017 The City Council adopted ordinance #1755 which corrected ordinance #1750 and made the amendments retroactive to June 19, 2017.  ORDINANCE #1755 ADOPTED 7/17/2017 PUBLISHED 7/19/2017 AN ORDINANCE AMENDING ORDINANCE 1750 APPROPRIATING ADDITIONAL FUNDS FROM THE UNRESTRICTED FUND BALANCE OF THE TOWN CONSOLIDATION DISTRICT WHEREAS, on June 12, 2017, the Council of the City of Norwich appropriated $346,000 of unrestricted fund balance (“UFB”) of the Town Consolidation District (“TCD”) for the purpose of mitigating the TCD tax levy; and WHEREAS, upon the appropriation of this $346,000 of UFB of the TCD, there was no longer an adequate amount of UFB available for purposes of making an additional contribution to the Volunteer Firefighters’ Relief Fund. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF NORWICH THAT Ordinance 1750, adopted June 19, 2017, be amended as set forth herein effective retroactive to June 19, 2017. Ordinance 1750 - 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 amend Ordinance 1750 to only 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. City of Norwich Volunteer Firefighters' Relief Fund $346K OF THE TOWN CONSOLIDATION DISTRICT FUND BALANCE WAS APPROPRIATED TO LOWER 2017-18 TCD TAXES Projected Revenues, Expenditures, and Transfers Fiscal Year 2017-18 July August September October November December January February March April May June TOTAL Beginning balance 2,140 149,822 123,429 97,020 58,097 26,401 (64) 160,497 130,091 102,667 56,227 28,760 2,140 City Contribution * 186,661 186,661 373,322 Volunteers' contributions 14,000 14,000 Interest Income 1 87 72 57 34 15 - 94 76 60 33 17 546 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 149,822 123,429 97,020 58,097 26,401 (64) 160,497 130,091 102,667 56,227 28,760 1,277 1,277 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 0.70% * With the appropriation 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.