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Fireman's Relief & Pension Board
AGENDA
July 21, 2015
3:30 p.m.
Mayor's Conference Room
1. Minutes of April 21, 2015 — Action
2. 2nd Quarter 2015 Financial Transactions — Action
3. Cost of Living Allowance — Information
4. Other Business
5. Adjournment
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Firemen's Relief & Pension Board Minutes
April 21, 2015
Board Members present: Mayor Suzette Cooke, City Clerk Ronald Moore, Al Bond,
Gene Grenstad, and Sam Grubbs
Others present: Finance Director Aaron BeMiller and Senior Financial Analyst
Susanne Shaw
Mayor Cooke called the meeting to order at 3:30 p.m.
Minutes of January 6, 2015. Sam Grubbs moved to approve the minutes of
January 6, 2015, as written, seconded by All Bond, Motion carried 5-0.
V Quarter 2015 Financial Transactions. BeMiller communicated that the
December 2014 report was also included in the packet which reflected the final
numbers for 2014. He noted that the main difference on the balance sheet is the
$1,170 in interest receivable. He highlighted that in March 2015 the City purchased
about $1 million in government bonds from the firemen's pension fund money
which was in the Local Government Investment Pool (LGIP). He noted that there is
a retained earnings savings of,$2,652,000, He continued and highlighted that the
general contributions and the average pension cost, or salary amount, is $41,000.
He noted that the benefit costs are set by the actuarial and for 2015 it is set at
226,000 and it includes a portion of the healthcare insurance and long term care
insurance paid for by the City. He also mentioned that the increase in the fair value
adjustment is not a real number, but it will be revealed at the end of the year.
Right now, he stated that it is a negative $39,000, but it could be completely
different by the end of the second quarter. He also noted that there is a net loss of
$136,000, but that will change with the fair market value adjustment as time goes
by. BeMiller explained the statement of cash flows. He noted that the operating loss
for the year is an outflow of cash that is recouped by selling the LGIP investments.
He noted that the operating loss for the quarter is going to be $136,000.
Mayor Cooke confirmed with BeMiller that as of June 30, 2015 the City is projecting
an increase of $5,000.
BeMiller discussed the five-year comparison of investment type page. He
communicated that the total investment in the pool has been revised based on the
purchase of the bonds. He noted that a much better rate will be realized based on
the maturity. He added that investments 2 — 4 are the new investments and the
yield with the pool is 0.135 percent and the yield on the new investments is over 1
percent.
BeMiller responded to Mayor Cooke that the state investment return rate has been
affected by the federal short term rates which are historically very low. Mayor
Cooke explained that the price of liquidity is a reduction in yield.
BeMiller noted that these quarterly reports are very formal General Accepted
Accounting Principal (GAAP) reports and communicated that management type
reports could be given to make the financials more understandable and easier to
read. He noted that these formal reports go into the comprehensive financial
report. He suggested presenting management reports in the packet for the next
meeting.
Discussion continued concerning the specific format of the reports and staff was
directed to present management reports at the next meeting.
Al Bond moved to approve the 1t Quarter 2015:financial reports, seconded
by Sam Grubbs. Motion carried 5-0.
Mayor Cooke verified with BeMiller that if the legislature changes pension funding
the City will be obligated to fill the gap through general fund dollars. BeMiller
confirmed that the gap would be hundreds of thousands of dollars.
Cost of Livina Allowance - Information. Shaw communicated as of April 1, 2015
there would be a 1.93 percent cost of living adjustment. She noted that when
LEOFF increases the City'sobligation goes down slightly. Mayor Cooke confirmed
that the pensions don't go down and Shaw added that when LEOFF goes down the
City fills the financial gap to ensure the pension rate stays the same.
2014 Year End Financial Statements — Action.
Discussion concerning the adoption of the 2014 Year End Financial Statements
occurred. Consensus was that the December 2014 report was not adopted at the
January 6 board meeting.
2
Sam Grubbs moved to approve the 2014 Year End Financial Statements,
seconded by Al Bond. Motion carried 5-0.
Other Business. None.
Adiournment. The meeting adjourned at 3:58 p.m.
Ronald F. Moore, MMC
Board Secretary/City Clerk
3
City of Kent
Firemen's Relief& Pension Trust Fund
Executive Summary
June, 201.5
Balance Sheet—June 30, 2015
m The fund has slightly more cash and investments than at 3/31/15, due to the Fire
Insurance Premium tax received in May, 2015. There was interest receivable on the
books at 3/31/15, which was received in June 2015, so that no longer shows on the
balance sheet.
Statement of Revenues Expenses and Changes in Retained Earnings—June 30, 2015
® General contributions of$219,032 (state payment of Fire Insurance Premium Tax) were
received in May.
• Pension costs for the year to date are $79,468. Pension costs represent the difference
between what firefighters would have received under the city pension vs. their current
LEOFF pension benefits.
® Benefit costs are set by the actuarial. For 2015 the annual benefit cost will be $226,000.
These costs are a portion of the cost of health insurance and long-term care insurance
costs that are paid by the City.
Statement of Cash Flows and Cash Flow Projections
• This report shows changes in the pooled investments only (cash held by city).
® The operating loss for the year is an outflow of cash.
® The operating loss per month is projected to be about $31,500 for the next three
months. Money will be moved from the State Investment Pool to cover this.
Five Year Comparison of Investment Types and Current Investment Values
® The investment picture for June is very similar to March, 2015. The only change is in the
State Investment Pool. The chart on page 4 shows the individual investments that
belong to the Fire Relief and Pension Fund. Investments 2-4 are the new bonds
purchased in March 2015.
New Management Reports
Two new reports are presented: Cash & Investments and Statement of Revenues and
Expenses, which simplify the same information presented in the previous reports.
KENT
WR5HING-ON
CITY OF KENT
FIREMEN'S RELIEF & PENSION TRUST FUND
FINANCIAL REPORT
JUNE, 2015
FINANCIAL STATEMENTS
Balance Sheet as of June 30, 2015 1
Statement of Revenues, Expenses and Changes in Retained Earnings
For the Six Months Ended June 30, 2015 2
Statement of Cash Flows and Cash Flow Projections 3
INVESTMENT INFORMATION
Five Year Comparison of Investment Types and Current Investment Values 4
MANAGEMENT REPORT S
Cash and Investments as of June 30, 2015
5 year comparison and breakdown of current investments 5
Statement of Revenues and Expenditures
for the Six Months Ended June 30, 2015 6
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