July 24, 2013
- Kelly Aberasturi
- John Bechtel
- Tom Dale
- Tammy deWeerd
- John Evans
- Jim Reynolds
- Steve Rule
- Darin Taylor
Staff and Guests
- Richard Davies – Nampa Fire Department
- Bill Deal – Idaho Department of Insurance
- Larry Maneely – Ada County
- Steve Torrano – OG’s BAD
- Bill Larsen – TVP
Mayor Tom Dale welcomed everyone to Nampa. He said he enjoyed the conversation prior to starting the formal meeting agenda and felt that those conversations are as important to this group as the group discussions we have.
Tom said, about three-four months ago, Garret Nancolas had surgery to do a hernia repair. For some reason his body rejected the mesh. He went back into surgery to remove the mesh and replace it with some other material. A couple days later, Garret was in incredible pain, so they went to St. Al’s for a diagnosis. Evidently there was a lack of blood flow during the surgery. The prognosis, however, is for a complete recovery and it will be at least 6 weeks before his digestive system is back to working order. So, Tom said, Garret will be lying pretty low for a while.
Larry Maneely indicated he is sitting in for Rick Yzaguirre who has been at the NACO convention. Regarding fellow Ada County Commissioner, Jim Tibbs, he is doing very well. He was discharged back home the day before. Apparently, he had three arteries blocked and they did an open heart procedure. Prognosis is for a full recovery.
Bill said that Dave Bieter sends his regrets as he apparently injured his knee the day before and was in the Doctor’s office.
Firefighters Retirement Fund
Tom introduced Don Drum, the Director of PERSI. Tom said that several members of the Partnership have employees involved in the Firefighters Retirement Fund and he wanted to have a discussion around this.
Don said, prior to 1980 there were approximately 22 employers who had firefighters that participated in a retirement plan that was not PERSI. It was called the Firefighters Retirement Fund. In 1980 a decision was made to move the administration of the FRF fund to PERSI. When it came to PERSI, the FRF fund set separate from the PERSI fund. The firefighters hired after that time for those employers, went into the PERSI fund. But all those employees that were hired under the FRF continued to accrue benefits from the FRF. So, today, there are still two employees working for employers who had the FRF. Everyone else has retired or passed away.
There is approximately 600 retirees or beneficiaries that are eligible for benefits under the FRF fund, so it is a relatively small group. Fortunately for those people and unfortunately for the fund, many of those firefighters married younger spouses. So the fund will last a little longer than the life expectancy of the firefighter.
In 1980 when it came over to PERSI, a decision was made by the legislature, employers, PERSI and others that there would be an excess contribution those employers would pay. That excess contribution would go to the FRF. There was an assumption at the time the fund would be fully funded. Here we are in 2013 and it is approaching full funding, but these participants have continued to pay into the firefighter’s fund. The Cities of Nampa and Caldwell are participants and it is a relatively significant expense to these Cities.
Tom said to put this in perspective; it amounts to $1.2 million out of a total fire budget of $11.8 million. It is 10% of our budget.
Don went on to explain how demanding this is. The employer pays almost 12% to PERSI for firefighters. On top of that, they have to pay an additional 17.4% for FRF. They are paying significantly more for FRF than they pay for PERSI and they have to pay that on all their firefighters. The reason it costs so much is those FRF’ers had a very, very, very good benefit that they continue to accrue till death.
So what happened when it came over in 1980, PERSI made a decision, in part because employers were already paying a higher amount, they don’t charge that fund any other cost. For administration, for valuation, for the fees associated with investments and so on, they don’t charge the FRF fund; they eat that out of PERSI. Part of the reason the PERSI Board made that decision, like all of you; they would like to get that fund fully funded and get it where they are not dealing with it anymore.
Their goal is to get the FRF fully funded and take that burden off the cities. The question he gets asked a lot is, “when is it going to be fully funded”. As of June 30, based on an early warning model the Actuary gave him, the FRF at 100.9%. So the question is, is that full funded. The risk is that when the stock market goes up or down, you can run the risk of not being fully funded.
So when they do away with the excess contribution rate, they don’t want to have to bring it back to the Cities. Their goal is to get to a level of funding where the risk of ever having to charge that excess contribution rate again, is minimal.
At this point, they have been trying to have discussions with all 22 of these employers and have discussions how they would like to handle this going forward. They have asked their Actuaries to do an analysis and give them a determination of where the funding level could be so they could adjust the investments into lower risk investments to a place where changes in the market would be less likely to affect full funding of the fund. They have not heard back from the Actuary yet on that analysis.
They are also getting an actuarial evaluation this fall that will tell us exactly where they are valued. The will bring all this information back out to employers. The City of Boise has asked for a meeting with employers and would like to address the PERSI Board with some options to impact that excess contribution.
There are options. One option would be would be to remove the excess rate and hope the market does well. If the market goes down too far, we would have to bring back the excess rate. Another option is to just get it funded and be done with it. Another option discussed was that some cities could come up with a lump sum amount to pay off their liability.
Tammy asked how the 22 employers became involved, were they the Cities that had fire departments at the time. Don said they had full time firefighters and they collectively participated in FRF. There could have been cities out there, that had firefighters, but had a different retirement system but the FRF fund.
Don said, the good news is the end is near. The bad news is the end is not as near as everyone would want it. He thinks there are some options that might help budget wise. But they won’t know till the end of September when they get the information back from the Actuaries.
This is an issue he has focused on the last couple of years. It is one of the expenses at the city level that needs to be addressed. Kuna for example, is paying about $50,000 per year and has zero retirees. There are no active employees and no one retired. So you can imagine what constituents would say if they saw those costs.
Don said that one option that was discussed in 2007 was to absorb the FRF into the PERSI fund. The Board was concerned about that because you would have these individuals with significantly better benefits that the rest. Another concern the employers had, when this fund ends, if there is a pool of money remaining, we could pass legislation to have that money go back out to the employers. If it gets absorbed by the PERSI fund, any excess would also get absorbed.
Tom said one of the things he recalls from a recent AIC meeting is that he thinks the Cities would be willing to take the risk and have the fund just shut off. If the fund expenditure has to has to be brought back because of market changes then that is the risk we would gladly take.
Jim asked if the Actuaries are going to determine a sunset for the FRF fund. Don said, that is the information they are waiting on and will get this fall. He proposes that when the information comes in, he would like to get the employers together with the PERSI board and come up with some workable options.
Tom said he wanted to thank Don for the job he is doing. He feels the nation is envious of PERSI because of the good work the fund is doing.
Tammy said she will ditto Tom’s sentiment. As a city it is important to have the benefit package for attracting and retaining employees and PERSI is huge.
Tom introduced Steve Torrano with OG’s BAD to give an update on gang mitigation activities. He has been an active member of the Nampa community. He served as the Director of the Boys and Girls club for three years.
Steve thanked the Partnership for inviting him and he likes the opportunity to give good news. This subject is typically not good news, but over the last couple years they have made some real strides. He thanked Tom and the City of Nampa for helping the organization get started out of the Boys and Girls Club and for helping to get funding for the building they are using. He thanked Commissioner Rule for the County’s help as well.
Steve said that Nampa and Caldwell had a real problem in 2004. They were meeting with a group then called Canyon County Valuing Youth Initiative headed by headed by Judge Gutierrez. This organization, OG’s Bad sprang from that effort.
In 2004, there were nine gangs in the Nampa/Caldwell area and over 500 members in those gangs. Today there are an estimated 1,600 members. However, these members are not near as active as they once were and they do not have the clout they once had. He indicated also, today there are better tracking practices in place that identify gang membership compared to 2004.
To give a perspective, when they applied for funding originally, they were rated in the top three communities in the U.S. needing gang intervention. Only Anchorage and San Francisco were rated higher. In the way of statistics, in 2010, after they had been in operation for a couple years, they had a goal of enrolling 75 kids in education programs and they reached 100. They had a goal of 29% or their kids attaining a High School diploma or GED. In 2010 43% of their participants did so.
Steve pointed to the sheet of statistics he displayed and showed that each year since 2010 the numbers have gone down. Their target for participants has changed. Gang kids are smart and they learn fast. The kids they are getting now are the tougher kids.
The thing they try to do is keep kids with them beyond the school day. 73% of their participants participate in their after school programs.
The big statistic the Department of Juvenile Corrections likes, is they had a 4% recidivism rate in 2012. The Department has a recidivism rate of around 87%.
Steve said that what they are seeing on the street is several fold. The Gang Task Force and the use of the SAUSA has been ridding the local streets of the upper level leadership and as a result local gangs are without older local leadership and are in somewhat disarray.
They have been successful at encouraging lower level newcomers to rethink the gang lifestyle and they are active in helping the youth look into alternatives to what they have been taught in the old gang lifestyle.
He feels they have made big inroads into bringing the services to these you that have been needed. It all would not happen without the excellent staff they have. Several staff are former gang members and are real effective at getting in the kids heads about gangs and getting them to look into healthy lifestyle changes.
Bill stated that the agenda for the retreat was coming together and he had all but one block of time filled and it would be completed by the end of the week. As soon as the agenda is solidified, he will send it out. This year we are staying in different houses, as the ones we have been using have been sold. It was a challenge to find two together. They are different streets but back up to one another.
In regards to the Statewide SAUSA initiative, Bill stated he felt he was making good progress. He has been discussing the idea with the AIC and IAC and believes their support will be attained. Bill stated he was meeting with Director Reinke the next day on the Proposal and was looking forward to getting the Director’s feedback.
Bill pointed to the budget for fiscal year 2013-4. He indicated that everyone’s dues would decrease and that all line items were going to be staying the same except for the Regional Meetings item. The cost for the Christmas luncheon has been going up every year and was consuming that entire budget item. He increased it to account for holding a legislative luncheon this fall.
It was moved and seconded to approve the minutes and financial report.