2004 Performance Based Budget - Laserfiche WebLink

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and retired members) these changes went into effect on 1/1/Ol for the Firefighters' and 1/01/02 for the Police. The City will continue to closely monitor this fund and will act when possible to curb anticipated 'increases in health caze costs. The City's Liability Insurance Reserve Fund reflects an overall increase in expenditures of 6% from the prior year's budget. This increase is based upon current yeaz trends, historical information (five yeaz averages) and consideration of pending claims. The City is currently trying to settle several significant claims filed against the City over the past several yeazs. These specific claims have not been inchxded in the 2004 Budget due to the uncertainty as to the amount and timing of any potential settlement. Any unusually high claim will need to be paid out of this fund's reserve cash balance which stood at $1,914,637 as ofDecember 31, 2003. The 2004 Budget inchides one fiord, Century Center, that is not "balanced" (revenues equal to or in excess of expenditures) for the year and thus this fiend will need to rely on existing fiend cash balances to support the projected 2004 deficiency. Fire and Police Pension Funds • Although the budgets for the Police and Fire Pension Funds have been favorably impacted in comparison to prior years' budgets as a result of recent changes enacted by the new state pension law, these two fiords will continue to be underfunded in the future years unless additional changes are made either by the State and/or through funding decisions within the City budget process. As the historical comparison report (inchzded later in this section) shows, the fund balances for these two pensions have steadily decreased over the years as a result of pension payments outpacing revenues supporting these expenditures. It remains as one of the major fiuidmg issues for the future. The recent passage of a state bill that shifts pension payments for certain retirees from the city to the state (with future payments for these retirees to be made from acost-sharing, multiple employer pension system administered by the Indiana Public Employees' Retirement Fund) has helped; however, it has not eliminated future fimdmg concerns. Prior to the passage of this bill, all City police officers and firefighters hired before May 1, 1977, participated in two single-employer defined benefit pension plans. Employees with twenty years of service could retire regardless of age and were entitled to full benefits. Benefits are based on actual years of service (twenty or more) and range from 50 to 74% of the current salary offirst-class patrolman or firefighter. These plans also provide for disability and death benefits. Covered employees are required by statute to contribute 6% of their salary. Indiana's state statute also requires annual employer contributions in an amount sufficient to fund projected benefits to be paid during that year on apay-as-you-go basis. As part of the police and firefighters pension reform legislation in 1977, the State created a pension relief fund. The State distributions from this fund are to provide assistance to cities in meeting their employers' contribution requirements on a pay-as-you- go basis for these pension plans. Funding for this pension relief is provided by the state utilizing cigazette tax, liquor excise tax and other state revenue. This state pension relief revenue, along with City property taxes and employee contributions, was used to fiord the City's current pension payments. However, due to the increased number of retirees that were employed prior to 1977, the pension payments were growing at a faster pace than the revenues supporting these payments. As a result, the Police and Fire Pension Fund balances were expected to be fully utilized by as early as 2001. It was necessary to begin to utilize General Fund dollars to support these two pension funds starting in 2000. The B-10