Monday, March 5, 2001    2^nd Meeting
Room 112 Capitol

LEGISLATIVE COMMISSION ON PENSIONS AND RETIREMENT

Senator Dean Johnson, Chair of the Legislative Commission on Pensions and Retirement, called the meeting to order at 6:05 p.m.

Commission members present:

Representatives Philip Krinkie, Harry Mares, Mary Murphy, Steve Smith, and Stephen Wenzel
Senators Don Betzold, Dean Johnson, Lawrence Pogemiller, Dan Stevens, and Roy Terwilliger

S.F. 358 (Betzold); H.F. 557 (Haas): Osseo Volunteer Fire; Special Appropriation To Offset Liability Increase; and
S.F. 1231 (Betzold); H.F. 1295 (Haas): Volunteer Fire; Requiring Bonding or Insurance For Financial Consultants

Senator Betzold explained the situation that led to the introduction of these two bills. Mr. Dave Callister, Osseo City Manager, provided background information on the issue. Mr. Phillip E. Phenow, former mayor of Osseo and member of the Osseo Volunteer Firefighter Relief Association, testified in support of the bill. Representative Haas told Commission members of his concern to make sure that everyone is protected, and that similar situations can be avoided in the future.

Mr. Lawrence Martin, Executive Director, Legislative Commission on Pensions and Retirement, reviewed the staff memo and policy issues raised by S.F. 358 (Betzold); H.F. 557 (Haas), and responded to member’s questions about the existence of similar situations and about the specific consultant in question.

S.F. 625 (Tomassoni); H.F. 474 (Rukavina): Eveleth P&F; Post Retirement Increase.

Senator Tomassoni and Representative Rukavina testified in support of the bill.

Senator Pogemiller moved technical amendment LCPR01-13. MOTION PREVAILED.

Senator Pogemiller moved S.F. 625; H.F. 474, as amended, for inclusion in the omnibus pension bill. MOTION PREVAILED.

S.F. 190 (Scheevel); H.F. 207 (Rifenberg): Volunteer Fire; Increase in Lump Sum Supplemental Benefit and State Reimbursement.

Senator Scheevel explained the bill and introduced Mr. John Shepard, Spring Valley Volunteer Firefighter Relief Association, who is a local volunteer firefighter. Mr. Shepard testified in support of the bill, noting the need to recruit, retain and retire volunteer firefighters.

Mr. Edward Burek, Deputy Director, Legislative Commission on Pensions and Retirement, reviewed the staff memo and policy issues raised by the bill, and reviewed amendments LCPR01-16, LCPR01-17, and LCPR01-18. Senator Scheevel expressed his support of LCPR01-18.

Senator Terwilliger moved LCPR01-18, inserting the date "January 1, 2002". MOTION PREVAILED.

Representative Mares asked for input from the Departments of Finance and Revenue. Ms. Kristin Dybdal, Department of Finance, testified that she would need to confirm information with the Department of Revenue. Senator Johnson said that the Commission would like to have more details from the Department of Revenue.

S.F. 451 (Pogemiller); H.F. 712 (Mares): PERA-Correctional; Contribution Rate Reductions.

Senator Pogemiller gave background information on the issues behind this legislation, and asked the Commission to consider at least a delay in the scheduled rate increase.

Mr. Kevin Corbid, Association of Minnesota Counties, testified in support of the bill, and recommended that the rate increase not be put into effect.

Mr. Robert Johnson, representing Teamster Local 320, testified that they are not opposed to the bill.

Mr. Burek asked the Commission for staff direction. Senator Pogemiller recommended that the Commission take the issue under advisement.

S.F. 810 (Pogemiller); H.F. ____ ( ); and S.F. _____ ( ); H.F. 855 (Mares): PERA; Contribution Increases, Benefit Modifications, and Coverage Changes.

Representative Mares gave background information on the PERA funding issue.

Ms. Mary Vanek, Executive Director, PERA, testified that the provisions in the bills reflect discussions held by the PERA Board in late 2000. Ms. Vanek responded to questions from Representative Mares to explain from where the deficiency came, and whether or not PERA saw it coming.

Mr. Kevin Corbid, Association of Minnesota Counties, provided a handout and testified in support of a balanced solution to the problem and that the Commission consider other options than just simply a contribution rate increase.

Mr. Eric Willette, League of Minnesota Cities, responded to a question from Senator Johnson that although he was unfamiliar with the 1989 and 1997 pension reform legislation, it was his recollection that the League’s position was neutral or in support if aid was included to pay for the benefit improvements. Mr. Willette testified in support of the inclusion of state assistance in the current bills.

Mr. Keith Carlson, Metro Inter-County Association, provided materials and testified on the potential impact of employer and employee contribution rate increases, in support of the inclusion of state aid, and urged the Commission to consider other alternatives to further contribution rate increases.

Mr. Bob Meeks, Director of Governmental Relations, Minnesota School Boards Association, testified that he does not believe that their employer group caused the problem. Regarding levy limits, they do not have levy limits and they do not have the authority to go to property tax without the approval of the voters, so the revenue they will take to pay for the proposed increase will come out of their general funds. He asked for the Commission’s help in identifying revenue that they can access to help pay for the increase.

Senator Pogemiller remarked that all parties need to move beyond the point of trying to find a scapegoat for the deficiency, and that everyone now needs to work toward a solution as the risk of not solving the issue this year will only create a bigger problem in the future. Representative Krinkie agreed that there is no doubt of the extent of the problem and that the Commission needs creative ideas for a longterm solution.

The meeting adjourned at 8:03 p.m.