FPDR board approves $3.3 million budget amendment after clean audit; disability costs fall

The Fire and Police Disability and Retirement Plan Board of Trustees on Nov. 18 accepted a package of budget amendments that reallocate roughly $3.3 million to reflect higher-than-expected starting pensions for recent retirees and lower-than-expected PERS reimbursements tied to reduced overtime, after auditors presented a clean annual opinion.

Stacy Jones, FPDR deputy director and finance and pension manager, told trustees the largest changes include a $1.5 million reduction to the budgeted reimbursements for PERS contributions to police and fire (based on evidence of lower overtime), an approximately $5 million increase to pension expense to reflect higher starting pensions among recent retirees, a $4 million increase in beginning fund balance tied to one-time urban-renewal revenue, and a $2.8 million downward revision to current‑year property‑tax collections. Jones described the net package as roughly a $3.3 million change and said the plan would still retain about $16 million in contingency.

The board voted to approve the amendment after a motion and second; no opposition was recorded. Jones said the $1.5 million PERS-reimbursement reduction reflects billing changes and improved overtime control in both bureaus, while the pension increase stems from unexpectedly high starting pensions — “we were projecting about $8,000 a month and in reality they were at $9,000 a month,” Jones said, noting over 100 retirements in calendar 2024 that contributed to the variance.

Auditors from Baker Tilly, who noted their firm changed names after a merger from Moss Adams, gave FPDR’s financial statements an unmodified (clean) opinion for the year ended June 30, 2025. “The audit opinion is, good news. Unmodified clean opinion on the financial statement. No significant deficiencies or material weaknesses noted in our audit report,” said Elise Horsley, the senior manager on the engagement. Lead partner Keith Simovic said the fieldwork ran on plan and described the results as “very, very positive.” They also flagged accounting-standard impacts: adoption of new GASB guidance required a restatement to beginning net position of about $700,000 related to compensated‑absence accounting, which does not affect cash.

Trustees pressed staff on modeling assumptions and timing risks. Jones described the pension‑model shortfall as a backward‑looking projection problem amplified by recent salary growth and large cost‑of‑living adjustments at public safety bureaus. She also explained the savings on interest expense — roughly $1.1 million — arose because the plan used an interfund loan at a lower effective rate than the original budgeted tax‑anticipation note assumption.

Alongside finance items, trustees heard program updates. Disability claims manager Kimberly Mitchell reported the new managed‑care organization Majoris has been successfully onboarded and that staff and the new business‑systems analyst have corrected reporting errors that previously obscured MCO discounts. Mitchell said total disability costs fell about 11% year over year, driven by lower medical spending (fewer high‑cost surgeries), and that approval rates remain high: about 88% of claims were approved in the overall dataset and roughly 94% of claims that were decided were approved. She noted roughly 84% of claims were decided within 60 days and said staff continue to work on timeliness for complex occupational or PTSD claims.

Sam (FPDR management) and other staff briefed trustees on IT priorities, including a planned migration of a 15‑year‑old database off an unsupported .NET Framework to a .NET Core environment, an upgraded firewall to meet Payment Card Industry data‑security standards tied to new banking processes with Wells Fargo, and an anticipated increase in vendor work with Online Business Systems (OBS) to support the migration. Management said it will return with a request to increase OBS’ not‑to‑exceed contract amount to cover the migration and backlog.

What’s next: staff said they will present the annual adjustment (COLA) discussion in January and return with contract and RFP results in the coming months. The board set its next meetings for January and March.