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Home My WebLink AboutOrdinance 7001Page 1 113 West Mountain Street Fayetteville, AR 72701 (479) 575-8323 Ordinance: 7001 File Number: 2026-1823 AN ORDINANCE TO IMPLEMENT AN ANNUAL 3% COMPOUND COST OF LIVING ADJUSTMENT FOR ALL ELIGIBLE PARTICIPANTS OF THE CITY OF FAYETTEVILLE FIRE PENSION FUND WHEREAS, on July 15, 2023, the Local Fire Pension Board met to review an actuarial study to determine the feasibility of consolidating the Local Fire Plan with the Arkansas Local Police and Fire Retirement System (LOPFI) and, at that meeting, the Board unanimously voted to request that the City Council approve a consolidation with LOPFI; and WHEREAS, on August 15, 2023, the City Council passed Ordinance 6676 approving the consolidation of the Fayetteville local fire pension fund with the Arkansas Local Police and Fire (LOPFI) retirement system; and WHEREAS, as part of the actuarial study, the feasibility of consolidating with a 3% cost of living adjustment (COLA) was analyzed but it was determined that revenues were not sufficient to fund a COLA at that time; and WHEREAS, in April of 2026, former representatives of the Local Fire Pension Fund board contacted the City with a request that another actuarial report be performed to assess the feasibility of providing a 3% COLA; and WHEREAS, based on the projections included in the actuarial report and an analysis of the projected property tax and state turnback revenues, it has been determined that a 3% compound COLA can be funded at this time. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1: That the City Council of the City of Fayetteville, Arkansas hereby enacts § 33.051(C) as follows: “(C) The City Council authorizes the implementation of an annual three percent (3%) compound cost of living adjustment (COLA) for all eligible paid service participants, excepting alternate payees under a Qualified Domestic Relations Order, of the Fayetteville Fire Pension Fund to be awarded each July 1st under the administrative guidelines of the Arkansas Local Police and Fire Retirement System beginning July 1, 2026.” Section 2: That the City Council of the City of Fayetteville, Arkansas recognizes that the Arkansas Local Police and Fire Retirement System (LOPFI) is the administrator of the Fayetteville Fire Pension Fund (Local Plan) and, therefore, the Mayor is hereby authorized to provide LOPFI with an approved copy of this Ordinance approving this annual 3% compound COLA for the Local Plan. Section 3: Due to the need to promptly implement this benefit amendment for the Local Plan named in Section 2, an emergency is hereby declared to exist, and this Ordinance shall be in full force from and after the date of its passage Docusign Envelope ID: 5943785C-9CE8-8F88-832E-A55F9B595BFC Ordinance: 7001 File Number: 2026-1823 Page 2 and approval. PASSED and APPROVED on June 2, 2026 Approved: _______________________________ Molly Rawn, Mayor Attest: _______________________________ Kara Paxton, City Clerk Treasurer This publication was paid for by the City Clerk-Treasurer of the City of Fayetteville, Arkansas. Amount Paid: $ 209.76 Docusign Envelope ID: 5943785C-9CE8-8F88-832E-A55F9B595BFC Mailing address: 113 W. Mountain Street Fayetteville, AR 72701 www.fayetteville-ar.gov CITY COUNCIL MEMO 2026-1823 MEETING OF JUNE 2, 2026 TO: Mayor Rawn and City Council THROUGH: Mayor Rawn FROM: Steven Dotson, Chief Financial Officer SUBJECT: Request by participants in the Local Fire Pension and Relief Fund to approve a compound COLA RECOMMENDATION: Recommend approval of a 3% compound cost of living adjustment (COLA) for the participants of the City of Fayetteville Local Fire Plan (now consolidated with LOPFI), and authorizing the Mayor to sign any documents required to enact the COLA. BACKGROUND: The Local Fire Pension Board met on July 15, 2023, and reviewed an actuarial study to determine the feasibility of consolidating the Local Fire Plan with the Arkansas Local Police and Fire Retirement System (LOPFI). At that meeting, the Board unanimously voted to request that the City Council approve a consolidation with LOPFI, which was passed and approved by Council on August 15, 2023. As part of the actuarial study in 2023, the feasibility of consolidating with a 3% cost of living adjustment (COLA) was analyzed. At that time, it had been determined by City staff that revenues were not sufficient to fund a COLA, but that the City would agreeable to reevaluating the revenues at a future time. DISCUSSION: In April of 2026, former representatives of the Local Fire Pension Fund board contacted the City with a request that another actuarial report be performed to assess the feasibility of providing a 3% compound COLA at this time. The actuarial report was reviewed, and in an analysis of the projected property tax and state turnback revenues, it was determined that a 3% compound COLA could be funded under the current projections included in the actuarial report. BUDGET/STAFF IMPACT: Based on the actuarial report, current revenues received from the property tax millage and state insurance turnback are sufficient to cover the compound COLA adjustment. ATTACHMENTS: 3. Staff Review Form, 4. Fayetteville Local Fire Plan COLA, 5. Fayetteville Fire COLA Ordinance Docusign Envelope ID: 5943785C-9CE8-8F88-832E-A55F9B595BFC Page 1 City of Fayetteville, Arkansas Legislation Text 113 West Mountain Street Fayetteville, AR 72701 (479) 575-8323 File #: 2026-1823 AN ORDINANCE TO IMPLEMENT AN ANNUAL 3% COMPOUND COST OF LIVING ADJUSTMENT FOR ALL ELIGIBLE PARTICIPANTS OF THE CITY OF FAYETTEVILLE FIRE PENSION FUND WHEREAS, on July 15, 2023, the Local Fire Pension Board met to review an actuarial study to determine the feasibility of consolidating the Local Fire Plan with the Arkansas Local Police and Fire Retirement System (LOPFI) and, at that meeting, the Board unanimously voted to request that the City Council approve a consolidation with LOPFI; and WHEREAS, on August 15, 2023, the City Council passed Ordinance 6676 approving the consolidation of the Fayetteville local fire pension fund with the Arkansas Local Police and Fire (LOPFI) retirement system; and WHEREAS, as part of the actuarial study, the feasibility of consolidating with a 3% cost of living adjustment (COLA) was analyzed but it was determined that revenues were not sufficient to fund a COLA at that time; and WHEREAS, in April of 2026, former representatives of the Local Fire Pension Fund board contacted the City with a request that another actuarial report be performed to assess the feasibility of providing a 3% COLA; and WHEREAS, based on the projections included in the actuarial report and an analysis of the projected property tax and state turnback revenues, it has been determined that a 3% compound COLA can be funded at this time. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1: That the City Council of the City of Fayetteville, Arkansas hereby enacts § 33.051(C) as follows: “(C) The City Council authorizes the implementation of an annual three percent (3%) compound cost of living adjustment (COLA) for all eligible paid service participants, excepting alternate payees under a Qualified Domestic Relations Order, of the Fayetteville Fire Pension Fund to be awarded each July 1st under the administrative guidelines of the Arkansas Local Police and Fire Retirement System beginning July 1, 2026.” Docusign Envelope ID: 5943785C-9CE8-8F88-832E-A55F9B595BFC Resolution: File Number: 2026-1823 Page 2 Section 2: That the City Council of the City of Fayetteville, Arkansas recognizes that the Arkansas Local Police and Fire Retirement System (LOPFI) is the administrator of the Fayetteville Fire Pension Fund (Local Plan) and, therefore, the Mayor is hereby authorized to provide LOPFI with an approved copy of this Ordinance approving this annual 3% compound COLA for the Local Plan. Section 3: Due to the need to promptly implement this benefit amendment for the Local Plan named in Section 2, an emergency is hereby declared to exist, and this Ordinance shall be in full force from and after the date of its passage and approval. Docusign Envelope ID: 5943785C-9CE8-8F88-832E-A55F9B595BFC 5/14/2026 Submitted Date -$ -$ Budgeted Item? Does item have a direct cost? Is a Budget Amendment attached? Total Amended Budget Expenses (Actual+Encum) Available Budget Item Cost Budget Amendment Remaining Budget -$ -$ -$ -$ Project Number Budget Impact: FundAccount Number Project Title City of Fayetteville Staff Review Form 2026-1823 Item ID 5/26/2026 City Council Meeting Date - Agenda Item Only Recommend approval of a 3% cost of living adjustment (COLA) for the participants of the City of Fayetteville Local Fire Plan (now consolidated with LOPFI), and authorizing the Mayor to sign any documents required to enact the COLA. N/A for Non-Agenda Item Action Recommendation: Submitted By Steve Dotson CHIEF FINANCIAL OFFICER (110) Division / Department Comments: Purchase Order Number: Change Order Number: Previous Ordinance or Resolution # Approval Date: Original Contract Number: 6/2/2026 Docusign Envelope ID: 5943785C-9CE8-8F88-832E-A55F9B595BFC Docusign Envelope ID: 5943785C-9CE8-8F88-832E-A55F9B595BFC Docusign Envelope ID: 5943785C-9CE8-8F88-832E-A55F9B595BFC April 27, 2026 Mr. David B. Clark, Executive Director Arkansas Local Police and Fire Retirement System 620 West 3rd, Suite 200 Little Rock, Arkansas 72201-2212 Re: Employer Contribution Cost for Fayetteville Local Fire Plan Benefit Amendment Dear Mr. Clark: Enclosed are the results of a supplemental actuarial valuation related to a proposed benefit change for the Fayetteville Local Fire Plan administered by the Arkansas Local Police and Fire Retirement System (LOPFI). Please call if you have any questions or comments. Respectfully submitted, Gabriel, Roeder, Smith & Company Heidi G. Barry, ASA, FCA, MAAA Casey T. Ahlbrandt-Rains, ASA, FCA, MAAA HGB/CTA:sc Docusign Envelope ID: 5943785C-9CE8-8F88-832E-A55F9B595BFC 4/27/2026 1 Arkansas Local Police and Fire Retirement System Supplemental Actuarial Valuation – Fayetteville Local Fire as of December 31, 2025 Requested By: Mr. David B. Clark, Executive Director Arkansas Local Police and Fire Retirement System Date: April 27, 2026 Submitted By: Heidi G. Barry, ASA, FCA, MAAA and Casey T. Ahlbrandt-Rains, ASA, FCA, MAAA Gabriel, Roeder, Smith & Company As requested, we have determined the expected increase in the employer contribution rate that would result from implementing a compounding annual Cost-of-Living Adjustment (COLA) effective July 1, 2026. Various levels of COLA were evaluated, as described in the following scenarios: Scenario 1: 1% COLA to members and surviving spouses (excluding QDROS) Scenario 2: 2% COLA to members and surviving spouses (excluding QDROS) Scenario 3: 3% COLA to members and surviving spouses (excluding QDROS) The date of the study was as of December 31, 2025. This supplemental valuation does not predict the result of the December 31, 2026 valuation or of any other future actuarial valuation. (Future activities can affect future valuation results in an unpredictable manner.) Rather, the supplemental valuation gives an indication of the probable effect of the proposed changes on future valuations without comment on the complete end result of the future valuations. This report is intended to describe the financial effect of the proposed plan changes. Except as otherwise noted, potential effects on other benefit plans were not considered. No statement in this report is intended to be interpreted as a recommendation in favor of the changes, or in opposition to them. GRS is not responsible for unauthorized use of this report. In the event that more than one plan change is being considered, it is very important to remember that the results of separate actuarial valuations cannot generally be added together to produce a correct estimate of the combined effect of all of the changes. The total can be considerably greater than the sum of the parts due to the interaction of various plan provisions with each other and with the assumptions that must be used. In accordance with LOPFI Board policy, the employer contribution rates established by this valuation report are valid for purposes of approving the benefit changes until October 31, 2026. Heidi G. Barry and Casey T. Ahlbrandt-Rains are Members of the American Academy of Actuaries (MAAA) and meet the Qualification Standards of the American Academy of Actuaries required to render the actuarial opinions contained herein. Docusign Envelope ID: 5943785C-9CE8-8F88-832E-A55F9B595BFC 4/27/2026 2 Arkansas Local Police and Fire Retirement System Supplemental Actuarial Valuation – Fayetteville Local Fire as of December 31, 2025 This report was prepared using our proprietary valuation model and related software which, in our professional judgment, has the capability to provide results that are consistent with the purposes of the valuation and has no material limitations or known weaknesses. We performed tests to ensure that the model reasonably represents that which is intended to be modeled. This report is intended for use by LOPFI and the Local Fire Plan and those designated or approved thereby, and may be provided to other parties only in its entirety and only with permission. GRS is not responsible for unauthorized use of this report. The purpose of this valuation is to calculate actuarial liabilities and resulting contributions under the proposed benefit provisions. This report should not be relied on for any purpose other than the purpose previously described. The actuarial methods and assumptions and data were the same as those used in the regular valuation as of December 31, 2025. In particular, the economic assumptions used in the supplemental actuarial valuation were net investment return of 7.25% per year. A brief summary of the benefit recipient data used for the purposes of the study as of December 31, 2025 is presented below. Current Annual Average Group Number Benefits Current Age Benefit Paid 36 $1,151,921 75.97 $31,998 There are no active members of the Local Plan. Docusign Envelope ID: 5943785C-9CE8-8F88-832E-A55F9B595BFC Arkansas Local Police and Fire Retirement System Supplemental Actuarial Valuation – Fayetteville Local Fire as of December 31, 2025 4/27/2026 3 Benefit Provisions of Interest: Scenario 1: 1% COLA to members and surviving spouses (excluding QDROS) Scenario 2: 2% COLA to members and surviving spouses (excluding QDROS) Scenario 3: 3% COLA to members and surviving spouses (excluding QDROS) Actuarial Information: The following shows the computed impact on Plan liabilities and resulting change in the monthly employer contribution rate, under current assumptions, that would be necessary to fund the proposed benefit: Baseline: December 31, 2025 Results under Current Benefits Scenario 1: 1% COLA Scenario 2: 2% COLA Scenario 3: 3% COLA Actuarial Accrued Liabilities (AAL)10,297,907$ 11,088,619$ 11,981,823$ 12,995,286$ Total Assets 1,626,846 1,626,846 1,626,846 1,626,846 Unfunded AAL1 8,671,061$ 9,461,773$ 10,354,977$ 11,368,440$ Monthly Employer Contribution2 80,840$ 89,046$ 98,316$ 108,834$ (For FY 2027) Increse/Decrease From Current Benefits Actuarial Accrued Liabilities (AAL)790,712$ 1,683,916$ 2,697,379$ Unfunded AAL1 790,712 1,683,916 2,697,379 Monthly Employer Contribution2 8,206 17,476 27,994 (For FY 2027) Actuarial Impact of the Proposed Scenarios 1 Unfunded Actuarial Accrued Liability as of December 31, 2025. 2 UAAL amortized over a 12-year period. Docusign Envelope ID: 5943785C-9CE8-8F88-832E-A55F9B595BFC ORDINANCE NO.__________ AN ORDINANCE IMPLEMENTING AN ANNUAL THREE-PERCENT COMPOUND COST OF LIVING ADJUSTMENT FOR ALL ELGIBLE PARTICIPANTS OF THE FAYETTEVILLE FIRE PENSION FUND. WHEREAS the City Council authorizes the implementation of an annual three percent (3%) compound cost of living adjustment (COLA) for all eligible paid service participants, excepting alternate payees under a Qualified Domestic Relations Order, of the FAYETTEVILLE FIRE Pension Fund. This COLA will be awarded each July 1st under the administrative guidelines of the Arkansas Local Police and Fire Retirement System. The first COLA to be awarded will be effective as of July 1, 2026. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: SECTION 1. The City Council recognizes that the Arkansas Local Police and Fire Retirement System (LOPFI) is the administrator of the FAYETTEVILLE FIRE Pension Fund (Local Plan). Therefore, the Mayor is hereby authorized to provide LOPFI with an approved copy of this Ordinance approving this annual 3% compound COLA for the Local Plan. SECTION 2. It is the intent of the City Council, and it is hereby ordained that the provisions of this Ordinance shall be codified into the Code of Ordinances of Fayetteville, Arkansas and the sections thereof may be re-numbered and re-lettered as necessary to accomplish such intention. SECTION 3. Due to the need to promptly implement this benefit amendment for the Local Plan named in Section 1, an emergency is hereby declared to exist, and this Ordinance shall be in full force from and after the date of its passage and approval. PASSED:____________________ Date APPROVED:_______________________ Mayor Molly Rawn ATTEST:____________________ Witness Docusign Envelope ID: 5943785C-9CE8-8F88-832E-A55F9B595BFC 1 Form vl.55 DECEIVENV\ A 6/8/2026 m is CITY OF FAYETTEV+LLE CITY CLERK'S OFFICE • Account#: NWCL5004205 Company: CITY OF FAYETTEVILLE-CLERKS OFFI 113 W MOUNTAIN FAYETTEVILLE, AR 72701 Ad number#: 602387 PO #: Matter of: Ord 7001 AFFIDAVIT•STATE OF ARKANSAS I, Maria Hernandez-Lopez ,do solemnly swear that I am the Legal Clerk of the NWA Democrat Gazette,a daily newspaper printed and published in WASHINGTON/BENTON county,State of ARKANSAS;that I was so related to this publication at and during the publication of the annexed legal advertisement in the matter of: Ord 7001 Pending in the court,in said County,and at the dates of the several publications of said advertisement stated below,and that during said periods and at said dates,said newspaper was printed and had a bona fide circulation in said County, that said newspaper had been regularly printed and published in said county,and had a bona fide circulation therein for the period of one month before the date of the first publication of said advertisement;and that said advertisement was published in the regular daily issues of said newspaper as stated below. And that there is due or has been paid the NWA Democrat Gazette for publication the sum of$209.76. (Includes$0.00 Affidavit Charge). NWA Democrat Gazette 06/07/26;NWA nwaonline.com 06/07/26 Wt2lti �`< Y'�Li11.47,J /%1 \\\\G\111111 i 111/,,,//' Busy % F ' Legal Clerk ,<J��\•;; s 03F-F� 1ARy ;. State of ARKANSAS,County of Sebastian , E- �O .: Subscribed and sworn to before me on this 8th day of June, 2026 = .2 PUP.•! u 8'- ? z -77 NOTARY PUBLIC Ordinance:7001 File Number: 2026.1823 AN ORDINANCE TO IMPLE- MENT AN ANNUAL 3% COM- POUND COST OF LIVING ADJUSTMENT FOR ALL EUGIBLE PARTICIPANTS OF THE CITY OF FAYETTEVILLE FIRE PENSION FUND WHEREAS,on July 15,2023. the Local Fire Pension Board met to review an actuarial study to determine the feasibility of consolidating the Local Fire Plan with the Arkansas Local Police and Fire Retirement System (LOPFI)and,at that meeting,the Board unanimously voted to re- quest that the City Council ap- prove a consolidation with LOPFI;and WHEREAS, on August 15, 2023,the City Council passed Ordinance 6676 approving the consolidation of the Fayetteville local fire pension fund with the Arkansas Local Police and Fire (LOPFI)retirement system;and WHEREAS,as part of the ac- tuarial study,the feasibility of consolidating with a 3%cost of living adjustment(COLA)was analyzed but it was determined that revenues were not suffi- cient to fund a COLA at that time;and WHEREAS,in April of 2026, former representatives of the Local Fire Pension Fund board contacted the City with a re- quest that another actuarial re- port be performed to assess the feasibility of providing a 3% COLA;and WHEREAS,based on the pro- jections included in the actuarial report and an analysis of the projected property tax and state turnback revenues,it has been determined that a 3% com- pound COLA can be funded at this time. NOW,THEREFORE,BE IT OR- DAINED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1:That the City Coun- cil of the City of Fayetteville, Arkansas hereby enacts § 33.051(C)as follows: "(C)The City Council author- izes the implementation of an annual three percent(3%)com- pound cost of living adjustment (COLA)for all eligible paid serv- ice participants,excepting alter- nate payees under a Qualified Domestic Relations Order,of the Fayetteville Fire Pension Fund to be awarded each July 1st under the administrative guidelines of the Arkansas Local Police and Fire Retirement System begin- ning July 1,2026." Section 2:That the City Coun- cil of the City of Fayetteville, Arkansas recognizes that the Arkansas Local Police and Fire Retirement System (LOPFI) is the administrator of the Fayet- teville Fire Pension Fund(Local Plan)and,therefore,the Mayor is hereby authorized to provide LOPFI with an approved copy of this Ordinance approving this annual 3%compound COLA for the Local Plan. Section 3:Due to the need to promptly implement this benefit amendment for the Local Plan named in Section 2,an emer- gency is hereby declared to exist,and this Ordinance shall be in full force from and after the date of its passage and ap- proval. PASSED and APPROVED on June 2,2026 Approved: Molly Rawn,Mayor Attest: Kara Paxton City Clerk Treasurer This publication was paid for by the City Clerk-Treasurer of the City of Fayetteville, Arkansas. Amount Paid:$209.76 June 7,2026 602387