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HomeMy WebLinkAbout01.17.12 Council PacketCity of Farmington 430 Third Street Farmington, MN 55024 1. CALL TO ORDER 7:00 P.M. 2. PLEDGE OFALLEGL4NCE 3. ROLL CALL 4. APPROVE AGENDA S. ANNOUNCEMENTS COMMENDATIONS FARMINGTON CITY COUNCIL Todd Larson, Mayor Jason Bartholomay Christy Fogarty Terry Donnelly Julie May AGENDA REGULAR CITY COUNCIL MEETING JANUARY 17, 2012 7:00 P.M. CITY COUNCIL CHAMBERS 6. CITIZEN COMMENTS /RESPONSES TO COMMENTS (This time is reserved for citizen comments regarding non- agenda items. No official Council action can be taken on these items. Speakers are limited to five minutes to address the Council during "Citizen Comment" time.) 7. CONSENT AGENDA a) Approve Council Minutes (1/3/12 Regular) (1/9/12 Special) (1/9/12 Workshop) b) Accept Resignation Parks and Recreation Commission Administration c) Approve Appointments Boards and Commissions Administration d) Approve Legal Newspaper Administration e) 2011 4 Quarter Building Permit Report Building Inspections f) School and Conference Finance and Administration g) School and Conference Municipal Services h) 2011 Annual Report Fire Department i) Approve VEBA Welfare Benefit Plans Trust Agreement Human Resources j) Approve Bills REGULAR AGENDA (The Council takes a separate action on each item on the Regular Agenda. If you wish to address the Council regarding any or all of the items on the Regular Agenda, please address the item when the item is discussed. Speakers will be given at least three minutes to speak per item. Additional time may be granted to speakers representing two or more persons.) Mission Statement Through teamwork and cooperation, the City of Farmington provides quality services that preserve our proud past and foster a promising future. Action Taken Approved Accepted Approved Approved Information Received Approved Approved Information Received Approved Approved 8. PUBLIC HEARINGS 9. AWARD OF CONTRACT 10. PETITIONS, REQUESTS AND COMMUNICATIONS a) Receive Public Comment on Acquisition of 420 Elm Street for Downtown Liquor Store Parks and Recreation 11. UNFINISHED BUSINESS 12. NEW BUSINESS 13. COUNCIL ROUNDTABLE Comments Received 14. ADJOURN Persons with a disability may request a reasonable accommodation by contacting the City Administrator's office at 651- 280 -6803. Request should be made 24 hours in advance or as early as possible to allow time to arrange accommodation. Table of Contents Agenda 2 Approve Council Minutes (1/3/12 Regular)(1 /9/12 Special)(1 /9/12 Workshop) Regular Minutes 1/3/12 4 Special Minutes 1/9/12 11 Workshop Minutes 1/9/12 12 Accept Resignation Parks and Recreation Commission Memo 14 Approve Appointments Boards and Commissions Memo 16 Approve Legal Newspaper Memo 17 Fourth Quarter 2011 and Year -End New Construction Report and Population Estimate 4th Quarter Bldg- end of year report 2011 22 School and Conference Administration /Finance Memo 31 School and Conference Municipal Services school and conference 36 2011 Annual Report Memo 37 Annual Report 38 Approve VEBA Welfare Benefits Plans Trust Agreement VEBA Trust Agrmt 2012 70 City of Farmington VEBA Trust Agreement 20120101 71 Approve Bills List of Bills 99 Receive Public Comment on Acquisition of 420 Elm Street Property as a new Downtown Liquor Store Site Memo 125 letter 126 Comments 127 Financing Options 128 Concept Plan 130 1 COUNCIL MINUTES REGULAR JANUARY 3, 2012 1. CALL TO ORDER The meeting was called to order by Mayor Larson at 7:00 p.m. 2. PLEDGE OFALLEGL4NCE Mayor Larson led the audience and Council in the Pledge of Allegiance. 3. ROLL CALL Members Present: Larson, Bartholomay, Donnelly, Fogarty Members Absent: May Also Present: Andrea Poehler, City Attorney; David McKnight, City Administrator; Teresa Walters, Finance Director; Randy Distad, Parks and Recreation Director; Kevin Schorzman, City Engineer; Cynthia Muller, Executive Assistant Audience: Larry White, Larry Werner, Chad Hjellming, Jim Kris Schmitz Mayor Larson called for a moment of silence for Mr. Louis Schmitz who passed away on December 30, 2011. 4. APPROVE AGENDA Councilmember Bartholomay pulled item 7j) Bills for discussion. MOTION by Fogarty, second by Bartholomay to approve the Agenda. APIF, MOTION CARRIED. 5. ANNOUNCEMENTS 6. CITIZEN COMMENTS 7. CONSENTAGENDA MOTION by Fogarty, second by Bartholomay to approve the Consent Agenda as follows: a) Approved Council Minutes (12/19/11 Regular) b) Approved School and Conference Engineering c) Received Information Boards and Commissions Attendance Administration d) e) 1) g) Adopted RESOLUTION R1 -12 Approving Gambling Premise Permit Fire Fighters Relief Association Administration Adopted RESOLUTION R2 -12 Approving Gambling Event Permit Southern Dakota County Sportsmen's Club Administration Received Information School and Conference Economic Development Adopted RESOLUTION R3 -12 Accepting Donation to Youth Scholarship Program from Rotary Club of Farmington Parks and Recreation 4 .7;E. Council Minutes (Regular) January 3, 2012 Page 2 h) Adopted RESOLUTION R4 -12 Approving 2012 Community Development Block Grant Application Planning i) Adopted Joint RESOLUTION R5 -12 Amending Existing Maintenance Agreement for 225 Street Planning j) Approved Bills APIF, MOTION CARRIED. j 8. PUBLIC HEARINGS Approve Bills Councilmember Bartholomay asked about the bill for the Orpheum Theater and the number of registrations. Parks and Recreation Director Distad noted if the minimum number of registrations is not received to cover the cost, the program is cancelled and the money is refunded. Councilmember Bartholomay asked about Muzak LLC for the liquor stores. He had a hard time telling taxpayers they need to pay $126 /month for music in the liquor stores. He asked why we cannot use the radio or purchase an Ipod. Parks and Recreation Director Distad replied Muzak also includes the license and copyright fees. If we were to play music off of anything publicly we would have to have a license and pay a copyright fee. We have had this in the liquor stores for many years to create an environment that is conducive to the public and employees. Some content from a radio station may not be appropriate. Muzak guarantees no commercials, and it is based on satellite radio so we can select the types of songs played. Councilmember Bartholomay asked about the bills for Orkin and Metro Pest. He suggested using one company for the City. Staff will look into this. Councilmember Bartholomay asked about the Nextel bill and asked staff to determine if it would be more cost effective to give a cell phone allowance of $40 to those authorized to have a cell phone. That would amount to $360 vs $930 which we pay now. This would not apply to police and fire. Councilmember Fogarty recalled this was discussed in the past and Parks and Recreation use the two way radio piece with Nextel. Mayor Larson noted some people may not want to take the allowance and use their personal cell phone. Councilmember Fogarty felt it was worth revisiting. Parks and Recreation Director Distad stated the Nextel phones are on the State bid contract. With this contract we get new phones every year. The radio piece is the important part for Parks and Recreation. Councilmember Bartholomay asked about the bill for CP Telecom long distance. He asked if we could go out for RFP to see if we are getting the best rate. $2500 for long distance seems high. Staff will look at this. 9. AWARD OF CONTRACT 5 Council Minutes (Regular) January 3, 2012 Page 3 10. PETITIONS, REQUESTS AND COMMUNICATIONS a) Annual Organizational Matters 10a(1). That Councilmember Donnelly be designated as Acting Mayor from January 4, 2012 through December 31, 2012. 10a(2). That the Farmington Independent be designated as the official publication from January 4, 2012 through December 31, 2012. Mr. Larry Werner, Editor and General Manager of ThisWeek Newspapers and Dakota County Tribune spoke on behalf of ThisWeek Farmington/Lakeville newspaper. ECM Publishers has now acquired Sun Current newspapers, which makes ECM the largest circulation newspaper company in the state. Mr. Werner stated ThisWeek would be very honored if the City of Farmington would select them as the official newspaper. He understood the statute requires that if a newspaper is selected that does not have an office in Farmington, you must select a newspaper that goes to at least 75% of the homes in Farmington. He provided Council with ThisWeek's audit showing a circulation of 9,172 papers in Farmington which is about 7,200 more than the current official newspaper which has a circulation of 1,800. Mr. Werner felt they fulfill the requirement of covering the affairs of the City. Ms. Laura Adelmann has been covering Farmington for many years. While ThisWeek does not have an office in Farmington, they are devoted to serving the needs of the readers and advertisers in Farmington. Mr. Werner understood their bid is $.26 more /inch than the Farmington Independent's bid. Mr. Chad Hjellming, General Manager Farmington Independent, stated they have been located in Farmington for 20 years and are taxpayers in the community. Most people think of them as the community newspaper. Mr. Nathan Hanson and Ms. Michelle Leonard have been covering the community for many years. He noted the difference between the two bids is $.76 /inch. Their circulation is a paid circulation which means people have invited them into their homes which makes the newspaper more likely to be read. Along with the 1,800 circulation, they have more than 40,000 page views on their website where legals are also published. Among that are 9,000 unique visitors, or 9,000 different IP addresses that come to their website so that can be included in the circulation. Of those, approximately 4,000 are from Farmington. Last month public notices was clicked on 291 times which shows people are coming to their website to find out information on public notices. They would like to continue to be Farmington's legal newspaper. Councilmember Bartholomay asked about their circulation number last year. Mr. Hjellming noted it was 1,900 and the online presence was approximately 6,000 less. Over time as circulation goes down, the online presence goes up. The readership now is higher than it was ten years ago, just in a different way. Mayor Larson noted Mr. Werner said ThisWeek was $.26 /inch higher. Mr. Werner was going by the bid submitted for e- mailed legal notices which is $9.00 /column inch compared to $8.74 /inch submitted by the Independent. It is $9.50 /inch if it has to be retyped. Mr. Werner noted their website gets 150,000 page views a month. As part of their acquisition of Sun Current, ECM websites have more than 1 million page views a month. 6 Council Minutes (Regular) January 3, 2012 Page 4 Mr. Hjellming noted the Independent has 11 newspapers in the metro area. In December they had 2,040,637 page views. Mayor Larson asked City Administrator McKnight about the $9.00 bid for e-mails and asked how we distribute information to the newspapers. City Administrator McKnight stated last year Council did not have an apples to apples comparison so staff sent out a form that asked for price per inch for printing legals. Responses were received from the Farmington Independent for $8.74 and $9.50 from ThisWeek. Mayor Larson asked if staff had received the $9.00 amount. City Administrator McKnight replied it was received at 4:00 p.m. today, but we did not ask for that. We asked for apples to apples information. Either way the $8.74 bid is the lowest and that is what he based his recommendation on. Councilmember Bartholomay asked what ThisWeek's bid was last year for e- mailing. Staff did not have that information as that was not considered for this bid. Mr. Werner stated the $9.00 bid was submitted on December 1, 2011. City Administrator McKnight noted a form was sent to ThisWeek and submitted to the City that lists $9.50. Council has the bid form used by the City. The $8.74 is the cheapest bid and that is what the recommendation is based on. Councilmember Fogarty stated in the information from City Administrator McKnight, there are four conditions to designate a legal newspaper and one is a unanimous vote from Council. We do not have a full Council tonight, so can we make a change tonight. City Attorney Poehler replied no, it will need to come back another night as you can change newspapers anytime during the year. Council should adopt an official newspaper tonight so you have one in place and you can change it at a later date. Mayor Larson asked Council if anyone was interested in switching newspapers. Councilmember Bartholomay stated when comparing the two and one is reaching below 30% of the residents and the other reaches most of them, it is a tough decision when considering customer service. He wants as many residents as possible to get information. Councilmember Fogarty felt it was difficult to compare the two newspapers when looking at circulation. Council's goal is to find the publication that will reach the vast majority of our residents. We have to designate the Farmington Independent tonight, but she would like this item brought back in two weeks for a discussion. If we are talking about $.25 difference in cost, then that is worth it to reach the majority of the residents. Councilmember Donnelly agreed we want to reach the largest number of people, but we cannot change it tonight. Mayor Larson understood Council wants to designate the Farmington Independent as the legal newspaper tonight and bring it back in two weeks for discussion with a full Council. Councilmember Fogarty will be requesting more information. She asked what we spend in legal ads each year. Staff will obtain that information. MOTION by Fogarty, second by Donnelly to approve the Farmington Independent as the legal newspaper and bring it back for discussion at the January 17, 2012 Council meeting. APIF, MOTION CARRIED. 10a(3). Continue the Agreement for Legal Services with Campbell Knutson, Joel Jamnik as City Attorney for 2012. 7 Council Minutes (Regular) January 3, 2012 Page 5 Councilmember Bartholomay recalled last year Council requested an RFP be done for this year and after that have an agreement for four to five years. He asked that an RFP be considered for next year. 10a(4). That the Anchor Bank of Farmington, League of Minnesota Cities 4M Fund, RBC Capital Markets, Wells Fargo Investments, Smith Barney Inc., Premier Bank, and Roundbank (Farmington) be designated as the Official Depositories from January 4, 2012 through December 31, 2012. 10a(5). That all sworn personnel in the Farmington Police Department be designated as process servers for the calendar year 2012. 10a(6). Approve a $1,000,000 Faithful Performance bond for the City Clerk. 10a(7). ORDINANCE NO. 011-638 Establishing Fees and Charges for licenses and permits for 2012 was adopted October 17, 2011. 10a(8). Appointments to Boards and Commissions Candidates will be interviewed January 9, 2012 and appointments will be made at the January 17, 2012 Council Meeting. 10a(9). Appoint Councilmember Bartholomay as the primary and Councilmember May as the alternate representative to the ALFAmbulance Board. 10a(10). Confirm Mayor Larson as the Director and Councilmember May as the alternate to the Dakota Communications Center Board of Directors through December 31, 2012. 10a(11). Appoint Mayor Larson as the City's representative to the CEEF Committee. 10a(12). Appoint Councilmember Fogarty, Staff member David McKnight and a Planning Commission member to the Farmington/Empire Planning Advisory Committee. 10a(13). Appoint Mayor Larson, Staff member David McKnight and a Planning Commission member to the Farmington/Castle Rock Discussion Group. 10a(14). Appoint Councilmember May, Staff member David McKnight, and a Planning Commission member to the Eureka/Farmington Planning Advisory Committee. 10a(15). Appoint Councilmembers Donnelly and Bartholomay to the MUSA Review Committee. 10a(16). Appoint Brenda Wendlandt as Director and Jim Constantineau as Alternate to LOGIS for 2012. 10a(17). Appoint by RESOLUTION R6 -12 David McKnight as the Responsible Authority for data practices and Brenda Wendlandt as Data Practices Act Compliance Officer and Brian Lindquist as Responsible Authority for law enforcement for 2012. 8 Council Minutes (Regular) January 3, 2012 Page 6 10a(18). Approve Council By -laws as presented. 10a(19). Approve the Council Policies as presented or advise of any desired changes. Councilmember Bartholomay asked if Council will see these policies every year. City Administrator McKnight confirmed they will be included every year. MOTION by Fogarty, second by Bartholomay to approve items 10a(1 -19) except 10a(2) as noted. APIF, MOTION CARRIED. 11. UNFINISHED BUSINESS 12. NEW BUSINESS 13. COUNCIL ROUNDTABLE Councilmember Fogarty: The Rotary Club of Farmington donates money every year to help children participate in Parks and Recreation programs. A donation was once again approved on the Consent agenda tonight. She thanked the Rotary Club for all the work they do for the community. Councilmember Bartholomay: He congratulated Finance Director Walters on receiving the Certificate of Achievement for Excellence in Financial Reporting which is the top award in municipal finance. Commissioner Frans will be at the Farmington Library on January 11, 2012 discussing tax reform plans. The Community Expo will be held January 28, 2012. City Administrator McKnight: On January 9, 2012, Council is scheduled to conduct board and commission interviews. He asked for guidance on which groups Council would like to interview. Council agreed to interview Planning Commission and Parks and Recreation Commission applicants. Interviews will begin at 6:00 p.m. City Engineer Schorzman: Staff has received numerous calls regarding FEMA changes to the flood map. Residents have been receiving calls from their mortgage companies telling them they need to purchase flood insurance. Staff sent packets to affected residents in November 2010 with their letters of map revision. Residents should show those to their bank along with information from the City's website re- validating that information. If there are concerns, residents should contact City Engineer Schorzman. If you did not have flood insurance before, you should not need flood insurance now. No one has been put in the flood plain that was not there before. Mayor Larson: At the beginning of the meeting he spoke regarding the passing of Mr. Louie Schmitz. He wanted to mention the passing of another long time Farmington resident, Loren Markuson. He encouraged residents to shop local. He noticed Angel 2 Diva had some customers from St. Louis Park and they will be telling their friends about it. They also liked the downtown area of Farmington. Lillian's also has customers come 9 Council Minutes (Regular) January 3, 2012 Page 7 from the metro area. He also asked residents to patronize the Farmington Liquor stores as profits do stay within Farmington. Council recessed into Executive Session at 7:43 p.m. 14. EXECUTIVE SESSION a) Preliminary Consideration for Purchase of Property at 420 Elm Street Council came out of closed session at 8:11 p.m. 15. ADJOURN MOTION by Fogarty, second by Bartholomay to adjourn at 8:11 p.m. APIF, MOTION CARRIED. Respectfully submitted, Cynthia Muller Executive Assistant 10 COUNCIL MINUTES SPECIAL January 9, 2012 Council convened at 6:00 p.m. to interview five applicants for various Boards and Commissions. Present: Larson, Bartholomay, May, Fogarty (arrived 6:04 p.m.), Donnelly (arrived 6:05 p.m) Absent: None Council recommended appointing three applicants to the Planning Commission and two applicants to the Parks and Recreation Commission. Council directed staff to continue advertising for the vacant seats on the Water Board and Heritage Preservation Commission. Council adjourned at 7:00 p.m. Respectfully submitted, Cynthia Muller Executive Assistant 11 License Center Discussion Council Workshop Minutes January 9, 2012 Mayor Larson called the workshop to order at 7:04 p.m. Present: Larson, Bartholomay, Donnelly, Fogarty, May Absent: None Also Present: David McKnight, City Administrator; Cynthia Muller, Executive Assistant MOTION by Bartholomay, second by Fogarty to approve the agenda. APIF, MOTION CARRIED. The purpose of the workshop was to obtain direction from the City Council on whether to continue working with the Department of Public Safety to allow the City to have a license center. Mayor Larson would like to discontinue the process. Councilmember Fogarty wants to take this issue to the next level at the Department of Public Safety. Councilmember Donnelly felt the process should be discontinued. Councilmember Fogarty felt it was up to the elected officials to pursue this. She would like to receive background information on what staff has done so far and how other cities have accomplished having a license center unless other Councilmembers object. Councilmember May objected. Mayor Larson has tried to talk to personnel at the Department of Public Safety, but they will not respond. Councilmember Donnelly noted it would not be a full service license center. City Administrator McKnight stated the State wants the license center to be run by a City employee, not Quick -Serv. Councilmember Donnelly stated if it can be full service and carry its own weight, then we should hire someone to run it. Until then, let it go. Councilmember May felt the City has bigger issues to deal with right now. Mayor Larson suggested waiting until the State officials re -write the legislation to allow full service and then look at it. Councilmember Bartholomay agreed we are done until there is new legislation. Council consensus was to stop the process at this time. City Administrator Update City Administrator McKnight has received a request from ThisWeek newspaper asking if they could rent space in City Hall to allow them to establish an office in Farmington. Councilmembers felt there are less expensive places to rent in Farmington. Council has received an e-mail from a resident regarding train quiet zones. This will be brought to Council at a future work session. Purchase of property for a downtown liquor store will be on the January 17, 2012 Council agenda. There will be an article in the newspaper. Councilmember May stated, at the meeting it will be open for comment and then brought back to the February 6, 2012 Council meeting. She 12 Council Workshop January 9, 2012 Page 2 would like a meeting before they vote. Councilmember Bartholomay has spoken with staff and feels the Vermillion River Crossing area would be better. City Administrator McKnight noted it sounds like the City will need to extend their lease at the current location. Staff will meet with the landlord to re- negotiate the lease extension. MOTION by Fogarty, second by May to adjourn at 7:25 p.m. APIF, MOTION CARRIED. Respectfully submitted, Cynthia Muller Executive Assistant 13 TO: FROM: SUBJECT: DATE: DISCUSSION Cynthia Muller Executive Assistant Cynthia Muller Executive Assistant January 17, 2012 City of Farmington 430 Third Street Farmington, Minnesota 651.280.6800 Fax 651.280.6899 www.cifarmington.mn.us Mayor, Councilmembers and City Administrator Accept Resignation Parks and Recreation Commission Mr. Charlie Weber has submitted his resignation from his position on the Parks and Recreation Commission. His term on the Board runs through January 31, 2013. A copy of Mr. Weber's resignation is attached. ACTION REQUESTED Accept the resignation of Charlie Weber from the Parks and Recreation Commission effective January 12, 2012. Respectfully submitted, 14 �6 From: Charlie Weber [mailto:cweber84 ©charter.net] Sent: Monday, January 09, 2012 12:38 PM To: Randy Distad Subject: Resignation I am resigning from the Park and Rec. board effect as of Jan. 12, 2012. Charles F. Weber City of Farmington 430 Third Street Farmington, Minnesota 651.2$30.6800 Fax 651.280.6899 www.ci.rarming m.mn_us TO: Mayor, Councilmembers and City Administrator FROM: Cynthia Muller, Executive Assistant SUBJECT: Appointments to Boards and Commissions DATE: January 17, 2012 INTRODUCTION DISCUSSION The City Council is recommending the following applicants be appointed to various Boards and Commissions: Seat Applicable Term New Appointment Planning Commission 1) 2/1/12 1/31/14 John Franceschelli 2) 2/1/12 1/31/14 Steve Kuyper 3) 2/1/12 1/31/14 James Primmer Rambling River Center Advisory Board 1) 2/1/12 1/31/15 Beve Preece 2) 2/1/12 1/31/15 Kim Lomas 3) 2/1/12 1/31/15 Gil Anderson Water Board 1) 2/1/12 1/31/15 Vacant Parks and Recreation Advisory Commission 1) 2/1/12 1/31/15 David McMillen 2) 2/1/12 1/31/13 Randy Oswald Heritage Preservation Commission 1) 2/1/12 1/31/15 Beve Preece 2) 2/1/12 1/31/15 Vacant Applications will continue to be accepted for the vacant seats on the Water Board and Heritage Preservation Commission. ACTION REOUESTED Council by -laws state that commission appointments shall be made at the second regular meeting of the year. Therefore, the action requested is to approve the appointments to the various Boards and Commissions for the above stated terms. 16 TO: Mayor and Councilmembers City of Farmington 430 Third Street Farmington, Minnesota 651.280.6800 Fax 651.280.6899 www.clfarmingtonann.us FROM: David J. McKnight, City Administrator SUBJECT: Legal Newspaper DATE: January 17, 2012 INTRODUCTION The City annually selects a legal newspaper at the first meeting of the year. At your January 3, 2012 meeting you selected the Farmington Independent as the legal newspaper and asked that this item be placed on the January 17, 2012 agenda in order to have all members in attendance and to potentially reconsider this item. DISCUSSION The City Attorney and I offer the following information on this topic. 10a(2). Official Publication Per State Statute 331 A.04 Subd.2, the Farmington Independent is the only publication located within the City's corporate limits and as such the City is required to designate it as the City's legal newspaper, unless the statutorily authorized exception to the designation priority is approved by unanimous vote of the Council. The exception allows unanimous approval of an alternative to a paper with its known office of issue in the city if that paper: (1) is a qualified medium of official and legal publication; (2) the publisher of the newspaper furnishes a sworn statement, verified by a recognized independent circulation auditing agency, covering a period of at least one year ending no earlier than 60 days before designation of the newspaper, stating that the newspaper's circulation reaches not fewer than 75 percent of the households within the political subdivision; (3) the newspaper has provided regular coverage of the proceedings of the governing body of the political subdivision and will continue to do so; and (4) the governing body votes unanimously to designate the newspaper. 17 71 The law also provides that if the circulation of a newspaper designated under this subdivision falls below 75 percent of the households within the political subdivision at any time within the term of its designation as official newspaper, its qualification to publish public notices for the political subdivision terminates. The City has also received a bid from ThisWeek Newspapers to become Farmington's legal newspaper. By unanimous vote, the City Council may designate This Week Newspapers as the city's official newspaper if the conditions of the exception specified above are met. The City Council also has the authority to designate more than one legal newspaper. If two publications are chosen as the City's legal newspaper, official notices must be submitted to both papers. This additional expense was not included in the 2012 budget. At your January 3, 2012 meeting discussion took place about the quotes submitted by the two newspapers. In 2011 the City Council asked that a bid form be sent out in the future so you could have an apples to apples comparison of costs. This bid form was developed and used for the legal newspaper for 2012. The bid forms and the prices submitted by the two newspapers are attached to this memo for your review. The two bids submitted are: Farmington Independent $8.74 per inch Thisweek Newspaper $9.50 per inch During the January 3, 2012 meeting Thisweek Newspaper Editor Larry Werner shared a document with the City Council stating that they submitted this document along with their bid showing that their costs for legal documents is reduced to $9.00 per inch if the ads are emailed to the newspaper. It should be noted that this is the first time that city staff responsible for this process saw this document. A question was asked about the amount of money the city has spent recently on legal advertisements. In 2010 the city spent $3,995.87 and in 2011 we spent $2,509.91. BUDGET IMPACT The budget impact of this issue depends on the decision made by the City Council. ACTION REQUESTED With the selection options now clarified, I recommend making a motion to name the Farmington Independent as the legal newspaper for 2012 based on the lower price per inch bid submitted. Respectfully submitted, David J. McKnight City Administrator 18 City of Farmington 430 Third Street Farmington, Minnesota 651.280.6800 Fax 651.280.6899 www.ci.farmington.mn.us Quote for 2012 Legal Printing Rates Name of Publication Farmington Independent Date Submitted 11/17/2011 Contact Person _Chad Hjellming Price per inch for printing legals $8.74 Number of lines per inch _10.5_ Printed characters and spaces per line 48 Type size, in points 6 Circulation 1,800 Legal notice deadline Friday at 5 p.m. Publication Day Thursday Return to: Cynthia Muller 430 Third Street Farmington, MN 55024 E -mail: cmuller @ci.farmington.mn.us Fax: 651 -280 -6899 19 City of Farmington 430 Third Street Farmington, Minnesota 651.280.6800 Fax 651.280.6899 www.ci.farmington.mn.us Quote for 2012 Legal Printing Rates Name of Publication Thisweek Farmington Lakeville Date Submitted December 1, 2001 Contact Person Ellen Reierson Price per inch for printing legato $9.50 Number of lines per inch 10lines per inch Printed characters and spaces per line average 45 Type size, in points 6 point Circulation 23,986 Legal notice deadline Tuesday, 4:00 p.m. Publication Day Friday Return to: Cynthia Muller 430 Third Street Farmington, MN 55024 E -mail: cmuller @ci.farmington.mn.us Fax: 651- 280 -6899 20 ecuspapers Quotation for City of Farmington Thisweek Farmington/Lakeville Number of lines per column inch 10 Printed characters and spaces per line Average 45 Total characters and spaces per column inch Average 450 Per line cost $0.95 Per column inch cost $9.50 Per column inch cost for e- mailed (Word or InDesign notices) ads $9.00 Circulation 23,986 Legal notice deadline Tuesdays 4 p.m. Date December 1, 2011 By Ellen Reierson 21 Office Manager City of Farmington 430 Third Street Farmington, Minnesota 651.280.6800 Fax 651.280.6899 www.cifarmington.mn.us TO: Mayor, Council Members, City Administrator FROM: Ken Lewis, Building Official SUBJECT: Fourth Quarter 2011 and Year -End New Construction Report and Population Estimate DATE: January 17, 2012 INTRODUCTION DISCUSSION In addition to the new housing units, the following numbers reflect other permits that were issued during 2011. Building 765 (decks, basement finishes, additions, garages, roofs, siding, remodeling, etc.) Plumbing -107 (lawn irrigation, water softener, water heaters, water and sanitary piping, etc.) Mechanical -128 22 7� The following report summarizes the new construction permits issued during the fourth quarter of 2011, the year -end building permit totals, and the year -end population estimate. Fourth Quarter Building Permit Information: During the fourth quarter of the 2011 building construction season (October 1s through December 31 the City issued 12 new single family detached housing permits and 0 new multi- family permits, for a total of 12 new fourth quarter housing permits. A permit was issued for 1 new commercial project (Trinity Memory Care Group home). Construction valuation for the single family homes totaled $2,534,000. Trinity Memory Care Group Home has a valuation of $850,000. The average building valuation of the single- family homes during the fourth quarter of 2011 was $211,167, up from $201,088 during the thud quarter of 2011. (Note that the valuation averages do not represent the average sale price or average market value of the homes in question, since they do not include the value of the lot or any amenities added to the home that are not part of the building code formula). Year-End Building Permit Information: The year -end figures reflected 52 new single family units and 92 new multi- family units. Total permits for new commercial are 2. They included Immanuel Dental and Trinity Memory Care Group Home. The new single family permits resulted in a total new residential building valuation of $11,115,400. Of that year -end total, the average valuation was $213,758 per single family unit. The valuation for multi family construction was $9,017,600 for an average valuation of $98,017 per unit. The valuation for new commercial construction permits were $1,250,000. As noted above, these valuation averages do not represent the average sale price or average market value of the homes in question, since they do not include the value of the lot or any amenities added to the home that are not part of the building code formula. (furnaces, garage heaters, gas piping, fireplaces, ductwork, etc) Total additional permits issued -1000 Inspections performed for 2010 Building 3039 (Footing, foundation, poured wall, flaming, insulation, finals, etc.) Mechanical -182 (Rough -ins, air tests, finals, etc.) Plumbing 154 (Rough -ins, air tests, finals, etc.) Miscellaneous 7 (Code issues, renter complaints, etc.) Total number of inspections performed 3382 Year-End Population Estimate: At the beginning of 2003, City staff decided that each quarterly building permit report should also include an updated population estimate for the City of Farmington. After discussing several methods of calculating population, a decision was made to base our population estimates on Certificates of Occupancy rather than upon building permits. Building permit activity is not a "real time" reflection of actual population, given the "lag time" between the issuance of the permit and the actual occupancy of the dwelling unit (i.e., the time required to construct, market and sell the home). Accordingly, staff started with the City population as of April 1, 2000 (as determined by the U.S. Census Bureau) and then determined the number of Certificates of Occupancy [C.O.s] issued by the City since that date. The number of C.O.s is multiplied by 2.98, which was (according to the 2011 Census) the average number of occupants per Farmington dwelling unit. The resulting calculations are as follows: 21,086 Estimated population as of March 31, 2011 (Census Adjustment) 74 25 Certificates of Occupancy issued for the period from 4/1/11 to 6/30/11 X 2.98 (Census Adjust) 21,160 Estimated population as of June 30, 2011 45 15 Certificates of Occupancy issued for the period from 7/1/11 to 9/30/11 X 2.98 21,205 Estimated population as of September 30, 2011 42 14 Certificates of Occupancy issued for the period from 10 /1 /11 to 12/31/11 X 2.98 21,247 Estimated population as of December 31, 2011 ACTION REQUIRED This item is informational in nature. No action is required Respectfully Submitted, 7 t/v/ Ol <€.w Ken Lewis Building Official 23 24 A C rrr P m C 6 E 0 -o m w E co ITo Date 1 2011 ITo Date 1 2010 ITo Date 1 2009 ITo Date 1 2008 ITo Date 1 20071 ITo Date 1 1 20061 1 20051 Year J2011 Total pith 13rd )2nd Dist Qrt J2010 Total 14th 13rd 2nd 11stQrt 12009 Total 14th 13rd 12nd 11stQtr 12008 Total 4th 1 2nd 11st Qtr 12007 Total 14th 13rd 12nd 11stQtr 12006 Total 1 4th 3rd 2nd I1 Q tr 1 2005 Total 1 4th 3rd 2nd 1st Qtr 1 Quarter 52 12 CO 1 19 12 95 19 15 26 35 V 24 A 11 OD CO 8 33 OD 10 J 72 CO 21 27 15 118 20 28 32 38 109 1 21 27 13 New SF Units 00000 0 0 0 0 0 00000 40040 00000 00000 0 C New Duplex Units 92 0 26 66 0 00000 00000 26 37 A'JO 73 14 10 24 25 87 19 18 O)A S 42 16 23 CO New Townhome/Multi- Family Units 00000 C 0 00000 00000 00000 New Rental Housing 144 12 35 85 12 95 19 15 26 35 24 11 34 74 12 21 145 31 51 205 39 38 82 198 90 37 50 21 Total Residential Units N0 ---'0 00000 00000 01 A—•0 Co) 0 COA —G)0 CD— New Commercial Permits Issued 00000 0 0 0 0 0 00000 0 0 0 0 0 00000 0 0- 0 00000 New Industrial Permits Issued 00000 00000 —.000 00000 0301 —.0—/.00 00000 New Public/ Institutional/Other 24 A C rrr P m C 6 E 0 -o m w E co m 0 L tU v c_ 0 L c D (0 c 0) 1 0) 0 -o O g. Z 0 0 0 0 Monthly permits N 01 0 0 o N• N N N N O O O O O O CO 00 25 0 -n co 0 (D 0 Z 0 0 m 0 N O Accumulated Total Permits Q) 26 03 O O N O O O O L N (D Q' W ID c c (D c c c c Cn (D a 0 Z 0 ci CD 0 Monthly Inspections O O 0 O O O O Na El ri N N O O O O O O O (O 00 27 W .A P L7 w O V7 O O O O O w m 0 C- M 7 m N 6 0 o z 0 0 0 n 01 O Total Inspections N N W W P P O Cn O 01 O 01 0 Ch 0 0 0 0 O 0 0 0 0 0 0 0 0 0 0 0 1 2 0 L m v D a c_ fD c_ c C" c U) (D rt 0 0 z 0 0 CD 0 (P O (T Plans Reviewed N N W O 01 O II I \NMI II. I I 1 ••1 -rI N N N N O Co O Co —a O co O CO CO 29 W (P O 01 O O N co co c- C 0) CD a 0 N n Plans Reviewed O O O O O O O 0 30 TO: Mayor and Councilmembers FROM: David J. McKnight, City Administrator SUBJECT: School and Conference Administration/Finance DATE: January 17, 2012 INTRODUCTION Ehlers holds an annual public financial seminar for local government officials in February. The seminar is meant for local government officials who deal on a day to day basis with a wide variety of financial issues. DISCUSSION This year the conference is being held at the Earle Brown Heritage Center in Brooklyn Center. The seminar will be held on February 2 -3, 2012. The seminar will offer a variety of topics to choose from including a legislative update, property tax system update, TIF and tax abatement, development opportunities and more. This seminar has a very good reputation and has been attended by representatives from Farmington for a number of years. BUDGET IMPACT The cost of the seminar is $260.00 per person. Funding for this seminar is included in the 2012 budget. ACTION REQUESTED Approve David McKnight and Teresa Walters attendance at the Ehlers 2012 Public Finance Seminar. Respectfully submitted, David J. McKnight City Administrator City of Farmington 430 Third Street Farmington, Minnesota 651.280.6800 Fax 651.280.6899 www cifarmington.mn us 31 7-r FI 0 F 1 F+ 1 pci 14 a 0 011 0 P I a a 1 o oao OCI C a e C3 Ft/ 4 'g. al 021 m t .:3 V t., a o m Lh 0 a m ig la Oka 0° r a A o Al 1 to i H o la as CL) 0 cc 0 z X u ar v a ry cu 0 0 a 0 LL 1••• a a n. o 3 21! sti III I wail I ,g s I it g e �E kid ca p 44 T' 0 0 a co tL 0 a) (13 0 w w ce 0 5 0 0 v v Lu to) cu I INTRODUCTION DISCUSSION BUDGET IMPACT ACTION REOUESTED Respectfully submitted, Todd Reiten Director of Municipal Services City of Farmington 430 Third Street Farmington, Minnesota 651.280.6500. Fax 651.280.6899 www:ci.farmi i on.mn.0 TO: Mayor, Councilmembers and City Administrator FROM: Todd Reiten, Director of Municipal Services SUBJECT: School and Conference DATE: January 17, 2012 Each year there is an Annual Collection System Operators Conference for operators to renew their sewer collections licenses. The conference gives the attendees the training and knowledge on existing and new ideas and products. This year the conference is held at the Ramada Mall of America Hotel in Bloomington January 18 20, 2012. Under the job description for the maintenance worker it is required to have a minimum class D collection license. The licenses are valid for three years and depending what license a person has they need a certain amount of hours to renew their license. The conference is worth 16 contact hours. Glenn Mogensen, Jeff Olson Matt Waltman are up for renewal this year and they need 16 contact hours to renew their collection license. The cost per employee is $300.00 each, which would be a total of $900.00. Funding for the conference is included in the 2012 budget. Authorize approval of this school and conference for Glenn Mogensen, Jeff Olson Matt Waltman 36 Date: January 10, 2012 From: Troy Corrigan Assistant Fire Chief Action Requested: None PI w%1 37 t 14TM111II+ 1888 430 Third Street Farmington, MN 55024 (651) 480-6940 EP To: Mayor Todd Larson, Councilmember's Jason Bartholomay, Terry Donnelly, Christy Jo Fogarty, and Julie May, City Administrator David McKnight Enclosed for your information and use is the 2011 Annual Report for the Farmington Fire Department. I hope that you fmd this information useful and informative. Please feel free to contact me with any questions or comments that you may have. We would like to thank Council and staff for their support of the Farmington Fire Department over the past year. 7/, Prepared by Troy Corrigan Assistant Chief 38 FI n) III 1 2011 AIIIJAL HPOIT Farmington Fire Department 2011 Annual Report For over 125 years the Farmington Fire Department has served the community, standing ready and prepared to answer emergency calls day and night, to help save lives and property. The Farmington Fire Department is made up of 50 paid on call firefighters, has a service area of approximately 75 square miles. In addition to the City of Farmington, the Farmington Fire Department also provides services for the townships of Castle Rock, Empire and Eureka. The population served is approximately 25,000 citizens. Dedicated to provide for the safety and welfare of the community that we serve through the preservation of life, property and the environment. 1 39 Farmington Fire Department 2011 Annual Report Table of Contents Highlights for 2011 Page 3 Organizational Structure Page 4 Stations Page 5 Apparatus Page 6 Incident Response Page 11 Rescue Squad Page 17 Fire Marshal's Report Page 23 Explorer Post Page 25 Public Relations Page 27 Membership Page 29 Service Area Page 31 2 40 Farmington Fire Department 2011 Annual Report Highlights for 2011 Jim Schmitz was reappointed as Assistant Chief. Ron Lindstrom was appointed as Captain of Squad 4. Adam Fischer was reappointed Captain of Squad 2. Chris Matek was appointed as Rescue Squad Captain. Andy Skluzacek was appointed as Lieutenant of Squad 1. Jason Greiner was reappointed Lieutenant of Squad 3. Rick Fischer, Aasa Just, Dan Kuykendall, Travis Pugliese and Linda Thelen started as probationary Firefighters on March 21 Kevin Kuehn completed 20 years of service. Jim Schmitz completed 10 years of service. Jeff Albee, Jason Greiner, Ken Kelly and Chad Thelen completed 5 years of service. We were awarded $5,551 in funding from the Minnesota Board of Firefighter Training and Education in August. This will be used to help fund Firefighter training in 2012. 5 Firefighters completed their Firefighter I certification (Aasa Just, Dan Kuykendall, Tyler Leppert, Travis Pugliese and Linda Thelen) 3 Firefighters completed their Firefighter II certification (Amanda Christensen, Tyler Leppert, Chris McCann) 24 Firefighters completed their Fire Apparatus Operator course and certification (Jeff Allbee, Jeff Alm, Mark Arens, Caleb Bolton, Amanda Christensen, Dustin Dingman, Matt Donnelly, Bob Eibner, Adam Fischer, Luke Fischer, Brian Hanson, Matt Homerin, Nick Luchsinger, Chris Matek, Dan Moulin, Bob Murphree, Tim Nielsen, Jim Oates, Zach Rademacher, Doug Rowe, Andy Skluzacek, Dave Standke, Dan Strumberger, Chad Thelen, Heath Walker) Nine firefighters completed their Probationary period (Marke Arens, Chris McCann, Dave Standke, Caleb Bolten, Amanda Christensen, Brian Hanson, Dan Moulin, Doug Rowe and Dan Strumberger). One Firefighters completed their Rookie period (Tyler Leppert). One Firefighter completed First Responder certification (Dan Strumberger). Firefighters completed EMT certification (Justin Elvestad) Matt Homerin resigned from the department effective July 4 after 4 years of service. Travis Pugliese resigned from the department effective October 24 after 7 months of service. Members have attended numerous schools and conferences. 3 41 Secretary Ken Kelly Farmington Fire Department 2011 Annual Report Organizational Structure Chief Tim Pietsch Fire Marshal John Powers 1 I Asst. Chief Asst. Chief Jim Schmitz Troy Comgan 1 1 1 1 Station 1 Station 1 Station 2 Station 2 Captain Captain Captain Captain Justin Elvestad Adam Fischer Dan Meyer Ron Lindstrom Fire Lieutenant Fire Lieutenant Fire Lieutenant Fire Lieutenant Andy Skluzacek Tim Vanderlinde Jason Greiner Jeff Allbee Caleb Bolton Amanda Christensen Bob Eibner Conrad Adelman Dustin Dingman Matt Donnelly Luke Fischer Jeff Alm Rick Fischer Brian Hanson Nick Luchsinger Mark Arens Ken Kelly Aasa Just Chris McCann Jason Conway Tyler Leppert Kevin Keuhn Dan Moulin Rob Murphree Chris Matek Dan Kuykendall Tim Nielsen Jim Oates Jim Meyer Zack Rademacher Heath Walker Dan Strumberger Nate Sole Doug Rowe Chad Thelen Dave Standke Joe Tullar Dan Thelen Mike Wise Linda Thelen Rescue Assistant Chief Todd Kindseth Rescue Captain Chris Matek 1 1 Rescue Lieutenant Rescue Lieutenant Mike Wise Zack Rademacher 1 1 1 Station 1 Station 2 Matt Donnelly Tim Pietsch Jeff Allbee Justin Elvestad Chad Thelen Jeff Alm Adam Fischer Dan Thelen Mark Arens Ken Kelly Joe Tullar Jason Conway Kevin Kuehn Nate Sole Bob Eibner Jason Greiner 4 42 Farmington Fire Department 2011 Annual Report Stations 5 43 Station 1 21625 Denmark Avenue Station 2 19695 Municipal Drive Farmington Fire Department 2011 Annual Report Apparatus 6 44 Chief/Fire Marshall 2002 Ford Expedition Utility 3 /Assistant Chief's 2008 Chevrolet 2500 HD Assistant Chief/Rescue 2005 Ford Crown Victoria Farmington Fire Department 2011 Annual Report Station 1 Apparatus 7 45 Engine 1 2001 Pierce 1500 GPM Pumper Rescue 1 2005 E -One Heavy Rescue Tender 1 2004 Semo Vacuum Tanker 3000 Gal. Tank Brush 1 1991 Ford F350 Brush Truck Farmington Fire Department 2011 Annual Report Station 1 Apparatus (Continued) 8 46 Brush 12 1991 Ford Super Duty Mini Pumper Polaris ATV with Rescue Trailer Sharing F.P.D's ATV and Rescue Trailer, F.D. Provided Trailer for hauling and storage. Farmington Fire Department 2011 Annual Report Station 2 Apparatus 9 47 Engine 2 1993 Luverne 1250 GPM Pumper Rescue 2 1986 Ford 8000 Heavy Rescue Tender 2 1989 Ford L8000 1800 Gallon Tank Farmington Fire Department 2011 Annual Report 10 48 Brush 2 1992 Ford F350 Brush Truck Rescue Boat 12' Zodiak w/Trailer Dakota County First Responder Mass Decon Trailer Farmington Fire Department 2011 Annual Report Incident Response In 2011 we saw another decrease in the number of incidents. The Farmington Fire Department responded to 227 calls from 12/16/2010 to 12/15/2011. This is a 12% decrease in the number of calls as compared to the 2010 fiscal year. This year we have seen some minor changes in the allocation of calls between the City and the Townships. As compared to 2010, Farmington dropped from 84% to 81% of the responses. Empire Township increased from 5% to 11 Castle Rock Township dropped from 4% to 3 Eureka Township dropped from 5% to 4 and 1% of the responses were requests for mutual aid from our neighboring cities. With the decrease in the number of calls, we saw the personnel hours that were spent on incident response decrease from 4,917 in 2010 to 4,301 in 2011. The average response time for emergency responses (time of page to time first unit is on scene) in 2011 was 6 minutes. 90% of the time the first arriving unit was on scene within 11 minutes from the time we are paged. Both of these are a reduction of 1 minute as compared to 2010. This response time includes response to incidents in the townships which could be up to 10 miles in travel distance. The split station response is continuing to work well. For the full department pages in 2011 we had an average turnout of 19 members. For the station 1 or station 2 only pages, that average personnel turnout was reduced to 11 members for a difference of 8 firefighters per call. This reduction equates about 432 less personnel hours and a savings of several thousand dollars in salaries. This reduction in the number of personnel responding is not a reduction in service, but a better allocation of resources. We now have the appropriate number of personnel responding to the various types of incidents. Officer Calls: 28 12% Total Training Hours: 2,364 Station 1 Calls: 21 9% Total Incident Hours: 4,301 Station 2 Calls: 33 15% Total Personnel Hours: 6,665 Full Department Calls: 145 64% Total Number of Calls: 227 100% 11 49 12% 9% li do Incident Response by Station Fire All Stations Fire Station 1 Fire Station 2 o Fire Officer Call Location Farmington Castle Rock Empire Eureka Mutual Aid Rosemount Mutual Aid Hampton Mutual Aid Northfield Totals Farmington Fire Department 2011 Annual Report Incident Response by City 0 0% `0% 4% 1% 0 11% Number of Calls Percent of Calls 183 81% 7 3% 25 11% 8 4% 1 <1% 1 <1% 2 1% 12 50 227 100% Farmington Empire Castle Rock Eureka Mutual Aid Rosemount Mutual Aid Hampton /Randolph n Mutual Aid Northfield Farmington Fire Department 2011 Annual Report 300 250 200 150 100 50 Response by City Comparison 0 Farm ington Empire Castle Rock Eureka Mutual Aid 12007 O 2008 02009 O 2010 2011 Average Response Time 6 Minutes (time of page to time first unit is on scene) 90% Fractile Response Time 11 Minutes (90% of the time, on scene in 11 minutes) Average Number of Personnel per incident: 17 Farmington Fire Department 2011 Annual Report Type of Call 2011 of of 2010 of 2009 of 2008 of 2007 of Calls Calls Calls Calls Calls Calls FALSE CALLS False Alarm 102 45% 89 116 80 62 FIRE Structure 8 4% 17 5 13 7 In Structure 8 4% 6 7 10 4 Vehicle 5 2% 9 6 6 4 Grass/Brush 6 3% 5 12 7 8 Rubbish 2 1% 4 10 2 5 Outside 2 1% 2 1 0 2 Equipment Fire Other 2 1% 3 6 5 8 RESCUE/EMS 10/52, Rescue 5 2% 11 27 11 14 Asst. HAZARDOUS CONDITION NO FIRE Gas Leak 25 11% 18 26 25 22 (Nat/LPG) CO Alarm 5 2% 10 10 6 17 Power Lines 3 1% 8 4 10 3 Combustible 0 0% 4 1 2 3 Spill Electrical 6 3% 3 10 1 2 Problem Overheated 1 <1% 0 0 0 1 Motor Haz. Cond. 16 7% 11 1 2 Other GOOD INTENT Cancelled En- 21 9% 25 29 21 33 Route Public Assist 3 1% 4 1 10 15 Smoke Scare 4 2% 10 17 4 4 Good Intent 3 1% 0 11 10 12 Other SEVERE WEATHER Lightning 0 0% 2 0 2 5 Strike SPECIAL INCIDENTS Citizen 0 0% 1 2 Complaints Total: 227 100% 257 324 230 225 14 52 350 300 250 200 150 100 50 0 2004 2005 Farmington Fire Department 2011 Annual Report 2006 2007 15 53 2008 2009 2010 2011 Severe Weather Citizen Complaint Good Intent Cancelled En Route Service Calls Hazardous Condition No Fire Rescue Assist Fires Other Structure In Structure Fires False Calls Type of Response Comparison by Year 0 50 100 150 2007 12008 12009 12010 2011 Response by Year 24 257 230 227 76 84 350 300 250 200 150 100 50 0 2004 2005 Farmington Fire Department 2011 Annual Report 2006 2007 15 53 2008 2009 2010 2011 Severe Weather Citizen Complaint Good Intent Cancelled En Route Service Calls Hazardous Condition No Fire Rescue Assist Fires Other Structure In Structure Fires False Calls Type of Response Comparison by Year 0 50 100 150 2007 12008 12009 12010 2011 Response By Day of Week 40 38 35 30 25 20 15 10 5 —36 34 34 2b 21 26 18 11 28 19 17 12 17 15 7 1 lac <4 e �acor o ils 4a S P c 61" ,c.‘04 Oro i Sun Mon Tues Wed Thurs Fri Sat Response by Month 35 30 25 20 15 10 5 0 -55-------- 47 2b 21 24 18 11 19 17 12 17 15 7 1 lac <4 e �acor o ils 4a S P c 61" ,c.‘04 Oro Response by Time of Day 60 50 40 30 20 10 -55-------- 47 39 23 11 0 O O O 0 r N O O O O O 0 O O O O r N Farmington Fire Department 2011 Annual Report 16 54 Farmington Fire Department 2011 Annual Report Rescue Squad P1 E RESC� Fly U EMERGENCY CARE STARTS WITH 911 By: Rescue Assistant Chief Todd Kindseth Up to twenty two of the department's Fire Fighters are also members of the department's Rescue Squad. Effective December 19, 2011 the compliment of the Rescue Squad was increased from twenty to twenty two. The additional members will be added to station 2. The role of the Rescue Squad is to provide support for the primary provider at major emergency medical incidents, provide basic life support care until the primary provider arrives on scene as well as provide extrication and water /ice rescue services. These are all services that the department is expected to provide and which are typically provided by the entire department in our neighboring communities. By limiting the response to the Rescue Squad instead of the full department, the expenses incurred are reduced and better customer service is provided. The split station response is also working well for the Rescue Squad. For the full Rescue Squad pages in 2011 there was an average turnout of 7 members. For the station 1 only pages the average was 5 and it was 4 for the station 2 only pages. This reduction equates to a savings of approximately 336 personnel hours. In 2011 the Rescue Squad responded to 274 calls. This is fairly consistent with last year's count of 272. The allocation of the Rescue Squad responses within the city and to the Townships as compared to 2010 is as follows: The responses within the Farmington City limits it remained consistent at 84 the calls to Castle Rock decreased from 7% to 4 Empire increased from 8% to 9% and Eureka stayed at about 2 The majority of the responses were for medical assists. The Rescue Squad average response time was 7 Minutes from time of page to time first unit is on scene and 90% of the time the response time was 12 Minutes or less. The Rescue Squad is made up of 2 EMT -P's, 10 EMT -B's and 8 First Responders. 17 55 Farmington Fire Department 2011 Annual Report Rescue Squad Statistics Call Location Number of Calls Percent of Calls Farmington 230 83.9% Castle Rock 12 4.4% Empire 26 9.5% Eureka 5 1.8% Mutual Aid 1 .4% Totals 274 100% Rescue Incident Response by City 1.8% 4.4% 0.4% 9•5% 83.9% Farmington Empire Castle Rock Eureka o Mutual Aid 18 56 Rescue Response by Year 500 450 400 370 350 300 250 274 200 150 100 50 0 2004 2005 1 2006 1 2007 I 1 2008 2009 1 2010 2011 Farmington Fire Department 2011 Annual Report Rescue Squad Statistics Call Location Number of Calls Percent of Calls Farmington 230 83.9% Castle Rock 12 4.4% Empire 26 9.5% Eureka 5 1.8% Mutual Aid 1 .4% Totals 274 100% Rescue Incident Response by City 1.8% 4.4% 0.4% 9•5% 83.9% Farmington Empire Castle Rock Eureka o Mutual Aid 18 56 400 350 300 250 200 150 100 50 0 Rescue Response by City Comparison Farmington Empire Castle Rock Eureka 2007 2008 2009 2010 2011 Type of Call Rescue/EMS Other Medical Assist/Assist EMS Crew Motor Vehicle Accident w/Injury Cancelled En -Route Other Farmington Fire Department 2011 Annual Report Total: Rescue Squad Type of CaII Response 22% 0% 4% 7% 1111067% a Rescue /EMS Other Medical Assist/Assist EMS Crew Motor Vehicle Accident w /Injury or Extrication Other Cancelled En -Route Average Response Time 7 Minutes (time of page to time first unit is on scene) 90% Fractile Response Time 12 Minutes (90% of the time, on scene within 12 minutes) Average Number of Personnel per incident: 7 19 57 Number of Calls 1 182 20 61 10 274 Percentage of Total 0.4% 66.4% 7.3% 22.3% 3.6% 100% Rescue All Stations: 140 Rescue Station 1: 66 Rescue Station 2: 68 274 Farmington Fire Department 2011 Annual Report 51% 24% 25% 100% Total Training Hours: 404 Total Incident Hours: 1,827 Total Personnel Hours: 2,231 Rescue Response by Station Rescue All Stations: Rescue Station 1: Rescue Station 2: 20 58 Farmington Fire Department 2011 Annual Report Runs by Dispatch Reason Provider Impression of Runs of Runs Abdominal Pain 5 1.82% Altered Mental Status 6 2.19% Back Pain (Non Traumatic/Non- Recent Trauma) 1 0.36% Behavioral/Psychiatric Disorder 2 0.73% Cardiac Arrest 3 1.09% Cardiac Rhythm Disturbance 4 1.46% Chest Pain 19 6.93% CHF 1 0.36% COPD 3 1.09% Diabetic Problem 1 0.36% ETOH Abuse 3 1.09% Fever 1 0.36% Headach 2 0.73% Heat Exhaustion/Stroke 1 0.36% Hypotension 1 0.36% Nausea 1 0.36% No Apparent Injury 4 1.46% Not Applicable 115 41.97% OB/Delivery 1 0.36% Other 7 2.55% Pain 11 4.01% Patient Assist 1 0.36% Poisoning/Drug Ingestion 2 0.73% Respiratory Distress 26 9.49% Seizure 8 2.92% Stroke /CVA 1 0.36% Substance Abuse 1 0.36% Syncope/Fainting 2 0.73% TIA 1 0.36% Traumatic Injury 27 9.85% Unconscious/Fainting 7 2.55% Unknown Problem 2 0.73% Weakness 4 1.46% Total: 274 100.00% 21 59 Rescue Response by Month 40 35 35 30 28 25 20 15 23 24 22 23 2 1 19 22 21 22 14 0 ,a J1' c`e6 §c) 1 A P J �J e� e G ,ope' c e eel Farmington Fire Department 2011 Annual Report 60 50 40 30 20 10 50 40 30 20 10 0 Rescue Response By Day of Week 40 37 42 39 36 1 40 35 Sunday Monday Tuesday Wednesday Thursday Friday Saturday Rescue Response by Time of Day 24 33 55 JV 52 54 0 0001 0401 0801 1201 1601 2001 0400 0800 1200 1600 2000 2400 22 60 Farmington Fire Department 2011 Annual Report Fire Marshal's Report By: John Powers 2011 has been another great year for the Farmington Fire Department and it has been especially rewarding for me as your Fire Marshal. Below you will fmd some of the hi blights of our year. Insurance Services Office (ISO) conducted our audit this summer. Several long weeks went into preparing for this and conducting a water shuttle drill with our neighboring departments. This audit is a measure of firefighting capabilities of a given department. The 14F1) was graded on communications, training, inspections, pumping capacity, tools, equipment location, and water supply. This rating is important as it is used by insurance companies to determine commercial insurance rates. The better the rating, the lower the rates for our business owners! The complete report has not been finalized, however it looks like our rural rating had dropped from the successful water shuttle drill! Thanks for everyone's hard work! The Dakota Communication Center has made significant improvements in dispatch services to its associated agencies. We are currently working to lower call process times in order to deliver more timely pages to our responders. Part of this was to start using the Motorola Premier 1 CAD. While the switch over was time consuming and somewhat painful, the new system will allow us to better serve the community. I have completed my term as Fire/EMS Operations Chair after 4 years; however I look forward to continuing to help this joint process evolve into a first class dispatch service. Dakota County Fire Investigation Team has also had a successful year. The Team has responded a total of eleven fires last year. We had did not have any requests for assistance in our service area but provided three requests to other departments. The team's goal for 201 is to certify all members as a fire investigator thru the Minnesota Fire Service Certification Board (we are waiting on test results). The Domestic Preparedness Committee, which oversees the Dakota County Special Operations Team, the First Responder Group and the Incident Management Team, has also made large strides this year. We have completed a County wide assessment of target hazards, and our abilities to protect those hazards. During this Risk Assessment we identified needs and prioritized funding to meet the demonstrated needs. Fire Inspections/Permit Issuance is a focus of the Fire Marshal's duties. This year 61 inspections for fire code issues were conducted. 43 fire permits (sprinklers and alarms) and 290 burning permits were issued. I followed up on 22 fire calls that were false in nature, to help assure that the problems were corrected. 21 daycare /foster care inspections were also completed in single family homes. I also conducted 11 inspections /consultations outside Farmington in the surrounding townships for fire response advice. Fire Prevention/Fire Education This is a year round activity as we attend many community events. This is highlighted by Fire Prevention week in October. This is when we visit local schools 4 grade classes to talk about fire safety and have our poster contest. The week is capped off with the Fire Station open houses. 23 61 Farmington Fire Department 2011 Annual Report This past year, I have participated in the following organizations; Fire Marshal's Association of Minnesota Board of Directors International Association of Arson Investigators Dakota Fire Chiefs Association South East Fire Marshals Association Farmington Development Committee Image Trend Development Committee Farmington Fire Department 2011 Annual Report Explorer Post 9470 By: Explorer Post Officers: Josh McClure Dalten Stafford The Farmington Fire Explorer Post 9470 is currently made up of 12 members. Explorers learn about the profession of firefighting and emergency services and what it takes to start a career in the field. The young men and women of the Post have joined for many different reasons and come from different backgrounds, but have found the experiences within the Post to be a uniting factor. The Explorers have worked very hard and have earned the privilege of responding to Fire Department's rescue calls upon completion of their First Responder certification and with the approval of the Rescue Squad's supervision. December 2, 2010 was the first official day of Explore Post 9470 and five teenagers became our first members. Today, 3 of the original members continue to work hard for the post and two of them occupy officer positions. Through the past year, our membership roles have fluctuated for many reasons, including losing members to our nation's armed forces. The post continues to grow and is always interested in new members. We are very proud of those of us who have chosen to serve our country and we support them in their protection of our liberties. In the Post's first official competition at the State Conference in Columbia Heights, we received 3rd Place in Team Gear Donning. At our second conference, held at the Minnesota State Fair, we trained with neighboring posts and supported each other in competition. It was a very rewarding experience. By far, our biggest event was held on Saturday, May 21st, 2011 and began at 0700. The name given to this unique experience is "Fire House Living" and is a 24 hour shift wherein the Explorers act and respond as the duty crew to a series of calls set up by our advisors. We were also joined by EMS Post 3300 from Northfield. Both posts were dispatched to fire and EMS responses and had our skills put to the test as we extinguished fires, rescued victims and transported the sick and injured to our "hospital" at station 2. We did everything that day from cooking meals, to cleaning and servicing trucks, to taking care of station duties and training in between calls. After going through the Fire House Living all of the explorers gained a more thorough appreciation for what it takes to provide emergency services to our community. Post 9470 has also been participating in several fundraising events during the past year to raise money for equipment and uniforms. The explorers earned more than two thousand dollars for their efforts and are putting the money toward dress uniforms this year. Future fundraising events are hoped to provide funding for training and equipment as the Post moves forward. By far, the most fun (and the most work) was the Haunted Fire House. It took many days and late nights of hard work from 25 63 Farmington Fire Department 2011 Annual Report Explorers and Advisors alike to get it ready and we plan to continue the annual event for years to come. For our near future, we are about to begin our Fire Fighter 1 course starting January and look forward to our next Fire House Living in May. We continue to work hard, serve our community and support our Fire Department as they support us! 26 64 Throughout the year, the Farmington Fire Department participates and hosts many community events to improve and promote public safety awareness. The number of requests for station tours and event participation by youth groups, daycare providers and community organizations continues to increase. Whenever possible, members of the department volunteer their time to accommodate these requests. In 2011 members of the department participated in the following events: Farmington Community Expo Several Dew Days events Salvation Army Kettle Program Pond and Park Clean up Midwest Mopars EMS coverage Neighborhood Block Parties Business Community Events Southern Cruzers EMS coverage Red Cross Blood Drive Farmington Fire Department 2011 Annual Report Public Relations National Night Out Support our Troops Haunted House Toys for Town Community Ed Events Military Family Day Rambling River Center Fundraising Events Patriotic Service Day Numerous parades in neighboring communities Warrior to Citizen Events Fire prevention week was October 9th through the 15`". As we do every year, John Powers, along with several firefighters visited the elementary schools to talk with the 4 grade students about fire prevention and safety. We also held an open house at station 2 that was well attended by the public. The members put in numerous hours planning this event. 2011's open house was by far our most successful. 27 65 Farmington Fire Department 2011 Annual Report Turkey Bingo Fundraiser The Farmington Fire Department Relief Association held its 61st annual Turkey Bingo Party on November 12` This event continues to be much anticipated and well attended by the public. The support from the local business community in the form of donations of raffle and door prizes continues to be strong and is very much appreciated. The firefighters put many hours into preparing and executing this event. This year's bingo party was the most successful that we have ever had. The Relief Association also published a fire prevention calendar this year. This is the sixth year that a calendar has been published and is typically distributed during Fire Prevention Week. In addition to being an effective method of communicating fire prevention messages, the calendar has become a major fundraiser for the Relief Association through the sale of advertising space. The Calendar Committee puts a lot of time and effort to make this a success. Funds raised from these events will be used to purchase equipment for the department that in not currently provided through the city budget. This year funds we used to purchase new and replacement cut -off and chain saws as well as 2 training manequines. 28 66 Farmington Fire Department 2011 Annual Report Membership Early in 2011 we hired 5 new firefighters to replace those that retired or resigned over the course of 2010. The efforts required from the new member committee and city staff to accomplish this is greatly appreciated. The members that we have brought on are energetic and excited to be with us. We look forward to their contributions for many years to come. I would also like to thank these new members for their hard work and dedication in completing the training courses and certifications offered throughout the year. During the course of 2011 we had 2 members resign from the department. Matt Homerin resigned from the department effective July 4 after 4 years of service and Travis Pugliese resigned from the department effective October 24 after 7 months of service. Much to the surprise of many of our citizens, the City of Farmington does not have full time firefighters. Our Firefighters serve on a paid on -call basis, which means they are paid a small wage only for the time they put in. Our members hold regular jobs and strive to strike a balance between the demands of work and home. When their pager sounds they stop whatever they are doing, rush to the fire station, to help those in need. They make great sacrifices in time away from their family, friends and work to serve their community. There is no other group within the city that puts forth this kind of commitment to community service. Their service and sacrifice is greatly appreciated. We would not be able to do what we do without the support of our friends and families. As always, we would like to thank the friends and family members of our firefighters for their continued support. 29 67 Farmington Fire Department 2011 Annual Report 15 -20 20 -25 25 -30 >30 4 9% 4% 2% 10 -15 4% 5 -10 25% Active Members Years of Service lb <5 5 -10 10- 15 •15- 20 52% of the Department has less than 5 years experience 33% of the Department has more than 20 years experience 15% of the Department has between 5 and 20 years experience 30 68 Farmington Fire Department Service Area 15 14 Farmington Fire Department 2011 Annual Report 07 I 11 =o c 31 69 CASTLE ROCK TO: Mayor, Councilmembers, and City Administrator FROM: Brenda Wendlandt, Human Resources Director SUBJECT: VEBA Welfare Benefit Plans Trust Agreement DATE: January 17, 2012 INTRODUCTION The purpose of this memorandum is to provide information and request approval for the Welfare Benefits Plan Trust Agreement between the City of Farmington and MG Trust Company, LLC (the Trustee). DISCUSSION The City offers a High Deductible Health Plan with a Health Reimbursement Arrangement (HRA) as part of its benefit package. In conjunction with the HRA, the City has established a trust account to provide for the benefit offered through the HRA to be held in a trust account. The trust is intended to meet the requirements of Section 50(c)(9) of the Internal Revenue Code, as amended, as a tax- exempt voluntary employee's beneficiary association (VEBA). The City is working with our third party Administrator, SelectAccount, and MG Trust Company to transfer the City's VEBA trust account from Wells Fargo, N.A. to MG Trust Company, LLC. The attached trust agreement holds all money and future investments and earnings in trust and shall be administered by MG Trust Company, LLC as the Trustee for the purpose of providing benefits to persons eligible to receive benefits under the City's HRA plan(s). This agreement has also been reviewed by the City Attorney and though there is a concern about some of the contract provisions, this proposal is more cost effective and time efficient on the day to day management as compared to our current contract with Wells Fargo. ACTION REOUESTED Approve the Welfare Benefits Plan Trust Agreement between the City of Farmington and MG Trust Company, LLC. Respectfully Submitted, Brenda Wendlandt, SPHR Human Resources Director cc: file City of Farmington 430 Third Street Farmington, Minnesota 651.280.6500. Fax 651.280.6g99 ww.uci.farmingtinn.nin. as 70 7 MG TRUST COMPANY, LLC PUBLIC EMPLOYER VEBA TRUST AGREEMENT 71 TABLE OF CONTENTS AGREEMENT 1 ARTICLE I DEFINITIONS 1 1.01 Affiliated Employer 1 1.02 Beneficiary 2 1.03 Code 2 1.04 Confidential Information 2 1.05 Designated Representative 2 1.06 Eligible Employee 2 1.07 Employer 2 1.08 ERISA 2 1.09 Force Majeure 2 1.10 Instructions) 2 1.11 Investment Manager 2 1.12 IRS 2 1.13 Named Fiduciary 2 1.14 Participant 2 1.15 Person 3 1.16 Plan 3 1.17 Plan Administrator 3 1.18 Trust 3 1.19 Trust Agreement 3 1.20 Trust Fund 3 1.21 Trustee 3 ARTICLE II ESTABLISHMENT AND PURPOSE OF THE TRUST 3 2.01 Designation 3 2.02 Purpose 3 2.03 Exclusive Benefit 4 2.04 Return of Amounts to the Employer 4 2.05 Superseding Effect of the Trust Agreement 4 -i- 72 Page TABLE OF CONTENTS (continued) 73 Page ARTICLE III ACCEPTANCE OF, CONTRIBUTIONS TO, DISTRIBUTIONS FROM TRUST 5 3.01 Acceptance of Trust 5 3.02 Receipt of Contributions 5 3.03 No Separate Trusts 5 3.04 Distributions 5 ARTICLE IV MANAGEMENT AND CONTROL OF TRUST FUND ASSETS 6 4.01 Standard of Conduct and Liabilities of Fiduciaries 6 4.02 Trustee's Powers of Investment and Management 6 4.03 Investments 10 4.04 Authority of Trustee 10 4.05 Power to Do All Necessary Acts 10 4.06 Voting of Proxies 10 4.07 Appointment of Investment Manager and Power to Direct Trustee 10 4.08 Employer Representations and Warranties 11 ARTICLE V THE PLAN ADMINISTRATOR, THE DESIGNATED REPRESENTATIVE AND THE EMPLOYER 12 5.01 Action by the Plan Administrator 12 5.02 Action by an Employer 12 5.03 Formal Action by Employer 12 5.04 Appointment of Designated Representative; Action by the Designated Representative 12 ARTICLE VI THE TRUSTEE 13 6.01 Reliance on Written Instrument 13 6.02 Action by the Trustee 13 6.03 Consultation with Counsel and Accountant 13 6.04 Bond Not Required 13 6.05 Returns, Reports and Information 13 6.06 Indemnification 13 6.07 Acts of Prior Trustees 14 6.08 Plan Assets Not Held in Trustee's Trust 14 -ii- ARTICLE VII DISPUTE RESOLUTION ARTICLE VIII ACCOUNTS AND RECORDS ARTICLE IX FEES AND EXPENSES 9.01 Expenses of Administration 9.02 Authorization with Respect to Taxes ARTICLE X 10.06 ARTICLE XI ARTICLE MI 12.01 TABLE OF CONTENTS (continued) 14 15 15 15 16 RESIGNATION OR REMOVAL OF TRUSTEE; SUCCESSOR TRUSTEE 10.01 Resignation; Removal of the Trustee 10.02 Appointment of Successor Trustee 10.03 Transfer of Assets to Successor Trustee 10.04 Terminating Trustee's Accounting 10.05 Changes in Organization of Trustee Employer Bankruptcy AMENDMENT OF TRUST ADDITIONAL EMPLOYERS Adoption of Trust 12.02 Withdrawal from Trust ARTICLE XIII TERMINATION OF TRUST 13.01 Termination of Trust Fund 13.02 Continuation by an Employer's Successor 13.03 Liquidation of Trust ARTICLE XIV MISCELLANEOUS 14.01 Applicable Law 14.02 Evidence 14.03 Notices 14.04 Limitation on Claims 14.05 Severability of Provisions 14.06 Trust Qualification 14.07 Construction of Trust Agreement 14.08 Spendthrift Provisions -iii 74 Page 16 16 17 17 17 17 18 18 18 18 19 19 19 19 19 19 19 20 20 20 20 20 20 20 TABLE OF CONTENTS (continued) Page 14.09 Title of Trust Assets 21 14.10 Rights Determined from Entire Instrument 21 14.11 Waiver 21 14.12 Word Usage 21 14.13 Assignment 21 14.14 Force Majeure 21 14.15 Complete Agreement 21 14.16 Confidentiality 21 14.17 USA Patriot Act Notification 21 14.18 Execution in Counterparts 22 -iv- 75 EMPLOYER AND PLAN IDENTIFYING INFORMATION Employer (Plan Sponsor): City of Farmington Address: 430 Third Street City: Farmington State: MN Zip: 55024 Phone Number: (651) 280 -6806 Plan Name: City of Farmington HRA Trust Original Effective Date of Plan: Trust Tax ID#: 41- 6568907 Trust fiscal year end date: December 31, 2012 Plan Administrator (if different from Plan Sponsor): Address: City: State: Zip: Phone Number: Designated Representative: Mil Life. Inc.. dba SelectAccount Address: P.O. Box 64193 City: St. Paul State: MN Zip: 55164 Phone Number: (651) 662 -2320 AGREEMENT This Directed Trustee Agreement "Trust Agreement') is entered into by and between the Employer, the Designated Representative, and MG Trust Company, LLC "Trustee effective as of December 20, 2012. ARTICLE I DEFINITIONS For purposes of the Trust Agreement, the following terms shall have the meanings respectively indicated unless the context clearly requires otherwise: 1.01 Beneficiary. "Beneficiary" means any Person or entity entitled to receive benefits which are payable upon or after a Participant's death pursuant to the Plan. 1.02 Code. "Code" means the Internal Revenue Code of 1986, as amended from time to time. References to any section of the Code shall include any successor provision thereto. 1.03 Confidential Information. "Confidential Information" shall mean (individually and collectively) proprietary information of the parties to this Trust Agreement, including but not limited to, their inventions, confidential information, know -how, trade secrets, business affairs, prospect lists, product designs, product plans, business strategies, finances, and fee structures. "Confidential 76 Information" as defined by this agreement shall include all non public data as defined by the Minnesota Government Data Practices Act, Minnesota Statutes Chapter 13. 1.04 Designated Representative. "Designated Representative" means any Person named above or in Instructions provided to the Trustee, and as set forth in Employer and Plan identifying information provided to the Trustee, who is authorized by the terms of this Agreement and the Designation of Representative attached as Exhibit A, to give directions to the Trustee or to act on behalf of the Plan Administrator hereunder. 1.05 Eligible Employee. "Eligible Employee" means an employee and/or retiree who is eligible to participate in the Plan, as set forth in the Plan documents. above: 1.06 Employer. "Employer" means the sponsor of the Plan and related Trust designated 1.07 ERISA. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time, or, if the Employer, Plan, or voluntary employees beneficiary association "VEBA is not subject to ERISA (i.e., because the arrangement is a governmental plan established by a public employer), ERISA means any comparable and applicable provisions of State law. Use of the term "ERISA" in this Trust Agreement, regardless of its specificity or context, shall not cause any Plan, VEBA, Employer, Trustee, or other party in interest or fiduciary that would not otherwise be subject to ERISA to become subject to ERISA, to fall within the jurisdiction of any regulatory authority charged with enforcement of ERISA, or to held to any standard or requirement of ERISA that varies from applicable State law. 1.08 Force Majeure. "Force Majeure" means a cause or event outside the reasonable control of the parties or that could not be avoided by the exercise of due care, such as an act of God or any mechanical, electronic or communications failure. 1.09 Instruction(s). "Instruction(s)" means any oral, written, or electronic direction given to the Trustee in a form and manner required or accepted by the Trustee. The Trustee may require that any Instruction be in writing or in an electronic format, and may recognize standing requests, directions, or requisitions as Instructions. 1.10 Investment Manaeer. "Investment Manager" means a Person defined as such under ERISA Section 3(38) that is identified as such in Instructions to the Trustee, and who is appointed in accordance with Section 4.07 to manage, acquire or dispose of any portion of the Trust Fund. Investment Manager may also be a State governmental entity if permitted by applicable State law. 1.11 IRS. "IRS" means the Internal Revenue Service. 1.12 Named Fiduciary. "Named Fiduciary" means the Employer, a named fiduciary of the Plan within the meaning of ERISA, or such other Person as is so designated under the Plan's terms and identified as such in Instructions to the Trustee. 1.13 Participant. "Participant" means an Eligible Employee who participates in the Plan as provided in the Plan, and shall include any employee, former employee, or dependent of any of the foregoing who is eligible to participate in and receive benefits from the Plan, and shall include the Beneficiary(ies) with respect to any deceased employee or former employee for such time as the Beneficiary is entitled to participate in the Plan -2- 77 1.14 Person. "Person" means an individual, committee of individuals, partnership, limited liability partnership, joint venture, corporation, limited liability corporation, mutual Employer, joint -stock Employer, non -profit or not for profit organization, trust, estate, unincorporated organization, association or employee organization. 1.15 Plan. "Plan" means the employee welfare benefit plan or plans listed above, as presently in force or as hereafter amended by the Employer from time to time, some or all of the assets of which are held by the Trustee pursuant to the terms of this Trust Agreement. The Plan may consist of health, accident, life insurance, and other such benefits permitted under Section 501(c)(9) of the Code for Eligible Employees and their dependents and Beneficiaries, the governing instruments of which shall be on file with the Designated Representative. The Employer shall not be under any obligation to provide any specific type or level of benefits to Eligible Employees and their dependents and Beneficiaries solely because of this Trust Agreement. 1.16 Plan Administrator. "Plan Administrator" shall have the meaning provided in the Plan. 1.17 Trust. "Trust" means the legal entity resulting from the Trust Agreement between the Employer(s) and the Trustee who receives the contributions, and holds, invests and disburses funds to and for the benefit of Participants and their Beneficiaries, and each separate trust, if any, existing hereunder at the time in question. If the Plan existed prior to the effective date of this Trust Agreement, the Trust shall constitute a continuation by means of an amendment and restatement of each of the prior trusts from which Plan assets are transferred to the Trustee. 1.18 Trust Agreement. "Trust Agreement" means this Directed Trust Agreement between the Employer and the Trustee, as reflected herein, provided that if this instrument, pursuant to its terms, be amended, "Trust Agreement" as at a particular date, shall mean this instrument, as amended and in force on such date. 1.19 Trust Fund. "Trust Fund" means all assets of whatsoever kind or nature from time to time held by the Trustee pursuant to this Trust Agreement, without distinction as to income and principal. 1.20 Trustee. "Trustee" means MG Trust Company, LLC and any duly appointed additional or successor Trustee or Trustees acting hereunder. ARTICLE II ESTABLISHMENT AND PURPOSE OF THE TRUST 2.01 Designation. The Employer hereby establishes the Trust. The Trust shall consist of an initial contribution of money or other property, acceptable to the Trustee in its sole discretion, made by the Employer or transferred from a previous trustee under the Plan, and such additional sums of money or other property acceptable to the Trustee in its sole discretion, as shall from time to time be delivered to the Trustee under the Plan, all investments made therewith and proceeds thereof, and all earnings and profits thereon, less the payments that are made by the Trustee as provided herein. 2.02 Purnose. This Trust is part of the Plan. The purpose of this Trust is to implement the Plan, which provides certain benefits for the Employer's Eligible Employees who become Participants. The Employer intends the Trust to qualify as a tax exempt trust of a voluntary employees' beneficiary association "VEBA within the meaning of Section 501(c)(9) of the Code and the regulations issued thereunder, and if applicable, to comply with ERISA. Should the income of the Trust become subject to unrelated business income tax, the Employer shall so notify the Trustee. The Employer established the -3- 78 Trust to provide funding only for benefits that are permitted to be provided by a VEBA under Code Section 501(c)(9) and that are payable to Eligible Employees of the Employer. Any benefits provided to retirees or other former employees through the Plan and this Trust are pursuant to the continuation of an active employee benefit program under the Plan or other predecessor plans thereto. 2.03 Exclusive Benefit. This Trust shall be maintained for the exclusive benefit of Participants and their Beneficiaries and, to the extent permitted by the Plan, the payment of reasonable Plan administration expenses. Except as provided under applicable law or otherwise provided in Section 2.04 below, no part of the Trust Fund shall be used for, or diverted to any purpose other than that stated in this Section 2.03. It is intended that this Trust Agreement be construed so that no disqualified benefit (within the meaning of Section 4976 of the Code) be provided hereunder. 2.04 Return of Amounts to the Employer. The Trustee will return contributions to the Employer if the Employer or the Plan Administrator provides Instructions to the Trustee to do so. The Employer agrees that at no time prior to the satisfaction of all liabilities to Participants and their dependents and Beneficiaries under the Plans shall any part of the net earnings of the Trust Fund inure to the benefit of the Employer or any individual other than through the payment of benefits permitted by such Plan and this Trust Agreement, nor shall any part of the corpus or income of the Trust be used for, or diverted to, purposes other than for the exclusive benefit of such Participants and their dependents and Beneficiaries. Notwithstanding the above, Trust Funds maintained for a Plan may be refunded to the Employer upon its Instruction to the Trustee in the following circumstances if, and only if, a Plan expressly so provides for such refund: (a) A contribution is made to the Trust Fund by the Employer because of a mistake of fact and is returned to the Employer within one (1) year after payment of such contribution; (b) A contribution is conditioned on qualification of the Plan as exempt from tax under Section 501(a) of the Code, and the contribution is returned within one year after the date of denial of qualification of the Plan; (c) Any excess insurance premiums, based on mortality or morbidity experience of the insurer, may be refunded to the Employer. Any contributions returned will not include gains on such excess contributions, but must be reduced by any losses. If the qualification of a Plan as exempt from tax under Section 501(a) of the Code is denied, the Trust Agreement may be restated as a governmental trust under Section 115 of the Code, and in such event, all assets of the Plan will remain in the Trust Fund pursuant to the terms of the restated Trust Agreement. In all circumstances, it is understood and agreed that the Employer is solely responsible for ensuring that an Instruction to return any amount to the Employer meets all applicable legal requirements, including those of ERISA, as applicable. The Trustee has no duty or responsibility to question, and may conclusively rely upon any such Instruction. 2.05 Supersedine Effect of the Trust Agreement. To the extent there are any inconsistencies between this Trust Agreement and any provisions set forth in the Plan document pertaining to a matter addressed herein, this Trust Agreement shall control, and its provisions shall supersede all other provisions in the Plan pertaining to the duties, responsibilities, obligations and liabilities of the Trustee. Further, this Trust Agreement shall operate as an amendment of the Plan that replaces all references to trustee discretion in the Plan with references to the discretion of the Plan Administrator. Under no circumstances shall the terms of the Plan be interpreted as conferring any investment or administrative discretion on the Trustee. -4- 79 ACCEPTANCE OF CONTRIBUTIONS TO. DISTRIBUTIONS FROM TRUST 3.01 Acceptance of Trust. The Trustee, by affixing its signature to this Trust Agreement, accepts this Trust and agrees to act as Trustee of the Trust according to the terms and conditions of this Trust Agreement, all of which the parties hereto agree, and to which the Employers and the Participants from time to time hereunder, and all those Persons claiming through or under any of them, shall be deemed to have agreed. Nothing contained in the Plan, either expressly or by implication, shall be deemed to impose any powers, duties or responsibilities on the Trustee beyond those imposed by this Trust Agreement. The Trustee shall not have the authority to interpret the Plan. 3.02 Receipt of Contributions. The Trustee shall receive any contributions under the Plan paid to it in cash. All contributions so received, together with the income therefrom, any other increment thereon, and all assets acquired by investment or reinvestment, shall be held, managed, and administered by the Trustee pursuant to the terms of this Trust Agreement without distinction between principal and income and without liability for the payment of interest thereon. The Trustee shall not be responsible for the collection of any contributions under or required by the Plan, but shall be responsible only for cash actually received by it hereunder. The Trustee shall have no power or duty to inquire whether the amount of any contributions delivered to it by an Employer is correct or complies with the terms of the Plan. The Trustee shall have no duty to compute any amount required to be transferred or paid to it by the Employer. 3.03 Separate Accounts for Plans. The Trustee will establish an account for each Employer, and all assets held by it and contributions received by it, and all such contributions and accruals thereto from time to time, shall be held by the Trustee hereunder in the Trust Fund and shall be invested and applied by it as herein provided, and all of the assets in the Trust Fund Shall be available to pay benefits that become payable with respect to the Employer. Notwithstanding the foregoing, the Designated Representative shall create and maintain separate accounts for each separate Plan of the Employer under the Trust Fund. The account of each Plan shall be debited or credited, as the case may be, (i) for the entire amount of every contribution received on behalf of such Plan, every benefit payment or expense or other charge properly allocated to such Plan, and every transaction relating solely to such Plan, and (ii) for its equitable share (i.e., in proportion to the relative balance of its then existing account interest) of any item of allocated or accrued income, gain or loss, and general expenses and other transaction allocable to the Trust Fund as a whole. With every payment of a contribution to the Trust Fund, the Employer shall give written notice to the Designated Representative of the Plan with respect to which the contribution is made. 3.04 Distributions. ARTICLE III (a) Distributions. Upon receipt of Instructions from the Plan Administrator and/or the Designated Representative, the Trustee shall make payments from the Trust Fund in such manner, amounts and times, and for such purposes, as may be specified in such Instructions, or for the payment of fees and expenses pursuant to Article IX "Distributions The Designated Representative shall have the responsibility for making benefit payments under the Plan. The Designated Representative may open a benefit account, including through a commercial checking account in a federally insured banking institution. The Designated Representative shall have the responsibility to assure that any such commercial banking account is established and maintained in accordance with ERISA and is properly insured, as applicable. The Trustee shall make transfers of funds to the benefit account at such time and in such amounts as the Designated Representative may from time to time direct. The Designated Representative shall identify those individuals who are authorized to sign manually or by facsimile -5- 80 signature any and all checks, drafts and orders against the benefit account, and the depository bank is authorized to honor any and all checks, drafts and orders so signed, regardless of by whom or by what the actual or purported facsimile signature or signatures may have been affixed thereto, if such signature or signatures resemble those duly filed. The Designated Representative shall have full responsibility with respect to all matters relating to the benefit account, including the power to direct stop payment on any check, draft or order, and to reissue and deposit checks. The Trustee shall have no duty to question the propriety of any direction of the Designated Representative to make transfers from the Trust Fund to the benefit account, to account for funds retained in or disbursed from the benefit account, or to pay any tax arising by reason of any benefit payment. (b) Trustee Liability for Distributions Pursuant to Instructions. The Trustee shall not be liable for any Distribution made by it pursuant to Instructions received from the Designated Representative and/or the Plan Administrator, and shall be under no duty to make inquiry as to whether any Distribution directed by the Designated Representative and/or the Plan Administrator is made pursuant to the provisions of the Plan or any applicable law, or as to the effect of any Instruction for tax purposes or otherwise. Likewise, the Trustee need not see to the application of any Distribution made to or for the benefit of a Participant pursuant to the Instructions of the Designated Representative and/or the Plan Administrator. (c) Limitations. The Trustee shall neither be responsible for the adequacy of the Trust Fund to discharge any payments and liabilities under the Plan, nor be required to make any Distributions under the Plan in excess of the net realizable value of the assets of the Trust allocable to such Plan at the time of the Distribution. The Trustee shall not be required to make any Distribution in cash unless the Designated Representative and/or the Plan Administrator has/have provided Instructions as to the assets to be converted to cash for the purpose of making such Distribution. ARTICLE IV MANAGEMENT AND CONTROL OF TRUST FUND ASSETS 4.01 Standard of Conduct and Liabilities of Fiduciaries. (a) The Trustee and each fiduciary hereunder shall discharge its duties hereunder solely in the interest of the Participants and for the exclusive purpose of providing benefits to Participants and for paying reasonable expenses of administering the Plan. The Trustee and each fiduciary hereunder shall perform all of its duties with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims, or in accordance with such other standard as may, from time to time, be required by law, and in accordance with the Plan and this Trust Agreement, insofar as they are consistent with ERISA. The Trustee and each fiduciary hereunder shall not cause the Trust to engage in a transaction if it knows or should know that such transaction directly or indirectly constitutes a prohibited transaction under ERISA Section 406 or Section 407 that is not exempt under ERISA Section 408, as applicable. The fiduciary standards reflected in this Section 4.01(a) shall apply to the parties hereunder according to and limited by the scope of such party's duties, as expressly described in this Trust Agreement. (b) Except as may be authorized by regulations promulgated by the Secretary of Labor, the Trustee shall not maintain the indicia of ownership in any assets of the Trust Fund outside of the jurisdiction of the District Courts of the United States. -6- 81 4.02 Trustee's Powers of Investment and Management. (a) The Trustee shall have no discretion over the investment of Trust assets, no responsibility for the selection of investment options under the Trust, and shall not render investment advice to any Person in connection with the selection of such options. Except to the extent required by ERISA or as otherwise provided in this Trust Agreement, the Trustee shall have no duty or responsibility to review, initiate action, or make recommendations regarding Trust assets and the Trustee shall retain assets until it receives Instructions from the Designated Representative and/or the Plan Administrator regarding disposal of them. Except as provided below, the Plan Administrator shall have all power over and responsibility for the management, disposition, and investment of the Trust assets, and the Trustee shall comply with the Instructions of the Plan Administrator concerning those assets. The Plan Administrator represents to the Trustee that it shall not issue Instructions that violate the terms of the Plan and Trust or that are prohibited by the fiduciary responsibility rules of ERISA. (b) The Plan Administrator shall have the exclusive authority and discretion to select the investments pursuant to Section 4.03, and to provide Instructions to the Trustee regarding investment of contributions hereunder unless an Investment Manager is appointed for such purpose. If permitted under the Plan, the Designated Representative shall maintain separate accounts for Participants under one or more Plans and each separate account for each Participant under each Plan shall be maintained in accordance with procedures and/or systems approved or arranged by the Employer. The Employer may direct the Trustee in writing to divide the Trust Fund into two (2) or more subfunds, including an interest bearing account to hold balances in Employees' accounts below a minimum threshold determined by the Employer (the "Base Account and an array of investment subfunds which shall serve as vehicles for the investment of Employees' accounts at the direction of Employees. The Employer shall determine the general investment characteristics and objectives of each investment subfund. The Employer or the investment manager designated by the Employer, as the case may be, shall have complete investment discretion over each investment subfund assigned to it, subject only to the general investment characteristics and objectives established for the particular investment. The Employer acknowledges and agrees that the Trustee shall not select the Base Account or the investment subfunds. The account of each Participant shall have a ratable interest in the Base Account or investment subfund. Participant directions regarding investments of such accounts shall be furnished to the Plan Administrator under procedures adopted by the Employer and/or the Plan Administrator consistent with the Plan document, and the Designated Representative and/or the Plan Administrator shall provide Instructions to the Trustee regarding the investment of such amounts. The Plan Administrator is responsible for ensuring that the design and operation of a Participant directed investment program satisfies the requirements of the Plan. The Trustee shall not be liable for any loss, or by reason of any breach, which results from such Participant's exercise of control with respect to Plan investments. If a Participant who has the right to direct investments under the terms of the Plan fails to provide such direction to the Plan Administrator, the Plan Administrator shall direct the investment of such Participant's account. The Designated Representative and/or the Plan Administrator shall maintain records showing the interest of each Participant and/or Beneficiary in the Trust Fund. The Trustee shall have no duty or responsibility to review, make recommendations, or otherwise render advice regarding investments made pursuant to Instructions received from the Plan Administrator or the Designated Representative, and shall be required to act only upon receipt of such Instructions. (c) When acting hereunder, subject to the Instructions of the Designated Representative and/or the Plan Administrator, as provided in the remaining Sections of this Trust Agreement, the Trustee shall have the following powers with respect to any and all cash and other assets at any time held by it and constituting part of the Trust Fund: -7- 82 (1) To purchase or subscribe for securities or other property and to retain them in trust to sell any securities or other property at any time held by it at either public or private sale for cash or other consideration or on credit at such time or times and on such terms and conditions as may be deemed appropriate; to exchange such securities or other property and to grant options for the purchase or exchange thereof, and to convey, partition or otherwise dispose of, with or without covenants, including covenants of warranty of title, any securities or other property free of all trusts; to charge the Trust for the cost of all securities purchased or received against a payment and to credit the Trust with the proceeds received from the securities sold or delivered against payment. For any trades not settled immediately upon placement, the Trustee shall have the right to sell securities from the Trust in a reasonably prudent fashion sufficient to recover any funds advanced; (2) To oppose, or consent to and participate in, any plan of reorganization, consolidation, merger, combination or other similar plan; to oppose or to consent to any contract, lease, mortgage, purchase, sale or other action by any corporation pursuant to such plan, and to accept and retain any securities or other property issued under any such plan; to deposit any securities or other property with any protective, reorganization or other similar Plan Administrator; to delegate discretionary power thereto and to pay and agree to pay part of its expenses and compensation and any assessments levied with respect to any such securities or other property so deposited; (3) To assign, renew, extend or discharge or participate in the assignment, renewal, extension or discharge of any debt, mortgage or other lien, upon such terms, including a partial release, as may be deemed advisable by the Trustee, and to agree to a reduction in the rate of interest thereon or to any other modification or change in the terms thereof or of any guarantee pertaining thereto, in any manner and to any extent that may be deemed in the best interest of the Trust Fund; to waive any default, whether in the performance of any covenant or condition of any note, bond or mortgage or in the performance of any guarantee, or to enforce any such default in such manner and to such extent as may be deemed advisable; to exercise and enforce any and all rights of foreclosure and to exercise and enforce, in any action, suit or proceeding at law or in equity, any rights or remedies in respect of any debt, mortgage, lien or guarantee; (4) To exercise all conversion and subscription rights pertaining to any securities or other property; (5) Except as limited in Section 3.02 hereof, to collect and receive any and all moneys, securities or other property of whatsoever kind or nature due or owing or belonging to the Trust Fund and to give full discharge and acquittance therefor, (6) Upon the receipt of Instructions from an Investment Manager or other Plan fiduciary, to exercise, personally or by general or limited power of attorney, any right, including the right to vote or grant proxies, discretionary or otherwise, appurtenant to any assets held by the Trust, and the right to participate in voting trusts with other stockholders. The Plan Administrator shall have responsibility for instructing the Trustee as to voting such shares and the tendering of such shares, by proxy or in person, except to the extent such responsibility is delegated to another Person, under the terms of the Plan or Trust Agreement or under an agreement between the Named Fiduciary of the Plan and an Investment Manager, in which case such Persons shall have such responsibility. In no event shall the Trustee be responsible for the voting or tendering of shares of securities held in the Trust or for ascertaining or monitoring whether or how proxies are voted or whether the proper number of proxies is received; (7) To register any securities or other property held by it hereunder in the name of the Trustee or in the names of nominees with or without the addition of words indicating that -8- 83 such securities or other property are held in a fiduciary capacity, to take and hold the same unregistered or in form permitting transferability by delivery, to deposit or arrange for the deposit of securities in a qualified central depository even though, when so deposited, such securities or other property may be held in the name of the nominee of such depository with other securities deposited therein by other Persons, or to deposit or to arrange for the deposit of any securities or other property issued by the United States government, or any agency or instrumentality thereof, with a Federal Reserve bank, provided that the books and records of the Trustee shall at all times disclose that all such securities or other property are part of the Trust Fund; (8) To settle, compromise or submit to arbitration, any claims, debts or damages due or owing to or from the Trust Fund; to commence or defend suits or legal proceedings whenever, in its judgment, any interest of the Trust Fund so requires, and to represent the Trust Fund in all suits or legal proceedings in any court of law or equity or before any other body or tribunal and to charge against the Trust Fund all reasonable expenses and attorney's fees in connection therewith; (9) To borrow money for the purposes of the Trust Fund from others, excluding the Trustee in its corporate capacity and excluding any other party in interest; (10) To invest all or part of the Trust Fund in interest bearing deposits with a bank or similar financial institution related to the Trustee if such bank or other institution is a fiduciary with respect to the Plan as defined in ERISA, including but not limited to investments in time deposits, negotiable order of withdrawal (NOW) accounts, savings deposits, certificates of deposit or time accounts which bear a reasonable interest rate; (11) To invest and reinvest all or a part of the Trust Fund, in accordance with the Designated Representative and/or the Plan Administrator's Instructions, in any available investments and to dispose of all or any part of the Securities or other property which may from time to time or at any time constitute the Trust Fund, in accordance with Instructions provided by the Designated Representative and/or the Plan Administrator, and furnished to the Trustee pursuant to Section 4.03; (12) The Trustee may invest and reinvest all or a portion of the Trust Fund pursuant to an agreement between the Employer and the Trustee establishing a special designated "pooled investment fund" primarily for the purpose of valuing certain trust assets held by the Trustee in a fiduciary capacity. The terms and conditions of such an agreement specifically creating such a pooled investment fund shall be incorporated by reference into this Trust Agreement; (13) To register Trust Fund property in the Trustee's own name, in the name of a nominee or in bearer form, provided the Trustee's records and accounts show that such property is an asset of the Trust Fund; (14) To exercise or dispose of any right it may have as the holder of any security, to convert the same into another security, to acquire any additional security or securities, to make any payments, to exchange any security, or to do any other act with reference thereto; (15) To exchange any property for other property upon such terms and conditions as the Trustee may deem proper, and to give or receive money to effect equality in price; (16) To deposit any security with any protective or reorganization committee, to delegate to that committee such power and authority as the Trustee may deem proper, and to agree to pay out of the Trust Fund that portion of the expenses and compensation of that committee as the Trustee may deem proper; -9- 84 (17) To appoint agents as necessary or desirable, including legal counsel who may be counsel for the Employer; (18) To hold that portion of the Trust Fund as the Trustee may deem necessary for ordinary administration, to transfer assets to another trust or fiduciary, pending investment Instructions, and to disburse funds in cash, without liability for interest, by depositing the same in any bank (including deposits that bear no interest or a reasonable rate of interest in a bank or similar financial institution supervised by the United States or a State, even where a bank or financial institution is the Trustee, or otherwise is a fiduciary of the Plan, subject to the rules and regulations governing such deposits, and without regard to the amount of any such deposit); and 4.03 Investments. (19) To retain insurance contracts that are guaranteed investment contracts. (a) Investment Options. The Plan Administrator and/or the Designated Representative (or, if applicable, the Investment Manager) shall from time to time notify the Trustee in writing or electronically of its selection of the investments available under the Plan. The Plan Administrator (or, if applicable, the Investment Manager) shall have the sole duty to ascertain whether such investments are consistent with the Plan's investment policy, if any, and/or are otherwise a suitable investment of the Plan's assets. Cash or other property received by the Trustee as contributions, or otherwise, as permitted hereunder, shall, per the Plan Administrator's and/or the Designated Representative's Instructions, be credited to any or all of such investments. (b) Investment Direction. The Plan Administrator and/or the Designated Representative shall have the exclusive right, in accordance with the provisions of the Plan, to direct the investment by the Trustee of all amounts allocated to this Trust Fund among any one or more of the available investments. All investment Instructions provided to the Trustee by the Plan Administrator and/or the Designated Representative shall be timely furnished. In making any investment of the assets of the Trust Fund, the Trustee shall be fully entitled to rely on such directions furnished to it by the Plan Administrator and/or the Designated Representative or Named Fiduciary in accordance with the Plan Administrator's and/or the Designated Representative's approved rules and procedures, and shall be under no duty to make any inquiry or investigation with respect thereto. If the Trustee receives any contribution under the Plan that is not accompanied by Instructions directing its investment, the Trustee shall notify the Plan Administrator of that fact within a reasonable period of time, and the Trustee may, in its discretion, hold uninvested or return all or a portion of such contribution without liability for loss of income or appreciation pending receipt of proper investment Instructions. It is specifically intended under the Plan and this Trust Agreement that the Trustee shall have no discretionary authority to determine the investment of the assets of the Trust Fund except as otherwise provided in Section 4.02(d)(18) and this Section 4.03. 4.04 Authority of Trustee. A third party dealing with the Trustee shall not make, or be required by any Person to make, any inquiry concerning the authority of the Trustee to take or omit any action but shall be fully protected in relying upon the certification of the Trustee that it has authority to take such proposed action. No Person dealing with the Trustee shall be required to follow the application by the Trustee of any moneys, securities or other property paid or delivered to the Trustee. 4.05 Power to Do All Necessary Acts. To the extent not inconsistent with the express provisions hereof, enumeration of any power herein shall not be by way of limitation, but shall be cumulative and construed as full and complete power in favor of the Trustee. In addition to the authority specifically herein granted, the Trustee shall have such power to do all acts as may be deemed necessary -10- 85 for full and complete management of the Trust Fund and appropriate to carry out the purposes of this Trust Fund, and shall further have all powers and authorities conferred on trustees by the laws of the State of Colorado. 4.06 Voting of Proxies. The Trustee shall maintain a complete record of the manner in which it votes securities held as part of the Trust Fund, which shall be voted only in accordance with Instructions provided to the Trustee by the Plan Administrator or other Plan fiduciary independent of the Trustee, as provided under this Trust Agreement. 4.07 Anointment of Investment Manager and Power to Direct Trustee. (a) Anointment. The fiduciary named in the Plan as having such authority, may in its sole discretion appoint one or more Investment Managers with respect to some or all of the assets of the Trust Fund as contemplated by ERISA Section 402(c)(3). Any such Investment Manager shall: (1) be registered as an investment adviser under the Investment Advisers Act of 1940 and/or registered under the laws of the applicable state; (2) be a bank, as defined in the Investment Advisers Act of 1940; or (3) be an insurance company qualified to manage, acquire or dispose of Plan assets under the laws of more than one state. The authority of the Investment Manager shall not begin until the Trustee receives Instructions from the Employer regarding the appointment of such Investment Manager. Such Instructions shall specify the scope of the Investment Manager's authority with respect to the assets of the Trust Fund, and the Investment Manager's authority thereunder shall continue and the Trustee shall be fully protected in relying on the notice of appointment provided hereunder until the Trustee receives an Instruction containing notice that such appointment has been rescinded. (b) Power to Direct Trustee. The assets with respect to which a particular Investment Manager has been appointed shall be specified by the Employer, and the Trustee shall account for such assets separately from all other Trust assets. The Investment Manager shall, in accordance with the standard of conduct contained in Section 4.01 hereof, have the duty and power to direct the Trustee in every aspect of its investments specifically including (1) the power to direct the Trustee to invest and reinvest any securities or other property under its management and control so that such investments are diversified so as to minimize the risk of large losses unless under the circumstances it is prudent not to do so, and (2) the voting of proxies with respect to shares of stock which are subject to such Investment Manager's management, control, and responsibility with respect to investment and reinvestment. The Employer shall require the Investment Manager to maintain a record of the reasons for the manner in which it voted such proxies and the date it instructed the Trustee to vote and communicate such information from time to time to the Employer, but not less frequently than annually. The Trustee shall follow the Instructions of the Investment Manager regarding the investment and reinvestment of the Trust Fund or such portion thereof as shall be under management by the Investment Manager. The Trustee shall be under no duty or obligation to review any investment to be acquired, held or disposed of pursuant to such Instructions nor to make any recommendations with respect to the disposition or continued retention of any such investment. The Investment Manager shall have the sole duty and responsibility of determining the acceptability of any contributions of property made under this Trust if such contributed property is to be part of its investment responsibility. (c) Reliance Upon Directions. The Trustee may rely upon any order, certificate, notice, direction, or other documentary confirmation purporting to have been issued or given by an Investment Manager, which the Trustee believes to be genuine and to have been issued or given by such Investment Manager. The Trustee shall not be liable for the acts or omissions of an Investment Manager and shall have no liability or responsibility for acting or not acting pursuant to the direction of, or failing to act in the absence of, any direction from the Investment Manager (except with respect to short-term investments under Sections 4.02(d)(18) and 4.03(a) hereof), unless the Trustee knows that by such action 86 or failure to act, it would be itself committing a breach of fiduciary duty or participating in a breach of fiduciary duty by the Investment Manager, it being the intention of the parties that, except with respect to investments under Sections 4.02(d)(18) and 4.03(a) hereof, the Trustee shall have the full protection of ERISA Section 405(d). 4.08 Employer Representations and Warranties. (a) Proper Anointment of Investment Manager. The Employer hereby represents and warrants to the Trustee that it has taken the necessary and advisable steps to properly appoint, accredit, and supervise any Investment Manager authorized hereunder, including: (1) Execution by the fiduciary named in the Plan as having such authority of instruments appointing the Investment Manager; and (2) Receipt of an instrument executed by the Investment Manager accepting such appointment and acknowledging that it is a fiduciary, within the meaning of ERISA Section 3(21)(A), with respect to the relevant assets of the Trust Fund, and that the Investment Manager meets the requirements of Section 4.07(a)(1) (3) above. (b) Survival. The provisions of this Section 4.08 shall survive the termination of this Trust Agreement. ARTICLE V THE PLAN ADMINISTRATOR. THE DESIGNATED REPRESENTATIVE AND THE EMPLOYER 5.01 Action by the Plan Administrator. The Trustee shall be fully protected in relying upon Instructions provided by the Plan Administrator. 5.02 Action by an Emnlover. Any action by an Employer, including action taken pursuant to the Plan, shall be evidenced by a copy of a written instrument executed in accordance with Section 5.03 hereof. The Trustee shall be fully protected in acting in accordance with such written instrument delivered to it. 5.03 Formal Action by Employer. Any formal action herein permitted or required to be taken by an Employer shall be by resolution of its board of directors or other governing board or body, or by written instrument executed by a person or group of persons who has been authorized by resolution of its board of directors or other governing board or body as having authority to take such action 5.04 Annointment of Designated Representative: Action by the Designated Renresentative. The Employer hereby designates and authorizes its Designated Representative to provide Instructions to the Trustee on behalf of the Employer, including to place orders for the purchase and sale of securities, and authorizes the Trustee to disburse funds on behalf of the Employer upon Instruction from such Designated Representative and perform as otherwise described in this Trust Agreement. The Employer hereby also authorizes and directs the Trustee to pay for securities and receive payment from the sale of securities or other investment transactions arising out of Instructions of the Designated Representative. Designation of a Designated Representative is subject to the following provisions: -12- 87 (a) The Employer agrees that the Trustee may rely on Instructions from the Designated Representative, and the Employer agrees that the Trustee shall be under no duty to make an investigation with respect to any Instructions received from the Designated Representative; (b) Except to the extent delegated to an Investment Manager or another trustee, the Employer is solely responsible for managing the investment of the Trust Fund and for the direction and supervision of the Designated Representative. All Instructions, directions, and/or confirmations received by the Trustee from a Designated Representative shall be deemed to have been authorized by the Employer; Trustee; and (c) The Employer agrees that a Designated Representative is not an agent of the (d) The Employer may remove a Designated Representative and designate a new representative at any time by written notice to the Trustee in a form satisfactory to the Trustee. The Employer will give the Trustee prompt written notice of any change in the identity or authority of any Designated Representative. Removal of a Designated Representative will not have the effect of canceling any Instruction that has been received by the Trustee from the Designated Representative prior to the date that notice of removal is received by the Trustee. Until written notice of such change is received, the Trustee may conclusively rely upon and be protected in acting on the latest identification provided to it without further inquiry or verification. (e) The Designated Representative must comply with the Minnesota Government Data Practices Act, Minnesota Statutes Chapter 13, as it applies to (1) all data provided by the Employer pursuant to this Agreement, and (2) all data, created, collected, received, stored, used, maintained, or disseminated by the Designated Representative pursuant to this Agreement. Designated Representative is subject to all the provisions of the Minnesota Government Data Practices Act, including but not limited to the civil remedies of Minnesota Statutes Section 13.08, as if it were a government entity. In the event Designated Representative receives a request to release data, Designated Representative must immediately notify Employer. The terms of this paragraph shall survive the cancellation or termination of this Agreement. ARTICLE VI THE TRUSTEE 6.01 Reliance on Written Instrument. The Trustee shall be fully protected in relying on the identity of the Plan Administrator identified above, and the identities of successors to such Person or others authorized to provide Instructions to the Trustee to the extent that the Trustee is provided Instructions regarding appointment of same. The Trustee shall be fully protected in acting upon any instrument, certificate, or paper believed by it to be genuine and to be signed or presented by the proper Person or Persons. The Trustee shall be under no duty to make any investigation or inquiry as to any statement contained in any such writing but may accept the same as conclusive evidence of the truth and accuracy of the statements therein contained. 6.02 Action by the Trustee. The Trustee may delegate ministerial acts, specifically including, but not limited to, the signing of checks, endorsement of stock certificates, production of statements and accountings provided for hereunder, execution of transfer instruments and any other document, and the signing of tax returns and governmental reports to be done by any agent of the Trustee. -13- 88 6.03 Consultation with Counsel and Accountant. The Trustee may from time to time consult with counsel or an accountant who may also be counsel or an accountant for an Employer, and as long as the Trustee acts in conformity with the standards of Section 4.01 hereof, the opinion of such counsel or accountant with respect to legal matters or accounting matters, respectively, shall have full and complete authorization and protection in respect of any action taken or suffered by the Trustee in good faith and in accordance with such opinion. 6.04 Bond Not Required. Except as required under ERISA Section 412, the Trustee shall not be required to furnish any bond or security for the performance of its powers and duties hereunder. The cost of any bond required by applicable law shall be paid as an expense of the Trust Fund, unless paid by the Employer. 6.05 Returns. Reports and Information. Except as set forth in a written agreement between the parties, the Plan Administrator shall be responsible for the preparation and filing of all returns, reports, and information required of the Trust or Plan by law, including (as applicable) Forms 990, 990 -T, W -2, or any other information or tax returns. The Plan Administrator shall also be responsible for making any disclosures to Participants required by law. 6.06 Indemnification. Unless prohibited or specifically required otherwise by applicable law, the Employer hereby agrees to indemnify the Trustee and its affiliates, and their respective directors, managers, officers, employees, agents and other representatives for and to hold it harmless against all liabilities, losses, costs or expenses (including but not limited to legal fees and expenses, costs of or associated with enforcement actions, investigations, suits, and regulatory or other actions and appeals thereof, arising, directly or indirectly, out of any loss or diminution of the Trust Fund resulting from changes in the market value of the Trust Fund assets) of whatsoever kind and nature which may be imposed on, incurred by or asserted against the Trustee at any time by reason of the Trustee's service under the Trust provided that the Trustee did not act dishonestly or in willful or a grossly negligent violation of the law or any applicable regulation under which such liability, loss, cost or expense arose. The Employer waives any and all claims of any nature it now has or may have against the Indemnified Parties, which arise, directly or indirectly, from any action that the Trustee takes in good faith in accordance with any certificate, notice, confirmation, or Instruction from a Plan Representative. The Trustee shall not be liable to the Employer or a Plan Representative for any act, omission, or determination made in connection with this Trust Agreement except for its gross negligence or willful misconduct. Without limiting the generality of the foregoing, the Trustee shall not be liable for any losses arising from its compliance with Instructions from the Employer or a Plan Representative; or executing, failing to execute, failing to timely execute or for any mistake in the execution of any Instructions, unless such action or inaction is by reason of the gross negligence or willful misconduct of the Trustee. The provisions of this Section 6.06 shall survive the termination, amendment or expiration of this Trust Agreement. 6.07 Acts of Prior Trustees. The assets of the Trust Fund or evidence of ownership shall be held by the Trustee under the terms of the Plan and this Trust Agreement. If the assets represent amounts transferred from another trustee, the Trustee named hereunder shall not be responsible for any actions or inactions of prior fiduciaries, including the review of the propriety of any investment under the former trust; said review to be the responsibility of prior fiduciaries. The Trustee named hereunder shall not be required to examine or question in any way the administration of the Trust prior to its appointment. -14- 89 6.08 Plan Assets Not Held in Trustee's Trust. If, as provided in the Plan, other trustees of separate trusts under the Plan may be appointed, the Trustee under this Trust Agreement shall have no duties or responsibilities for Plan assets not held in the Trust by the Trustee. ARTICLE VII DISPUTE RESOLUTION The parties acknowledge that this Trust Agreement evidences a transaction involving interstate commerce. Except as provided in Section 10.02, the parties agree that any misunderstandings, controversies or disputes arising from this Trust Agreement shall be decided by binding arbitration which shall be conducted, upon request by either party, in the county of the Employer's principal place of business, before three (3) arbitrators designated by the American Arbitration Association (the "AAA in accordance with the terms of the Commercial Arbitration Rules of the AAA and, to the maximum extent applicable, the United States Arbitration Act (Title 9 of the United States Code). The decision of the majority of the arbitrators shall be binding and conclusive upon the parties. Notwithstanding anything herein to the contrary, either party may proceed to a court of competent jurisdiction to obtain equitable relief at any time, other than to stay arbitration. Further, any such court proceeding shall only be brought in the federal district court for the district where the Employer has its principal place of business. The arbitration panel shall have no authority to award special, indirect, consequential, punitive or other damages not measured by the prevailing party's actual damages. To the maximum extent practicable, an arbitration proceeding under this Trust Agreement shall be concluded within one hundred eighty (180) days of the filing of the dispute with the AAA. The provisions of this arbitration clause shall survive any termination, amendment or expiration of the Trust Agreement and if any term, covenant, condition or provision of this arbitration clause is found to be unlawful or invalid or unenforceable, the remaining parts of the arbitration clause shall not be affected thereby and shall remain fully enforceable. Judgment on any award rendered by the arbitration panel may be entered in any court having competent jurisdiction. The parties shall each pay one -half of the forum and arbitrators' fees. The prevailing party in the arbitration, or in any court proceeding, shall be entitled to its reasonable attorney's fees and expenses from the non prevailing party. ARTICLE VIII ACCOUNTS AND RECORDS The Trustee shall maintain true, accurate, and detailed accounts of all investments, receipts, disbursements and other transactions hereunder. All accounts, books, and records relating thereto shall be open to inspection and may be audited from time to time by any person designated by the Plan Administrator during the Trustee's regular business hours as mutually agreed to in writing by the parties. Within thirty (30) days after the close of the calendar year of the Trust Fund, within thirty (30) days after the removal or resignation of the Trustee, and from time to time as mutually agreed to by the Plan Administrator and the Trustee, the Trustee shall file an account with the Plan Administrator which shall show: (a) the assets of the Trust Fund, as of the end of such period, and current value thereof as defined in ERISA Section 3(26); and (b) all investments, receipts, disbursements, and other transactions effected by it during such calendar year or other period for which such accounting is filed. The Plan Administrator may approve such accounting by notice of approval delivered to the Trustee or by failure to express objection to such accounting delivered to the Trustee within sixty (60) days from the date upon which the accounting is delivered to the Plan Administrator. Upon the expiration of sixty (60) days from the date of filing such account with the Plan Administrator or upon earlier specific approval thereof by the Plan Administrator, the Trustee, as between each Employer, the Plan Administrator and the Trustee, shall be forever released and discharged from all liability as to all items and matters included in such accounting -15- 90 as if settled by the decree of a court of competent jurisdiction, except with respect to any such action or transaction to which the Plan Administrator shall within such sixty (60) day period, file written objections with the Trustee. The liability of the Trustee to persons other than an Employer or the Plan Administrator shall be limited to actions under ERISA brought within the period permitted by law for the bringing of such action. Nothing herein contained, however, shall be deemed to diminish the right of the Trustee to have its accounts judicially settled by a court of competent jurisdiction. In any case, the Trust Fund shall be valued by the Trustee at the frequency agreed to by the Trustee and the Employer, but in any event not less than annually at the fair market value as of the close of business at the end of the last business day of the fiscal year of the Plan. Except as specified below, in the absence of fraud, the Trustee's valuation of the Trust Fund shall be conclusive. ARTICLE IX FEES AND EXPENSES 9.01 Expenses of Administration. (a) Generally. The Trustee shall be paid such reasonable compensation as shall from time to time be agreed upon by the Employer and the Trustee. Compensation payable hereunder shall include any earnings on funds retained pursuant to Section 4.02(d) (18) hereof. Such compensation may be paid by the Employer or the Designated Representative or, upon receipt of Instructions from either, may be deducted from the Trust Fund. Subject to the Plan Administrator's approval, the Trustee may pay outside counsel, independent accountants, actuaries, and other outside persons engaged by it, such compensation and expenses as are reasonable and proper as expenses of administration of the Trust Fund. All such compensation and all expenses of administration of the Trust, and the Plan of which it is a part, including fees of outside counsel, independent accountants, and actuaries, shall be a charge against and may be withdrawn by the Trustee out of the Trust Fund. However, nothing herein shall prohibit the Employer from paying such amounts if the Trust Fund is sufficient and the Employer so elects. The Trustee may charge the Trust for the cost of all securities purchased or received against a payment and credit the Trust with the proceeds received from the securities sold or delivered against the payment. For any trades not settled immediately upon placement, the Trustee shall have the right to sell securities from the Trust in a reasonably prudent fashion sufficient to recover any funds advanced. Expenses incurred by the Trustee that it believes to be subject to indemnification under Section 6.06 of this Trust Agreement shall be paid by the Employer upon the Trustee's request, provided that the Employer may delay payment of any amount in dispute until such dispute is resolved according to the provisions of Article VII hereof. Such resolution may include the award of interest on unpaid amounts determined to be payable to the Trustee under this Section. The Trustee shall not be held liable for its use of Plan assets to the extent that the use of such assets is permitted by ERISA. In the event a successor Trustee is named pursuant to Section 10.02, prior to transferring assets to such successor, the Trustee is authorized to reserve such sum of money as it may deem advisable for payment of its fees and expenses in connection with the settlement of its accounts or other proper Trust expenses, and any balance of such reserve remaining after the payment of such fees and expenses shall be paid to the successor Trustee. If the Trust applies to a court for appointment of a successor Trustee, as permitted under Section 10.02, the Trustee shall be entitled to reasonable compensation and reimbursement for costs associated with bringing such action. -16- 91 (b) Disclosure. The Designated Representative shall disclose any compensation, reimbursements, fees and/or expenses payable from the Trust Fund pursuant to Section 9.01(a), and any changes to such amounts, to the Employer and the Participants, as required by applicable law. 9.02 Authorization with Respect to Taxes. The Trustee may execute, as trustee, any declarations or certificates pertaining to the Trust that may be required under any tax law(s) or governmental regulation(s) now or hereafter without prior approval of the Employer. The Trustee shall notify the Plan Administrator and/or the Designated Representative of any tax levied upon or assessed against the Trust Fund of which the Trustee has knowledge. If the Trustee receives no Instructions from the Plan Administrator and/or the Designated Representative, the Trustee may pay the tax from the Trust Fund. If the Plan Administrator and/or the Designated Representative wish(es) to contest the tax assessment, it shall give appropriate and timely instructions to the Trustee. The Trustee shall not be required to bring any legal actions or proceedings to contest the validity of any tax assessments unless the Trustee has been indemnified to its satisfaction against loss or expense related to such actions or proceedings, including reasonable attorney's fees. ARTICLE X RESIGNATION OR REMOVAL OF TRUSTEE: SUCCESSOR TRUSTEE 10.01 Resignation: Removal of the Trustee. The Trustee may resign at any time by giving at least thirty (30) days' prior notice of such resignation to the Employer, the Plan Administrator and all other fiduciaries of the Plan that have been identified in Instructions provided to the Trustee. The Employer may remove the Trustee, with or without cause, upon giving at least thirty (30) days' prior notice to the Trustee, the Plan Administrator and all other fiduciaries of the Plan that have been identified in Instructions provided to the Trustee. As directed by Employer, notice of removal of the Trustee may be provided by the Designated Representative. 10.02 Annointment of Successor Trustee. The Employer shall appoint a successor Trustee or additional Trustees to fill the vacancy occurring as the result of the resignation or removal of the Trustee. The Employer shall designate the successor Trustee by an instrument, delivered by Employer or the Designated Representative to the Trustee so removed and to the successor Trustee, the Plan Administrator and all other fiduciaries of the Plan that have been identified in Instructions provided to the Trustee. The successor Trustee shall have all of the rights, powers, privileges, liabilities, and duties of a Trustee as set forth in this Trust Agreement. If either party has given notice of termination as provided under this Trust Agreement, and upon the expiration of the advance notice period no other successor Trustee has been appointed and has accepted such appointment, this provision shall serve as (a) notice of appointment as Trustee of the Designated Representative if authorized under state law to serve as a trustee, and (b) as acceptance by the Designated Representative of that appointment. If no appointment of a successor is made by the Employer within thirty (30) days after the resignation or removal of the Trustee, after notice to the other party, the Trustee or the Employer may apply to any court of competent jurisdiction for appointment of a successor. The Trustee shall be furnished with notice from the Employer or the court, as the case may be, of the appointment of the successor, and shall also be furnished with evidence of the successor's acceptance of trusteeship. 10.03 Transfer of Assets to Successor Trustee. Upon acceptance of such appointment by a successor Trustee, the Trustee shall assign, transfer, pay over and deliver the assets then constituting the Trust Fund to the successor Trustee. The Trustee is authorized, however, to reserve such reasonable sum of money, as to it may seem advisable, to provide for any sums chargeable against the Trust Fund for which it may be liable, or for its fees and expenses in connection with the settlement of its account or -17- 92 otherwise, and any balance of such reserve remaining after payment of such fees and expenses shall be paid over to the successor Trustee. If the reserve is not sufficient for all amounts otherwise payable hereunder, the resigning or removed Trustee shall be entitled to reimbursement for any deficiency from the successor Trustee and the Employer, which shall be jointly and severally liable therefor. Each, successor Trustee shall succeed to the title of all securities or other property then held in the Trust Fund and vested in its predecessor without the signing or filing of any further instrument, but any resigning or removed Trustee shall execute all documents and do all acts necessary to vest such title of record in any successor Trustee. The terminating Trustee shall transfer all property of the Trust Fund then held by it to such successor Trustee. The terminating Trustee may require as a condition of making such transfer that the successor Trustee present evidence that any bonding requirement under ERISA Section 412 has been met and/or may require that the Employer provide the Trustee with an indemnification against any losses arising from the replacement of the Trustee. 10.04 Terminating Trustee's Accounting. Within thirty (30) days after the transfer to the successor Trustee, the terminating Trustee shall provide the Employer with an account in the form and manner prescribed for the annual account by Article VIII hereof. Unless the Employer files written objections with the Trustee within sixty (60) days after such account has been mailed or otherwise delivered, the account shall be deemed to have been approved by the Employer. 10.05 Changes in Organization of Trustee. Any corporation, banking association or trust company into which a corporate Trustee may be merged, converted or with which it may be consolidated, or any corporation, banking association, or trust company, resulting from any merger, reorganization or consolidation to which a corporate Trustee may be a party, or any corporation, banking association or trust company to which all or substantially all of the trust business of a corporate Trustee may be transferred shall be the successor of the corporate Trustee hereunder without the execution or filing of any instrument or the performance of any other act and with the same powers and duties as conferred upon the Trustee hereunder. In any such event, it shall not be necessary for the Trustee or any successor Trustee to give notice thereof to any person, and any requirements, statutory or otherwise, that notice shall be given is hereby waived. 10.06 Emnlover Bankruptcv. (a) If the Employer becomes insolvent, files for or becomes subject to bankruptcy or a similar proceeding in state or federal court, the Employer will notify the Trustee in writing as soon as possible. The notification will include confirmation of the individual(s) who will direct the Trustee. If, within sixty (60) days of such filing the Employer does not notify the Trustee, the Trustee may invoke the provisions of Section 10.06(c). (b) Notwithstanding any provision hereof to the contrary, in the case of bankruptcy, insolvency, or dissolution of the Employer, the Trustee will have the right to petition a court of competent jurisdiction to appoint a new Trustee, the costs of such action being payable from the Trust Fund. (c) In the case of dissolution of the Employer, or at any other time that the Employer does not respond to requests from the Trustee for confirmation of the individuals who will provide direction to the Trustee, the Trustee may, in its sole discretion, assume the Plan has been terminated and distribute assets according to applicable law. Before the Trustee may make such assumption, however, the Trustee will send to the last known address of the Employer, and the individuals who last had authority for providing direction to the Trustee, via certified mall, a written notice of the Trustee's intent to begin such action. The Trustee will then wait at least thirty (30) days before beginning such action. -18- 93 (d) If the Trustee receives notice of the Employer's bankruptcy, insolvency or dissolution (either by the Employer or a court of competent jurisdiction), or if the Plan has been deemed abandoned as described in Section 10.06(c) above, any fees and other expenses relating to the provision of services under this Trust Agreement (whether current or overdue) may be immediately deducted from the Trust Fund. ARTICLE XI AMENDMENT OF TRUST This Trust Agreement may be amended by an instrument executed by the Employer and the Trustee, and the provisions of any such amendment may be made applicable to the Trust Fund as constituted at the time of the amendment as well as to any part of the Trust Fund subsequently acquired. Any amendment shall, unless otherwise provided therein, become effective upon execution by the Employer and the Trustee. However, no amendment shall alter the duties, liabilities, or compensation of the Trustee without its consent. Nor shall any amendment cause any part of the Trust Fund to revert to or be recoverable by the Employer or to be used for or diverted to purposes other than the exclusive benefit of Participants and their dependents and Beneficiaries, except to the extent permitted by law and the Plan. An amendment to this Trust Agreement that is mutually agreed to hereunder by the Employer and the Trustee shall be binding upon all Employers as of the effective date of such amendment. ARTICLE XII TERMINATION OF TRUST 12.01 Termination of Trust Fund. This Trust Agreement and the Trust created hereby may be terminated at any time by the Employer upon thirty (30) days notice. 12.02 Continuation by an Employer's Successor. Any corporation or other business entity succeeding to the interest of an Employer by sale, transfer, consolidation, merger, or bankruptcy, may elect to continue this Trust or any separate trust then existing hereunder, subject to the approval of the Employer, by adopting this Trust Agreement and assuming the duties and responsibilities of the Plan and Trust, or such corporation or other business entity may establish a separate plan and trust for the continuation of benefits for its employees, in which event, subject to the approval of the Employer, the Trust assets held on behalf of the employees of the prior employer shall be transferred to the trustee of the new trust. 12.03 Liquidation of Trust. The Employer reserves the right to terminate the Trust upon notice in writing delivered to the Trustee as described above; provided, however, that at no time may any part of the corpus or income of the Trust Fund be used for, or diverted to, purposes other than for the exclusive benefit of Participants and their Beneficiaries under a Plan, and defraying the administrative expenses of the Plan until all Plan liabilities have been satisfied, except as set forth in Section 2.04. If the Trust is terminated, the Trustee shall distribute all cash, securities and other property then constituting the Trust Fund, less any amount constituting charges against the Trust Fund, in such manner and at such times as may be prescribed by the Plan or Plans. If a Plan is terminated, this Trust Agreement shall nevertheless continue in effect. If, upon termination of a Plan, there remains a balance in the Trust Fund with respect to the Plan, the Trustee shall apply and distribute such balance, less the amount of any charges against those assets arising under the terminated Plan, in such manner and at such times as the Employer shall determine. Notwithstanding the foregoing, in no event shall any part of the corpus or net earnings of the Trust Fund inure to the benefit of any individual other than through the payment of benefits described or otherwise provided in Section 501(c)(9) of the Code. Any assets remaining after 94 payment of all obligations of the Trust and satisfaction of liabilities to Participants and their Beneficiaries shall be returned to the Employer to be used exclusively to provide additional benefits permitted under Section 501(c)(9). The Trustee may condition the transfer or distribution of any assets of the Trust Fund in its sole discretion, on the indemnification of the Trustee against any liability arising from such transfer or distribution that is provided by the Employer or may require the Employer to post a bond sufficient to protect the Trustee against such liability. From the date of termination of the Plan and until the final distribution of the Trust assets, the Trustee shall continue to have all the powers provided under this Trust Agreement that are necessary or desirable for the orderly liquidation and distribution of the Trust Fund. 13.01 Applicable Law. ARTICLE IIIII MISCELLANEOUS (a) Choice of Law. Except where inconsistent with the express provisions hereof, or where preempted by ERISA, the powers and duties of the Trustee and all questions of interpretation, construction, operation, and effect of this Trust Agreement shall be governed by the laws of the State of Colorado. All contributions to the Trustee shall be deemed to take place in the State of Colorado, and except for such matters as may arise under ERISA, the Trustee shall be liable to account in the courts of that state. (b) Choice of Venue. All controversies, disputes, and claims arising under this Trust Agreement and not otherwise resolved will be submitted to the United States District Court for the district where the Employer has its principal place of business, and by executing this Trust Agreement, each party hereto consents to that court's exercise of personal jurisdiction over them 13.02 Evidence. Evidence required of anyone under this Trust Agreement may be by certificate, affidavit, document, facsimile, E -mail or other form which the person acting in reliance thereon considers to be pertinent and reliable, and to be signed, made, or presented by the proper party. 13.03 Notices. The address of the Employer shall be as set forth in this Trust Agreement, but may be changed by providing written notice to the Trustee sent by certified mail, return receipt requested. 13.04 Limitation on Claims. No claim may be made by the Employer against the Trustee for any lost profits or any special, indirect or consequential damages in respect of any breach or wrongful conduct in any way related to this Trust Agreement. 13.05 Severability of Provisions. Should any provision of this Trust Agreement be held invalid or illegal for any reason, such illegality or invalidity shall not affect the remaining provisions of this Trust Agreement, but shall be fully severable, and the Trust Agreement shall be construed and enforced as if such illegal or invalid provision had never been inserted herein. 13.06 Trust Oualification. The Trust is intended to qualify as a tax exempt trust under Code Section 501(a) such that it may be part of a plan that is qualified under Code Section 501(c)(9) as a "voluntary employees' beneficiary association." The Trust is also intended to meet the applicable requirements of ERISA, to the extent applicable to the Plan, and the provisions hereof shall be interpreted consistent with such intentions. The Employer shall be solely responsible for ensuring the compliance of the Plan and Trust with the applicable sections of the Code and ERISA, and the Trustee may assume, -20- 95 unless advised to the contrary that the Plan is qualified and that the Trust is entitled to tax exemption. If the Plan ceases to be qualified within the meaning of Code Section 501(c)(9), the Employer shall notify the Trustee of same as promptly as is reasonable, and such notice shall include Instructions to the Trustee as to the disposition of the assets remaining in the Trust. 13.07 Construction of Trust Agreement. If and whenever the Trustee be, in good faith, in doubt as to the proper construction or interpretation of this Trust Agreement, or any other question that may arise during the administration of the Trust herein created, the Trustee is authorized to resolve all such doubts and questions in such manner as it may deem proper, without the necessity of resorting to a court for construction or instructions, and all decisions so made shall be binding and conclusive on all persons ever interested hereunder. In addition, the Trustee may apply to the Plan Administrator for Instructions, directions, authorizations or information, and the Trustee may demand assurances satisfactory to it that any action that it is directed to take will not adversely affect the tax exemption of the Trust; provided, however, that no such assurances shall be required if, in the opinion of counsel (which counsel may also be counsel for the Employer), such action does not adversely affect the tax exemption of the Trust. This Trust Agreement shall be binding upon all persons who are ever entitled to such benefits hereunder, their heirs, executors, administrators and legal representatives, and upon all Employers and their successors, and upon the Trustee and its successors. 13.08 Spendthrift Provisions. Any claimed interest of a Participant, or of a dependent or Beneficiary of a Participant, in the Trust Fund or to a benefit from the Plan shall not be subject to the claims of any creditors or others, or to legal or equitable process, and may not be voluntarily or involuntarily alienated, encumbered or assigned. Neither the Trust Fund nor any benefits hereunder shall be liable for or subject to the debts, contracts, liabilities, engagements, or torts of any person to whom such benefits or funds are payable, nor shall the Trust Fund or any benefits hereunder be considered an asset of such person in the event of his bankruptcy. 13.09 Title of Trust Assets. The legal and equitable title and ownership of all assets at any time constituting a part of the Trust Fund shall be and remain with the Trustee, and neither any Employer nor any Participant in the Plan (or any person who may be entitled to benefits under the Plan) shall ever have any legal or equitable estate therein, save and except that a Participant shall be entitled to receive distribution as and when lawfully made under the terms hereof. 13.10 Rights Determined from Entire Instrument. This Trust Agreement embodies the entire agreement and understanding of the parties relating to the subject matter hereof. This Trust Agreement, for convenience only, has been divided into Articles and Sections, but the rights, powers, duties, privileges, and other legal relationships shall be determined from this Trust Agreement as an entirety and without regard to the division into Articles and Sections or to the headings prefixing such Sections. 13.11 Waiver. No waiver by either party of any failure or refusal to comply with an obligation hereunder shall be deemed a waiver of any other obligation hereunder or any subsequent failure or refusal to comply with any other obligation hereunder. 13.12 Word Usage. Whenever appropriate, words used in this Trust Agreement in the singular may mean the plural, the plural may mean the singular, and the masculine may mean the feminine. The words "herein," "hereof," "hereto" and "hereunder" shall refer to this Trust Agreement. 13.13 Assignment. This Trust Agreement, and any of the rights and obligations hereunder, may not be assigned by the Employer without the prior written consent of the other party(ies), and such consent may be withheld in any such party's sole discretion. The Trustee may assign this Trust -21- 96 Agreement in whole or in part, and any of its rights and obligations hereunder without the consent of the Employer, provided notice of such assignment is sent to the Employer at least thirty (30) days prior to the effective date of any such assignment. All provisions in this Trust Agreement shall extend to and are binding upon the parties hereto and their respective successors and permitted assigns. 13.14 Force Majeure. The Trustee may delay the processing of any transaction provided for hereunder due to a Force Majeure. 13.15 Comnlete Agreement. This Trust Agreement and any schedule of fees provided to the Trustee by the Employer or the Plan Administrator embody the entire agreement and understanding of the parties relating to the subject matter hereof. 13.16 Confidentiality. The parties to this Trust Agreement recognize that in the course of implementing and providing the services described herein, each party may disclose to the other Confidential Information. All such Confidential Information, individually and collectively, and other proprietary information disclosed by a party shall remain the sole property of the party disclosing the same, and the receiving party shall have no interest or rights with respect thereto. Each party agrees to maintain all such Confidential Information in trust and confidence to the same extent that it protects its own proprietary information, and not to disclose such Confidential Information to any third party without the written consent of the other party(ies). Each party further agrees to take all reasonable precautions to prevent any unauthorized disclosure of Confidential Information. In addition, each party agrees not to disclose or make public to anyone, in any manner, the terms of this Trust Agreement, except as required by law, without the prior written consent of the other party(ies). Confidential Information as defined for this agreement includes all non public data as defined by the the Minnesota Government Data Practices Act, Minnesota Statutes Chapter 13. The Trustee must comply with the Minnesota Government Data Practices Act, Minnesota Statutes Chapter 13, as it applies to (1) all data provided by the Employer pursuant to this Agreement, and (2) all data, created, collected, received, stored, used, maintained, or disseminated by the Designated Representative pursuant to this Agreement. In the event Trustee receives a request to release data, Trustee must promptly notify Employer. The terms of this paragraph shall survive the cancellation or termination of this Agreement. The Designated Representative must comply with the Minnesota Government Data Practices Act, Minnesota Statutes Chapter 13, as it applies to (1) all data provided by the Employer pursuant to this Agreement, and (2) all data, created, collected, received, stored, used, maintained, or disseminated by the Designated Representative pursuant to this Agreement. The Designated Representative is subject to all the provisions of the Minnesota Government Data Practices Act, including but not limited to the civil remedies of Minnesota Statutes Section 13.08, as if it were a government entity. In the event Designated Representative receives a request to release data, Designated Representative must immediately notify Employer. The terms of this paragraph shall survive the cancellation or termination of this Agreement. 13.17 USA Patriot Act Notification. The following notification is provided to Employer pursuant to Section 326 of the USA Patriot Act of 2001, 31 U.S.C. Section 5318: IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each Person or entity that opens an account, including any deposit account, treasury management account, loan, other -22- 97 extension of credit, or other financial services product. What this means for the Employer: When Employer opens an account, if the Employer is an individual, the Trustee will ask for the Employer's name, taxpayer identification number, residential address, date of birth, and other information that will allow the Trustee to identify Employer, and, if Employer is not an individual, Trustee will ask for the Employer's official name, taxpayer identification number, business address, and other information that will allow the Trustee to identify the Employer. The Trustee may also ask, if the Employer is an individual, to see a valid driver's license or other identifying documents, and, if the Employer is not an individual, to see the Employer's legal organizational documents or other identifying documents. 13.18 Execution in Counterparts. This Trust Agreement may be executed in any number of counterparts, each of which shall be deemed an original and no other counterpart need be produced. Telephonic or electronic facsimile copies of original signatures, writings, or initials on this Trust Agreement shall be as valid as the original signatures, writings, or initials. IN WITNESS WHEREOF, the parties have caused this Trust Agreement to be executed by their duly authorized officers effective as of the date and year first written above. 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CO N 1� Ni N I■ N CD e- w 2 co w I o U LL z D U 11.1 Ill W W W W W I�yy 0 Z 0 00 UjUI W8 1111 r z z r z w w w w w w 5. z U1 w CO CO CO CO 0 0 W Q U U a3 z 0 a 0 CO 0) Z z O O g Lil 1.1J O O CO en cn U 0 CO 3 „ON, TO: Mayor, Council Members and City Administrator FROM: Randy Distad, Parks and Recreation Director SUBJECT: Public Comment on Acquisition of 420 Elm Street Property as a New Downtown Liquor Store Site DATE: January 17, 2012 INTRODUCTION City Council requested that staff mail a letter to property owners within 350 feet of property located at 420 Elm Street notifying them about the possible acquisition of this property as a new Downtown Liquor Store site. The intent of the letter was to provide adjacent property owners with an opportunity to give input on the acquisition of the property. DISCUSSION A letter was mailed to residents on Wednesday, January 4, 2012. A copy of the letter is attached. Several property owners have already provided their input to City Administrator David McKnight via either by phone or email and these comments have been attached. Property owners should also be given an opportunity to comment at the January 17, 2012 City Council meeting. Comments received during the Council meeting should be tabulated with written comments received. The City Council should then weigh the public comments against the pros and cons of the City acquiring the property located at 420 Elm Street as a new Downtown Liquor Store site and make a decision at a future Council meeting. Included in your packet are sketch plans of the 420 Elm Street property that conceptually depict what a liquor store could look like on the site. The sketch plans were created by Larry White and the intent was to provide a visual example so City Council members and residents would be able to visually see what the improvements to the exterior of the building could look like. The sketch plans are based on using materials that were included in the project budget estimate that Mr. White prepared for the City. ACTION REOUESTED Provide property owners who were notified by letter about the acquisition of the property for a new Downtown Liquor Store with an opportunity to provide input at the January 17, 2012 City Council meeting. Then based on the input provided, consider at the February 6, 2012 meeting whether or not it wishes to purchase the property at 420 Elm Street as a new Downtown Liquor Store site. Respectfully Submitted, Randy Distad, Parks and Recreation Director City of Farmington 430 Third Street Farmington, Minnesota 651,280.6800 Fax 651 280,6899 wtiblticci.i'dnningu nnTruts 125 io6 City of Farmington 430 Third Street Farmington, Minnesota 651.280.6800 Fax 651.280.6899 www cLfarmington.mnua Thank you for your time on this important matter. DATE: January 4, 2012 TO: Neighbors in the Elm Street/Sixth Street Area FROM: David J. McKnight, City Administrator SUBJECT: Potential Purchase of Property to be used as a Liquor Store The Farmington City Council asked me to make property owners within 350 feet of the property located at 420 Elm Street aware of new potential use of thin property. This property, the current Laundromat/vacant building, is being considered as a new home for the city's downtown liquor' store. Before the City makes any final decisions on purchasing this property the City Council wanted to get the opinion of the property owners in the area. With this in mind this issue will be placed on the Tuesday, January 17, 2012 City Council agenda and anyone wishing to share their opinion will have an opportunity to do so at that time. The City Council meeting will be held in the City Council Chambers at 7:00 p.m. at: Farmington City Hall 430 Third Street Farmington, MN 55024 If you cannot attend the meeting and want to share your opinion with the City Council or if you have any questions you can call me at 651 -280 -6801 or email me at dmcknight @ci.farmington.mn.us. 126 From: David McKnight Sent: Monday, January 09, 2012 11:57 AM To: Randy Distad Subject: Potential Purchase of Liquor Store Comments Randy- Here are the comments I have received so far from the mailing to neighbors on the potential purchase of the 420 Elm Street building. Comment One -Owns three properties in the area and thinks it would be a good use of the building. Comment Two -Owns a commercial property in the area and is willing to discuss the sale of this property with the city for a liquor store. Comment Three -Owns a home in the area and thinks it would improve the appearance of the building and eliminate the parking lot as an area for kids to hang out in during the summer months. Comment Four -Owns a home in the area and thinks it is a bad idea. There are other properties in the city that could be used for a liquor store. I will pass on any other comments I receive. I will also forward you any emails /comments I receive after the packet is sent out so you can share them next week. Any questions please let me know. gavId J(e./^rnif1t Farmington City Administrator 651 280 -6801 dmckniohtAci.farminoton.mn.us www.ci.farminoton.mn.us 127 Amount Financed Rate Term Annual Payment Total Paid Over Term $1,040,000 5% 10 $134,685 $1,346,848 $1,040,000 5% 15 $100,196 $1,502,940 City of Farmington 430 Third Street Faxining on, Minnesota 651.280:6800 Fax 651.280.6899 www.cLt rmingtor rnn.us TO: Mayor, Councilmembers, David McKnight, City Administrator FROM: Teresa Walters, Finance Director SUBJECT: Liquor Store Financing Options DATE: Jarnuary 19, 2012 INTRODUCTION: The Downtown Liquor store lease will end effective August 2012. The City currently pays $165,000 per year (in rent and common area expenses) to lease space in the City Center Development. It appears to be more cost efficient to own a liquor store property than to lease it since the annual payment would be lower (in most cases) and the building would be owned by the City with no further payments once the loan is paid in full. The Council has discussed two potential locations: Elm Street and Vermillion River Crossing (VRC). The Elm Street option involves purchasing an existing 40 year old building and renovating it. This option includes lease revenue from the existing Laundromat business currently located on the property. The estimated cost to buy and renovate the property is $1 million. The VRC option would provide us with the opportunity to construct a new building. The estimated cost to build at VRC is $1.5 million. Options 1 and 2 include $40,000 $46,000 in issuance costs for the Financial advisor, Bond Council, Rating agency, County Auditor, etc. DISCUSSION: The City has several options available for financing the Liquor Store depending upon the location chosen by the Council. OPTION 1 A. Straight Financing Purchase and renovate existing building: With this option, we would finance $1,040,000 at 5% interest. The interest savings in going with 10 years vs. 15 years is $156,092. 128 Amount Financed Rate Term Annual Payment Total Paid Over Term $1,546,000 5% 10 $200,214 $2,002,141 $1,546,000 5% 15 $148,945 $2,234,178 Amount Annual Total Paid Financed Rate Term Payment Over Term $1,040,000 3% 10 $121,920 $1,219,197 $1,040,000 3% 15 87,117 $1,306,759 Amount Annual Total Paid Financed Rate Term Payment Over Term $1,546,000 3% 10 $181,238 $1,812,384 $1,546,000 3% 15 $129,503 $1,942,547 B. Straight Financing Purchase land and build a new store at VRC. With this option, we would finance $1,546,000 at 5% interest. The annual payment for 10 years would be higher than what we are paying for our lease now. Therefore, 10 years is not recommended for this option. OPTION 2 A. Lease to own (Elm Street): The EDA would purchase and own the property. If the EDA purchases the property and leases it to the Liquor store (with an option to purchase it for $1 at the end of the lease, then the rates would come in much lower. The savings in going with a 10 year vs. a 15 year bond is $87,562. B. The annual payment for 10 years would be higher than what we are paying for our lease now. Therefore, 10 years is not recommended for this option. BUDGET IMPACT: Elm Street: Financing through the EDA would save us a total amount between $127,651 $196,181 depending on the term of the loan. VRC: Financing through the EDA would save us a total amount between $189,757 $291,631 depending on the term of the loan. INFORMATION: The lowest cost option is to buy the existing building and renovate it. The lowest cost financing option is to have the EDA finance the Liquor Store for 10 years and lease it back to the Liquor Fund with the option to buy at the end of the 10 year lease. 129 Amount Annual Total Paid Financed Rate Term Payment Over Term $1,546,000 3% 10 $181,238 $1,812,384 $1,546,000 3% 15 $129,503 $1,942,547 B. Straight Financing Purchase land and build a new store at VRC. With this option, we would finance $1,546,000 at 5% interest. The annual payment for 10 years would be higher than what we are paying for our lease now. Therefore, 10 years is not recommended for this option. OPTION 2 A. Lease to own (Elm Street): The EDA would purchase and own the property. If the EDA purchases the property and leases it to the Liquor store (with an option to purchase it for $1 at the end of the lease, then the rates would come in much lower. The savings in going with a 10 year vs. a 15 year bond is $87,562. B. The annual payment for 10 years would be higher than what we are paying for our lease now. Therefore, 10 years is not recommended for this option. BUDGET IMPACT: Elm Street: Financing through the EDA would save us a total amount between $127,651 $196,181 depending on the term of the loan. VRC: Financing through the EDA would save us a total amount between $189,757 $291,631 depending on the term of the loan. INFORMATION: The lowest cost option is to buy the existing building and renovate it. The lowest cost financing option is to have the EDA finance the Liquor Store for 10 years and lease it back to the Liquor Fund with the option to buy at the end of the 10 year lease. 129 B. Straight Financing Purchase land and build a new store at VRC. With this option, we would finance $1,546,000 at 5% interest. The annual payment for 10 years would be higher than what we are paying for our lease now. Therefore, 10 years is not recommended for this option. OPTION 2 A. Lease to own (Elm Street): The EDA would purchase and own the property. If the EDA purchases the property and leases it to the Liquor store (with an option to purchase it for $1 at the end of the lease, then the rates would come in much lower. The savings in going with a 10 year vs. a 15 year bond is $87,562. B. The annual payment for 10 years would be higher than what we are paying for our lease now. Therefore, 10 years is not recommended for this option. BUDGET IMPACT: Elm Street: Financing through the EDA would save us a total amount between $127,651 $196,181 depending on the term of the loan. VRC: Financing through the EDA would save us a total amount between $189,757 $291,631 depending on the term of the loan. INFORMATION: The lowest cost option is to buy the existing building and renovate it. The lowest cost financing option is to have the EDA finance the Liquor Store for 10 years and lease it back to the Liquor Fund with the option to buy at the end of the 10 year lease. 129 E— L!) 2 J w O N d- 2 J w co rY c6 O 2 D I— CY Ln J Z 0 O w w ce z O O (9 H Z Z H O 00 ce O w L ~H C_ W 0 Z 0 0