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HomeMy WebLinkAbout07.08.13 Work Session Minutes Council Workshop Minutes July 8,2013 Mayor Larson called the workshop to order at 6:30 p.m. Present: Larson, Bartholomay, Bonar,Donnelly Absent: Fogarty Also Present: David McKnight, City Administrator; Cynthia Muller, Executive Assistant Fire Department -Tim Pietsch, John Powers, Troy Corrigan, Jim Schmitz, Jeff Allbee, Mark Arens, Dan Moulin, Adam Fischer,Matt Donnelly MOTION by Bartholomay, second by Donnelly to approve the agenda. APIF,MOTION CARRIED. 2014 Budget Update City Administrator McKnight stated information was sent to the Department of Revenue last week so they can determine Farmington's levy limit. The levy limit will be received by the end of August. Staff is continuing to work on$300,000 in cuts for the 2014 budget. A workshop will be scheduled once the levy limit amount is received. The fiscal disparities amount will also be received in August. Fire Department Requests The Fire Department discussed three issues;their retirement funding, uniform allowance, and vehicle CIP. Long term fmancial options for retirement—Members were not asking for a raise in the retirement amount;they are planning long term. There are many retirements coming up. Amounts range from$125,000 -$180,000. Worst case scenario, in one year there could be $500,000 paid out for retirements. Whatever is done now with funding becomes effective in two years. A comparison of pension funding from other cities was presented, ranging from$7,500 - $4,575. Farmington is at the bottom. In 2006,the pension was over 100%funded, a new fire station was built, and more firefighters added, and there was a pension increase. Two years later, in 2008, the required contribution amount was zero, however the City did providing funding towards the pension, but the market dropped that year. By adding on 20 extra firefighters for station 2,the City did not think of the effect on the pension and did not put extra money into the pension to cover them. Not only did the stock market crash,but there were also 20 more members. There were also five retirements. Since then,they have been doing very well with interest rates. Fire fighters are eligible for retirement at age 50, or at 20 years of service. If someone retires with 20 years of service prior to age 50, payments start at age 50. In 2013 there is a potential pension payout of$522,831. The fund would be$279,831 short. Members also presented potential payouts for future years. 8 Council Workshop Minutes July 8,2013 Page 2 Members are proposing to set a fixed dollar amount for the City contribution at$150,000. This will cover increases in the portfolio, offset pension payouts,offset yearly interest losses, allow for increases in the number of fire fighters, increase fire fighter retention, attract fire fighters, and allow increases in future pension amounts without increasing future City contributions. This amount will fully fund the pension fund. Otherwise,the City has to make up the difference in payments when members retire. The full membership is 50 fire fighters;we are currently at 44 members. There are four potential retirements. Councilmember Bonar stated they are asking for a contribution increase from$137,000 to $150,000;an increase of$13,000/year for five to seven years. This is a$91,000 plan in new dollars. Members noted it is difficult to predict retirements and keep that balance. They asked if the City would be able to make a$200,000 - $300,000 payout. There has not been an increase in the pension since 2007. Farmington is the lowest in the area. Mayor Larson stated this will avoid financial problems that could exist and help with budgeting. Councilmember Donnelly stated we may agree to it this year, but things can change with future Councils. Councilmember Bartholomay agreed this will help with budgeting purposes, and understood the concern over pension increases. Members would not consider a pension increase for five to six years so the pension fund would be 100%funded. Councilmember Bonar wanted to hear the rest of the presentations before agreeing to this contribution amount. Clothing Allowance—Members have to pay for their own fire department clothing. Currently there are 44 members. Last year there were 21 registered, non-paid events and 20+events in 2012 that were not registered, meaning the members did not turn in attendance slips, but the event is in the books as being held. A total of 98 hours were registered and 225+man hours were not registered in 2012. Members also presented a breakdown of events in 2012. In 2013 there have been 16 hours/fire fighter in volunteer hours. They want to look professional at events to represent the City and the Fire Department. Members have been paying for clothing for these events out-of-pocket. The total price of clothing is$410.65/fire fighter/year paid out- of-pocket. Members are asking for a clothing allowance of$200/fire fighter/year. At 50 members this would be an additional $7,500 to the budget for a total of$10,000/year for clothing replacement. The current level is$50/fire fighter/year. Clothing comes from Aspen Mills which has a tracking program for clothing allowance. The program would notify members once the $200 limit has been reached. Currently the$50 is included in the payroll check. Fire Vehicles CIP—Members proposed a solution to the current fire vehicle replacements. Currently the City is missing a ladder truck,they need four chief's vehicles and currently have three of which two are deferred and two are missing. The tender has been deferred, three brush trucks have been deferred,the Fire Marshal vehicle is missing and is currently shared by the Fire Marshal and Fire Chief and is run 24 hours/7 days a week. It was up for replacement last year and was cut. The rescue/pumper to replace Engine 2 was deferred. There are 11 vehicles that are missing or past their replacement schedule (seven deferred and four missing). The goal of the vehicle committee is to purchase vehicles that are cost effective to operate,multipurpose by design and efficient to maintain through their useful life. 9 Council Workshop Minutes July 8,2013 Page 3 Members feel a fire vehicle CIP is needed due to past deferments. To fund the CIP, money from the sale of vehicles would go to the fund,the fund would be self-sustaining with no anticipated increases to funding over the next 30+years, there would be no need to borrow after the initial 10-year bond, members are requesting $280,000/year for the first 10 years, anticipate $240,000/year starting year 11, and$245,000/year starting year 23. Some of this would be used to pay off the bond and some would go into the CIP fund. Any growth with adding a third station would be outside of this plan. City Administrator McKnight noted the bond would be issued in 2013, taxes are collected in 2014, and bond payments are due in 2015. So vehicle purchases would start in 2015. Mayor Larson recalled the Chief's vehicle is on the list to be purchased this year with reserve money if that money is not used by September 2013. The CIP shows seven vehicles purchased in 2015, two vehicles in 2016, and two vehicles in 2020. Mayor Larson clarified they are asking for four chiefs vehicles and a fire marshal vehicle. Members noted Farmington is the only city in the county that does not have a fire marshal vehicle. Members reviewed the CIP noting the vehicle and year for replacement. Some chiefs respond to incidents with their personal vehicles. One chief uses a used police vehicle which the police have said is unfit for emergency response. Mayor Larson stated his plan is to provide a new chief's vehicle this year, another one next year, the oldest police Tahoe could eventually go to the Fire Department. After that,have police vehicles with all wheel drive. He understood their needs, but this is a lot with retirement funding, clothing allowance, and a vehicle CIP. We are not back on our feet yet with the City budget. He sees a vehicle parked in a driveway and used maybe twice a week if that. He did not see why the police vehicles will not work, especially the Tahoe to bring down the expense of Chiefs vehicles and allow more funding for brush trucks, etc. Used police vehicles are unfit for a 100 mph chase, not to respond to a fire. Members felt the place to reuse vehicles is not in emergency response vehicles. A better use of used vehicles is in park and rec. If a used vehicle breaks down and there is an incident, is it worth the cost of a life. Mayor Larson stated things could happen to a new vehicle also. The City is trying to give the Fire Department the vehicles they need to do their job,but$280,000 is a lot of money. Members noted in the 1990's a ladder truck was requested each year and Council probably never saw it. Fire members wanted to do a better job of talking to the City Administrator and Council. The cost of a Tahoe chiefs vehicle is$40,000- $45,000 with equipment. City Administrator McKnight stated the Fire Department needs to talk further with Council about the need for a ladder truck. There are eight vehicles, other than a ladder truck, in 2015 and 2016 for new purchases. It may be possible looking at LGA dollars and levy dollars to fit those into budgets for 2014—2016. These are the type of purchases Council was talking about. Councilmember Donnelly agreed this is well thought out,but the question is where to get the $280,000. Councilmember Bartholomay suggested using the majority of revenue received from the townships for fire services and put that into the CIP. The township is not paying for trails to be paved;they are paying for fire services. Mayor Larson noted there would be a hole somewhere else in the budget. Councilmember Bartholomay felt it would be more transparent and could be done over time. There are also operational costs. Fire Chief Pietsch stated historically the townships covered 20%of the budget. So putting that into the CIP would be 10 Council Workshop Minutes July 8,2013 Page 4 huge as a funding source. Unfortunately, someone else would be short. Councilmember Bartholomay looked at it as more of a dedicated fund. Councilmember Bonar appreciated their logical approach, but this may not be the time. The current CIP would be LGA dollars with some set aside for fire vehicles. City Administrator McKnight stated for 2014 LGA dollars there is a chiefs vehicle for$45,000, brush vehicle and skidster for$60,000. We are 90%sure we will buy a chiefs vehicle this year, because none of the reserve has been spent. One of the brush trucks and equipment will be purchased in 2014 with levy dollars. Councilmember Bonar stated in the short term we have a plan for a few of the vehicles being requested. If everything remains the same,that could be taken off the table. Regarding township dollars, whether it is a levy or bond it will be an increase to the residents. In doing that we do have a dedicated fund to spend for those needs. Councilmember Bonar summarized the requests were for a$13,000 increase in pension, $7,500 increase in clothing, and if you were to add$100,000 to that, you would be close to the$130,000 coming from the townships. Add that to what is already on the table that would not be bonded for serves as a good installment in 2014 and 2015 as we continue to consider long term investments in bonding. Our largest investment in this budget is life safety;the second largest investment is principal and interest. We have a large cloud of debt and we need to be careful how we manage that debt going forward. During one of the last workshops, a fire station was mentioned in Empire Township. Fire Chief Pietsch stated the Rosemount Fire Chief is retiring an they take care of the university property. In the future,when that property becomes residential,that becomes Empire Township. At that time, Rosemount has no interest in covering that fire service area. If we are going to absorb that area, it would be good for the City and Empire to discuss a long term plan for that. Perhaps station three would be in the university property. Currently,we would not be able to staff having a truck in the township's shop as there are only three or four members in that area. City Administrator McKnight stated we will come back with a ladder truck discussion later this year. Staff and the Fire Department will work together on the remaining eight vehicles for the 2014—2016 budgets, and find a funding source for a fire vehicle CIP. Two sources have been identified in township revenue and LGA dollars. There will be a big purchase of Engine 2 in 2019. Council reached a consensus to support the$150,000 City contribution for retirement and to support the clothing allowance using the Aspen Mills program. MOTION by Bartholomay, second by Bonar to adjourn at 8:30 p.m. APIF,MOTION CARRIED. Respectfully submitted, Cynthia Muller Executive Assistant 11