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City of Dundas

Administrator/Clerk’s Report City Council Meeting, October 28, 2013

To: Mayor and Council

From: John M. McCarthy

Date: October 25, 2013

Consent Agenda

Transfer: This transfer of $205,963.25 from Tax Increment Fund 405 to Water Fund 601 is for the principal and interest payment on 2005 Water & Sewer Revenue Bonds. The transfer also includes 4 days of interest on the refunding of the 2005 bonds.

Public Hearing

Staff has reviewed the enterprise funds with committees and Council. A concern has been interfund loans which helped fund the infrastructure improvements done in 2006 and 2007. The loans are primarily from the enterprise funds to the construction fund but there are some loans from the sewer fund to the water fund. Current projections indicate the water fund will be able to repay the loan from the sewer fund over the next four to five years. The majority of the interfund loans owed by the capital improvement fund to the sewer fund will be repaid from assessments involved with the Railway Street project. The project was originally intended to be funded with 429 Street Improvement bonds, but needed to be funded internally. Instead of the assessments making the bond payment, they are assigned to repayment of the interfund loan. Some of the street project was funded by the general fund. The remainder of the loan from sewer, plus loans from the water fund and the storm water fund will be repaid by fees when development of the Bridgewater Heights project restarts. Proposed changes and additions to the fees are: Changes: Residential Water Base: increase $1.00 / month Residential Water Use Fee: decrease by $0.50 / 1,000 gal Commercial Water Use Fee: decrease by $0.60 / 1,000 gal The proposed changes in the water base and use fees will result in a $0.50 increase in the minimum charge, $15.45 to $15.95 per month, (including the first 1,000 gallons) and a decrease of about $1.60 for the average residential user (about 4,200 gallons / month). Higher users will see a larger decrease. This rate adjustment will more closely reflect a goal of having the base rate cover the majority of fixed costs with the use rate covering most of the variable costs. Commercial and residential use rates will be equalized. No changes are being proposed for the sewer utility fund or the refuse utility fund. Staff will be proposing the implementation of a storm water ordinance and related fees. The time line is to adopt the ordinance in 2013 with the fee structure being implemented on July 1, 2014. Staff will be proposing a rate reduction for those property owners that provide both onsite stormwater management and operation and maintenance of the onsite system. The approximate six month delay in implementation will provide a period to inform and educate the rate payers. Additional Fee: Duplicate Utility Bill: $2.00 / billing

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Grading: $100.00 The duplicate utility bill charge is being proposed to offset the cost of sending a bill to both an owner and the renter. The number of rental single family homes in Dundas has increased over the last several years. The property owner is ultimately responsible for the utility bill but usually wants the renter to receive a copy so that the renter can pay. A charge is being proposed for a grading permit. This fee is intended to cover the costs of review and inspection to insure a modification of the grade will not adversely affect neighboring properties or stormwater management. Staff recommends that at the next regular meeting of the City Council to be held on November 4, 2013, that Council appove the 2014 Budget for Water, Sanitary Sewer and Refuse and adopt Ordinance 2013 – 04.

Fire Service Task Force Presentation

Task Force Chair Glen Castore will review the work and recommendations of the Task Force. Castore presented the report to the Northfield City Council at a work session on October 22, 2013. The Northfield Council expressed interest in the recommended joint powers board, but indicated more information would be needed to make an informed decision.

New Business

Health Insurance Benefit: The Public Employees Insurance Program (PEIP) has informed the City that rates for employee health insurance will be increasing. The HR Committee met to review the health insurance plans alternatives and costs. The City’s current annual costs for health insurance total $52,140. If no changes in the contribution plan are made, the annual cost to the City will be $56,031 or 7.5%. The Committee reviewed a proposal to increase the City’s contribution to 50% of the increase from PEIP. This would cost $59,273. The Committee suggested increasing the City’s portion tor all employees to the amount of the HSA plan, $601.16, and reducing the contribution to the HSA plan from $1,600 to $700. (Motion) Employee Compensation: All employees have been reviewed and wage adjustments were discussed with the HR Committee. The last time wages were adjusted for most employees not covered by a bargaining unit was March 2012. I am recommending the adjustments be made effective November 10, 2012 which is the beginning of pay period 24. (Motion) Part Time Police Compensation: Chief Mincke is requesting the City adjust the hourly rate for Part Time Police Officers. The current rate of pay for Part Time Officers is $14.62. Using the current scale, this will increase to $14.68 beginning in 2014. The HR Committee reviewed the request and a suggestion was made that the scale could include 2 steps in the first year instead of one. After discussing with Chief Mincke, I am recommending the Part Time Officer wages be adjusted according to the following scale: Upon hire: $15.25 / hour After completion of probationary period; $15.75 / hour After working for the City for one calendar year; $16.25 / hour (Motion) Advertise Part Time Public Works Assistant: The HR Committee discussed hiring a part-time person to assist in snow removal. After reviewing the wage and possible duties, the committee recommends advertising for a part time public works assistant and approving a wage range of $16.50 to $17.50. (Motion)

Administrator’s Report

Financial (and investment report): As of the end of the first three quarters, the City’s General Fund expenditures, adjusted for a onetime expenses accrued in 2012, are $624,513 or $32,829 less than the same period last year. The year-to-date expenditures are 74% of the budget. Most departments have under spent their budget. Revenues for the period are $542,735 or $21,790 more than last year. Year to date water fund revenue, not including transfers, is $224,989 or $15,862 more than the same period last year. Revenue from water sales is down by $7,032, but recent building has increased WAC

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collections. Water fund operating expenditures are $218,910 or $74,675 more than last year. Most of the increase in expenditures is due to repair and upgrading of Wellhouse #1. For the first 3 quarters, sanitary sewer fund operating revenue is $296,121 or $24.304 higher than last year. Revenue from sewer use is up by $2,724. Sewer fund expenditures are $202,319 or $29,094 more than last year. Refuse fund revenue is $68,281 or $178 less with expenses being $59,782 or $4,411 more than last year. So far this year, the storm sewer fund revenue is $9,000 with expenditures of $10,383.78. The city had $5,695,312 in certificates of deposit, money market and checking accounts as of the end of September. The cash balance not related to the 2013A bonds decreased by $80,130 from last September Snow Plow Truck: The City has purchased the 2005 International snow plow truck from LaFarge Truck in Wisconsin. Delivery of the fully equipped unit will occur the week of October 28th.

Legacy Grant: Hoysler Associated, Inc completed and submitted the appraisals for the properties to be acquired. Northfield submitted the joint application. According to information received from MnDNR, grant awards should occur in early 2014.

Joint Governmental Quarterly Meeting: A quarterly joint governmental meeting was held on October 22 at Bridgewater Town Hall. Most of the discussion centered on stormwater concerns in the Spring Creek watershed.

10/25/2013

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Shared Fire Services Task Force Recommendation

How we started – Objectives

Research – Data and Models

Our recommendation

Task Force MembersGlen CastoreErica ZweifelGlenn SwitzerRhonda PownellPaul LiebensteinJerry AndersonLee Runzheimer

The Task Force was formed as a community effort to retain and improve what we have:

Low Cost

Equipment& Facilities

ExcellentPerformance

Budget: $30,000

Northfield, 45%

Rural Fire District, 45%

Dundas, 10%

The Task Force Charter 

Consider three options and make a recommendation

Taxing District

Joint Powers Agreement

Consolidation under Northfield

Sept. 2012 First meeting / draft RFP

Oct.  Distribute RFP

Nov.  Engage ESCI

Dec. 2012 ESCI starts – interviews, tour facilities

Jan. 2013 Task Force defines objectives for new organization

March ESCI report (draft) completed

June  Final ESCI report

Rule out taxing district

July Task Force agrees on governance model

Aug. Task Force agrees on cost allocation model

Sept. Work through the details of 2 options

Oct. 2013 Recommendation

Taxing District

Requires special legislation – no guarantee it will pass

If it passes – 2016 is earliest it could be operating

Levy amount to Rice County by July 1, 2014

Levy collected in 2015

Funds available in 2016

Another structure could be a steppingstone to a taxing district

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Performance

ISO Rating, ESCI Report 

Northfield ISO Rating = 4    Top 7% of 2069 departments 

0 039

103

187

244

310

114 95

825

152

0

100

200

300

400

500

600

700

800

900

1 2 3 4 5 6 7 8 9 10 11

ISO Scores ‐Minnesota 2011

Cost

Per Capita cost is among the lowest in the state (ESCI)(some departments include emergency services Nfld does not)

$17.27

$73.40

$131.31

$0.00

$20.00

$40.00

$60.00

$80.00

$100.00

$120.00

$140.00

Northfield Minnesota National

The Task Force developed objectives for a new organization in three areas

Governance

FinanceCapital Resources

Governance

Governance: Establish clear governance, fiduciary and management responsibilities to accomplish the mission of the department, including coordination with all other emergency services.

Policies, Procedures & Training: Ensure implementation and ongoing maintenance of “best practices” of all regulatory, audit and rating standards agencies and insurance carriers.

Governing Board Composition: Determine fair and equitable representation on the governing board of the organization.  

Personnel:   Continue as a volunteer Paid on Call organization. Leadership is chosen by the governing board, in its exercise of its governance responsibility.  Develop an explicit succession plan and leadership training program for the chief and key officers.  Develop an action plan that addresses culture, communication, change management and morale issues with department members.

Finance

Cost Sharing Agreement: Develop the formula for fair and equitable 

future sharing of all operating costs; equipment purchases and facility upgrade costs.  

Administrative & Operating Expense: Avoid or minimize any increase in headcount or organizational expenses and utilize shared services from current government entities.

Pension funding: Develop a plan for sustainable funding of the pension plan.  Any deficit should be funded per a cost sharing formula.

Capital Resources

Facilities:   Facilities must be functional, cost effective and properly 

maintained.  New or upgraded facilities and maintenance costs will be shared in a fair and equitable manner. 

Equipment:   Maintain modern apparatus with a replacement schedule and/or refurbishment.  Replacement costs will be funded from a depreciation fund, in a fair and equitable manner.

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Cost Sharing

Philosophy: The fire department is essentially an insurance program for 

people and property

• Population 80%

• Estimated Market Value 20%

Northfield74%

Dundas5%

Rural21%

Cost Sharing in 2014

74.0% 5.3% 20.8%

TOTAL Northfield Dundas Rural 

Operations & Maintenance $430,000 $318,200 $22,790 $89,440

Equipment Fund  $115,993 $85,835 $6,148 $24,127

Facility $0 $0 $0 $0

TOTAL $404,035 $28,938 $113,567

Cost Sharing(with facility improvements)

74.0% 5.3% 20.8%

TOTAL Northfield Dundas Rural 

Operations & Maintenance $430,000 $318,200 $22,790 $89,440

Equipment Fund (see Note 1) $115,993 $85,835 $6,148 $24,127

Facilities Option A (see Note 2) $120,720 $89,333 $6,398 $25,110

TOTAL  $493,368 $35,336 $138,676

Assumes a $2,500,000 bond at 2.5% interest with 20 year amortization.

Representation

Nine Member Board:

• 5 members appointed by Northfield City Council

• 3 members appointed by the Rural Fire Board

• 1 member appointed by the Dundas City Council

Decisions are by majority vote

Capital Equipment Funding should be based on setting money aside annually to pay for these large purchases.  To give this time to fill out, the city and the rural would each fund the next truck purchases in their queue.

Pension Funding, we agree that the firefighter pensions should be fully funded in compliance with state statue and that we strive toward a more constant contribution level.

Facilities, we agree that the facilities need to be improved.  We recommend a range of $2.5 to $5 million to make improvements to the current structure, add on to the new police station or build a new stand‐alone fire hall.

Department Objectives

1. Consistency in policies and management

2. Retain experienced members

3. Improve firefighting capabilities

4. Productive and frequent communication

5. Place financial resources as close to the front line as possible

Based on a Task Force interview with the Chief and Assistant Chiefs

10/25/2013

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The Task Force Vote

4 – Joint Powers Agreement

1 – Contract with Advisory Board

1 – Contract with Governance Board

Dundas withdrew from the committee in August

Moving Forward

Nov.  Votes by City Councils, Rural Fire Board

Nov. – Jan. Finalize Agreement / Contract

Jan.  Name Board

Feb. – Mar. Establish operational infrastructure

Mar. Town Meetings – approve contributions

Apr. Fire Department operating under new structure