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SR 03-06-1995 - JOINT~ \\ y of ~ 'lk River CITY OF ELK RIVER SPECIAL MEETING NOTICE SPECIAL MEETING OF THE ELK RIVER CITY COUNCIL I, Henry Duitsman, Mayor, hereby request a special meeting of the City Council on Tuesday, March 21, 1995 at 5:30 p.m., to be held at the Elk River Country Club. The purpose of the special meeting is to hold a "State of the City" meeting hosted by the Elk River Area Chamber of Commerce. In accordance with State Statute, I hereby request the City Clerk to post this notice. I further request the City Clerk to notify each member of the City Council of this special meeting, in writing, at least one day before the w meeting. L~ en A. Duitsman, Mayor ~~,/~S- Date I HEREBY CERTIFY, that this .notice has been posted and that I have served this notice upon the members of the Elk River City Council by mail at least one day prior to the above-called special City Council meeting. Sandra A. Thackeray, City C • ~`l~ ~9 s" Date 13065 Orono Parkway • P.O. Box 490 • Elk River, MN 55330 • (612) 441-7420 • Fax: (612) 441-7425 r a~ ty of lk~ River CITY OF ELK RIVER SPECIAL MEETING NOTICE SPECIAL MEETING OF THE ELK RIVER CITY COUNCIL I, Henry Duitsman, Elk River Mayor, hereby request a special meeting of the Elk River City Council on Monday, March 6, 1995, at 5:00 p.m., to be held at the Elk River City Hall - 13065 Orono Parkway in the Training Room. The purpose of the special meeting is to meet jointly with the Elk River Fire Department. In accordance with State Statute, I hereby request the City Clerk to post this notice. I further request the City Clerk to notify each member of the City Council of this special meeting, in writing, at least one day before the meeting. • ~/~/~.~- enr A. Duitsman, Mayor Date I HEREBY CERTIFY, that this notice has been posted and that I have served this notice upon the members of the Elk River City Council by mail at least one day prior to the above-called special City Council meeting. 3 /, /~~-- iSandra A. Thackeray, City Cler Date • 13065 Orono Parkway • P.O. Box 490 • Elk River, MN 55330 • (612) 441-7420 • Fax: (612) 441-7425 • CITY OF ELK RIVER SPECIAL JOINT MEETING OF THE CITY COUNCIL AND THE FIRE DEPARTMENT ---------------------------------------------------------------------------------------------------------- AGENDA Monday, March 6, 1995 5:00 p.m. Elk River City Hall - fining Room ITEM NUMBER ACTION TAKEN +• V11LL 111E •-• 111\tA 1 V V1VL 1~J1V (-~1 l/. ~/V J. •^Yl• 2. CONSIDER COUNCIL AGENDA 3. DISCUSSION ON ELK RIVER FIRE COMPENSATION TASK FORCE'S PROPOSED FIRE DEPARTMENT COMPENSATION PLAN AND THE FIRE RELIEF ASSOCIATION'S CHANGE FROM A DEFINED BENEFIT TO DEFINED CONTRIBUTION PLAN 4. OTHER BUSINESS 5. ADJOURNMENT '~ i s: \council\ag3-6fd.doc ~~ ~'~r ~~ ITEM 3. MEMORANDUM ity of ~~ l~ ~ TO: Mayor & City Council River FROM: Lori Johnson, Assistant City `-~~ Administrator v ' DATE: March 6, 1995 SUBJECT: Joint City Council/Fire Department Meeting In the fall of 1993, the City Council appointed a Task Force to review the Fire Relief Association Pension Plan and Firefighter Compensation. The Task Force held its first meeting on October 19, 1993, and has met 13 times since then. At the January 16 City Council meeting, the Mayor updated the Council on the Task Force's progress. The Task Force is now prepared to present a proposed compensation package which includes revisions to both the pension plan and firefighter pay. • A copy of the proposed compensation package is attached for your review. Several of the items included in the package need further discussion before approval by the City Council. The main items of discussion include special pay (holiday and night call pay) and the total rate of pay per hour. The pay items presented are based on the assumption that the fire department will vote to approve a change to defined contribution. If the fire department does not approve that change, the compensation portion of the proposal would not be implemented. In regard to the special pay, Task Force member Cliff Skogstad surveyed numerous cities to determine whether other cities had either holiday or night call out pay. None of the cities surveyed have a special pay rate for holiday or night call out pay; all calls were paid based on the same hourly rate. The other main item of discussion is the total hourly rate to be paid to the firefighters. Attached is a sheettitled "Fire Department Hour and Pay History," which shows how the total hourly pay is calculated. The average total hourly pay for the last nine years is $21.16. The Council should keep in mind when setting this rate that the City's contribution would fluctuate depending upon the amount of state aid received and the total number of firefighter hours. Only fire call and training hours would be included in this calculation. Other pay for meetings and work station duties would be paid • only the base rate. It is anticipated that this item will generate considerable 13065 Orono Parkway • P.O. Box 490 • Elk River, MN 55330 • (612) 441-7420 • Fax: (612) 441-7425 • discussion at Monday night's meeting as this is one of the items that is of most concern to the Council and firefighters. The proposal includes several other new pay issues: Firefighter pay would be included as part of the pay resolution so that the firefighters would receive the same cost of living increase that all other City employees receive. The pay structure would be changed so captains and assistant chiefs would be paid at a higher rate, and probationary firefighters would receive less than the base rate. Currently, all firefighters are paid $8.00 per hour with the exception of assistant chiefs who are paid $9.00 per hour. Based on the proposal, probationary firefighters would be paid $7.00 per hour, firefighters $8.00 per hour, apparatus officers $9.00 per hour, captains $9.00 per hour, and assistant chiefs $10.00 per hour. Keep in mind that the additional per hour pay would not change the calculation for total hourly pay and the amount the City would be required to contribute. Additional pay for extra training was also added. The Task Force also felt that it was appropriate that firefighters who take the initiative to become more well trained should receive some benefit. The proposal calls for an increase of $.50 per hour for the first 60 hours of formal training and an additional $.25 per hour increase for each additiona175 hours of formal training. Formal training means that it is training above and beyond the department's training requirements as • determined by the Fire Chief. The major component of the proposal is a change in the pension plan from defined benefit to defined contribution. Many firefighters support the change to a defined contribution method as long as the majority of the compensation portion of the proposal is approved as presented. Following the joint meeting on Monday, it is anticipated that the fire membership will take an official vote on changing the bylaws to call for a defined contribution pension plan. We will then proceed with making all necessary bylaw changes related to the pension plan plus any other changes which the City Attorney feels are appropriate. Finally, a copy of the February 2, 1995, Task Force meeting minutes is attached for your information. All members of the Task Force will be in attendance on Monday to answer questions and further explain the proposal. After the Council takes action. on the proposal, the fire department will vote on it; if it is approved the by-laws will be updated and presented to the Council for approval. • council:jntfdcc JANE 1 6-95 MC7N 1 3 26, ELK R I',~ER MACH JANUARY 10,.1995 • • COMPENSATION TASK FORCE ELK RIVER FIRE DEPARTMENT SUMMARY OF PROPOSED FAIR COMPENSATION PACKAGE THIS COMPENSATION PACKAGE WILL INCLUDE CHANGING THE DEFINED BENEFIT TO DEFINED CONTRIBUTION. THIS CHANGE IN A FAIR AND EQUITABLE WAY THAT WILL NOT REGRESS ACCOUNT BALANCES.. THE CHANGE NEEDS TO BE DONE~SO FIGHTER, WHETHER NEW OR LONG .STANDING MEMBER, DIFFERENTLY~THAR ANOTHER. BENEFIT PAY IS DEFINED AS THE PENSION PAY PER HOUR THAT GOES INTO THE DEFINED CONTRIBUTION RETIREMENT PAY. P 01.03 PENSION FROM WILL BE DONE ANY PENSION THAT NO FIRE IS TREATED TOTAL BENEFIT WILL BE DEFINED AS FOLLOWS: , TOTAL BENEFIT HOURLY PAY + BENEFIT PAY HOURLY. PAY IS DEFINED AS THE PAY THAT IS PAID DIRECTLY TO THE FIRE FIGHTER. EMERGENCY). ALL HOURS FOR TRAINING DRILLS AND FIRE RELATED SCHOOLING.. TOTAL BENEFIT HOURS WOULD BE APPLIED TO THE FOLLOWING HOURS: HOURS WHILE ON A PAGED EMERGENCY CALL {MINIMUM 1 HOUR PER PAGED HOURLY PAY ONLY,..WOULD APPLY TO THE FOLLOWING HOURS: HOURS. FOR COMMITTEE WORK THAT HAS BEEN PRE-APPROVED. ALI, WORK DUTY HOURS AT THE FIRE STATION. ALL FIRE MEETINGS. THE TOTAL BENEFIT PAYMENT WOULD BE MADE UP OF THREE FACTORS: 1) HOURLY WAGE PAID TO THE FIRE FIGHTERS. 2) THE 2g STATE PENSION PAYMENT. 3) TH£ CITY OF ELK RIVER PENSION PAYMENT. EXAMPLE: IF 5000 HOURS WERE PUT IN BY THE FIRE FIGHTERS IN ONE CALENDAR YEAR 5000 hrs X $22.25 {RATE PAID IN .1991.) = TOTAL BENEFIT. THE FIRE FIGHTERS WERE PAID $8.00 PER HOUR IN 19.91, SO THE BENEFIT PAY WOULD. BE $22.25 LESS $8.00 = $14.25 PER HOUR. THE CITY PENSION PAYMENT AND THE STATE 2$ PENSION PAYMENT WOULD BE 5000 X $14.25/hr, WHICH WOULD BE PUT INTO THE RELIEF ASSOCIATION PENSION FUND FOR THE FIRE FIGHTERS. THE CITY'S PENSION PAYMENT WILL FLUCTUATE WITH THE HOURS PUT IN AND WITH WHAT THE STATE 2g PENSION PAYMENT IS FROM THE STATE OF MINNESOTA. SPECIAL HOURLY 'PAY RATE WILL BE AS FOLLOWS: HOLIDAYS WILL BE PAID AT A DOUBLE TIME RATE. THIS ONLY' APPLIES TO THE HOURLY PAY THAT THE FIRE FIGHTER RECEIVES AND NOT THE BENEFIT PAY FATE.. THESE HOLIDAYS ARE TO BE NEW YEARS DAY, MEMORIAL DAY, 4th OF JULY, LABOR DRY, THANKSGIVING DAY., CHRISTMAS EVE AND CHRISTMAS DAY. NIGHT CALLS WOULD HAVE A 2 HOUR MINIMUM PAY BETWEEN THE HOURS OF 10:.00 PM AND 6:40 AM. • JANs 1 6-95 MON 1 3 - 27 ELK R I tiJER MACH P 031.03 • HOURLY PAY kiOULD HAVE A BASE RATE WITH THIS. RATE CHAIvGIAIG AS FOLLOWS: PROBATIONARY FIRE FIGHTER BASE RATE LESS $1.00/Yis APPARATUS OFFICER BASE RATE PLUS $3.00/hr CAPTAINS BASE RATE PLUS $1.00/hr ASSISTANT CHIEFS BASE RATE PLUS $2.00/hr THE INDIVIDUAL FIRE .FIGHTER COULD INCREASE THEIR OWN BASE RATE BY GETTING ADDLTIONAL TRAINING. THE RATE WOULD CHANGE BY $0.50/Y~r AFTER THE FIRST 60 HOiJR5 OF FORMAL TRAINING. .FOR EACH ADDITIONAL 75 HOURS THE RATE .WOULD INCREASE BY $0.25/hr. THE MINIMUM. PROBATIONARY TRAINING HOURS WOULD NOT COUNT TOWARDS THIS INDIVIDUAL RATE CHANGE. THE FIRE FIGHTERS WOULD GET THE SAME RAISE PERCENT AS THE REST OF THE CITY EtdPLOYEES GET. THIS WOULD BE APPLIED TO.THE HOURLY RATE.., THE BENEFIT RATE AND THE TRAINING HOURLY PAY INCREASE. THE PENSION PAY RATE WOULD BE THE TOTAL BENEFIT RATE LESS THE BASE HOURLY RATE. AN INCREASE IN AN INDIVIDUAL'S PAY RATE WOULD NOT EFFECT (LESSEN) THE PENSION PAY RATE. • FIRE DEPARTMENT HOUR AND PAY HISTORY • Total Year Hours x 58/hr State Aid City Cont. Total Hourly Pay 1986 2,227 17,816 26,997 11,000 55,813 25.06 1987 3,945 31,560 30,837 11,000 73,397 18.61 1988 2,963 23,704 33,509 15,000 72,213 24.37 1989 3,103 24,824 36,297 15,000 76,121 24.53 1990 5,039 40,312 38,221 18,100 96,633 19.18 1991 4,032 32,256 38,907 19,000 90,163 22.36 1992 5,171 41,368 38,590 19,000 98,958 19.14 1993 5,277 42,216 38,514 19,000 99,730 18.90 1994 5,907 47,256 41,526 19,000 107,782 18.25 AVERAGE 521.16 DEFINED CONTRIBUTION Annual Revenue Allocation Requirements • Per Minnesota Statute 424A.02 Subd. 4 Relief Association revenues must be distributed in the following manner: Each individual member account shall be credited a right to an equal share of: 1. State Aid 2. City Contributions 3. Forfeited retirement account funds All interest or investment income shall be credited in proportion to each member's account balance. • 3/2/95 FIREHRS.XLS MEETING OF THE ELK RIVER FIRE DEPARTMENT COMPENSATION TASK FORCE HELD AT THE ELK RIVER FIRE STATION THURSDAY, FEBRUARY 2, 1995 Members Present: Tom Dillon, Cliff Skogstad, Lori Johnson, Randy Sykes, Hank Duitsman, Bob Pearson Members Absent: None Also Present: Bruce West, Fire Chief, Rob Dreissig Randy Sykes called the meeting to order at 7:03 p.m. The minutes of the January 10, 1995, meeting were reviewed. There was discussion on the total hourly pay rates as previously calculated by Randy and whether or not actual hours were now available. Lori indicated that the 1990 actual hours were 5,039, which equated to pay of $19.18 per hour. Prior to that time, (1986 to 1989) Marv Dreissig, as Treasurer of the Elk River Fire and Ambulance Corporation, paid the fire fighters. Marv will gather the hour information so it is available when the fire department and City Council hold their joint meeting. • There was a question regarding vesting. Bruce indicated that vesting in both plans is the same and that there is a required minimum of five years of service before becoming fully vested. It was indicated that both the City Council and the fire department had seen the proposed compensation package. Hank informed the task force that it was distributed at a Council meeting; however, it did not generate a lot of discussion. He stated that the Council is happy that this is progressing, and the Council is anxious to meet with the department to complete this project. There was no discussion on the total hourly pay rate; it was assumed that once actual hours were available, the hourly rate would be negotiated between the department and the City Council. Hank indicated that night call out pay may be an issue; he stated he was not sure what the City Council's thoughts were on that portion of the proposal. Everyone felt that it was appropriate to have a joint meeting to bring this issue to a conclusion. After a per hour rate is agreed upon, the Council will be in a position to approve the proposal and the fire membership can then vote on the plan. Hank stated that the City Council feels that the allocation of the City contribution should be based on individual hours earned, but that is up to the Fire Membership. Since the by-laws need to be reviewed in order to incorporate the change in the retirement plan, it was agreed that the City Attorney, Peter Beck, should review the by- laws to incorporate any other changes and updates that need to be made. Lori will send a copy to Peter for his review. • Randy gave an overview of the Department meeting on the proposed compensation package. Again, the hourly rate was an issue and how the pie is split was an issue with the fire membership. The $8.00 per hour rate is not an issue at this time. There was a question on how the two different revenue sources would be split. It was indicated that state aid needs to be split equally and the City portion could be split equally based on hours or account balances as long as it is equally split. That issue will be resolved in the by-law changes and will be determined by vote of the fire membership. It was indicated that the fire department members overwhelmingly voted to continue with the process to change the retirement plan and to implement a new pay system. It was agreed that the Council and fire fighters would schedule a work session for 5:00 p.m., Monday, March 6, at City Hall to discuss the Task Force's proposal. Prior to that meeting, Cliff will make contact with other cities to see if they pay night call-out pay and Lori will check to see which methods of splitting the pie are legal. There was discussion on how the conversion would take place and on eligibility dates. Bruce indicated that eligibility and conversion dates can be different; that issue would be discussed when the by-laws are amended. Bob Pearson questioned whether clothing replacement was something that should be considered as part of the compensation package. Bruce said that he was not aware of any department that offered a clothing replacement allowance. The meeting of the Elk River Fire Department Compensation Task Force was adjourned at 8:15 p.m. • Respectfully submitted, Lori Johnson Finance Director •