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7. Discussion on Fire Services Agreement with May Township Staff Report Date of Meeting: To: City Council From: Neil Soltis, Administrator Re: Fire Services Agreement with May Township Background: Based on a request from May Township, the City agreed to utilize a 3-part formula in order to determine the amount of the charge for fire services provided to the portion of May Township serviced by the Scandia Fire and Rescue. A draft agreement was approved by the Council in April and forwarded to May Township for review. The draft agreement included the number of fire calls, the market value of taxable and non-taxable structures, and the number of households as the factors to be used for the charge. In discussion on the draft agreement the number of households was to be determined using the dwelling type information on the most recent Washington County property tax records. In discussions May Township is seeking to use population as a factor with the May Township household count begin derived from the Washington County records and then multiplied by the Metropolitan Council estimate of household size. May Township is seeking for the City’s population to be based on the Metropolitan Council estimate which is derived from the Metropolitan Council estimate of households multiplied by the Metropolitan Councils estimate of household size. The proposed language is highlighted in the draft that follows. Also highlighted are minor changes that are proposed by May Township. Attached is correspondence from Township Chair Bill Voedisch. Note that the City has billed the Township for services based on the predecessor agreement which calls for billing at the previous agreement rate plus 5%. The Township is requesting that the 5% increase be removed based on negotiating in good faith. In contracting with other Cities for service the 3-part formula is utilized for the agreement with the City of Stillwater while the agreement with Marine on St. Croix is based on a fixed amount with an increase that is based on the consumer price index. A projection of the charge for services based on the information available is also attached. League of Minnesota Cities Model Contract: 12/15/2017 Page 1 City of Scandia, Minnesota Town of May, Minnesota Fire Service Contract This Fire Service Contract (the “Agreement”) is made and entered into this _______ day of _______, 2018 (the “Anniversary Date”) between the City of Scandia, Washington County, Minnesota, 14727 209th St. N, Scandia, MN 55073, a municipal corporation and political subdivision (the “City”), and the Town of May, Washington County, Minnesota, 13519 May Ave. N, Stillwater, MN 55082, a municipal corporation and political subdivision (the “Town”). Collectively, the City and the Town are referred to herein as the “Parties.” RECITALS A. City maintains a volunteer fire department with medical rescue service equipment and fire-fighting trucks equipped with hose and water tanks suitable for use in the protection of property against loss by fire in areas inside and outside of the corporate limits of the City. The Town does not maintain medical rescue service equipment or fire-fighting equipment of its own, and the Town desires to purchase the services of the City on an ongoing basis for fire and medical rescue services within a portion of the Town’s corporate limits. B. The purpose of this Agreement is to memorialize the cooperative obligations and responsibilities of the Parties in order to provide for a steady and consistent revenue stream to support the ongoing rescue and fire-fighting obligations of the Scandia Fire Department (the “Fire Department”). C. The Parties hereto acknowledge and agree that the Town receives fire services from one or more other fire departments pursuant to one or more other written agreements. The Fire Department has historically provided regular coverage to a discrete area of the Town, which coverage will continue pursuant to this Agreement. Such discrete area of the Town covered by the Fire Department as the regular service provider is referred to herein as the “Town Service Area.” The entire area regularly served by the Fire Department, including within the corporate limits of the City, is referred to herein as the “City Service Area.” In consideration of the mutual promises and agreements hereinafter set forth the Parties do hereby agree as follows: 1. Fire Services. Town agrees to purchase from City, and City agrees to provide Town, the following fire-related services (the “Services”): League of Minnesota Cities Model Contract: 12/15/2017 Page 2 Check all those that apply. √ Structural Firefighting √ Emergency Medical Services √External Structural Firefighting √ Fire Scenes √ Interior Structural Firefighting √ Rescue Scenes √ Grass/Forest Firefighting √ General Medicals √ General Firefighting Level of Emergency Medical Response √ Vehicles & Equipment □ First Responder √ Carbon Monoxide Calls √ Emergency Medical Technician √ Other Non-Structural Firefighting □ Paramedic √ Rescue □ Fire Code Enforcement √ Vehicle & Equipment Extrication √ General Search & Rescue √ Hazardous Materials Response √ Confined Space Rescue √ High Level Rescue Level of Hazardous Materials Response √ Water Rescue □ First Responder, Awareness √ Diving/Recovery √ First Responder, Operations □ HAZMAT Technician √ Disaster Response □ HAZMAT Specialist √ _Active Shooter Response______________________________ The Services indicated above are further explained, or limited, as follows: a. Allocation of Resources. The Parties understand the Fire Department officer in charge of the particular scene shall exercise independent and unfettered judgment to determine, in consideration of all the established policies, guidelines, procedures, and practices of the Fire Department, how best to allocate the available resources of the Fire Department under the circumstances of a given situation. Failure to provide the Services because of poor weather conditions or other conditions beyond the control of City shall not be deemed a breach of this Agreement. b. No Guarantee. The Parties understand and agree City will endeavor to reasonably provide the Services indicated above given the circumstances, but City makes no guarantees that the Services it actually provides in a given situation will meet any particular criteria or standard. The City and its officers, employees and volunteers shall not be liable to the Town or any other person for failure to furnish assistance under this Agreement or for recalling assistance. 2. Payment. Town agrees to pay City annually during the term of this Agreement the “Town Payment Amount” determined annually according to the following formula: League of Minnesota Cities Model Contract: 12/15/2017 Page 3 The following percentages relate specifically to Town in relation to the entire City Service Area (e.g., the entire City, the Town Service Area, and all or any portions of other cities, towns, or unorganized territories included in the City’s primary City Service Area). Number of fire service calls to the Town Service Area averaged over the last three years in relation to service calls averaged over the last three years in the City Service Area (not including recalled calls and other calls for response outside of the City Service Area): _______% Market value of all taxable and non-taxable structures within the Town Service Area, in relation to the City Service Area, as determined by Washington County using the most recent Washington County property tax records: _______% Households in the Town Service Area, in relation to the City Service Area, as determined by Washington County using the dwelling type information in the most recent Washington County property tax records: _______% Total: _______ % ÷ 3 = _______% of Town Cost Allocation Population in the Town Service Area, divided by the population of City Service Area, determined as follows. “Households” are defined as any separate living space; a single family home counting as one, an attached or detached apartment counting as one, a duplex counting as two, a four-plex counting as four, and the like, the number determined by Washington County using information in the most recent Washington County property tax records. The number of Households in the Town Service Area will be multiplied by the household size factor for the Town as determined by the Metropolitan Council, to arrive at the Town’s population, and the number of Households in the City will be multiplied by the household size factor for the City as determined by the Metropolitan Council, to arrive at the City’s population, all as reviewed and agreed upon by both parties. The population of the Town will then be divided by the population of the City Service Area (population of the Town plus the population of the City), expressed as a percentage: _____ To arrive at the Town’s Cost Allocation Percentage Share of the Operational Budget, the three percentages calculated above are added and then, divided by 3. Total Fire Department Annual Operational Budget for the upcoming year: $_______ $_______ x ________% = $_______ Operational Budget Town Cost Allocation Town Payment Amount City shall provide Town a written claim for the Town Payment Amount by the following date, or for each partial payment of the Town Payment Amount according to the following schedule: League of Minnesota Cities Model Contract: 12/15/2017 Page 4 a. Annual Meeting of Parties. Town and City shall hold at least one joint meeting annually during the term of this Agreement at least 60 days before its Anniversary Date to calculate the Town Cost Allocation and the Town Payment Amount for the upcoming year, discuss Town’s satisfaction with the Services provided during the preceding year, and to discuss such other issues as either Party deems relevant to this Agreement. If the Town Payment Amount is based on a lump sum rather than a formula, the financial terms of this Agreement will be reviewed annually and appropriate cost adjustments made upon mutual agreement of the Parties. The meeting shall be held separately from any regular Town Board or City Council meeting and shall be attended by at least a quorum of each party’s governing body. Any numerical changes to the Town Cost Allocation, the Fire Department Annual Operational Budget, and the Town Payment Amount may be made and agreed to by the Parties without further amendment to this Agreement. 3. Emergency Service Charge. Town, in its sole discretion, may exercise its authority to impose and collect an emergency service charge on those receiving emergency services, including fire services, within Town. City shall have no right to, or interest in, any service fees collected by Town. If Town imposes an emergency service charge it shall provide City a list of the specific types of information it determines it needs collected in order to successfully impose and collect the charge. City shall make a good faith effort to collect the requested information for each service call to the Town Service Area and promptly provide Town with the information it collected. 4. Service Area. City shall provide Services as indicated in this Agreement to the Town Service Area described or as indicated on a map which is attached hereto and made part of this Agreement. The identified area shall constitute the Town’s Service Area for the purposes of this Agreement. 5. Term. This Agreement shall commence on the Anniversary Date indicated above and shall expire _______ years from that date unless terminated earlier as provided herein. This Agreement shall commence on the Anniversary Date indicated above and shall expire three years from that date unless terminated earlier as provided herein. 6. Ownership. City owns the buildings and equipment associated with the Fire Department and the amounts paid by Town do not give rise to any ownership interest in, or r esponsibility toward, those items unless a specific ownership interest is indicated below: 7. City’s Responsibilities. In addition to any other obligations described herein, City shall: a. Authorize and direct the City Fire Department to provide the Services described herein to Town Service Area; b. Develop a detailed annual operational budget for the Fire Department for each year during the term of this Agreement before the joint meeting described in Section 2(a) of this Agreement, and present it to Town along with sufficient information to explain the items included in the budget figures; League of Minnesota Cities Model Contract: 12/15/2017 Page 5 c. Upon Town’s request, provide Town access to financial and cost data related to the Fire Department for five years prior to each current service year; d. Disclose to Town any proposed action City or the Fire Department intends to take that can reasonably be expected to effect the Insurance Services Office Fire Protection Grade in the Town Service Area or City’s ability to provide the Services indicated above; and e. Promptly disclose to Town any information City can reasonably anticipate will directly affect its ability to perform its obligations under this Agreement. 8. Town’s Responsibilities. In addition to any other obligations described herein, Town shall: a. Promptly pay City the Town Payment Amount as indicated above for each year of service, or a prorated share of the Town Payment Amount for the length of service in a given year actually provided if this Agreement is terminated early; b. Present a budget and levy proposal to the Town electors at each annual Town meeting during the term of this Agreement seeking authority to levy funds as needed to pay the Town Payment Amount; and c. Promptly disclose to City any information Town can reasonably anticipate will directly affect its ability to perform its obligations under this Agreement. It is understood and agreed Town shall have no responsibility whatsoever toward the City firefighters or other emergency personnel including any employment related issues such as training, supervision, performance reviews, discipline, compensation, benefits, insurance coverages, compliance with any employment related federal, state, and local laws and rules such as OSHA, ERISA, RLSA, FMLA, or any other employment related issues. It is further agreed Town has no responsibility, beyond paying the agreed upon Town Payment Amount, for acquiring, operating, maintaining, housing, or replacing equipment as needed to provide the Services described herein. 9. Insurance Requirements. City shall maintain general liability insurance for its Services and shall include Town as an additional insured for the term of this Agreement and any extensions thereof. The City shall maintain insurance equal to or greater than the maximum liability applicable to municipalities as set forth in Minnesota Statutes, Section 466.04, Subd. 1, as amended. City shall also maintain inland marine, automobile, and property insurance coverages. City shall provide Town proof of such insurance coverages and the additional insured endorsement naming the Town annually by the Anniversary Date of this Agreement. City shall also maintain workers’ compensation coverage as required by law. 10. Indemnification. City agrees to defend and indemnify Town against any claims brought or actions filed against Town or any officer, employee, or volunteer of Town for injury to, death of, or damage to the property of any third person or persons, arising from City’s performance under this Agreement for Services. Under no circumstances, however, shall City be required to pay on behalf of itself and Town, any amounts in excess of the limits on liability established in Minnesota Statutes, Chapter 466, as amended, applicable to any one party. The limits of liability for Town and City may not be added together to determine the maximum amount of liability for City. The intent of this subdivision is to impose on City a limited duty to defend and indemnify Town for claims arising out of the performance of this Agreement subject to League of Minnesota Cities Model Contract: 12/15/2017 Page 6 the limits of liability under Minnesota Statutes, Chapter 466, as amended. The purpose of creating this duty to defend and indemnify is to simplify the defense of claims by eliminating conflicts between the Parties and to permit liability claims against both Parties from a single occurrence to be defended by a single attorney. 11. No Waiver. Nothing herein shall be construed to waive or limit any immunity from, or limitation on, liability available to either Party, whether set forth in Minnesota Statutes, Chapter 466, as amended, or otherwise. 12. Good Faith Services Provided. The Fire Department will act in good faith in sending vehicle(s), equipment and personnel to any fire or medical rescue emergency within the Town Service Area, shall use best efforts and practices to provide the Services pursuant to current fire safety protocol and as required under federal and state law and the then-current Minnesota Fire Code, and no liability shall attach to the City by reason of any such fire or medical rescu e emergency or by reason of any negligent act or omission of the driver(s) or any of the personnel sent by City in connection with the work of providing any of the Services. If multiple fires or medical rescue emergencies occur at the same time within the City and Town Service Areas, the Fire Chief or his designee/agent shall have the independent and unfettered discretion to direct the deployment of available vehicle(s), equipment and personnel to a certain location or locations. Shall road or weather conditions be, in the independent and unfettered judgment of the Fire Chief or his designee/agent, unfavorable in the furnishing of vehicle(s), equipment and personnel at the time, City is not obligated to respond to said call. City and its officers, employees and volunteers shall not be liable to Town or any other person for any failure to furnish assistance under this Agreement or for recalling assistance as provided herein, should conditions or circumstances warrant such action. 13. Modification. This writing contains the entire agreement between the Parties and no alterations, variations, modifications, or waivers of the provisions of this Agreement are valid unless reduced to writing, signed by both City and Town, and attached hereto. 14. Subcontracting & Assignment. City shall not subcontract or assign any portion of this Agreement to another without prior written permission from Town. Services provided to Town pursuant to a mutual aid agreement City has, or may enter into, with another entity does not constitute a subcontract or assignment requiring prior approval of Town so long as City remains primarily responsible for providing the Services to the Town Service Area. 15. Termination. This Agreement may be terminated at any time during its term by mutual agreement of the Parties. Either Party may terminate this Agreement by personally serving a 120 day written notice of termination on the other Party. This Agreement shall terminate 120 days from the date of personal service of the written termination notice unless the Party serving the notice withdraws the notice in writing before it is effective. If Town fails to pay for the Services according to the schedule established herein, City may terminate th is Agreement 60 days from the date of personal service of a written termination notice. Notice to City shall be served on the City Administrator, or if the City Administrator is unavailable, the Mayor, and notice to Town shall be served on the Town Clerk, or if the Town Clerk is unavailable, the Board Chair. League of Minnesota Cities Model Contract: 12/15/2017 Page 7 This Agreement may be terminated at any time during its term by mutual agreement of the Parties. Either Party may terminate this Agreement by personally serving a 240 day written notice of termination on the other Party. This Agreement shall terminate 120 days from the date of personal service of the written termination notice unless the Party serving the not ice withdraws the notice in writing before it is effective. If Town fails to pay for the Services according to the schedule established herein, City may terminate this Agreement 60 days from the date of personal service of a written termination notice. Notice to City shall be served on the City Administrator, or if the City Administrator is unavailable, the Mayor, and notice to Town shall be served on the Town Clerk, or if the Town Clerk is unavailable, the Board Chair. 16. Service Contract. This Agreement is a service contract. The Parties do not intend to undertake or create, and nothing herein shall be construed as creating, a joint powers agreement, joint venture, or joint enterprise between the Parties. 17. Minnesota Law Governs. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Minnesota. All proceedings related to this Agreement shall be venued in the State of Minnesota. 18. Severability. The provisions of this Agreement shall be deemed severable. If any part of this Agreement is rendered void, invalid, or otherwise unenforceable, such rendering shall not affect the validity and enforceability of the remainder of this Agreement. League of Minnesota Cities Model Contract: 12/15/2017 Page 8 IN WITNESS WHEREOF, the Parties have executed this Agreement effective on the date indicated above. City of Scandia, Minnesota Town of May, Minnesota By its Mayor: By its Chairperson: ___________________________________ ______________________________________ Signature Signature ___________________________________ ______________________________________ Print Name Print Name ___________________________________ ______________________________________ Date Date ___________________________________ ______________________________________ City Administrator Clerk ___________________________________ ______________________________________ Print Name Print Name ___________________________________ ______________________________________ Date Date League of Minnesota Cities Model Contract: 12/15/2017 Page 9 EXHIBIT A MAP OF TOWN SERVICE AREA December xx, 2017 List of Scandia leadership - - Re: Fire Contracts, 2018 and Beyond Dear Honorable Leadership of the City of Scandia: For a few months now, staff between our two municipalities have been try to negotiate a new fire contract since our current one expires at the end of the year. So far we have not been successful so we are proposing that we expand negotiations to include additional leadership of the parties. At the heart of discussion is the formula used to calculate May Township’s share of Scandia’s fire expenses. The formula for calculating May’s share of Scandia’s fire expenses The issue being discussed is the formula used to allocate Scandia’s fire expenses across our two municipalities and thus calculate May Township’s share. Up to now we have used population as the sole measurement: Pop (May) = Population of May’s service area Pop (Scandia) = Population of Scandia May’s % Share = Pop (May) / (Pop (May) + Pop (Scandia)) We have mutually used this formula for many years however at this point May Township has proposed using the Minnesota State Formula to calculate our respective shares. What is the State Formula? Years ago the State of Minnesota adopted a formula based on “Guidelines for Minnesota Fire Protection Contracts” (rev. November, 2001) as drafted by the Fire / EMS / Safety Center. The formula uses three measurements to determine the share of fire expenses: - Population - Assessed value of property - Number of runs The formula goes beyond just using population, to include two other factors that can be predictors of potential stress on the fire and rescue resource, namely assessed property value and the number of runs. This formula has been adopted by the Minnesota Association of Townships (MAT) as well as the League of Minnesota Cities (LMC). The MAT sample contract is attached and you will note that all three of the factors are part of formula. Assessed value of property Just as population as a formula factor recognizes that the number of people is a predictor of resource use, so assessed value of property as a formula factor recognizes that the amount of real property (structures) is also a predictor of resource use. Clearly buildings of an accessory or commercial nature, when serviced by utilities (electrical and/or gas) are candidates to become involved in fire, just as homes are. Number of runs This factor recognizes that in addition to the first two factors, the actual number of runs should also be considered in the formula. Using number of runs is a way to account for a particular segment within either municipality generating more than a fair share of calls, such as the Vet’s Rest Camp in May Township, with its sometimes elderly and infirmed user community. The recommendation here is that the parties use a 3-year rolling average for the number of runs since a single year for either party may be abnormally high or low, and would skew the results if that was the year used to set new 3-year contract terms. Where is the State Formula used locally? The City of Stillwater has provided fire and rescue services to three other communities for many years: May Township, Stillwater Township and Grant. Stillwater has always used the State Formula in calculating fire contracts for their three “customer” communities. Early on, Stillwater described the basic fairness of the State Formula, and we all agreed to use it. Next steps Please provide us some feedback here so we know where we are at. To assist matters we can make ourselves available to come to a Scandia City Council meeting in January. In the meantime, since we are still negotiating in good faith yet we will be going past the end of the year, we respectfully ask that the 5% extension penalty be waived until we can get the matter resolved. Thank you for your consideration Voedisch Sparks . FIRE CONTRACT CALCULATION ESTIMATED COMBINED AVERAGES FIRE RUNS HOUSEHOLDS TOTAL AVERAGE Scandia 88.54% 89.91% 178.45% 89.23% May Township 11.46% 10.09% 21.55% 10.77% Total 100.00%100.00%200.00%100.00% BUDGET COST OF FIRE PROTECTION 2018 NOTES Operating Costs $238,200 Depreciation $89,806 Administration (2% of Operations) $5,430 Total $333,436 2018 2017 $ Increase % Increase Proposed Actual (Decrease) (Decrease) COST ALLOCATION (1)Contract Amount Contract Amount Scandia $297,510 May Township $35,926 $34,212 $1,714 5.01% Total $333,436 3 YEAR % of Total AVERAGE 2016 2015 2014 FIRE RUNS Scandia 88.54% 170 167 182 162 May Township 11.46% 22 22 26 17 Total 100.00%192 189 208 179 Population Served (2016 Met Council Est) Population Households Persons / HH HH Served Population Served % Population Served Scandia 3,945 1,506 2.6195 1,512 3,945 89.91% May 2,761 1,079 2.5589 173 443 10.09% 6,706 2,585 1,685 4,388 100.00% COST OF FIRE PROTECTION 2018 Budget Operating Costs: Expenditures for 2018 271,500 Other 0 Total Expenditures 271,500 Less: Capital Outlay* 0 Fire Retirement Contribution 33,300 Total deductions 33,300 Total Operating Costs 238,200 Depreciation: Fire 89,806 Fire Donated 0 Total Depreciation 89,806 Administration (2% of Operations)5,430 TOTAL COST OF FIRE PROTECTION 333,436 Asset Description Acquisition Date Cost 12/31/2017 Cost 12/31/2018 Depr 12/31/2017 2018 Depr Accum Depr 12/31/2018 Fire Dept/Public Works Land 2000 100,000.00$ 100,000.00$ -$ -$ 5 Panther SCBAS 2006 15,565.00$ -$ 15,565.00$ -$ 15,565.00$ 7 Survivair SCBAS 2007 27,680.00$ -$ 27,680.00$ -$ 27,680.00$ Air Containment Unit 2008 5,885.00$ 5,885.00$ 5,885.00$ -$ 5,885.00$ Pagers 2008 8,128.00$ 8,128.00$ 8,128.00$ -$ 8,128.00$ Siren 2009 17,208.00$ 17,208.00$ 3,871.80$ 430.20$ 4,302.00$ Two APX7000 Digital Portable Radios 2010 10,802.70$ 10,802.70$ 8,642.16$ 1,080.27$ 9,722.43$ Holmatro 4050NCT Cutter Twin Line 2010 5,254.25$ 5,254.25$ 4,203.42$ 525.43$ 4,728.85$ Two 1998 Federal Thunderbeam Sirens 2013 15,856.49$ 15,856.49$ 3,964.10$ 792.82$ 4,756.92$ LUCAS Chest Compression Device 2015 14,417.00$ 14,417.00$ 3,003.54$ 1,441.70$ 4,445.24$ Thermal Camera 2017 7,077.46$ 7,077.46$ 353.87$ 707.75$ 1,061.62$ Thermal Camera 2018 -$ 9,540.00$ -$ 477.00$ 477.00$ SCBA Equipment 2018 -$ 97,378.15$ -$ 4,868.91$ 4,868.91$ 127,873.90$ 191,547.05$ 81,296.89$ 10,324.08$ 91,620.97$ 95 Ford Pickup Truck 5175 1995 19,016.00$ 19,016.00$ 19,016.00$ 19,016.00$ 00 Pumper Truck 5176 2000 243,000.00$ 243,000.00$ 218,700.00$ 12,150.00$ 230,850.00$ 03 Peterbilt Tanker Truck 5178 2003 120,000.00$ 120,000.00$ 90,000.00$ 6,000.00$ 96,000.00$ Ford F-550 Truck Chassis 2009 42,664.29$ 42,664.29$ 19,198.91$ 2,133.21$ 21,332.12$ Fire Rescue Truck 2010 184,000.96$ 184,000.96$ 73,600.39$ 9,200.05$ 82,800.44$ Polar Ranger UTV 2012 11,425.65$ 11,425.65$ 3,427.69$ 571.28$ 3,998.97$ 2013 Pumper Truck 2013 344,953.00$ 344,953.00$ 68,990.60$ 13,798.12$ 82,788.72$ Fire Tanker #5177 2015 214,938.00$ 214,938.00$ 22,389.38$ 10,746.90$ 33,136.28$ Replacement for 5175 2017 89,996.00$ 89,996.00$ -$ 4,499.80$ 4,499.80$ 1,269,993.90$ 1,269,993.90$ 515,322.97$ 59,099.36$ 574,422.33$ 1,497,867.80$ 1,561,540.95$ 596,619.86$ 69,423.44$ 666,043.30$ Fire Hall/Public Works 2000 1,528,727.00$ 1,528,727.00$ 489,192.64$ 30,574.54$ 519,767.18$ 1,528,727.00$ 1,528,727.00$ 489,192.64$ 30,574.54$ 519,767.18$ 1,019,151.33$ 1,019,151.33$ 326,128.43$ 20,383.03$ 346,511.45$ 89,806.46$