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t~ver <br />Fire Department <br />13065 Orono Parkway <br />Elk River, MN 55330 <br />Friday, August 06, 2010 <br />Mike Robertson, City Administrator <br />City of Otsego <br />8899 Nashua Ave. NE <br />Otsego, MN 55330 <br />Re: Fire Protection Services Contract <br />Dear Mr. Robertson, <br />Thank you fox taking the time recently to discuss the fire protection senrices contract between the <br />CitST of Elk River and the City of Otsego and for providing me the opportunity to address your <br />Council on July 26, 2010with ayear-to-date update. I hope that pour Council and staff found the <br />information informative and helpful. <br />In follow-up to our previous discussions, I have had the opportunity to review ow: existing <br />contract which vas last formally updated on September 16, 1998 and to prepare a proposal for <br />what I hope will set the foundation to update/renew the contract in the near future. <br />Presently, the contract is based upon a percent of fire calls within the Elk River "Otsego" fire <br />district As all of us have noticed in the past five years, the actual amount has fluctuated <br />depending on the number of calls for service. This model makes budgeting for both Cities <br />difficult and doesn't accurately reflect the actual cost of running the fire department (considering <br />costs related to operating expenses, capital purchases and general overhead). Regardless of the <br />number of calls for service, the department must be at a constant state of readiness. <br />With the assistance of our City's Finance Director, Tim Simon, we researched a number of <br />different options and recommend changing the model to a per parcel amount. This is a widely <br />used model and better reflects the administrative/operations budget of the fire department. <br />According to the Wright County Assessor's Office, there are 3,248 parcels in Elk River's fire <br />protection district. Taking into consideration the fire department's requested 2011 budget <br />0766,190) and the percentage of parcels in Otsego (22%), this equates to X52.28 per parcel The <br />total proposed 2011 Otsego contract amount would be X169,799.64. <br />The City of Elk River is recommending a five (5) year contract with a 3% annual increase <br />although we will be happy to discuss other term options. This amount does not include fire <br />inspection senrices which will be proposed separately. <br />Phone: 763.635.1100 <br />Fax: 763.635.1090 <br />www.ci.elk-rivermn.us <br />