3.4. SR 12-20-2010 - Laserfiche WebLink

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REQUEST FOR ACTION TO ITEM NUMBER Ci Council 3.4 AGENDA SECTION MEETING DATE PREPARED BY Consent A ends December 2Q 2010 T. ohn Cunnin hate, Fire Chief ITEM DESCRIPTION REVIEWED By Otsego Fixe Contract Tim Simon, Finance Director REVIEWED BY Lori ohnson, Ci Administrator ACTION REQUESTED Request to approve the draft 2011 firefighting services contract fox the City of Otsego. BACKGROUND/DISCUSSION In August, 2010, the fire department and city administration began reviewing the fire services agreement with the City of Otsego. The last formal agreement was executed on September 16, 1998. During the course of this evaluation, one of the concerns that was raised was the yearly fluctuation in receivables to the City of Elk River for services rendered. Under the previous agreement, billing was based upon a percent of fire calls within the Elk River "Otsego" fire district. This model makes budgeting fox both cities difficult and doesn't accurately reflect the actual cost of running the fire department (considering costs related to operating expenses, capital expenses, and general overhead) and providing this service to the City of Otsego. Regardless of the number of calls fox service, the department must be at a constant state of readiness. Previous invoice amounts are reflected below: • 2010: $99,980 • 2009: $123,785 • 2008: $170,406 The pay structure fox the proposed new contract is based on aper-parcel amount and the fire department's 2011 budget. The current Elk River "Otsego" fire district includes 3,248 parcels. Taking into consideration the proposed fire administration budget (including a 15% administrative factor and annual depreciation of equipment), the price per parcel comes to $52.28. This proposed rate structure has been previously discussed with the officials from the City of Otsego. The total contract amount proposed fox 2011 is $169,805.44 which is reflected in the attached contract. The City of Elk River is proposing a five (5) year contract with a 3% annual increase to the base amount. The five year contract will encourage a fresh look at the agreement and to allow for any adjustments to the base amount, if needed (factoring in capital expenditures, etc.). The contract calls fox two equal payments to the City of Elk River, one in January and the other in July. This payment structure is similar to other service contracts in place with other departments. N:\Public Bodies\City Council\Council RCA\Agenda Packet\72-20.2010\Otsego R¢e COntracLdoc