4.2. SR 07-26-1993 - Laserfiche WebLink

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Did you know? e Thomas M. Gilbertson Financial responsibility of fire departments At many city clerk meetings, League staff encountered questions regarding financial responsibility in fire depart- ments. We asked Thomas M. Gilbert- son, general counsel, Office of the State Auditor, to provide insight into a few of these queries. Q. What is the fire department fiscal responsibility of a city clerk concerning the investments made by the fire relief association? A. The fire department and fire relief association are two separate entities. The permissible investments for a relief association are much broader under Minnesota Statutes Section llA.24, than those investments allowed for municipal investment. Relief associations must prepare an annual financial report countersigned by the city clerk (M.S. 69.051). The clerk's signature attests to the accu- racy of the statement, not the full compliance with the relief association investment laws. It is the duty of the board of trus- tees, along with the treasurer of the relief association, to determine invest- ment policy for the association. Invest- ment agents may be appointed. The city clerk or (clerk-treasurer or finance director) is an ex-officio member of the board of trustees under M.S. 424A.04. As a trustee, the clerk has a fiduciary . obligation to act in good faith and to exercise the judgment and care in making investment decisions for the relief association that prudent people would exercise in managing their own affairs. (M.S. 11.09A.) The mayor has a similar responsibility. In cities with paid fire departments, the clerk may have responsibility for countersigning disbursements, if the clerk is designated as the municipal representative under M.S. 423A.22. Q. Our fire department has fund rais- ers they use for departmental social activities. Are these funds supposed to be channeled through the city office? A. If these are monies received by the fire department which are intended for the fire department, then they should be turned over to the city treasurer. The fire department is a subordinate department of the city. It is created and funded by the city. A fire depart- ment has no power to receive contri- butions except through statutory authority given to the city (M.S. 465.03). Funds received by the fire depart- ment are subject to the control of the city council and should be turned over to the city treasurer and are subject to regular city controls and disbursement procedures. GARY FORD Ehlers and Associates, Inc. LEADERS IN PUBLIC FINANCE If the question addresses those situ- ations where firefighters, as members of a relief association, engage in fund raising (which is a common practice), monies should be received by the relief association, placed in the association's general fund, and disbursed according to bylaws. These monies are subject to the regular relief association audit. Q. Does the fire chief have authority to spend money for the fire department without consent of council? In one case a fire chief ordered $7,000 in detached fire equipment. A. In statutory cities, the city council creates the fire department (M.S. 412.221, subd. 17.) The city council defines the powers of both the depart- ment and the fire chief. The state law gives no statutory powers to fire chiefs. If the council has given specific prior approval to the fire chief to make a particular purchase, the council would be bound by the purchase. If there was no such approval, then the purchase would be beyond the fire chief's authority. If the city has accepted the equipment and made payments for the same, it may have legally waived its right to claim the fire chief was without authority to make the purchase. ~ 612-389-2312 GF Contracting, Inc. Route 3, Box 255 Princeton, MN 55371 OVER 40 YEARS EXPERIENCE n STEEL ERECTION . SANDBLASTING AND PAINTING ~ I CONTRACT WELDING . GENERAL MAINTENANCE FREEZE-UPS . EMERGENCY SERVICE . FROST JACKETS Lnng-term finanCing and acquisition of funds for municipalities. OFFICES IN MINNEAPOLIS AND WAUKESHA ~7 Marquette Avenue. Minneapolis. MN 55402 . 612.339.8291 October 1987 33