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Home My WebLink About2.b. Firefighter Compensation Package E X E C U T I V E S U M M A R Y City Council Work Session: October 1, 2019 AGENDA ITEM: Firefighter Compensation Package AGENDA SECTION: Discussion PREPARED BY: Logan Martin, City Administrator Jeff May, Finance Director AGENDA NO.: 2.b. ATTACHMENTS: 2019 Fire Department Comparisons APPROVED BY: LJM RECOMMENDED ACTION: Discuss the City’s compensation package provided to Firefighters and provide feedback. BACKGROUND Based upon direction received from the Council at its August work session, staff would like to engage in a discussion on the overall compensation package that the City provides to its Firefighters. As the Council is aware, the City operates under a “paid on call” Fire Department, meaning that officers get an hourly rate for responding to calls, attending training, and performing ancillary duties. Currently, Rosemount Firefighters are paid $12 per hour for calls, $10 per hour for training. The average shown on the attached list of comps is $14.04 Secondly, members of the Fire Department receive a retirement benefit based on their years of service. The Fire Relief Association, which manages the pension funds for our firefighters, has worked closely with the City to remain competitive in the pension compensation offered to our staff. In August, the Council agreed to increase that annual rate to $7,400 per year of service. The average shown on the attached list of comps is $7,344. Representatives from the Relief Association provided staff with updated financial projections reflecting this proposal, which indicate that the Relief Fund will be 131% funded after accounting for the proposed increase. As the Council will recall, the City worked with the Relief Association in 2015 to reduce the City’s annual contribution to the Relief Fund from $171,000 annually to $30,000. This allowed the City to reduce its levy, and also led to the development of a five-year plan whereby an annual retirement benefit increase of $100 per year would be considered, up to the Relief Association’s goal of $7,500 per year. A fund balance requirement of at least 120% coverage was also an agreed upon component of this plan, as the fund needs to be able to support its future liabilities. In August, representatives from the Relief Association presented a new proposal going forward, which would be more directly tied to the performance of their investments and their State-mandated funding ratio. The below table reflects the initial proposal that was shared with staff. Funding Ratio Increase Less than 120% $0 120% - 124% $100 <124% - 128% $175 <128% - 132% $250 <132% - 136% $325 136% or greater $400 2 Staff understands that hourly compensation is also an important part of the compensation offered to the Firefighters and agrees that a discussion is needed with the Council to determine an appropriate way to adjust hourly rates as dictated by the market. One option to consider would be to increase hourly rates commensurate with the Cost of Living increase provided to the broader City Staff. For example, if a 2.75% COLA increase is provided to staff, it could also be provided to Firefighters (see below visual). This model could ensure that wages don’t become artificially “frozen” for long spans of time and remain competitive. 2020 2021 2022 2023 2024 2025 2026 $ 12.00 $ 12.33 $ 12.67 $ 13.02 $ 13.38 $ 13.74 $ 14.12 No decision is being asked of Council at this time, but staff views this as a chance to discuss options and ideas going forward. Attached to this memo is an updated and confirmed sheet of comparables from Dakota County and the surrounding area. Additional wage and benefit information from a broader swath of the metro is available also and will be discussed as needed during the work session. RECOMMENDATION Discuss proposal and provide direction. 2019 Compensation Fire Relief Annual City Total Operating Per Hour Beneft Amount Contribution City Budget (If Paid-On-Call)(Per Year of Service)To Fire Relief Apple Valley $1,963,642 $16.50 $7,000 $255,233 Burnsville *$7,551,808 n/a n/a n/a Eagan **$4,288,100 $13.00 $8,261 $34,715 Farmington $1,267,885 $12.88 $7,500 $150,000 Hastings **$1,823,522 $13.60 - $15.65 $6,100 $0 Lakeville ***$2,034,937 $13.00 - $18.00 $8,395 $0 Rosemount $453,000 $12.00 $7,400 $30,000 South St. Paul ****$2,467,945 n/a n/a n/a West St. Paul ****$2,467,945 n/a n/a n/a Chanhassen $1,020,000 $13.39 $6,800 $60,000 Cottage Grove $1,183,485 $14.75 $6,000 $0 Prior Lake *****$933,000 $12.20 $8,500 $20,000 Savage $813,689 $14.92 $6,074 $184,514 Shakopee ******$2,272,100 $15.30 $8,750 $0 Avg= $14.04 Avg= $7,344 Avg= $66,769 * Burnsville has a Full-Time department so columns 2, 3 & 4 are not applicable ** Eagan & Hastings have part Full-Time and part Paid-On-Call *** Lakeville's benefit for 2020 will go from $8,395 to $9,195 **** South St. Paul & West St. Paul shares a full-time department called the South Metro Fire Department so columns 2, 3 & 4 are not applicable ***** Prior Lake's compensation for 2020 is proposed to go from $12.20/hr to $14.10/hr ****** Shakopee's budget reduced by State Aid pass through of $258,000 2019 Fire Department Comparisons O:\taxation\TNT\2016\2.x. Comprehensive Fire Pay discussion (attach 1)