By Barbara Brown

A lengthy discussion regarding Rush City firefighter pension benefits resulted in a compromised agreement between the city and the fire department.

The council met Aug. 23 for its regular meeting and heard from Fire Chief Bob Carlson about a proposed increase in the benefit set aside for firefighters before their retirement.

Before Monday nightís discussion, Rush City firefighters earned $1,200 in a pension account per year of service. The last time the departmentís pension benefits were raised was four years ago.

The increase the council voted to approve will make their pension payments $1,350 per year of service.

Firefighters are vested in the departmentís pension fund after 10 years. They may begin collecting the money after 20 years in the department or when they turn 50.

The council received information compiled by City Administrator Daniel Hoffman that showed the departmentís pension accounts assets and liabilities and information from the cityís accountant.

The Fire Relief Association, the name of the pension group, invests its money through the State Board of Investment.

That agency holds investment accounts for firefighters, teachers and public employees, among others.

According to the information supplied by Hoffman, over the past four years the account has grown by $20,000, but if it had to pay out all pensions tomorrow, it would be in deficit about $73,000.

The council focused much of its discussion of what kind of impact an increase in the pension benefit would have on the cityís already high tax rate.

The city would have to raise nearly $11,000 in taxes to pay for the increase for the department of 27 members.

In Rush City, an increase like that has different impact than in a place like North Branch where the department is practically the same size.
Rush Cityís tax rate is 58 percent, among the highest in the area, and the tax capacity, or city worth, is $552,000. In North Branch, the tax rate is 42 percent with a tax capacity of $4.7 million.

Compounding the need to raise taxes to pay for an increase in pension benefits is the cityís expectation that it will receive less local government aid from the state than anticipated.

Carlson shared some statistics of his own during the meeting.

He showed the average number of training hours for 2000 was 1,257. That increased for 2003 to 1,793.

The average number of members responding to calls was 12 with the average number of people at meetings was more than 20.
The average time for firefighters to get out of the station was 3:42. The members not only give their time to fight fires and respond to other emergency calls, they also do maintenance on the fire trucks and building, totalling more than 540 hours in 2000, 2001 and 2004 alone.
ìIf youíre looking for extra money, you might as well take another part time job for all you miss with programs and kids and everything,î Carlson said. ì[Pension benefits] are something nice, something extra for all they put in.î
The council assured Carlson and the other firefighters that their efforts were appreciated more than they knew.
ìItís not that you guys are not deserving of your request,î Councilman Michael Louzek said to Carlson and two other firefighters who were present. ìI guess, to me, and who knows what the state Legislature is going to do, Rush City ñ just like all the other cities ñ if we had any fat, we got rid of it.î
After considering both sides of the issues, Mayor Mike Skalsky suggested that instead of the $1,500 pension rate suggested by the department, that the city council employ the same method it uses with city employees.
Each year, the cityís staff receives a two or three percent pay increase.
ìPersonally, I think itís a great thing to have for the fire department,î said Skalsky. ìAfter all those years of service, itís better than a gold watch. The only question I have is affordability. Can the city afford it?î
Using a three percent value over the past four years, Skalsky suggested the $1,350 for pensions.
The council agreed unanimously with Council member David Bengtson tempering his vote with recognition of the accountantís opinion that the city could find itself in a tough position in coming years if the state does not improve LGA payments while the city still maintains services.

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