Alright. It's 05:00. We'll start our study session. First up tonight, 05:00 until 05:30 is the ICS Police Fire Station's design update. And I'll turn it over to administrator Tula. Yeah. I just, would like to introduce Chris Zemer from ICS, who has an, an update on police and fire as we get moving on this. Just wanted to keep the council updated on where we are and what's kind of shaping up. So, Chris, I'll turn it over to you. You have thirty minutes. Sure. Thanks again for allowing me to speak and give an update. On some of these slides you've seen before,
the update really is at the end, but, I guess we'll speed through some of the past information just so it's continually visited as we go through. Again, back in 2024, we created the task force that met for the majority of '25, that came up with the scopes that, we were provided with direction from Council in December '25 to move forward with. So again, task force makeup, project delivery model, and then the guiding principles that continue to be the test that the designs are measured up against. So Council adopted these as well in December '5,
I believe, And we've continued to measure the designs and the solutions against these. Chris, can you clarify, it was 2024? December 2024. 2024, yep. Sorry. Can you run back to that task force slide quick? Because I think there's some people that weren't sure who, if they want a few seconds to see who all was involved for the last three years, two years, whatever. Alright. Thank you. Yep. So, Yen. So again, our overall timeline of condensed those three slides into one just so you can see the overarching timeline that we've been following.
Again, this effort started way back in 2019 with an assessment of the government facilities. And then picked up again in 2022 of trying to prioritize, what facilities needed attention in the city of Owatonna. Fire and police were not the only facilities. Public works was another facility, but when they were ranked along with existing facilities, being city hall, library, fire and police needs were rose to the top, and those others to be visited in future years. Right now we're looking at, if things stay on track, completion of the projects in 2028.
So fire hall, existing fire hall, again, four story building is the 1906 Building. It's had a series of renovations, I think, 1997. They did some dorm renovation, and then there were some elevator upgrades done in the early two thousands. The apparatus bay was added in 1997. So again, building current facility is twenty seven thousand eight hundred square feet. Current facility needs, based on the year long programmatic exercise we did with the fire department, it's 40,500 square feet. And that breaks down not only in office space,
dorm space, being able to function, but also the apparatus space with numerous pieces of equipment stored around town, which is slowing down, potentially, slowing down response times when we need to go get that equipment. Because we're coming to the fire department, grabbing a vehicle, going to get a trailer, coming back, and then answering our call. Programmatic deficiencies in the existing facility, again it was training facilities as high on the list. While the Fire Department has done a good job of creating some training facilities in the basement, it's lacking in terms of required space to run some of those exercises.
Living quarters are not private. We've got three firefighters sharing some of the rooms right now. Lack of dedicated cool down mental health space, again, becoming a more important need in society as we learn more and more how our, first responders deal with some of the things they see on a daily basis. Parking is severely lacking at the existing fire hall, and then existing facility is landlocked. There's no room for future growth right now. EOC, while it exists up on the 3rd Level, is not what, a current EOC standard would be.
So there's quite a few things lacking there that the new facility will take care of. The LEC, again, Sheriff recently moved out, so some of the space has been freed up, which we'll see on a future slide, and nine eleven will be moving out in, I think between June and July as of right now, based on our understanding of their project. So again, it's a two story building with a basement, constructed in, 1950s. Its existing space is 30,000 square feet. Existing freed up space from the sheriff moving out is 9,550
square feet. When nine eleven moves out, that'll add to that as well, but you're still 18,450 square feet short, and it's not just square footage you're short, you'd be short in specific programmatic spaces, so the number actually grows a little bit because some of that can't take place in the existing building. Facility needs at our current program for the new building is 58,000 square feet. And the temporary swing space, the former district office is 13,000 square feet, which is short, 45,000 square feet. And the site is only about an acre and three quarter right now.
So the site is extremely small if that were to ever be the a future home, final home for for police, which it currently does not meet. Programmatic challenges, again, the build this building was not originally constructed as a police station, so it's been retrofitted, in 1997, the main retrofit, and then there's been some small renovations throughout just to accommodate need. As of right now, no future renovations have been taken on, with the Sheriff moving out as, police have made use of some of the spaces and mainly,
the mental health, spaces is really kind of some of the space that they've been able to create now that they didn't have. Facility lacks adequate separation of public and law enforcement spaces. Again, anyone who's been on the tour can see that as you walk through the building, if you go on a tour, you're brought right into a space that's technically CJIS border, and there's a lot sensitive data that's going on that the public shouldn't be seeing. Lacks dedicated family victim interview rooms, lacks appropriate secure and custody holding, lacks of dedication, cool down mental health.
Again, we're temporarily taking care of that right now, but it's not, ideal space as to what should be being done there. Evidence storage, problematic because it's on the second level, and, with its restricted access and the way it's set up right now, it doesn't really easily flow for checking evidence in. There's often evidence sitting out in the hallway until it can be checked in. It just doesn't flow very well, and there's also space needed there to take on more evidences. That continues to grow, and the requirements of holding that evidence,
continue to be refined by the state. Site lacks dedicated public parking, the gun cleaning and ammunition storage is inadequate, special investigations is in the basement with no access to daylight, and then site facility lacks adequate buffers. Again, it's right up against the road, there's no buffer there, there's no hardening measures for the existing exterior of that building. And then, sheriff moving out, it still lacks a secure sally port, evidence processing and storage, and then secure and close parking for police vehicles and equipment. Just a reminder, we went on a series of tours. The upper left or the left side,
I will say, are the preferred of all the, venues that we toured, these were the ones that did things well, and had aspects that did well. Maybe not the whole facility, but there were takeaways on how to do things better than what the existing facilities are currently doing. So takeaways, addressing outdated, cramped facilities, creating modern functional spaces, and building a stronger community by allowing, community more access to the facilities they have right now. So again in twenty twenty five December, council, moved forward with,
locating the facility. At that time it was a joint facility on the West Hills site. As we further investigated response times, which we'll show in a little bit for fire, the need was very clear that we need to break the facility's part based on available property that the city currently owns. So police is located on the West Hills campus, as mentioned before. That is the original diagram. As you'll see, the plan has morphed a little bit since then. And then response times for fire. Again, the Pearl Street location is centrally located within town.
This is important not only for the full time, firefighters, but because you are partially on call yet. This is the least minimal response time for those answering a call coming from remote locations to the station and then coming back out. We pull that star one way or another. We potentially are adding to someone getting to the fire station to respond to a call. Apologize for that. What's going on here? Sorry. My computer's going a little haywire at the moment. Alright. There we go. So Fire Department site,
again, the city owns, the two houses, to the bottom there, along with the vacant lots. And actually, this slide hasn't been updated, but the house, with the resident, to the immediate right of the LEC approached the city. The city has since purchased that lot as well. So there's enough city property there to, put the new fire station on. That's an early diagram of that. So current site, this just shows the facilities. It's updated on here. It shows three residences that are owned by the city,
the existing LEC, the surface parking, and then the garages. This is the current layout of the fire station. We are going to keep the garages to the north and then utilize those other properties to expand staff parking as well as public parking. Current main level. So we've got, the office areas and the, EOC on the right side here, along with the training room. And then the apparatus bays that immediate happen are the two SUV pickups that are
commonly used on response, along with the three most commonly used, vehicles that respond to calls on a daily basis. In the middle there is the gear storage, the decontamination sequence, and storage of other equipment and gear, along with all the other equipment that is being stored. As currently shown, in the existing space, we have one bay, let's call it, or one station where we could put an additional vehicle. Otherwise, this represents all of the equipment the department currently owns, so that it is housed in one location.
And then future expansion is possible at a future date to the north or the left hand of this slide. It's just to clarify that one, one half a bay. Is that Half a bay, which would be a smaller rig, let's call it, that would fit in there. Second level, we've got the training in between the apparatus phase along with some mechanical equipment. And then, primarily, this is the living quarters, dorms, for your permanent staff, as well as your some of your on call staff that you offer quarters to
while they, live at the station. Some of the imagery that's being developed right now, so this would be a view from the southwest corner of the site. This is a view from the West. View from the Northwest. And this would be the back of the building on the East side. Police station. This is the current site that exists right now. As you can see, the new station's dashed in on this slide. I think the most important thing to note is that, we are actually back a little bit, a couple feet from the front of City Hall, and the entrance aligns somewhat with the Arts Center entrance of the building across,
and we're reutilizing the, see, that'd be the most easterly lot, for the senior center as part of this project. This is the current site layout with the gray box being the footprint of the new proposed facility. As you can see, we're realigning some of the streets to create some better intersections, so that we're not coming in at angles, trying to look over shoulders as we're exiting and getting clipped by cars. And again, that senior center lot on the East side is being repurposed and reconfigured for some
of the visitor, parking that would come to the fire, the police station, with surface staff lot to the south, and then what's not shown on here, is the berm and some landscaping that'll help shield the backside of this building. The retention pond, actual infiltration pond, is the, the bigger, oval there on the right along with the dashed line in it. So a lower level of the police station, again, this is primarily the secure indoor parking, gear storage, general storage, ammunition storage, and then the training facilities for police,
including defensive tactics and fitness area. The fitness area will be available for for all city staff and we're making accommodations so that, secure barrier is not breached by those visiting and they can still utilize fitness equipment while the police are utilizing it as well. There's also a decontamination sequence in this facility as well as police sometimes come back from calls with blood or other, biological contaminants so that they can clean up immediately. Upper level, so we've got, the drive through Sally Port,
large evidence storage, and then SWAT garage on the upper level. There's no basement under that, and then the basement begins underneath the rest of the facility. The most important thing to note here is that, there is future expansion planned. We are not building over the entire garage, so the two white boxes to the right allow this facility to expand in the future if it needs to, with some very minor, planned growth within the existing floor plan. Nothing really severe though. Hey, Glenn. Can I Kevin, can I ask a couple of questions on here this week?
I know we're short on time, but can you just know, because I know it's a public interest, what's the need for the law enforcement? Can you just highlight a couple of the areas or the areas that we currently do not have at the current law enforcement center of what's the need? So in custody holding is severely lacking in the existing building. Right now, you basically have a room that maybe is about this size. So we're adding that, secure interview rooms are another lacking component that are adjacent to custody holding right now. They kind of serve as the same space.
In a new facility, as we saw on the tours, you really want to keep those separate. So one, you may be interviewing more than one person and you may also be holding more than one person at one time, so that allows for adequate space to have those things to occur along with a secure sally port, so, right now as they hold people in the existing building there is no secure area. They are held in the corridors and in the current patrol area with staff watching them. Let's see,
training room, we don't have a training room in the existing building, that has public access. There is a training space that's being used, but it's also the evidence and case study space. So if they are working on a case and they have things pinned up, they have to pull those down before they have a training in the building. Because that cannot be seen by others, in the same department and by others that are visiting. Let's see here. Evidence storage, obviously, I've talked about that needing to grow a little bit. Interview rooms right off of the main lobby.
Again, those do not exist as well. So, and then just a training room that can be subdivided, whether that's a press, event where the chief needs to update the local press on an event, or it's just small trainings and there's two trainings happening, just gives you flexibility in the future. How about the Sally Port SWAT, large evidence? Are we These do not exist right now. The existing garage serves somewhat as a large evidence room, but it is not secure and separated. And on the slide beforehand, the lower level is really all outside parking or a couple of garages
currently have? All of this parking is outside. Defensive tactics has been moved into the existing safe, that's subdivided into two rooms, so it doesn't really serve for a full size defensive tactics room. They're making that work into kind of two smaller rooms. Fitness exists in the current space. Locker rooms are not adequate, nor are there adequate toilet showers for both male and female staff. And then gun cleaning, as I spoke to in armory spaces, is adequate in the new plan versus the existing plan.
There also is not a place to take care of the canine when the officer is in the building. That's something that the new facility will take care of as well. So view from the Northeast of the building as you're coming up the drive. View from the Northwest. This would be view from the North, so imagine that you're standing over at the art center looking straight across. This is the view you would see. And then this is the view from the South where that staff parking lot is. Swing space, again, this is the improvements we're looking at. A lot of this is existing space,
that we're, working on a hard drawing for so we can put hard estimates to and get quotes, so that this work can happen before we move police out temporarily, which will allow us to demolish the LEC, allowing us to conduct both projects at the same times, which is an overall savings, because time is savings and money, just due to inflationary costs and phasing costs. So that will save fifteen to eighteen months of the project if we're doing them both at the same time. The biggest things here are the changing rooms and evidence,
or locker rooms, sorry, so that they have a place to change temporarily, when they're either working out or, again, if they get blood or a, biological agent spilled on them, they can come and clean up quick. And then evidence storage, we're doing a little bit of work in that area to make it secure and have the proper exhaust. And then there's some minor office changes up in the patrol area just to provide for those staff. But again, in walking with the Chief, I think we've walked with his staff, about six times through this facility.
This is the plan that will meet the temporary need, and it's stressed temporary. It's not a final home. It will not work as a final home for them. So again, overall project timelines, we're here in February, so we're working on documents yet. Just about to move in the construction documents. We're just started design development estimates for the project, so we'll be coming to you at a future update with just where project costs are sitting right now. But again, as I mentioned, we're looking for 2008 for completion as these projects are completed.
As I mentioned, next steps, we're working on the estimates. We're gonna continue to refine the design on budget estimates and then continue to update council periodically as design progresses. Any questions? Brent. Yeah, Chris, I struggle sometimes with the cost of these facilities. Yep. And I often wonder why didn't we explore going west of the current fire department, buying out those properties, expanding that existing fire hall, putting in the $1,400,000 of facility needs. Because it clearly in my mind, I think we'd be able to get another apparatus bay to the west with two
or three floors above that for sleeping, training room, etcetera. In my mind, that'd be a lot cheaper than potentially spending $30,000,000 on a new fire department in a different location knowing that in the future at some point we'll likely need to build some type of satellite facility for the fire department. So I would hate to see us build a $30,000,000 facility, have it paid off in twenty, twenty five years, and then turn around. Oh, our city has grown so much we need to add another satellite office for the
fire department, which is gonna cost us another $10,000,000 for that. So, I mean, in my mind, I think it would be a lot more feasible, responsible with our government money to actually look at exploring to the west of the existing fire department and what would that cost us, to build to a spanner fire department there because it is a historic structure from nineteen o four. Once we vacate that building, I don't know what use is gonna wanna go in there because with $1,400,000
of maintenance needs, it's gonna be a a vacant building in our downtown area for years to come. Sure. So So you've hit on quite a few items there. I'll try to knock them off as I go. We did actually look at that site and what it would take. The limiting factor is not necessarily buying property to the west, it's the, communications building that's to the south. The alley doesn't allow for vehicles to for the fire engines to come through and drive through. And that's, you know, what we saw through most of the facilities.
Actually, all the facilities we toured is that that's the most efficient. That's what everyone's building nowadays is a pass through Salley Port. That's not to say you can't back in, but you're also, there's a risk of accidents there with the road being there, even with the stoplight potentially coming out in the future. So I know that was looked at. Also cost of property wasn't in that original estimate for trying to look at that site, so that's a cost that's unknown right now of what those properties would cost. On top of that, you would you would absolutely need to remodel the all four floors if you're gonna
stay there. And that was a pretty significant cost because the dorms would have to be reconfigured to a more modern layout so that they all have access to a shower and toilet. They're not sharing toilet facilities. That's the old model that no one is following anymore throughout the country. And then on top of it, yes, you could build an apparatus bay to the west, but now you really have to look at how you're gonna reconfigure the main floor, because the main Floor of the existing facility is severely lacking square footage for what Ed and his staff need,
to operate. And now you've separated the two apparatus space, so you're gonna have to start making decisions. Do you have enough in the one to the east to get the storage equipment, and then you're building the new. So I think by the time you we were done, we were easily over 60% of the cost of building new, which is kind of the trigger to start looking at building new versus remodel. It It would be a lot less than $30,000,000 So this is my thoughts. Three out a 110 year old building when you're done.
Upgrade it though. Modernized. So that's my thoughts for now. So All right. It is 05:30. Appreciate one question, a comment. Promise Chief Hoffman and Chief Mundale that we're really going to get after new facilities, and I think we're well on the way to doing that. But I also promised our constituents fiscal responsibility. When we started the project, I think we were at 51 or 52,000,000, something like that. 54,000,000. Pardon me? 54,000,000. 54,000,000. And I said right away, I think I can sell my citizens, my constituents at 499.
That was the one building facility, and now we split to two buildings and added ten or eleven million dollars. I sure hope that there's room for the both chiefs to look at what we can right size this building and help some of our constituents that, are really concerned about $65,000,000. Comparison, a municipality just north of us built a $60,000,000 jail. And at the time, I thought they were goofy. Those folks have two and a half times the tax base that we have.
They've got the city of Faribault. They've got half the city of Northfield and all of Rice County paying for that $60,000,000, where we've got our 28,000 people paying for that $60,000,000. And I think there's gotta be some rightsizing being done. Whatever we end up with is certainly gonna be better than what we have, and I hope everyone is happy with what we come up with. But $65,000,000 is I I don't know how our taxpayers can take that. So the project budget to be clear right now is 61,000,000?
The 60 the project budget to be clear right now is 61,000,000. The 65,000,000 is a financial thing that Ehlers can speak to more. And I know we have to take the next step. Yep. Get it out for bid to see what the actual numbers are for what we're dreaming of? It might might not be fully fulfilled. So 54,000,000 was doable. I don't know $49.09 as I've spoken numerous times in task force meetings or this meeting. It was never achievable. What I understand That's just what I thought.
Yep. $49.09. I mean, I think our I think constituents would understand that the age of these buildings and the way they're contoured and the way that we've band aided things for so long. I could convince my constituents that forty nine nine, maybe it balloons to 54. I think they would understand that. Now all of a sudden we've gone from one building to two buildings and it's 65. I don't know what I don't know what I don't know if you can see what the numbers come in at. But to be clear, when we divided the building into two buildings, we lost the efficiency of one facility.
I I agree. So that's why the cost goes up. There's two sites now we have to deal with. K. Two individual sites. Yep. I agree. So there's costs that go there. So multiply that cost by two. K. There's also just construction flavor force. Multiply that by two now. I can understand that. I'm in here looking at it. But then when I walk away from this and think of what, this is Jones on the top of Main Street Hill is gonna do. What does, TGK, my old business, gonna do?
My old back in 2017, my little piece of heaven down there in the corner cost me $13,000 a year in taxes. That was in '17. Since then, we've gone 8%, 10%, 10%. And now if we took look at '65, where are we gonna come back this fall at? Twenty, twenty one, 22% levy? I'm just I'm just being cautious because I made a promise to the two chiefs, but I also made a promise to my constituents that would be fiscally responsible. And I realize you're doing your best bet. I'm I'm anxious to take the next step and see exactly what
the numbers are. Okay. We do need to move on. We're four minutes behind now. Next up is, five thirty financial management planning background with Ehlers. Once again, CMS Gary Tuma. Yeah. Thank you. Yeah. We've been working on this for a while on our financial management plan. Dan is here, from the Eller's Group, to give us just a little bit of background what goes into a financial management plan, and I won't steal your thunder, Dan. There you go. That's fine. Steal away. And Jackson's gonna switch it over, I believe. Sounds good. Well, good evening, council president,
members of the council. Excuse my voice. I'm getting over a little bit of a cold. So thankfully, there's quite a bit of a well in between you and I for this presentation. I've been lucky enough, we have a six month old daughter and we, sent her to daycare last week and lo and behold she came home and gave me a cold. So that's the way that goes as I understand it. So, by way of introduction my name is Dan Tinter. I'm a senior missile adviser with Ehlers and Associates. And to touch on the comments of City Administrator Tuma, we have been working over the past several months in earnest on a financial management plan for the city of Owatonna.
And we are scheduled in about a month or so, around March 24, to come back to the council and actually, share the analysis and findings of the plan, in advance of that discussion. Excuse me one second. Maybe not. My clicker does not seem to be working. Turn down the side. Let's see. It says it's on. Try it. We'll just reset it. How about if you lean up in the front? Okay. Point it back to the back of the room and see if we can do it as I figure it out. You, Jackson, will you go ahead and flip the slide? Thank you. But in, in advance of that discussion,
what we were planning on doing is talking to the council a little bit about what is actually included in the financial management plan, the process that we go through to really give you a better understanding of the undertaking, that an FMP is for, city staff as well as Eller's. So today, really, we're gonna talk about is what is a financial management plan? Ultimately, how does that fit into the city's budget process later in the year? What are some of the steps that we undertake to actually create the financial management plan and the things we do along the way? And then ultimately what you should consider when we actually develop the FMP.
Alright. We're off and running. So, just a little bit of a primer kind of on the annual budgeting process. It's worth noting, that really this is the most important task annually for elected officials such as yourselves. Of course, budget is a number of things. It is a financial document. It is a value statement. It is a reflection of a period of time, usually twelve months to reflect the fiscal period. And it meets various statutory requirements. So in a single vote, when you adopt the budget in a given year, you check off a lot of boxes for the organization for the following year.
It's worth noting, and we will talk about it during the financial management plan. Both the city administrator and the city administrator provide a lot of information about comparative and pure organizations, which we have dug a lot of information up on. But it's worth noting that every organization does pay for things differently and that comparing this, as the slide says, is not always fair. I would go a step further and say sometimes it's even a little dangerous to do. But we will look at about, 10 different organizations. But it's worth noting that not all of those communities are the same. There are different levels of development,
different stages of life. Their facilities are in different states of repair. They have different service level expectations, different local politics and political wills, and that, ultimately, they have different staffing needs corresponding to all of that. But generally, if we look at a decent sample size, we can still provide some context in terms of what's being analyzed and requested through the financial management planning process and then ultimately as I'm sure the council is well aware more services amenities do create greater costs we often hear about efficiencies technologies if
we just do things a little faster, a little smarter, if we just get a little more water from this rock, we should be okay. But really, in all my times traveling the highways and byways of Minnesota, I have yet to find a high service, low tax community. And so that's always something to keep in mind when we do go through the financial management planning process is that there are a lot of ins and a lot of outs and there are a lot of considerations along the way. And it turns out that the more that you want to do, the greater costs that are created. And the thing that we do in the financial management plan is we don't necessarily
from an elders perspective opine on whether or not those are good ideas or bad ideas. We help design the revenue requirements needed to meet those strategic goals that have been established by the city council. So when we talk about kind of strategic planning and budgeting we do start with your vision, your strategic priorities, and your program plans. We are fortunate enough here in Owatonna that you have adopted a twenty five to twenty seven strategic plan and we will look at that to basically figure out what ought to be in the financial management plan and to guide our decision making before
we present anything to staff as well as the city council. The thing to keep in mind as we look mostly at new and revised capital outlays as was just discussed there are new public safety facilities under consideration and we do know that the strategic plan itself also has consideration of a community center at some point in the future. And these will, of course, have large impacts on the costs associated with operating, the organization both from a debt service perspective potentially, but then also as was talked about in the previous presentation, staffing costs,
expanded footprint of facilities, etcetera. So we will identify the costs that are needed to achieve those goals. And they really go beyond things like capital outlay from your own strategic plan. And I'm a say I'm preaching to the choir here. There are considerations about housing solutions, staffing needs, airport expansion and a number of other areas. So we do try to incorporate that into the financial management plan discussion, understanding that this is and will be a snapshot in time and it can be fairly difficult sometimes to know exactly where things will land over the next ten years.
But the goal is of the plan is essentially to give you as elected officials a sense of the financial position of the organization and then how some of those decisions along the way could impact the financial wherewithal of the city both now and then over a ten year period. So when we look at putting everything together, I've touched on some of this. We take a look at the vision of the organization as established by the elected officials and, the powers that be. And then, of course, the twenty twenty five to 2027 strategic plan. But then we also know that the community has a number of what we call
program plans. And these can take different forms. And this is just a sampling not necessarily specific to the city of Owatonna, but you may have seen some of these plans in some way shape or form, such as a park system master plan or facilities plan or if you have an active transportation plan, we'll take a look at those and figure out what exactly the community is up to over the next so many years. And those tend then to find their way into various financial plans, such as, and I would say most notably, a capital improvement plan, which addresses specifically capital outlays for the organization,
usually over a five to to ten year period. The financial management plan will incorporate capital improvements, but it also considers operating costs and other outlays as well as property tax impacts, growth factors, and comparisons to other organizations as I discussed earlier. But ultimately, as you can see, the one of the linchpins between vision and the strategic planning process as well as the goals outlined in those program plans is this financial management planning step. It is the bridge really to your annual budget and figuring out really you have
all of these great ideas and now the next question invariably is how do you pay for them and that's where the financial management plan comes in where we fold in all of these seemingly, disparate goals, strategies, projects, and figure out how they impact overall the financial health of the organization. And in case you're wondering, ACPER stands for annual comprehensive financial report. That's just a really fancy way to say the city's annual audit. But that's technically what our friends at, the government accounting standards board calls it. And I guarantee you there is an exciting group as you might imagine. So let's talk a little more specifically about what is a financial management plan.
I've kind of bandied this term around a bit. But really, it is a multiyear fiscal plan, for the entire organization. It says park system, and I apologize for the typo. But it's for the entire organization. And on in this particular plan, we're looking at over a ten year period. We look at all the previous actions of the governing body. So the plans that you've adopted, the agreements that you've entered into, the contracts that the organization has committed to fulfill, any existing and future operating costs as we understand them, any capital improvement or equipment plans, so all the big stuff that you plan on buying over the next ten years.
We look at any existing debt projects that you have completed that you currently have to service bond payments on and then any potential debt like we've just talked about with potentially a public safety improvements and from all that we look at the property tax and fee schedule changes that may come as a result of all those various projects. But really, it is designed to basically test a set of facts using a certain set of assumptions over a certain period of time. And I'm, you know, I'm ruining my joke for when I come back and actually present it,
but what I am absolutely confident about when we present it is that, if I'm sure of anything, is that it's wrong. Is that we're doing our best bet to incorporate all of this information and help the council understand exactly what will happen over the next ten years. And as you might imagine, one of the recommendations in the financial management plan that's in every single one I've ever done is that you review and update it on a regular basis because things change. You have a better understanding of the cost of projects. You hire certain staff. You initiate new programs. There's perhaps turnover,
in the city council and there's new feelings about how things maybe should happen or not happen. And using all that information you then update the plan on a regular basis so you can understand how those changes impact the financial position of the city. So I won't go through all these in great detail and I touched on them a little bit in the previous slides about some of the really financial planning benefits. It does help you translate vision into action and also helps you identify funding sources for your various priorities, perhaps most importantly, new funding sources.
Through the financial management planning process we often identify ways that communities can raise revenues outside of the property tax levy specifically and that can be very helpful for organizations that are trying to figure out ways to pay for their various priorities and objectives. We do find it helps manage community expectations. It really does provide a way to have a dialogue for and among policy issues and really helps you understand trade offs and opportunity costs that are associated with perhaps doing one project,
not doing another, waiting a few years to do something, perhaps pulling a project forward, waiting to maybe hire some staff, etcetera. So in that way, you can pull on different levers and really see how it will impact what would happen in the organization financially. We find that it reduces stress in the budget process. As a former finance director, I am always partial to that particular box. But we do find once organizations have financial management plans when the time comes to consider the annual budget and adopt the annual budget, we do see organizations often understand the fact that they're just working the plan.
That we've talked about this early in the year. We've discussed the strategies, the priorities, and now the rubber has to meet the road and that is in the way of the annual budget. And so we do find that there are kind of quote unquote fewer surprises for elected officials when you go through a financial management planning process because you've kind of talked about everything leading up to the annual budget. We also know that it communicates, with, long term plans to external parties. This is this is good for a few reasons. The first is your credit rating agencies love, love, love long term financial management planning. They like to see when they're determining your credit worthiness when you go to borrow
money, are you doing your best to kind of peek around corners? Are you talking about the financial health of the organization? Do you have reasonable financial policies in place? And a financial management plan can be an excellent vehicle to answer those various questions. We also find that organizations use it to communicate to other levels of government, let's say the county or the state legislature, to help those parties understand what your financial needs are, especially if you're requesting things like grants, cost, participation, or even state bonding. We find that elected officials at those levels do appreciate that they see that the
city's putting in so much money and perhaps you need a little more from your project partners to make a project go. So a few things about the where all this kinda comes together. As I talked about before, we're planning on March 24 presenting the financial management plan to the city council. So really in that kind of first phase of the year, January to March, that's typically when governing bodies are doing their goal setting, priorities, talking about the financial plans for the upcoming budget year. And that can be an excellent time to actually put together a financial management plan. As I mentioned, it's a great vehicle for policymakers to discuss all of the ins and outs of
the various financial pressures on organization and provide direction to staff. And And then as you know, typically between April and June, that's when staff kinda goes away and crunches numbers, reviews the budget internally, considers requests from department directors, and then typically comes back to you in the second half of the year. And that's when you start having your city council work sessions and some of your regular meetings where you would review the various parts of the budget and give more specific feedback. But as I mentioned on an earlier slide, we find that latter half of the year does go a little smoother because if you've given kind of clear direction in the form of financial management plan to staff,
let's say, in terms of how many additional staff you may be considering as part of a budget authorization process, perhaps some guidance around what an acceptable increase or change in the property tax levy might be, maybe interest in certain capital projects versus other capital projects. It can be much easier for staff then when the time comes to put together an annual budget to know exactly, what the council would be receptive to or perhaps not receptive to in that particular fiscal year. So I'm gonna walk through a few steps. As I mentioned, Administrator Tummo wanted the council to have a little better understanding of kind of all
of the goings on in a financial management plan. So really in the first step of the project, the project, we look for participants and stakeholders, the governing body, of course. If there are any advisory commissions that you'd like us to talk to along the way, sometimes we do have interactions with particular community groups, that are interested in certain parts of the financial operations of the city. Of course, we talk to the administrator, the finance director, our friends in public works, and then any other department directors that may be involved in the process. It's worth noting that I've actually worked on financial management plans.
And in one particular example, we prepared the plan, and it turns out that the parks director was never consulted on the park CIP component of the plan. And so we had to basically go back to square one because they were not comfortable with everything that was in the financial management plan. So we wanna make sure kind of early and often that we're checking in with the department directors. And as the slide says, it's really only good as the data used to make it. So we wanna make sure that we're hearing from all quarters when the time comes to put together the plan. Really, we're making sure that staff are involved in the process and that we have the
appropriate timeline to solicit input. We don't want to necessarily rush this. We want to make sure that folks have the opportunity to give their feedback and ultimately for someone like city administrator Tuma to weigh the pros and cons when making formal recommendations to the city council regarding what is actually included in the financial management plan. In case you were wondering, that is the right county justice center. After that, we identify projects anticipated costs. This is when we really start to look at the strategic priorities of the organization that I mentioned earlier.
We start, consulting with experts and other stakeholders. So as I mentioned, your public works staff, mainly for those capital projects. Any consulting engineers that are involved in the process, either for current projects or prospective projects. They can be very useful resources to helping us understand what the potential cost of a project might be. And of course, we always recommend that you consult your friendly neighborhood municipal advisor so we can help you understand borrowing costs, other costs that are associated with the project. We also include various market factors. So we'll look at inflation and then depending on the nature of the projects that
are included in the plan, we'll also look at commodity prices as perhaps a proxy to understand how the cost of projects and other activities might change over the duration of the plan as I mentioned earlier in the presentation we do recommend the financial management plans reviewed at least annually that does and by review that doesn't necessarily mean updated we just want to make sure that organizations are look at it looking at it at least every other year it's totally acceptable to look at the plan and say hey not a whole lot has changed we still feel comfortable with what it is telling us and we
really don't need to update it this year and in fact we find that organizations really tend to do a more in-depth update probably every two to three to four years again depending on the level of activity that they're undertaking organizations that are perhaps adding staff over a series of years, maybe undertaking major capital projects, you may update it every year, for a few years until you get through that more involved period and then perhaps go back to maybe doing it every by an every biennium or something to that effect. Ultimately, we encourage canned discussions about needs.
One of the things that we run into a lot is, especially from department directors, is we'll hear a comment along the lines of, well, I was asking for what I thought was possible, not not necessarily asking for what the organization needs. And so we do try to understand what is everything that is needed, not necessarily what we think can survive scrutiny. And that's mainly making sure that the appointed and elected officials have a good understanding of all of the needs from all quarters of the city. So when you're actually weighing those trade offs and opportunity costs, you understand perhaps what you're giving up versus what it is that you're funding through
the financial management plan and ultimately the annual budget. We like to use reasonably conservative estimates when we put together the financial management plan, and that's primarily because what we like to do is to show that expenses will increase slightly more than revenues. That naturally creates a gap in the plan, and that's generally because we have found over time that it's easier to come back to a group of elected officials and the community at large and say, hey, it turns out that costs were a little less than we thought and revenues are a little more than we thought. It turns out that it's much more challenging to describe the reverse situation where it's
like, oh, we didn't have as much revenue as we thought and expenses are more than we thought and now we do have a gap that we weren't planning on having. It's always easier to solve for having less of a gap than more of a gap. And so generally, the plan tends tends to be set up in a in a conservative way in that manner. And because I know you're curious, that is the Graham Park Exhibition Center that is currently planned by the city of Rochester, right now at an estimated cost of $48,700,000 So in the plan, we'd like to talk about which funds are included.
Right now, under the current proposal, we are including the general fund, the capital project funds, the stormwater fund, sales tax, capital project fund, the vehicle replacement, internal service fund, and then three different economic development authority funds, and several debt service funds. It's worth noting that generally financial management plans look at governmental funds or the box on the left, and that is because they are funded primarily through the property tax levy. And so when we're doing a financial management plan, we tend to look at those funds supported by property taxes. If we were looking at proprietary funds,
we tend to use what are called utility rate or fee studies. And that is primarily because those are a different methodology. So when you're thinking about your public utilities, for example, when we're trying to figure out what the user fee should be, that's a different calculation and a different methodology than using the property tax system, which is quite specific and outlined in state law. And so for this iteration of the plan, we're only looking at those handful of funds. It's worth noting that at some point in time in the future, the city could do a utility rate study or a fee study on some of
those proprietary funds. We do find that once organizations go through the financial management planning process, they tend to then want to do utility or fee study, in a similar way. And then as I mentioned reaching back to an earlier slide, it's not uncommon then to perhaps every other year, One year, you're updating the financial management plan, and the following year, you're updating utility rate study, and you just go back and forth year over year to make sure that those plans are up to date and funding all of the activity they ought to be
funding. So we get into step three. That's when we start prioritizing all the major projects. Everything is in the hopper, and we start looking at a few different things. The first and foremost is the legal requirements. For example, and this is not necessarily applicable to the city of Owatonna, but if you're ever to accept state bond proceeds from from the state of Minnesota, you sign a bond covenant that actually says you, as a legal obligation, have to maintain those facilities in a state of good repair. And if you don't, you can have to you may have to refund those bond proceeds. And so we often see these kinds of legal requirements baked into bond agreements,
grant agreements, joint power organization agreements, things of that nature. And so we have to make first make sure first and foremost that you're meeting any legal requirements and the costs that are associated with them. Public safety concerns and asset conditions usually come in as kind of the second and third considerations. Of course, public opinion and political will always matters in all of these capital projects. There can be cost benefit considerations, operating impacts, and then of course, just plain old fashioned resource availability. Are there monies actually available to, fund the projects? In the case of resource availability though,
sometimes if there's not money to fund the projects, you will see that they will move into the plan usually in years eight, nine, and ten. And that's generally intentional to say, hey, we are aware that these projects exist. We're not necessarily sure how we're gonna fund them, but we also wanna make sure they don't fall off the radar so that you as elected officials understand they're kind of hanging out there and they are unresolved questions. Nothing's going to happen with them, but we also wanna make sure that we're not not talking about them. And so, as mentioned, sometimes those projects do wind up in what we call an out year.
And then perhaps one of the most interesting projects in the entire presentation, this is actually the Bilsby Lake Dam, which is owned and operated by Dakota County. They got it for a dollar, from a neighboring county and then subsequently had to put in tens of millions of dollars to make the, dam operational. So if you're ever wondering about, boy, what what are we up to and what are we running here, be thankful that you're not running a dam. You got that going for you. So one thing to talk about when it comes to the FMP structure, the year one is the budget, and then typically we have five to ten years of forecast.
One thing that we do find when we talk with, various organizations is there there is this idea that you can potentially kind of amend the budget to take money from future years. But legally, and this is what I should say, I'm not an attorney or an attorney spokesperson, but legally, you cannot essentially amend from future years. Those budget years don't exist yet. The council has not acted on them. But through the financial management planning process, we can make approximations from what's gonna be happening in those years so the council can have a good sense about what is happening in a current budget year versus
potentially in a future budget year so you can make more informed choices from a financial perspective in any given annual budget development process. But unfortunately, there is not the opportunity. And I have seen, council resolutions where, intrepid, directors have tried to amend future years of the budget to pull budget authority forward. And unfortunately, in the state of Minnesota, no such authority exists. So after that, we analyze data. We do a lot of number countrying. As you might imagine, this is probably the part of the process that's near and dear to my heart,
as a total spreadsheet junkie. But we review all of the individual funds and we look at their balances, their trends, if they have any surpluses or deficits and when. We look at the debt service requirements if there needs to be additional debt service to support certain activities. We start to identify other budget impacts. These are primarily operating costs that are related to new capital projects. So for for example, if a new facility was coming online, what does that mean for utility consumption, custodial costs,
grounds and maintenance, etcetera, and figuring out exactly what ought to be put into the operating budget. We also look at related capital costs, usually in the forms of deferred maintenance that will happen at some point in time in the future on new facilities and when that should start to be included in the plan. This may sound a little Lincoln esque, but I like to say the things having been built have to be maintained. So we try to bake that into the plan so there are no surprises at some point in the future about where we're gonna get the money to, let's say, replace boilers or chillers or,
you know, do roof repairs, what have you. And then ultimately, as time goes on, we refine those project cost estimates to figure out what things will actually cost. You know, as you know, going through the facilities process, you start with the concept and as those as those projects become more approximate, you get better information, better costs, and we will refine those estimates, over time. This is when we try to be as critical as possible and really critique what's going on, in each of the different funds and provide some additional insight,
potential levers that could be pulled, get feedback from staff about things that maybe could wait or have to happen sooner. Or in the case of a new facility, if you are building a new facility, what deferred maintenance in the plan could come out because now you have a new facility and you don't have to potentially do certain activities once that new facility is constructed. And ultimately this is a good opportunity to figure out kind of when certain things will happen and how that will affect the financial position of each of the, individual funds. And then this particular project is, between Rice County and MnDOT.
They actually partnered on a six legged roundabout Northbound I 3rd 95 and Trunk Highway 19 interchange. So the project included the intersections of Rice County Roads 4659, and Trunk Highway 19. So nothing like a big old roundabout. So after that, we identify some existing and new funding sources. We look at a number of different things, both from a local perspective. Perhaps there's opportunities, use additional special assessments or fund balances, property taxes, local option sales tax. Although I should say, having, heard from some folks in Omega Minnesota Cities at a seminar I was at recently,
we're not supposed to call it local option sales tax anymore. It's just local sales tax. So instead of lost, I guess it's list. So we got that going for us. Bond proceeds, if you have any TIF or tax abatement revenues that could be applied or any service revenues or potentially charges for service. One thing that, city minister Artuma has pointed out that we will talk about as part of the plan development is perhaps the inclusion of park dedication fees to support park system expansion and certain, improvements to the organization. It's not necessary to say that the city council would ultimately opt for that funding
source, but reaching back to my earlier slide about analyzing the data when we were looking through the various revenue sources, we did notice that there were no park dedication fees. So something to keep in mind there. Non local, if there are grants, federal aids, private partnerships, but really ultimately all of these different funding sources often have different legal restrictions. And so when we are weaving together the tapestry that is the financial management plan, we look at all those legal restrictions to make sure that's what is being suggested to fund the various projects and activities actually meet the requirements outlined in state statute.
Now we prepare the model. So this is, the only, numbers that are actually in the presentation, but I couldn't help myself. This is actually my alma mater, the city of Fridley. This is their IT fund. And ultimately what we end up doing when we put together the financial management plan is we look at the various funding sources. So in this example, property taxes, local government aid, and then interest on investments. So you can see in 2025, they had about $340,000 coming into the fund. And then in that year, their capital plan expenditures totaled a little over $450,000. So you can actually see they're drawing down the fund by about a $125,000.
And if you look all the way down at the bottom of that, orange box you can see that they would end up being under their fund balance requirement by about $70,000 And if you were preparing an annual budget and you were doing it in a single year you would look at this 2025 and you would say boy that's a problem we can't afford everything that we're planning on doing we are going $70,000 below the amount of money we ought to have in the fund at any given time. Now when we zoom out a little bit and take a financial management planning approach we can see that in 2026 just jumping over one more column that they're actually
about $60,000 above the fund balance requirement and then at the end of the five five year projection they're actually $200,000 over the fund balance requirement and that's primarily because in 2025 they have larger than usual outlays and then in '26 and '27 they go to have it to spending just under $200,000 a year on IT equipment. And so we can see that under this model, they can actually afford to spend that money in 2025 knowing that they're going to rebound in 2026 and have even more in 2027.
And so this approach helps this organization actually avoid debt. Most of the time, what you would do when you go below your fund balance requirement in an IT capital projects fund is you would likely issue an equipment certificate to pay for that equipment. Here we see that's not necessary because in the following year, there'll be enough money in the fund to support that larger outlay. So that's really a long way of saying that financial management planning ultimately saves the organization money and it helps you buy things when you need them. So just a little bit of reminder, you know, why do we talk about cash and fund balances and why do we have requirements
for them? Really, organizations like cities, you get your money at certain periods and certain intervals. So in the case of property taxes, you really only get your property taxes twice a year. And then you have to cash flow the operations of the organization in between those those settlements. And so, really, we end up seeing that the government finance officers association, the office of the state auditor actually recommends that organizations on a general fund basis hold anywhere between 3550% of the next year's general fund expenditures. And so that's making sure that essentially you have enough money to fund your operating
costs. But beyond that, that you can find any unforeseen circumstances. These are things like changes in or shifts in state or federal policy. So for example, we know that at the state level, they're staring down a budget deficit for the next biennium, and there could be changes to certain state aid programs that this the city relies on. And rather than putting you in a financial position where if those monies are pulled back, you have to make tough choices. If you have enough fund balances, you can sometimes feather in some of those changes over time and not be in as reactive position if there are changes beyond things that you can control.
And of course, much like in your personal lives, you save a little money just for really ordinary emergencies that happen any point in time. For example, I think, the council president mentioned in a previous discussion a windstorm that rolled through the city of Owatonna, and that required overtime and additional costs, working with contractors, etcetera. And those things are really outside of the city's normal budget authority. And so the question is how do you pay for that? You pay for it because you have extra money in the funds to support these kinds of things that happen from time to time.
And then of course, they help with long term planning and expenditures. So really making sure that you are you are smoothing out any funding requirements and you're taking the time to save and manage the resources of the organization over time. So a few more steps. We analyze any of the options. Once we get to this point, we start talking to the depart departments. We analyze the impact of all the capital projects and project changes. We look at affordability of the CIPs. Mainly in that situation, we're talking about property tax impacts. And then to use a technical finance term, that's when we start doing some what if in.
So we start moving some things around, trying to figure out what makes most sense, how to look at the various fund balance of the organization, talking with, the department directors and the city administrator, speaking with the council about what you're comfortable with. And then, of course, we consider any number of other factors such as timing and, of course, political will. None of these plans are ever put together in a vacuum. And as was mentioned earlier when we were talking about the public safety facility, you know, sometimes you have to explain to constituents why certain things are happening. And while a financial management plan can be an excellent vehicle to explain that,
ultimately there has to be political will to deliver on the projects that are included in the plan. So, the assistant city administrator was, pointed out to me that I actually had a sheriff's vehicle in here, so I went and, found a nice Owatonna police cruiser. Figure I should have one shout out to the organization I'm presenting at. But we do look at, alternatives to aid the review process. So oftentimes, this means that we will put together multiple scenarios. You may recall when we talked about the public safety facility bonding options, we had option one, option two, option one a, option one b,
option two a, option two b. The financial management plan will take a very similar approach where there will be sometimes ranges or even different scenarios. After that, we start having some discussions with the council. So we start reviewing all of these different scenarios with you. We disclose and review our various assumptions. We try to provide the information as easy to understand the format as possible. It can sometimes be a little tricky to unpack all of the complex financial information, but we do tend to use graphs and charts and pictures. And we do try to provide as thoughtful recommendations as possible,
really relying reaching all the way back to the other part of the presentation on the priorities established by the city council, and the organization generally. And as always, we're always ready for more analysis and considering other scenarios. The one thing I always like to do here, and it's mentioned on the slide, is we take the time to remind the city council about all the things that you have already decided. We don't come to the financial management plan kinda making any of this up. It turns out that the council's taken a number of actions over a number of years, and we try to bake that into the plan and remind you that you've already
made some of these choices, that, you know, staff is not necessarily making these things up or relying on guidance from the elected officials to inform these decisions that are ultimately underpinning the recommendations of the financial management plan. Ultimately though, it is up to the organization to advocate for its needs in the financial management planning process. And then the slide here, this is my home county, Washington County. And every year they do a name the snowplow, contest. And so on the left that is Sir Plows a Lot, and on the right,
that is the Land of 10,000 Flakes. So so then after that, we adopt the plan. We typically ask the governing body to formally accept it, and that's because it outlines all the assumptions and similar factors clearly. That gives clear direction to staff that you're comfortable with those assumptions. And so when they go forth and put together the annual budget, they're not necessarily flying blind. Blind. They're relying on guidance from the elected officials about the various projects and assumptions that are included in the financial management plan. And at this point in time this is when we really start to talk about
any property tax or user fee impacts that are associated with the plan. So if there's new staff, new debt, changes in programs, activities, other projects, then we'll talk about how that moves the property tax levy, how that changes the tax base, and then ultimately what tax rate is expressed in the plan. And then that is the number that is used to calculate the actual property tax impacts for individual property taxpayers. In the plan, we usually express this impact as the as the impact on
the value of a median valued residential homestead in the community. But we can always prepare other tax impacts if the council was, so inclined. So we do prepare a presentation to summarize the plan. And then of course as you might imagine through all of this, I always take a good amount of time to thank all of those involved in the process. And this is maybe one of my favorite city council chambers. It's actually the Saint Paul city council chamber, which they share with Ramsey County. And reason it's my favorite is I always just think it looks like Raiders of the Lost Ark. That's just the vibe I get from it.
So. So always remember when we're doing the financial management plan, we really start with strategic priorities and plans. We use those reasonably conservative assumptions to make sure that we're not backing into any unforeseen budget holes. We try to be honest and really use simple and relatable, communication devices when we're, conveying budget impacts. You know, we really want folks to understand what the heck it is that we're talking about when we're putting all this stuff together. We have really found that FMPs really do end up being a pay me now or a pay me later proposition. Most organizations tend to do the same or similar things year in and year out,
and they have episodic outlays like new facilities or new equipment that they have to buy. And it turns out that if you wait, those things ultimately just get more expensive over time. It's not to say that there aren't good reasons to wait or certain considerations as to why you should wait, but ultimately, our entire economic system is predicated on inflation. And so we do see that come through in the financial management plan. And, I'll give this reminder probably a few times every organization does pay for things differently.
But that also means that there's an opportunity to be quite creative when we're putting together the financial management plan. So I always encourage elected officials to press us for new and interesting ways of doing things. And of course we try to be as transparent as possible, talking with the department directors and the assistant city administrator and city administrator, presenting at the city council. The current proposal for the FMP actually has us coming back a couple of times, so there is an opportunity to have a few conversations with the city council, because we do find that, we often cannot answer all the questions when we present the plan the first time
around and I do like to avoid crunching numbers live on TV. Not to say that I haven't done it, but it's nice if we can if we can skip that and come back maybe in a couple weeks or a month and answer your questions in the most thoughtful manner possible. So, you know, ultimately, when it comes to the financial management plan, it is a great way to be thoughtful and proactive with the financial position of the organization. I really do believe that, as the slide suggests, that you know genius is that 1% inspiration and the rest of it is the budget allocation. How it is that you're gonna pay for it and weigh all of the pros
and cons associated with funding one thing versus another thing and the impacts that are associated with making many many many of these tough choices when trying to figure out how to fund all the various demands placed on city services. So with that, I'd be happy to answer any questions about the financial management planning process. I know that was a tremendous amount of detail, but we will be back in about a month to actually go over some of the numbers. And we'll talk a little bit about the process then too, just to give you a reminder about how we got there.
But I do thank you for your time, this evening. All right. Thanks, Dan. Appreciate it. Next up is the 06:15, the update on the fire vehicle replacement fund with, fire chief Ed Hoffman and guests. What would you like? Charlie's being shy. Charlie's never shy. Waiting for my computer to come on here. So as Ed's getting his There we go. Computer, synced up, we are we have a vehicle replacement, fund. Each department has one, and we buy our equipment out of that fund as you know.
And so you are ready to go. I'll turn it over to you. Well thank you. I'll try to speed this up real quickly, but let me know if you have any questions. Goal tonight's just sort of to lay out a little bit of the fire department's vehicle replacement plan and an upcoming purchase we're currently working on for a replacement fire truck. With me tonight too I have Charlie Skora from our department. He's been leading our committee looking at the specs. Then Tom Solon which is from one of the manufacturers that we've been dealing with who we've purchased our trucks from in the past. So again I'll go quickly, these are just sort of the bullets I'm gonna race through here.
Starting out again I introduce the folks that are with me to help answer questions. Some of this you saw last time I was here talking about the rural association. So a little background on how we put together when we purchase our trucks. One of the things is National Fire Protection Association. They have sort of standards, guidelines that sort of guide us through every part of the fire service. When we look at vehicles, these are some of the things they have in their recommended best practices, that a fire truck is fifteen years as a frontline apparatus and then it can move into a reserve status for about fifteen years.
But they recommend that after twenty five years, vehicles are replaced. Based on that though, what we're looking at and sort of the plan we're working towards here in Owatonna with the fire department since I got here, is for our large fire apparatus getting on a thirty year cycle. So when we purchase a truck, we use it for thirty years. And the steps with that, you can see here, the first ten years, it's our primary engine. That's what we're taking first out to calls. After ten years old, then it gets put to a secondary status where it's still responding to calls. It's a second alt truck. If we have two calls or bigger calls,
it's responding with it. So it's still a frontline apparatus, just our second truck. And then after twenty years, we move it to a reserve status. So it's a truck, if one of our trucks goes down for service or whatever, we bring it out and we can use it for that. So basically where NFPA is sort of saying twenty five years, we're looking at more thirty years, because again we have that three trucks and it makes sense to replace them on that cycle. Some of the other vehicles we have in our fleet, again we have the support vehicles, number of pickups, I'm not gonna talk a lot about those tonight. But with those, getting equipment, our grass rigs,
things like that, we're looking at more of a ten year plan on that. And part of the reason for that is so that we can trade them in and get some good value for them before they're basically expanded their whole life. We saw that. I know the police department trades in a little bit more frequently again to get that trade in value. So that's why we're looking at ten years. And then our aerial device, again we're looking at thirty years for that just because the cost of it. It's low usage, something we need for our community. But again, putting that out there, that's not something that goes every year. And as you know, our vehicle replacement fund,
Dan was talking about that, we make a contribution every year. Fire department, that's one of our bigger line items into that fund. Here's just the high level of our fleet. You can look at it and it's, I have it sorted by anticipated replacement date. So these are our primary vehicles and our pickups, support vehicles, and our fire apparatus. You can see our oldest truck in the fleet, we've actually pushed it out a few times. It's a 2,001 pickup truck. We use it for utility work. It's one of our grass rigs. It's older, it's starting to rust a little bit. Our weed inspector uses that in the summer.
It's still operating. It doesn't have much trade in value. So we figured we're gonna stretch that out a few more years. So we push that out. Tentatively, that's scheduled for replacement in '27. They'll be 26 years old then. The main truck talking about tonight is 9702. It's a 1994 Pierce truck. Again, purchased in 'ninety four. Our planned vehicle replacement plan had us replacing it in 'twenty seven. I did put an asterisk to that just because on the next couple slides I'll talk about the lead times for the trucks and how long it takes. There are three to four years, five years out.
So it won't be, we won't be replacing that in 'twenty seven, but if we did replace it in 'twenty seven, it would be thirty three years old. Again, that's our reserve truck. It's not a day to day truck that gets used. It's actually out at the airport. It helps support, if we had something at the airport, it could help us out there. But when one of our other trucks is down for a few days for maintenance, it comes back, we put some of our equipment on there and we use that as a backup truck then. And then you can see the other trucks, but for sake of time, I won't go through all of them right now. So like I said, the one we're looking at replacement is 9702.
It's a 1994 truck. That's a picture of it there. You can see some of the specs there. Currently 32 years old. So as we're looking getting ready for the replacement of that, we've done similar how we've done it in the past. We formed a committee. Charlie's been helping lead that. Made up of, some of our full time fire staff, some of our paid on call, and also working with our city shop because they do a lot of the maintenance on it. We wanted them to have some input on what we're getting to. So we looked at, you know, what what have we currently been using for trucks? What do we need for that, you know, maybe there's some features we don't use,
are there ways we can help save some money. So reviewing basically all the specs on there, we created a spec, we worked with Pierce, again McQueen is the distributor of the Pierce trucks, to get a little bit more firm price on there. So that brings us to what we've got for a proposal, initial proposal. Again, the truck that we configured, if you notice, our current two first out trucks, nine thousand seven hundred and one and nine thousand seven hundred and three, are are basically very similar. It's the same model. Having that standardization helps us for response efficiency. The same equipment,
same spots, they're operated very similar. Our city shop can maintain them better. Again, we don't have 10 different brands of trucks. So that was sort of our starting point. So looking at the Pearson PEL model truck, the specs it's actually a little bit bigger pumped than what we have now on that. But then also with the pricing with this, the same way we've done our last couple of trucks, We've looked at the HGAC and Sourcewell, so they're big government consortium pricing features, that's how we purchased our last two trucks, and getting our prices off of that.
So it's not necessarily going out for bid, but it's using these consortium prices to purchase it. The current price right now, we're looking at an estimated $1,400,000 for a truck. Again, we pulled some equipment off of it. I don't think we really added a whole lot, but as you go forward, you know, things get more expensive. You know, we're talking about buildings, Dan was talking about facilities, things like that. The production time right now is out there a bit, forty four to fifty months. So basically, you know, best case, you know, it's probably gonna be 29 if we were to order it now when we take delivery. So the truck it's replacing ninety seven zero two will be about 36 years old
at that point. Do they give you a price guarantee if it takes four point five years, it's going to be more expensive by then, probably double again? Nope, it won't. And Tom can help answer some of the pricing questions and how that works. And When I zip through a couple more slides and then if we have questions I'll have these two gentlemen help with that. Alright, sorry about that. This is my, no that's fine. This is my last slide. So as I mentioned, we're putting right now, in '26 we have budgeted for the fire department, dollars 230,000 of our budget is going to our vehicle replacement fund.
It's basically my second biggest line item in our budget, second only to our labor costs. At the '25 we had a balance of roughly $858,000 Planning out what's budgeted to put in this year, so the '26, we'll be at $1,100,000 And if I take that out to '29, if we put the same amount in that we're currently doing today, that'll be right around the $1,400,000 I'm looking forward to, you know, talking to, Abdo this morning and working with Ehlers, you know, as we flush out this vehicle replacement plan too to get it on a good cycle. So we are saving enough of those enough as a goal and making sure we're
meeting the needs of the department going forward in the future. So that is what I had. Again, just wanted to give you the overview of what we're doing. Again, we're working on getting the specs flushed out, nailing down some costs, and looking forward because it is, like I said, forty four to fifty months out, placing the order sometime soon to lock in these prices right now before there are price increases again. So with that, are there any questions? Again, I have Charlie with me to answer questions about how we expected out things we did and Tom from the vendor. Doug got a question?
Oh, no. No. Okay. Yeah, I've got a couple of them. One just for the taxpayers listening. Sometimes we have that levy, and the price goes up. Folks, it's it's not just because what we're spending today and this year is putting stuff aside for expenses like this. When you order a truck, could you order a truck today and put a down payment down? Is that how it works, or just tell them you want it and then they There's sort of both options, and that's what I see our next step is working with, McQueen on how we can do that. So there are options if you prepay. Yeah.
You can get some discounts if you pay it all upfront. There's also we can basically put the order in now, not pay anything and wait till delivery, and pay basically the price then. So there's different options on there and then again working with our finance team and, McQueen on what is the best for us. You know, we have money saved up and looking at. Did I hear that one of our tankers is leaking? So we have, the rural association actually owns our two tankers or they own the trucks. So they're not city owned equipment. Right now they are not leaking. We had the older one did have some problems with the actual tank on that.
The rural, again, they own the trucks, they replaced the tank on there. There's some additional, repairs that need to be done on that. That does not come out of the city budget. That is currently out of our rural association pays for that. What's the old ones? We trade them in? The old trucks, so when we got seven zero three, our newest engine, we put our, the one that was being replaced on auction and end up selling it, I believe, is a training institution in Texas that purchased it. Again, there isn't a whole lot when they get to be 30 years old, there isn't a whole lot of market for them, but we do try to get as much money as we can.
Thank you. I've got one question. It appears that our next major expense comes in 2,036, which isn't as far away as it used to be. What is the replacement cost going to be on a new aerial truck? Right now, I think in our vehicle replacement fund, I have two or two point two million in there for that. We've been having discussions internally though and really looking at what does our community need. We have a the aerial device we have now, again, it's getting older. You can see, it's purchased in 'nine.
It has a lot of flexibility. That may be more you know, to get something like that, it's probably gonna be close to $3,000,000 I don't know. That's a guess. I don't know if Tom would even guess on that. Yeah. But we're looking does our community you know, it's nice to have. It makes it great for firefighters, but do we really need that? So we've been discussing what can we what do we need instead of, you know, replacing it like for like? What does our community need? Also working with our neighbors, with mutual aid. So okay, do we need to get something extravagant if we can call Faribault or Waseca or someone too? So making sure we're complementing each other too and not spending more on meetings.
So we're looking at ways of scaling that back. So we've got to be looking at only spending $1,500,000 To be honest, I think by that time we're probably looking, you know, to get a very basic aerial device, maybe just a stick or stuff. We still might be close to $2,000,000 But again, if we were looking at the Bronto with the articulating and the stuff we have now, that could be over $3,000,000 Burnout numbers, it's going to be expensive though. So that's why we're, like I said, really looking at what do we need for our community.
Okay. Thank you. Any questions? I don't know if you guys have anything else to throw out there, but I appreciate. Like I said, our next step now, we'll start looking at some specs, looking at some different ways of financing it so we can bring back the official proposal to you guys. Thank you. Thank you. Thanks Chief. Next up tonight is our update to the proposed ordinance for use of ATV, UTV golf carts within the city limits and Chief Mundale is here for that. Good evening sir. Good evening.
Kevin are you okay? Good to go. Yes, yes absolutely. All right, good evening Mayor and Council. Back on February 10, you were provided a draft ordinance of the proposed UTV golf cart ordinance. In addition to that, there's a few community community members in our audience that also have that draft ordinance. Mr. Walbrand and I have been working on this ordinance a few days or a few hours since it came out. So there are a few changes. It's not significant. So we wanted to just highlight that. That's so the ordinance that you have is a draft.
Depending on what happens out of tonight's study session, if there's more changes that are needed, Mr. Walbrand and I'll go back to the ordinance and make those changes that are necessary. So this summary that I just provided you, I just put this together here today. It's more of a highlight of what the ordinance is gonna look like even with the changes that we've added today. So I'm just gonna briefly go through this, but just for the benefit of the members of our community, the reason why we're doing this ordinance is because it's required by law for UTVs and golf carts to be,
for there to be a city ordinance to authorize operation in the city limits. So even though we've seen these on the streets for many many years, they're growing in popularity. So we're really just trying to do the right thing and put an ordinance in place to allow operation. So I think our community will probably not have any problems with this ordinance. So I'm just gonna highlight that right now. So really the governing statute on this ordinance is 01/9045. The governing bodies of a whole rural charter city may, may by ordinance authorize the operation of golf carts,
ATVs, UTVs and mini trucks on designated roadways or portions thereof in its jurisdiction. So the city also has the legal authority to regulate any time, place and manner restrictions as they seem necessary, which may mean limiting the use of these things on any particular street they wish. The study group that kind of was looking at this was a council president Rainey, vice president Boss and council member at large Bokey, in addition to myself, Captain Duchaine and city attorney Mr. Walbrand. The first reading of this ordinance will actually be heard next council session on March
3 and the second reading would be heard on March 17. At that point, that's when we plan or intend to have this ordinance go live. So the scope of this ordinance here, For the purpose of the ordinance, we're gonna kinda redefine what these vehicles are. So we're gonna call them an off road vehicle, which is gonna mean the UTV, ATV, class one, two, except the many trucks which are a separate designation. A UTV, we have UTV, ATV, class one, two, and golf carts all defined by statute. And the other thing I think it's important to note that anything that's really in here is pretty much a mirror of state statute.
Whether it's required equipment, required license, any regulating state law that's in place. We just pretty much mirrored that ordinance. However, it is important to note that the city can take more of a restrictive stance on this if they wish. So required permits will be required on off road vehicles, money trucks or golf carts. Which means that it'll require citizens to purchase a permit. In addition for off road vehicles, those operating the UTV ATV class one two will also be required under chapter 84,
which is the DNR statute to have a special or register the vehicles with the Commissioner of Natural Resources. Insurance will be required on all these vehicles, off road vehicles, mini trucks and golf carts on public streets. That's governed by state law. Designated roadways starting with off road vehicle and including mini trucks, they will be permitted on all public streets within our municipality with no restrictions on location. Golf carts, there will be limitations. Council's recommendation, or our work group recommendation rather, is to propose that these remain on streets at 30 miles per hour zones or
less. They can cross perpendicular streets. They can cross higher, how should I say, they can cross speed limits with higher speed zones as long as they're crossing in a perpendicular manner. So for example, if you're on 7th Avenue, Saint Paul Road and you wanna cross 26th Street because it's regulated with a higher speed zone, you have to do so in a perp perpendicular manner. Or if you're crossing Bixby Road from Sherwood Heights, you can cross in a perpendicular manner and use Havana Road. Other restrictions, does no downtown driving, which is gonna be bordered with Rose Street, Elm,
Mill, and Oak. We have similar ordinances in place for like bicycles and skateboards, and they also have a downtown theme. They're not exactly the same as this recommendation. We chose these streets just for the purpose of Grove will be an accessible street. Whereas for bicycles and skateboards they can't be on those streets, so, or on sidewalks rather. They will be able to be in this downtown district with a special use permit issued by the city. For example, let's say parades or certain events.
Other streets that are gonna be restricted for golf carts is, our recommendation is no operation on Oak, Hoffman and West Bridge Street. West Bridge Street was not listed in the original draft ordinance. We spotted that as an error, but that was our recommendation to prohibit West Bridge Street operation. They can't be used on trails, sidewalks or paths, except we do recognize that folks that live out in, Mossy Creek area, that Rose Street is going to be hard to navigate. Number one, it's going to be over the speed limit. And number two, it's a tight roadway. So,
the exception is they'll be able to use that path, from, help me, Massey Creek. What's Country View. Country View all the way over to Partridge. They'll be able to use that path to reach either Roe Street to continue down Roe Street or maybe use the golf course to, if that's acceptable to cut through the golf course to go to the clubhouse. The other street is Cherry Street that will be, a, that you can ride on the sidewalk there. Pertaining to required equipment on the off road vehicle, anybody born after 07/01/1987 needs an ATV safety course. Again,
that only pertains to off road vehicles. You have to be 16 years old or older with a valid DL and within your driving restrictions to operate. Rear side mirrors, that's only applicable if it fits under chapter 169.7, though. It all it all depends if you read the definition of that, and that's something that Mr. Walbrand and I are still working on. Even though it says required equipment, that there may be some exceptions to that just based on the nature of the vehicle. For example, if there's no obstructions and the operator can just turn and look over shoulder, you wouldn't need a side mirror nor is it necessary.
So some of these things are required and some are not. But we're just following whatever the applicable statute is under 169.7. Some other things. Headlights are required if the vehicle is equipped with such. In addition to taillights, brake lights, signals, again if equipped. But if they're not equipped, then the operation is limited to sunrise to sunset. Turn signals are required and if you don't have lamps then you can use your hand. And that's also governed under 169.19 sub seven listed in the, will be listed in the ordinance. Helmets are required for persons 18 or under in addition to all passengers 18.
Again this follows state law. Everybody has to be seated in a designated seating position designed for transport. And all statutes and regulations apply that are not outlined in this ordinance. Whatever governing statutes there are, they will apply. Limitations on the off road vehicle. They can't be on sidewalks, paths, within the city limits. Going to golf carts. Recreational operation will be allowed, not just for the purposes of golfing to and from the golf course, but they'll be allowed throughout the city with some restrictions on location. You have to be 16 years old or older with a valid deal and within
driving restrictions. Again this is something that the city can impose tighter restrictions. There's no state law that governs such, so the city has taken the stance that they are requiring operators on golf carts to be 16 or older with a valid DL. Headlights, taillights, brake lights, signals if equipped. And if not, you can operate between sunrise and sunset as long as there's not inclement weather present. You have to have a slow moving vehicle sign and a rearview mirror again if it's applicable. Signals and attention to turn, again following the Minnesota state law, you can use your hand or if there's a lamp,
you can use lamps. Occupants as long as it doesn't exceed load capacity and everybody must be in a seated position for transport. Limited use, not on sidewalks, paths or trails within the city except on Rose Street as I said, Cherry Street, and you have to keep to the right. That can only be in speeds loans 30 miles an hour or less. Waiver of liability is required and this requirement rests with the permit holder, operator, and occupants. And the city assumes no responsibility for accidents or injuries. The city is exempt from registration. So they can operate at any time in place for trail maintenance or emergency situations.
There's a penalty statute. First two violations are petty misdemeanor and then after that it's enhanced to a misdemeanor if you have two or more violations with a twelve month period. Registration fees will be required and that'll be established by city council to resolution and listed on the master's fee schedule. A few other things that popped up here recently through just some community feedback is, there may be some interest in a dealer license plate. So, dealers that are working on, service or sales of these, but maybe it's not a city resident, so they don't have a registration, we'll have to consider issuing some sort of dealer plate so they can do test
drives and things like that. And again, that's not covered in order rooms right now, but that will be something that we'll have to consider moving forward. So that's all I have as a summary unless Mr. Walbrand has anything to add. You did a wonderful job. Thank you. Any questions Council? Mayor? I've got a question for you guys. On the side by sides, are mostly engines 1,200 cc or less? Yes. Okay. So that will not be an issue? There's, there's only just a couple models that have recently come out that are considered 1,500 cc, but they're a utility vehicle. They are lower horsepower,
so they're not performance oriented or just a sales number if anything. Okay. Thank you. Anyone else have questions on this? The public see a copy of that. I could answer them. Can you hear me back then? Mr. Walbren and I need to just add a few adjustments to this since that February 10 draft. So, when we're done with it, maybe in the next few days. In the next few days. Can we give you feedback after that? Please. Sure. Okay. I don't know how where can we post that? On the city site or just word-of-mouth? We can send it out.
I don't know what's the best venue for getting that. On the March 3, agenda along with, Deanna can put it as a new slash too, I believe, or on our website so if people can review it or an attachment. I get the nod yes. So. So it would be in the March 3, the best place for all access for all city residents would just be the March 3 city council agenda packet. That's where the official one will be. And and then, chief, will you be ready by the the end of the week possibly that we could share it on website? Yeah. The draft again.
Draft. Yeah. It hasn't reached the first or second reading, so just a draft. Yes. So we'll make sure that gets done. I would just add quick that, Mr. Matacek here is our, to me, our expert consultant. So as you read through it, if you have any questions, make sure you talk to Chief Mundale because we value your input on that. We're trying to do this properly for you. Yes, Mundale. That looks pretty good. Okay. Thank you. Anything else? Kevin, I'd just like to acknowledge the amount of work that went into this from going from nothing to, this really took a lot of work.
So, the number of council members, staff that have been working on it, along with the Chief and Mr. Walbrand. It was a lot of work and especially the last study session hearing from the side by side businesses that sell these and the golf cart. That's very much appreciated. And yes, it's we think it's pretty good. There may very well be some tweaks after it's put in. We're always looking at that, but I think this is a very good first step. And if constituents have suggestions,
who should they reach out to? They they can email myself or chief Manila. Just so you know, that miss Toomer would be the one that would take your suggestion or advice or whatever. Criticisms or criticisms. Alright. We will adjourn until 07:00. Thank you all.