by Dave DeMars
news@thenewsleaders.com
The Newsleader reported in its Nov. 18 issue on the approval of firefighter-pension increases by the Sauk Rapids City Council at the Nov. 14 council meeting. Questions raised by readers prompted us to research the issue more deeply so it might be better explained for citizens of Sauk Rapids.
City Finance Director Jack Kahlhamer provided some explanation as to why the increase is really a justified increase. In his e-mailed memo, Kahlhamer wrote, “It takes a lot of commitment, sacrifice and effort to make it that many years (to become vested and qualify for the pension at all). These firefighters must respond to calls during daytime hours, working hours, night-time hours, holidays that often get disrupted, weekends (and more) during any kind of weather: snow, below zero, extreme heat and humidity.”
The fire department in Sauk Rapids is a volunteer force which means it’s made up of members who live in the community. Kahlhamer went on to say that firefighters are on call day or night, that they train extensively, do fundraising in the community for other charities, and do it all for $13.61 per hour.
In order to become vested and qualify for the pension, the volunteer firefighter must have worked for 10 years, and at that point they are only 50 percent vested, Kahlhamer explained. In order to become fully vested, a firefighter would have to work 20 years. Based on the amounts reported in the Nov. 18 issue of the Newsleader, a firefighter retiring after 10 years of service would qualify for a $45,000 pension; after 20 years it would be a $90,000 pension.
Readers should also understand the auditor for the State of Minnesota routinely monitors and audits the funding of fire departments. According to the auditor’s report, “nearly 84 percent of relief associations in Minnesota are lump-sum plans,” meaning they pay benefits as a one-time lump-sum payment to members upon their retirement. In lump-sum plans, benefits are paid to members based on an annual benefit level in effect at the time of the member’s separation from active service and membership; Sauk Rapids has a lump-sum disbursement plan.
According to the 2014 auditor’s report, there were some 18,000 retired and active firefighters in the state of Minnesota. There were only 1,371 benefit disbursements made to members or their beneficiaries, and some of those were disability benefits, and survivor benefits presumably covered partly or completely through insurance.
Kahlhamer also explained the pension dollars are not all from the coffers of the city. The primary sources of revenue for relief associations are fire state aid, municipal contributions and investment earnings. Most of the funding comes from a state fund called the Fire State Aid Fund. That money is based on the amount of physical territory the fire department serves. In order to serve on the fire department, a volunteer must reside within the acceptable response time area.
Response time means getting from home or the job to the fire station, getting geared up, on the truck and to the fire or emergency call in a set number of minutes. With regular full-time firefighters in big cities, the response time is generally about nine minutes. Keep in mind, the sooner firefighters are on scene, the more lives and property that can be saved.
The Sauk Rapids Fire Department serves not only the city of Sauk Rapids, but Sauk Rapids Township, Minden Township, the south two-thirds of Watab Township, Haven Township and the west two-thirds of Mayhew Lake Township. All of those townships contribute to the pension fund. The actual contribution of the City of Sauk Rapids amounts to about $12,000 per year.
“It is well deserved and the city has had a hard time keeping a full amount of authorized firefighters on staff since I have been here for the last 15 years,” Kahlhamer wrote.
He added other cities have difficulty recruiting and keeping firefighters. Sauk Rapids just recently added two firefighters to bring the city roughly to a full contingent of 30 firefighters. Many firefighters fail to qualify for even the 10-year pension because they move out of the acceptable response time area.
“The city takes the funding level of the pension very seriously, so neither the city nor the firefighter have to worry their pension will be there when they retire,” Kahlhamer wrote.
Presently, according to the 2014 auditor’s report, the pension is 110-percent funded. That may seem excessive, but part of that is the result of excellent management, and some good investment results in the past, according to officials.
If any reader is interested in becoming a firefighter, he/she should contact Sauk Rapids Fire Chief Jason Fleming at jfleming@ci.sauk-rapids.mn.us.
Firefighters practice using the extension bucket both for fighting fires and for rescue operations. For all of their training and being on call 24/7, firefighters might qualify for a lump-sum pension, but only after 10 years.
