02 City Council (08/12/02) - Laserfiche WebLink

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City Council Meeting Aug. 12. 2002 Page 10 said that he provided the county with a copy of the invoice where the city paid for the actual truck, which was $229,449.00. The city has never charged the county with any supplies or maintenance that has to go on the rescue truck, all of that is absorbed in the Fire Department's budget. Councilwoman Neeley stated that the city bought the equipment that is on the rescue truck and that is at the city's expense. Mr. Anderson said yes the city purchased the truck out of Certificate of Obligation funds which the city paid just over 5% interest rate on. Because the truck has an expected life of over 20 years or longer, they just amortized the $229,449.00 at 5% for 20 years and that comes up to $18,180.00 a year, and he rolls that $18,180.00 into the total cost. He said they provided the county documentation on how they did that. Mr. Anderson stated that another thing that the county asked about persistently was the administrative overhead at 6.5% and whether or not that is a fair and reasonable number. He provided the county with two examples. One was the Women, Infant and Children program that is operated at the Health Department that is a State funded program and they allowed an administrative cost to be paid to the city because the city does the administrative work for this program. He keeps the books, pays the bills, and processes the payroll. If there is a legal issue, then City Attorney Schenk handles the legal matters, and the State allows under that 10% of the direct salary cost for the administrative overhead. Mr. Anderson said if you take 10% of the direct salary cost for administrative overhead factor and put it in the EMS contract, the city would draw more money using that standard than we do 6.5%. Mr. Anderson said the other example he gave the county was one of the first contracts that he had anything to do with when he came to work for the city. In 1985, the city was negotiating a wastewater treatment contract with Merico, and in that agreement with them, the city negotiated an administrative overhead as 6.5%. Mr. Anderson felt that both of the examples showed the reason for the 6.5% that the city adds on for this cost. That it was not just a number pulled out of the air, but it is a reasonable number. Mayor Pro Tem Manning asked Mr. Klinkerman to explain why we run the rescue truck every time they call.