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Notes Question 1 What is a realistic timeline to implement a fire district? Answer It would likely take one-year to complete Opinion of Chief Boehlke Question 2 Will the fire department need to disband or dissolve? Answer The financial and operational functions can be kept separate or they can both be handled by the Fire District. In other words, two structures could be used: (1) the Fire District could be used merely to levy taxes, manage the budget, and handle the financial aspects only while the fire protection operations are accomplished by the Fire Department; or (2) the Fire District can handle all the financial and operational functions as an entity that directly employs firefighters, owns the fire stations and equipment, and is managed by a single board. The second option, the Fire District operating as a fire department, makes sense because it eliminates the redundancy of administering two boards and maintaining the Fire Department as a separate entity, including corporate and financial recordkeeping and reporting. It would be appropriate to dissolve the Fire Department after the Fire District has been established and the merger is completed. Dissolving a nonprofit corporation such as the Fire Department involves several steps, as outlined below, and takes several months to complete. Thus, you should anticipate an interim period during which the Fire Department will continue to operate in concert with the Fire District until all assets and liabilities of the Fire Department are transferred to the District and the Fire Department is dissolved. Opinion from attorney Erich Hartmann Question 3 What would the fire department need to do to become part of the new fire district? Answer An initial overview of the steps to transition from the Fire Department to the Fire District follows: a. Each municipal partner must approve a resolution and an agreement concerning the Fire District, as outlined in Joe Kelly’s December 27, 2021, memo and pursuant to Minn. Stat. § 144F.01. b. The municipal resolution or agreement must specify that the Lake Johanna Firefighters Relief Association pension plan is associated with the Fire District. § 144F.01, Subd. 2(c). c. The Fire District must file the establishing resolution and required agreements (and any amendments) with the Minnesota Department of Revenue. d. Bylaws of the Fire District should be prepared for execution upon formation of the Fire District. e. I anticipate that the Fire Department will dissolve, following this process: a. Prepare resolutions of Fire Department board and members approving the dissolution of the Fire Department and transfer of all its assets to the Fire District. b. Prepare notice of meeting of Fire Department members stating that a purpose of the meeting is to consider dissolving the corporation. c. Hold meetings of board and members. d. Proceed with dissolution (Minn. Stat. § 317A.701(a)(2)): i. Prepare and file Notice of Intent to Dissolve with Secretary of State. ii. Submit Notice of Intent to Dissolve required by Minn. Stat. § 317A.811 with Attorney General. iii. Commence winding up process (§§ 317A.725 and 317A.735). 1. Collect any debts owed to the Fire Department. 2. Pay or make arrangements to pay debts, liabilities, and obligations of the Fire Department. Chief Boehlke April 5, 2023 Page 3 3. Complete § 317A.811 requirements prior to transfer of Fire Department assets to Fire District. 4. Obtain waiver or satisfy 45-day notice period (to AG) in § 317A.811, Subd. 2. 5. Transfer assets in accordance with § 317A.735. a. Confirm adequate insurance is in place for the Fire District. b. Deed the real estate to the Fire District. c. Assign trucks, equipment, and personal property to the Fire District. 6. Submit to Attorney General a list of persons to whom assets were transferred pursuant to § 317A.811, Subd. 4. 7. Prepare and file Articles of Dissolution with Secretary of State. Opinion from attorney Erich Hartmann Question 4 What would the governance structure of a fire district be? Answer The bylaws of the fire district would likely determine this; it is unlikely that firefighters would be part of that structure Statement from Brad Martens Question 5 Would the fire department be able to keep its tax-exempt status? Answer The Fire District will be exempt from tax as a special taxing district that operates a fire department. I recommend having an initial discussion now with your accountant. Opinion from attorney Erich Hartmann Question 6 What would the fire districts' budget and finance controls look like? Answer The bylaws of the fire district would likely determine this. Statement from Brad Martens Question 7 What staffing changes would be required for the fire district? Information regarding the potential transition to a fire district