S.F. ___ (_____); H.F. 3235 (Murphy) creates a 17-person task force (12 representing volunteer firefighters, four city representatives, and one state official) to study the advisability of the Legislature creating a voluntary statewide lump sum volunteer firefighter retirement plan to replace some or many current lump sum volunteer firefighter relief associations by conducing a survey of volunteer firefighter relief associations and by holding various hearings around the state to gather information abut the potential details of a statewide plan. The appointments from the Minnesota Area Relief Association Coalition (MARAC), the Minnesota State Fire Department Association (MSFDA), and the Minnesota State Fire Chiefs Association (MSFCA) would be made by the presidents of the organizations. The task force would be chaired by the State Auditor or the State Auditor’s designee and would be staffed by the Office of the State Auditor, funded by a $350,000 appropriation deducted from 2002 fire state aid. The work of the task force would result in a report to the 2004 Session of the Legislature.

S.F. ___ (_____); H.F. 3235 (Murphy) would create a structure for an organized consideration of the potential for creating a statewide volunteer firefighter retirement plan to replace on a voluntary basis some or many volunteer firefighter relief associations. The study would be conducted by a volunteer firefighter-dominated task force, which would conduct a survey of volunteer firefighter relief associations, hold various regional meetings to receive reactions from volunteer firefighters, have actuarial work on alternatives prepared, and prepare a report to the Legislature.

The proposed legislation raises several pension and related public policy issues, as follows:

1. The Appropriateness of Encouraging A Statewide Volunteer Firefighter Retirement Plan. The policy issue is the appropriateness of the Legislature in encouraging the creation of a statewide volunteer firefighter retirement plan in place of many or most of the current 700+ volunteer firefighter relief associations by mandating a study of the creation of the plan by a specially created task force. Minnesota has had volunteer firefighters for over one hundred years and has provided them with retirement coverage for more than six decades through a decentralized system of volunteer firefighter relief associations. This history of decentralized retirement coverage, which has a discernable cost, is proposed for being reversed by the creation of a statewide retirement plan for volunteer firefighters. The sponsor of the task force proposal, the Minnesota Area Relief Association Coalition (MARAC), has made no statewide or general public policy argument for the proposal, but only provides prospects for increased individual volunteer firefighter benefit amounts and other personal gain advantages by volunteer firefighters for the proposal. If the policy advantages of a shift from a decentralized retirement system to a statewide system cannot be articulated, perhaps there is no statewide advantage. The Legislature certainly can be supportive of greater benefits for volunteer firefighters, but those greater benefits can be obtained by more knowledgeable investment practices by the current volunteer firefighter relief associations and by the provision of greater monetary support by the affected municipality or municipalities. If there is no clear statewide advantage from the ultimate result of the task force’s work, and consequently the creation of a statewide plan is a dubious prospect, then this proposed legislation may be a waste of effort that could be avoided.
   

2. Unnecessary Legislation Because a Self-Help Remedy Is Available.  The policy issue is the appropriateness of the proposed legislation and its utilization of legislative time and effort when the interested parties have a self-help remedy of conducting a study on their own. The Minnesota State Fire Department Association, or the Minnesota Area Relief Association Coalition (MARAC), or the Minnesota State Fire Chiefs Association, as organizations, separately or jointly, could establish a task force or a working group that could elicit and assemble information on the proposal without any legislation. Since the Minnesota State Fire Department Association and MARAC are funded from dues derived in whole or in part from fire state aid, the source of funding of the task force would essentially be the same whether the study was mandated by the Legislature or conducted on a self-help basis.
   

3. Appropriateness of the Relative Proportion of Task Force Representation.  The policy issue is the appropriateness of weighting the task force membership significantly more heavily from the volunteer firefighter community than from other interested parties. The draft proposed legislation would give the volunteer firefighter community 71 percent of the total membership on the task force. From the standpoint of potential salesmanship of the ultimate product of the task force to the currently suspicious volunteer firefighter community, overweighting the task force with volunteer firefighters may be assistance, but if the goal of the task force actually is to dispassionately gain information on the topic and report its findings, the overweighting may not be necessary or desirable. The bulk of the financing of volunteer firefighter relief associations is derived from state taxes on fire insurance premiums and local municipal contributions. Representatives of those interests should be included in greater proportion. A third party study entity, such as the University of Minnesota or the Citizen’s League, also could be contracted with to undertake the study.
   

4. Potential Burden on the Office of the State Auditor.  The policy issue is the appropriateness of placing the burden of staffing the task force on the Office of the State Auditor. The actual staffing burden on the Office of the State auditor will be dependent on the length of time over which the task force will operate (potentially 18 months), the number of meetings that the task force will hold, and the extent of statewide travel the task force will engage in. Since the State Auditor is designated to be the chair of the task force, the State Auditor can ameliorate some of the burden on the office by the manner in which the Auditor organized the work of the task force.
   

5. Reasonableness of the Cost of the Task Force.  The policy issue is the reasonableness of the cost of the task force and the proposed study. The draft proposed legislation would expend up to $350,000 for a six-month study. By comparison, that amount is approximately 65 percent of the appropriation of the Legislative Commission on Pensions and Retirement for a year and the task force’s work represents a much narrower legislative assignment. The appropriation will be borne from fire state aid, meaning that employers of paid firefighters will also be bearing some of the cost of the volunteer fire study because of its impact on the fire state aid distribution formula.
   

6. Eventual Disposition of the Study.  The policy issue is the likelihood that the study will produce a legislative initiative and resulting volunteer firefighter relief association decisions that merit the effort and expense for this study. Any controversy in volunteer firefighter relief association proposed legislation from the volunteer fire community generally dooms that proposal. It is unclear that the proposed study by a task force, which will likely be perceived by the volunteer fire community as predisposed to creating a statewide retirement plan, will result in a widely supported legislative proposal for the 2003 Legislature to consider. It may be advisable to utilize a study entity that is more clearly unattached to any potential result of the study.