Progress! Understanding the structural, financial, and legal operations of the Fire Relief and Rescue Squad associations

At the August 21, 2012 City Council Work Session, TJ Dvorak and Tom Nelson from the Fire Relief Association and Rescue Squad Association met with the Council to:

… provide an update on their efforts to address process and procedural topics of the Association. Attached is supporting information on the steps they are taking in this process and how the Relief Association is integrated with the Fire Department and the Rescue Squad.

It’s been a long and tortuous road to this point (see all the blog posts for background). There are no dollar amounts attached to anything yet, so it remains to be seen whether item 3D Transparency Review will reveal the important numbers to the public. But I’m pleased that there appears to be progress. The document in the packet (PDF) included this outline and flowchart (PDF):

Northfield Fire Relief Assn and Northfield Rescue Squad Relief Assn Funding FlowchartNorthfield Fire Relief Association & Northfield Rescue Squad Association – Progress Update

1. Process Goal: Association and City staff leaders jointly review (with external assistance) the structural, financial, and legal operations of non-profit Fire Relief/Rescue Squad associations, outline recommended changes, and report to City Council

2. Process Team

a. TJ Dvorak – Association President
b. Tom Nelson – Association Secretary
c. Mark Taylor – Public Safety Director
d. Tim Madigan – City Administrator
e. Kathleen McBride – Finance Director
f. External Review/Recommendations members
i. Tom Olinger CPA – Abdo, Eick, and Meyer CPA
ii. Eve R. Borenstein JD – Eve Rose Borenstein LLC

3. Process Steps:

a. Preliminary Meetings and flowchart development
b. Information/documentation gathering for external review
c. Outline Time Line – process, deliverables, and any change management.
d. Transparent Review – Structural, Fiscal, and Legal
e. External Assistance/Recommendations – CPA and Non Profit specialized JD
f. Recommendations Review – External consultants and process team
g. Next Steps & Change management
h. Final Report presentation to Council

Here’s the video from that segment of the work session:


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Props to the Northfield News for the Fire Relief Association ethics story

Northfield NewsSaturday’s Northfield News carried a front page story titled Concerns arise over Fire Department expenses; Northfield officials fear funding is going toward non-firefighting expenses.  (The headline used for the online version: Ethical questions arise over Northfield Fire Relief Association expenses.)

Griff Wigley with May 12, 2012 edition of Northfield NewsI’ve done four fire department/association-related blog posts since January (here, here, here, and here) as well as a three more on attorney David Hvistendahl (here, here, and here) who’s representing the fire and rescue squad associations. It’s a complex and constantly evolving issue.

So it’s really helpful to have a someone else, in this case, Northfield News reporter Suzy Rook, digging into the story, too.   And for the first time, the paper cited Locally Grown (twice) in a story:

Fire Department officials, including Fire Chief Gerry Franek, did not respond to several requests from the News for association financial records or comment. Assistant Fire Chief Tom Nelson at an April 24 City Council meeting said documents posted on the blog Locally Grown are 2010 and 2011 relief association check registers. But those registers don’t clearly state how and where monies were spent, and are likely a listing of transactions from several accounts compiled into a single document…

The association had a net revenue of $14,263 in 2011, according to a Gambling Control Board report to the Legislature. Of that, $4,110 was used for what’s termed lawful purpose expenditures. In 2010, its net receipts were $17,730. Of that, $8,354 was used for lawful expenditures. Figures provided to the state Gambling Control Board don’t match the association’s 2010 tax return, a document Assistant Fire Chief Tom Nelson says he provided Locally Grown. According to that document, the association lost $2,209 in 2010.

I appreciate that. Follow Suzy Rook on Twitter @rooksuzy.

Why is the Northfield Rescue Squad Association retaining attorney David Hvistendahl?

I was surprised to see on page 17 of the April 24 Council packet that there’s a letter (separate PDF here) from Northfield attorney David Hvistendahl to the CPA firm of Abdo, Eick & Meyers in which he’s telling them to not disclose any financial info about the Northfield Rescue Squad Association to the City of Northfield:

Hvistendahl NRSA letter to AbdoRemember your firm’s fiduciary duty owed to the Association on the basis of your professional services to the Association. We assume you will honor that duty and not disclose any information pertaining to the Association without our written consent.

Unless the city has a written agreement with the Association that gives them the power to request such an audit, or unless a Minnesota statute grants the authority to a municipality to compel an audit, the city lacks the standing to request an audit.

The Northfield Rescue Squad Association (NRSA) is separate from the Northfield Fire Relief Association (NFRA). The NRSA runs the bingo and duck race fundraisers during DJJD. I don’t know the history on why there’s a need for two organizations. I don’t understand how the gambling/pull-tab revenue is handled.

But regardless, why is it important that the City not know the Northfield Rescue Squad Association financials?

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