Fire Chief Provides Budget Presentation

Posted: 04-Jun-2012

At a special Moraga-Orinda Fire District Board of Directors meeting on Wednesday, May 30, 2012, the Fire Chief presented the Fire District’s “Draft” Preliminary Budget for the Directors’ review, comment and recommendations.  During the presentation the Fire Chief identified the primary reason for the fourth year of cost increases is the due to the continued escalation of retirement costs.  The Fire District belongs to the Contra Costa County Employee Retirement System (CCCERA).  Due to the economic downturn that began in 2008 and CCCERA’s decision to “de-pool” member agencies, the pension cost to the District has continued to escalate.  “In fiscal year 2012/13, MOFD’s pension costs will have increased by $1.4 million annually (since 2008/09) and are projected to increase another $500,000 in 2013/14,” the Chief stated as he walked the Board and the public through the challenging budget projections.  “In the past three years we have been able to reduce administrative staff, renegotiate service contracts, eliminate non-essential programs, offer employees incentives to turn down health benefits and recoup some costs by billing insurance companies for vehicle accident responses; but ninety percent of our costs are personnel who are assigned to ambulances and fire engines and we no longer can balance our budget without service level impacts.”  The District is facing an $862,000 shortfall for 2012/13.

During his presentation Chief Bradley offered the Director’s three choices; (1) divert funds from a special tax that have been earmarked for capital equipment and facilities into the operating budget; (2) shift from a model where the District fully staffs two ambulances and cross staffs one ambulance (with personnel assigned to an engine company) to a model where the District fully staffs one ambulance and cross staffs two ambulances.  Under this proposal the one fully staffed ambulance would be located in the middle of the Fire District; (3) The third option presented was to utilize the District’s reserves to balance the budget, continue to allocate earmarked capital funds to the capital accounts and maintain current service levels.

After the presentation the Board unanimously chose the option to utilize reserves.  Later Director John Wyro commented that the District is fortunate to have reserves, “While I realize that our reserves will not last forever, I think that it is important to utilize our reserves to maintain service levels.  The community of Moraga and Orinda both expect and deserve fully staffed ambulances 24/7 and until we are in a position where there are no other choices I am adamant that we should keep that commitment.”  Board President Fred Weil agreed with Director Wyro and was also concerned about appropriating earmarked capital funds to the general fund.  “The special tax that we use for capital is of declining value and if we experience inflation like we had in the 70’s and 80’s that $1 million will buy us very little.  We cannot go into the direction of the schools that failed to invest in infrastructure and hoped that the public would bail them out by issuing bonds.”

In 2008 the District issued Pension Obligation Bonds and chose to deposit $500,000 into an account as a mechanism to reduce the amount of interest paid on the bonds.  The Board directed staff to determine if the $500,000 could be moved to the general fund to offset the amount of reserves that will be needed to balance the 2012/13 budget.  Staff agreed to investigate if the funds could be moved and utilized in the general fund.

With the concurrence of the other two Board Members, Director Frank Sperling challenged the staff to continue to review and evaluate the District’s “program budgets” to identify any additional reductions that will not decrease service levels.  “I would like to review the program budgets in greater detail and if something jumps out, I would like to be able to ask questions prior to approving the preliminary budget.  I think that is an important part of this process.”  The staff committed to providing the draft program budgets to the Board and the public for review and comment prior to June 14, 2012.

MOFD’s Preliminary Budget will be reviewed and is expected to be adopted on June 20, 2012.  The final budget will be adopted in September, 2012.

Budget Presentation