Nevada County Consolidated Fire District is still projecting red ink over the next five years, but much less so than a year ago.
“This tells us we have a little bit of work to do,” said Consolidated Finance Manager Jeff Van Groningen, after the district’s finance committee approved a preliminary five-year projection and a 2014-15 budget on Wednesday.
According to his five-year projection, Consolidated’s operations fund budget turns to red after 2014-15 for the next four years, ending in a cumulative shortfall of $567,000 in 2018-19.
Last year’s five-year projection released in October forecast more than a $4 million deficit over the next five years.
“Compared to last year’s five-year projection, these numbers look a lot better,” said finance committee chairman Mark Bass.
“We have to address our issues of overtime, insurance and salary increases,” said Consolidated Board Chairman Warren Knox, also a finance committee member. “Business as usual is probably not the way to do things in the future.”
Van Groningen said his new projections are the result of trimming costs and reworking accounts, including removing all equipment purchase expenses from the operations fund.
Consolidated’s 2014-15 final budget, which now goes to the full board for approval at the next public meeting, shows a $5.89 million operations fund spending plan, up from $5.78 million actually spent in 2013-14.
The 2014-15 operations fund, the major portion of Consolidated’s budget, includes a positive carryover balance of $101,000, plus a beginning cash balance of $515,000. But the positive balance ends after 2014-15 amid rising costs for labor.
Including worker’s compensation costs, labor costs make up 80 percent of the 2014-15 operations fund, Van Groningen said. That percentage rises to an estimated 86 percent in 2018-19, he said.
Richard Ulery, head of Consolidated’s Citizens Oversight Committee, said he was unhappy with the high labor costs, and disappointed that the shared services plan, which would have split the cost for a single “super-chief” to serve Consolidated, Nevada City and Grass Valley, was upended Aug. 21 when Consolidated instead acted independently to promoted Division Chief Jim Turner to fire chief and Division Chief Jerry Funk to deputy chief.
“I believe the move at the (Aug. 21) board meeting only exacerbated the cost of salaries,” Ulery said. “The numbers are up in almost all categories.”
He said the budget presentation Wednesday “builds a case that the entire revenue from the Special Tax of 2012 went to salaries and benefits,” he said. “I don’t think that’s what the taxpayers intended for that tax.”
Ulery also pointed to the fact that the operations fund budget did not include any line item expenses for new equipment.
Consolidated plans to use other sources of revenue, such as proceeds from the sale of a home the district owns, and money from its AB 1600 development mitigation fees fund, to pay for equipment.
In 2014-15, the district allocated $85,000 toward a new $550,000 fire engine out of the AB 1600 fund, along with $30,000 for tanks for its firefighters’ air packs.
“I don’t think relying on AB 1600 mitigation fees to fund capital expenses over the next five years is a good situation at all,” Ulery said. “The board needs to take some serious actions.”
Linda Chaplin of Nevada City, who is running against Spencer Garrett for a two-year seat on the Consolidated board, said she thought allocating money in the budget for the two new chiefs was better than leaving the line item blank in order to move money around into other expenses, as has been done in the past.
“I don’t want to continue to trade one thing for another,” she said. “We can’t have an orchestra without a conductor.”
The final 2014-15 spending plan includes $173,625 for both Turner and Funk’s salaries, which are expected to be finalized at the next full board meeting.
On the good news side, Van Groningen said property tax revenues are projected to be up 5.7 percent in the district for 2014-15.
He said he stayed conservative in his projections, including only a 5 percent increase in tax revenue for 2014-15 and 3 percent in the next four years.
He said he used a cost of living increase of 1.5 percent for most projected expenses, as well as the same number for salary increases after the 2014-15 budget.
For 2014-15, he projected a 4.4 percent rise in union firefighter salaries, which includes an expected 2 percent in negotiated raises and 2.4 percent increase as an offset from CalPERS retirement benefits contributions.
Employees will trade the offset by contributing more toward their own retirement benefits.
Ulery, meanwhile, said later that he “thinks the action at the (Aug. 21) board meeting really threatens the entire shared services agreement,” he said.
“The Citizens Oversight Committee stated that shared services was supposed to save the district money — I don’t think that’s going to happen.”
To contact Staff Writer Keri Brenner, email firstname.lastname@example.org or call 530-477-4239.
“We have to address our issues of overtime, insurance and salary increases. Business as usual is probably not the way to do things in the future.”
Consolidated Board Chairman Warren Knox