The Chelsea Area Fire Authority Board looked at three preliminary budget scenarios for 2014 at the work session on Tuesday, Oct. 29, which included staffing levels for retaining six firefighters, five firefighters and three firefighters.
Keeping all six firefighters would result in three 4-man shifts, while retaining five firefighters would result in two 4-man shifts and one 3-man shift and the third plan would result in three 3-man shifts.
CAFA received a SAFER grant that allowed them to hire additional firefighters for a 3-year period, but the grant money has now run out and the board must decide how many of them they can afford to retain.
The board expressed concerns with all three manpower options presented by Fire Chief Jim Payeur because they included deficit spending.
The fire department budget is primarily based on a millage of 1.8 mills, which is collected from resident taxes in the CAFA member service areas — the City of Chelsea, and the townships of Lima, Lyndon and Sylvan. And although the millage allows CAFA to project revenues into the future, taxable values have been lower than expected and there’s no guarantee of how much they will increase.
CAFA Board Chairman Rod Anderson presented the board with a preliminary projection with an assumption that costs only go up 1 percent and showed scenarios based on 1-, 2- and 4-percent increases in the taxable value while retaining 6, 5 and 3 firefighters.
Of course, retaining all six firefighters showed the largest amount that would need to be spent from CAFA’s reserve fund to balance the budget. Beginning with an initial reserve fund of $650,000, about $160, 700 would be needed in the first year, leaving the department with about $489,300 in reserves, but by 2015, at this 1-percent increase in revenues, the cumulative net result would be about $230,100 left in reserves. Carrying this out to 2017, it would mean an about negative $562,000 in reserves.
To retain the six firefighters, even at a 4-percent increase in revenues, CAFA would be about $343,000 in the red by 2017.
The most viable option is to retain just three firefighters, which would still result in a chipping away at the reserve fund resulting in about $53,200 in revenues at a 1-percent increase in property values, about $125,200 at a 2-percent increase in property values and about $272,200 if property values went up 4 percent.
“I don’t want to see a negative reserve fund in 2015 and 2016,” said Board Member Jamie Bollinger.
And he was not alone. After looking at these projections, all of the board members felt that the chief needed to bring back budget scenarios that stayed within the 1.8 mill revenue projections and he is expected to do this for another work session scheduled for Tuesday, Nov. 5 at 9 a.m. at Sylvan Township Hall.
“My initial reaction,” said Board Member Kurt Koseck, “is we need to work within the 1.8 mills,” (and not deplete the reserve fund.)
CPA’s and auditing firms recommend that an organization have between 10-20 percent of their operating funds in reserve for emergencies.
Which means the board has some tough decisions to consider.
Among those mentioned were increased firefighter contributions to their health care costs, smaller proposed raises, the possibility of doing away with the three lieutenant positions, and reductions in the proposed overtime costs and perhaps make better use of paid-on-call firefighters.
And although the chief has come in under budget for the last several years, previous budgets did factor in reserve funds to pay for expenses.
“Hopefully, things will balance out (in the future),” Payeur said, but if not, some hard decisions will have to be made.
He said he was aware that the board was concerned about deficit spending included in the 2014 budget, especially if six firefighters were retained. He said he was basing his budget on a 3-percent increase in taxable value for 2014.
Plus, he said, in 2016, the tanker will be paid off and that would add about $65,000 that could be used elsewhere.
He also mentioned that having four firefighters on duty at all times satisfied the 2-in, 2-out rule, which states that before two men can go into a structure fire, there must be two firefighters outside to back them up. However, there are exceptions that can be implemented in dire emergency situations.
“The biggest problem I have with this budget,” said Board Member John Francis, “is there are no actuals,”
Board Member Craig Maier said he’d like to be able look at each line item and see if it is over or under the amount allocated and Pat Hanniford, CAFA’s auditor, said he’d work with 7th Rule Accounting, which does the CAFA books, to provide those numbers for the prior year, the current year and any proposals for the future.
What the board members need to know going forward is what major expenses must still be paid for the remainder of 2013 that haven’t shown up in the numbers they’ve been given to date in order to make decisions about where the budget needs to be in the future.
The board also asked about adding more paid-on-call firefighters as an alternative to reduce some of the about $80,000 that was included in the budget for overtime costs.
Payuer said he was looking into the possibility of having a job fair at the high school and if there was enough interest, offering Firefighter 1 and Firefighter II classes in Chelsea High School for students. That way, once they graduated from high school they’d have the classes they need and could receive additional training as paid-on-call firefighters.
“This could be a way to integrate them into the department,” Anderson said.
In addition, the department needs to replace their breathing apparatus, called Scott packs, and they are hoping to receive grant funding to cover all or some of this about $150,000 expense.
