|District residents discuss the future needs of the Mehlville Fire Protection District at a recent meeting of the Fire District Advisory Committee for Tomorrow's Emergency Services.
Bill Milligan photo|
Panel hears draft plan to address fire district's needs for 10 years
Draft recommendations presented to the Mehlville Fire Protection District's Fire District Advisory Committee for Tomorrow's Emergency Services, or FACTS, project that a 47-cent tax-rate increase would address the district's needs for the next 10 years.
"The draft recommendations that we're going to look at this evening are your comments and your suggestions that we used as building blocks for assembling these recommendations,'' Comptroller Jeff Geisler said Aug. 4, noting that at the previous FACTS meeting, "We heard a lot of comments and suggestions (about) the fact that the district needs to have a long-range plan, a 10-year plan, and unfortunately some of the presentations that I presented at that meeting only provided a five-year funding solution for some of the items that we had discussed.
"One of the items that we had discussed was the balanced budget. In order to maintain the balanced budget and also to maintain our current level of operations, (it) was originally shown on a five-year funding basis and based on your comments, we need a 10-year plan. So we've gone back and revised the plan for that item,'' he said.
About 45 people attended the FACTS meeting last week and began formulating recommendations for the Board of Directors to consider. FACTS participants are scheduled to finalize their recommendations at their last meeting, which will take place at 7 p.m. Wednesday, Aug. 11, in Ahrens' Church Hall at St. Simon the Apostle Catholic Church, 11011 Mueller Road.
Recommendations are scheduled to be presented to the Board of Directors — Chairman Tom O'Driscoll, Treasurer Dan Ottoline Sr. and Secretary David Gralike — at 6:30 p.m. Monday, Aug. 16, at the district's headquarters, 11020 Mueller Road, Green Park.
A tax-rate increase of 47 cents per $100 of assessed valuation would generate $103,005,561 over the next 10 years. The annual cost to the owner of a home assessed at $100,000 would be $89.30, according to Geisler.
The specifics of the draft recommendations presented to FACTS participants last week by Geisler are:
• Balanced budget — Based on historical trends and a 3 percent inflation assumption, the district will need $74,818,593 to cover future operating expenditures in excess of revenue to have a balanced budget and maintain its current level of service. This excludes any new equipment and facility repairs or improvements.
To generate $74,818,593, a tax-rate increase of 32 cents per $100 would be needed, according to Geisler. The annual cost to the owner of a home assessed at $100,000 would be $60.80.
• Restore staffing — The district's rescue squad and fifth ambulance currently are in service 50 percent to 60 percent of the time with a district staff of 33 paramedics and 80 firefighters. The 10-year cost to keep the rescue squad and fifth ambulance in service 100 percent of the time with a full staff of 36 paramedics and 84 firefighters would be $13,963,103.
To generate $13,963,103, a tax-rate increase of 7 cents would be needed, according to Geisler. The annual cost to the owner of a home assessed at $100,000 would be $13.30.
• Ten-year replacement plan for fire/EMS apparatus and equipment — The 10-year plan calls for purchasing fire apparatus totaling $5,206,651 and EMS equipment totaling $2,165,114.
To generate the $7,371,765, a tax-rate increase of four cents per $100 would be needed, according to Geisler. The annual cost to the owner of a home assessed at $100,000 would be $7.60.
• Phase I facilities 10-year plan — This 10-year plan calls for replacing firehouses 2, 3 and 4. Renovation and maintenance projects would be performed at firehouses 3, 4, 6 and 7. Also included is a training tower and a confined training complex. The total cost would be $5,352,100.
To generate $5,352,100, a tax-rate increase of three cents per $100 would be needed, according to Geisler. The annual cost to the owner of a home assessed at $100,000 would be $5.70.
• Land acquisition — The 10-year plan calls for purchasing three parcels of land for firehouse 2, 3 and 4 at a cost of $1.5 million.
To generate $1.5 million, a tax rate increase of one cent per $100 would be needed, according to Geisler. The annual cost to the owner of a home assessed at $100,000 would be $1.90.
Based on comments made at previous meetings, Geisler said, "... The first and the biggest most critical issue is a balanced budget. Based on our historical trends and a 3 percent inflation assumption, the district is going to need approximately $74.8 million to cover future operating expenditures in excess of our revenue in order to have a balanced budget and to maintain our current level of service or operations that we have today.
"Our current level of operations that we have today does not include any equipment, does not include any repairs or improvements in any of our facilities or any of our other infrastructure. This is just to maintain what we're doing today,'' he said.
"When we looked last time at the last FACTS meeting, we looked at the 10-year projection for the general fund, taking our historical revenue trend and expenditure trend and assuming an optimistic 3 percent revenue growth or CPI over the next 10 years, adding in our double-digit expenditures for health insurance of 19 percent and 20 percent for workers' compensation and property insurance and also adding in fuel costs, which approximates about a 12 percent growth per year, puts in our projections for the 10 years. 2005 will be our first deficit spending year and the deficits will obviously continue to climb for the next 10 years,'' he said, noting that in 2015 "the district can expect to have a $10.7 million deficit in the general fund. And keep in mind, that is just maintaining the level of operations that we're doing today.
"That's not purchasing one pumper, not buying one ambulance, adding any additional staff. That's just doing what we're doing today, which includes having the rescue squad and the fifth ambulance, which is down 50 to 60 percent of the time. Staffing is down to an all-time low of 33 EMS and we have only 80 firefighters presently,'' he said.
The ambulance fund currently is faring better than the general fund — the direct result of the decision to begin charging for ambulance service, Geisler said.
"The ambulance fund is doing a little better than the general fund ... We're not actually running any deficit spending until about 2009,'' he said, noting that the primary reason for that is the district started charging for ambulance service in the fourth quarter of 2002. "And that activity actually brings in about $2 million a year. So that should actually fund the operation of the ambulance fund up until about 2009. From that point, the expenditures will (exceed) our revenues, resulting in deficit spending. And then again, the deficits will continue to escalate until the 10th year. In 2015, the anticipated deficit at that point in time will be $3.8 million.''
Geisler said, "If we take these two funds, the ambulance fund and the general fund and we put them together and look at the deficits over the next 10 years we get this illustration that I have here, where we start combining future operating deficits just maintaining our current level of operations. Over the next 10 years in order to fund, in order to do what we're doing today and adding no enhancements, no equipment, no facility repairs, it's going to cost approximately $74.8 million or 32 cents per year over the next 10 years.
"The combined deficit in the 10th year with the general and the ambulance fund will amount to $14.5 million. So, in effect from this point forward, the general fund's basically going to be swimming in a sea of red ink and in the ambulance fund, that's not going to occur until about 2009,'' he added.
The comptroller later said, "In closing, the district, I think in the past that the district has demonstrated that it can operate in an efficient and also a responsible manner. It's been over 14 years — obviously prior to my time here — but it's been over 14 years since the district has obtained a voter-approved tax increase and the district has operated quite well and I think that was back in, I believe it was back in 1989, and the district has operated, you know, the long-range plan that the district had in 1989 and that tax-rate increase got the district to where it is today, which carried it 14 years. But due to the, you know, the simple logistics of single-digit revenue growth and double-digit expenditure growth, you obviously are going to hit the break even at some point in time and that just happens to be the year 2005.''
The district's last voter-approved tax-rate increase was in 1989. Since 1989, the district's tax rate has increased by 20 cents to the current rate of 90 cents from 70 cents. The board last voted to increase the tax rate in August 1998 when it raised the pension fund levy by 2 cents. That increase was the district's first since 1993 when the board raised the levy by six cents — to 90 cents from 84 cents.
At one point, the district's tax rate increased to 92 cents per $100. However, because of the Hancock Amendment, which limits revenue growth to 5 percent or the Consumer Price Index, whichever is less, the district was required to roll back the tax rate to its current rate of 90 cents per $100.
One resident later noted that the 10-year plan calls for the replacing firehouses 2, 3 and 4, yet repairs are planned to firehouses 3 and 4.
Dwight Dickinson of Dickinson Hussman Architects said, "We're not proposing to go in there and do wholesale repair work on all those buildings and then tear it out a couple years later. Our intent in the plan is just to stabilize and to keep those buildings operational until such time we can go ahead and tear them down. So hopefully we will be spending a minimum amount of money ...''
Regarding the $74.8 million needed to balance the district's budget and maintain the current level of operations, another resident asked what those expenses are and whether any plan was being considered to control or minimize those expenses.
Geisler said, "I think the biggest problem is — health care is obviously the biggest, one of the biggest expenses that the district has. It's a national crisis. It's not a Mehlville issue. It's a national issue and 19 percent increases in health insurance, I don't know what you can do about it ... We've gone out for bid. Most people I think whenever they get health insurance, most organizations they do a multi-year, three-year contract with whoever their provider is. And the district, we re-contract, negotiate every single year ...''
The rising cost of workers' compensation and fuel also were cited by Geisler.
The district provides medical, dental and vision coverage for its employees and 100 percent dependent coverage for all employees.
In his projections for the next 10 years,Geisler anticipates annual increases of 19 percent for health insurance. For 2004, the district is paying $1,691,676 for health insurance. In 2015, Geisler projects health insurance will cost $11,463,936 — a 577 percent increase over the 2004 cost.
For workers' compensation and property insurance, the comptroller projects annual increases of 20 percent. For 2004, the district is paying $759,859. In 2015, Geisler projects workers' compensation and property insurance will cost $5,645,816 — a 642 percent increase over the 2004 cost.
For total salaries, Geisler is projecting 1 percent increase in steps/longevity and a 3 percent annual increase. Longevity pay is determined by an employee's base salary and the number of years of service to the district. In 2004, total salaries, including overtime, are projected at $10,409,000. In 2015, Geisler projects total salaries, including overtime, at $16,024,178 — a 53 percent increase over the 2004 cost.
Geisler also projects that transfers from the general fund and the ambulance fund to the pension fund will continue. In 2004, the two funds transferred $110,740 to the pension fund. For 2005, Geisler projects that $202,853 will be transferred to the pension fund from the general fund and the ambulance fund — an 83 percent increase. In 2015, he projects that $330,425 will be transferred to the pension fund from the general fund and the ambulance fund — a 198 percent increase over the 2004 amount.
Employees do not contribute to the district's pension fund, which is funded by tax dollars and the return on investments. In the district's current tax rate of 90 cents, 9.3 cents are designated for the pension fund.