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Surplus revenue up in amended MFPD budget for fiscal '04


December 15, 2004 - By SCOTT MILLER

Staff Reporter

An amended 2004 budget approved by the Mehlville Fire Protection District Board of Directors projects an increase of nearly $785,000 in surplus revenue over the original budget.

The Board of Directors voted unanimously last week to approve the amended 2004 budget that projects a surplus of $1,911,674 — $784,722 more than the surplus of $1,126,952 projected in the original budget approved a year ago.

The amended 2004 budget projects total revenues of $20,563,508 and estimated ex-penditures of $18,651,834 — a surplus of $1,911,674. The original budget projected total revenues of $19,458,263 and estimated expenditures of $18,331,311.

The increase in revenues — $1,105,245 — largely is the result of the fire district's sale of its No. 1 house to the Missouri Department of Transportation, which is planning improvements to the intersection of Lemay Ferry Road and Lindbergh Boulevard. The amended budget also projects a $300,000 decrease in revenue generated by ambulance billing. The original budget estimated $2.1 million in revenue from ambulance billing, while the amended budget projects $1.8 million.

The amended budget also projects an increase in expenditures — $320,535 — over the original budget, according to information Comptroller Jeff Geisler presented to the board. Part of the increase is from additional transfers to the pension fund and a transfer to the sick leave reserve fund.

District voters last month approved Proposition S, a 33-cent tax-rate increase designed to address the district's needs for the next five years. The 33-cent tax-rate increase was formulated by the Fire District Advisory Committee for Tomorrow's Emergency Services, or FACTS, during a more than two-month public engagement process that in-volved about 100 district residents.

With the approval of Proposition S, the district's tax rate next year will increase by roughly 36 percent to $1.235 per $100 of assessed valuation from the current rate of 90.5 cents per $100.

While the amended 2004 budget projects revenues to climb roughly $1.1 million, the general revenue fund actually will increase by more than $1.3 million due to the shifting of revenues from one fund to another, according to Geisler.

"For the general fund, we're going to be increasing the revenues and transfers by $1,365,710. The predominant part of that increase in the revenues comes from the sale of the 1 house to MoDOT (Missouri Department of Transpor-tation) to make way for the intersection improvements," Geisler said. "We sold it to MoDOT for $1,150,000."

The money is committed, though. The Board of Direc-tors awarded a $1.1 million contract in November to Hof Construction Inc. to serve as general contractor for the district's new No. 1 engine house.

"Also included in this revenue increase is the FEMA (Federal Emergency Management Agency) grant that was approved last year for $102,000, which would purchase the necessary equipment for the fire district, as well as the workers' comp refund that we received during the year for our salaries being less than what we expected from positions being left open from individuals who had left the district," Geisler added. "Also included in this increase is a ($165,00) pumper deposit that we had planned on; money that was set aside in the fire apparatus (for the pumper). With the success of the Proposition S, that pumper now will be funded out of the tax dollars that were approved by the residents.''

As a result, the $165,000 will be returned to the general revenue fund.

Fund transfers also reduced the total amount of the estimated general revenue fund increase, Geisler added.

"A reduction in those revenues comes from additional funding for the pension plan and also for the sick-leave fund. On the sick-leave fund, we will increase the revenues transferred by $16,937. This is basically to keep the funding level for the sick-leave fund at an 80 percent funded level. The expenditures of the sick-leave fund anticipate a decrease by $116,700. We've had seven positions that have left the district that have not been refilled and those pay-outs accumulated to a net reduction of $116,700."

Of the $16,937 transferred to the sick leave reserve fund, general fund transfers accounted for $10,840 and $6,097 was transferred from the ambulance fund. Projected sick-leave pay-outs for 2004 total $183,300 — $116,700 less than the $300,000 originally anticipated.

Under the amended budget, an additional $82,453 will be transferred to the pension fund, bringing the total pension fund transfers for 2004 to $193,193. Including the amendment, the district has transferred $123,330 from the general fund and $69,863 from the ambulance fund this year to cover its pension obligation. In total, the district anticipates contributing $1,732,453 to the pension fund this year.

From fiscal 2003 to the fiscal 2004 amended budget, revenues increased 10.6 percent and roughly $1 million more is coming in this year than anticipated. In addition, with the aid of budget cuts last year, expenditures in-creased about 5.6 percent during the same period of time.

Still, at the end of this year, the district will have a $1.9 million surplus.

But district officials say that trend won't continue and expenditures next year will surpass revenues, hence the need for Proposition S.

In particular, skyrocketing health insurance and workers' compensation costs will nag on district revenues, Geisler said. In effect, 2004 would be the last "break-even year," he said this summer during the district's community en-gagement process that led to Proposition S, though the district did better than breaking even this year, stocking a $1.9 million surplus.

And workers' compensation actually contributed to 2004's revenue increases because of salary reductions, Geisler said, but the expense still was greater than 2003. In 2004, the district expects to spend $653,737 on workers' compensation insurance, according to the amended budget.

Based on budget projections formulated this summer, Geisler originally projected spending $759,859 for workers' comp, a 20 percent increase from fiscal 2003. Com-paring those projections with the amended fiscal 2004 budget, the district saved $106,122, or about 14 percent.

Geisler expects workers' compensation premiums to increase 20 percent each year, according to budget projections presented during the FACTS process. But when comparing the 2004 amendment with Geisler's fiscal 2005 projections, the compensation insurance would jump nearly 40 percent to $911,831 in fiscal 2005. Final approval of the district's 2005 budget will be considered by the board later this month.

As a result of Proposition S, the district plans to restore staffing to prior levels — 84 firefighters and 36 paramedics. Board members also intend to keep the rescue squad and fifth ambulance operational full time, two more hefty expenditures.

Restoring staff particularly will be expensive as more than 87 percent of the district's budget goes toward salary and expenses. A 2002 analysis by the Call found that the lowest paid district union employees would be making an annual salary of $50,000 by the end of 2002. Those two employees were probationary and more than half of the district's employees earned between $70,000 and $75,000 per year.

FACTS participants formulated a 10-year, long-range plan to address the fire district's needs and discussed a draft recommendation of a 47-cent tax-rate increase to fund the plan. But at the final FACTS meeting on Aug. 10, Bill Cocos, one of four community co-chairs, said that while participants agreed that a 10-year operating and facilities plan was needed for the district, some were uncomfortable with the funding required for that amount of time.

Given that, he said that while FACTS participants would recommend the 10-year plan to the board, they also would recommend funding — 33 cents per $100 — for the first five years of the long-range plan that is projected to cost $32,631,858. After five years, Cocos said the FACTS group would be reconvened to review the progress that has been made and "tweak'' the long-range plan if necessary.

The projected cost of funding the first five years of the 10-year, long-range plan is $32,631,858, which will be used "for the purpose of replacing old and worn-out ambulances, emergency medical equipment and fire trucks and equipment; providing up-to-date training for firefighters and paramedics; keeping firefighter and paramedic salaries comparable to other fire districts; maintaining high-quality paramedic, ambulance and fire protection services; replacing paramedic and firefighter positions lost through budget cuts; and renovating, repairing and replacing worn-out and obsolete buildings and building conditions as recommended by the Fire District Advisory Committee for Tomorrow's Emergency Services,'' according to the resolution placing the measure on the ballot.

Revenues cannot keep pace with those expenditures, even though revenues are growing without the aid of Propo-sition S.

The district's tax base increased by about $100 million from 2003 to 2004, Geisler told the board last year when the fiscal 2004 budget was adopted. But the Hancock Amendment limits growth to 5 percent or the consumer price index, whichever is lower. Without the Hancock Amendment, the district would have collected an additional $638,000 from that tax base increase just from 2003 to 2004, he said. Each year, the district may collect more as it covers the capped growth from the $100 million tax-base increase in 2003.

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