February 28, 2000
WOODINVILLE--Chief Steve Smith of the Woodinville Fire & Life Safety District gave a financial breakdown of the fire district's current budget at the City Council's Feb. 22 study session.
Councilmember Bob Miller had requested the report to answer charges of irresponsible fire district spending raised by Fire Commissioner Dave Callon at the Council's Feb. 7 meeting.
The commission majority's greatest concern was that three years of deficit spending, from the lower tax rates in the 1997-99 budgets, drained their reserve fund from the target range of $4.5-5 million to only $2.7 million by the end of 1999, said Smith. Miller said the district had not had a deficit spending year since the early '80s, which resulted in taking out a loan.
"The reserve fund philosophy, established by the fire commission in the '80s, is that paying for equipment and facility expenses with the interest gained from the reserves is more fiscally responsible than having to hold emergency tax levies or taking out loans," said Smith.
The interest on $3.9 million from the 1998 reserve was $200,000, while the interest on $2.7 million from the 1999 reserve was only $110,000. The lower tax rates led to deficit spending of $250,000 in 1997, $426,000 in 1998 and $500,000 in 1999, said Smith. That all came out of the reserve fund.
"It took several years of sacrificing by the district to get those reserves up close to $4 million," said Miller, a fire commissioner and Chairman during the late '80s and early '90s.
In an interview last week, Callon said he is the only commissioner left from the previous board majority that lowered taxes. During the last two years, a different majority elected to the Fire Commission has gradually raised taxes to their former level (of $1.50 per $1,000).
This year, $580,000 will go back in reserve. But since facility expenses are not covered by the budget, $1 million of the reserve will go into building the new downtown fire station, plus $150,000 to finish last year's repairs at two stations. That will leave around $2.3 million in reserve at the end of 2000, said Smith, well below the ideal range of $4-5 million.
The district is looking at a 10-year timetable for replacing the reserves, partly because 82 percent of their budget goes to employee payroll and benefits, he said. I-695 also plays a role in the slow recovery.
"Our attorney advised us that, under I-695, we will only be able to ask for the same revenues next year as this year, plus new construction revenue," Smith said. "We won't be in financial crisis in the foreseeable future. If we had stayed at the previous budget request level ($1.32 per $1,000), we would definitely be in trouble. But the Board corrected that deficit spending level at last October's budget hearing."
The Council thanked Smith for providing them with a clearer perspective than they had before.
"I'm glad to see the reserves will be building back up, engines will be replaced, and that we'll retain a Class-3 rating, which saves insurance costs," said Miller. "Please thank the other Fire Commissioners for their fiscal responsibility." The "Class-3" rating comes from a state survey of all Washington fire districts to give them a fire insurance rating, on a descending 1-10 scale of fire protection.
Smith said the district needs to hire three firefighters this year to staff an aid unit at the headquarters fire station, due to the rapid increase from that area, including downtown Woodinville. He also cited the fact that 14 percent of the headquarter station's 1999 aid calls had to be answered by the Bothell Fire Department.
The district is currently exploring the possibility of a co-purchase and co-staff of an $800,000 ladder truck and its personnel costs with Bothell, as one cost-cutting measure, said Smith.