With an additional $1.4 million in an additional unexpected property tax revenue, the East Contra Costa Fire Protection District will keep Station 94 (Knightsen) open through June 2015.
During Mondays special board meeting, directors approved its 2014-15 operating budget of $12.5 million which came in $1.4 million higher than anticipated in property tax revenue which they had estimated a 5% increase, however, the County Assessors Office came in at an increase of 16.7%.
The news of higher property tax revenue will prevent Station 94 from closing December 1 and will ensure it remains open through June 2015 while it also prevents firefighter layoffs and the District will maintain its 39-firefighters.
Through next June, the District will operate having 4-fire stations covering 250-square miles–on overflow calls, they will still be forced to rely on assistance from Contra Costa County Fire as well as all residential/commercial structure fire responses.
Chief Hugh Henderson warned that the current budget will not allow the four-stations to remain open through all of 2015, but this does allow extra safety for our communities and firefighters through June 30.
Station 54 (downtown Brentwood) will remain closed per the budget as there is no revenue to re-open it which closed Sept, 1. Chief Henderson explained that without more revenue, the station will remain closed and Station 94 will follow on June 30, 2015
The District will also pre-fund for retirement healthcare costs which the board has a pre-funding retiree health care benefits for future retirees at 85% of the ARC in fiscal year 18/19. According to Henderson, the District’s finance committee recommended to the full board that they start funding at the 85% beginning in fiscal year 15/16.
The District will now work on putting out another Benefit Assessment before voters in the coming months after they recently voted to postpone the Benefit Assessment vote after it was discovered 10,000 out of 44,000 ballots that went out had incorrect data. So far, its spent $12,5000 on printing post cards notifying property owners that the ballot had been cancelled and that a updated ballot will be sent in the future and the voting process will begin again.
Per the staff report, the following is a summary of additional assumptions included within the proposed budget:
- Revenue: The majority (96%) of the District’s revenue is from property taxes. As a result of recent economic conditions, this District’s property tax revenue has declined 20.6% from six years ago. Although local jurisdictions have begun to see signs that property values are stabilizing, all indications are that it will take many years before the District’s property tax revenues can be expected to return to prerecession levels. The District estimates that FY 2014-15 property tax revenues will increase 16.7% ($1,443,247) over FY 2013-14. Property tax receipts in the District are projected to increase in the upcoming years as follows: 4% in FY 2015-16, 3.0% in FY 2016-17, and 2% per year in Fiscal Years 2017-18 through 2023-24.
- Retirement Expenses: After receiving revised pension cost estimates from the County retirement system based on the County’s latest actuarial study, accepted August 6, 2013. District’s pension contribution rates for FY 2014-15 have increased significantly. The increases are required due to a combination of factors, including the investment earnings rate decreasing from 7.75% to 7.25%, historical contribution rates, and the de- pooling of all the agencies in the retirement system.
- Capital Improvement/Vehicle Replacement/Reserve Funds: Each of these funds represents a fixed 1% of the operating budget and, as the funds accumulate over the years, they will be available for station upgrades/repairs and replacement of equipment.
- SAFER grant: The grant term started in November 2012 and will end in November of 2014. Personnel costs associated with grant-funded services will end in FY 2014-15 when the grant term ends.
- East Bay Regional Communications System Authority: Starting in FY 2014-15 the District will start paying a monthly system fee for the regional radio system. The system fee is estimated to be $48,000 per year and has been included in the current service model.It is important to note the operating budget scenario incorporates only the necessary minimum expenses required to operate under the current service model in an attempt to lower the revenue gap. This leaves very little room for contingencies. Reserve and replacement funds are in place, though they are in their infancy and are not intended for use to support routine operations. Unexpected events that may negatively affect the budget will be brought to the Board’s attention, as will any required budget adjustments and a mid-year budget review.
Other Post-Employment Benefits (OPEB)
The OPEB Fund provides a funding source for post-employment retirement health benefits for the District to meet its future financial obligations identified in existing employment contracts. With approval of the proposed Operating Budget, the Board will be able to fund 53% of the District’s OPEB liabilities, taking another step toward the Board-approved goal of funding 85% of the District’s OPEB liability by FY 2018-19. The Finance Committee on September 18, 2014 recommends to the Board to fund the OPEB liability at the 85% goal starting in fiscal year 2015- 16.
Other Funds
Separate from the General Fund, which funds on-going operations and maintenance, the District has various other funds that have been formed pursuant to State Codes or District policies. Subject to State law and District policies, these funds are earmarked for specific uses; therefore their revenues and expenditures are restricted and are limited. The following summarizes the various funds:
Development Facility (Impact) Fees: These fees are collected under Government Code Section 66000 to mitigate the impacts of new development on fire facilities. Funds may only be used for facilities, not operations, and are to provide necessary facilities and equipment as a result of growth. Therefore these funds cannot be used to maintain existing facilities. The following fees were imposed prior to the District’s merger in 2002 and the fees were supported by facilities specific to the individual Districts; therefore, by law, separate accounting, investment and expenditure is mandatory. Fees are collected from new development as residential and non- residential building permits are issued.
- Bethel Island Fire Protection District Facility Fee
- East Diablo Fire Protection District Facility Fee (applicable to Brentwood, Byron,
Discovery Bay) - Oakley Fire Protection District Facility Fee (applicable to Oakley and Knightsen)
Development activity is unknown as a result of the current economy; therefore revenue from new development is not anticipated in this fiscal year.
Community Facilities District: This is a special tax applicable to the boundaries of the Cypress Lakes (now Summer Lakes) development in the City of Oakley for the purpose of operations and maintenance. The tax is applicable to 629 parcels, of which 62% are built out. The budget includes a contribution to the General Fund for services and costs associated with the tax levy to be collected on the property tax roll. Revenue is transferred to the General (operating) Fund to help support services in this area.
Capital Improvement: Formed by the Board in April 2010, the Capital Improvement Fund is intended to be used for improvement to District assets valued at $25,000 or greater. This fund could be used for fire station remodels, refurbishment or replacement and District-wide needs for critical infrastructure. The Capital Improvement Fund budget includes a transfer from the General Fund of 1% of the operating budget.
Equipment Replacement: The Equipment Replacement Fund would be used for capital equipment and replacement of equipment with a useful life of 5 years or more or a replacement cost of $10,000 or greater. This fund was also formed by the Board in April 2010. The Equipment Replacement Fund includes a transfer from the General Fund of 1% of the operating budget.
12 comments
How much money was the botched Benefit Assessment District tax “engineered” to raise? We it looks like we need about $1,443,247 less from the BAD tax now. Thank goodness for this new-found money, and thank goodness the botched BAD tax process had to be cancelled. It would have been a darn shame to have voters decide this issue based on understated (incorrect) revenue!
It reminds me of when the earlier property tax increase was voted down, and then out of nowhere we learned the SAFER grant wasn’t denied, in fact is was granted!
Either we have luckiest little fire district in the world, or positive financial information isn’t made available when the district puts decisions before the voters.
Every new story leads me to the same conclusion: Our district is too small for its administration to function efficiently and effectively. We need to merge with Con-Fire and take advantage of the highly paid County Supervisors, and their staffs, who oversee it. Our board members are volunteers with no support; Con-Fire’s board members are highly compensated full time County Supervisors, each with their own highly compensated staff members who are far better equipped to oversee fire protection services.
Furthermore, because EMS is a County function, and fire protection services are very tightly intertwined, bringing it all under the County BOS makes even more sense.
I agree Laugh. I remember a few blogs back those guys with the rocks in their pockets telling everyone how there is no money even after I read there was about 400K extra and a 20% increase in property tax revenue as the housing was coming back big time. Wow was I wrong. There is 1.4 million extra. Housing sales are up and that’s good for everyone because taxes go up too. The pocket rocks boys were obviously FOS. Those pocket rocks also said that the pension fund was making huge interest. Boy they were even more FOS by this article info. Then we are told that part of this money has to pay back payments on short paid payments this past few years. I thought the firefighters were paying for their pensions themselves according to the pocket rock boys. To have this information come out this late makes me wonder if they knew it all along about the 1.4 million coming in.
Read the paragraph above about OPEB. Our district was only paying in 53% of 100% of the amount the pocket rock boys said was already paid. Now they will bump the payments up to 85% by 2018-19. Something smells real bad in east county about taxes, fire money, and pensions. We need to merge with Con Fire. Even paying 85% of a 100% bill that the firefighters supposedly already pay is insane and will eventually come back to us for more BAD taxes. Merge now. Send the problem back to the county where it was created. They have the means and the staff. The firefighters also deserve the same pay.
@Laugh-
When I read your comment, I wondered if you were attempting satire. In case you weren’t, let me just point out that those highly paid Supervisors and their highly paid staffs formed the district in 2002 and did nothing about long-term funding. They hired CityGate as a consultant to do a study in 2006, and when the report showed the looming funding disaster they again did nothing.
The first Benefit Assessment was based on the preliminary budget assuming a 5% increase in Assessed Valuation. As soon as the District was given the true figures from the Assessor (always done in August), it was factored into the budget, and was part of the Final Budget passed last Monday. It will be part of the revised Benefit Assessment. No one (including the Assessor as of last April) predicted the jump in Assessed Valuation; the Assessor had indicated in a comments to the Fire Commissioners Association last April we might see 7-8% tops.
I’ve seen how the County administers a lot of Fire Department matters, and it isn’t pretty. Starting January, we will be working directly with one of the finest Municipal Finance Departments in the state, that of the City of Brentwood.
@Chuck-
your comment is so incoherent I won’t even try to respond point by point. The common target for everyone administering retirement plans is to prefund (or reduce unpaid liabilities) up to 85% of actuarial requirements. We are keeping up with our side of the payments to CCCERA in their program to achieve the 85% level for pensions. One of the first policies established by the Local Board in 2010 was to begin its own program to prefund OPEB (basically Retiree Health) to 85% over a seven year period ending in FY 2018/19. Last Monday the Board voted to use around $170,000 to finish that process early.
Laugh,chuck
Cat got your tongue. Hard to argue with facts. Show up to a meeting and pay attention. There is no smoke and mirrors just honest people trying to do the right thing for their community. The dept is crumbling we can’t even keep any new hires. It’s that bad here.
@ Better off,
The facts that remain are that the county created a no win for this fire district to avoid political ramifications. They need to solve the issue. The district will not survive with a new BAD tax because that money will go to medical and retirement benefits that the district has already committed to these past years. That is proven fact by where this new 1.4 million is spent. If those extra tax dollars didn’t show up now, OPEB would be forced to kick the district out of the pension or foreclose on some assets. The BAD tax is just another band aid in hopes taxes will go up faster than normal. Well, they jumped big time and the money is going to pay pensions that are only paid at 52%. The new rule is pay up to 85% now. The district can’t without taking away services that at this time are not even close to required standards. Pay as you go or you are right back at where we are now in a few years. The BAD tax is questionable because it challenges prop 218. This little district does not have the funds to defend itself against a prop 218 challenge let along catch up on pension commitments. However, the county does. OPEB now says everyone needs to stand on their own for pension payments. This is something that is unattainable for this district without continuing to cut services. Services should not be cut just for benefit payments. This means the district either gets more money or only exists to satisfy the debt it has already created. Either way it is doomed unless the larger more stable con fire take it in. The firefighters deserve the same pay and the public deserves standard rated service. Merging with Con Fire leaves the only logical result for equal pay and equal service.
To answer you Steve,
I think it is great that the board has attempted to meet OPEB 85% pension payments. The problem Steve is the district is cutting services to do that. That is just wrong and inexcusable that the public is put in danger because of it. Steve, send it back to the county where the problem came from. The public will thank you and the firefighters will get equal pay.
Mr. Smith,
I’ve little interest in discussing the history of the district, not because I disagree with you, or find it uninteresting, but because it will not help us move forward. As we have seen all too often, such a discussion leads to endless debate that serves only to divide.
I will defend the board, yourself included, as all are indeed doing their best given their limited experience and resources.
Three questions….
1) Who is best able to manage the district, the County Board of Supervisors or a local volunteer board?
2) What benefit do we gain from the current board and district formulation? And don’t put too much importance on ‘local control’ because beyond the slogan, is there an example or two of how that ‘local control’ actually brought about a single positive outcome for us.
3) Mr. Smith, where do you stand on the concept of a merge? Is it worth investigating?
Steve,
Does your comment mean you are working with the City of Brentwood for financing?
Brentwood needs to step out and move on with their own fire department.
Chuck
I do agree with some of your points. The county has created this mess, and they were all too willing to let us go on our own. The public cried for local control. Now we have it and look. It’s a giant mess. As far as our OPEB it’s all our past administrators that caused it. We are working on Fire Chief # 6 since 2000. They come collect their pension or health care and move on. In the history of ECCFPD there has been two. Yes two rank in file employees who have retired. Every other person has either left for greener pastures or has been medically retired. FACT!!!! Of those who are left very few of us can ever expect to collect anything above 60 percent our final three years salary. And we pay above twenty percent from our monthly gross into it. Now if I happen to die before my wife she only collects half my pension. FACT!!!!! People want to accuse us of these golden benefits. Trust me nothing is golden in east contra costa for its firefighters except the hills that burn every year.
@ Better off,
You speak as if you are a firefighter for the district. I want to make clear that any comments that I make are not directed in any way to Firefighters. The Firefighters are the only great thing about the ECCFPD. Your facts are correct and I totally agree. As you commented regarding only two fully retired firefighters and the several Chief’s that have left, that is very important. When the County or should I say Supervisor Piepho in 2010 handed over local control, the district was several million dollars behind in pension payments or unfunded liability. The county basically screwed over the local control financially when it was handed over a district several millions in debt. The county should have wrote a ten million dollar check to offset what it’s control created from 2002 until 2010. Of those years six were at the control of Supervisor Piepho’s leadership. If the county made the district whole ( meaning no debt) when handing it over,the board would have had a level playing field to start with. Instead, the district was duped into a no win situation. Sadly, I think they knew it. Since then the firefighters have been made to accept less and pay more out of their check for what the Supervisor created. What is wrong is Supervisor Piepho ignored a written letter asking not to approve new development unless an assessment district was put in place like Cypress lakes to offset increased costs. She ignored it. You think self interest was involved, maybe your chance at equal pay ignored, or the publics best interest in safety not considered?
So you see the only way for equal pay for equal work, is send it back to the county. Merge with Con Fire.That is the only solution. It should have been done long ago.
johnny, your PDS(Piepho Derangement Syndrome) is flaring up again.
Get some help, buddy. The County has a free help line that is perfect for people like you struggling to cope with reality.
Piepho has not presided over approval any significant number of development approvals since taking her seat. The development you whine so much about was largely approved in the 1990s for the unincorporated areas and the County has no say in what the cities do for benefit assessments. So much for FACTS, huh?
Where do you think pension money comes from at the County level, johnnyboy? Would that be the taxpayers?
So explain to the nice readers how it’s any different with ECCFPD as a local controlled entity.
The obvious answer is you want the whole County to subsidize us. Which is precisely the same result you’re wanting with a merge. Why can’t you just sack up and admit it?
The number of fire stations that would be reopened with a merge with ConFire = ZERO
They have their own $10M deficit and will be facing station closures within their district once their SAFER grant money runs out. Ask the nice folks in Clayton about Station 11 if you forgot.
BTW, how does one take a fire department with a $10M deficit and insist that you can pay everyone more money? Is that “Knightsin” math again?
At Clue,
Discovery Bay is going to be just like Oakley or worse. Cookie cutter homes and no business.
More homes but no more emergency services. I’m right next to where those five hundred homes are going to be.They were just recently approved.Not twenty five years ago.You are a liar.You must be that guy Bob who sticks his nose in everything.People are tired of you sticking your nose in government business to stir the pot.We need more emergency services not more homes.
Talking to your fantasy rocks again Clue? What is it with your Piepho fetish? Your response is really stupid. Discovery Bay is not a City. I know it tries to think it is but it is not. Development in Discovery Bay and a benefit assessment on its development would go through the county BOS. First it would begin with your dream girl Supervisor Mary Piepho. Your spin for Mary is not working. The creator of the problem should be the resolver of it also. Merge with Con Fire for equal pay and equal service.
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