Another Year of High Spending Increases by East Greenwich Fire District

This East Greenwich Fire District news article highlights the latest actions of a group that has a historical tendency to increase spending at a far faster rate than the incomes of East Greenwich taxpayers:

The Board of Fire Commissioners will seek voter approval to begin the process of constructing and staffing a new fire station at its annual financial meeting June 20.

The proposal comes at a time of uncertainty in the district's $4.1 million budget, with about $300,000 in revenue in question as Warwick considers whether to renew its contract for fire coverage in the Potowomut section of the city.

The board will present four separate questions at the financial meeting, one of which is a proposal to purchase a yet-to-be determined piece of land for the new station.

The board...and Fire Chief Thomas Rowan would like to see the new station, if approved, built in the area of the Rocky Hill fairgrounds because of the plans set for that land...

Under the plan, the Frenchtown Road station would remain open at full capacity, while the Main Street station would be reduced to a substation and would mostly serve the downtown and Post Road areas of town. While some may question the need for three fire stations in such a small town, Rowan said the town has continued to grow over the years, while the Fire District, physically, has not...

Commissioners refused to give a purchase price for the land, citing ongoing negotiations, but said they would seek only the land this year, putting off presenting a plan for the construction of a new station until the 2006 financial meeting.

The final price, including land acquisition and constructing and equipping the new building, could be in the $4 million range, Rowan said.

Fire officials stressed that the construction of the new station would not be coming solely out of the residents' pockets, with some funding coming from impact fees on new construction in town.

Enacted in 2002, the fees builders pay help the Fire District keep up with expansion in town. District Treasurer Craig Delfino said there is about $100,000 in the account already, but that does not include several projects, including most of the construction set to take place at the Rocky Hill fairgrounds...

In addition to the land purchase, the board will ask voters to approve an increase in staffing as it looks to add eight firefighters to the rolls, a move that will cost approximately $160,000.

Commissioner Robert Berlyn said the additions would not necessarily come all at once and may not even affect this year's budget, but the board would like to fully staff Station 2 at the Frenchtown station and look to the future as it proposes a new station.

Residents might be more shocked at the proposed increase in their fire taxes if the Potowomut contract falls through. The board recently completed a three-year contract with the city that paid the town $200,000 for the fire coverage.

Thinking that the contract may have short-changed the district, fire officials analyzed the number of calls and increased the requested amount to $350,000 this year...

Carnevale said he has sent two letters to Warwick mayor Scott Avedisian without response. He said he would contact the board's legal counsel to notify the city that the board must have an answer by the end of this week so the commission can adequately plan for the budget, which will swing to a huge increase without the planned revenue.

Although spending in the budget increased more than 12 percent, an increase in the tax base this year would keep the overall increase in taxes to around 7.5 percent. However, if the district were to lose $300,000 in revenue, the increase could be in the neighborhood of 17 percent.

The budget itself represents an increase of $375,000 in spending, but, like many suffering school districts across the state, a large portion of that is due to an unplanned increase in pension payouts.

This year, benefits contributions shot up more than 300 percent over last year, more than $300,000 more than last year's budgeted numbers...

Other questions that will be proposed at the annual meeting include a request to grant single health care coverage to the members of the Board of Fire Commissioners, a request that residents rejected in a 12-11 vote at last year's meeting.

Commission members, in a 5-0 vote, elected to add the item to the meeting agenda again, noting that the town's elected officials are offered coverage and that the members of the commission have not received a raise in their $1,000 pay in more than 20 years...

The Fire District will also seek the approval of a new pump truck at the cost of $300,000. The purchase of the vehicle will be offset by the sale of a tanker truck for $99,000.

The board's next meeting, where it will continue the budget discussion, will be Tuesday at 7 p.m. in the conference room of Station 1, 284 Main St.

So many questions and so few answers that the taxpayers deserve answers to before anything is approved:

A $4.1 million budget means spending is up $375,000 or 12% from last year's budget. The Fire District Commissioners need to identify all budget line items which increased or decreased by more than $20,000 over last year's budget.

What is actual spending for the current budget year and what level of increase ($ and %) does the new budget represent over this year's actual spending? (Several years ago, the Fire District district budget increase for the new year was understated because they did not compare it to actual spending in the prior year - which was below budget and effectively gave them a much bigger budget increase for the new year.) How much cash does the Fire District expect to have at the end of the current budget year?

If the Warwick contract of $350,000 doesn't happen, then taxes will go up roughly 17%. Otherwise, they "only" go up 7.5%.

What expenses would be cut if the Warwick contract is dropped so taxes don't go up 17%? I.e., what is the contingency plan?

Pension costs are up over $300,000. We understand the Fire District has no control over this expense.

If pension cost increases represent over 75% of the total spending increase, that leaves less than $75,000 for all other spending increases - which is hard to understand if they are hiring 8 new firefighters and buying land and a truck. How much is assumed in the new budget for the purchase of the land for a new station and for the new firefighters?

What is the capital budget for next year? Is that where the land and fire truck purchases are?

How many firefighters does EG have now and what percentage increase does 8 new firefighters represent? Does that percentage increase correlate with the percentage increase in the town's population?

If Main Street is being reduced to a substation, does that save headcount? If so, why are 8 additional heads needed? If not, why not?

Why do 8 firefighters cost only $160,000? What is the full salary and benefits expense for all 8 firefighters when they are on staff for an entire year? What is the total financial commitment for new headcount expenses that the Fire District is seeking approval on next week? One Commissioner says not all of the new headcount will be being hired in the new budget year; if so, why is approval being sought now?

How many additional capital expenditure and operating expense dollars are being submitted for approval next week but won't hit the tax bills or residents until future years? I.e., how much of the estimated $4 million for the new station land and construction costs and the new headcount expense will be paid for after the end of the new budget year?

Has a formal feasibility study been done on the new fire station? I.e., what sort of formal analysis - with hard data - has been done to justify a new station with a $4 million commitment? If not, why should it be approved now?

I recall a new firetruck being purchased several years ago; not sure what kind of truck it was. Why is another truck needed at this time? What is the age of the old truck and what is typically the useful life of such trucks?

Will the new truck be financed or paid for via an outright cash payment like last time - which makes no economic sense?

I have been told the healthcare insurance coverage is free to the commissioners and the cost will be roughly $5,300 per person. Is this true? Why do they get free healthcare coverage when the taxpayers don't get free coverage? Why are they putting this up for vote after it was defeated last year? Why when the School Committee is asking the teachers' union to accept a co-pay are Fire District personnel proposing free insurance?

By being separate from the town and school budgets, the Fire District budget manages to escape the level of scrutiny that it deserves. With a tax increase of as high as 17%, the Fire District is not being financially responsible. I hope they are not seeking approval now for large spending increases that will only hit future years' budgets. Frankly, it would be kind - at best - to call such behavior disingenuous.

If we can consolidate the Finance departments of town and school, we should consolidate the Fire District back into the town and put their financial actions under a much brighter spotlight.

I hope nothing will be approved by taxpayers next Monday until after they receive satisfactory answers to questions like those shown above.

ADDITIONAL INFORMATION:

An email from Town Council member John McGurk on June 20 includes some words from the Town Manager, Bill Sequino:

From the Town Manager's office:

I have been asked by several people how the Fire District budget could go up 16% if the state law on a tax cap was 5.5%. It has always been my understanding that the District has to abide by the same law. In an abundance of caution I checked with the Office of Municipal Affairs today and was informed that, the tax cap statute is silent about the Fire District's tax setting ability. They have no tax cap.

Bill

A more recent ProJo news article provides additional and somewhat different information:

Voters at tonight's annual financial meeting of the East Greenwich Fire District will be asked to approve a fiscal 2006 budget of nearly $4.4 million -- a 16 percent, or $614,000, increase over current spending -- and to authorize a bond issue to buy property for an eventual third fire station...

Fire Chief Thomas Rowan said Friday that he was unsure what increase the budget would require in the district's property tax rate, currently $1.61 per $1,000 of assessed valuation...

Among the new costs reflected in the budget increase, Rowan said, are $178,000 in additional pension contributions, which have been mandated by the state, and $165,000 to hire four additional firefighters.

Rowan said that the district is also applying for federal grant money to hire four more firefighters, for a total of eight new firefighter positions in the coming fiscal year...

In addition to tonight's budget discussion, Rowan said that the district will stage an "in-depth" presentation on why the town, he said, needs a third fire station to supplement the stations on Main Street and Frenchtown Road.

The new station, Rowan said, would help the fire district keep up with the town's development -- particularly in and around the intersection of South County Trail (Route 2) and Division Road, the prospective site of a new corporate headquarters for Brooks Pharmacy...

The district is eyeing a two-acre site on South County Trail just south of Division Road.

Rowan said that the district has negotiated a purchase price for the property that will be disclosed at tonight's meeting...

Many of the same questions noted above still remain valid. Here are some additional questions and comments:

Why does spending need to go up 14% when pension expenses only total roughly 30% of the total increase, the Consumer Price Index is increasing by about 2%, and taxpayers' incomes are going up 1-4%?

It is still not clear why 8 new firefighters are necessary, particularly if Main Street is downsized to a more limited operation.

How long does a government grant for new firefighters last? I.e., when will the financial burden be borne fully by the taxpayers of East Greenwich? What percentage of their costs does it pay?

I hope the "in-depth presentation" will be more than just a sales pitch and will include meaningful analytical data to prove the need for a new fire station is real. It would be more credible if a formal feasibility study was done by an independent third party.

I must say I find it galling that approval for a bond issue will be voted on when there has been NO public discussion in town about such a claimed need.

I now understand the Fire District has $1.8 million of cash in its bank account, an awfully high amount given a $4 million budget. In other words, residents have been overtaxed in recent years by a rather hefty sum. Why do they continue to overtax the residents of our town?

We need answers to some important questions before anything gets approved. That is all we ask so we can make informed decisions at tonight's meeting.