- Elizabeth Larson
- Posted On
Lakeport Fire faces personnel cuts; new fiscal year budget adoption delayed to allow meeting with union
The board held a special meeting at the district’s downtown headquarters on Tuesday, Aug. 28, the open portion of which was devoted solely to a public hearing on the final fiscal year budget.
Chief Doug Hutchison had two options for the board to present, neither one of them good.
The first, what he called a “Band-Aid measure,” would lay off one full-time firefighter and three part-time positions, while digging into district reserves.
The “black and white” option that he originally had planned to present called for deeper cuts in full-time staff, three of whom would be laid off, taking the staffing down to two personnel per shift.
Those cuts are deep for a district that has only eight full-time firefighters, in addition to the chief, plus three part-time staffers and 20-plus volunteers.
The situation is explained by looking at the budget numbers: Lakeport Fire’s 2018-19 fiscal year budget documents show a projected shortfall of $415,000 for a $2.3 million budget if only part-timers were let go and everything else stayed the same.
The stop-gap budget Hutchison presented, which includes cutting the part-time positions and one full-time position, comes in at just over $1.9 million. That’s compared to the $2.6 million that was budgeted for 2017-18, with $2.7 million actually spent, Hutchison said.
While some of the issues arise from dropping ambulance revenues, Hutchison – who became the district’s chief in 2014 – emphasized that problems have been building for years, with no one single cause but many factors.
“Sooner or later this was going to happen unless something was done,” he said.
In a written statement to Lake County News issued the day after the meeting, the Lakeport Professional Firefighters Union expressed concern at the potential for personnel cuts and what that could mean for community safety.
“After Lakeport’s professional paid and part-time firefighters received the grave news during last night’s special board meeting, the Lakeport Professional Firefighters Union would like to ensure our community knows that we have always, and will continue to remain 100-percent committed to providing the highest level of service to the community we all live in and are proud to serve. Without the adequate daily staffing levels that our operations require, a significant concern for the safety of our community and firefighters may be realized. The Lakeport Professional Firefighters Union is currently in the process of diligently working with the district to ensure that the current staffing levels we have fought for decades to maintain are preserved,” the group said in its statement.
The situation and the decision to cut staff appears all the more stark in light of the fact that, just a month ago, the entire city of Lakeport and surrounding areas were under mandatory evacuation due to the approach of the River fire, the southern arm of the Mendocino Complex, the largest wildland fire in California history. The Ranch fire portion to the north continues to burn but is expected to be fully contained by Sept. 9.
Hutchison said that the last time the district had such budget difficulties was in 2010, when it eliminated standby positions and everyone took a 10-percent pay cut.
Facing difficult choices
When the fire protection district board met last Tuesday, its meeting only lasted 16 minutes, with the board voting to table the budget in order to have a chance to meet and confer with the firefighters’ union.
What the five-member board was facing was a budget that Chief Hutchison said he and district Secretary Linda Buckner had been working to make the numbers and revenue projections balance.
Hutchison said the district had, at that point, been unable to meet and confer with the labor group representing firefighters.
“We’ve been pushing the numbers around all day,” said Hutchison, explaining he had come up with a short-term plan to get the district through until negotiations are completed.
But he cautioned it was far from perfect, and will use more of the district’s reserves than anticipated.
That short-term measure also calls for the the elimination of one full-time position now plus all three part-time positions, with future reevaluation after labor negotiations, he said.
“It’s a Band-Aid measure,” Hutchison said. “It’s the best we can do right now.”
He added, “It will affect us operationally, unfortunately.”
Board member Bill Whipple said the district had been having difficulties making ends meet since the start of the year, and in light of the budget difficulties they had been discussing taking a tax measure to district voters next year.
However, he acknowledged, “That doesn’t help us right now.”
Turning to the small audience, mostly made up of district firefighters in their navy blue uniforms, Whipple asked firefighter association members to meet with their labor representatives.
“We're supposed to adopt this now, but I don't want to,” he said, adding he wanted input from the firefighters’ union first.
Board member Randy Williams said the situation wasn’t a new subject, adding that the association was aware of it since the meet and confer last year. He said they needed to prevent similar issues in the future.
In coming up with the proposed budget, Hutchison said he and Buckner redid their revenue projections – not quite as conservatively as they normally like to do – based on last year’s income.
“It will not get us through an entire fiscal year,” he said.
Whipple asked about revenue projects compared to the previous fiscal year budget.
Hutchison said the fire tax is stagnant except for the consumer price index, property tax is up 2 percent from last year, but it’s falling ambulance revenues that are hurting them. Reimbursements for ambulance transports also have dropped dramatically, and interfacility transports are down.
Whipple asked if other fire districts are experiencing the same challenges.
Hutchison said Northshore Fire and Lake County Fire got out of doing interfacility transfers because they couldn’t make money doing it. Now only Lakeport Fire and Kelseyville Fire do them.
“It's got to be at best self-supporting,” Hutchison said, explaining that it has been viewed as something that would always be there and expenditures have been built on top of it.
Board Chair John Whitehead said he agreed with Whipple in holding off on accepting the budget, suggesting they hold off for a maximum of two weeks to do meet and confer.
“I feel the same thing,” said Board member Don Davidson, asking staff to seek an extension on the budget from the county.
From the audience, Engineer Dan Kane told the board that the association had submitted its proposed dates for meeting the previous week and hadn’t yet heard back from anyone.
Davidson moved to table the budget until the next regular meeting on Sept. 11, which the board approved.
It was the last meeting for Board member Gerry Mills, who noted, “I've been here 20 years and this is really a good department.”
He added, “We've never been in this position” of having to consider laying someone off. But he said they were getting down to the point of having to make cuts somewhere. “We appreciate any help you guys can give us,” he said to association members.
Hutchison said the county approved the district’s request for an extension on submitting its approved budget on Wednesday.
While the firefighters’ union indicated surprise in response to the budget proposals, Hutchison explained during a followup interview that last summer the district and the union had discussed the budget situation at the time of the union contract coming up.
At that time, the contract called for an automatic cost of living adjustment on July 1, 2017, of no less than 2 percent and no more than 5 percent. That put it around 3.5 percent, Hutchison said.
Hutchison said he looked at the numbers and said the district couldn’t afford it. Later, in February, the board gave union members a 3-percent raise that was not retroactive.
“They were told at this time that it’s gonna cost positions,” he said.
He said that the district also reached out to the union’s attorney on Aug. 15 and stated that absent reductions in pay or benefits, the district would have to cut positions.
The hope is that the district and union can meet by next week, as Hutchison said they have until Sept. 11 to finalize the budget.
Chief explains revenue sources, challenges
In a followup interview, Hutchison explained to Lake County News the district’s different revenue sources.
One source is ground emergency Medi-Cal transportation, or GEMT, a program which Hutchison said was set up to reimburse public ambulance providers for the loss of revenue for transporting Medi-Cal patients.
The first year Hutchison was with the district, they received a $140,000 check for the GEMT program. But that has dwindled down – to as low as $1,400 last year.
Hutchison said that Medi-Cal has moved people off of fee for service – such as the GEMT program – and more to managed care. “That’s one of those reasons you can’t count on that money and budget for it.”
There is also the intergovernmental transfer program for public ambulance providers. Hutchison said it’s much like the GEMT, in that it takes advantage of the fact there are federal dollars available for reimbursement on ambulance transports if the state puts up the money. It’s also determined through a complex formula.
“It’s just not a good, stable source of funding,” he said.
Interfacility transports play into these revenue sources, with Hutchison explaining that when you’re in the ambulance business, it comes down to the “payer mix” – or who ultimately is paying the bills.
A large portion of the people in the county and the Lakeport Fire district are on Medi-Cal, Medicare or some combination of government-funded assistance program, Hutchison said. He ventured to guess that maybe 7 percent of those transported by the district’s ambulances have private insurance.
Hutchison said Medicare pays a certain amount and, typically, Medi-Cal pays about half of what Medicare pays.
When the district can staff an ambulance, the transports pay for themselves. However, Hutchison added that if they don’t have staffing available, it becomes a matter of pulling personnel away from 911 calls.
Hutchison said that ambulance revenue accounts for about half of the district’s overall revenue, with interfacility transports about half of the ambulance revenue. In the 2016-17 year, there was about $986,000 in ambulance revenue.
Property tax, which is a more stable revenue source, can only go up about 2 percent per year. Hutchison said 23 percent of the district doesn’t pay any property tax to the district because of negotiated tax agreements.
Then there is the fire tax that’s been in effect for about 20 years, which has had no consumer price index adjustments and is determined on a complicated “unit of benefit” formula that assigns different values to different properties.
The owner of a vacant piece of land pays $10 annually for fire protection, while it would be $30 for a house, $40 for a duplex or granny unit, a base rate for hotels and motels, and another square footage formula for commercial buildings, he explained.
As an example, Hutchison said Kmart pays less than $500 per year for fire protection, while Safeway pays the same amount despite being half the size.
“Sooner or later expenses are going to outrun revenues, and that’s basically the point we’re at now,” he said.
The result is that they’ve had to cut everything they can to keep the lights on. Hutchison said they haven’t had new, apparatus not funded by grants in a long time, and some of their equipment shouldn’t be used any longer according to industry standards.
“We’re not able to put away anything for reserves,” he said.
Another challenge: The district’s headquarters station at 445 N. Main St., is housed in an 80-plus year old building which Hutchison said isn’t seismically safe and needs a new roof, which is expected to cost about $87,000.
All of these factors have led to the district’s consideration of putting a tax measure before voters next year.
Hutchison said he has advocated for a measure similar to the one passed in March 2017 by the Lake County Fire Protection District that would be a parcel tax and not use the confusing units for service formula.
The district board has been receptive. “That’s a good thing for the future,” Hutchison said, adding, “It’s not going to help us now,” with revenues not likely to be realized for at least a year if the measure were approved, at the earliest, in April or June.
The entire situation, said Hutchison, has been a long time in coming. “Now it’s finally reached the point where something has to be done.”
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