Saturday, May 28, 2011

Fairview Fire District Is in Crisis

On Thursday, May 26, 2011, the Fairview Fire District Board of Fire Commissioners combined Budget and Long Range Planning Committees held a remarkable public workshop meeting at the Fairview Fire House.  The picture of Fairview's status painted at this meeting is nothing short of dire.  This meeting marks a major turning point in Fairview's history.  To put this turning point into perspective, it helps to know Fairview's previous turning point:

Fairview's Previous Turning Point

On April 24, 2008, over 400 residents of the Fairview Fire District attended a meeting of Fairview's Board of Fire Commissioners to express their outrage at the exorbitant Fairview fire tax.  Fairview's fire tax rate had for years been the highest by far of any fire district in Dutchess County, and one of the highest in New York State.  That meeting marked the beginning of increased involvement by Fairview's residents (including me) in Fire District matters.  In the following three years, voters turned out in extraordinary numbers to elect three newcomers to the Board of Fire Commissioners, Jill Line, Bob Gephard, and Joe Petito.  These newcomers replaced veterans who had run Fairview for years, if not decades.  In my view, this is an inspirational story of democracy in action, a counterexample to the common lament that politicians who displease us are entrenched, and that there's nothing we can do about it.  The fact is that a surprisingly small group of dedicated Fairview taxpayers and residents was able to replace the veterans with newcomers who were believed to better represent the interests of Fairview's residents.

Public Workshop Meeting

This week's public workshop meeting was billed as an attempt to “discuss with the residents the status of the District”.  I had commended Mr. Gephard beforehand for initiating and leading the long range planning committee, and for arranging for this public workshop meeting.  As I saw it, openness about long range planning helps all stakeholders see what possible futures may look like, and allows the public to influence decisions before things get really bad.  At worst, this exercise does no harm.  I did not realize beforehand the critical situation that would be revealed at the meeting. That fact, in my view, makes Bob's contributions even more important than I'd originally thought.

Advance publicity for the meeting was minimal, and it gave no clue that two bombshells would be dropped at the meeting.  This is probably why less than a dozen residents attended, mostly the regulars at monthly commissioners meetings.  However, many other stakeholders were present, including career and volunteer firefighters, Fairview Board Chairperson Jill Line, Fairview Treasurer Jim Passikoff, and various other officials.  In the end, perhaps 30 people were there, including about half a dozen presenters.

Commissioner Gephard, Firefighter Mark Bendel, and others presented two hours of detail on the financial and operational status of the district, followed by an hour of questions and comments from the floor.  A serious difficulty, in my view, was that there was precious little in the way of summary of the main points by the presenters, particularly in the financial area.  I have frankly struggled to divine what the main issues are.  What follows is my best understanding of the main points.  I likely haven't got everything right here, and I welcome corrections and clarifications.

So What's the Crisis?

There are actually two crises, an immediate one, and a long-term one:
  1. The immediate crisis is that the fire station has become understaffed, and that the firefighters are greatly overstressed.
  2. The long-term crisis is that the fire district has not been setting aside sufficient funds for future obligations.  When these costs come due, the District will not have the funds to pay them.
The problem is that it may not be wise to attempt to solve the immediate crisis without knowing how the long-term crisis will be solved.

Short Term Staffing Crisis

Mr. Bendel's presentation on the immediate crisis was particularly effective.  Bendel explained that the fire station must be staffed by 4 career firefighters at all times (24x7) in order to maintain Fairview's level of service in the District.  This staffing level requires at least 16 career firefighters.  Unfortunately, in recent months 3 firefighters have left the District (retirement and transfer), and one more is unavailable because of injury.  To continue Fairview's level of service, the remaining firefighters have been working overtime (mostly at straight-time pay) for a number of months.  Although the financial cost of this arrangement is minimal, the stress on firefighters is extreme, and unsustainable.

The District cannot simply reduce the fire station staffing from 4 per shift to 3, even temporarily, without major repercussions.  Mr. Bendel explained that having only 3 firefighters available to fight a structure fire would dramatically reduce the level of service, resulting in significant increases in risk to both life and property.  Not only that, but the reduced level of service would cause all property insurance rates in the fire district to increase considerably.  All stakeholders would be substantially affected by a reduced level of service.   

A decision to reduce the level of service amounts to a game-changing dismantling of part of Fairview's mission.  The Fairview Fire Commissioners would presumably ask for input from all major stakeholders before authorizing a reduced level of service.  This public meeting appears to be the beginning of such an inquiry.

Long Term Financial Crisis

In recent years, Fairview's budgets have not set aside sufficient funds for future maintenance and replacement of apparatus and equipment and other future obligations.  The money that should have been set aside was used instead to decrease the fire tax burden.  The result is that Fairview's fire tax rate has remained remarkably steady at just over $5.00 per thousand dollars of market value since the economic meltdown of 2008, despite falling property values.  See the chart on page 7 of Fairview Fire District Property Tax Data.  Fairview's steady tax rate on that chart is in sharp contrast to that of the other of the big three fire districts of Dutchess CountyArlington and LaGrange.  The tax rates of both these fire districts have been climbing steadily since 2008.  I had seen Fairview's constant tax rate in recent years as the result of prudent management.  In reality, it has been just the opposite.  Fairview has essentially been “robbing Peter to pay Paul” by not setting aside money for future needs. 

What are Fairview's choices at this point to solving its financial crisis?
  1. Decrease the budget.  However, this cannot be done without reducing staffing, because staffing is the primary cost in the budget.  Reducing staffing cannot be done without major safety and insurance repercussions, as described above.
  2. Increase the fire tax levy significantly.  However, a strong case can be made that the fire taxes are already as high as can be tolerated.  Many would argue that the tax rate is higher than can be tolerated, although it's been at about the same $5.00 rate for nearly a decade.  On the other hand, Fairview's tax rate was $6.07 in 2001 and $5.73 in 2002.  See Fairview Fire District Property Tax Data. So a painful argument could still be made that there's room to increase the tax rate by almost $1.00.  Even so, would that be enough?  On the third hand, if Gov. Cuomo's two percent tax cap applies to fire districts, this choice is entirely off the table.
  3. Obtain significant and sustained funding from sources other than property tax. 
The most obvious place to turn for funding is Marist College, St. Frances Hospital, Dutchess Community College, and the other not-for-profit institutions in Fairview which are exempt from fire tax.  Tax exempt properties make up 48 percent of Fairview's market value.  In the past, these institutions have provided only very limited support.  But the circumstances may be different now.  If these institutions do not contribute substantial payments in lieu of taxes (PILOTs), they may be faced with a substantial degradation in services from Fairview, resulting in increased risk to their property (and the lives of their students, patients, and employees) and increased insurance premiums at the same time.  These considerations may persuade these institutions that it is in their interest to increase their support to Fairview.

Tying the Two Crises Together

How much time does Fairview have to resolve these crises?  The staffing crisis is clearly urgent, and cannot be allowed to continue any longer than necessary.  However, simply adding staff now to solve the immediate crisis would only make sense if the financial crisis can be solved by finding more income, a strategy which is not certain of success at this point.  If Fairview replaces staff now, and then fails to secure more income, Fairview will need to decrease staffing after all.  It might not be prudent for Fairview to bring on more staff now without some assurance that it can be paid for. 

Fairview is indeed in a very difficult position.  It is by no means certain that Fairview can continue to provide the level of service that it has in the past.  Resolving this crisis will require continued openness by the new Board of Fire Commissioners, as well as the cooperation of all other stakeholders.  Even then, it will require skill, creativity, and perhaps even some good luck.

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