Fire Funding Still Bedevils 29 Palms H2O District

TWENTYNINE PALMS — The Twentynine Palms Water District, its board of directors and its interim general manager have yet to formulate a precise financial strategy for keeping the fire department under the purview of the water district, two weeks after the board of directors voted to do just that.
Without making any commitment to a definite course of action, fire chief Jim Thompson is considering a range of options, including service cuts that would reduce operations by up to fifty percent of the current level of protection as well as an effort to generate further revenue that will allow the department to carry on in its current staffing and operational mode.
Since 1958, the Twentynine Palms Water District has overseen the fire department, defraying entirely fire protection operations in the 88-square-mile jurisdiction of the water district with a special parcel tax that at present generates $1.24 million per year. Currently, the seven-man, two-station fire department costs $1.48 million to run annually and carries with it a future unfunded liability in the form of pensions for its firefighters when they retire. Last year, voters turned thumbs down on an increase in the fire service per parcel tax.
The lion’s share of that $1.24 million is generated in the more densely developed 59-square mile incorporated area of Twentynine Palms that lies within the water district’s boundaries, which also includes 29 square miles of unincorporated county area.
The county Local Agency Formation Commission (LAFCO) in a review of all of Twentynine Palms’ governmental service agencies last year concluded that the water district could not sustain continuing to operate the fire department. As a consequence, the water district board voted last summer to have the county’s fire division take over the fire department’s operations, but missed an October 1 deadline to have the Local Agency Formation Commission initiate the processing of that merger. The water board’s members along with members of the community grew concerned that county fire chief Mark Hartwig‘s plan to reduce the department to a one-station, three-firefighter operation would be inadequate for the city and its outlying area.
Pressure mounted on the city, which has historically made no contribution to the operation of the fire department, to subsidize the water district, take over that element of the operation serving the incorporated portion of Twentynine Palms or take it over in whole. That eventuality seemed to pick up steam when Cora Heiser displaced John Cole on the Twentynine Palms City Council on December 11, following the November election. Heiser has made clear she wants to retain local control of the fire department.
On January 14, however, Twentynine Palms City Manager Richard Warne gave an unequivocal recommendation against the city taking up the financial burden of operating the fire department.
The fire department is “insolvent,” Warne said in warning the city council, telling its members, “The city cannot take on the fire department’s open-ended responsibilities” given the “new reality” of   uncertain and diminishing revenue available to Twentynine Palms and government entities throughout California. “The water district has not recognized this new world and/or made adjustments to the new reality. As a result, the Twentynine Palms Fire Department is insolvent today due to decisions made by the firefighters union, fire chief, water district finance director and water district board. They all share responsibility for the current situation. The fire department’s controllable expenditures have significantly exceeded inflation as measured by the Consumer Price Index (CPI) and they have acquired huge unfunded firefighter pension obligations and post-employment retiree benefit obligations that appear to be impossible to pay. In this respect they are like many governments in California facing bankruptcy.”
Warne said that “after years of deficit spending and nine months after the failure of the ballot measure, the fire chief and the water district board still have no plan to bring expenditures into line with revenues. The fire department cash position is deteriorating each day due to deficit spending, while the unfunded firefighter pension obligations are growing each day.”
The city council, sobered by Warne’s assessment, balked at stepping in and subsuming the fire department, as several members of the community, including Heiser and members of the fire department and their families were hoping it would.
On January 23, in response to the intense lobbying by vocal members of the community who objected to the prospect of the fire department being relinquished to the county, the water district board voted 4-1 to retain control of the fire department.
More than two weeks later, however, the district is yet struggling with the harsh financial realities that created the crisis.
There is a general perception that the lower grade of pay provided to the department’s current crop of firefighters will allow the department to sustain its current staffing level.  Last fall, San Bernardino County Fire Chief Mark Hartwig proposed reconstituting the Twentynine Palms Fire Department to consist of one chief and one firefighter/paramedic at Station 421 in downtown Twentynine Palms and two firefighters/paramedics at Station 422 on Lear Avenue, with a total operating budget of $1 million to $1.3 million annually. Subsequently, after Hartwig spoke in depth with current fire chief Jim Thompson and made a consideration of various staffing scenarios, it was determined that the most likely form the department would take would be three firefighters composing one engine company which would operate out of one station, most likely the one in town.
Crunching numbers and calculating the limits of what could be accomplished with the available revenue, Hartwig said  four of the seven firefighters currently with the district would have to be laid off. With three employees, the department could sustain itself with $1.16 million per year. But upon hiring a fourth firefighter who would earn no overtime, the cost of running the department would jump to $1.3 million, exceeding the $1.24 million in available annual funding.
Hartwig’s calculations, however, were based upon a pay scale provided to county firefighters pursuant to a collective bargaining agreement between the firefighters’ union representing county firefighters and the county.
At the January 14 meeting, councilwoman Heiser inquired about the relative pay provided to the county’s firefighters and the firefighters currently employed by the Twentynine Palms Fire Department. She was told that Twentynine Palms firefighters average about $14.05 per hour and county firefighters are paid about twice that.  On that basis, it is believed by some that the fire department can remain as a two-station, two-engine, seven-man entity under the administration of the water district, if a few adjustments are made and economies effectuated.
Warne, however, cast doubt on that conclusion, saying that a major challenge to the district remains in the form of institutional deficit spending represented by the unfunded pension account liability the district has. That problem is ongoing and will manifest in earnest when the current firefighters reach retirement age. He said the district had allowed those costs to move beyond the span of management and control when the board in the past acceded to contractual obligations with the firefighters that exceeded the water district’s means. He said the principles of sound governmental management demand that the water district take up that funding issue now to avoid the otherwise inevitable insolvency crisis that looms shortly in the future.
The water district board’s action on January 23 seemingly put the ball in the court of the water district’s management team, including interim general manager Ray Kolisz, fire chief Jim Thompson and the district’s finance director, to map out a strategy by which the water district can  keep the fire department up and running under the funding limitations it is straddled with.
When reached by the Sentinel on February 4, Kolisz, who formerly served as the district’s operations manager before he was elevated to the temporary general manager position to replace Mike Wright in October, said, “Those questions are more geared for the fire chief,” Kolisz said. “You should talk to Jim Thompson in regard to that.”
Thompson told the Sentinel that he is in the course of drafting a financial plan, but that everything was subject to a sliding scale, given the uncertainty of future funding at this point.
“Under the worst case scenario we are preparing to implement what is essentially a 50 percent reduction of our service level, closing out the Lear Avenue Station and laying off three of our firefighters. We would downsize the volume of our activity by approximately half. If we do that, we should be able to sustain that across five years at our current funding levels.”
Thompson said such a reduction would still count on the department’s deployment of volunteer firefighters.
Reducing the department to a one-station, four-man operation, he said, “would put the western end of the city, Indian Cove, and the entire Desert Heights area outside the city limits more than five road miles from the responding fire station. Our ability to respond to structure fires in those areas will be compromised, no question.”
To sustain the department at its current level, Thompson said, “We are looking at identifying additional revenue.” He said that one approach to this involved making a “political” appeal to the decision makers in Twentynine Palms, i.e., the city council, to either augment the water district with subsidization funding for the fire department or take it over completely. “Twentynine Palms is the only city in the county that provides no portion of the general tax levy income it receives toward the fire department that operates within its city limits,” he said.
Simultaneously, Thompson said, the district is looking to create a citizen’s committee to gather community input and carry out an informational campaign related to seeking voter approval on another tax measure. He said that in 2004, an effort to up the per parcel tax to support the fire department failed. When the Lear station was shut down as a consequence of that vote, the following year the community voted to approve raising the per parcel fee to $80, he said.
At the same time, Thompson expressed doubt that the committee could be formed, an informational campaign carried out, and that the special election could be held prior to July 1, when the water district’s fire operations funding will be exhausted.
“In the meantime, we need to find stopgap funding,” Thompson said.
Thompson reiterated that the Twentynine Palms firefighters were paid at a scale far below firefighters with other agencies. His lowest paid firefighter received $13.68 per hour, he said, while his highest paid firefighter was remunerated $15.58 per hour. A fire captain with the county, he said, receives $31.07 per hour.
Though  Thompson acknowledged that the fire department’s retirement account “is slightly underfunded,” he said this was generally the case with the majority of governmental entities in the county and state.
“That so-called unfunded retirement liability is only an unfunded liability if we terminate from the California Public Employees Retirement System,” he said.

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