Despite East Pierce Fire and Rescue successfully submitting their budget to the Pierce County Council on Dec. 5, the fire department and its labor union remain locked in discussion over how to mitigate a $1 million shortfall in the budget.
The deficit is currently covered by East Pierce’s ending net cash from the general funds, but both organizations are looking at concessions to lessen the damage.
“We’ve been trying to negotiate concessions as a result of the levy failure,” said Fire Chief Jerry Thorson. “We are trying real hard to make sure the long-term financial picture of the organization is strong, even with all of these cuts.”
While East Pierce and the union did not discuss current negotiations with the Courier Herald, both Thorson and union President Mike Westland said layoffs are still on the table as a solution, though both parties have said they are doing their best to avoid them.
Westland has that the financial need to lay off personnel is not present, because the union has offered several concession packages to East Pierce that would get the department where they need to be financially.
“It should also be noted that we gave them concessions just a couple of months ago to help out, as well as significant concessions several other times in the past few years,” Westland said. “It is not as if we do not want to help, we do and always have in the past.”
The money East Pierce will use to cover the deficit in the budget comes from its ending net cash, which rolls over from year to year. The ending net cash is a buffer of money to help the department cover costs from the first quarter of the year, because the department doesn’t receive tax money until near the second quarter, according to Thorson. “Without the ending fund money, Washington fire districts wouldn’t be able to pay the bills, including salaries, until revenue starts coming in April each year,” Thorson said. For the last several years, the department had around $6.5 million in its ending net cash balance, but it is estimated to drop to $5.5 million in 2015 if concessions are not made.
East Pierce has a policy to have ending net cash equal to 20 percent of the budget by the end of the year, according to fire Commissioner Dale Mitchell.
With the department’s current level of $6.5 million in ending net cash reserves, this puts the ending net cash reserves closer to 27 percent of the general fund budget, seven percent more than the department’s policy. If the ending net cash drops to $5.5 million for the 2015 budget, the percentage shrinks to 23 percent.
Westland has questioned why the department is trying to keep its ending net cash reserves at 27 percent when the department’s policy requires only 20 percent.
Thorson said, “While the policy states the district must carry over 20 percent, the amount actually needed, due to some delinquent taxes, is closer to 25 percent.”
The department is also using an additional $1.2 million from its reserve fund to replace its self-contained breathing apparatuses, which Thorson said is an absolute necessity for the department’s firefighters.
In total, the department will spend $2.2 million from two reserve pools of money if the department and the union cannot agree on concessions. Thorson said that if the department can cut that $2.2 million down “to a reasonable amount, then it is much more sustainable, especially if the economy continues to recover.”
