MORAGA -- Despite a boost in property tax revenue and an influx of federal grant money to pay for hiring four additional firefighter/paramedics in order to reduce overtime costs, the Moraga-Orinda Fire District is expecting to end the next fiscal year $1.25 million in the red.
Interim fire Chief Stephen Healy will ask directors next week to approve the final 2013-14 general fund budget that shows the district dipping into general fund reserves for the third consecutive year in order to avoid service cuts. The capital projects budget is also facing a $574,376 shortfall.
"Over the past three years, the district has been negatively affected by the economic downturn," Healy wrote last week in a letter to MOFD's board of directors. "Although the district has exercised financial prudence and focused on cost-cutting measures, the district continues to deficit spend, negatively affecting ... long-term financial stability."
Staffers are estimating total general fund revenues of nearly $19.3 million in 2013-14, and expenses of $20.5 million, according to the budget.
The revenues include an additional $325,586 in property tax income stemming from an increase in assessed property values calculated by the Contra Costa County Assessor's Office.
The general fund also includes more than $443,000 in federal grant money, most of it from a Federal Emergency Management Agency grant awarded earlier this year that district administrators say will allow for the hiring of four firefighter/paramedics.
In his letter to the board, Healy said the hirings have decreased projected overtime expenditures. Those costs increased last year, said Administrative Services Director Gloriann Sasser, primarily due to the December 2012 Highway 24 accident in which three firefighters were hit by a car, resulting in overtime worked by other firefighters. Still, the district has budgeted $1.5 million in overtime during the 2013-14 fiscal year.
Other expenses continue to rise. Permanent salaries are expected to grow to $8.19 million, or 9.26 percent more than the previous year, according to the budget. Sasser says each new firefighter/paramedic will cost the district about $141,000. Still, the increase comes despite a reduced administrative staff and continued contract negotiations that have frozen firefighter health care benefits and cost-of-living salary increases.
Rising retirement costs are also continuing to hammer the district. Staffers project an 18.43 percent increase in employer retirement contribution costs next year for existing MOFD employees because of lowered investment assumptions by the Contra Costa County Employees' Retirement Association, which manages the district's retirement benefits. The district also recently saw unfunded employee pension debt to the retirement association grow an additional $21.8 million.
The budget trouble also means MOFD is once again not planning to fund retiree health care debt, estimated at $11.7 million; the district pays only its share of the current year's retiree medical insurance costs. Staffers have, however, budgeted $2.6 million toward paying pension bond debt.
Should directors elect to use reserves for the general fund shortfall, the district will end next year with a total general fund balance of $886,805.
The meeting starts at 7 p.m. Wednesday in the Mosaic Room at the Hacienda de las Flores, 2100 Donald Drive.