(June 15, 2017) The Town of Berlin and Berlin Fire Company continue to be at odds over the philosophy of budgeting, although officials on both sides said they are looking forward to an independent assessment that could resolve some differences.
During a mayor and council meeting on Monday, PKS & Company presented a compilation of fire company expenses. Managing Partner John Stern said a compilation was essentially a comparison to numbers presented during other years. Unlike an audit, it does not “test the numbers.”
Based on his assessment, Stern said the Berlin Fire Company is healthy, with cash and investments of more than $3.1 million.
Fire company officials, however, said those numbers were more than 11 months old.
President David Fitzgerald, Fire Chief Jim Corron and EMS Captain Duane Phillips painted a much grimmer picture during a more than one-hour budget request that followed.
Fitzgerald said the fire chiefs had to do “an unbelievable job … cutting back to bare bones just to operate” in crafting a budget for fiscal year 2018.
Corron said new equipment requests were zeroed out and the company was at a standstill in replacing its outdated gear.
Phillips said EMS is operating at a deficit and is planning a reduction of service by reducing its paid staff after Labor Day, to make up the difference.
Cash flow was an issue, Fitzgerald said, and the necessary purchase of a new fire truck for more than $700,000 reduced reserves to just $170,000.
As a rule, Fitzgerald said, the company does not finance any of its equipment purchases.
“What would happen if the town or county would, for some reason, change or stop funding? How would we make that payment?” he asked. “Also, why would we pay interest?”
If the company financed its new fire truck, he said, it would have cost more than $800,000.
“We try not to finance because we don’t want to pay any interest,” he said. “We don’t want the taxpayers paying interest if they don’t have to. It’s business.”
Stern argued there was a benefit to financing. What’s more, he said money the fire company had sitting in the bank was earning just 0.1 percent interest.
“If you managed your money better – what [you] call taxpayer’s money – it could earn a lot more than 0.1,” Stern said. “This has been going on for a quite a few years. With the proper, professional management those monies could be a lot higher.”
Berlin Mayor Gee Williams said there were plenty of other questions stemming from the nearly $1.2 million the fire company had collected for “Station Three,” a building on Ocean Gateway near Stephen Decatur High School that Williams said “many people are not even sure is needed.”
“The main headquarters, we all agree, needs a lot of things right now,” Williams said. “We have these critical, critical needs in town. I don’t think people can make heads or tails … of why that this situation is the way it is.”
Councilman Thom Gulyas said he was also “having a hard time” deciphering the fire company’s approach.
“I don’t understand why you want to build something two miles down the road and not take care of what you have,” he said. “Why would you do something like that? It just doesn’t make fiscal sense.”
Fitzgerald said money raised for Station Three was taken, at least in part, from county grants given for fire company response outside of Berlin town limits.
“Where do you think that money comes from, sir?” Gulyas asked.
“All the taxpayers of Worcester County,” Fitzgerald said.
“Which the town is, part of Worcester County,” Gulyas said. “So they’re going to be paying for it twice. That’s not fair.”
For fiscal year 2018, the town budgeted $250,000 for the Berlin Fire Company, plus an additional $150,000 contingent on an independent assessment taking place. The study would be paid for from that balance, and Williams said a worst case scenario was it would cost about $50,000. The remainder of the money would then go to the fire company.
Williams said there were legitimate concerns about fire company budgeting he hoped the study would resolve.
“The way you do your financing is your choice, but it contradicts just about everything else that’s done in both the for-profit sector, government sector and the nonprofit sector,” Williams said. “Maybe you have the magic solution, but until we have some, I think, independent comparison, there’s just a lot of questions out there. And, I think, they’re legitimate questions.”
Councilman Dean Burrell agreed.
“It is our hope that this study will answer some of those questions that you may have, that we may have, but biggest of all, that the public may have,” he said. “One of the questions I hope that this study will address is just where is Berlin in relationship to the need of an additional station that’s actually located outside of the town.”
Corron asked if the fire company would be part of the decision to select a firm to perform the study.
Williams said he welcomed the advice of fire company officials, but the contract would ultimately be put out to bid and selected by the town. But, if the fire company wanted certain firms to be contacted about submitting a proposal, he welcomed that.
“We hope [the study] will be a tipping point in all that has transpired,” Williams said.
“It’s only going to benefit both sides,” Phillips said. “We look forward to the direction that is going to be presented to us also – it’s going to give us both some direction.”
During a mayor and council meeting on Monday, PKS & Company presented a compilation of fire company expenses. Managing Partner John Stern said a compilation was essentially a comparison to numbers presented during other years. Unlike an audit, it does not “test the numbers.”
Based on his assessment, Stern said the Berlin Fire Company is healthy, with cash and investments of more than $3.1 million.
Fire company officials, however, said those numbers were more than 11 months old.
President David Fitzgerald, Fire Chief Jim Corron and EMS Captain Duane Phillips painted a much grimmer picture during a more than one-hour budget request that followed.
Fitzgerald said the fire chiefs had to do “an unbelievable job … cutting back to bare bones just to operate” in crafting a budget for fiscal year 2018.
Corron said new equipment requests were zeroed out and the company was at a standstill in replacing its outdated gear.
Phillips said EMS is operating at a deficit and is planning a reduction of service by reducing its paid staff after Labor Day, to make up the difference.
Cash flow was an issue, Fitzgerald said, and the necessary purchase of a new fire truck for more than $700,000 reduced reserves to just $170,000.
As a rule, Fitzgerald said, the company does not finance any of its equipment purchases.
“What would happen if the town or county would, for some reason, change or stop funding? How would we make that payment?” he asked. “Also, why would we pay interest?”
If the company financed its new fire truck, he said, it would have cost more than $800,000.
“We try not to finance because we don’t want to pay any interest,” he said. “We don’t want the taxpayers paying interest if they don’t have to. It’s business.”
Stern argued there was a benefit to financing. What’s more, he said money the fire company had sitting in the bank was earning just 0.1 percent interest.
“If you managed your money better – what [you] call taxpayer’s money – it could earn a lot more than 0.1,” Stern said. “This has been going on for a quite a few years. With the proper, professional management those monies could be a lot higher.”
Berlin Mayor Gee Williams said there were plenty of other questions stemming from the nearly $1.2 million the fire company had collected for “Station Three,” a building on Ocean Gateway near Stephen Decatur High School that Williams said “many people are not even sure is needed.”
“The main headquarters, we all agree, needs a lot of things right now,” Williams said. “We have these critical, critical needs in town. I don’t think people can make heads or tails … of why that this situation is the way it is.”
Councilman Thom Gulyas said he was also “having a hard time” deciphering the fire company’s approach.
“I don’t understand why you want to build something two miles down the road and not take care of what you have,” he said. “Why would you do something like that? It just doesn’t make fiscal sense.”
Fitzgerald said money raised for Station Three was taken, at least in part, from county grants given for fire company response outside of Berlin town limits.
“Where do you think that money comes from, sir?” Gulyas asked.
“All the taxpayers of Worcester County,” Fitzgerald said.
“Which the town is, part of Worcester County,” Gulyas said. “So they’re going to be paying for it twice. That’s not fair.”
For fiscal year 2018, the town budgeted $250,000 for the Berlin Fire Company, plus an additional $150,000 contingent on an independent assessment taking place. The study would be paid for from that balance, and Williams said a worst case scenario was it would cost about $50,000. The remainder of the money would then go to the fire company.
Williams said there were legitimate concerns about fire company budgeting he hoped the study would resolve.
“The way you do your financing is your choice, but it contradicts just about everything else that’s done in both the for-profit sector, government sector and the nonprofit sector,” Williams said. “Maybe you have the magic solution, but until we have some, I think, independent comparison, there’s just a lot of questions out there. And, I think, they’re legitimate questions.”
Councilman Dean Burrell agreed.
“It is our hope that this study will answer some of those questions that you may have, that we may have, but biggest of all, that the public may have,” he said. “One of the questions I hope that this study will address is just where is Berlin in relationship to the need of an additional station that’s actually located outside of the town.”
Corron asked if the fire company would be part of the decision to select a firm to perform the study.
Williams said he welcomed the advice of fire company officials, but the contract would ultimately be put out to bid and selected by the town. But, if the fire company wanted certain firms to be contacted about submitting a proposal, he welcomed that.
“We hope [the study] will be a tipping point in all that has transpired,” Williams said.
“It’s only going to benefit both sides,” Phillips said. “We look forward to the direction that is going to be presented to us also – it’s going to give us both some direction.”