2023-24 Budget Message

This budget, like previous budgets, has been constructed through the collaboration of many members of the District. 

May 5, 2025

Budget Message and Transmittal Letter for Fiscal Year 2025-26

 Polk County Fire District No.1 Board of Directors, Budget Committee, Members of the Public, District Staff, and Volunteers,

It is an honor to present for your consideration the Polk County Fire District No.1 Budget for Fiscal Year 2025-26. This Budget, like previous Budgets, has been constructed through the collaboration of many members of the District. I would like to thank all those who played a part in the process. I’m particularly grateful for the incredible work and time Stephanie Hale has put into this year’s Budget.

Before I address the financial status of the District and highlight some of the changes in this year’s Budget, I would like to take a moment and explain the Fire District’s budgeting to those who may be picking up this document for the first time. In order to understand the area we protect, the services we offer, our method of staffing, and the way we are governed, I would encourage you to read the page titled, “District Demographics and Profile,” within the budget materials.

Our Budget is comprised of six Funds.

1.         General Fund: The General Fund includes resources from taxes and other sources, mainly ambulance service revenue. The expenses within the General Fund are Personnel Services (wages and benefits), Materials and Services, Capital Outlay, and Debt Service.

2.         Equipment Reserve Fund: The purpose of the Equipment Reserve Fund is to set aside resources from year to year in order to save for purchases of apparatus and expensive equipment. The District uses an Equipment Replacement Plan to anticipate needs from this Fund.

3.         Grant Fund: From time to time, the District receives grants and this Fund is set up to track grant resources and expenditures.

4.         Mark and Mildred Laudahl Fund: The Laudahls were loyal residents of our community and left a generous donation to the Fire District. This Fund accounts for the earned interest from the donation and expenditures incurred in their honor.

5 & 6.  Bond Capital Projects Fund and Bond Debt Service Fund: In 2014 the Fire District passed a two-million dollar Bond. The Bond Debt Service Fund tracks the repayment schedule. All expenses of the Fund have been completed.

Our Budget is a public document – it is, after all the public’s money. The District presents the Budget to our Budget Committee for review, deliberation, and approval. These are public meetings and public comment is always welcome. After approval from the Budget Committee, a Budget Hearing is held, then the Budget is presented to the Board of Directors for adoption by resolution. A complete schedule of the budgeting process is included in the budget materials.

Before introducing the 2025-26 Budget, I’d like to review the current 2024-25 Budget as it draws to a close.

In Fiscal Year 2024-25, after consulting with the County Assessor, we budgeted for an overall tax increase of 4.50%. The actual rate increased considerably less at 3.88%. This is the slowest rate of growth for our District in a decade. Unlike the previous years, however, values in the Urban Renewal Districts (URD’s) did not drastically outpace the value as a whole. The value increase within the URD’s was 6.35%. This means that while the total value of the District didn’t go up as much as previous year, a lot of the value increase was in areas where we collect our full tax rate. The amount lost to the increment of the Renewal Districts was approximately $236,000. After accounting for losses to the URD’s, this is the smallest increase in taxable property value for the District since the 2018-2019 Fiscal Year.

Ambulance service revenue is the second largest source of revenue after taxes. The Ground Emergency Medical Transport (GEMT) program that reimburses shortfalls in Medicaid payments for ambulance transport through the federal government did not result in as much revenue in FY 2024-25 as in previous years. This is due in part to recipients being transferred to Coordinate Care Organizations (CCO’s) which provide less favorable reimbursement structures than the Fee-for Service (FFS) program. Regardless, ambulance revenue from ambulance transport was positive and revenue increased from the previous fiscal year.

With interest rates remaining high since the Federal Reserve started increasing interest rates at the beginning of FY 2022-23, this was the third consecutive year of record-breaking interest earnings for the District.

We expect our Personnel Services expenditures to be within one-half of one percent of what was budgeted. During the first few months of FY 2024-25, we were still in the process of hiring to achieve our target of six firefighters per shift. While the delay in hiring resulted in some cost savings, we incurred personnel costs from multiple conflagrations. While the costs are reimbursed, it is still an expenditure from the General Fund. In FY 2024-25, we budgeted for $50,000 in conflagration coverage personnel, but by the time the California wildfires were completed, that amount had grown to over $230,000. Again, 100% of these expenditures are reimbursed to the District.

There were a few items of note in Materials and Services that will be overspent by the end of the current fiscal year. The first is #6021, EMS Training and Education. We had some incredible training opportunities. Not only does this line item include regular CPR classes, but also an airway class with physicians who flew in from Utah. The District charged for these classes so expenses were offset in revenue during 2024-25.

Line item #6041, Wellness, is another item that we plan on overspending. Our volunteers have been extremely active in group events including firefighter stair climbs and mud runs. This has resulted in improved fitness, teamwork, and moral among our members. The District had sixteen members compete in the Seattle Stair Climb and while members were responsible for fund raising and to pay for their own food, lodging, etc, the District covered the registration cost to support their participation.

Another project that has been completed in the closing months of FY 2024-25 is upgrading our controlled medication storage and tracking process. While this purchase was not a part of the initial Budget, in January of 2025 the Board decided to move forward with the NarcBox system after recognizing that the District’s outdated system of a paper check-off and receipt to track controlled medications was inadequate.

While only a few line items were overspent, more line items were spent closer to the total amount budgeted than in previous years. This will result in a larger increase in materials spending than in pervious years. With materials and services spending ending down slightly in 2023-24, this is not something to be overly alarmed about, but is still something that administration needs to continue to pay attention to.

There were several capital items budgeted in FY 2024-25. While we did not upgrade security at Station 90 as budgeted, we did receive a matching grant from SDIS to upgrade the lighting at Station 70. As a result, an upgrade to lighting at Station 70 was completed and the Station 90 security system upgrades were deferred. I’m very pleased to report that after being budgeted for multiple times, thanks to the leadership and persistence of Chief Ehrmantraut, our rural stations will have reliable generator power by the end of the current fiscal year. As was mentioned in last year’s Budget, converting the mobile data terminals (MDT’s) in the apparatus to iPads that can receive our computer aided dispatch (CAD) information has resulted in savings when it comes to purchasing replacement computers.

In our Equipment Reserve Fund, we budgeted for and purchased new battery powered extrication tools. We also replaced the Toyota Prius with another hybrid support vehicle. The light rescue to replace the 1999 American LaFrance was also purchased, but whether or not we receive delivery and make the final payment prior to the close of FY 2024-25 is still in question.

The District continued to pursue grant opportunities in FY 2024-25. The Oregon Department of Forestry matching grant to help improve our wildland PPE was awarded for $8,000. A $5,000 grant by the Pacific Power Foundation was used to aid in the purchase of iPads to be used as MDT’s as referenced above. We also received a $2,500 grant from the RoundHouse Foundation that was used to certify Emergency Medical Responders (EMR’s) from police and fire agencies throughout Polk and Marion counties. We received a $75,000 grant from OSFM for help with defensible space projects that help our residents and educate our community. Lastly, for the third year in a row we received the OSFM seasonal staffing grant. This awarded us $35,000 to hire volunteers part time throughout the summer to augment our response. We used funds from a Community Risk Reduction Grant to purchase the materials for address signs and used manpower provided by the seasonal staffing grant to place free address signs at the foot of the driveway of every rural home in our District.

The FY 2024-25 Budget did not include any expenditures from the Laudahl Fund and none were made. We expect revenue of over $30,000 in the Fund from investments by the conclusion of the fiscal year.

Now that we’ve reviewed the major events of FY 2024-25, let’s look to each of the Funds that make up the 2025-26 Budget.

THE 2025-26 BUDGET

GENERAL FUND

Revenue

After reducing our anticipated tax revenue increases two years in a row, we are once again reducing our anticipated increase. Last year, we budgeted for a total increase of 4.5% with a 15% increase within the URD’s. This year, we are modifying downward once again to 4.0% with a 10% increase within the URD’s. It is notable that using last year’s projections (4.5% and 15%) would only result in $19,000 more in anticipated revenue. These small changes do not have a large impact on revenue over the next year, but the compounding impact of the values make them important going into the future.

The FY 2024-25 budget message included the sentence, “GEMT has provided a lifeline to our ambulance service.” The biggest headline in this year’s Budget is the threat of losing this “lifeline.” The GEMT program relies on Federal reimbursement. As we all know, the Federal Government is aggressively reducing programs and has publically indicated that cuts will be made to the Centers for Medicare & Medicaid Services. GEMT reimbursements are already funded through the end of calendar year 2025. Although some programs have been halted even after being funded, based on conversations we have had we believe that we can rely on GEMT revenue through the end of 2025. The bigger question is in the stability of GEMT in 2026 and beyond. This Budget takes into account the fact that we may have GEMT revenue decreased by $150,000 in FY 2025-26. If the program is cut and the District is unable to receive funds in the future, it could result in a reduction in the order of $300,000 in revenue each year.

In FY 2025-26, the District has budgeted to receive $332,000. For the past several years, the District has budgeted to receive $100,000. The District is awaiting a check from the State of California for $232,000 for the Palisades Fire which we expect to receive in the coming fiscal year.

GENERAL FUND

Personnel Services

This will be the first full fiscal year that we are able to maintain eighteen line staff (six regularly scheduled 24/7). Through the Civil Service Commission and contract negotiations last year, the District worked with the Union to ensure that if a Firefighter who is hired as an EMT receives their Paramedic certification, there is a clear path to them working as a Paramedic with pay incentives to match. While this does result in some increased costs for the District, it is an incredible operational advantage that of our six Firefighter/EMT’s, four are enrolled in Paramedic school and expected to graduate during FY 2025-26.

If GEMT is the headline on the revenue side of the equation, PERS is the headline on the liabilities side. Our new PERS rates for the upcoming biennium have increased substantially. The result is $220,000 in increased PERS costs in the upcoming year. The combination of the potential loss of GEMT revenue and increase in PERS have made the coming years more challenging than what was expected.

GENERAL FUND

Materials & Services

We will continue to support the growth and development of our personnel in FY 2025-26. We will do this by funding several items. The first of note is funding the ability to send two of our members to the Fire Department Instructors Conference International (FDIC). FDIC is an internationally recognized fire service convention in Indianapolis, IN with attendance exceeding 36,000. In addition to fire training, we will also support our members through funding wellness activities. Our group of very active and athletic members who have been going to athletic events together (mud runs, stair climbs, etc) have been inspiring their peers. The District is working with the Volunteer Association to create a program where if participants attend a certain number of team training events (evening stair climbs at the WOU stadium, evening runs, etc), their registration for the event will be paid. These competitions have offered a great boost to moral through team bonding and physical fitness.

Information technology continues to be a growing and evolving expense for the District. FY 2023-24 was the first year that we had an “Operational System Software” line item. The District uses multiple subscription software products to manage personnel, notify our volunteers of calls, complete medical and fire reporting requirements, and more.

A large portion of our materials and services spending goes to maintenance of our vehicles. We have enjoyed a very positive relationship with the Dallas City Shops. They have done a good job of prioritizing our equipment and attempted to maintain sufficient staffing to ensure we have our needs met. There are, however, smaller projects that the District will attempt to complete in-house. This will be done through the hiring of a part time mechanic who is able to complete smaller tasks and track larger items as they move through the repair process. After reviewing the number of projects this position may be able to handle as well as the cost to employ against the cost to outsource the work, we have budgeted for a budget neutral impact. We are hopeful we may receive some cost savings but are certain that even if the program is cost neutral, at minimum it will result in vehicles experiencing less down time and quicker repair timelines.

 GENERAL FUND

Capital Outlay

While the District will need to purchase some new computers prior to Windows 11 being unsupported, the District anticipated this event and has worked for several years to update computers so that it does not all come at once.

We need to continue to improve our security system at Station 90. This is a twenty-four hour building with staff, volunteers, and the public passing through day and night. It is important that we are able to monitor and secure our premises starting at Station 90.

EQUIPMENT RESERVE FUND

Within the budgeted expenditures of the Equipment Reserve Fund is the rest of the payment for a light rescue to replace the 1999 American LaFrance. We expect delivery very close to the start of the new fiscal year.

The District owns two 2014 Chevy Tahoe’s. One is currently used as a “chase” vehicle by the duty crew and the other is assigned to the Fire Chief. The Fire Marshal uses a 1999 Ford F-150 pickup with 160,000 miles on it for his routine duties. It is experiencing an increasing number of mechanical issues. The additional staff vehicle will be to replace the Fire Chief’s vehicle and allow the Fire Marshal to use the Tahoe previously used by the Fire Chief.

GRANT FUND

For the third year in a row, we have received the OSFM seasonal staffing grant. Once again we have reached out to our volunteers who are “ready to go on day-one.” They will be paired up and put on-duty during peak hours during the wildland season. When not responding to incidents, they will be posting grant-provided address signs, doing pre-planning, and consulting with rural residents interested in improving their defensible space. They will also assist with station upkeep tasks at our rural stations.

Last year, we successfully trained and licensed Emergency Medical Responders (EMR’s) from across Polk and Marion counties. This achievement was made possible through a grant from the Healthcare Preparedness Program. We have been awarded this grant once again, however, at the time of preparation of this Budget the program is not recommended for funding in the President’s FY 2026 Budget.

Last year, for the first time in over a decade, we qualified the ODF VFA/RFA Grant. Previously, we were excluded from consideration due to the sizes of Monmouth and Independence. Last year, in our first year qualifying, we were successful. This year, we are once again submitting a matching grant for various wildland items.

We continue to have funds available through grants from OSFM for community risk reduction as well as defensible space. We will continue to work on these projects in FY 2025-26.

There are various other grants that we may apply for throughout the year.

LAUDAHL FUND

We intend to fund two projects through the Laudahl Fund in FY 2025-26. The first is a landscape renovation of the front yard of Station 90. Growth in the city of Independence has outpaced its water access. As a result, not only is supply unstable, but rates are increasing. By completing a hardscaping project of the front lawn and surrounding flower beds, the District will save money on irrigation while being able to demonstrate ways to create defensible space around a structure. Some of this project will be funded through the defensible space grant from OSFM.

The second project is a drinking fountain and water bottle filling in the lobby of Station 90 available to the public and staff. The current water fountain has experienced multiple mechanical failures and has been completely out of service for long periods over the last couple of decades. This project will also include upgrades to the piping to the fountain. In anticipation of this project, the District has discontinued its contract with a drinking water supplier.

BOND DEBT SERVICE FUND

The District continues to pay off the $1,980,000 General Obligation (GO) Bond that was issued in FY 2014-15 with a maturity date in FY 2029-30. This year, the District will make a principal payment of $160,000 and two interest payments totaling $26,800.

ENDING BALANCE AND CONTINGECNY

With a majority of the District’s revenue being received from taxes in November, the District must be thoughtful of the fact that at the conclusion of the FY 2024-25 Budget, there must be enough of an unappropriated ending fund balance to keep all of our essential functions going until we receive taxes. For this reason, the District anticipates needing approximately $1.47 million to begin the 2025-26 Fiscal Year.

Each year, it is possible for unexpected circumstances to arise that were not anticipated at the time the Budget was developed and adopted. The Government Finance Officers Association, League of Oregon Cities, and Special Districts Association of Oregon recommend between 5% and 8% of a fund’s budget be set aside for contingencies. Due to the increase in personnel costs as a result of PERS as well as budgeting more conservatively due to the threat of losing GEMT revenue, the District has not set aside money in a contingency. We believe, however, that given the generally conservative approach to budgeting, the District is a able to absorb a vast majority of unanticipated expenses.

SUMMARY

Since the passage of the local option levy in 2023, our District’s capacity has grown considerably. With the support of our staff - administrative, line, and volunteer; this growth has gone relatively smoothly. We talk about the next steps in growth being even more complex. While further hiring and expansion is not included in the FY 2025-26 Budget, we must keep an eye on where we will be in five and ten years to make sure we position ourselves in a way that we can continue to offer reliable, sustainable, dependable lifesaving services. Unfortunately, neither the increase in PERS nor the grave threat posed to GEMT were known when we started making large steps in growth. Thankfully, with the support of our staff and public, we will continue to communicate openly and work tirelessly to live up to the commitment we have made to service.

I would like to thank District patrons for taking interest in the Fire District and our Budget. I would like to thank our staff for all the help and input in the budgeting process, and I would like to thank the Budget Committee and Board of Directors for your time and your thoughtful consideration of this Budget.

Respectfully Submitted,

Ben Stange, Fire Chief

Polk County Fire District No.1