Municipal Government Finances: Tiptoeing Through the Political Tulips

We strongly suggest that the chief fire officer who seeks to receive funds from a dedicated user-oriented fee schedule seek both political and legal advice before proceeding with such a program.

A question often asked by harried taxpayers who pay for fire trucks and other equipment used daily to provide services to us all is, quite simply, “Where does all the money (that you collect in the form of taxes)” go?

Regardless of whether the authority to spend is vested in an independent fire company that raises and spends its own funds;, or lies within a fire district which taxes and spends, or comes directly from local government, the question remains the same. The consequences to the authority receiving the money also remains the same.

A community in Florida developed a program to impress the citizens and politicians in their community with the costs involved in delivering municipal services. All vehicles purchased city-wide had the cost of its purchase indicated on its side, including fire equipment. People were able to compare the cost of a fire truck with that of a street sweeper. The program met with mixed success and was discontinued after a few years.

While funds are available from higher levels of government for health, education, and sanitation, little in the way of money for fire safety comes from transfer payments. The level of spending varies, but it is fair to say that a very high percentage of funding for fire protection efforts comes directly from locally-generated sources.

Responsible communities expect a fair and accurate accounting of how the funds are spent. It is the astute fire officer who constantly reinforces this concept of fiscal accountability to those who provide the tax dollars, as well as those who allocate the resources in local government.

No study of local government expenditures would be complete without a look at the ratio of short-range current expenses to the longer and larger periphery of the bonded capital debt. Two distinct areas of expense make up the local spending arena. Things paid for on a day to day basis, through the current expense funding mechanism take up the immediate attention of the fire administrator. Projects whose cost is spread over a number of years require the administrator’s talent at planning.

The reasons for varying levels of local fire expenditures go well beyond those things which local government can directly control. However, the trends must be monitored and local operations and expenditures tailored to meet the newly emerging protective service needs dictated by these trends.

An example of this would stress that those charged with providing fire protection in an area of explosive suburban growth are powerless to influence the influx of new citizens to their community. Various socio-economical and demographic factors have combined to assure semirural and suburban areas are very attractive to urban dwellers within easy commuting distance.

The astute fire officer cannot wish the people of their community away. They must adjust financial resource commitments to provide everyone with a reasonable level of fire protection. It would also be wise for him to meet with developers in an effort to share some of the cost of new fire stations and make a case for residential sprinklers in new construction.

Public administrators must be responsive to factors which have historically impacted the delivery of services. Population shifts have been referred to previously, but there are other elements which combine to determine the level of local government expenditures.

The overall national economy will impact decisions as to how money will be spent. When the economy is doing well, people are usually more willing to commit funds which they would not consider doing during a downturn. Economic downturns must be monitored for their effect at the local level. Any change in the amount of income flowing into a community can spell change for the jurisdiction and its financial operation system.

Another area of concern for local government financial people us the cost of the service they are providing, in relation to others giving the same service. This may mean more to the person charged with sanitation or municipal recreation than the firefighter, because there are few alternatives to calling the fire department when your house is burning. However, a long-term swing may occur if the private sector can begin to provide fire protection at a lower cost than local government.