Jan. 25--In just a few years, the Moraga-Orinda Fire District could find itself without any operating cash, because it won't have enough capital fund money to borrow to keep its general fund afloat, according to a midyear budget review up for discussion Jan. 27.
A board finance committee is scheduled to look at the midyear financials before the full board reviews them Feb. 5.
The revised budget includes projections the district will deplete its capital projects fund during the 2016-17 fiscal year, based on existing expenses and revenue projections.
If that happens, the district won't be able to draw cash from that fund to help replenish its general fund, its reserves having been exhausted last year. Administrators say the district will have to keep using capital funds to sustain operations through fiscal year 2018-19. They plan to borrow $700,000 from that fund this year to supplement the general fund; the capital fund balance was $3.4 million at the end of last year.
"We'll be out of cash, basically -- there won't be any money" said Administrative Services Director Gloriann Sasser, adding that the district was addressing the situation through labor negotiations now heading into their fourth year.
According to the budget, the district is expecting to pay $30,000 more than budgeted this fiscal year for a professional services labor negotiator. The expired union contracts currently eat up about 91 percent of the district's general fund revenue.
Other revisions detailed in the report include:
--A projected increase in property tax revenue of $153,000 more than originally expected. It is estimating total property tax revenue of $14.5 million, which does not include $2.8 million in property taxes to pay off pension debt.
--An increase in the cost of salaries and benefits despite reducing daily minimum staffing from 19 to 17 personnel. The costs will exceed budget by nearly $300,000. Fire Chief Stephen Healy attributed that to the timing of a staffing reduction plan; personnel on disability and increased staffing on red flag (high fire danger) days.
--Total general fund expenses are now expected to exceed revenue by $598,927, which is less than the $1.3 million deficit projected last year. The district originally projected total revenue of about $19.3 million and expenses of $20.5 million.
Directors will also revisit a long-range financial plan created by former administrators that projects about 15 years of district revenues and expenses.
Unlike previous versions of the financial plan that projected the district's expenses for retiree pension and health care payments, the current plan does not account for those amounts.
Sasser said she removed those figures -- which now total about $82 million of unfunded liability -- because some of the amounts can vary each year.
The district makes annual payments for the pension debt, but once again does not plan to make its yearly payment for retiree health care debt, which the budget report estimated at $24 million in 2009, the last year for which figures are available.
"We're drawing attention to the board that we're not saving for this like we should be saving," Sasser said. "We're not doing it because the money is not there. The district should be saving money."
The district is waiting to complete labor negotiations before updating the retiree health care debt figure, Sasser said.
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