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HomeMy WebLinkAboutFIN 2017-10-17 Item 2E - Update - Fire Department BudgetCity of Tukwila Allan Ekberg, Mayor INFORMATIONAL MEMORANDUM TO: Finance Council Committee FROM: Peggy McCarthy, Finance Director and Jay C Wittwer, Fire Chief BY: Vicky Carisen, Deputy Finance Director CC: Mayor Ekberg DATE: October 11, 2017 SUBJECT: Fire Department Budget Update and Preliminary Year -End Budget Amendment Information ISSUE The discussion below encompasses the Fire Department budget. It also includes a brief discussion of other proposed budget amendments in order to provide context for the Fire Department budget. The Fire Department is currently projected to exceed the 2017 adopted budget largely due to additional pipeline positions authorized by the Council in late 2016 and fewer than anticipated retirements in 2017. BACKGROUND Pipeline Positions Pipeline positions were introduced to the Fire Department in February of 2014. City Council approved up to three pipeline positions in 2014 and an additional two pipeline positions in June of 2016 in anticipation of future retirements. Pipeline positions are unbudgeted and were created to save overtime costs associated with retirements. When a Firefighter retires, it takes six to nine months to hire a Firefighter and have them complete the training academy. The intent of the pipeline positions is to have staff ready to move into the vacated position, thereby eliminating the need to fill the position with overtime. The City has experienced overtime savings due to the pipeline positions; however, the savings were not as much as expected. Pipeline positions that are not filling vacated positions provide an additional cushion between total staffing per shift and minimum staffing of 13. Fire Department Retirements The Fire department's staff enjoys a significant amount of longevity. There are currently 24 Fire personnel, or 34%, that are eligible to retire in three years or less. Retirements have been averaging three a year since 2012. However, through the end of August, there has only been one retirement. When the authorized pipeline positions increased from three to five, it was anticipated that there would be at least three retirements in 2017 and pipeline positions would transfer into the vacated position. 53 54 INFORMATIONAL MEMO Page 2 At the September 19, 2017 Finance Committee meeting, staff briefed the Committee that the Fire Department is expected to be over budget due to the additional pipeline positions approved in 2016 and the lack of retirements that were anticipated to occur in 2017. Additionally, expenditures associated with deployments are unpredictable and in September, fire personnel were deployed to assist with recovery efforts associated with two hurricanes. Staff committed to returning to the Finance Committee with greater detail on a budget amendment for the Fire Department. Additionally, staff committed to providing information on other possible budget amendments. DISCUSSION Projected Year -End — Fire Department At this time, staff is estimating that the Fire Department will exceed their adopted budget by approximately $400 thousand, of which $160 thousand is revenue backed. To address the current over budget situation, staff will be recommending a budget amendment; details on which is provided below. In addition to the budget amendment, staff is taking additional steps to better manage the Fire Department's budget. There has been, and will continue to be, ongoing discussions regarding minimum staffing needs and better management of overtime to stay within budget. After review of the impacts of the two additional pipeline positions on salaries, benefits, and overtime, staff has determined that it would be appropriate to reduce the number of pipeline positions to three. When the next two retirements occur, the pipeline positions will not be filled. The budget amendment for 2018 will help cover costs associated with the pipeline positions until they can be absorbed into the budget. Proposed Budget Amendment — Fire Department Staff is recommending a budget amendment of $400 thousand for the Fire Department consisting of three elements. 1. Costs associated with the two additional pipeline positions authorized in June 2016. Costs for each pipeline position is approximately $120 thousand including wages, benefits, equipment, and training for a proposed amendment of $240 thousand. This element of the amendment will be requested for both 2017 and 2018. 2. Expenditures associated with the deployments related to the hurricanes. Approximately $125 thousand in costs were incurred to deploy fire personnel. These costs are revenue backed so the budget amendment would include not only an adjustment to overtime and related benefits but to revenue as well. Due to the lateness in the year that the deployments occurred, the City will most likely not receive reimbursement until 2018. 3. Additional EMS levy funds to account for costs for providing emergency medical services. The City has requested, and will receive, an additional $35 thousand in EMS levy funds that is expected to be received this year. Both revenue and expenditure lines will be adjusted $35 thousand. Other Proposed Budget Amendments Staff is reviewing budgets and identifying other possible budget amendment requests in addition to the budget amendment for the Fire Department. Staff has currently identified the following possible amendment requests, most of which are housekeeping in nature rather than required: Z:\Council Agenda Items\Finance\10.17.17\Info Memo - Fire Budget 10.17.17.docx INFORMATIONAL MEMO Page 3 1. An amendment to the Council budget to include costs incurred in 2017 related to the contract with Steven M. Golblatt Public Safety Plan Program Management Quality Assurance. 2. An amendment to the Recreation budget for four grants received after the budget was adopted. The amendment is revenue backed. 3. An amendment removing the revenue associated with the sale of the Gregor House. Rather than selling the property, the property will be leased to the Way Back Inn. 4. Add funds to the City Facilities fund (306). This fund is used to account for costs associated with the Public Works Shops facility. When the budget was written, it was anticipated that the City would sell bonds in 2017, however, the earliest bonds will be sold for the Public Works Shops facility will be in 2018. 5. Potential amendment to the Interurban project. 6. True up of Public Works capital projects to actuals as needed in capital project funds. 7. Potential amendment in the Public Safety Plan fund (305) to change the year of purchase for certain apparatus and equipment. 8. Adjust beginning fund balances to actual in various funds. RECOMMENDATION For information only. Z:\Council Agenda Items\Finance\10.17.17\Info Memo - Fire Budget 10.17.17.docx 55