I’m not an accountant but the following Sheet is apparently the main breakdown of the budget that the Big Tree Volunteer Fire company sent to the IRS in 2006. A little birdie sent it to me. It shows that they had a budget of just over $421,000 and they charged $197K for depreciation of equipment/property and then charged themselves $92K to occupy the two buildings they own.
As I said before I’m not an accountant and i don’t necessarily know what is included in each line item on the tax return. However, I think it should be self explanatory and if this isn’t the biggest crock of crap I ever seen it’s close to it. From what I gather they apparently didn’t use the whole budget amount given by the town so I believe they then find a fictitious way to justify keeping the money by inflating their depreciation values which are arbitrary because depreciation values don’t prevent you from doing the job andthey aren’t an everyday expense. Depreciation isn’t a cost that is supposed to be added onto a yearly budget.
Next you will see the result of that inflated budget by a real money account value of $1.2 million and an investment account valued at more than $1.3 million bucks. It’s easy to save millions when you are not using all the money the town gives you and then you save it in your own account or invest it in your own portfolio.
The end result is a portfolio worth $2.7 million dollars at the end of fiscal year 2006.
Not really intersted in your fight with BFD one way or the other, but I have to point out that depreciation expenses are absolutely an expense that should be included in an annual budget. By including depreciation expenses, an organization (profit or non-profit) accuarately reflects the true value of their assets. In this case it would be all of the fire equipment that they own. To put it simply, when a fire engine is bought for $250,000 (making these numbers up as I have no idea what a real fire engine actually costs), it losses value each year. That decrease in value is an ABSOLUTE legitimate expense (not only legitimate but mandated) that ANY organization (profit or non-profit) can write off of their balance sheet, and that expense in the form of a decrease in asset valuation must be reflected in the annual budget.
OK, but if it were a legitimate expense then why is it almost half their yearly budget? I really don’t care if they put it on the form but it is being used to justify half the 2006 budget expenditure that they got money from the town for. That’s not right. They didn’t need this $197K to operate and I think that’s very misleading by using it as a yearly expense. There should have been a separate unassociated category to put this in that doesn’t reflect how town funds were used. But as I said before I’m not an accountant.
While I see why depreciation expenses representing a large proportion of an overall budget would raise an eyebrow with regard to a normal corporation, not for profit or municipality, you have to take into account that this is an all volunteer organization. In other words, the normal corporation, not for profit, or municipality’s vast majority of expenses would fall under the labor cost category. Obviously that category doesn’t exist as there isn’t a payroll for an all volunteer organization.
On the contrary, the vast majority of funds expended in an organization like a volunteer fire company comes in the form of fire equipment. So, the fact that depreciation expenses would represent a higher proportion of an annual fire department budget than the normal organization would be consistent with their fiscal priorities.
Whether or not all the equipment purchased is actually needed for the Town’s safety is a completely different discussion, and as I said before I have no dog in that fight as I do not beleive myself to be qualified to pass judgement on what type of fire equipment we need or do not need, but I do not see this financial statement as irregular simply because deprecition expenses represent a high proportion.
Also to clarify, I am also not an accountant, but I did stay in Holiday Inn Express last night.
When 60% of a budget is depreciation and occupancy expenses their is something wrong with the accounting or they are stealing money from the public. If they have to add depreciation values into a yearly budget and charge the public for it then it should be reasonable. 60% is not reasonable, it’s theft!
Once again all this goes into how much they use the equipment? I don’t care if they are driving a 40 year old fire truck. If it’s only used twice a year and gets ten miles a year on it, it should last 60 years. After all the truck is only a giant pump that hooks up to a fire hydrant, and those hydrants last 50+ years without replacement. If it still works it doesn’t need to be replaced. The fire companies will argue that they need the latest equipment, but in reality the latest equipment is still a pump truck. It may pump water differently, but it’s still a pump truck all the same. A ladder truck is a ladder truck and an ambulance is an ambulance. The only equipment that technology changes require consistent upgrades are hand or body carry devices like thermo cameras and oxygen breathing apparatuses. That stuff doesn’t add up to $197K a year no matter how you slice it.
But all this can be solved with contractual oversight. The bottom line is it’s our tax money and we have no oversight. It’s taxation without representation.
You need to look into NFPA and insurance requirements. Does BTVD or any Hamburg Volunteer Fire Department resident have a low rating for their fire insurance? There are regulations that the federal government requires.
A pumper, with trade in can cost $350K. I know of no department that puts 10 miles on it and uses it twice a year. It’s used for weekly training, driver training, and the pump must be run weekly. I’d wish you would get accurate professional data and not make up what you think is the case. Where is your data that states hydrants last 50+ years?
You’ve stated that they use the money to throw parties. It’s called a 2% Fund. Basically, 2% of your fire insurance is returned back to the local fire department (if the ins co is based out of NYS) to be used for food/drinks/items that benefit the whole dept (shirts, caps, jackets, etc). Any vol FF will probably better explain it or can list a link to the actual law. So those funds are used to fund banquets and parties throughout the year. This is also a great recruitment and retention tool. Halloween, Christmas, and Easter parties and day trips for the whole family. The depts used to be called the poor man’s social club. Now there are many professionals who love to VOLUNTEER and socialize. They also must go through tremendous amounts of training. I wish I had the channel 7 news reporter who went through the fire training as part of a special series.
New York State also requires that any area of the state that can offer paramedic services are required to supplement their service with paramedics. Rural Metro does this and there is a fee for any person using that service. Rural Metro has a “Spirit” program where a family pays under $50 a year to have the fees that are not covered by insurance waived. It is on their website.
FJB – FOIL the Hamburg Town Dispatch for a monthly copy of the fires and runs for each department. It is printed at the end of every month and given to the departments. Their is nothing to hide.
I am vol FF and wish I had more time to volunteer. My kids understand that I have a ire call to respond to. The bike ride will have to wait until I get back. I’ll check their homework after the drill. They know not to play with matches, or goof around near our fire it, because they know I’ve come back from a fire where a house burned down due to kids playing with matches.
So go to Radio Shack and get a mobile scanner. Google the frequencies and monitor the calls all day and night. If you do not want to volunteer, then fine. Do not nitpick on those that do. Go ahead and respond that you are the keeper of us all and our tax money.
Again, get facts before you speak. Research, FOIL if necessary, and report facts, not assumptions and guesses.
Good post TVFF. TY for talking intelligently without negative comments about me or my family like most replies have here.
To answer your comments I would like to say that I have FOIL-ed this information you mention twice now and I have e-mailed, called and even went to the home of the BTVFC Chief to get answers but still haven’t gotten a single response to any of my inquiries.
I’m sure the trucks put on more than 10 miles a year, that was a sarcastic comment made out of frustration. None of what I said is about the fire fighters themselves and I have said publicly and in print that I think the people who actually fight the fires are hero’s. It’s the administration of these funds that I’m after and nothing more. That’s why I don’t put any members names up here. I call the Chief – Chief, Lieutenant – Lieutenant and so on.
The only person I called out was the Secretary after she or her hubby posted from her husbands e-mail address without stating who they were. If they are in an officers position then they should use their names unless they are ashamed of what they have to say.
I think one of my early articles dealt with the issue of tax dollars funding their parties. I haven’t mentioned it since. I think a person posting a comment said something but it wasn’t me.
Once again the bottom line is that the fire company is listing more than half their yearly budget for depreciation and occupancy in order to prevent the town from decreasing their dollar amount when the fire company knows damn well they aren’t using all that cash each year and they are putting it in savings accounts and possibly investing it for further profit. These are tax dollars and it’s more valuable to me in my pocket not theirs.