A unique Enterprise

With its travel expenses and a lack of its own volunteer firefighters, fire company stands out from its county brethren

December 10, 2011|By ARNOLD S. PLATOU |
  • Western Enterprise Fire Company
By Kevin G. Gilbert/Staff Photographer

Like all 20 of Washington County's volunteer fire companies, Western Enterprise Fire Co. receives tens of thousands of dollars a year in public funding.

Unlike the rest, however, the volunteer fire company in the big brick building in Hagerstown's West End has enough money to go to conventions every year, to subsidize at least one tour bus trip, to pay a nonprofit group to run its gaming operation, to pay three of its top officers, and to contribute to neighborhood charities.

How the volunteer-owned Western Enterprise does all that while staying debt-free and earning more than $25,000 on its cash and investments last year while most other local fire companies struggle financially, isn't easy to explain.

And then, there's this:

Western Enterprise — while housing a city fire engine and ladder truck, a Community Rescue Service ambulance and crew, and a city Fire Department paid crew of firefighters — hasn't sent any of its own volunteers out to fight a fire in more than four years, according to Hagerstown Fire Chief W. Kyd Dieterich.

None of the members Western Enterprise has recruited, trained and outfitted over the years has gone to fight a fire since April 2007, which raises questions about some of the fire company's spending in recent years, Dieterich said.

About the same time that Dieterich says Western Enterprise stopped boosting the city's firefighting force with more volunteers of its own, the company's spending on conferences, conventions, meetings and travel increased, according to financial reports the company has filed with the Internal Revenue Service.

"Why does a company that doesn't have any riding members, have these types of expenses for training or travel or what have you?" Dieterich asked.

"I don't question them attending the conventions, it's just the amount of money" that's being spent," Dieterich said. "It's like, wow!"

But James Schaffer, longtime volunteer president and paid administrator of Western Enterprise, said the spending is justified and the city's way of counting each company's volunteer firefighters is bogus.

Schaffer said Western Enterprise's members include "probably about 12 or 15" volunteer firefighters, who are also members of other fire companies in the city. It's "stupidity" that the city ties those members' fire responses to the company they joined first, rather than to all the companies where they're also members now, he said.

"Why in hell are we calling it a city fire company if you have to be members of individual fire companies?" Schaffer asked.

In addition, Schaffer said, he is tired of criticism of the amount of money the company has earned and he doesn't think people understand how much of it the company has spent maintaining and improving its fire station.

"Right now, we have some savings, yes. But what happens if a windstorm comes through here and tears the roof off all these buildings?" Schaffer asked. "Is the insurance going to pay for it? Hell, no!"

Still though, explanations of how the company earns and spends the money are hard to come by.

During a yearlong investigation by The Herald-Mail into the financial accountability of local fire and rescue operations, the leaders at Western Enterprise said repeatedly they weren't interested in talking to the newspaper.

From last January through this fall, Schaffer bristled at questions, hung up repeatedly during telephone interviews and angrily alleged the city government and the firefighters union are "out to get our money. ... Some of these people they want to run everything. You're getting no information out of us."

Just last month, Schaffer alleged that the newspaper was writing the stories as part of a conspiracy because "your boss, he's getting something to push this."

Last winter, Mike Kline, chairman of Western Enterprise's board of trustees, said he'd told current and former officers and members not to talk to the newspaper. And, he told the paper not to try to reach them either.

When Schaffer, 70, who was a volunteer firefighter years ago and whose stepfather was a firefighter, did an interview in May, he unleashed criticism at local government over its funding of the volunteer fire companies.

In a long interview last month, Schaffer provided details about some of the expenses his own company, as a tax-exempt organization, has reported to the Internal Revenue Service (IRS).

But Schaffer refused to explain others, saying he didn't understand how the company's accountant had filled out the IRS reports, even though every report from 1998 through 2010 appears to bear Schaffer's signature, verifying their accuracy.

Moreover, Schaffer refused to authorize the accountant to explain the expenses to the newspaper.

So some questions must go unanswered.

Fire companies in city are in better financial shape

Financial differences between the independently owned volunteer fire companies in Hagerstown and the area's rural fire companies aren't hard to spot.

Nearly all of the 20 fire companies countywide must file financial statements, called Form 990s, to the Internal Revenue Service every year. Form 990s aren't available yet for the Fairplay and Mt. Aetna fire companies because their tax-exempt status is new or not yet complete.

The Form 990s show that most of the rural fire companies are in debt — as much as $2.4 million by summer 2010, for the Volunteer Fire Company of Halfway, Md. In all, the company made a total of $114,648 in payments the previous 12 months.

Meantime, the Form 990s filed by each of the six fire companies in Hagerstown list no debt at all since at least 2006.

Halfway ended its 2010 budget year on June 30 with a total of $141,666 in cash and investments. During the year, it earned just $233 in interest and dividends, according to its Form 990.

By contrast, Western Enterprise ended its 2010 budget year last December with $451,266 in cash and investments, according to its Form 990. And, it shows, the company earned $25,199 in interest and dividends.

During the year, Western Enterprise received $149,830 in revenue and spent $116,678, its Form 990 shows. That was a gain of $33,152 over expenses.

Most of Western Enterprise's revenue that year was public funding, totalling $81,087, the Form 990 shows. The funding included: $47,014 from the county government as a basic subsidy and utility reimbursement; $29,571 distributed by the county Volunteer Fire and Rescue Association from the county Gaming Fund; and a $3,000 subsidy from the city to help pay for maintenance of the fire station.

In addition, to the $25,199 earned in dividends and interest, Western Enterprise reported receiving $20 in membership dues and $43,524 in profit from its bingo operation, the Form 990 shows.

Like all of the county's other emergency volunteer companies, Western Enterprise also files an annual financial statement to the county government. That statement can be useful in analyzing a company's finances because it details some revenues and expenses that the Form 990s don't.

But Western Enterprise's reports to the county aren't reliable, Schaffer has told the newspaper. "I know there are discrepancies there," he said, explaining that he reports figures to the county before all his records are in, unlike the 990s which are done more thoroughly by an accountant.

Indeed, on its county report for 2010, the fire company listed earnings totalling just $789 in interest and dividends, compared to the $25,199 reported on the 990.

And, the fire company's reports conflicted on gaming, telling the county such fundraisers grossed $149,594 in revenue, but saying on the 990 that the gross revenue from gaming alone topped $300,000.

Western Enterprise's bus trip

Beginning with 2008, the year after city Fire Chief Dieterich says Western Enterprise stopped sending its own volunteer firefighters out on alarms, the fire company began listing a "travel" expense in its annual Form 990.

In 2008, Western Enterprise listed a travel expense of $23,528. The report doesn't say whether that expense was for one trip or more, tell the purpose or destination, or say how many went.

The expense is far higher than any the newspaper noticed for "travel" for any of the fire or rescue companies in their annual reports going back through 2007.

Asked this past winter where people from the fire company are travelling that costs so much as $23,528 and why, Schaffer responded with two questions.

"Some saying we're not allowed to get a bus and charge people and take them on trips?" Schaffer asked. Then, he asked whether the fire company is not allowed to do that as a fundraiser.

So, a reporter asked Schaffer, you're saying the $23,000 was spent taking people on a bus trip as a fundraiser?

"Yeah," Schaffer replied, "everything we do here is what's done for the fire company."

Later, Schaffer was asked again, are you saying the $23,000 is money from a bus trip that was a fundraiser?

"It's possible," Schaffer replied.

At that point, company board chairman Kline told Schaffer: "Don't answer any more questions."

But Schaffer answered anyway. "People pay to go on a trip," he said.

In an interview later, Schaffer said the fire company has been organizing an annual tour bus trip for years. Not long ago, he said, they were to go to Maine.

He said that though he and everyone else buys the tickets, the trip is intended as a sort of reward for those who volunteer as helpers at the fire company's bingo games.

Originally, he said, the company was going to do the trips as a fundraiser — to sell the tickets and make a profit. But later, it was decided to sell tickets to others outside the fire company at the same price that members pay, to ensure enough tickets are sold to make the trip possible and pay the entire bill.

Schaffer said the $23,528 travel expense "might have been what we paid the (bus trip) company. ... We had (ticket sales) money that came in on that trip."

When asked why the Form 990 that lists the $23,528 travel expense, doesn't list $23,528 in travel income on its revenue page, Schaffer said he doesn't know.

Indeed, the 990 lists only four kinds of revenue: $89,686 in government grants, $44,986 in gaming profit, $2,090 in miscellaneous receipts and a $37,379 loss in sales of securities. That figures up to the total $99,383 that Western Enterprise reported as its entire income that year.

Asked if the $23,528 travel expense could have been the fire company's net expense — the amount it had to pay that wasn't covered by ticket sales, Schaffer said no, the fire company did not subsidize the costs of that trip.

Schaffer said he doesn't know how the accountant reported the trip expenses and revenue on the 990.

But as to the $7,529 travel expense that Western Enterprise listed in its Form 990 report for last year, Schaffer said at least part of that expense is what the fire company had to pay to subsidize that year's tour bus trip. He said it didn't sell enough tickets.

"I guess it could be because we didn't have quite as many people this time. We still had to pay for it whether we had a full bus or not, which we didn't have," Schaffer said. "We didn't want to cancel it (the trip) at the last minute."

Schaffer said the $7,529 could have paid a couple other expenses, too. He said he's not sure, but the accountant may have included travel costs for the company's former chief, who is a member of the state chief's association and attends events in Baltimore and Harrisburg, Pa.

Asked to open his financial records at the fire station to show a reporter how much money was received from ticket sales for the tour bus trip in 2008 or in 2010, and how much the company paid the bus company, Schaffer refused.

"No," he said. "You got the 990. It should be on there. If it's not, I'm not going to give it to you off the computer because I have no idea."

Conferences part of travel expenses

The same year of 2008 that Western Enterprise reported spending $23,528 on travel, it also reported spending $6,536 on conferences, conventions and meetings.

"Conferences, conventions and meetings" is a standard line item on the Form 990, and Western Enterprise began listing an annual expense there in 2004, according to the newspaper's review of the company's IRS reports from 1998 through 2010.

Schaffer said the $5,020 his company spent on conferences, conventions and meetings last year wasn't all spent to go to the Maryland State Firemen's Association's annual convention, which is held each summer in Ocean City, Md.

He said a lot of the trips are made by representatives of the fire company's ladies auxiliary, which is headed by his wife, Gloria Schaffer. She is also president of the county's ladies auxiliary, James Schaffer said.

Representatives of Western Enterprise's auxiliary goes to meetings and conferences often. "They have like four or five conferences a year. Some's in the region, some's down here, some's in Baltimore. They just went to one in Ocean City," James Schaffer said.

"Usually, it's two or three (women from Western Enterprise who go), and we do give them the motel overnight for their conferences away," he said. "So, that'll add up a little bit," he said.

Back home, he said, the auxiliary is active in fundraising with bingo and other activities. The money has been used to help needy families at Winter Street Elementary School and to buy meals or meat to benefit the Salvation Army, he said.

As to the state firemen's convention, Schaffer guesses that his company usually spends "around two grand or something" in attending. By going to meetings there, the company's representatives can catch up on new firefighting rules and such information and bring it back to the fire company, he said.

So, Schaffer said, the conventions are useful for his fire company, even at a time when, according to the city fire department, the company isn't fielding any volunteer firefighters.

"Even though we don't have a whole lot going on with the city the way things are set up, we are still set up as a fire company," he said.

What are 'volunteer relations'?

And then, there's the question of the money Western Enterprise has spent on what it has told the IRS are "volunteer relations."

From 1998 through 2007, the fire company has spent a total of $111,232 on "volunteer relations," according to the newspaper's review of the Form 990s.

Asked to explain what "volunteer relations" are, Schaffer — who has been president at least since 1998 and appears to have signed every year's 990 since then — said he doesn't know.

"I don't know what the accountant, how the accountant does that," Schaffer said.

As to other expenses, Western Enterprise is unique among local fire companies in that it pays three of its top officers — or, at least, that is how they are described in the company's Form 990s. At other companies, the top officers commonly volunteer their time.

In 2010, on the report Western Enterprise sent to the IRS, Schaffer is listed as president. He is paid $10,800 a year for working an average of 26 hours a week, the report says.

His wife, Gloria, is listed as auxiliary president. In 2010, the company began paying her $3,300 a year for working an average of 20 hours a week, the report says.

Clyde Tressler is listed as vice president. He is paid $1,200 a year for working an average of two hours a week, the report says.

Schaffer disputed some of that information, as to the roles for which he, his wife and Tressler are being paid.

"I don't get paid" as president, James Schaffer said. "No, vice president doesn't get anything. President doesn't get anything. The administrator does. There's a difference."

He is paid $10,800 a year as the administrator to do financial records, order supplies and such tasks, he said. Other times though, like on Saturday nights at bingo, he is a volunteer, he said.

Furthermore, he said, his wife isn't being paid as the auxiliary's president, but rather "to like, run to the accountant to help me because I do all the paperwork, take care of all the state stuff, do all the stuff for accounting."

He said the company's board of trustees decided to pay her to do that work "because if anything happens to me, at least someone will know what's going on with the computer."

And, James Schaffer said, Tressler "hasn't been vice president for years." Instead, he said, Tressler is being paid because he "takes care of all the numbers and figures and all that for the Gaming Commission," as far as reports it needs from the fire company.

It's hard to find people who will volunteer their time for such jobs, Schaffer said. "You're going to find some of the other companies probably do it, too, but they just don't report it that way," he said.

Schaffer said something that's long bothered him is that neither the county government nor Hagerstown's give enough funding to the volunteer fire companies in the city.

He said it isn't fair that the county gives each of the rural companies $48,000 a year as a basic subsidy, while it only gives the six companies in the city $24,500 a year each.

And, he said, it's not fair that the city government only gives each of the six $3,000 a year to help pay to maintain their fire stations for the city's fire apparatus, paid crews and the volunteers.

"Boy! That goes a long way," Schaffer said of the $3,000. "Well, guess what? It takes three times that just to keep the firemen we have in here in toilet paper and towels and stuff like that. We try to keep the (crew) quarters up. They're here 24 hours a day. We pay for (TV) cable for them. It sure takes more than $3,000."

It's small consolation, Chief Dieterich said later, but the city government has agreed to increase the maintenance subsidy to $4,500 a year for each of the companies, beginning this year.

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