The Washington County Volunteer Fire and Rescue Association is about to take steps to increase accountability for the public money it, and its members, receive.
This week, for the first time in at least four years, the association is to present its operating budget for the coming fiscal year in public session to the Washington County Commissioners.
And, it will answer all questions, association President Dale Hill said Friday night.
In addition, the association has told its 27 member companies they soon will have to report how they spend each year’s allocation of public gaming money, said Hill, who became president in January.
He said the full public disclosure of how much money each company earns from its own tip jar and, in some cases, bingo operations “may be something we can work on in the future.”
Hill said a majority of the companies have voted to divvy up about $263,000 of the association’s financial holdings.
Members of the state delegation have criticized the association for having that much money on hand, instead of distributing it to the volunteer companies. Hill said the $263,000 was being saved to help fund an emergency services training center, but members now believe the county is going to pay for that.
“It’s a different administration and a different process,” Hill said of his election and that of other top officers, and of the changes being made.
In recent talks with some of the commissioners and the county’s emergency services director, Hill said, “I’ve said I want to make sure we have an open, cooperative relationship ... and not have any stigma that the association is a group on its own.”
Accountability is more important than ever because the local fire companies need more public funding, he said. “Because of the increased costs, it’s becoming increasingly harder for the volunteer organizations to continue functioning,” he said.
Hill’s pledge of openness is in contrast to that of the association’s previous president who said he gave the county commissioners the financial information they wanted — a claim the county administrator has disputed. In addition, the previous president refused to divulge information to the county gaming director and urged his members not to provide any either.
Such a limitation on information-giving hasn’t always been the case.
Former president Glenn Fuscsick, who was president in 2006 and 2007, said Saturday he’d always heard that former administrations had given copies of their budgets to the county government. He said he doesn’t know whether they presented it in person.
Fuscsick said he personally made accountability a priority.
“I was about accountability with the commissioners because I thought that was the only way we could justify asking for more money — by being good stewards and being 100 percent accountable for the money we received,” Fuscsick said.
Told of Hill’s commitment to make changes, including requiring the companies to say how they’ve spent the public gaming money, Fuscsick said, “That’s great news.”
This week’s changes come in the wake of a series of stories examining fire and rescue funding that The Herald-Mail published late last year..
The newspaper’s major findings in a yearlong investigation included discovery that over the years the association has kept 20 percent of the millions of dollars of public gaming money that state lawmakers said they intended to go to the volunteer companies. The money is a portion of the profits local businesses and private clubs reap from the sale of tip jars — a form of paper gambling.
Much of the association’s 20 percent cut has been used for programs that benefit the companies, but by the summer of 2010, the association had $628,842 in cash and investments, according to a report it filed with the Internal Revenue Service.
In interviews a year ago, when the balance was said to be about $450,000, an association official said $200,000 of that was earmarked for the new training center, about $125,000 was needed to carry the association through the rest of its budget year, and the remaining $125,000 was committed to vehicle replacement and “unforseen emergencies,” such as lawsuits.
Weeks later, when the next public gaming check came in, the association retained 20 percent — $80,000 — increasing the association’s so-called “rainy-day” fund to roughly $205,000.
The “little nest egg,” as then-association president Glenn Fishack called it, prompted Del. John P. Donoghue, D-Washington, to say the money was meant to help the companies, “not for somebody to build fund balances in case something’s going to happen.”
The newspaper also found apparent flaws in the 1995 law granting the gaming money to the association. Donoghue, who spearheaded the legislative effort to win passage, said later that he had trusted the association to be accountable.
The law had no restrictions, thus giving the association the right to do whatever it wanted with the money, without telling local government. County Administrator Greg Murray and county gaming Director Jim Hovis said the association wasn’t giving them its budget, was refusing to say how much money it kept and was often slow in filing other financial reports.
Asked about such claims, Fishack told the newspaper last year, “I think we’ve been scrutinized enough on the damn finances. Who else is going to request (information)? Little Joe Blow out here that may not give a damn dime?”
Presenting the budget
Hill said such comments, as well as questions raised by the newspaper accounts after one fire company refused repeatedly to explain tens of thousands of dollars in expenses, have hurt all of the companies.
“Everybody else is kind of tarred with that,” even though many of the companies have been trying to be open and accountable in their use of public funds, Hill said.
So, at a time when firetrucks, protective gear and other equipment are “rapidly increasing in cost,” and when volunteers are harder to find, forcing several companies to hire daytime drivers, it is important for the association and its companies to be open about their finances, he said.
The new gaming legislation that local lawmakers proposed to close the accountability gaps the newspaper stories pointed out should help restore the public’s confidence in the volunteer companies, Hill said. The measure, now before the Maryland legislature, would require the association to submit an annual budget for the County Commissioners to approve.
Before 1995, when the current gaming law was approved, the county paid the association’s operating costs. Since the law took effect, the association has paid its operating costs from its share of the gaming fund.
Hill said that with the new legislation, he wants to commit to being open about association expenses.
“So this year, we’re back in their system. We’re back where we have to fully justify any expenditures. We now have to explain to the county anything we’re budgeting for,” he said.
“And also, if the legislation passes, which I wouldn’t have any reason to think it wouldn’t, then at the end of the year, we’ll send them a full report as to the expenditures of the association, which I think is much more open.”
In preparation for this week’s meeting, Hill said the association delivered its budget information to the county Office of Budget & Finance by the county’s March 2 deadline. He said the budget, which covers association expenses from this July through June 2013, was approved by the companies at an association meeting in February.
Hill declined to give the newspaper a copy of what the association gave the county because, he said, it’s now a county document that only the county can release.
But, he said, to fund most of its budget, the association plans to again take “basically about 20 percent” of fire and rescue’s share of the public gaming money. In all, he said, the budget totals $432,000 — including $145,000 in supplemental funding it is asking from the county government.
About $65,000 of that extra money is needed to help the association cover the skyrocketing cost of providing physical exams for all of the county’s fire and rescue volunteers, he said. There were about 1,055 last year.
The overall cost of the exams increased last year after the premium for workers’ compensation insurance that the county government pays for the volunteers more than doubled. Part of the reason was that their claim history was about 2 1/2 times the national average.
As a result, the county told the association to require the exams in an effort to rein in the claims. Before that, up to 230 volunteers were taking the exams each year, an association official has said.
With hundreds more volunteers now required to take the exams, even on an age-based system under which younger volunteers have three years between exams, the association’s costs soared.
During the current budget year for July 2011 through June 30, the $85,000 the association had budgeted for the exams “ran out by the first of January,” Hill said. To cover the cost of exams needed through June, the association is drawing money from its cash and investments accounts, he said.
Offhand, Hill didn’t know the total amount of money in those accounts but he said that by the time the current budget year ends June 30, there’s “going to be very little left over. ...It’s certainly not going to be anything like it was before.”
If the commissioners don’t approve next year’s supplemental funding, the budget will have to be taken back to the association’s members to decide how to adjust the budget, he said.
Even though the legislature hasn’t yet approved the new gaming measure, Hill said he wants to be as open now with the commissioners as the new law would require.
Under it, the commissioners would be given the right to approve the association’s budget.
“We want them to review the budget and if they have problems with it, we’ll have to re-evalutate the budget and then take it back to the commissioners for approval,” Hill said.
He said his understanding of the new legislation is that it wouldn’t give the commissioners power over each budget item.
“It’s not approval where they would go in and move things around, is what my understanding’s going to be of it. It’s not actually approve the budget per se, line item by line item. But we want them to see that the association is being accountable and not doing anything way out of line,” he said.
Passing out checks
Hard economic times as well as a need to pay for the physical exams was part of the association’s debate on whether to turn over about $263,000 of the association’s investments to the companies, Hill said.
“I think that was part of the thinking of some of the companies now, that they’re running into some financial troubles and that this would help them at least for this part of the year,” he said. “But again, taking that money kind of put us into the situation of running short on physical fitness funding and then having to approach the county for financial help.”
The voting was deeply split, with just “two or three” company representatives the difference in giving the majority to those who wanted to withdraw the money and give it to the companies, he said.
The checks have been written, he said, and on Thursday night, at the association’s regular membership meeting, each of the companies will be given a check for about $10,100.
In all, there will be 26 checks — not 27 as has been the number of companies recognized previously, he said. For this distribution, he said, the members decided that Williamsport Volunteer Fire & Emergency Medical Services would be considered as one company, rather than two.
The Williamsport fire and EMS operations, which joined forces a couple of years ago, are still counted separately for the association’s distribution of public gaming funds twice a year. That money, after the association takes a 20 percent cut, is divided equally among all 27 companies.
As the popularity of tip jar gaming soared, the amount given each company rose to a peak just topping $43,800 during the July 2006 through June 2007 budget year. But as the recession has caused people to tighten their belts, the amounts they’ve spent on gaming has waned, dropping each company’s share to just under $28,900 this past year.
This coming year, the share is expected to drop even lower, Hill said.
Nonetheless, for the first time since it began distributing the public gaming funds, the association is going to begin requiring its members to report how they are spending the money.
The change comes on the advice of the county’s legislative delegation, which told Hill that the association should be accountable for how the money is spent.
“We’re going to develop some type of a form for the departments that they’re going to have to submit back to the association, explaining what they did with the gaming funds,” Hill said. “That’s one thing I basically promised the delegation we would do.”
And, he said, as far as he knows, the companies are willing to file such reports.
Striving for accountability
Meanwhile, the finances of some companies have slipped even further this year, with their annual community fund drives “really down,” Hill said.
That of the Funkstown Volunteer Fire Co., of which Hill is in his fourth year as president, is down 10 percent to 12 percent, he said.
Hill said he doesn’t know whether such declines are a result of the area’s economy or are related to the newspaper’s focus on the companies.
But the newspaper has “a job, and some concerns that you have brought up about some departments, that shed a bad light,” he said. “And, unfortunately, we’re all in it together. We understand.”
The questions the stories raised about how one company, in particular, is spending its money did “pop up red flags,” Hill said. And, he said, he was concerned at learning that the number of volunteer firefighters in Hagerstown has dropped sharply.
Hill said that such questions make it even more important for the association and its members to work toward full accountability. He said that’s “the price” they must pay to regain the public’s trust and to earn the increased level of funding they need from county government.
The county already gives a basic subsidy of $48,000 a year to each of the fire companies outside Hagerstown. And, it reimburses them for what they spend on utilities.
But more is needed, Hill said.
“It’s at a critical point to make sure that we have somebody responding” during the weekdays when fewer volunteers are available, he said. Some of the companies, including Funkstown, spend all of the basic subsidy or even more to hire daytime drivers, an expense that’s draining money needed to maintain equipment, he said.
For the short term, Hill said he thinks the county could help all the fire companies and help them be accountable by paying for specific needs.
“You know, if they purchased so many sets of protective gear, where you could see tangibly what it’s going for, or picking up fuel reimbursement, or some of the maintenance costs of the apparatus,” he said. “To me, I think that would be a more workable program in the near future.
“But I still think they’re (commissioners) going to have to take a look at a more long-term plan for funding fire and rescue companies in the county. It’s just going to get more costly.”