Contributing to the Idyllwild Fire District’s budget shortfall is the overpayment of health benefits for the past 16 months, according to Idyllwild Fire District Commissioner Jerry Buchanan. This financial mistake was unearthed in April after the Commission was advised that its budget deficit continued to expand.
The department budget balance through March is a negative $220,000, a $35,000 increase in the possible fiscal year deficit.
Consequently Buchanan began a more intensive review of the agency’s budget accounts and payments. He uncovered the apparent discrepancy between the salary and benefits accounts.
Starting in November 2011, IFPD inadvertently increased staff pay in an amount equal to the cost of the employee’s health benefits ($750 monthly for senior firefighters such as the captains and $450 for the other firefighters). Buchanan says it was not a pay raise because the district expected to recover these funds to pay for the benefits.
“The district was advised by a former bookkeeper, confirmed by the auditors, that the district needed to disclose the medical insurance contributions on the employees pay checks,” Reitz explained in an email message.
However, the department did not collect the extra pay; nevertheless it continued to pay the health benefits directly.
In effect, IFPD was paying for employee health costs twice. This error has amounted to about $6,000 monthly for the past 16 to 17 months, according to Buchanan and Reitz. The misappropriated funds total more than $100,000. No one was aware of or acknowledged this error until Buchanan began his investigation.
Board President Jeannine Charles-Stigall asked if an employee had brought the mistake to anyone’s attention. Fire Chief Patrick Reitz replied, “No.”
For some reason, Rapid Data, the firm that handles IFPD payroll, was supposed to include the health payments in employee’s gross income statement and then deduct it from the department’s payment. The deduction never occurred and IFPD continued to budget and pay the health benefits through March, according to Reitz.
On Thursday, April 25, the commission’s Labor Relations Committee held an official “meet and confer” session with the Idyllwild Career Firefighters Association. Another meeting is scheduled for May 14, Reitz wrote. They were to discuss how the department could recover these unintended payments.
ICFA President Capt. James Reyes announced that the association’s representatives were ready to meet with the committee about this subject as well as many other issues.
However, at the April 23 board meeting, prior to the Thursday committee meeting, Reitz could not identify any legal authority to compel repayment.
“These payments made it through two audits, without being identified,” Buchanan told his colleagues. When asked about this, the audit firm, Rogers, Anderson, Malody and Scott, LLP, of San Bernardino, said they only audit the numbers, not the process, according to Buchanan.
Consequently IFPD has contracted with an independent certified public accountant to review its budget and accounts for any other similar financial mistakes.
If no immediate resolution of this error can be obtained, Buchanan estimated that IFPD may end the year with a budget deficit. Nevertheless he is optimistic that revenue in the final two months will be nearly $570,000, possibly resulting in a deficit of $40,000 or less, Buchanan said.
Later in May, the commission will begin reviewing the budget in preparation for the 2013-14 budget year.
Rhonda Andrewson, IFPD administrative assistant, intends to run for a commission seat in this year’s election. Chief Reitz announced her resignation effective May 31.
The commission discussed several items, which will be on future agendas. Commissioner Dr. Charles “Chip” Schelly asked about a patient satisfaction survey. He recommended that it be viewed as an outcome assessment tool, to include fire incidents, rather than simply medical care satisfaction.
Commissioner Pete Capparelli supported his urging that the issue receive a higher priority.
Schelly also suggested that the topic of preparing a long-range plan for the fire district be added to a future agenda. While Charles-Stigall was skeptical of proceeding with the project before the next budget is completed, Schelly emphasized that he just wanted to establish a schedule since the plan has been deferred for several years.
When the 2013-14 budget is being prepared, Schelly recommended that the commission also prepare a letter requesting an advance of December property taxes so there would not be a financial disruption during the first several months of next fiscal year. While Buchanan agreed, he said his calculations indicate that IFPD will not need the additional funds until the October payroll.