More than $12 million in tax dollars went untouched by the Mehlville Fire Protection District in 2008 because of a tax rate set at slightly more than half of the legal maximum, according to a recently approved financial report.
In 2008, the Board of Directors set the district’s tax rate at 56.3 cents per $100 of assessed valuation, which is 53 percent of the maximum legal rate of $1.05 per $100. In 2007, the district’s tax rate was 60.8 cents per $100.
As a result of the 2008 rate, the report states, “Approximately $12,400,000 in tax dollars were left untouched while still providing full services to the community.”
The Board of Directors voted unanimously June 23 to approve the Comprehensive Annual Financial Report, audited by Hochschild, Bloom and Co. for the year ending Dec. 31, 2008.
Robert Offerman of Hochschild, Bloom and Co. said the district received an “unqualified opinion” on its 2008 financial statements — the best possible opinion that can be given.
In addition, the district earned a Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association for its 2007 financial statements. This is the 10th consecutive year the district has received this recognition. The district also will send its 2008 statements to the association for certificate qualification.
Total district revenues were down more than 16 percent from 2007, a drop from $21,757,349 to $18,135,565, according to the audit.
Taxes accounted for 76 percent of the district’s revenues in 2008, but property taxes brought in about 16 percent less than they did in 2007, decreasing from $16,606,606 to $13,818,677 due to the lowered tax rate.
“The 2008 tax rates were set based on the district’s financial need and not funds available from the increase in property assessment. Due to the voluntary reduction in the district’s tax rate in 2008, the ceiling for 2009 will be lowered by the state,” the report stated. “A permanent reduction in the property tax levy was approved by the voters on the April 2009 ballot. There will be a reassessment of property values in 2009. The preliminary reassessment showed a 3-percent drop in home values.”
Expenses totaled $16,855,825 in 2008, down 18 percent from the $20,580,354 spent in 2007, the report states.
District assets for the past year totaled $39,811,640, up slightly from $39,588,929 in 2007. Total liabilities were listed as $10,008,404 in 2008, a decrease of about 9.5 percent from $11,065,433 in 2007.
Net assets — the amount of assets minus liabilities — totaled $29,803,236 in 2008, up nearly 4.5 percent from $28,523,496 in 2007. The report credits the construction of the new No. 2 firehouse, which was completed in March without a bond issue or property-tax increase, as the primary reason for the increase in assets.
Other financial highlights:
“As of Dec. 31, 2008, the district’s governmental funds reported combined ending fund balances of $25,078,746, and increase of $530,989 in comparison with the prior year. Of this amount, $12,175,377 is designated for next year’s operations, $1,202,603 is designated for sick leave benefits, $255,000 is designated for dispatching equipment and $11,445,766 is unreserved and undesignated.”
“At Dec. 31, 2008, the unreserved fund balance of the ambulance fund was $5,890,072 or 130 percent of ambulance fund expenditures. This fund balance will be used to finance the next 12 months of operations during 2009 and pay for future capital assets and other contingencies.”
Besides the new firehouse, the report cited as a service upgrade a 20-percent increase in call responses from 2004 to 2008, 10,146 to 12,240.
The report also identified several budgetary reforms during 2008:
“Workers’ compensation premiums de-creased from $892,000 in 2005 to $714,899 in 2008. The premium decreased 20 percent during that period, and the surcharge of 5 percent due to claims was eliminated. The district had the fewest claims since 1990.”
“Salaries remain the largest cost factor, and appropriate increases will occur in 2009 along with hiring 14 new fire/medics. In 2008, all fire/medics were given a $2,000 in-crease over their 2007 rate.”
“The district contracted with Christopher Bosche, M.D. to oversee and train the free/medics. Dr. Bosche is paid as an independent contractor.”
“The district offered any employee who enrolled in the Health Savings Account plan a start-up deposit of $1,500 tax-free income and full payment of their premiums. This also included the dependent coverage under the family plan. Forty-two employees took the Health Savings Account.”
“At the end of 2008, a buy-out of $1,000 for each year worked and a lump sum of $20,000 was offered to employees with 20 or more years of service. Three employees took the buy-out before the end of 2008. This will be the final time a buy-out is offered to the district’s employees.”
In 2008, the district’s total debt decreased to $6,435,092, down from $7,096,575 in 2007 — a decrease board Chairman Aaron Hilmer said was noteworthy.
“You look at last year’s report, that number was nearly $8 million … So over two years we’ve decreased our long-term debt by nearly 20 percent …,” Hilmer said June 23 during a meeting off the Board of Directors. “I think that’s something the board needs to take note of, because it’s pretty clear a lot of changes that were put in place four years ago … you can really see the fruit they’re bearing there.”
The district added $1,093,508 to its pension fund during 2008. Of that amount, $1,167,598 was in investment income and $622,676 came from employer contributions. Benefits of $3,852,080 were paid to plan participants and beneficiaries. It also paid $47,724 in professional fees and $38,274 in disability insurance from the pension fund for a total payment of $6,255,530. The district also reduced its unfunded actuarial accrued liability from $5,884,487 on Jan. 1, 2007, to $449,885 on Jan. 1, 2009, which increased the funded ratio from 86.4 percent to 98.5 percent.
“Most retirement systems all had substantial losses in 2008, and ironically because of the way your system was being terminated and the funds were held in secure investments, you actually made $1.2 million on your investments this year …,” Offerman said.
Mehlville Local 1889 of the International Association of Fire Fighters filed a lawsuit just days after the board voted on March 16, 2006, to adopt an amendment and two resolutions changing the fire district’s pension plan from a defined-benefit plan to a defined-contribution plan. That lawsuit was settled last December two weeks after the Eastern District of the Missouri Court of Appeals affirmed an August 2007 ruling by St. Louis County Circuit Court Judge Thea A. Sherry that dismissed the lawsuit filed against the board by Local 1889.