The financial condition of the Mehlville Fire Protection District remains strong, despite a decrease in the district’s net position.

The Board of Directors recently voted unanimously to accept the district’s Comprehensive Annual Financial Report, audited by Hochschild, Bloom & Co., for the fiscal year ending Dec. 31, 2014.

Robert Offerman of Hochschild, Bloom & Co. told the board that the district received an “unmodified opinion” on its 2014 financial statements — the best possible opinion that can be given.

“… The district is in a very good financial position. It’s very solvent …,” he said.

In addition, the fire district earned a Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association for its 2013 financial statements. This is the 16th consecutive year the district has received this recognition.

In 2014, the district’s total net position — total assets — decreased by $705,399 to $37,381,911 from $38,087,310 in 2013. That amounts to a 1.85-percent decrease, according to the report.

Offerman attributed the decrease in the district’s net position to roughly $300,000 in remaining assets from the South County Fire Alarm Association, or SCFAA, which ceased operations June 30, 2013, being transferred to the Pension Benefit Guarantee Corp.

“… That expense is distorting your change in net position a little bit,” he said. “In addition to that, there’s about $900,000 of depreciation that’s an expense in these financial statements …”

Of the total assets, $16,240,447 represents the district’s investment in capital assets, net of related debt; $1,958,527 is restricted for dispatching; and the balance of $19,182,937 will be used to meet the district’s ongoing obligations to citizens and creditors, the report states.

During 2014, revenues decreased by more than $1.67 million — 8.02 percent ­to $19,208,087 from $20,883,077 in 2013.

Of the district’s revenues, 84.4 percent came from taxes, 14.7 percent came from charges for services and the remainder came from other income and investments.

The district’s expenses increased in 2014 by $469,516 — 2.41 percent — to $19,913,486 from $19,443,970 in 2013.

Roughly $300,000 of that increase is attributable to the transfer of the remaining SCFAA assets, Offerman said.

District liabilities include debt totaling $1,309,676 due within one year, long-term debt totaling $2,056,097 and a net pension obligation of $3,830,476.

A total of $3.61 million in certificates of participation, or COPs, were issued in May 2000 to fund the expansion and renovation of the district’s No. 5 firehouse and administrative headquarters on Mueller Road in Green Park.

In July 2005, the Board of Directors voted to refund the COPs issued in 2000 with a savings of more than $240,000 in interest payments. As of Dec. 31, the district owed $1,540,000 on the COPs.

The district’s liability for accrued vacation totaled $1,035,144 at the end of 2014, a decrease of $12,675.

The district’s liability for accrued sick leave totaled $790,629 at the end of 2014, a reduction of $43,401.

In 2011, the district reduced its liability for accrued sick leave by $1,487,347 — to $897,897 from $2,385,244. That liability was reduced through attrition and a $1.1 million payout to employees.

Offerman also discussed the unfunded actuarial accrued liability of the district’s defined-benefit pension plan, which currently has 28 participants. No active employees participate in that plan.

Starting this year, the district’s pension obligation of roughly $3.83 million will be reported differently as a result of Statement No. 68 from the Governmental Accounting Standards Board, he said.

“… GASB 68 is going to require the actual actuarial liability, which is about $8 million, to go on your financial statements … So that $3.8 million will become about $8 million, but there’s actually $4.6 million sitting in the pension fund that has not been put into the defined-benefit plan — or it wasn’t as of Dec. 31, 2014,” he said. “So when you take that $4.6 million out, it would only make the underfunding about $3.4 million, which is actually less than the $3.8 million that you currently have recorded on your balance sheet …

“It depends on what the directors do with the $4.6 million sitting in the fiduciary fund, but potentially there will be a big hit on your balance sheet when GASB 68 requires the recording of the liability …”

Chief Financial Officer Brian Bond noted that funds placed in the fiduciary fund are earning more interest than funds in the pension fund.

“So we have funds at BMO Harris, where the defined-benefit pension plan assets resided, and those funds became very liquid. At one point, we had planned on paying out everyone on that plan …We’re getting .01 percent (interest) on the assets there. We have other funds that have come in through the pension fund that we keep at Pulaski Bank, invested through the CDARS (Certificate of Deposit Account Registry Service) program, where they’re earning about 50 basis points, as opposed to .01. So we’re earning more interest at Pulaski than we would have earned at BMO Harris …”

The district’s 2014 blended tax rate of 71 cents per $100 of assessed valuation was “the lowest tax rate of all fire districts in St. Louis County for the ninth year in a row,” the report states.

The report highlighted several upgrades in service during 2014, including:

• “2014 represented the first full year after the district transitioned to a new emergency dispatching center and recognized substantial technological upgrades related to Advanced Vehicle Locator — AVL — and Mobile Data Terminal — MDT. AVL service utilizes global-positioning-system technology and allows the closest available unit to be dispatched based upon location, versus using a system of designated areas of response. MDT service provides electronically transmitted, real-time patient-information updates to the crews while responding to the call.”

• “The district continues to purchase a new ambulance each year and provides the largest ambulance service of all fire districts in St. Louis County. 2014 represented the second full year of the district’s modified-staffing model to provide a sixth ambulance in service, improving response times for emergency medical services.”

• “The district was the first fire district in St. Louis County to implement a physical abilities test to verify an employee’s physical aptitude for firefighting responsibilities. The district mandates successful completion of this test for continued employment.”

• “The district’s child safety seat program implemented in 2006 has installed over 1,600 safety seats at no cost to residents.”

During 2014, board Chairman Aaron Hilmer was paid $1,850, board Treasurer Bonnie Stegman was paid $1,850 and board Secretary Ed Ryan was paid $1,800 — a total of $5,500.

“I think your directors’ fees are probably the lowest of any district in the county — about $1,800 per director,” Offerman said.