A decision to voluntarily roll back the Mehlville Fire Protection District’s tax rate by levying only four cents of a voter-approved 33-cent tax-rate increase saved the district’s taxpayers $4.576 million, according to the district’s Comprehensive Annual Financial Report for the fiscal year that ended Dec. 31.

“Beginning in April 2005, the current administration diligently examined the entire operations of the district and adopted innovative cost-saving policies and procedures,” the report states. “By reducing our alarm fund tax levy by four cents and then levying four cents or 13 percent of the Prop S voter-approved 33-cent tax levy in the general fund, we succeeded with no tax increase from last year.

“The four cents is earmarked for future capital outlays. As a result, the original budgeted tax-rate levy of $1.19 was amended drastically to reflect the major voluntary reduction in the property-tax levy to 86 cents,” the report states.

Voters in November 2004 approved Proposition S — a 33-cent tax-rate increase designed to address the fire district’s needs for the next five years.

The 36.5-percent tax-rate increase was formulated by the Fire District Advisory Committee for Tomorrow’s Emergency Services, or FACTS, during a two-month public engagement process that involved about 100 district residents.

As proposed, the tax-rate increase would be used for replacing older ambulances and medical and fire equipment, keeping district employees’ salaries comparable to other districts, repairing and replacing worn-out buildings and providing up-to-date training for firefighters and paramedics, according to the resolution that placed the measure on the ballot.

But board members voted 2-1 last August to establish the tax rate at 86 cents with board Chairman Aaron Hilmer and Treasurer Bonnie Stegman in favor and Secretary Dan Ottoline opposed.

The Comprehensive Annual Financial Report for fiscal 2005 was presented last week to the district’s Board of Directors by Comptroller Jeff Geisler, whose resignation was accepted by the board during a June 13 closed session, and Robert Offer-man of Hochschild, Bloom & Co.

The 2005 Comprehensive Annual Finan-cial Report includes an audit performed by Hochschild, Bloom & Co. that gave the district an “unqualified opinion” on its financial statements, which is the best opinion that can be given. Furthermore, the district also received for the eighth consecutive year a Certificate of Achievement for Excellence in Financial Report-ing for its 2004 report from the Government Finance Officers Association. The district plans to submit the 2005 report, which was accepted with a unanimous vote of the board, to the Government Finance Officers Association for qualification for a certificate.

The report notes that one budget amendment for fiscal 2005 was adopted by the board. Besides saving taxpayers $4.576 million by reducing the alarm fund tax levy by four cents and then levying four cents of the voter-approved 33-cent tax levy, “operating transfers out were decreased by $1,333,640 mostly for the same reason.”

Other differences between the 2005 original budget and the final approved budget include:

• A $265,138 increase in other revenues due to higher-than-expected investment earnings, building permits, rents and a Federal Emergency Management Agency grant.

• A $1,455,298 decrease in personnel costs mostly from removing the Proposition S staffing models and having employees pay part of their health insurance premiums.

• A $8,760 decrease in administrative costs due to a voluntary reduction in pay for members of the Board of Directors and lower office expenditures.

• A $24,999 decrease in training and education costs due to removing the Proposition S-funded newsletter.

• A $23,728 decrease in professional fees mostly due to changing law firms with lower rates.

• A $227,842 decrease in outlays due to postponement of purchasing new vehicles. “In contrast, there were additions for FEMA grant-equipment purchases.”

During 2005, the district’s general fund balance increased by $199,444 or 1 percent.

“As of Dec. 31, 2005, (the) unreserved and undesignated fund balance of the general fund was $13,562,515, while total fund balance reached $15,160,158 … (The) unreserved fund balance represents 128 percent of current and debt-service expenditures and total fund balance also represents 144 percent of that same amount,” the report states.

During 2005, the district’s ambulance fund balance increased by $971,346 or 18 percent, to $6,281,356 — all of it unreserved and undesignated.

Key factors in the growth of the ambulance fund, the report states, include increased property-tax revenue and investment earnings. Also, revenue from medical transports increased by $315,110 or 20 percent from the previous year.

“Additionally, there were decreases in total personnel costs from changes to our staffing models. In contrast, there were increases in capital outlays for a new ambulance and a new firehouse,” the report states.

For compensated absences, including vacation and sick-leave benefits, the district reported total liabilities of $3,516,656, according to the 2005 audit report.

“The district grants vacation to all employees at a rate based on years of experience and employees are scheduled to take vacation in the following year. In the event of termination, an employee is reimbursed for accumulated vacation days,” the audit stated. “The liability for accrued vacation at Dec. 31, 2005, amounted to $1,152,608.

“The district also grants sick leave to all employees. Sick-leave days are earned at various rates, depending on the employee’s classification and the amount of sick leave already accumulated by the employee. Upon termination of employment due to retirement or other reasons, one-third to 100 percent of the balance is paid to the employee at the rate of pay at which the amounts were accumulated.

“The amount paid depends on the number of service years attained and the reason for termination. The $2,364,048 liability for accumulated sick leave at Dec. 31, 2005, is reflected at the present value of such benefits discounted at 5 percent to 6 percent,” the audit report states.

During 2005, the district’s long-term debt decreased by $693,775 due to the net effect of decreased sick-leave benefits and the refinancing of bond-like certificates issued in 2000 to fund the expansion and renovation of the district’s No. 5 firehouse and administrative headquarters on Mueller Road in Green Park.

The report and audit also addressed the district’s pension fund, which is funded by tax dollars and the return on investments. Employees do not contribute to the plan.

“The district’s defined-benefit plan has been under significant scrutiny as the costs of the benefits have become higher than acceptable and are projected to continue to significantly increase. As a result, on March 16, 2006, the plan was amended, terminated and then replaced with a defined-contribution pension plan. These pension program changes are being contested through the court system, creating additional uncertainty for plan costs in the future,” the report states.

During his discussion of the audit, Offerman said the district’s defined-benefit plan had assets of $38,046,481 on an actuarial basis and actuarial accrued liabilities of $43,378,524.

“So the district’s pension fund had a deficiency of about $5.3 million,” he said, later noting the pension fund is 87 percent funded.

In 2000, the unfunded actuarial accrued liability for the pension plan totaled $730,472, according to the audit. For 2005, the unfunded actuarial accrued liability totaled $5,332,043, according to the audit.

During 2005, the district’s investment in capital assets totaled roughly $2 million, including:

• Completion of a new firehouse at 3241 Lemay Ferry Road totaling $1,468,973.

• The purchase of three hydraulic rescue tool sets totaling $40,463.

• The purchase and installation of two new HP servers for the district’s network totaling $8,994.

• The acquisition of a 2005 Pierce Dash pumper and a 2005 Wheeled Coach ambulance for $496,433.

Under state law, the three members of the Board of Directors are reimbursed for attending board meetings.

The total cost to the fire protection district in 2005 was $10,469.

During 2005, former Chairman Tom O’Driscoll was paid $1,900, former Secretary David Gralike was paid $1,733 and Ottoline, who was treasurer and later secretary, was paid $2,978. Hilmer and Stegman, who were elected in April 2005, were paid $1,950 and $1,908, respectively.

Hilmer told the Call that while he was pleased with the audit, further changes are needed to reduce some of the district’s long-term debt.

The board chairman also hopes to reduce the district’s tax rate while expanding medical services.

Hilmer said, “While we were very pleased with some aspects of this audit, you have to realize that the reforms only had half a year to kick in. In 2006, we’ll be able to see the full effect of that. Seeing that, there’s some things we have to work on. The $1.1 million in liability for vacation is too high. We’re going to have to work to reform that. And also with the tax rate — we need to get this tax rate lower and we need to get this budget lower. We’re going to work on those things in July and set it (the tax rate) in August with a focus on spending more money on increasing our medical services to our community.”