MORAGA -- Rising pension costs and other expenses coupled with stagnant revenue has helped push the Moraga-Orinda Fire District's yearly budget deeper into the red.
Trustees last week approved the district's final 2012-13 general fund budget, which includes a shortfall of more than $800,000 despite a tiny spike in property tax revenue and a rebate of more than $200,000 from the county.
They also greenlighted the district's capital projects fund, which includes expenses of more than $2.3 million to rebuild Station 43 in Orinda and remodel Station 41 in Moraga.
Fire chief Randy Bradley told directors at the Sept. 19 board meeting that administrators are doing their best to maintain service despite a less-than-ideal financial picture. "We continue to struggle to balance the budget without reducing service levels," he said.
The district started the year's budgeting process with a $258,313 deficit carried over from the previous year after the board voted to balance the 2011-12 budget by dipping into reserves. This year, they've budgeted a $549,916 increase in pension contributions to the Contra Costa County Employee Retirement Association, which manages the fire district's post-employment benefits, and a $115,000 payment toward pension obligation bonds.
But the district's biggest expenses remain salaries and benefits, projected to cost nearly $14.3 million for 2012-13 -- up almost 2 percent from last year. That figure reflects increases in retirement costs, according to district data.
"Our budget is primarily salaries," the fire chief told directors before focusing on revenues, which include about $80,000 in property tax money.
Revenue also includes a one-time $226,311 credit from the county deriving from an appeals court ruling that requires Chevron to pay more than $27 million in additional property taxes. That money is being credited to some cities and special districts.
The chief also listed capital expenses, including station construction costs, $32,000 for a new fire prevention vehicle and $49,000 in tech upgrades.
Directors spent little time discussing the budget, explaining they had gone over it in detail during draft sessions and noted that the deficit was less than had been previously projected. Then they turned their attention to the district's draft long-range financial forecast, which maps out the next five years. Bradley has said the plan will help the district address its unfunded liabilities, but is not sharing details because of ongoing contract negotiations with firefighters.
The district has come under fire for its future unfunded liabilities, which some residents have estimated at around $700 million. Critics, some of whom question the veracity of the district's financials in general, recently authored a 90-page audit of the fire district, and at least one is questioning whether administrators should be budgeting more money to pay for this year's increased pension costs -- and cutting down on expenses such as fire station construction.
Bradley did not directly address the report, but following a resident's prompting, trustees asked him to come back with an analysis of any new information.