Rough and Ready Fire Protection District is in dire financial straits, according to auditor reports and the District Board. Following several special meetings, a clearer picture is emerging of the financial situation and possible consequences. Also taking shape is a plan to move forward.
The district’s budget for July 2021 through June 2022 shows income of $774,270.00 and expenses of $720,076.30. However, this does not account for accrued expenditures and late payments of past-due invoices. The budget income side also anticipates $285,560.00 in strike team payments. This income is not guaranteed as it depends on the occurrence of large fires in California and the availability of staff and apparatus to be assigned to a strike team.
The district’s voters approved a special assessment in 2019 “to provide an additional revenue source to supplement existing property tax revenues and other sources for the District beginning in Fiscal Year 2019-20.” The assessment provided additional revenues of $130,317.00 for the fiscal year 2021-2022.
Part-time Fire Chief Robb Rothenberger submitted his resignation to the Board of Directors last week, effective May 1st. The news became public during the district’s special meeting last Thursday. The only item on the agenda was “Review and discuss potential Financial Short Falls and Staffing of Station.” No decision was made, except to continue discussing the issues.
For now, the district has one Captain, one Lieutenant, three firefighters/EMT and two firefighters. The district provides 2-0 staffing on their engine, meaning two people are assigned to one engine.
Local 3800, representing the firefighters, attended Thursday’s meeting. Clayton Thomas, spokesperson for the union, told YubaNet, “We are very concerned about the fate of the firefighters and the district’s ability to respond to calls.” The union representatives will closely follow the upcoming meetings and negotiate with the district to protect the existing jobs or have the firefighters transfer to neighboring departments.
Today, Directors met in another special meeting at 10:00 am. After a closed session, they accepted the Chief’s resignation unanimously by a 4-0 vote (one director was absent.) No members of the public, except this reporter attended.
After the meeting, directors offered to answer questions and provide context for the budget shortfall. The prior administration of the district allegedly did not have solid bookkeeping and thus many invoices were left unpaid. When the district board became aware of the deficiencies, the current administrator took over. Cj Bryant is now the District Administrator and Clerk of the Board.
Directors Doug Wittler and Tom Nelson admitted that after paying all the past-due obligations, “we basically have a zero budget now.” Chairman Sheridan Loungway added the board is reaching out to neighboring fire districts and that residents of the district are still fully covered, be that through direct response by Rough and Ready or mutual aid from Penn Valley or Nevada County Consolidated. “We are not closing our doors.”
The District Board has reached out to Penn Valley Fire and will give a presentation at their upcoming meeting in May.
Meanwhile, the Directors will form a committee tasked with finding a way to achieve sustainability for the district. They are planning on reaching out to Nevada County, Penn Valley Fire and Nevada County Consolidated to be part of the committee.
Auditor’s report shows material weakness
The district’s independent auditor submitted report for the past fiscal year and noted a number of ongoing issues with the district’s finances. The report for the fiscal year ending on June 30, 2021 contains the following comments:
- At the time of our audit, we noted that the financial statements as presented to us for audit contained misstatements in accounts payable, salaries and benefits payable, and expenditures that required adjustment.
- For the year ended June 30, 2021, we noted that the District incurred expenditures in excess of appropriations of $322,381 in the General Fund.
- The financial statements as presented to us contained misstatements and required adjustment.
Condition – There is an absence of segregation of duties consistent with control objectives.
Cause – The District has limited office staff.
Effect – The District’s internal control procedures do not include appropriate segregation of duties.
Questioned Cost – No questioned costs were identified as a result of our procedures.
This is a repeat of prior year finding 2020-002
Condition – During fieldwork, we noted that the District did not file payroll tax returns for the quarters ending September 30, 2020, December 31, 2020, March 31, 2021, and June 30, 2021, until August 2021.
Cause – The District did not have procedures in place to prevent the late filing of payroll tax returns
Effect – The District did not file the September 30, 2020, December 31, 2020, March 31, 2021, and June 30, 2021 payroll tax returns by the established due dates.
This is a repeat of prior year finding 2020-004.
The Board of Directors is working on procedures to correct the deficiencies and come into compliance with applicable laws and standards. The auditors also recommended the district obtain a loan to pay the full amount of liabilities as soon as the loan was approved. The District agreed and now has a mortgage backed loan to cover all past liabilities, in their entirety, including the interest and penalties. The firehouse serves as the guarantee for the loan.
The Board’s next regular meeting is set for Tuesday, May 10th at 6:30 pm.