Varna Volunteer Fire Company

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Varna Volunteer Fire Company

• 2006 Budget Conversation with the Town of Dryden
  Board
• June 8, 2006 (Thursday)

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Accountability over time

• Our conversation over time demands
• Point-in-time accountability.
• Calculations independent of individuals.
• Understanding our budgets three main components
  allows for
• More precise focus on changes in our environment
  and associated expenses.
• The subsequent financial choices required.

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Three components of the VVFC budget
Characteristics

• OperationsLine-by-line detail.Annual timeline.
• Miscellaneous Capital EquipmentItem-by-item
  detail.5 - 25 year timeline (amortized).
• Truck replacement scheduleTruck-by-truck
  detail.10 20 year timeline (amortized).

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Three components of the VVFC budget Distributions
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Three components of the VVFC budget Transparency

• Each of the three budget components allow for
  timely feedback, before crisis.
• Results in accountability over time, calculations
  independent of individuals.
• Pattern Budget gt Learn from actual expenses gt
  Timely adjustments in expenditures and/ or budget
  request.

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1. Operations.

• Line-by-line detail.
• Annual timeline.
• Examples
• Fuel costs jumped up this year, obviously.
• Health and Training New members and higher
  standards.
• Personal protective equipment To zero.

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The long view budget approach normalizes expenses
over time and reduces financial crises.

• Item specifically detailedIs it needed?
  Alternatives?
• Expense of item regularly reviewedHas price
  gone up or down, compared to 6?
• Expected lifespan of itemKey to spreading
  payments over time, without paying interest
  charges.

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2. Miscellaneous Capital Equipment.

• Item-by-item detail.
• 5 - 25 year timeline.
• Greater accountability than simple one time
  appeals. And spreads costs out more evenly over
  time.
• Examples
• Firefighter envelopes.
• Cascades.
• 911 Radio reserves.

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3. Truck replacement schedule.

• Truck-by-truck detail.
• 10 20 year timeline.
• 2004 and 2005 371,000 truck.2006 120,000
  truck.All cash (No loans).
• HoweverIn six AND twelve years Cash crisis.

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3. Truck replacement scheduleFuture Cash Crisis
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3. Truck replacement schedule Considerations

• Depth and breadth of our current truck fleet is
  necessary now and in future.
• Their rate of inflation has been about 6
  annually, on the nose.
• These trucks are expensive and have a limited
  lifespan. They represent a substantial amount of
  our annual budget, amortized over time.

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3. Truck replacement schedule Which status quo?

• Our current funding model is to set aside
  sufficient funds to avoid costs of borrowing and
  avoid spikes in funding requests.
• If we want to maintain this model, we need to
  make a course-adjustment now to avert a problem
  in six years.

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3. Truck replacement schedule How much?

• 14,661, if started in 2007.
• That is, 65,170 instead of 50,509 for 2007.
• Concurrent with decision to eliminate antiquated
  5,000 matching funds program.
• Status quo 6 of 2007s amount thereafter.
• Averts future shortfalls102,247 shortfall in
  2012.185,479 shortfall in 2018.

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3. Truck replacement schedule Choices, over time
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Discussion

• Next steps?

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Thank you!

• www.varnafire.org/budget