Surprise: City of Edmonds gets $1.67 million bill from Fire District 1

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Fire District 1Nearly five years after the Edmonds City Council voted to contract with Snohomish County Fire District 1 to handle City of Edmonds fire services, the city has been hit with a $1.67 million bill covering retroactive pay raises for the Fire District’s union employees. Here’s the city announcement My Edmonds News received Tuesday morning:

Edmonds Mayor Dave Earling announced Tuesday that the City of Edmonds, together with the cities of Mountlake Terrace and Brier, has received word from Fire District 1 leadership that, pursuant to contracts with their union personnel, the cities now owe retroactive payment for represented employee pay raises accruing from 2013 and 2014. For the City of Edmonds the bill amounts to $1.67 million.

“While we had been expecting an eventual bill from the Fire District for this back-pay, we were definitely taken aback at the size of the bill,” remarked Mayor Earling, referring to provisions in the contract between the City and Fire District 1, resulting from the City’s 2009 decision to contract directly with the District for service, that allow for such a retroactive payment. The Mayor added: “we are currently working with Fire District 1 representatives and our attorneys to analyze the details of the requested payment in attempt to find any potential savings that could lower the final bill.”

The Mayor stated that he and his staff are exploring all options to be able to accommodate this new financial obligation, pointing out that this payment will definitely impact the City’s potential flexibility to accommodate new programs or initiatives in the 2015 budget.

Looking ahead, after this bill for back-pay has been dealt with, the City, along with its neighbors, will also need to include room in future budgets to accommodate Fire District personnel cost-of-living increases in future years.

17 COMMENTS

  1. Why would the amount be a surprise? Is someone on the city staff not being proactive in finding out, or is the Fire District not being open with this information? Doesn’t FD1 brief the staff and council at least once a year?

  2. Who is running our city? I’m wondering how a million dollar item could be missed and just all of a sudden pop up. It sounds like that white elephant in the room again

    Something very wrong. I find it a stretch to believe nobody in our government knew this was coming down the pike. unless of course you think 1.67 million is nothing. Who is running our city and who is not doing their job?! These questions need to be answered. Who is not doing their job?

  3. Had the cost of living increases been paid on time as opposed to retroactively, this would not be an issue. Why did we wait for the numbers to get so big?

  4. How does expecting an eventual bill for back pay go together with being taken aback by the size of the bill? Was no one aware of how much Edmonds was under contract to pay for 2013 and 2014? Wasn’t that anywhere in the budget? How could that be any kind of a surprise? It is not a “new” financial obligation of the City at all. Needing to accommodate it in the future is what wasn’t done to date apparently. Amazing. Simply amazFire protection isn’t optional, it must be paid for and should not come as any surprise if Edmonds has a contract with Fire District One. It is pretty darn basic.

  5. Back on August 11, 2011, Harry Gatjens wrote an article titled: Citizen Harry: Is change in City of Edmonds accounting found money? Shell game? Clarity?

    Here is the link:

    http://myedmondsnews.com/2011/08/citizen-harry-change-in-city-of-edmonds-accounting-found-money-shell-game-clarity/

    In his article Harry stated the following:

    The last method, and the one that has been used by the City of Edmonds, is called modified accrual accounting. This is used primarily by government organizations as an attempt to present as conservative an approach to financial condition as is possible. What this does is take the city’s cash minus its current liabilities (what it owes), with the difference being the working capital balance. The thought here is that cash is 100-percent solid and what an organization owes is 100-percent solid, but accounts receivable is less than 100-percent guaranteed because it depends on whether you collect it. In summary, this method takes into consideration all the money you owe, but does not include money owed to you until it is collected. This is the method Edmonds has used for a number of years.

    Assuming the City uses Modified Accrual Accounting, wouldn’t some type of liability or contingent liability have been recorded related to this obligation due Fire District 1?

    Maybe there was. Maybe Fire District 1 had the related receivable on its books. Hard to know without much research.

    I would hope our accounting records would have taken into consideration all the money Edmonds owed. Sounds like they didn’t and now we have a surprise.

    On August 11, 2014 we found out that the City of Edmonds financials breezed through the state audit for calendar year 2013.

    Here is that link:

    http://myedmondsnews.com/2014/08/city-edmonds-financials-breeze-state-audit/

    It will be interesting to find out if the State Auditor had anything to say about this liability that would have helped is imagine that a surprise might be coming.

    Following is information taken from the Washington State Auditor’s Office Audit of Fire District 1 for 2009:

    City of Edmonds Interlocal Agreement:

    On November 3, 2009 the District entered into an Interlocal agreement with the City of Edmonds for the provision of Fire and Emergency Medical Services to the citizens of Edmonds.

    The term of the agreement is from January 1, 2010 through December 31, 2030, automatically renewing under the same terms and conditions for successive, rolling five year periods unless terminated as provided in the agreement. Under the Edmonds contract, the City will pay the District an annual fee for service ($6,203,322 in 2010) and the District will assumes responsibility for staffing and operating Edmonds’ three fire stations. On January 1, 2010 all 54 Edmonds Fire Department employees became SCFD#1 employees. Additionally as called for in the agreement, the District purchased all of the City Fire Department’s rolling stock, attractive assets, onboard equipment, and non-built in, non-fixed fire station furnishings.

  6. Is no one from Edmonds on the FD1 Board? I’m very liberal, but we should be involved in the decision making for services like this. We should not have been in a position to be surprised.

  7. Let’s not turn this into an anti-union rant. People who provide vital services to us have earned the pay, and deserve cost of living increases. I wonder why the city was not anticipating the amount. Sounds like a lack of communication.

  8. Smells fishy…those who don’t want the anti-union rant must be unionists…so am I so fret not! Union Bosses do get richer when their members get richer…it still smells fishy…

  9. I’d like to hear more from the City on this issue. And I’m having trouble recalling if we’ve had 2 or 3 Finance Directors during this time frame.

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