Rodeo Hercules Fire District Fiscal Year 2014/15 Annual Operating Budget

RHFD  5 Year Financial Condition  Property tax revenues declined primarily due to redevelopment diversions, state take-a-ways and lower assessed valuations.  Declining revenues, restrictions on raising tax rates and fee structures limits the District ability to enhance funding levels.  Percentage of ad valorem (tax) received and benefit assessment in the Fire District is among the lowest in Contra Costa County.  Currently a structural deficit exists and there is still an overall budget reduction of $1.1 Million from FY 08/09 in FY 13/14.  General Fund shortfalls were augmented from District reserves. Pride Excellence Professionalism

RHFD  Overview  Design (Integrated)  Program  Line item  Project  Oversight (Supervision)  Established budget limits  Review intra-fund transfers  Overall performance  Monitor departmental efficiencies  Priorities determined from central vantage point

Pride Excellence Professionalism RHFD  Revenue  Major Categories  Property Tax  Benefit Assessment  Minor Categories  Measure H  City of Hercules  Fees  Public/Private Grants  Permits  LAIF Investments

RHFD 2013/2014  Financial Condition*  ERAF Shift  Historical Loss ($15,150,000)  2013/14 ($1,025,000)  Property Tax Revenue (Hercules “Former” RDA)  Historical Loss ($9.1M)  2013/14 ($928K)  Revenue Shift  Revenue Shift 2013/14 ($1.75 M)  Property Tax Revenue  2013/14 ($3M)  Benefit Assessment  Est. 2013/14 – ($1.338 M)  Other  2013/14 ($488,752) Pride Excellence Professionalism *Estimated secured taxes without anticipated new revenue

RHFD 7 Year GF Budget Regression  FY – $6.1Reserve – 2.9  FY – $5.5Reserve – 2.2  FY – $5.2Reserve – 1.6  FY – $5.1Reserve – 1.1*  FY – $4.9Reserve – 1.3  FY – $5.0Reserve – 1.3  FY – $5.3**Reserve – 1.1*** *BOD mid year adjustment to maintain Station 75 **Does not include SAFER Grant ***Includes 2014 Special Benefit Assessment

RHFD 2014/2015 Expenditures 13/14Anticipated Expenditures 14/15 GF & Capital Budget $5.2MGF & Capital Budget $5.57M Salary & Benefits $4.2M*Salary & Benefits $4.5M** Operations & Maintenance $822KOperations & Maintenance $838K Capital Improvement $144KCapital Improvement $232K Financial Condition Annual Deficit $00KAnnual Deficit ($968K) Net Annual OPEB Obligation $1.25MNet Annual OPEB Obligation $958K Fund Balance $1,062,000Fund Balance $1.1M*** Budget Shortfall $1MBudget Shortfall $1.4 *BOD authorized Station 75 closure**SAFER funding not included ***Includes Benefit Assessment Pride Excellence Professionalism

Deficit Reduction 2011/122012/13 Revenue – $4.8 MRevenue – $4.9 M Expenditures – $5.3 MExpenditures – 4.7 M Deficit – ($550K)* *BOD authorization to staff E75 Deficit – (+) $180,000

Deficit Reduction 2012/132013/14 Revenue – $4.9MRevenue – $5.0 M Expenditures – $4.7 MExpenditures – 5.0 M Deficit – (+) $180,000Deficit – $00

Deficit Reduction 2013/142014/15 Revenue – $5.0 MRevenue – $4.37 M* Expenditures – 5.0 MExpenditures – $5.6 M Deficit – $00Deficit – ($1.1M) *P66 reassessment and RDA

RHFD 2014/2015  Budget Highlights  Increase in workforce (9 positions)*  Funding for 23 employees**  Communications/EBRCS (Dispatch)  CCCERA  New Apparatus/Equipment  Employee contribution to OPEB  Oil Fire School  Fire Prevention Activities *SAFER Grant **ASO Position Defunded Pride Excellence Professionalism

RHFD 2014/2015 Financial Stabilization Plan Measures were implemented to increase regional cooperation, produce efficiencies, reduce the deficit or enhance revenues prior to the adoption of the plan. Some of these actions and proposed actions included:  Fire Station Closure  Labor Concessions  PEPRA – Normal Rate Contribution  Grant Funding/Public Private Partnerships  Pinole Fire Department Contract*  Revenue Measure  Lease Purchase  Fee Structure  Strategic/Business Plan (*Ended July 2013) Pride Excellence Professionalism

OUTLOOK Additional revenue streams and efficiencies are necessary to protect the erosion of the Fire District’s tax base due to declining revenue, economic considerations and state fiscal emergency impacts. Last year’s activities were the first steps towards the introduction of a Strategic Plan intended to guide the future of the district. Looking to FY look forward to :  Continue Implementation of Business Plan Initiatives  Continue cooperation with rank and file  Grant funding to hire new firefighters  Exploring additional public/private partnerships  Revenue measure  Additional development in Hercules  Redistribution of Measure H Funding  ROPS Payment  Expanding community outreach  District Master Plan Pride Excellence Professionalism

CHALLENGES Additional revenue streams and efficiencies are hampered due to the reassessment of the Phillips 66 Refinery, the impacts of Senate Bill 535, diversion of Prop 172 monies to offset ERAF, additional losses to the former redevelopment agency. Prospects of restoring lost services and maintaining an all-risk full service agency are grim. Struggles ahead include:  Maintaining Station 75 after SAFER grant funding is depleted  Providing fire protection  Continued cooperation with rank and file  Developing a “Contract Service Model”  Lack of Administration and support functions  Developing alternative revenue streams  Additional development in Hercules  Replenishing reserves  Authoring legislation  Deferred maintenance  Cost increases Pride Excellence Professionalism