By Randall Hanifen
Edge Contributor
As I browsed social media, I came across a statement that read, “The rich stay rich because they live like they are poor and the poor remain poor because they live like they are rich.” This resonated with me in that I am far from rich, but I live frugal to maintain a growing reserve fund. I also have noted in my career that many fire departments could use this advice. I have witnessed many well-to-do organizations living frugally to ensure they have funds in the future to maintain and build their service. I have noted others who – the minute that monies are allotted to them – start purchasing the latest toy or adding more lights to their staff car. So, what is a good balance?
Spending Strategically
We must make continual purchases in fire and rescue departments to ensure that we can continue to function. We have all seen departments that have the fanciest fire trucks, but only have one person on that truck. We have also noted departments that have apparatus held together by duct tape with five personnel who make the best money in the area.
Aligning the budget with strategic and budgetary plans will help ensure this misalignment does not occur. Each organization should have a comprehensive vehicle replacement plan that incorporates the cost versus benefit of keeping each vehicle. While many just randomly pick 15 years to keep a ladder truck, consistent tracking of mileage, hours, costs of maintenance and viability of reserve apparatus should all be factored into the schedules.
Fire and Rescue Departments Equipment Replacement Schedule
Fire and rescue departments should have equipment replacement schedules that incorporate the technology changes and deterioration from use. I have created a 5-year equipment replacement schedule for technology items (such as radios and thermal imaging cameras), a 10-year schedule for equipment with moving parts (such as hydraulic rescue tools and nozzles), and a 15-year limit on equipment with no moving parts (such as a Halligan bar or a shovel). While we may not replace equipment at these exact intervals, we should heavily review the items upon these pre-set deadlines to ensure that we do not have to make emergency purchases that can upset the budget in other areas of spending, such as apparatus and facilities.
All of these spending plans must help accompany strategic and operational plans. For instance, if you are planning to convert a percentage of your personnel from volunteer to paid or from part-time to career professionals, you will need to match the purchases with these conversions to ensure that you can afford all of the planned changes – and still have a reserve. As we all know, the best laid plans often have an unforeseen issue arise that can cost a great deal of money.
Financial Cycles
A strategic and fiscal plan that is not often discussed is the alignment of spending with the national economic cycle. While this should not have bearing on spending from a technical and logical stance, the emotional part of government leaders does come into play more often than anyone would like to admit. We saw in the economic downturn of 2009 that public sentiment towards well-paid law enforcement and fire personnel changed when citizens saw other members of the community being laid off or fired and having their homes taken on foreclosure. This was certainly not the time for fire and rescue departments to add personnel, purchase million-dollar ladder trucks or purchase the latest trinket.
Instead, we pushed purchases to later dates, downsized projects and became very conservative to ensure that layoffs were avoided. Understanding the national economic cycles is of great importance to the success of fulfilling your strategic and operational plans.
Communication and Input on Plans
As all government spending is subject to emotional thought processes of the elected and government officials, it is vitally important to have these people involved in your planning process. For example, knowing that movement of a fire station can cost upwards of $5 million but could save adding another station at a cost of $2 million a year allows the decision makers to understand the spending and how it supports the delivery of service rather than just spending on a new facility. It also helps when those approving the purchases have agreed to the service delivery model and approve the spending to support their idea.
In conclusion, nothing in life is free. The ability to pay our people on the upper end of the spectrum will equate to attracting and retaining the best employees, so it is imperative that we spend the 10-15% of what is left after payroll in a frugal and strategic way.
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