A local fire district made progress paying down debt, decreased spending and increased its net position in 2013 but criticisms persist.
The Emergency Services District No. 2 and its 11 rural fire departments received high marks from independent auditors for 2013. However, lingering questions about potential problems within its policy and procedures and reimbursements remain.
ESD No. 2 includes Arp, Bullard, Chapel Hill, Dixie, Flint-Gresham, Jackson Heights, Noonday, Red Springs, Troup, Whitehouse and Winona volunteer fire departments. The five-member district board sets the entity’s tax rate and budget and monitors district revenues, assets and expenses.
The audit showed more than $4.2 million net position for the district, which includes more than $9 million in total assets and $4.8 million in total liabilities. The audit showed a fund balance of more than $2 million, up more than $200,000 than last year and that the district brought in $1 million more than it spent.
The decrease was due to lower department reimbursements and a $200,000 early loan payment penalty.
Board president Randy Melton said the board made it a priority to address deficiencies listed in the past two audit reports, which included setting policies and accounting controls to protect taxpayer dollars.
“We’ve come a long way in the past year,” Melton said. “There are still some issues but we’re headed in the right direction.”
Melton said the board is concentrating on addressing ongoing concerns about reimbursements to departments covering northern Cherokee County.
He also said departments are also preparing for a long-awaited, district-wide assessment of its “hauled water” capabilities, which would affect Insurance Services Office ratings in more rural areas. Reducing ratings translates into possible insurance premium reductions for homeowners.
In 2010, departments received assessments of their “hydranted” capabilities, which included areas within five miles of fire stations and 1,000 feet from a fire hydrant. Non-hydranted/water haul areas include those where hauling water to fire scenes is necessary.
Board member Robert Dear said he hates to be a critical voice among members appointed to oversee district dealings, but he will continue to point at what he believes are “concerns.”
Dear has been critical of the Cherokee County coverage, which by his estimates cost Smith County taxpayers more than $100,000 each year without reimbursement.
He said he considers hiring former Tyler Fire Department District Chief Terry Rozell, who was also Dixie Fire Chief until taking the post, a conflict of interest and against state law because he said Rozell maintains active involvement on fire scenes.
“He’s a very competent man, but you’re not supposed to put the fox in charge of the hen house,” Dear said.
Rozell said his record, as a fire fighter and the district’s operations manager, speaks for itself and saw no need to respond further to Dear’s comment. He said the audit shows the district is moving forward and financially responsible.
Board treasurer Bill Bellenfant said the level of financial checks and balances and responsibility is improving annually and that residents should be confident departments and the board want to provide the service at the best possible price.
Bellenfant said past boards acted bravely to purchase new equipment, which meant borrowing millions of dollars. He said those purchases are paying dividends now by reducing maintenance costs and improving emergency responses.
Despite progress, Dear said the “good ol‘ boy” system continues within the district at the expense of Smith County taxpayers.
“The district provides a much needed service to Smith County, there’s no doubt, and I’d like to talk about the positives but I can’t ignore the problems,” he said.
The district has experienced varying degrees of tumult since its 2007 voter-approved inception. Questions have been raised about individual departments’ spending, undocumented reimbursements, construction projects moving forward without adherence to state procurement laws and procedures, and questionable purchases.
The board membership has also experienced more than a dozen premature exits since 2010, via resignation or removal by Smith County Commissioners, which appoints its members. Board positions are expected to be elected in November, after a state law created single-member districts for the two Emergency Services Districts in Smith County.