Presented here are a series of financial reports which display MOFD’s past, present and possible future financial health. While the District has its own version of these reports, we believe that the reports contained here paint a clearer picture.
MOFD’s main financial report is the 103 page CAFR (Comprehensive Annual Financial Report) which includes numerous tables and text regarding MOFD’s financial performance for the year. The two most significant reports are the balance sheet on page 12 and a summary of revenues and expenses on page 17. While the CAFR accounts for every dollar that comes into and is spent by MOFD, it does not give any indication of where MOFD has come from or where it is going to.
The following reports attempt to provide this information. They include:
* Revenue and Expense – The history of MOFD’s revenue and expenses from 2007 through this year. Expenses are segregated by Employment costs (85% of all expenses), other Operating Costs, and Capital Expenditures.
* Balance Sheet – A detail of the balance sheet as of June 30, 2018 and the history of MOFD’s assets and liabilities going back to 2010. These show MOFD’s total assets and liabilities ($245 million retirement plan liabilities) as opposed to the official GASB (Government Accounting Standards Board) version which shows only net values for the retirement plans. The current CAFR understates the pension liabilities by $20 million.
* Long Range Financial Projections – A twenty year projection of revenues, expenses and fund balances including a plan to fully fund MOFD’s retirement benefit plans and provide tens of millions of dollars for increased services such as wildfire prevention.
What these reports show is:
* 85 percent of all of MOFD’s revenue goes to employee compensation today, as it has for the past ten years, and most likely since MOFD was formed.
* Despite spending 85% of revenue on employee compensation, the employee retirement benefit plans are $78 million underfunded. MOFD should have spent MORE than 85% of revenues if it had wanted to pay out currently what their employees were costing. How much more? A separate analysis shows close to 100% of total revenues, leaving virtually no money for other operational expenses or capital improvements.
* Looking forward, if MOFD can constrain its employee’s salary increases to 3% per year after the current contract expires in 2021, it can pay down the $78 million in unfunded retirement plan liabilities AND accrue $140 million over the next 20 years which can be used for additional services to the community. Currently, the services provided to the community are six paramedic-firefighter response units stationed in five stations; the same service we were receiving in 1997 when MOFD was formed. Other than the Fire Marshall and a few aides hired to inspect properties for fire danger, the District spends nothing on proactive fire prevention.