Fire department flying well below accountability radar

Originally published in the Texarkana Gazette and on writeforarkansas.org on Oct. 3, 2011.
 
Several million dollars in local tax revenue has been paid to Miller County Rural Volunteer Fire Department over the past three decades with virtually no oversight and in possible violation of the Arkansas Constitution.

Since 2002, the department has received more than $1.7 million through countywide sales and property taxes, according to county treasurer’s records. At least that much was disbursed since tax funds were first allocated to the department by voters in 1978.

Records from years prior to 2002 are in storage at Miller County Courthouse and were not readily accessible.


Left alone 
What happens to the tax money after it leaves the courthouse has been entirely up to the fire department.

County officials have always kept the fire department at arm’s length, and not just in financial matters, said Miller County Rural chairman George Goynes, who has served on the department for 10 years. Members of the department have sought help from the county for guidance and to help solve organizational problems and quell internal divisions, Goynes said.

“The county really never has wanted to help us in any way,” he said. “They pretty well just left us alone and let us do what we wanted to do.”

In the meantime, the department has become, in many ways, a broken organization, at least when it comes to making decisions and working together away from a fire scene.

Miller County Rural board meetings are often diverted by lengthy arguments about the contents of the department’s bylaws, the revision of which has been stalled for more than two years. Board members frequently take thinly veiled jabs at each other during meetings.

Debate extends even to the department’s correct name. The department is known either as Miller County VFD, as the name appears on its monthly tax check, or Miller County Rural VFD, the name under which the department filed as a nonprofit with the Arkansas Secretary of State in 2004 and which is used by the department when referring to itself.

Expenditures are approved by a majority vote of the board, which consists of two representatives from each of the nine stations, and audited by Secretary/ Treasurer Sue Green, but this arrangement has not always been adequate.

A review of fire department records by the Gazette has revealed that thousands of dollars have been questionably spent over the past decade.

Recently, a former station chief was paid more than $20,000 for storing trucks and equipment at his home for five years, and more than $3,000 in fuel was improperly purchased on a department credit card.

Part of the county? 
The fire department’s relationship with the county is complicated, and confusion extends to the most basic questions.

It remains a topic of debate as to whether the department is even part of MIller County.

“It’s got to be some type of county entity in order to receive the (tax) funds, so, yes, it’s a county entity,” said Justice of the Peace Dean Langdon, who chairs the Quorum Court’s volunteer fire department committee.

In practice, however, it’s not so clear.

County departments are included in the county budget, and their expenditures are ultimately overseen and approved by the Quorum Court.

With the fire department, county officials have no control of its sales and property tax money once the monthly check leaves Miller County Courthouse. In that respect, the department is treated more like Miller County’s school or levy districts, whose tax funds pass through but are untouched by the county, said Miller County Treasurer Ronnie Baird.

“It’s not like county funds at all,” he said.

And while the finances of all county departments are included in regular reviews by state auditors, fire department records have not been audited until this year, a report for which has not yet been issued.

The department was clearly not a part of the county in the mid-1970s, when residents of Bright Star, Mandeville and a handful of other communities began organizing themselves into loose fire department, offering fire protection for the first time to rural areas.

“We started organizing because we realized that out there in the county, there wasn’t any fire protection,” said Alice Yeager, who helped found Mandeville Volunteer Fire Department with her late husband, James Yeager.

The early years were lean, Yeager said. The departments scraped together operating funds from fundraisers, donations and, often, their own pockets and made do with hand-me-down trucks and equipment. Fire calls were dispatched by phone.

In late 1977, the chiefs of six volunteer departments in the county approached County Judge Sam Rose seeking financial help from the county, according to minutes from Quorum Court meetings from the period.

Rose established a volunteer fire department committee to consider the county’s options. The Quorum Court put a one-mil property tax on the November 1978 ballot, which was subsequently approved by voters, to fund the department.

In 2010, the department received nearly $90,000 in property tax revenue.

A bigger chunk of funding came in 1988, when voters approved a one-cent sales tax, 3 percent of which funded the county’s volunteer department. The rest was divided between Fouke, Texarkana, Garland City and other county funds.

In recent year’s, the department’s annual share of county sales taxes has averaged about $120,000.

Nothing in writing 
Despite the tax allocations and subsequent coverage of fire department personnel and equipment under county insurance policies, Miller County Rural has apparently never been established as part of the county.

“I know when I came in, they just kept on doing whatever they had been doing in the past,” said former County Judge Roy John McNatt, who left office last year.

Hubert Easley, his predecessor, took a similar approach.

“It all went so good during my time that I never did (look into it),” said Hubert Easley, McNatt’s predecessor.

In June 1988, just before putting the fire department on the ballot in the coming sales tax election, the Quorum Court issued a resolution “recognizing the existence” of nine county fire departments and noting “the importance of rural fire protection.”

That’s as close as the department has come to being officially recognized as part of Miller County.

“For years, we have tried to get (the Quorum Court) to tell us we are a county entity,” Goynes said. “Every time we’d get to talking to them, they’d say ‘Yeah, you are because you get tax money,’ but we never could get anything in writing anywhere that says we are.”

The lack of formal inclusion in county government and Quorum Court oversight puts Miller County Rural’s tax receipts in apparent violation of the Arkansas Constitution, which prohibits giving tax funds to private entities.

Miller County Rural was an independent organization when it first started receiving tax money in the 1970s, and a review of county records produced no evidence that the Quorum Court took any action to change this.

Wouldn’t interfere 
Concerns about the department’s organization and receipt of tax revenue have arisen in the past.

Jerry Sewell, who owns Pier 27 restaurant near Doddridge, served as a justice of the peace for eight year, leaving office at the end of 2000.

He researched the department and asked Easley, the county judge at the time, to form a volunteer fire department committee, which had stopped meeting after the one-mil tax was passed in 1978.

Sewell became chairman of the five-person committee, which was reestablished in July 1997 and included three additional justices of the peace and current Prosecuting Attorney Carlton Jones, who was then a deputy prosecutor.

Sewell said it became clear that the fire department was receiving “a lot of damn money” with no checks on how it was spent.

It didn’t take long for Jones to reach a similar conclusion.

In a letter dated dated Aug. 7, 1997, and sent to Easley and the Quorum Court, Jones wrote that there was virtually no oversight of Miller County Rural’s expenditures.

“This is what needs to be corrected and is not meant to imply any wrongdoing on the part of the local volunteer fire departments,” Jones wrote. “In the expenditure of public funds, the legislative body (Quorum Court) should be involved.”

There are myriad ways for fire departments to organize under Arkansas law—as independent nonprofits that collect voluntary membership dues or as fire protection districts formed by a petition and popular vote and funded by a levy on property within the district, among other options.

The receipt of county tax funds, however, limits the options.

It’s unclear exactly how many counties in Arkansas provide rural fire departments with sales or property tax revenue.

Charles Gangluff, director of the Rural Fire Protection Program for Arkansas Association of Resource Conservation and Development Councils, knows of at least a half dozen that allocate some degree of funding.

Volunteer fire departments in Conway County, where Gangluff is a chief, receive about $700,000 per year in tax funds. Every expenditure, from utility bills to fire trucks, goes through the county courthouse.

“We’re kind of like the county sheriff’s office or the county road department, but we are the county fire department,” Gangluff said.

In his 1997 letter, Jones outlined two options that would bring the fire department’s funding in line with state law and more closely resemble the setup in Conway County. The Quorum Court could have voted either to establish a countywide fire department under the direct control of the county judge; or establish a five-member administrative board, members of which would be appointed by the county judge pending confirmation by the Quorum Court.

“To implement either of these options, ordinances would have to be passed to establish an appropriate and definite procedure,” Jones wrote.

Sewell said the Quorum Court was waiting to see how fire department revenue would be affected by the flurry of annexation by Texarkana, Ark., in the late 1990s.

But no ordinance was ever drafted or passed, and the issue was set aside.

Easley doesn’t remember Jones’ letter but said the department was operationally and financially sound during his time as judge.

“I remember some stuff come up one time, but myself and others figured they’re doing such a good job, we just wouldn’t interfere,” he said.

Sewell disagrees. He said he would have continued to push for greater Quorum Court involvement in the fire department, but his wife’s health caused him to leave his post at the end of 2000.

“If I’d have stayed on there, they’d have been put on a budget,” Sewell said.

Stuck in limbo
But the county’s inaction has prompted a more immediate concern.

Miller County Rural has more than $160,000 in state insurance turnback, or Act 833, funding that has gone unclaimed for three years.

To access the funds, the department must submit its annual application, last completed in 2007, showing that all pump and hose tests are up-to-date and providing receipts showing about $175,000 in previously allocated funds have been spent.

Miller County Rural’s Act 833 coordinator Michael Cornett said the department can do all those things but is awaiting a resolution by the Quorum Court recognizing the department as a single department with nine stations rather than nine individual departments.

The Arkansas Fire Training Academy has requested the resolution before it swaps the nine Fire Department ID numbers previously issued to individual stations for a single, countywide FDID number.

All nine chiefs signed a document earlier this year promising to give up their station’s FDID number.

Several chiefs later retracted their support for a single FDID number. Langdon said he is worried that the switch could reduce the number of grants available to the fire department.

“I need to do more research … before I propose (to the full Quorum Court) how to identify the fire department,” he said.

Langdon also said that the Quorum Court will begin requiring the fire department to submit an annual report showing how Act 833 funds from the previous year were spent.

Under Arkansas law, quorum courts are required to file the reports with the County Clerk’s Office, the Arkansas Department of Emergency Management and state auditor by Jan. 15 each year in order to receive Act 833 funds.

There is no record that this has ever happened in Miller County since the Act 833 program was instituted in 1991, though this never stopped funding from being released.

For now, however, there are no expenditures to report, and the $160,000 awaiting Miller County remains unclaimed.

“We’re just stuck in limbo. … The holdup now is the Quorum Court,” Cornett said at a September board meeting.

Nothing that can’t be fixed 
Miller County Judge Larry Burgess, who took office in January, said it’s clear that Miller County Rural has been in organizational turmoil for a long time.

“I was told … if you care about your political career, let them handle their own problems,” he said.

Burgess has been attending the department’s monthly board meetings for more than a year and has pledged to oversee a reform of the fire department. Goynes said Burgess’ determination is a refreshing break with the past.

“Overall, he seems to be sincere and honest in what he wants to do in trying to help us out,” he said.

Burgess took the first major step toward that goal last month when he named Larry Pritchett as fire services coordinator. Pritchett is a 22-year veteran of Texarkana, Ark., Fire Department and deputy director of Miller County’s Office of Emergency Management.

Pritchett said he is still familiarizing himself with the department and hasn’t yet formulated any specific goals. e is optimistic the department can work through its current issues and emerge as a stronger department with a Class 7 ISO rating, which could save homeowners hundreds of dollars per year in insurance premiums.

Burgess, too, is hopeful.

“There’s nothing that can’t be fixed. I just want to fix it right,” he said.