AD-HOC HAGGERTY & HAGGERTY REVIEW COMMITTEE

The Ad-Hoc Haggerty & Haggerty Review Committee meeting was held on October 30, 2008 at 6:00 p.m. with Council President Hogan presiding. Members present were Mrs. Williams, Mrs. Russell, Mr. Slavin, and Mrs. Mitchell (Controller/Treasurer). Representatives of the Dover Fire Department present were Mr. Don Bates (past Fire Chief), Mr. Jason Osika (past Fire Chief), Mr. Trey Small (Board of Directors), Mr. Brian Bashista (past Fire Chief), Mr. Charlie Boyer (past Fire Chief), Fire Chief David Carey, and Mr. Brian Hoyt (Board of Directors).

Review of Financial Procedures Recommended by Haggerty & Haggerty

During the Regular Legislative, Finance, and Administration Committee meeting of February 25, 2008, members were provided the Independent Accountant’s Report on Applying Agreed Upon Procedures pertaining to the Dover Fire Department prepared by Haggerty & Haggerty, Certified Public Accountants and Management Consultants. Members accepted the Report, with the understanding that the Fire Chief and Finance Director would report back to the committee within two (2) to four (4) weeks with a set of procedures that would be beneficial to all parties involved.

During the Regular Council Meeting of September 8, 2008, members approved the Legislative, Finance, and Administration Committee’s recommendations (from their meeting of August 25, 2008), as follows:

1)That negotiations continue between the Fire Department, including the Controller/Treasurer and Council, and that those members of Council participating be appointed by Council at their next meeting and be given authority to represent Council for a report back at a future meeting of the committee for a final resolution of this matter.

2)That the negotiating principles are the eight (8) points found on the action form submitted by the Controller/Treasurer.

3)That Option #1, to provide monthly payments to the fire department, be added as another point that can be considered during the negotiations.

Fire Chief Carey advised members that the Fire Department selected Mr. Bashista (former Fire Chief) to address members on their behalf.

Mr. Bashista introduced the members of the Fire Department and stated that their goal is to work with the City in an effort to develop an agreement. He stated that the members of the Fire Department understand fiscal accountability and transparency, which are fully supported by members in their operations and finances. He explained that the members of the Fire Department feel that they are unappreciated by the City as a whole. They feel that the current issue is the result of the desire for City staff to control the Fire Department. Mr. Bashista also indicated that as a result of statements made, firefighters feel that certain City employees do not understand what firefighters do, the sacrifices they make, and the true danger to their lives. The community faces serious emergency situations daily that involve the fire department and/or the police department. Although police officers are respected, it is felt that the firefighters are not given this same respect. With the event of the Haggerty & Haggerty Report, and apparent concern from Council and City staff, Mr. Bashista questioned what Council’s vision is for the Fire Department.

With regards to derogatory remarks, Council President Hogan stated that City staff members were threatened by the Fire Department and threats were made that the Fire Department would not respond to fires involving members of City Council. He suggested that the anger between the City and the Fire Department cease and that focus be placed on the issues. Council President Hogan stated that it is the desire of City Council that the Fire Department be subject to the same accounting controls as other City departments.

Responding, Mrs. Williams indicated that she does not agree with the Council President. It was her feeling that there is already too much government and noted that the Fire Department is an independent entity.

Mr. Slavin felt that there is more that unites the City with the Fire Department than divides it and he expressed his confidence that any issues can be resolved. It was his opinion that both the Fire Department and the City envision a world class Fire Department whose desire is to provide the best services for the community, including assurance for the safety of firefighters and citizens, and the best financial management.

Mrs. Mitchell stated that when an issue involves finances, her concern should not be considered personal and explained that when there are suspicious issues, she will confront individuals. She relayed her appreciation and pride in the members of the Robbins Hose Company for the services they provide.

Responding to Mr. Slavin regarding communication, Mr. Bashista stated that there is a question as to who the Fire Department should report to, explaining that on some occasions they are to report to the Controller/Treasurer, and others, the City Manager and/or City Council. He stated that this question creates problems. He stated that the Fire Department’s interpretation of the Dover Code requires the Fire Chief to report to City Council; therefore, it was his opinion that the Fire Chief should report directly to the Council President.

Mr. Bashista questioned why the Fire Chief would be required to answer to the Controller/Treasurer when both positions are appointed equally to perform a job. Mr. Slavin explained that although there is a chain of command for the City’s reporting system, there are often times when the reporting requires “sideways” reporting.

Responding to Council President Hogan, Mr. Bashista explained that the Board of Directors for the Robbins Hose Company is in charge of the finances for the Fire Department and it is the President’s responsibility to assure that the expenses of each committee are appropriate. He advised members that the Robbins Hose Company has a line item budget, like the City. He stated that the City’s budget for the Fire Department is the responsibility of the Fire Chief. Mr. Bashista stated that, although Ray Book and Son conducts a review of the finances of the Robbins Hose Company each year, members are considering having an audit required.

In response to Mr. Slavin, Mr. Bashista advised members that, in accordance with the By-Laws, the budget process begins in April of each year. The various committees set objectives and required purchases for the year, similar to the City. The committee chairs submit their requested budget to the treasurer of the Board of Directors and then the Board of Directors review the committee budgets to determine what items need to be eliminated and then the final budget is submitted back to the committee.

With regards to State requirements, Mr. Bashista stated that any purchase over $25,000 requires that three (3) bids be obtained. However, according to the By-laws, any purchase over $25,000 requires a 2/3 vote of the company membership and any purchase over $750 must be approved by the company membership.

Mrs. Williams expressed her opinion that there are many entities, including the State of Delaware, that are involved with purchases for the Fire Department, and that the Robbins Hose Company has established and instituted rules and regulations regarding purchases for the Fire Department. Concurring, Mr. Bashista stated that the City rules are redundant to the State.

Mr. Slavin stated that City Council recently instructed the budget team to investigate the possibility of setting up tools for a grant-in-aid process for the City of Dover and the Fire Department. Having a better understanding of the finances for the Fire Department, he stated that there is a combination of a grant-in-aid process, similar to the State of Delaware, to assure that there are safeguards in place. He explained that a part of the application process would be for the organization to explain their procedure processes, which would include By-Laws, financial policies, etc. It was his feeling that having this information suffices for the grant-in-aid process.

Referring to the financial procedures recommended by Haggerty & Haggerty, Mr. Bashista questioned why Council did not support Option #1. He reiterated that the Fire Department felt that Option #1 would streamline operations and assure transparent financial responsibility. Under Option #1, the Fire Department recommended the following: That all City employees under the Fire Department would continue under the City budget system. The intent of option #1, as written in the Haggerty & Haggerty Report, is for all operational monies to be distributed to the Fire Department in installments, similar to what other Fire Departments receive throughout the State of Delaware (grant-in-aid). An example of operation spending and funding would be for the purchase of coats, helmets, tools, etc. Mr. Bashista noted that the Robbins Hose Company budget includes $1.2M from the City of Dover and that if salaries were eliminated, this amount would be reduced to $600,000.

Responding to Council President Hogan, Mr. Bashista indicated that when a budgeted item is purchased by the Fire Department, the invoices are submitted to the City for processing, just like other City departments. Council President Hogan questioned why there would be a need to change this procedure. Mr. Bashista stated that the Fire Department feels that the concern is that there is a control issue. Disagreeing, Mrs. Mitchell explained that this matter involves following policy.

Mrs. Williams questioned what the Fire Department has planned for the funds, less salaries, in the amount of $600,000. Responding, Mr. Bashista stated that the vision of Option #1 would be for the Fire Department to request the $600,000 to be paid in quarterly payments, to be placed in a separate account from all Robbins Hose Company finances. In order to assure accountability and transparency, they would follow all State of Delaware purchasing guidelines, as currently required of all fire departments, submit to Council a monthly detailed report of all purchases and expenditures, a full audit each year with an opinion statement from a firm of the City’s choice on all transactions placed in the separate account. The Fire Department would request that the City provide a 5% cost of living adjustment each year, over and above the $600,000. At the end of each fiscal year, all monies remaining in the account would be returned to the City of Dover. Mr. Bashista advised members that Option #1 is a common practice among other governments in the State of Delaware, as well as other states. It provides centralized accountability and streamlines operations in order to continue to maintain and expand the Fire Department’s scope of services to the community, as they guarantee to continue fiscal responsibility and transparency.

Mr. Bashista indicated that Option #1 would create a cost savings for the City of Dover and make the Fire Department more responsible for the funding received from the City, stating that an example would be for the Fire Department to stay within their budget. Under this system, there would be no budget revisions or overages. He stated that the main objective for the Fire Department is to staff their equipment, provide the safest equipment, and keep the Fire Department as it is today - a volunteer fire company.

Mr. Slavin felt that the Fire Department has put a lot of thought and effort into the proposal and noted that the reference to Option #1, explained by Mr. Bashista, is actually a new version. Although he felt that the 5% COLA is a good idea, he suggested that the language include a “not less than” clause. He also felt that language should be included to allow for consideration of special capital expenditures. With reference to the return of any unused funds to the City, Mr. Slavin suggested that there are circumstances when it would be difficult to expend the funds within a 10 month period; therefore, noting that the State of Delaware allows for the expenditure of funds within two (2) years, he suggested that language be included to allow for funds to be retained for certain purchases.

With regards to the Haggerty & Haggerty Report, Council President Hogan stated that, although the Fire Department provided responses orally, he suggested that they provide a written response. Responding, Chief Carey indicated that the responses should have been included in the minutes of the Council meeting of September 8, 2008. It was also noted that a response letter was submitted to Haggerty & Haggerty.

Mr. Slavin suggested that there are two (2) issues to resolve during the next Ad-Hoc Meeting: 1) obtain the Haggerty and Haggerty letter in an effort to factor in some of the suggestions; and 2) review language for the Revised Option #1.

Mr. Bashista requested that Chief Carey or himself be notified of any concerns relayed by other members of Council in an effort to maintain an open relationship. He suggested that if there are any questions of other members of Council, that they be channeled in this manner and avoid e-mails and telephone calls.

It was suggested that the City Clerk schedule the next meeting in two (2) weeks.

There being no further business, Council President Hogan declared the meeting adjourned.

Meeting Adjourned at 7:03 P.M.

                                                                                    Respectfully submitted,

                                                                                    Kenneth L. Hogan, Council President

                                                                                    Chairman

KLH/RR/TM/jg

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