Volunteer Costs

Personnel accrue 90 hours of sick leave at the beginning and middle of each year for a total of 180 hours or approximately 22 days per year. This is allowed to accumulate to 1,440 total hours or approximately 180 days. Southington should examine the ramifications of having such a large bank of sick time available to personnel. Often the rationale is for an employee to have a benefit to deal with a longer, non-work related illness or injury. An alternative is an acceptable disability insurance policy. These large banks are also often used as a retirement payout. A payout clause exists but is capped and grandfathered.

There is also an incentive to not use sick time. An employee gets ten hours of vacation in the following fiscal year for every six months they use no more than one sick day. Awarding this benefit in the following fiscal year usually means compensating the employee at a higher rate of pay than the previous year. Outside of financial concerns, the policy of encouraging personnel to not use sick time should be examined. Personnel that are sick should remain out of work to prevent others from getting sick.

Personnel may waive their health insurance. In addition to not having to pay the premium co-share, they receive an annual incentive of $1,00-3,000 depending on the coverage level (single, couple, family). Having coverage occur from another source is a good financial tool to reduce costs and exposure. The incentive may not be enough to encourage personnel from waiving coverage and Southington should survey the personnel to see if an increase would encourage more waivers.

Post-Employment Compensation and Benefits

Per the contract with I.A.F.F. Local 2033, career personnel are entitled to a retirement pension and other post-employment benefits (OPEB). Understanding the future financial commitment of these obligations is critical to ensure proper funding and avoiding spikes in costs. By making these observations we are not suggesting that these benefits are not deserved or that they should be changed. However, it is important for Southington to understand the financial commitments it has made.

Personnel participate in the State MERS retirement plan which requires employee and employer contributions. The state manages the pension fund and dictates the contribution rates based on liabilities and fund performance. A recent change in the discount rate from 8% to 7% significantly impacted the cost structure and Southington should have a plan to deal with future fluctuations.

Postretirement healthcare is only offered to personnel who pay the full COBRA rates. As of June 30, 2019, the total Southington OPEB liability was $41,150. Municipalities that offer OPEB tend to have much larger liabilities and many struggle to fund the program. OPEB should be avoided if possible and any request to include it should have an actuarial study done to calculate the future liability.

Volunteer Costs

Fire service volunteers are unique in the amount of funding needed to support them. Most volunteers in society need little to no financial resources while firefighters require substantial resources to be trained and equipped to appropriate standards. A trained volunteer firefighter is an investment that only pays off if they are actively responding to calls.

The main financial incentive for volunteers is the stipend program which pays volunteers based on a schedule of activities and milestones. There is also a budgeted amount for retirement plans that is divided amongst qualified volunteers as well as a tax abatement program. The two charts below illustrate the declining return on investment from the volunteer program. The first chart compares the stipend expense and total volunteers with trendlines. The trendline for the stipend expense is flat, but the pandemic and a change to the stipend calculation is contributing to a temporary depression of those numbers. A decline in volunteers of over 40% can be seen over this time period as well. The second chart shows the increasing cost of the stipend per volunteer resulting from the sharp decline in the number of volunteers.

$200,000

$180,000

$160,000

$140,000

$120,000

$100,000

$80,000

$60,000

$40,000

$20,000

$0 Figure 64. Volunteer Stipend

2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 (budgeted)

Volunteer Stipend Volunteers Linear (Volunteer Stipend) Linear (Volunteers)

2021-22 (budgeted) 100

90

80

70

60

50

40

30

20

10

0

$4,000

$3,500

$3,000

$2,500

$2,000

$1,500

$1,000

$500

$0 Figure 65. Stipend Cost per Volunteer

2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 (budgeted)

2021-22 (budgeted)

Stipend Cost per Volunteer Linear (Stipend Cost per Volunteer)

An active volunteer will always cost substantially less than an employee, so these incentives may be justified. However, there are several issues that may arise with the current configuration. Tax abatements are only beneficial if you pay property tax. Younger individuals may not own municipally taxable property and therefore receive no benefit. Resources should be aligned with the recruitment/retention goals.

Another issue is the use of a divided pool of funds for retirement. As the number of active volunteers continues to decline, the share of the pool per qualified volunteer will increase resulting in a small number of volunteers getting an increasing benefit. Again, resources should be aligned with recruitment/retention goals and this structure should be reevaluated.

The training and equipping of a volunteer firefighter to appropriate standards takes a large amount of time and funding. Since 2015, approximately $81,900 has been spent on tuition for 69 new volunteers. Today, only 22 of those volunteers remain active, a 32% success rate. In addition to the initial training, volunteers must get customized equipment made that is not easily transferable to other members. With an estimated cost of $5,035 for bunker gear, helmet, boots, radios, medical evaluation, and Firefighter I training, approximately $141,940 of mostly unusable equipment was left behind by the volunteers who left.