Mark Wallace 3.2.18
“In many cases, it will have taken multiple years, detailed proposals, and extensive justifications to get your department’s budget approved. It’s always more than a “continuation” of spending approval from what’s been done in the past. You’ve had to extensively prove your case, obtain realistic cost estimates, figure out how other departments are doing or funding the same project or equipment, and more. You’ve had to make some performance and outcome promises and have shown how your proposal will serve the community.”
“Fire department budgeting is more difficult than budgeting for a “for-profit” business. “For-profit” businesses actually intend to make a profit but don’t have to. Fire departments can’t. To make their profit, businesses charge more than a service or product costs. Fire departments are often prohibited from making a profit and are often required to use a “break-even” strategy as a best-case scenario. Few fire departments really accomplish break-even funding of key programs. EMS is a good example. Most fire departments charge for providing EMS, but the charges will never equal the cost of providing the services. The costs are “shared” among the taxpayers.
When a municipal fire department ends its budget year with extra funds beyond the amount needed as an ending fund balance as its planned carryover, often left-over funds are returned to the city’s “general fund” and are not kept within the fire department. This, of course, is not the same for fire protection districts or special districts funded by a specific tax levy assessed on properties within the district’s boundaries. But even in very successful districts that have an ending fund balance greater than is deemed necessary, future budget totals are often reduced.”
Mitch: Being not for profit in nature and largely supported by grants and taxpayer funding, many departments also legally have to charge something for their services. This creates a logistical nightmare. Much of the job of those in charge of controlling the budget is consumed by an ongoing attempt to perfectly meet, but not exceed budget projections. Indeed it is illegal in some states for EMS or fire departments from ending the year with a net profit. A department could be under their projected spending and need to spend the remaining balance in order to justify the same or greater budget the next year. There is a penalty for being under budget and one for being over. This makes timing and showing demonstrable advantages (to convince elected officials/budget planners of the need for given equipment) critically important to the business model of any company selling products to fire departments. Selling to the departments when they’re creating their budgets would be key, but so would an ongoing relationship with departments as opportunities to offer them more effective designs could arise at various points through the budgeted year if costs must be offset.
