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Budgets and Purchasing

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  • Budgets and Purchasing

    This question really pertains to the Volunteer Fire Departments across the country, but the paid departments are more than welcome to provide comments.

    Our Department has been having some purchasing issues with our Board of Directors. The last two quarters of 2000, our Treasurer provided the Board with a printout of where our money had been spent. This eventually led to two very heated discussions as to why the Firemen had spent so much money here, and what was this purchase, and why did this cost so much, etc. The Board conviently forgets that they had previously approved most of the purchases.

    So to counter this defensive mode that the Firemen have been forced into, we proposed a Budget for this coming year. Our Department has never done this before. In the past, we purchased things as needed, without planning for the upcoming year.

    The Budget that I presented to Board detailed how our expected income would be utilized in eleven categories, including a proposed amount. Our desire is to have the Board approve a Budget for the upcoming year, with amounts in each of the eleven categories, and not "micromanage" our decisions after the fact.

    How does your Department Budget for the upcoming year? Does your controlling Board/Council/whatever approve each and every one of your purchases? Do they have to meet and approve individual purchases over a set amount? even if the item has been approved in a Budget?

    Any information you could provide will be helpful.

  • #2
    Coming from a finance background, I think Budgets for any type of organization, including fire departments, are very important. Providing those in authority with a breakdown of where your money is expected to go in the next year, is one of the most benefitial pieces of information you can provide them.

    Throughout the year, people do not remember where their money is spent and then are supprised at the end of the year where it all went. In addition to providing a budget for the upcoming year, you might want to consider providing updates regularly to the board to show them how you are or are not meeting your budget. If you are over budget, explain why and get their documented approval of it. Then at the end of the year, show your budgeted expenses compared with your actual expenses, with additional notes explaining why expenses were above or below budget. I think your Board will be very pleased with this and will want this Budget going forward.

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    • #3
      I would have to agree with Newton. Budgets are important and I am surprised that you have gotten by this far w/o one. Budgets let everyone know what is needed and how much money can be spent on or in any one line item. If you have a budget, you are more likely to "shop" around and look for better deals. I think you made the right move going with the budget. It is going to catch the Board of Supervisors off guard, I will tell you that. They will then actually see how much money they give to you, and it will surprise them. Just be prepared to back up your budget, and MOST IMPORTANTLY, let the community know what is going on. If the BOS decides to combat you on any of these items, be prepared to take it to the citizens that the BOS has made the pledge to provide support. Good Luck and keep us informed of your progress.

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      • #4
        Jeffro,

        Budgets are the way to go. In my experiences, when the public sees the cost of the department, they naturally assume that it all goes for "stuff that they don't really need". If you can break it down into line items showing the cost of maintaining the department (heat, electric, fuel, vehicle maintenance, etc..) this takes up a large chunk of the total figure. Insurance is also a large factor in the budget.

        When my department started using a budget, we researched the figures needed for the past five years and figured out what the the numbers had to be for the next year. When the board saw what we were really spending on new equipment, they raised that portion (they stated that "you cannot run a department on that little amount of money") A budget can really work out in your favor.

        The first year that we used a budget our total figure was raised by $30,000 approximately.

        Chris Schultz
        Mountain Ambulance Service www.rescue70.org

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        • #5
          Unless you have unlimited funding, you really need to use a budget. Especially when you start factoring in capital expenses such as station and aparatus payments, or large items like insurance (ours is $45,000).

          Each year, everyone starts making their "wish lists" for the upcoming budget year. These get trimmed down by the elected officers and budget is submitted to the board. Once approved, we pretty much stick to it. The board doesn't get involved with purchases after the budget is finalized, although out-of-budget purchases over $5000 require board approval.

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          • #6
            I agree that you need a budget. At my department we have the people who are in charge of different areas such as Quartermaster, Training, Building and Grounds, Chief come to the Board and give them their proposed budget for the upcoming year. They judge their spending from the previous year and if they have any major purchases coming up that would change how much they need. The Board then approves or denies that amount.
            I would also recommend doing a long range plan. 1, 5, 10 year plan, kind of a "goals of the department" type of thing. These would be useful when you are needing a building expansion/renovation, new apparatus and large expense items. Give this to your municipality and they will be pleased and not suprised if you go to them and ask for some assistance with large purchases. A warning before the huge $$$$ is needed. It takes time but it is worth it.

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