Debts engulf Lemmon Fire District; chief quits when questions are raised

MEGAN NEIGHBOR, ARIZONA DAILY STAR

Publication Date: April 4, 2010 Page: A1 Section: NEWS Edition: FINAL

Just as the summer fire season approaches, Mount Lemmon - Tucson's favorite summer
and winter playground - is in danger of having its fire department personnel slashed.

After years of operating at a deficit, which the county has been covering, the district has
been cut off from further overdraft, leaving it with just over $40,000 to get them through
to August.

What's more, the district is looking for a new chief after Dean Barnella resigned when
questions were raised about the management of the department, which has been in deficit
since 2007 - a deficit other county taxpayers have been covering.

Mount Lemmon property values, and tax revenues, bottomed out after the devastating
2003 Aspen fire.

Still, the Fire District managed to live within its means until three years ago, when a
$58,831 shortfall appeared on the books, even though values were already on their way
back up. By last month the deficit had grown to $172,218.

County Treasurer Beth Ford notified Barnella in July 2009 that she was going to stop
covering the district's debts. But she didn't send a letter formally cutting off the district
from further overspending until March 18, 2010, one day after the Arizona Daily Star
made a public-records request for Mount Lemmon Fire District's monthly revenues and
expenditures.

"It's not what I want to do. It's what I'm required to do," Ford said of the notice.
The letter limits district spending to $475,000 - 90 percent of its tax levy - through mid-
August.

The district has already spent $435,000, leaving it just $40,000, which is not enough to
even cover the payroll for three-plus months.

A year ago the district scaled back firefighters on the mountain from nine to six. In
February it came under media scrutiny when further layoffs were "kicked around, but not
seriously considered" as a way to balance the budget, said Fire District board member
Dennis Cozzetti.

Despite the district's 2009 budget woes, Barnella was paid $71,450 and his wife, Deanna,
Mount Lemmon battalion chief and administrative assistant, was paid $46,200.

The next-highest-paid employee is a fire captain who made $37,000.

Both Dean and Deanna Barnella work second jobs - Deanna as a part-time employee at
the Mount Lemmon General Store and Dean as a full-time firefighter in Phoenix.

To commute between his two jobs, Dean Barnella drove a Cadillac that was donated to
the Fire District, Cozzetti said. The district also paid for Barnella's gas, Cozzetti said.

The arrangement continued for about a year and a half, until last month, when the
Cadillac was sold to raise money and replaced with a county surplus vehicle, Cozzetti
said.

Now Dean provides his own transportation to and from Phoenix, he said.

After the February 2010 Fire District board meeting, the fire chief and his wife took 10
percent pay cuts, and Deanna agreed to take an indefinite unpaid leave of absence
beginning this month.

In light of County Treasurer Ford's notice of the funding restrictions, Barnella said in an
e-mail to the Star dated April 1 that he will "donate his time" to the Fire District until he
leaves at the end of June. He didn't say why he was resigning.

CURRENT CRISIS

In 2003, before the fire, the district received nearly $221,000 in taxes based on $7.3
million in property value, and had four full-time firefighters.

This year the district's full levy is $530,000, an increase of $100,000 from the previous
year, based on $16.8 million in property value. This year's budget also includes $40,400
in other revenues.

By March, between tax payments, charges for services such as medical assistance and
contributions, the district was nearly $74,000 ahead of projections for that date, budget
documents show. Yet, the district had fallen even further into debt - from $62,533.44 in
July to $172,218 in March of 2010.

A Star examination of the district's expenses revealed it exceeded its year-to-date

expenditure projections for salaries, vehicle services and costs, utilities, medical supplies
and materials, administration costs and training costs.

DEFICIT BEGAN IN '07

Mount Lemmon lost 322 homes to the Aspen Fire, destroying the fire district's primary
revenue stream: property taxes.

Today, Mount Lemmon has 250 properties, in comparison to 470 before the fire, Cozzetti
said, although records show values are significantly higher.
Despite values and tax revenues plummeting immediately after the fire, Mount Lemmon
Fire District didn't start running a deficit until the end of fiscal 2007, when the mountain's
rebound was in full swing.

Star archives indicate that by August 2008, Barnella had hired an additional five
firefighters, bringing the total number of firefighters on the mountain to nine. That same
month, County Treasurer Ford told the Star she would give the district until June 2009 to
bring its balance back to zero. But that didn't happen, and the treasurer continued to cover
the shortages.

Ford says the county wrote warrants for Mount Lemmon Fire District for three years
because the property values never fully recovered after the Aspen Fire and the district
doesn't recoup a lot of its emergency medical costs.

In a June 2009 letter, Pima County Administrator Chuck Huckelberry wrote that
"apparently over 85 percent of the service calls that are medical are received from
visitors."

Although only 34 people live on the mountain full time, there are about 1.5 million
visitors annually, Barnella said.

The district bills individuals or their insurance companies for medical emergencies and
rescues only if it transports a patient, a policy similar to one followed by the city of
Tucson. Even then, district officials said they only collect a percentage of what is due.

In June 2009, Huckelberry wrote a letter to the district's board suggesting it consider
adopting a local rescue ordinance, which would allow the district to charge all visitors for
any medical services received, regardless of whether they are transported.

Huckelberry said he and the county attorney will meet with the board Monday to discuss
the possibility. If the board does that, Huckelberry said the county would be more likely
to continue covering Mount Lemmon's revenue shortfall through the third week in
August, allowing the district to keep operating while new budget plans are worked out.

STRUGGLES AHEAD

But the district still faces a tough time keeping up with growth. Although property taxes
will continue to rise on Mount Lemmon, the Fire District is restricted by a new law that
caps property-value inflation from year to year.

If property values were to rise 20 percent on Mount Lemmon from one year to the next,
under the new law, the Fire District can add only 8 percent of the property values'
increase.

That puts Mount Lemmon, a community that's continuing to rebuild after the fire, in a
tricky situation.
"The county ought to step up to the plate and help," said Anderson, fire board chairman.
"So many people from Tucson, around the state and the country visit Mount Lemmon
annually."

Contact reporter Megan Neighbor at 307-0579 or mneighbor@azstarnet.com