Checks Without Balances

Parkwood Fire Department: paid by the public, but not public

dkane@newsobserver.comDecember 29, 2013 

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    About the series

    This is part of a series of reports about public compensation during the recession. The News & Observer has obtained five consecutive years of employee pay to analyze records involving 435,000 public employees.

    To see previous stories, go to newsobserver.com/bigpay

    Our reporting on this issue will continue. Send your questions and tips to dkane@newsobserver.com

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    Top overtime payers

    State pension records show these five agencies devoted the highest percentage of their total pay toward overtime over the past five years.

    AgencyOvertime expenseTotal payPercent on overtime
    Parkwood Volunteer Fire Department$846,242$8 million10.6 percent
    Town of Canton$792,449$8.9 million9 percent
    Roanoke Rapids Sanitary District$746,223$8.5 million8.8 percent
    Bryson City ABC Board$41,527$482,0028.6 percent
    Town of Weldon$318,491$4 million7.9 percent

Despite its name, the Parkwood Volunteer Fire Department in south Durham is not staffed primarily by volunteer firefighters. It has 29 full-time employees, it’s supported by taxes, and as Durham as grown southward, it has become part of the city’s fire-protection and ambulance service.

It has also grown to be one of the most generous agencies in the state when it comes to paying overtime, state records show.

In the depths of the economic downturn from 2008 through 2012, the department spent more than 10 percent of its total pay on overtime, the highest percentage of any agency covered by the state pension system, according to records at the State Treasurer’s Office. That amounts to more than $846,000 during those five years.

Even though the department is part of the state pension system and its role and funding have changed, its nonprofit designation has not. It is not considered a public agency and would not provide The News & Observer with more information about its overtime and operations.

“We are a private, nonprofit corporation that’s contracted by the county and after that, that’s all I can say because the board has spoken on this and I work for them,” said Parkwood Chief William Colley Jr.

The Parkwood board’s president, Jim Barringer, a retiree from a Durham nonprofit, wouldn’t budge on the request.

“We don’t want to, we don’t have to, we don’t need to,” he said.

But as Durham County officials look at the fire-protection arrangements they have made with Parkwood and other nonprofit fire departments, some are saying their books should be open as a condition of accepting public money. County records show that in recent months, officials have had serious concerns about the Parkwood department’s ability to manage its money.

“With that amount of public money going to fund these departments, the public should be able to see their books, see their budgets and know how much money’s being spent on overtime,” said Ellen Reckhow, a Durham County commissioner. “These things should not be a secret.”

Public pensions

For 45 years, the Parkwood Volunteer Fire Department has been the hub of a small community near Research Triangle Park that the city of Durham swallowed as part of its expansion to the south.

The department serves as a polling station, hosts two popular barbecue dinner fundraisers each year, and takes part in the annual Christmas parade.

Parkwood started paying firefighters and emergency medical staff members about 20 years ago. Its staff of 29 full-timers, 13 part-timers and 25 volunteers handled more than 900 fire or rescue calls last year. Much of the department’s $4.1 million budget comes from special taxing districts within Durham and Chatham counties plus contracts with Durham city and county to provide fire and ambulance service.

Parkwood is one of four such hybrid departments in Durham County providing fire protection, but it is the only one that also provides advanced emergency medical assistance. None of the others is in the pension system, which requires employees to contribute but also guarantees a defined level of retirement pay backed by state and local taxpayers.

Parkwood is one of 13 fire departments that got into the pension system despite not being government agencies. All are nonprofits not subject to state public records laws. Their tax returns are public and show general revenues and expenses.

Of the 13, Parkwood and three others are in the Triangle. The others – the Bay Leaf Fire Department, Durham Highway Fire Department and Garner Volunteer Fire-Rescue – cover Wake County. Fire chiefs for Bay Leaf and Garner said their contracts with Wake County require more transparency on finances, and they make them public on request.

The chiefs said they are also required to submit pay information for each employee to the county and must pay according to a scale set by the county.

In 1977, state lawmakers allowed fire departments that receive public money to provide service to cities and counties to join the state pension system. Fifteen years later, state lawmakers stopped allowing the nonprofit departments to join.

Other groups outside government also have been allowed into the pension system. In 2011, The N&O reported the N.C. League of Municipalities and the N.C. Association of County Commissioners have long been in the pension system, requiring taxpayers to back pensions based on salaries as high as $207,000 a year.

But those associations don’t have to open their books to the public and wouldn’t when asked, even though they are largely funded by dues from cities and counties and lobby state lawmakers on municipal issues.

Some government watchdogs said then that lawmakers should require the transparency or kick the associations out, but no such action has been taken.

State Senate leader Phil Berger, an Eden Republican, said in a recent interview he may want to take up the issue as part of pension reform.

“One of the questions that we may want to take a look at is whether or not it makes sense to include them in the pension system,” he said. He did not offer an opinion about the nonprofit fire departments.

‘Simply unacceptable’

As the city’s and county’s population continues to grow, the nonprofit fire departments in Durham are under pressure to further professionalize. One such department – Bethesda – has already merged with the county. Its full-time staffers are in the pension system as county employees, and their pay is subject to the public records law.

A county-backed study looking at fire and rescue services has found several flaws with the way the county has contracted with these departments. The county never identified what would be “necessary” staffing and equipment, and it allowed the departments to produce audits more than a year after the end of the relevant fiscal year.

One of the study’s recommendations is to move to a countywide compensation plan that requires the disclosure of all salaries and benefits.

Meanwhile, Parkwood’s audits showed it has been struggling to maintain an adequate cash flow. Lee Worsley, a deputy county manager, said the department’s cash-flow problems caused it to pull $74,000 from a special relief fund for firefighters – in violation of state law.

“This is simply unacceptable and demonstrates reckless mismanagement of Parkwood Volunteer Fire Department’s finances,” Worsley wrote.

In correspondence with the county, Colley, the fire chief, blamed the cash-flow problems on billing issues for emergency medical services that were subsequently worked out.

Parkwood’s audits, however, gave few clues as to the amount of overtime the department paid each year. The audits listed total pay and benefits and did not break out overtime.

State pension records show that during the five-year period from 2008 through 2012, 10 employees made at least $10,000 in overtime in one year. One made nearly $20,000 in overtime in one year – just under 40 percent of his total pay.

“This is new information to me,” Worsley said.

Durham’s contracts with the department give it access to all financial records, and in recent months the county has used that provision to pull more information about the department’s finances.

Colley and Barringer, Parkwood’s board chairman, said the overtime numbers reported to the treasurer are accurate and are justified. Colley said full-time firefighters work 10 shifts of 24 hours each day a month, which results in some overtime. Other overtime expenses come from required training and “backfilling” for open shifts, Colley said.

“It’s not an abuse,” Barringer said. “We have just tried to make the best use of our workforce.”

State records show only 28 of the more than 1,200 agencies in the pension system spent more than 5 percent of their total pay on overtime from the period of 2008 through 2012. Most are small towns; none are state agencies.

All 28 agencies except Parkwood would be required to produce pay records and correspondence that would help explain the overtime expenses.

State Rep. Paul Luebke, a Durham Democrat whose district includes Parkwood, said the department should have to open its books as well.

“It would seem logical that those who benefit from a state-operated program – the pension fund – ought to be subject to the public records law,” he said.

Staff writer Andrew Kenney and news researcher David Raynor contributed.

Kane: 919-829-4861; Twitter: @dankanenando

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