Bodega Bay Fire Chief Sean Grinnell. (Kent Porter / Press Democrat)

Sonoma County fire districts revolt over county fees

RANDI ROSSMANN
THE PRESS DEMOCRAT

Sonoma County's new $22.4 million accounting and budgeting system has sparked a bitter bureaucratic feud with several local fire districts, prompting a growing number of them to cut financial ties to the county as the computer system goes live this summer.

The dispute is driven by what the fire chiefs claim are exorbitant costs charged by the county for a system both sides agree is highly inefficient. Exacerbating the issue, chiefs said, have been missteps during the new system's rollout for the dozens of special districts in the county.

Several chiefs said the county started off wrong by proposing prices that were later determined to be unjustified. Some claim the county then employed strong-arm tactics to keep fire districts from leaving the system.

"Enough is enough," said Gold Ridge Fire Chief Dan George. "Gold Ridge is pulling out. It'll save the district a little over $15,000 a year."

Of the county's 19 fire districts, seven to 10 are actively moving toward severing ties with the county. Five have notified the county they are out: Gold Ridge, Rancho Adobe, Bennett Valley, Kenwood and Graton.

"The county never thought fire districts would ever bolt," Rancho Adobe Chief Frank Treanor said in an email sent to numerous fire chiefs. He accused the county of "extortion" and playing "hard ball."

Several fire districts pay the county around $20,000 a year for accounting services. Outsourcing those services to a bank or other private financial institution will greatly reduce the cost, according to numerous chiefs.

Several more said they hope to pull their fire district from the county system in the coming year.

"The county is kind of throwing curves at us right now," said Forestville and Russian River Chief Max Ming, who plans to leave the county accounting system in the future. "If you are left behind are you going to absorb those costs? (If so) I don't want to be sitting here."

David Sundstrom, the county's auditor-controller-treasurer-tax collector, is shepherding the new system's rollout. He denied any efforts to retain districts and said he supports their attempts to find cheaper services.

"I've told them if they can find a better deal, please take it, one that does not have the onerous requirements we have," Sundstrom said.

Sundstrom acknowledged the county's initial price estimates were too high, which triggered the revolt. He said the large number of special districts in Sonoma County — 67 in all — made it more difficult for the county to project the proper costs that districts should bear.

"It's an awful thing how we're whipsawing these people," Sundstrom said.

Former Cloverdale Fire Chief Brian Elliott said the county's actions lack credibility. "They've been all over the map."

The unfolding issue has exposed tension between some of the largely independent districts and the county government, just as fire services across Sonoma County are in turmoil amid budget challenges and a shrinking volunteer base.

"It adds to the heat," said Elliott, now a private financial consultant for fire agencies.

The county's new accounting and budgeting system, which replaces a 30-year-old program, is one of the costliest capital projects in recent years. County officials have said the new software and hardware will help the county government better manage its $1.28 billion budget.

It is due to go live July 1.

Last year the county notified districts of their possible share of the cost of the new computer system, which is addition to the annual fees the districts pay for accounting services.

Some of the larger districts faced an annual cost of nearly $10,000 for the hardware and software, in addition to the cost of accounting services.

The county collects property taxes, holds the money and acts as bank and accountant-auditor for dozens of special districts, including fire, water and parks and recreation agencies. For some, the cost of county accounting services equals as much as $40 for every check the district writes to a vendor.

Unhappy already about how much taxpayer money the districts must spend on county accounting services, more than a dozen began to investigate options.

"As long as they have been doing accounting for us, they have charged an amount that includes all of their costs. The result is we pay close to $40 for each check," said Glen Ellen Chief Peter Van Fleet. "We always kind of grit our teeth and say 'Well, OK, we appreciate what the county does for us.'"

For his district, the initial fee for the new computer system was $5,800.

"Last year we paid $11,300 (for accounting services) and $5,800 on top of that?" Van Fleet said. "The computer (system) put us over the edge."

Due to the complaints, Sundstrom re-evaluated and dropped the fee by 75 percent, saying the districts use only a small portion of the system.

Then he dropped the price again, to zero, acknowledging the new system also would not improve current services for them as they are outside the county's computer network.

The initial amount of fees assigned to the districts for the new computer was about $300,000. Sundstrom said that amount now will be spread throughout county departments. Special districts that choose to remain will continue to pay the county for accounting services, but will not have to pay for the new computer and software system.

While some chiefs were soothed by the dropped fee, they quickly chafed at Sundstrom's concurrent announcement about a change in bookkeeping procedures that would result in a sharp increase in costs for the most financially strapped districts.

Citing state law, Sundstrom said districts can't go outside the county for payroll services if those districts need periodic cash advances from the county when they hit dry periods in their annual revenue stream.

Such advances are commonplace, coming from the county's shared $1.5 billion treasury.

District officials say it is their property tax money. Some chiefs questioned the timing of the change and said they would seek their own interpretation of the law.

The new ruling reverses years of practice by districts that have moved payroll to an outside agency as a way to reduce costs — and still gotten their dry period funding.

The ruling particularly hit districts like Bodega Bay, which can't leave because it relies on the county's advance money. While other districts with assets can leave the county system and pick up lines of credit or short-term loans from banks to tide them over, Bodega Bay owes too much to make that move.

Bringing its payroll back under the county's auspices would cost Bodega Bay thousands more per year — a painful expense in a district that recently lost a tax measure and is facing staff cuts and other service reductions.

"We're being bullied," Bodega Bay Chief Sean Grinnell said of the situation.

On Thursday, Sundstrom said he and county staff came up with a patchwork fix that would allow districts to keep their payroll out of the county system and still get their cash advances.

"I'm trying to do my best to accommodate them," he said.

Supervisor Efren Carrillo, who represents the west county, said there could have been "better communication" from the county.

"I can absolutely understand the frustration by the chiefs. Some of them are just barely making it through their budget year," Carrillo said.

Diane DeMartini, administrator for the Monte Rio Parks and Recreation District, last year pulled that district and the Monte Rio Fire District out of the county system — saving about $14,000 for the parks budget and $9,000 for fire.

"This tiny district's entire budget is $260,000 a year. Paying $14,000 a year to the county, that's extraordinary," she said. "I'm glad I got us out of it."

DeMartini said another reason she's glad to be out of the system is the labor-intensive, old-school banking methods required.

In an era of online banking and streamlined financial processes, district employees must do all of the bookwork, fill out county forms, then drive the paperwork to the county center in Santa Rosa, where a county employee enters the information into a computer. District staff then drive back to the county days later to pick up checks.

Chief Van Fleet called the system "ponderous to the extreme."

Sundstrom agreed the system, set up years before he arrived, was arcane. However, districts are outside agencies and direct use of the county computer would be a security issue, he said.

Sundstrom is up for election for his position in a June 3 race against Santa Rosa Councilman Gary Wysocky.

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