A game of “what ifs,” may end up as layoffs for the Sedona Fire District.

On Monday, March 9, Sedona Fire District Governing Board member Bert Berkshire asked staff to show how they would lower salaries and wages by $1 million to get the operating budget from $13,050,654 to $12,439,000.

That would mean layoffs, Business Director Karen Daines told him.

Based on an average salary of $55,000, Berkshire’s request would mean 18 positions lost organization-wide, she said, if the board agrees to the $1 million cut.

“The management team will recommend where we’d cut if we had to,” Daines said after his request.

Berkshire is predicting a worse financial situation than the budget portrays, he said.

“I’m asking you to look at this and tell me what it does to you to live inside my numbers,” he told staff. “I don’t want anyone to say he’s here to cut employees.”

Without input from the board so far this year, staff originally presented fiscal year 2009/10 budget to the board Feb. 28.

The board decided it needed more time to look over

the documents and called a special meeting for Monday, March 9.

In the budget’s rough draft, staff reduced the budget from last year’s $15.9 million, to $13.6 million.

The $2 million decrease came from reducing spending in the operations budget by 5 percent, and by cutting things like travel, training, education assistance and overtime.

For the first time in years, staff is not scheduled to receive a Cost of Living Allowance. Last year, the district had a 3 percent increase in salaries across the board.

SFD will also hold positions as they become vacant through attrition, Daines said.

The district is already holding two of its 116 positions

vacant.

Last year’s budget saw $1 million set aside for a Chapel area station and another $1 million for capital outlay. This year’s budget only has $240,000 of capital outlay expenditures and nothing earmarked for the Chapel station.

“Right now the Chapel station isn’t part of the recommended budget because they haven’t told us if they’re moving ahead with that,” Daines said.

If the board approves the plan to move ahead with the Chapel station, another $1 million could be added to the budget, she said, depending on how much the board wants to finance.

But if the board wants the district to cut staff, there won’t be a Chapel station either, Daines assured.

Without the employees to staff the station, SFD will not go ahead with the construction, she said.

Staff’s proposed budget also shows a decreased mil levy rate from 1.65 percent to 1.55 percent.

Since district residents won’t see reductions in assessed values in 2010, the only way to lower taxes is to lower the rate, Daines said.

In 2011, residents will likely see a reduction in assessed values, by 15 to 20 percent, so taxes will be even lower, she explained, even if mil levy rates stay the same.

Board member Liza Vernet was against Berkshire’s direction, which she said was looking to cut people and wages.

“It’s a community,” she said, “not a business.”

She also warned the board to be careful of what cutting services would do to the district’s insurance rating.

A spike in the insurance rating would mean a dramatic increase in insurance bills for business owners, she said.

Staff will come back with how it would meet Berkshire’s numbers at the Governing Board’s meeting Wednesday, March 25.

The board should approve the final budget in April, Daines said, and adopt it in June. It will become effective July 1.