Lebanon Fire District is facing a structural budget shortfall of $858,450 for Fiscal Year 2025-26, the district reported last week in a statement circulated to the community.
That deficit differs from cyclical deficits caused by temporary economic downturns in that it “reflects a persistent gap between expenditures and revenue,” LFD’s statement said.
“Without corrective actions, reserve fund balances will continue to decline, impacting cash flow and the ability to fund essential capital purchases, including fire apparatus, ambulances and life-saving equipment.”
LFD, which was established in 1884, has evolved into a “dynamic all-hazards organization, seamlessly integrating career firefighters and dedicated volunteers.”
The district has 43 skilled career personnel and 55 volunteers, and operates five stations, two staffed full-time and three supported by volunteers only.
Geographically, LFD covers 134 square miles fire for protection area encompassing 30,000 residents, and it oversees 419 square miles in an ambulance service area that provides emergency medical care to 40,000 people across Lebanon, parts of Scio, Brownsville and unincorporated areas of Linn County.
As is the case with other special districts across Oregon, LFD faces “a widening gap between revenue and expenses, making it increasingly difficult to maintain services at current levels,” it said in the statement, adding that its primary revenue sources – property taxes and ambulance service fees – are not enough “to keep pace with rising costs, inflation and increased service demands.”
Funding Limitations
“A significant challenge for LFD and other special districts is the revenue restrictions imposed by Oregon’s tax structure,” the statement said.
“Measures 5 and 50, enacted in the 1990s, placed strict limits on property tax revenue growth, preventing fire districts from keeping up with the increasing costs of emergency response services.
“These measures cap property tax rates and restrict annual growth, even as population increases and call volumes surge.”
Also, ambulance services fees, which have been a “crucial revenue source” for the district, are not sufficient to cover expenses.
“With LFD responding to over 6,700 calls annually – including 4,097 overlapping calls (more than one call happening at the same time) – staffing shortages and resource constraints are increasingly evident. Nighttime calls, which accounted for 2,281 incidents in 2022, contribute to longer response times and further exacerbate burnout and retention challenges.”
Adding to these problems, the district cannot tap into “critical federal funding streams” such as the CARES Act, the American Rescue Plan Act, and settlements such as the Opioid Class Action Lawsuit, because special districts like LFD are not recognized as government agencies under the U.S. Code.
“These acts are intended to augment the fiscal impacts to emergency responders who are tasked with responding to crises,” the district’s statement said. “While municipalities and counties have received substantial federal aid, fire districts must operate without these essential financial resources, placing further strain on already tight budgets.”
Budget Strategies
To address this shortfall, the district is implementing a series of strategic budget reduction measures that reduce services to achieve long-term financial stability. These strategies include:
- Spending Controls: Prioritizing “Need to Have” versus “Nice to Have” expenses.
- Staffing Adjustments: Further staffing reductions throughout the organization.
- Operational Restructuring: Balancing reductions across tax-based fire services and fee-based ambulance services.
- Revenue Exploration: Investigating new revenue sources to reduce reliance on traditional funding streams.
“These initiatives reflect a strategic approach to financial management, aiming to stabilize the district’s budget amidst challenges in providing critical emergency services,” the LFD statement said.
For more details on the budget and reduction strategies, see the staff report titled FY25/26 Budget Reduction and Organizational Restructure at bit.ly/Board-Documents, or email [email protected] for more information.
‘Unwavering Commitment’
The statement concluded: “Despite these challenges, the Lebanon Fire District remains unwavering in its commitment to serving the community.
“Firefighters, paramedics and volunteers continue to work tirelessly to provide high-quality emergency response and ensure public safety. While financial constraints present obstacles, LFD is actively pursuing solutions, including advocating for legislative changes, seeking grant opportunities, and exploring operational efficiencies to maintain critical services.
“The district takes immense pride in protecting the lives and property of those it serves. Amidst upcoming challenges, LFD will strive to answer the call, keeping the safety of the Lebanon community as its highest priority.”