The District’s financial records are maintained in compliance with Generally Accepted Accounting Principles (GAAP), as prescribed for governmental agencies in the United States. The Governmental Accounting Standards Board (GASB) sets the accounting and financial reporting standards that the District follows.

 

Revenues and expenditures are accounted for using the modified accrual basis of accounting. Under this method, revenues are recognized when they are both measurable and available to finance current period expenditures. "Measurable" means the transaction amount can be determined, and "available" means it is collectible within the current period or soon thereafter. For example, property taxes received within 60 days of the fiscal year-end and investment earnings paid after year-end are considered accrued revenues. Expenditures are recorded when the liability is incurred, if measurable, except for unmatured interest on long-term debt, which is recognized when due.

 

Fund Structure

The District tracks its financial activities across three main fund categories:

1. General Fund (GF): The primary operating fund, accounting for all financial resources not required to be recorded in another fund.

2. Capital Improvement Projects Fund (CIP): Used for the acquisition, renovation, or reconstruction of fire stations and other facilities.

3. Special Revenue Fund (SRF): Accounts for funds received and disbursed for federal emergency activities, including grants for the District’s California Task Force 3 Urban Search and Rescue, managed through FEMA agreements.

 

Financial Transparency and Accountability

This fund structure ensures clear tracking of the District’s financial resources and supports transparency in fund management and reporting. The District’s budget is prepared in accordance with GAAP, which also governs the preparation of year-end financial statements. This consistency ensures the District meets its operational needs while maintaining fiscal responsibility and upholding sound accounting practices.

Budgeting is a crucial aspect of organizational management, translating goals and objectives into financial and resource allocations. The budget serves as a management commitment, guiding efficient use of financial and human resources while ensuring accountability for the District’s programs over a twelve-month period. The Annual Budget is foundational for the District's financial planning and control.

 

The District supports a zero-based budgeting philosophy. Zero-based budgeting is a method of budgeting in which all expenses must be justified for each new period. The District forecasted revenues based on a realistic approach while using historical and known contract activities in the fiscal year. Payroll expenditures were budgeted based on actual full-time-equivalent positions authorized, using the approved memorandum of understanding and compensation agreement for all employee groups. Non-payroll expenditures were budgeted based on required operational activities and the need for the program managers to carry out the functions of their assigned programs. Each budget request has been justified before the executive management team through numerous budget meetings and workshops. The use of estimates was necessary in the preparation of the budget due to uncertainties in activities for the upcoming fiscal year.

To ensure smooth preparation, the District follows an annual budget calendar that outlines key deadlines and meetings, though the budgeting process is continuous throughout the fiscal year (July 1 to June 30). The process typically follows this cycle:

 

July through September

• Reconciliation of fiscal records

 

October through December

• Incorporation of encumbrances, capital project carryovers, and remaining grant balances into the budget
• Budget planning and preparation meetings
• Distribution of the budget proposal guide to all divisions
• Analysis of revenue estimates

 

January through March

• Entry of budget proposals into the financial system
• Budget workshops with the program managers
• Review sessions with the executive team regarding the budget
• Drafting of revenue and expenditure budgets
• Midyear fiscal review.

 

April through June

• Finalization of revenue and expenditure projections
• Presentation of the preliminary and final budget to the Board
• Public hearings regarding the budget
• Adoption of the budget 

The Fire Chief is responsible for ensuring the District maintains a balanced operating budget, with expenditures remaining within approved limits. The Fire Chief may also implement policies to support the District’s strategic goals. The Board of Directors approves the budget and any amendments through a formal resolution that outlines general operations, proposed expenditures, and funding sources.

 

The District adopts its budget annually, typically finalizing approval at the June Board meeting to meet the state’s July 1st deadline. The budget authorizes revenues and expenditures at the fund level, with detailed line-item appropriations for oversight. The District follows a policy of maintaining a structurally balanced budget, ensuring that recurring revenues meet or exceed recurring expenditures. Reserves may only be used to address temporary, non-recurring, non-operational shortfalls.

 

Revenues and expenditures are authorized at the fund level in the final budget resolution. The budget provides overall control of the District’s financial activities, including line-item appropriations and the methods for financing them. To facilitate ongoing monitoring, the District’s OpenGov portal provides real-time reports on expense activities, updated daily. These reports allow relevant staff to track the financial performance of their programs.

 

A summary of budget-to-actual performance for both revenue and expenditures is presented in the Treasurer’s Report at each regular Board meeting. This ensures continuous oversight and enables the Board to track the District’s financial health and compare actual results against the budget.

The FY25 adopted budget includes adjustments from the prior fiscal year to better align with new strategic priorities, goals, and service level requirements. The District’s staffing level remains unchanged at 152 full-time equivalent (FTE) positions. However, there are several vacancies currently being filled through ongoing recruitment, and the FY25 budget accounts for the estimated payroll costs associated with these vacancies.

 

The budget was prepared based on estimates, forecasts, and projections. While these estimates help guide financial reporting and disclosures, actual results may vary. To maintain a balanced budget, the District adopts a prudent approach in budgeting revenues and expenditures, carefully forecasting income while exercising caution to ensure financial goals are attainable.

The District believes that sound financial management principles require that sufficient funds be retained by the District to provide a stable financial base at all times. To retain this stable financial base, the District must maintain fund balances sufficient to fund all cash flows of the District, to provide financial reserves for the replacement of fixed assets such as apparatus and equipment, unanticipated expenditures, and/or revenue shortfalls due to unfavorable economic conditions or emergencies, set aside funds to work towards the pay down of the District’s unfunded pension liability and to provide funds for other operating and capital needs.

 

The District will maintain reserves of fund balances, as defined herein, in accordance with Governmental Accounting and Financial Standards Board Statement No. 54 (GASB 54), Fund Balance Reporting, and Governmental Fund Type Definitions. This policy will ensure that the District maintains

adequate fund balances and reserves in order to:

 

a) Ensure sufficient funding to support the District’s short-term and long-term operating objectives.

b) Limit adverse annual and multi-year budgetary impacts from anticipated and unanticipated expenditures or revenue shortfalls.

c) Cover current outstanding liabilities and fund a portion of actuarial unfunded liabilities.

d) Build and maintain the financial resiliency of the District.

The District completed a reorganization of the fire service operating structure in the past fiscal year. The executive team has four divisions that will have oversight of all the District programs in FY25 and beyond. Below are the four divisions:

• Administrative Services
• Operations
• Fire Prevention & Life Safety
• Training & Emergency Medical Services

 

All programs’ personnel operational hierarchies were reviewed and realigned to one of the five divisions to provide better training, efficiency, and effectiveness in the management of the programs. 

The District currently has several approved capital improvement projects (CIP). These include:

 

• Station 1 rebuild
• Station 2 apparatus bay door redesign
  
• Station 77 fitness room addition and mechanic shop extension
• Station 77 generator replacement 
• Special Operations Warehouse generator installation
• Special Operations Warehouse classroom HVAC and warehouse renovation

 

These projects are funded out of the General Fund excess revenues and CIP Fund reserve.

 

The District is working on completing a CIP plan to outline the timeline of all upcoming projects.  The CIP plan will encompass an estimate of funds needed for each project to set fiscal goals and set aside budget savings to fund these future projects. The future capital improvement projects that the District undertakes will include a thorough review to maximize the greatest value and use for the District and the community it serves.

The District has three represented labor groups, Local 829, American Federation of State, County, and Municipal Employees, AFSCME, San Mateo County Firefighters IAFF Local 2400, District 10, and San Mateo County Firefighters IAFF Local 2400, District 13, as well as two unrepresented groups, Chief Officers and Management and Confidential Unrepresented Personnel.

 

During Fiscal Year 2023-24, the District fostered and supported strong relationships with its employees. The year saw significant progress in labor relations with multiple rounds of negotiations, joint labor management committee meetings and meet and confer sessions. A key achievement was securing a three-year contract with San Mateo County Firefighters IAFF Local 2400, District 10, the District’s largest labor group. Additionally, the District successfully negotiated a successor three-year agreement with San Mateo County Firefighters IAFF Local 2400, District 13 (Battalion Chiefs). The District also recognized the valuable contributions of its unrepresented staff, Chief Officers, and Management and Confidential employees by amending their compensation plan to include a wage increase and enhanced benefits for the 2024 calendar year.

 

Looking ahead, the District will prepare for negotiations with Local 829, American Federation of State, County, and Municipal Employees, whose current contract expires on December 31, 2025, as well as work with the Board of Directors' on updating the compensation plans for Chief Officers and unrepresented Management and Confidential employees.

The Board of Directors has established seven key goals and priorities for the District to focus on over the next few years. For FY25, the adopted budget provides sufficient resources, both in terms of personnel and funding, to enable the District's executive team and staff to effectively pursue these goals and enhance the operational performance of the District. The following priorities, supported through this budget cycle, reflect the Board’s vision:

 

• Enhance Board and community analysis through improved data and analytics.
• Strengthen District-wide emergency preparedness, including engagement with community volunteers.
• Develop a comprehensive, multi-year facilities plan.
• Create a multi-year strategic plan and related processes.
• Improve oversight and governance.
• Foster greater diversity, equity, and inclusion (DEI) within the Fire District.
• Increase mental health awareness and support services for Fire District personnel.

 

To support these initiatives, several important steps have already been taken. In FY24, the District began realigning and consolidating three existing programs—public education, emergency preparedness, and community preparedness—into a single new program: Community Engagement and Resiliency. This initiative is designed to address Board Goal #2 by enhancing District-wide emergency preparedness and expanding community volunteer engagement. The program, which will be led by the Division Chief of Fire Prevention and Life Safety, has adequate funding and staffing in FY25 to achieve these objectives.

 

In addition, FY24 saw an increase in funding for the District's wellness program. This expansion is intended to introduce new initiatives aimed at improving mental health awareness and increasing available resources for District staff who may need assistance. These efforts are part of a broader commitment to support the well-being of personnel and enhance the District’s overall mental health resources. The executive team has also begun preliminary discussions regarding strategies to improve diversity, equity, and inclusion (DEI) within the District. Work on these goals will be ongoing throughout FY25, with initiatives designed to further integrate DEI principles into District operations and culture.

 

The implementation of Board Goals #1 (data and analytics), #3 (facilities plan), #4 (strategic plan), and #5 (oversight and governance) will continue throughout FY25, with measurable progress to be reported as the fiscal year unfolds. This focus on new and continued initiatives underscores the District’s commitment to operational excellence, community resilience, and the well-being of both staff and the public.