No need for code amendment
WEIRTON – West Virginia lawmakers don’t see a need to amend state code to specify what should be done with unspent tax dollars or equipment and properties purchased with them once a fire company disbands, saying that, with one notable exception, it hasn’t been a problem in the Mountain State, Del. Randy Swartzmiller, D-Hancock, said Friday.
In December, after reviewing records for the now-defunct Weirton Volunteer Fire Department Co. 1, the West Virginia Legislative Auditor’s Post-Audit Division said that in order to protect taxpayer interests, state code should be amended to force disbanded fire companies to return any unspent taxpayer dollars as well as assets purchased with those funds to the government entity that gave the money to them.
The auditors, who reviewed Co. 1 records from 2008 through 2010, also recommended that legislators:
Spell out exactly what to do with properties, equipment or other items that were purchased with state, county or municipal funds once a squad is decertified.
Require disbanded squads to return any unexpended, unencumbered state funds as soon as they are decertified by the State Fire Commission.
The audit identified more than $24,000 in taxpayer funds that it said shouldn’t have been spent by Co. 1 officers after the squad was decertified in 2007 and recommended that its officers repay the money and formally disband.
According to documents on file with the Secretary of State’s office, the Co. 1 officers also were the officers of the nonprofit North Weirton Storage Rental and the Phoenix Society. In 2007 another squad, Weirton Heights Volunteer Fire Co. 3, changed its name to the Phoenix Society.
The Phoenix Society was administratively dissolved on Dec. 21.
The audit report comes more than a decade after city officials, concerned with liability issues and duplication of services, had sought to bring the city’s three volunteer units under the direction of the city’s paid chief. Co. 1 and Co. 3 refused, prompting the State Fire Commission to withdraw their certification in 2002. While the state Supreme Court of Appeals eventually reversed that decertification decision for technical reasons, even with their certification restored, they no longer had a fire district and could not respond to fire calls in West Virginia.
The two squads eventually struck a deal with the county and new city administrators to bring back one of the two squads, Co. 1, which continued to receive state fire protection funds until 2007 when the State Fire Commission, this time with written rules and procedures the court required in place, again decertified them.
The audit of the group’s books for 2008-10 found that the Phoenix Society had used the state fire protection funds to cover a myriad of bills, including fuel and vehicle expenses, vehicle repairs, towing, vehicle cleaning, batteries, insurance, stamps, utilities, snow removal, a computer, mowing, business registration, batteries, car washing, clearing brush, toilet paper and paper towels, supplies, door installation and an office heater, none of which auditors said were allowable after decertification.
The audit team also noted the Phoenix Society had written 35 checks totalling $3,500 from the department’s state account to North Weirton Storage rental, the nonprofit subsidiary organized by Co. 1, and that it continued to use the Co. 3 firehouse even after they were no longer in the firefighting business.
Co. 1 isn’t the only squad in West Virginia taken to task for how it spent state funds: Audits of other volunteer squads from around the state over the past year found several had made questionable expenditures and it was recommended that they, too, reimburse the state. Several squads also were chastised for bad or non-existent recordkeeping, missteps not cited in the Co. 1 audit report.
Co. 1/Phoenix Society President Joe Stankiewicz said the Weirton squads had an accountant monitoring their books for them and insists the $24,000-plus in state money referred to in the audit had been received and spent before the state fire marshal’s cease-and-desist order was issued in December 2007.
“Nothing was done wrong, everything was done according to state guidelines and they received services for their money,” said Stankiewicz, who describes the Phoenix Society as a social organization. “The fact is, we kept the corporation alive after the initial shutdown … but that money (cited in the audit) was for a previous time people had received services.”
He also acknowledged it had been years since the squad responded to a fire call.
Swartzmiller, meanwhile, said the audit team’s recommendations are non-binding, leaving it to legislators to decide whether action is warranted. He said other squads that are no longer serving the taxpayers have returned tax dollars and turned over equipment and property as a matter of course, so he sees no need to push amended legislation through.
His counterpart, Del. Ronnie Jones, D-Hancock, said he’d received a packet of information from Weirton resident Dave Cline, at the heart of the decades-old drama surrounding volunteer fire department funding in Weirton, “but I haven’t had a chance to look into it yet.”
“I’m not sure we need to do anything with it right now,” he said. “I need to (read it) before coming to any conclusions.”
Stacy Sneed, director of the legislative post-audit division, has said it’s in the Legislature’s hands.
“At this point we have no authority to go in and seize any funds,” she’d said in a recent conversation. “That’s why we’re recommending to the Legislature that they put something in the code that requires fire departments to pay the money back.”
But with the 2013 legislative session nearing an end, Swartzmiller, House Speaker pro tempore, isn’t expecting action.
“(There’s) only one case I’ve ever known of where it happened,” he said. “If it was a problem I was seeing out there on a regular basis, I would say ‘yeah, we need it.’ But it’s just like if somebody does something out on the road one time, it doesn’t mean we should change road laws. Does the law need to be changed because it happens one time? I don’t think so. It would be a knee-jerk reaction if we did.”
Sneed, too, said she’s not aware of any community other than Weirton where it’s been a problem. When the Hookersville-Muddlety Volunteer Fire Department in Nicholas County closed, for instance, she said the squad turned over its remaining government funding and equipment without incident.
“Usually when a fire department loses its recognition or closes its doors, they release all of the equipment to the local jurisdiction whether that’s a city or the county, and if they have outstanding bills, the (county) usually sells the equipment to take care of the (debt) and whatever is left is dispensed between fire departments and municipalities,” State Fire Marshal Sterling Lewis Jr. agreed, adding he can’t explain why Weirton was the exception.
“Most of the fire departments that lose their certification or close on their own, usually they’re in debt pretty well and everything’s taken care of at the local level,” he said. “I really don’t know what the problems were up there.”
Stankiewicz said their firefighting equipment was dispensed to squads in faraway places: a pumper that had a lien on it ended up in North Carolina, while a ladder truck was sold to an Irwin, Pa., squad. One rescue truck ended up in the Susquehanna Valley (Pa.) and another on a sugar plantation in South America. A couple pieces are in New Cumberland, he said.
“And in all, the city spent over $2 million to replace equipment they’d said was surplus or duplicated,” he said.
Dave Cline, the Weirton resident who’s spent more than two decades tracking fire levy funding, said it makes his blood boil “to think somebody may have my tax dollars in their account and there’s no way to get it back, no rules to say they have to give it back or that it can only be spent a certain way.”
Cline, who previously served on council as well as the county commission, said he has boxes of documents and stacks of computer disks full of information on fire department funding that he gathered through freedom of information requests, lawsuits and civil complaints. “It’s about fixing things for the future,” he insists. “This is what happens if you don’t fix it. We don’t want it happening anywhere else.”
Even the West Virginia Supreme Court of Appeals has chimed in, upholding a lower court decision ordering the Phoenix Society to surrender the deed to the old Co. 3 fire station in Weirton’s west end to Hancock County commissioners, concluding that the property had been purchased with taxpayer dollars and as such ought to revert to the county since it was no longer being used for firefighting purposes.
The Phoenix Society had argued at the Circuit Court level that the $123,000 loan for construction of the west end station had been repaid 13 years later through a mix of its own fundraising and fire levy money.
The high court, however, noted there was “a paucity of evidence from either party … concerning how much each contributed financially toward the construction of the fire station through the repayment of this loan …” In their December opinion, the justices pointed out that the Phoenix Society had not supplied adequate documentation of how much money they’d generated through fundraising activities over the years or how they’d spent it.
“The record supports the conclusion that the county commission funded the purchase of the subject property, even though it never held actual title to the property,” the justices opined. “… It cannot be said that petitioner should be allowed to retain the subject property, which was purchased with taxpayer dollars and which was to be used solely for firefighting purposes, when petitioner is no longer providing firefighting services, simply because the parties’ agreement did not contain a reverter clause. Any other conclusion would penalize the public …”
Stankiewicz, in fact, said early working documents had stipulated the volunteers would retain ownership of the land, but concedes that language was omitted from the final agreement with the county. He insists the squad sold part of its land holdings and used the money – upwards of $70,000 – to help pay for the $120,000 firehouse.
He also characterized the volunteer community’s long-running dispute with Cline as a philosophical dispute that’s really about “personalities, and how much of government we want in our lives.”
“Government is everything to David (Cline), that’s his problem,” Stankiewicz said. “As long as government is doing it, that’s OK to him. It’s just David’s way, the way he thinks government should be.”
But State Fire Marshal Lewis, for one, said he doesn’t have a problem with adding language to the state code to prevent what happened in Weirton from happening ever again.
“It’s one of those things where it’s done differently from county to county,” he said. “It probably would be good to have a set process for when a fire department loses its certification, that way everybody statewide knows (what’s expected). And if there’s money out there like that, it needs to be returned to the state treasury.”
Swartzmiller, though, said he’s satisfied that most squads in West Virginia honor the spirit of the law as it is now written, loopholes and all, and characterized what happened in Weirton over the past decade as an aberration triggered by a long-running feud between Cline and the volunteers. He said the state would “get into a whole gauntlet of different problems” figuring out who should get what if squads are required to return property to the original funding source, though he did say there ought to be a mechanism to do a lockdown right away if a squad is decertified.
“What Co. 1 did up there prior to commissioners (interceding) was wrong,” he said. “They tried to hide fire trucks, that’s not how it should work. But that said, a redistribution back to taxpayers (wouldn’t resolve anything). To my knowledge, it hasn’t happened since then. It was a one-time deal and the equipment was recovered, it was redistributed. There wasn’t an issue until they … got audited.”
Cline said lawmakers tried to eliminate the loophole several years ago but the measure didn’t make it out of committee.
“It needs to be approved so it’s in all counties, so there’s no confusion and taxpayer rights are protected,” Cline said. “Most of the time it’s not going to be a problem, but for the one’s where it is … it would be a way for taxpayers to get their money or equipment back. The driving point for me is if my delegates don’t do something, they’re giving $25,000 (in tax dollars) away. If they don’t fix it, shame on them. … The effort should be made to make sure the law gets changed so it never happens again.”
Swartzmiller said it’s unlikely at this late date that they’d ask the squad to refund the money, pointing out that after 10 years with no income, “it would be hard to get blood out of a turnip.”
“They’ve been completely dissolved,” he said. “I think everything we could get we’ve (already) got back.
“Ultimately, at the end of the day (the system) worked,” Swartzmiller added. “The Supreme Court upheld (the county’s position) and the (fire house) is going back to the county commission. … At the end of the day, the taxpayers didn’t get cheated: The equipment is out there with other departments, and the Supreme Court ruled a private entity couldn’t end up with the property, so it’s going back to the county commission.”
(Harris can be contacted at email@example.com)