Legislation affecting funding for first responders, redesign of the nation's emergency management system and emergency scene communications are all receiving significant attention in the Nation's Capital.

"With the hotly contested 2006 elections looming on the horizon, it is more important than ever that the IAFF be fully engaged in congressional debates over fire service issues," says IAFF General President Harold Schaitberger. "We won't let the interests of our members become anyone's political football."

Much of the IAFF's efforts in recent weeks have been focused on the Homeland Security spending bill for fiscal year 2007. The Bush administration proposed slashing funding for fire service programs – including the complete elimination of the SAFER program and deep reductions in the FIRE Act – in the budget plan submitted earlier in the year. Some of the funding was restored when the House Appropriations Committee  took up the bill, but the legislation still contained significant reductions from last year's levels.

Working with Representatives Marty Sabo (D-MN), John Sweeney (R-NY), Steny Hoyer (D-MD), Curt Weldon (R-PA) and others, the IAFF crafted an amendment to shift more than $100 million to the FIRE and SAFER programs. The amendment was by far the largest change proposed to the bill on the House floor, but fire service champions in Congress made the initiative the first item of business considered and successfully passed the amendment by voice vote.

This is the third consecutive year that the House has voted to increase funding for fire service programs above the level recommended by the Appropriations Committee, an unprecedented string of victories that demonstrates the value that members of Congress place on the fire service.

While Congress was still debating the Homeland Security spending bill, the IAFF was forced to play defense to ward off an attack on the FIRE Act.  Representative Scott Garrett (R-NJ) offered an amendment to prevent any FIRE Act dollars from being used for wellness/fitness initiatives because, in Garrett's view, such programs "do not make anyone safer." 

The IAFF mobilized to defeat the amendment in two ways.  First, working with its allies on Capitol Hill, the International used parliamentary tactics to block action on the amendment.  Second, IAFF members and other fire fighters in Garrett's New Jersey district flooded his office with phone calls.  Within 24 hours, Garrett had reversed his position and pledged to work more closely with the nation's frontline emergency responders.

At the same time that the Homeland Security spending bill was moving through Congress, separate legislation reforming the nation's disaster response system was also being debated.  Four separate congressional committees have been developing legislation to overhaul FEMA in the wake of the botched government response to Hurricane Katrina. The IAFF has been working closely with these committees and other emergency responder groups to craft legislation that will assist fire fighters responding to disasters.

As part of this effort, the IAFF has proposed development of a credentialing and deployment system to assure that highly trained fire fighters can be more quickly dispatched to the scene of a major disaster and properly used upon their arrival. Other IAFF proposals include using an "all-hazards" approach to ensure federal preparedness programs don't focus exclusively on either acts of terrorism or natural disasters, and assuring that preparedness and response programs are fully integrated.

The most controversial aspect of FEMA reform is whether FEMA should remain within the Department of Homeland Security or return to its status as an independent agency.  The IAFF believes that having two separate agencies involved in disaster preparedness and response would only create more confusion and further hinder disaster response efforts. The IAFF has, therefore, endorsed retaining FEMA within DHS, while making major changes to FEMA to assure that the mistakes of Katrina are not repeated.

Another issue of concern to the nation's fire fighters is assuring universal access to 911 emergency phone service. Recent technological developments that allow phone calls to be made over the Internet provide consumers with new choices, but many providers of Voice Over the Internet Protocal (VOIP) phone services are not currently linked to a local 911 system. 

The issue has surfaced as part of congressional debate over updating the nation's telecommunications laws. The House-passed version of the telecom bill does not require VOIP providers to be linked to a 911 system, but Representative Dave Reichert (R-WA) raised the issue during debate on the House floor, and extracted a commitment from the bill's sponsor to address the issue before the bill is signed into law. Reichert, a former sheriff, told his congressional colleagues that although he generally supports the underlying bill, "our first duty is to protect American citizens."

Other fire service issues currently moving through Congress include pandemic flu preparedness, the HELPS Retirees proposal that allows for purchase of health care on a pre-tax basis, preserving Right to Know laws that enable fire departments to learn about large quantities of hazardous chemicals being stored in their jurisdictions, and blocking attempts to undermine the ban on contracting out fire protection at military installations.

Project HEROES (Homeland Emergency Response Operational and Equipment Systems), the IAFF initiative to rapidly develop, prototype and field test structural fire fighting Personal Protective Equipment (PPE) with enhanced chemical, biological, radiological, and nuclear (CBRN) protective qualities for today's new threats, has received a federal government contract by the Technical Working Group (TSWG) through the Department of Homeland Security (DHS).

Fire fighters do not currently wear structural fire fighting PPE that can protect them in environments where there has been a release of chemical, biological, radiological or nuclear agents. The IAFF is leading the Project HEROES team that includes the International Association of Fire Chiefs (IAFC), Total Fire Group, the National Institute for Occupational Safety and Health National Personal Protective Technology Laboratory (NIOSH NPPTL) and International Personnel Protection, Inc.  

The Project HEROES team is focusing its efforts on a development program that combines identifying and evaluating candidate materials, creating a design that addresses interfaces between ensemble elements and pursuing standards that rigorously define needed levels of protection. This program has resulted in materials with demonstrated CBRN protection that are integrated into the garments (coat and pants), hood, gloves and footwear of a fire fighter protective ensemble in a manner that does not sacrifice breathability or fire fighting performance. Each of the critical interface ensemble elements (e.g., garment to hood, hood to SCBA) have been addressed by applying innovative designs that prevent inward leakage of CBRN agents. The new interfaces also increase the overall ensemble's protective performance in the primary mission of structural fire fighting.

Extensive evaluations have been undertaken at the materials, ensemble and field test levels. Material testing included evaluations to demonstrate resistance to permeation and penetration by CBRN agents after simulated use of the garment material to assure that the protection remains in place over the full service life of the ensemble.

Overall integrity testing of Project HEROES ensembles using Man-in-Simulant Test procedures has shown overall protection factors between 450 and 540 (the proposed revision in NFPA 1971 specifies a minimum protection factor of 360). In comparison, a properly fitted standard ensemble provided protection factors of 13 and 14 when tested in the same fashion. In practical performance testing of prototype ensembles to evaluate fit and function, end users who had never seen or used the ensemble before unanimously preferred the Project HEROES ensembles over their current gear. In addition, comments from the end users indicate that the Project HEROES ensembles are lighter and more comfortable and keep them drier than their current standard structural fire fighting protective clothing.

The IAFF Project team has worked with the National Fire Protection Association (NFPA) to establish suitable requirements for CBRN protection in ongoing revisions of NFPA 1971 (structural fire fighting protection) and NFPA 1994 (CBRN protection), which will be adopted late in 2006.

 --Tom Woodley serves as IAFF General Counsel.

The Governmental Accounting Standards Board (GASB) has released Statement 45 (GASB 45) concerning health and other non-pension benefits for retired public employees. These financial requirements could result in cuts in benefits for IAFF affiliates and their members.  The IAFF urges affiliates to be aware of the consequences of these new requirements and to develop strategies for responding to probable cuts.

Who is affected by GASB Standard 45?

All public sector employers offering post-employment benefits (other than pensions) will be required to reflect the costs of those benefits in their financial statements.

How does GASB 45 affect post-employment benefits received by IAFF members?

GASB 45 creates challenges for IAFF affiliates.  Affiliates will likely be faced with employer proposals to reduce post-employment benefits liabilities by:

• Lowering the level of retiree health care benefits granted;

• Offering new employees (or new retirees) a reduced benefit level; or

• Placing a cap on total post-employment benefits. 

Affiliate leaders should insist on labor-management discussions to develop alternative solutions to these proposals.  For example, leaders should be prepared to consider options, including establishing a Retiree Medical Trust (RMT). RMTs give future retirees a lifetime of benefit payments for medical costs and insurance premiums, similar to a defined benefit pension. RMT insurance also includes medical, hospital, vision, dental and long-term care policies. 

The benefit payment can be used on individual or group medical policies (for example, the spouse's group coverage). A government may implement an RMT that does not create liabilities for GASB reporting.  When established through consultation with the plan's accountants and attorney and carefully defining the contribution to the plan, employers may avoid reporting liability for benefits under GASB 45. 

Even when such reporting may be advisable, the effect on financial statements can be minimized with an explanation that the benefits are not vested, and can be reduced when necessary for financial soundness of the plan.

What does GASB 45 require?

GASB 45 requires an employer to accrue the costs of other post-employment benefits over the career of an employee and to disclose the amount of any unfunded liability.

For employers who choose to fully fund these liabilities, this annual expense is called the Annual Required Contribution (ARC).  ARC is the sum of the annual costs for benefits earned during the year, plus an amortization – or costing out – of expenses for benefits earned before the adoption of GASB 45.

For employers who do not fully fund the costs of these benefits, the annual expense also includes further adjustments because there are no investment earnings to offset the liability. Under this scenario, the reportable annual expense for an unfunded benefit plan could be as much as twice the annual expense for a funded plan.  These increased costs are the primary reason that GASB 45 is so significant to public sector employees, since most post-employment benefits are not fully funded for the anticipated liability.

Does GASB 45 require advance funding?

GASB 45 does not require advance funding. Most public sector post-employment benefits are funded on a "pay-as-you-go" basis. The decision whether to fund the benefits has no impact on the actual cash costs eventually paid out as plan benefits.

The impact of this decision will, however, have a significant impact on the accounting process. The standard creates a strong incentive to fund. Employers that fund these benefits will generally be able to use more favorable accounting methods – which result in significantly lower post-employment benefit costs.  Furthermore, bond rating agencies may look unfavorably on governmental employers that do not have a plan for funding these obligations.

Do the standards require an actuarial valuation?

The short answer is yes. The purpose of a valuation is to:

• (a)  Determine the potential monetary liability of the retiree health plan;

• (b)  Budget for GASB costs and to properly distribute costs among employee classifications;

• (c)  Aid in developing strategies for managing costs through funding or managing plan costs; and

• (d)  Use data contained within these actuarial valuations to aid employers in union negotiations.

The valuation required by GASB 45 is similar to pension valuations that have been required for years under GASB 25: Financial Reporting for Defined Benefit Pension Plans and Note Disclosures for Defined Contribution Plans and GASB 27: Accounting for Pensions by State and Local Governmental Employers. However, the valuation under GASB 45 requires health care assumptions that are not present in pension valuations – such as premium rates and claim cost assumptions, health care trends (inflation) and levels of participation.

How frequently are valuations required?

Every two years for 200 or more members and every three years for less than 200 members. A member is defined as an active employee, a former employee with vested benefits, a retiree, a spouse or a widow(er).

How will the financial impact of expenses be documented?

Post-employment benefit expenses will be shown in the Statement of Activities on jurisdictional financial statements. Actuarial accrued liability will be disclosed on a Schedule of Funding progress report, typically presented as "required supplementary information." Unfunded plans will be required to show the unfunded liability on the Statement of Net Assets.

What is the potential investment impact of GASB 45?

Municipal bond and credit ratings will be affected by the results of GASB valuations and related decisions on whether to fund the liabilities. The cost of borrowing may increase and bond ratings may be affected if liabilities are unfunded or strategies are not developed to manage costs.

How does GASB 45 fit into the rating process?

Investor services – such as Standard and Poor's – will assess management, finances and debt factors by asking specific questions.  Investor services will use a series of questions to review management criteria, including:

• Is the jurisdiction actively pursuing alternatives to soften the impact of post-employment benefit obligations incurred under GASB 45?

• Where does the post-employment benefit problem rank in relation to other planning priorities?

• How conservative (or aggressive) are the methods and assumptions being used to determine post-employment benefit liabilities and plan for the future?

Investor services will also ask questions to review financial criteria, including:

• Are there other areas in the budget that can be cut to make room for increasing post-employment benefit costs?

• Will total carrying charges of bond debt service, pension contributions, plus post-employment benefit contributions be sustainable given existing (or projected) resources?

To review the debt criteria, investor services will ask:

• What is the legal obligation of the employer to meet retiree health care obligations and to pay benefits?

• How do post-employment benefits alter the long-term liability landscape for the employer?

• Do post-employment benefits put the employer at a comparative disadvantage in relation to its peers from the standpoint of total long-term liabilities?