Wednesday, May 25, 2016

A story of 2 fire departments - The Final Chapter

Over the past five weeks, I've described 2 different fire departments.  And how each operates its department.

The two departments had differing approaches to budgeting, its social responsibility, its purchasing decisions, and its financial record keeping.

Guess which department has better equipment, safer equipment, and is viewed more positively by its community?

Running a fire department is a complex endeavor.  The purchases are big, the decisions take time & thought to make & carry out well, and the stakes are life-threatening.  The decisions that a fire department makes affect the community. 
  • Does the fire department have or have a plan to get the safe and modern equipment to protect its citizens?
  • Is it prepared when the unplanned events happen (both in life and financially)?
  • Does the leadership view itself as stewards of the department, aware of its history and planning for a successful future?
The 2 fire departments I've described over the past few weeks answer those questions very differently.   And, in this age of economic consolidation, a fire department must "stand out" if it wants to survive.  And that means being or becoming a fire department that is strategic.

Summary

Your fire department is one of these two fire departments.  And I see a huge disparity when talking to these departments in what they have, the enjoyment of their experience being part of the department, and the confidence they have in serving their communities.

Stay safe!
John R. Hill
President
First Bankers

Wednesday, May 18, 2016

A story of 2 fire departments - Chapter 4

I regularly talk with 2 different types of fire departments.

And their stories are dramatically different. 

The story of fire department #1

This fire department calls for a loan.  They can't locate financial records, they don't have up to date financial information, or are missing some years.  Or worse, they really don't keep any financial records.

Further, they don't have anyone versed in financial affairs to answer any questions - answers to which may help them get a loan at a better interest rate.

Financial practices aren't very important to this department.  Which is fine, until they want to enter the financial world and get a loan.

The story of fire department #2

This fire department has all their financial records easily accessible.  They may even have an outside accountant audit their books to ensure they are accurate and there is no financial concerns or issues (such as embezzlement).

Their financial records are not shoddy.  They can provide them quickly and have someone who can help answer any questions (such as "Why did repair costs go up so much last year?).  Answers to questions like this help the bank analyze your credit ability and can lead to a lower interest rate.

Summary

Guess which fire department gets the lower interest rate?  When you want to engage the finance world, it's important to have the information that the finance world needs to do its job better.

Missing, sloppy, or inaccurate financial records will cost your fire department much.  Perhaps in higher interest rates or, worse, by not being able to buy a fire truck at all.

Stay safe!
John R. Hill
President
First Bankers

Wednesday, May 11, 2016

A story of 2 fire departments - Chapter 3

I regularly talk with 2 different types of fire departments.

And their stories are dramatically different. 

The story of fire department #1

 This fire department buys trucks buys their fire trucks when they need them.  But they haven't planned for the purchase.  Sure, they knew the last truck was on its last legs and that they needed a truck soon.

But they didn't take any steps to be ready.  They hadn't made any financial provisions for the truck. 

They purchased the truck when the last truck went out of service.  They were forced to react.  They need a truck now! and maybe view the purchase impulsively.  They are forced to accept the truck that's available now and the financing terms they can get.  They are not in control, they are controlled by other forces.

The story of fire department #2

This fire department is always planning on buying their next truck.  They have a replacement plan in place.  They knew approximately when they will need to buy their next fire apparatus.  They have been making financial plans - both by saving up a financial reserve and by communicating about what trucks cost so they won't be blindsided and can get the truck they need.

When they buy a fire truck, it's an intentional act.  They have been ready for a while and aren't forced to take whatever truck is available.  They also can borrow more wisely and at better terms because they are prepared.

Summary

Buying a fire truck is a continuous process. As soon as you buy a new apparatus, a savvy fire department starts to buy their next truck.  They investigate and make financial plans for the next truck always.


Stay safe!
John R. Hill
President
First Bankers

Wednesday, May 4, 2016

A story of 2 fire departments - Chapter 2

I regularly talk with 2 different types of fire departments.

And their stories are dramatically different. 

The story of fire department #1

 This fire department views itself as free from any burdens or responsibilities simply because it's the fire department in town.

It has to follow no rule except its own.  It sees itself as unique and special because it provides a safety service to the community.

It always seems to be fighting with someone about something.  I've even had a fire department like this say that they don't have to follow the IRS rules when financing their fire truck.

The story of fire department #2

This fire department realizes its part of a system to protect and serve their community. It understands it has to follow the rules and work with other individuals and organizations to share and build a responsible safety network.

When they ask for money, they respect that someone is giving money to them and will probably have a say in what happens at the department.  They don't declare war or issue proclamations when this happens, they talk and educate about what it takes to run a fire department.

Summary

Both of these fire departments protect and serve their communities.  I'm not inferring that an attitude makes a bad fire department.

But I do notice that fire departments like the second one have better relationships, newer equipment, and more budget to run their fire department.

Stay safe!
John R. Hill
President
First Bankers