Greater Harrisburg's Community Magazine

Huge Relief: As the number of volunteer firefighters in Harrisburg dwindled, a relief fund to benefit them grew and grew. What are they doing with all that money?

Illustration by Aron Rook.

Illustration by Aron Rook.

Glick Fire Equipment Company occupies a hangar-like building in the middle of a field outside Lancaster, just up the road from Bird in Hand, Pa. Behind a red-and-white, split-faced block façade, a six-bay garage looks out on an asphalt strip running through the grass. This is the runway of the Smoketown Airport, which hosts daily aerial tours of Amish country and an annual small-plane enthusiasts’ fly-in.

On a rainy day in February, Harrisburg Fire Chief Brian Enterline made the hour’s drive from the city to the Glick garage. Glick is a distributor for Pierce Manufacturing, a maker of customized fire trucks—what Faulkner is locally to automakers like Honda and Subaru. Enterline, accompanied by two city firemen, had come to pick up a new ladder truck, a mammoth, specialized piece of equipment costing close to a million dollars. By the chief’s reckoning, it would be the first truck with a 100-foot ladder the city had owned since 1981. More important, it was jointed in the middle, meaning it could cut tight turns in the city’s narrow streets.

The truck was waiting in the lot behind the garage, bright red beneath a gray sky. Enterline climbed up into the driver’s seat, while one of the firefighters, Corey Stone, mounted a separate cab in the back. Stone was taking the tillerman’s position, where he could control the truck’s rear wheels. They drove down the road to a nearby gas station. Speaking through a wireless headset, Stone told the chief that his seatbelt had been installed wrong. They finished fueling, turned around and drove back to Glick, where they executed an impossible-looking U-turn in a narrow corner of the lot, the truck folding at the hinge. “That was sweet, Corey,” said Enterline. “That was what she’s all about right there.”

How did Harrisburg, so recently on the edge of bankruptcy, afford a brand-new, million-dollar fire truck? It didn’t. Half the cost was paid with a grant from Dauphin County. The other half was paid by the Harrisburg Firemen’s Relief Association, a fund financed through a state tax on insurance companies.

There are nearly 2,000 such relief associations across Pennsylvania, each of them affiliated with one or more volunteer fire companies. They pay various kinds of benefits to make volunteering more attractive: medical costs in the event a firefighter is injured on duty and family assistance if the injury is particularly debilitating; a death benefit after a lifetime of service. Most of them don’t make grants of half-a-million dollars to help buy trucks, however. That’s because most of them don’t have resources like Harrisburg’s. At the end of 2014, according to federal tax forms, the HFRA had assets in excess of $16 million. That makes it the wealthiest volunteer relief association in the state, in a city that has relied mostly on paid firefighters going back several decades.

The HFRA hasn’t only lavished money on the city fire department. Since 2004, the tax forms show, it has paid $1 million in salaries to its officers. Such compensation, although permitted by state law, is unusual: most of the state’s relief associations pay officers a nominal stipend, if anything at all. The HFRA’s wealth is unusual, too, but there are other relief associations with substantial assets whose board members don’t seem to require compensation. The volunteer firemen’s relief of Lower Paxton Township, for instance, manages a fund of around $2.5 million, and it spends hundreds of thousands per year on equipment and benefits for firefighters. Yet it doesn’t pay its officers.

In 2002, then-Auditor Gen. Robert Casey, Jr., whose office reviews the finances of every relief association in the state, wrote a scathing report about the HFRA’s use of its vast resources. A press release described it as “little more than a secretive social club that exists to compensate the club’s top officials and maintain the clubhouse.” Firefighters’ relief funds, Casey said, “are supposed to provide essential protective equipment and benefits to the volunteer firefighters who bravely serve our communities. They are not to be used by a select group of individuals as an investment club for their own private benefit.”

At the time of the audit, the association’s president was Henry Young, a former executive editor at the Patriot-News. In a story that ran in the Patriot, Young dismissed Casey’s findings. “We have a big bank account. So what?” he reportedly said. “Tomorrow, we could have a fire, and a collapse could kill eight or 10 volunteers. I got to have the money to take care of the families and see the kids all the way through school.” Young did not mention that, at the time, there were more board members than there were active volunteers. Nor did he disclose that the association was paying him nearly $50,000 per year.

The Harrisburg Firemen’s Relief Association was incorporated in 1897. According to its charter, the organization’s purpose was to maintain a fund “for the relief, support and burial of certain of its members, and other beneficial and charitable purposes.” At the time, as detailed in David W. Houseal’s “History of the Harrisburg Volunteer Fire Department,” companies fought fires with steam-powered pumps mounted on horse-drawn carriages. With the exception of the chief and the assistant chief, who were hired by the city, and the paid drivers, the firefighters were volunteers.

Over the next century, volunteerism declined. The city government “chipped away at what the companies were responsible for,” Houseal writes, gradually taking charge of fire services under a paid Bureau of Fire. By 1980, 14 of the city’s 16 volunteer stations had been shuttered or sold. Yet, even as fire duties were assumed under a paid city department, the relief association only seemed to grow. One of the critiques in Casey’s audit had to do with the HFRA board members’ “questionable appointment and eligibility.” In the audit period, the association had paid a total of 29 officers, most of them representing volunteer companies that had long since closed.

If volunteerism was shrinking, where did the HFRA get all its money? The theory I heard from most people I spoke to centered on a quirk in the way the state funded relief associations. The money comes from insurance companies doing business in Pennsylvania, which pay a 2-percent tax on their premiums. The tax on “foreign” companies—those headquartered out of state—is remitted to local governments, which then pass the money along to the relief associations. In the days before zip codes, the theory goes, these “foreign” insurance companies mistakenly earmarked some taxes for Harrisburg that should have been going to neighboring suburbs. A homeowner in the 3000-block of Derry Street, for instance, would have listed his address as being in “Harrisburg,” though he technically lived in Paxtang.

Having the initial seed money is one part of the story. The other part is making smart use of it. Young, who had served as the HFRA’s president since at least the early 1980s, was a “very smart financial investor,” Chief Enterline told me. Through the ‘80s and ‘90s, Young ushered the organization towards a more aggressive investment strategy. “Henry is the one that got them out of the bank account and into the stock market,” said Don Konkle, a former city fire chief and the current director of the Pennsylvania Fire and Emergency Services Institute. The strategy extended beyond stocks, too. Konkle’s institute, for example, rents office space on State Street downtown—in a building the HFRA owns. The association bought it in 1997, adding to a diversified pool of assets that came to include bonds, stocks, cash and mutual funds.

By the time of the Casey audit, the value of the association’s cash and investments stockpile was approaching $11 million. Casey didn’t take issue with the amount of money so much as what the association was doing with it. In the three-year audit period, between 1998 and 2000, Casey claimed the group had spent less than a tenth of its income on member benefits, equipment and training. A third of the money it spent, if you excluded buying investments, went towards compensation of the association’s board members. Based on these numbers, Casey accused the HFRA of an “apparent failure to satisfy the statutory purpose” of relief associations—that is, protecting volunteer firefighters.

The audit also spent several pages attacking the association for refusing to provide an up-to-date roster of its members. That was one of the department’s “biggest gripes,” according to a past senior official there, who spoke on the condition of anonymity, saying he was not authorized to speak on behalf of his former boss. (Through a spokesperson, Casey, now a U.S. senator, declined to comment for this story.) The auditors viewed a complete roster as necessary proof that benefits were being paid to actual firefighters. But the HFRA, alone among the state’s 2,000 relief associations, argued they weren’t required to provide it. “They took the position, and it was preposterous, that they had no obligation to ever disclose to us a roster of the members,” the official said. “We had no way of knowing how many members there were, whether they were living or dead, whether they were actually engaged in fire service. It would be like someone saying they needed VA benefits but refusing to identify what branch of the service they were in.”

Casey’s audit was highly contested. Before releasing their final report, the auditors went back and forth with the board for a year and a half. The HFRA’s attorney challenged the findings in a lengthy letter. The auditors, in turn, replied with a dense counter-analysis, at one point going into a 200-word digression on the meaning of “professional skepticism.” When the audit finally came out in 2004, it “was just the crescendo of a long-standing dispute,” the former senior official said.

Nonetheless, in the years that followed, the association began to make some changes. In the period the Casey audit reviewed, the group spent just short of $60,000 on firefighting equipment; over the next four years, that number climbed to $340,000. The board also slashed its officer ranks, cutting the number by almost two-thirds, to 10 officers by 2009.

In the meantime, the relief association’s stockpile has continued to grow. “There’s no question Harrisburg’s amount is abnormally high,” the state’s current auditor general, Eugene DePasquale, told me recently. “I don’t know anyone that’s close.” Yet the relief association’s last few audits have not been critical. There is no legal prohibition on a relief association hoarding resources, and compensation of officers is still allowed. The appropriateness of such actions, DePasquale said, was a “policy question” for the state legislature.

Chief Enterline, himself a former volunteer, defers to the judgment of the state auditors. “If the AG’s office says everything is good with the organization, then who am I to second-guess it?” he said. In his view, Harrisburg and the HFRA had a “great relationship.” As for the officers’ salaries, he added, “I don’t wanna know.”

These days, the relief association board has nine members, representing the three volunteer companies still in existence: Camp Curtin, Mount Pleasant and Riverside. In January, I spoke briefly by phone with the board secretary, Jim Bailey. He disparaged the conclusions reached by the audit under Casey. “Mr. Casey didn’t give a shit about anyone in the Commonwealth of Pennsylvania,” he said, and “had no clue what he was doing.” He suggested Casey’s findings reflected nothing more than his ambitions for higher political office. He also pressed me repeatedly for my “motive” in pursuing the story and told me I was investigating an “old issue” and should “walk away.” When I persisted, he told me to call the association’s lawyer.

The HFRA is represented by Renee Lieux, a partner at the Lemoyne-based firm Bybel Rutledge, which specializes in business and corporate law. After a few weeks exchanging emails, she arranged for an interview with members of the board at the firm’s offices, on a commercial strip off the Harvey Taylor bypass. Joining Lieux and Bailey were John Fisher, the board treasurer, and Bill Hoyer, who succeeded Young as its president in 2007. (Young died in 2010.)

The current board’s position can be summed up in two main claims. First, they feel validated by the routine scrutiny of regulators, none of whom have ever accused them of breaking the law. The HFRA has “operated totally, totally straight-up legal,” Hoyer said. Aside from the routine state audits, board members claimed they’d also been investigated by both the state attorney general and the Internal Revenue Service, neither of which found any evidence of wrongdoing. The IRS only made one recommendation, they said, which was to reclassify the board members as employees rather than independent contractors. (A spokesperson for the attorney general’s office would neither confirm nor deny the existence of an investigation into the HFRA; federal law prohibits the IRS from discussing the tax account status of individual taxpaying entities.)

And second, the board maintains that what they’re paid is a bargain given the amount of assets they manage and the work they do. For the past five years, the total compensation to board members has been a little over $100,000 each year. But if you tried to replace the board with paid staff, Lieux said, “I’m sure you couldn’t hire enough people with that amount of money to do the job that these guys do.” Bailey elaborated. “If I weren’t in this organization, and these three people came to me and said, ‘Jim, I would like you to do this as a full-time job’? I’d laugh at you for a hundred thousand dollars. I wouldn’t do that for a hundred thousand dollars. I run a little crappy landscaping business that makes more money than that. So why would I have all of this responsibility for that little bit of money?”

Fisher, the treasurer, had brought along a written list of his duties—bookkeeping, recording invoices and checks, reconciling accounts, preparing monthly reports. He read the list out loud, which took a full two minutes. “That’s a partial list of what we do,” he said when he was finished. “It’s not coming in once a month at a meeting and writing a couple of checks and going home and collecting my salary. I’m in there every week working.” Bailey said the routine audits and outside investigations also consumed substantial amounts of time. “When we had our IRS audit, I spent probably a thousand hours on that,” he said.

Despite this, they had fuzzy notions about the relative compensation of board members over the years. At one point, Bailey said the pay for “some individuals” had “dropped significantly” in recent years. I challenged that, pointing out that his own annual salary had increased from $9,600 to $15,600 since 2004. He then told me to look at the “overall” compensation. “What you’re here to investigate is the organization,” he said. “Don’t pick me.” But the total board compensation had increased, too—by $8,000 since 2004, according to federal tax forms. When I pointed that out, Bailey urged me to look at individuals again, saying salaries had gone down “by hours, and by time, and by whatever, by job.” Yet every one of the board’s nine members, as of 2014, was making more than he made in 2004.

It is true that, after Young’s retirement, the board did cut the president’s salary nearly in half, to $25,000. And there was a slight dip in total compensation between 2006 and 2009. But in more recent years, it appears that, after trimming the total size of its board, the HFRA simply consolidated salaries. Where many of the 20-plus members in the past made several hundred dollars apiece, the members of the smaller board now each made several thousand. Hoyer said officers’ salaries these days are adjusted in accordance with cost of living increases. (I asked for a copy of the association’s by-laws, which presumably enshrine such policies, but Lieux declined to provide them, saying they contained “very, very specific” information about members’ benefits and were confidential.)

“This is a very important thing we’re doing,” Bailey assured me. “We have huge amounts of responsibility.” He said that he was more exacting with the association’s assets than he was with his landscaping business. “What I do in firemen’s relief is a hundred times more governed, and I’m more strict with that money that I am with my company,” he said. If anything, he thought the association should be praised for its stewardship of investments that now provided tangible benefits to the city’s fire services. “I am proud that we have done all of the good things that we’ve done with that money,” he said. “I would be embarrassed and probably not even want to talk to you if we had $10 million, and we blew it all.”

The next day, Hoyer, the board president, called me. He felt things had gotten a “little tense” during the interview, and he wanted to “smooth things over.” He was concerned the focus on what officers were paid would be “throwing the wrong message out” and would “bring in some of that negativity.” “People look at those numbers, and they form an opinion,” he said. He also wanted to remind me that the practice didn’t start under his tenure. “There’s always been salaries in Harrisburg Volunteer Firemen’s Relief,” he said.

Hoyer then urged me to look at the compensation of directors of national charities. The board members had brought this up during our interview, too, noting they were paid far less than directors at non-profits like the Red Cross and the American Cancer Society. “We fall way below the allowable salary levels of any non-profit,” Bailey had said. “What we’re getting paid at the end of the day is percentages of what we actually govern.”

It’s an odd comparison, not least because a substantial source of overhead for outfits like the Red Cross is the cost of fundraising, an expense the HFRA does not share. Even so, the association falls short of the spending standards aspired to by reputable national charities. The Better Business Bureau’s “Wise Giving Alliance,” which accredits charitable organizations, recommends that at least 65 percent of a charity’s expenses go directly to program services. Between 2004 and 2014, there were four tax years in which the HFRA spent more on officer compensation than on all “program” expenses—death benefits, family assistance, medical bills, training, insurance and equipment purchases—combined. In the period covered by its most recent audit, from 2011 to 2013, the HFRA spent a total of $1.8 million. Just shy of $830,000, or around 44 percent, went to fire services and benefits for volunteers.

The relief association’s ratio of overhead to services would be significantly worse if not for one category of expense in which it’s been increasingly generous over the years. That category is the purchase of fire equipment for Harrisburg, like the Pierce ladder truck that Chief Enterline went to pick up in February. In the 11 years covered by the federal tax forms I was able to obtain, the HFRA spent a total of $2.3 million on trucks and other equipment for the city. It was the sole category of expense whose totals surpassed the amount the association spent on officer salaries.

When Enterline discusses the HFRA, he focuses on this largesse. “I know they’re doing a good job for the volunteers and the city,” he said. He invoked charities like the Red Cross, too, to explain why he isn’t overly concerned about the association’s overhead. “You hear about CEOs making lots of money,” he said. “I don’t care what they’re making. We have a good relationship with the Red Cross.”

The fire bureau’s “good relationship” with the HFRA is symbiotic: the association supports the 25 or so volunteers who ride with the city’s paid firefighters on emergency calls, while the volunteers get valuable experience and training working at an urban fire department. “We’re the busiest and best show in town,” Enterline said, noting that most volunteers who come to Harrisburg see it as a stepping stone to a firefighting career. What the relief association’s officers are making doesn’t concern him, as long as the mutual support continues. “I gotta put the blinders on to that,” he said. “My focus is on where we are, and how do we make our combination department the best it can be.”

In 2006, Casey’s successor, Jack Wagner, released an audit of the HFRA that repeated many of his predecessor’s findings. Noting that the association’s state aid had been withheld for noncompliance for the past five years, Wagner urged the board to “give strong consideration” to ways they could use their resources “in the best interests of the citizens of the city of Harrisburg.” “While state law does not allow the funds to be simply turned over to the city,” he went on, “association management should consider how it can take some of the burden off the city budget by maximizing the authorized use of association funds.” The audit did not offer examples, aside from suggesting the HFRA might invest in city-issued bonds. It urged the board to explore its options with its “legal and financial advisors.”

The strict rules governing relief fund expenses can be a source of frustration for the board. Determining what is and isn’t a permissible expense can take hours of research, and even then, the association may still be in doubt about a purchase’s legality. Hoyer told me the story of a “finding” in an audit of the association released in 2013, which claimed that the HFRA had made an unauthorized expense of $45,000. The money had paid for the development of a website for the Pennsylvania Fire and Emergency Services Institute, the organization that rents office space out of the HFRA’s building on State Street. The auditors called it an “unauthorized and undocumented expenditure,” resulting from a “lack of due diligence” by the board.

In its response, the board noted that, before approving the expense, it had sought input from the state Department of Community and Economic Development. Because the auditor general is forbidden from giving pre-audit advice, DCED keeps a database of allowed expenses and occasionally advises relief associations on what they can buy. According to the audit, DCED gave a qualified nod of approval on the website purchase: “As you describe how you wish to develop and operate the web site, I would say you may spend VFRA funds on it but I would remain very interested to see it demonstrated.” Nonetheless, the auditors maintained the expense was inappropriate and urged the HFRA to seek reimbursement.

Hoyer’s point was not so much that the expense had been justified, but that the effort spent reviewing it had done more harm than good. The legal fees for dealing with the audit of the website expenditure alone, he said, cost $75,000. “That’s the kind of stuff that upsets me,” he said. “We’d gotten that expense approved. That’s what most frustrates me about the volunteer fire service.” (A DCED spokesman told me that any “information or guidance” provided by his department is “solely informal guidance and does not have any binding authority.”)

Episodes like this show the extent to which the HFRA is a historical curiosity: it has the resources of a large charity, but it’s governed by rules created with a much narrower purpose in mind. This helps to explain its relationship with the city, which seems satisfied with the level of support it’s getting from the HFRA—more than it’s ever gotten before, and perhaps as much as can be expected under current law. Certainly, with assets in excess of $16 million, the association has more than enough funds to pay “for the relief, support and burial” of its members. But what “other beneficial and charitable purposes” it should be financing has been a subject of negotiation for some time.

Chief Enterline told me one story about a meeting he had with Henry Young, the former HFRA president. It took place in the late 1990s, when Enterline was a young volunteer. The city had bought new air packs, but only for its paid firefighters. Enterline decided to ask Young if the relief association would pay for more air packs for the volunteers.

“He was a very staunch guy. Very direct in his thinking,” Enterline recalled. “And he wasn’t swayed very easily.” They met and talked for two hours. In the end, Young agreed to buy the packs, provided Enterline could get a letter from the city’s fire chief promising to pay the cost back if the purchase turned out not to be permitted under state law. “I still have that letter, and we still have those air packs today,” Enterline said. “And the relationship has only blossomed from there.”

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