During a three-and-a-half-hour meeting Tuesday, the Jackson County Fire District 5 board offered a glimpse into the embattled district’s financial woes, including how it went from receiving an unprecedented amount of grant funding to possibly running out of money before the year is out.

District officials reported a budget shortfall of between $1 million and $3 million at least in the near term, and a need to reduce staffing by up to a dozen people if drastic steps are not taken.

In a review of the district’s finances, interim Fire Chief Aaron Bustard informed board members, and an audience of about 20, of measures underway to save money.

All discretionary spending, Bustard said, has been “completely shut down.”

A firetruck ordered to replace one lost in a collision on Dead Indian Memorial Road in October has been canceled — despite the old one being insured — for a lack of funds.

The district has stopped participating in out-of-county deployments in which local fire districts and departments contribute personnel to a strike team mobilized to assist surrounding regions in large-scale emergencies. Bustard said the district could not in good faith send resources given the current uncertainty.

To deal with staffing shortages and a freeze on overtime, Bustard said neighboring districts have increased mutual aid to help with calls for service. Fire District 5 has also stepped up efforts to recruit volunteer firefighters to boost staffing levels.

“We’ve been forced to make a decision on how many people, basically, that we can staff per day,” Bustard said. “We want to keep three personnel on every fire engine. Because of that, we’re down to where we can staff two fire engines a day.”

To make payroll, Bustard said the district took out a line of credit earlier this year. Staffing alone makes up 110% of costs for the district, which serves over 22,000 people and operates fire stations in Phoenix, Talent and unincorporated Ashland.

Tuesday’s meeting comes just one week after the board unanimously voted to terminate the contract of district Chief Charles Hanley after an investigation corroborated allegations of covering up sexual harassment, covering up and participating in bullying, and interfering with a governmental promotion board.

Concerns about Hanley’s leadership were first raised publicly in February when members of the International Association of Fire Fighters Local 2596 said they had lost confidence in the chief.

In the months that followed, three board members resigned en masse, the Jackson County commissioners appointed their replacements, the district’s financial crisis became apparent, and district officials began developing plans to seek help from Jackson County Fire District 3 through an intergovernmental agreement.

To help combat the budget shortfall, Bustard said the district had reduced employee benefits — the interim chief himself took a benefit reduction, according to board chair Greg Costanzo — and also got board approval Tuesday to sell off district equipment.

Bustard said he saw red flags prior to being named interim chief in May, but that the reality of the district’s financial situation was worse than he could have imagined. Bustard said revenues were over-forecasted, line items under-budgeted and grant dollars that flowed in after the devastating Almeda Fire in 2020  poorly managed.

Just a year ago, the district was busy focusing on construction projects — including a station retrofit, a civic building in Phoenix and a new training facility — and added staffing.

Bustard said he quickly realized “our funds in hand were not enough to make it through the end of the year.”

Board member Chris Luz explained to audience members that things had been “a little bit siloed here in the district, whereby the former chief really had a grip on the finances and the budgeting and what was going on behind the scenes, and it wasn’t shared with everybody as much as it maybe should have been.”

Board secretary Derek Volkart remembers, before he served on the board, attending a budget meeting in which Hanley was “patted on the back for getting all that grant money.”

“He said, ‘Time to grow the district from the California state line to the city limits of Medford and charge forward,’” Volkart recalled.

“And here we are from $8.5 million in grant money to facing bankruptcy.”

Bustard said the district had rehired a previous office manager and finance officer “to get a perspective on what the financial outlook was for the year.” They provided a projected budget that showed the district possibly running out of operating funds in November.

Board member John Karns, who serves as fire chief for the Medford airport, said he was shocked by salaries in the district that are “above what is acceptable” and by the financial mismanagement that had taken place.

“You don’t take a district with personnel of around 25 and then add 21 people to that. It’s completely unsustainable,” Karns said.

“Astonishing finances here. And what was even more astonishing is they’re getting by the board. Absolutely asleep at the wheel.”

Karns said he hoped to see the district move forward with an intergovernmental agreement with Fire District 3.

In recent months, District 5 officials met with fire officials from Ashland, Medford and District 3 and directed Bustard to continue discussions with District 3.

District 3 Chief Mike Hussey said his district would provide some options that could bring District 5 reduced costs for certain administrative roles.

“We have an opportunity here with District 3. District 3 is the class of the field in two counties of Rogue Valley fire districts,” Karns said.

“They have the most resources, the most expertise … I hope everybody is unanimous — management, union, board, citizens, all cooperate on this because this opportunity will not come to us again.”

After Tuesday’s meeting, Bustard said support from around the region had been key in helping the district navigate its struggles.

Bustard and board chair Greg Costanzo urged the community to give input and to participate at upcoming meetings. Bustard said he felt hopeful that there were still options for the district to move forward.

“If we were a standalone agency and there was no one to assist us, there was no partnership, then people should panic, because no one would be coming,” he said.

“We have been a really strong partner to other agencies through the years, and now they are being strong partners to us … And that’s what I would tell the public, is that we’re navigating this, but we’re not being left out on our own.”

The top salaries in Jackson County Fire District 5 far surpassed state averages for the same positions, according to statistics posted on govsalaries.com, an independent site that collects salary data for government jobs around the country.

Fire Chief Charles Hanley’s total compensation for 2023 was $279,432, including $191,621 in base salary, $22,685 for Leave Sell Back, $23,212 for Out of Class pay, $4,527 Educational Incentive, $3,553 Longevity Pay.

The average fire chief salary in Oregon is $130,497. The salary range for a fire chief is usually between $89,590 and $166,368 a year. Top-paying employers for fire chief jobs, according to the site, include Tualatin Valley Fire & Rescue ($218,710), city of Portland ($214,977) and city of Hillsboro ($188,905).

Interim Fire Chief Aaron Bustard, as an assistant chief, made a $118,552 base salary in 2023 and $32,068 in overtime. The average salary for an assistant chief in Oregon is $74,754.

Several battalion chiefs in the district made just over $107,000. No averages were provided on the website for comparison.

Nine District 5 captains earned base salaries of between 95,000 and 98,000. They ranged in 2023 overtime pay between $21,000 and $56,000, for a total of more than $260,100.

Administrative assistant Tina Maziarski had a base salary of $78,551 and $2,226 in overtime. The state average for an administrative assistant position is $47,334.

Former Jackson County Fire District 5 board Chair Vicki Purslow issued a demand letter on Monday “to Cease Slander and Defamation of Vicki Purslow and Notice of Tort.”

The letter alleges differential treatment of Purslow because of her sexual orientation, as well as “intentional and negligent emotional distress and economic damage” of “at least $2,000,000.”

Purslow emailed a copy of the letter — addressed to new board Chair Greg Costanzo, board member Derek Volkart and International Association of Fire Fighters Local 2596 union president Brady Graham — to the Rogue Valley Times on Monday.

According to her letter, the board accused Purslow of violating district policies “in an attempt to delay the review and evaluation of Fire Chief Hanley by the board and union” — claims that the letter states are “untrue, defamatory, and are part of a chain of conduct designed to undermine our client and damage her both personally and financially.”

The letter alleges that Purslow’s personal and constitutional rights were violated when Volkart moved that the board investigate Purslow during a March 5 board meeting, a motion initiated, the letter claims, “based on lack of evidence, subterfuge and an attempt to merely attack our client in the public.”

“At this point it was clear to Ms. Purslow that these attacks on her integrity and false allegations would not cease until the Fire Chief Hanley was put on administrative leave. Ms. Purslow resigned in the middle of the March 5th JCFD5 Board Meeting causing board members Mike Winters and Cary Halligan to resign in support of her decision,” the statement reads.

“This was the continuing impact of your ongoing conduct to put Ms. Purslow in a false light and, eventually, force her resignation. You were on a continual and unwavering effort to destroy Ms. Purslow’s reputation among her peers and the community all to her personal and financial damage.”

Purslow’s attorneys claim Costanzo has a conflict of interest because of his co-ownership of a business complex in which his Ethos Academy is housed. Costanzo told the Times Wednesday that the union lease existed prior to his appointment to the board and that he had consulted the Oregon Ethics Commission during his tenure and confirmed he did not have any conflicts or benefit financially from the union.

Purslow also claims that Graham brought concerns to the board but “never wanted to find a resolution to the issues … despite the fact that Ms. Purslow has attempted to resolve these issues.”

The letter further states, “You have all been unwilling to listen and pursue this (matter) in an equitable manner, rather you have all simply been focused on embarrassing her and removing her from her position.”

“Ms. Purslow is the only female on the board. She is also a homosexual. We believe that the evidence shows a clear path to undermine her position on the board. She has been treated with disrespect and would not have suffered this treatment had she been a heterosexual male.”

The letter demands release of all communications or emails involving Purslow, as well as “an explanation as to why she is being treated differently than others on the board,” noting, “There simply is no other explanation other than the fact that you are simply interested in destroying her reputation based on her sex and sexual orientation.”

District officials have declined to comment on the letter.