TheBurg

18 | theburg | 04.16 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. e HFRA is represented these days 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.) e 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. e 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. e 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 a past 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. "at'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.) "is 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." T he 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. "ere'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. e 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. e 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. e 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. at 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

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