District informed of $1.4 million FEMA grant previously unknown to current officials, and it is due in full; there is a possibility it could be forgiven
By Buffy Pollock, Rogue Valley Times
A year and a half-long saga of financial and operational turmoil for Jackson County Fire District 5 got a bit more complicated this week following discovery of a $1.4 million debt previously unknown to current district administration.
District 5 board members on Wednesday held an emergency special session to disclose to district patrons that a FEMA loan, obtained following the 2020 Almeda Fire, was discovered Sept. 12. The added debt, currently due in full, brings total district debt to $9.6 million.
The district’s three fire stations provide fire protection to 120 square miles of southern Jackson County, including the cities of Phoenix and Talent and unincorporated areas surrounding Ashland, down to the California border.
During a recent budget process, district administration spoke of a lean but well-planned budget, ensuring continued services and restoring district stability. Fire Chief Mike Hussey, who oversees Districts 3 and 5, said district officials are assessing available options for addressing the debt, including whether some or all could be forgiven.
The district has not been “audit compliant” since 2021, according to state guidelines, and is currently working to regain compliance. News of the loan was a surprise, Hussey acknowledged.
“We feel like we were doing a really good job of getting a line cut around the fire we knew about, and now we got a pretty good spot fire outside the line and we’ve got to deal with that one too,” he told the Times Wednesday.
The district has been on a financial roller coaster since February 2024 when the Firefighters Local Union 2596 declared loss of confidence in former Fire Chief Charles Hanley, expressing concerns ranging from an alleged culture of harassment to poor management.
In the months that followed, three District 5 board members resigned en masse, the Jackson County Board of Commissioners appointed their replacements, and the newly reassembled board almost immediately placed Hanley on administrative leave in May.
Between May and August of 2024, district officials authorized an investigation into the former chief — who was later terminated from his position and subsequently filed a tort claim — that resulted in information being forwarded by the Jackson County Sheriff’s Office to state Department of Justice officials.
DOJ officials announced in recent weeks that they did not intend to further investigate criminal allegations against former district officials but Hussey said the district has since submitted additional evidence of potential criminal activity.
Late last year while facing financial insolvency, District 5 board members sought assistance from neighboring fire district officials, resulting in an intergovernmental agreement with Jackson County Fire District 3, which took effect Jan 1. The agreement provides administrative assistance and other services.
Stacy Maxwell, chief financial officer for both districts, said the recently uncovered FEMA loan was applied for based on district projections of tax revenue losses following the Almeda Fire. However, the district “did not experience the consequences of the Almeda Fire to the level that they estimated.”
Maxwell said the district saw a revenue decrease in 2021, but that tax revenues increased in 2022, 2023 and 2024. District administrators, however, continued withdrawing from available funds, even during years of increase, until “every penny” of the available $1.4 million had been taken out.
District officials projected a reduction of $4,337,920 due to decreased assessed valuation after the fire, Maxwell said, but realized only a $143,000 actual decrease.
Newly elected board member Eleanor Ponomareff expressed gratitude for continued assistance by District 3. “On face value, it would financially break the district, or any district. I believe there is a hope that we can amortize it out and find a way to work with FEMA,” she said Wednesday.
“I think it is going to be painful, but I personally don’t believe that this is necessarily a death knell. It is a perfect example of what happens when you don’t have adequate oversight of a district,” Ponomareff said.
Board member John Karns, a career fire service member and recent fire chief of Rogue Valley International-Medford Airport, said the district should carefully weigh its options.
“When they come back with a high-altitude view of the various options, we’ve really got to look at them all. This FEMA loan will be a pivotal issue going forward. … If it weren’t for the District 3 crew, in particular their financial department, we’d be done by now,” he told the Times on Wednesday.
“We haven’t given up the ship yet. We’ll get there eventually, one way or another.”
Hussey said past audits would hopefully be completed by March 2026. Of the FEMA loan, he noted, “It won’t necessarily break us, but it makes us more fragile from a financial perspective.”
Reach reporter Buffy Pollock at 458-488-2029 or bpollock@rv-times.com. Follow her on Twitter @orwritergal. This story first appeared in the Rogue Valley Times.
