A new fireboat, a looming financial squeeze and a small measure of employee sacrifice all figure prominently in Island County Fire District 3’s proposed budget for 2011.

“In this climate, in this budget, every penny counts,” Fire Chief Rusty Palmer said of the $2.6 million proposal district commissioners accepted for consideration earlier this month. A final budget will be approved in January.

Meanwhile, the lingering economic doldrums have placed a big question mark on long-range plans for a new headquarters and training center on district property at Bayview Corner.

“We need to revisit that to get a firm idea of what we really need,” Palmer said.

In an unexpected development on the budget front, four paid employees who where authorized to receive a 3-percent raise declined as a group to accept it.

“It just didn’t feel right,” said administrative assistant Paula Schuler, one of those who were to receive a raise next year. “Not when people in other government agencies are being laid off.”

Schuler, Assistant Chief Paul Busch and deputy chiefs Mike Cotton and Jon Beck all were to receive raises in acknowledgement of new responsibilities, but all declined to accept the money, Palmer said.

“It took a lot of courage for them to do that,” Palmer said, adding that the savings to the district would be about $7,000.

“It’s not much, but the statement that goes along with it is worth a whole lot more,” he said.

Next year’s proposed budget is down from this year’s $2.9 million, mostly due to fewer proposed capital expenditures, Palmer said.

He hopes one of those expenditures will be a new boat to bolster the district’s waterborne capabilities.

Palmer said the district is eyeing an all-weather twin-hulled vessel 26 to 30 feet long which could be outfitted with a pump and nozzle, and which not only would be effective in water rescues but also for evacuations, firefighting and other activities.

Currently, the district has only a 15-foot rubber-sided boat for rescues.

“It’s not very big, and really only suited for lakes,” Palmer said. “It’s not suited for rough seas at all.”

About three-fourths of the cost of a new boat would by financed by a $210,000 grant from the Federal Emergency Management Agency (FEMA), part of a larger grant applied for by the Port of South Whidbey, Palmer said.

The fire district would pay any additional cost for the new boat up to $90,000, he added, promising that the district would shop around for the best deal.

Palmer said port officials expect to know by the end of the year or early next year if the grant will be approved. If it isn’t, the district won’t buy the boat, he said.

“They haven’t said no yet,” Palmer said of FEMA. “That’s usually a good sign.”

He said fire district and port officials will meet next month to consider an agreement on where the boat would be based and other arrangements, if the grant comes through.

Meanwhile, the fate of a proposed new Bayview facility remains up in the air.

“That’s the $64 million question,” Palmer said, with an eye on the dismal economic indicators.

Originally envisioned was a 10,000-square-foot, two-bay fire station, a 5,400-square-foot administration building and a 400-square-foot training tower on a 9.4 acre L-shaped parcel owned by the district between Good Cheer Food Bank and Bayview School.

The latest cost estimate for the project by the district’s architects was about $4.4 million.

Palmer said the state of the economy, plus recent improvements and additions to existing fire stations, may mean a revised plan for Bayview is in order.

“We may need something smaller,” he said. “We just have to make sure what’s the right thing to do.”

When originally proposed nearly two years ago, commissioners considered asking district residents to approve a 25-cent property tax levy increase to finance the project. The recession put the kibosh on that idea.

The district’s current levy rate is 51 cents per $1,000 of assessed value, down from 84 cents in 1995. Increased property values in the district account for most of the difference, Palmer acknowledged.

Looking ahead, Palmer said the district may have to ask for a levy increase in 2012, just to maintain current services.

He said 2012 is when the district’s savings account and operating expenses are predicted to converge.

“Most government agencies around the region are facing the same thing,” Palmer said.

Noting that the district’s last levy lid lift request, in the 1990s, failed miserably, he said district officials may decide to request a series of smaller levy increases over time.

“We have to figure out were the balance is,” Palmer said.

Fire Commissioner Mike Helland said the district has done well with the resources it has, and he gives much of the credit to the volunteers.

“They’re highly skilled and qualified,” Helland said. “We’re the envy of a lot of other places.”