Longform

Burned

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Not such a shabby proposition. Another of the firefighters' gripes is the high salaries and bonuses given to recent Rural/Metro CEOs. Jerry Brucker, the current one, is making more than $700,000 at a time when the company's not sure it can afford a 2 percent match to its employees' 401(k)s.

The question of whether the firefighters were allowed to sell their own stock when they wanted to is unresolved. What's clear, according to filings with the U.S. Securities and Exchange Commission, is that there was a flurry of stock sales by Rural/Metro executives in late 1997 and early 1998, just before the company's stock dropped. Lou Jekel, Rural/Metro's attorney and secretary of the board, sold 6,000 shares at an undisclosed amount (it was in a family trust, so he didn't have to list the price, but the stock was valued at about $30 a share) in late January 1998.

At the beginning of March, with the stock price hovering above $33 a share, Rural/Metro board member James Bolin sold more than 20,000 shares. Board member Cor Clement optioned 6,250 shares of stock at $13 and sold it the same day, March 10, for a $20-a-share profit. Earlier that week, he had sold another 5,000 shares.

But the biggest seller was Bob Ramsey, the company's executive vice president, who had sold Rural/Metro his ambulance company, Southwest Ambulance. Ramsey started selling his stock in late 1997. Between October 31, 1997, and March 6, 1998, Ramsey sold more than 500,000 shares at anywhere from $29 to $35.

The sales are the subject of two pending class-action lawsuits filed by people who bought Rural/Metro stock between April 1997 and June 1998. Among the charges, the suits allege that Rural/Metro executives bought artificially inflated stock using insider information.

Gregg Hillman, a stock analyst with First Wilshire Securities Management in Pasadena, California, who has watched Rural/Metro, says the huge stock sales hurt the company even before business began to really sour.

In the fall of 1998, with the stock below $10 a share, Rural/Metro directors began to make purchases. Ramsey alone bought hundreds of thousands of shares.


Even the fortysomething firefighters who were able to sell some of their stock when the price was high are hurting.

One says he was allowed to sell 25 percent of his stock, but the company sold the stock at a "rolled" price over a three-month period. He lost $7 a share.



"I didn't understand it and I didn't question it," he says. "It was very insulting, but I didn't pursue it at the time because the funds I put it into did very well."

Unlike Ted Beam, this firefighter says he was discouraged from selling his stock. "They said I was crazy to do it," he says, although "they didn't stand in my way. It was more like, that's not a sound decision. I wanted to diversify. Glad I did."

Instead of meetings where he was encouraged to diversify, the employee recalls "flip charts and bar charts" showing how much he'd get over a 20-year period, if he didn't sell. "They were projecting ridiculous growth. It was unbelievable for me because I'd been buying stocks for a while. That was during the you're-all-going-to-be-millionaires talks."

Even with his other investments, which have done well, the firefighter figures he'll have to retire at 65.



His hope is that the cities and towns that contract with Rural/Metro -- including the one he works for -- will break away and form their own public fire departments. That's not out of the question; Sun City, Sun City West, Gilbert and the Salt River Indian Community have all parted company with Rural/Metro. Whether to keep Rural/Metro service or start its own fire department has been the source of intense political debate for months in the town of Fountain Hills.

The firefighter says he went to work for Rural/Metro so he could serve his hometown, but the decision has not served him well.

If he joins the state retirement system, he'd only have to put in a few more years to get a major portion of his retirement, the firefighter says.

He hopes it happens soon.

"I'm starting to hurt after fires. I'm almost 50 years old, and I have nowhere to go."

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Amy Silverman is a two-time winner of the Arizona Press Club’s Journalist of the Year award. Her work has appeared on the radio show This American Life and in the New York Times, the Washington Post, Lenny Letter, and Brain, Child. She’s the co-curator of the live reading series Bar Flies, and a commentator for KJZZ, the NPR affiliate in Phoenix. Silverman is the author of the book My Heart Can’t Even Believe It: A Story of Science, Love, and Down Syndrome (Woodbine House 2016). Follow her on Instagram (@amysilverman), Twitter (@amysilvermanaz), and at amy-silverman.com.