The Fire District 16 Board of Commissioners has voted to put a multi-year lid-lift levy on the August ballot to increase the so-called “fire tax” from the current $1.34 to $1.50 per $1,000 of property value.
The $1.50 amount has been approved several times in the past –– back in the 1990s and again in 2006; it’s the maximum allowed by law.
The economic downturn of the past several years has reduced property values, and hence, the department’s revenue.
So the fire department has had to go to the voters with an emergency medical service levy in 2010 and an maintenance and operation levy in 2012.
Both of those passed, but, according to Chief Guy Allen, the department miscalculated on the 2012 levy and underestimated the downturn’s effect on property values.
“We failed on that one,” Allen said. “We missed getting enough information to do our due diligence to get to a point where we could say, ‘We can’t do what we said we were going to do.’”
But if those most recent special levies had not passed, there would be fewer firefighters and less protection today, he added.
Allen doesn’t want to have to go to the voters every other year for things like new equipment, he said.
He said he’d rather build up the department’s financial stability so there’s plenty of money in the bank during the first three months of every year as well as adequate funds to “keep modern, viable and reliable vehicles on the street, without having to go to the voters with a special M&O levy.”
Allen figures that the department will need to spend $6.5 million on new vehicles and equipment over the next 25 years.
Instead of going to the voters every couple of years with a special M&O levy to purchase equipment, Allen plans to create a replacement budget fund to sustain an ongoing fleet for the next 25 years and beyond.
“As long as next next fire chief does that same thing and sustains that mentality, we should never have to go to the voters again and ask for money to buy equipment,” he said.
Allen also plans to “build up our budget so in the future we can get through the first three months of every year,” he said.
“The reality is that the fire district gets paid twice a year –– in April and October –– when property taxes are paid. So we have to have ‘carry forward’ money in our budget so we can pay our bills for January, February, March and into April,” he said.
For the past several years, the department has had to tap into its reserve accounts in order to pay its first-quarter bills.
That has depleted the reserve account to dangerous levels, Allen said.
The industry standard for reserves is 15-20 percent of operating expenses. For KP Fire, that amounts to about $750,000, Allen said.
“Right now we have less than $230,000 in reserve. So we have a ways to go to build that back up, on top of paying all the bills and keeping everybody employed in the future.”
The projections for this multi-year lid-lift levy are based on the assumption of a 2 percent increase in property values across the district,” he said.
Even though the economy is starting to improve, “our tax rate is growing much slower than other places like Gig Harbor, and much slower than in other parts of the county. There are still properties here on the peninsula that had a minus value this year,” he said.
The August lid lift levy doesn’t include money for staffing, he said. Staffing will be covered in next year’s M&O levy. “That one totally has people tied to it. It has six people tied to it, and if it doesn’t pass that means we can’t pay six people wages and benefits, which means a decrease in our level of service,” he said.
Allen acknowledged that there is a perception among KP citizens that the fire department goes to the voters every single year for money.
“I want to be able to say. ‘Here’s what you can expect from us for the next five years –– lid-lift levy in 2015, M&O renewal in 2016.
“There is nothing planned for 2017 or 2018, then EMS levy in 2019,” he said.
If the August lid-lift levy is successful, Allen’s long-term goal is to “get the M&O levy off the books entirely so we can sustain all our career staff and our operating expenses within the EMS and regular fire tax. If property values outpace what we’ve projected, then maybe we’ll be able to go without having to renew the M&O levy after 2016,” he said.
Allen emphasized that he wants “to be as open and upfront and direct as I possibly can. I know exactly what I intend to do and I want the public to know that plan. This paves the way for the future. It really is the first stone in the wall to build this plan forward so we can do what our mission says: to be responsible stewards of the resources entrusted to us by the community,” he said.
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