Whatever the fire commissioners end up deciding to do, the cost of providing fire and emergency medical services is going to end up costing local taxpayers plenty. The only question is how much and when.
The commissioners of the Point Roberts fire district will hold two more special meetings on Tuesday, June 6, and Monday, June 12 before a regular meeting on Wednesday, June 14 to consider financing options to pay for its newly adopted Capital Facilities Plan (CFP). From 2023–2036, the district has anticipated capital expenditures on new and upgraded infrastructure of approximately $4.2 million (bit.ly/3WtGpdi).
These expenditures include replacement of fire vehicles, renovations to the fire hall and replacement of the hall’s parking lot, among other items. Given the district’s current income, the district could expect to incur a deficit of around $4.2 million if capital expenditures are made as scheduled. At a special meeting held May 17, fire chief Christopher Carleton provided commissioners an overview of the various avenues open to the district to pay for expected upgrades and new equipment.
In order to raise the district’s levy above the 1 percent allowed annually, it would have to seek voter approval of a levy lid lift of up to six years. To pass, a levy lift requires a simple majority (RCW84.55.050.)
The district could seek a temporary levy lift for 1-6 years for a specific purpose eg. buy a new piece of apparatus in which case the levy would drop down to the former level once the time was up.
It could also ask for a permanent levy lift in which case the district would use the new levy as the basis for future 1 percent annual increase. Additionally, the district could ask voters to approve a set growth factor, for example, the CPI, for years two through six at which level the annual 1 percent increase would apply.
The district could also seek voter approval of a governmental obligation (GO) bond to pay wholly or partially for capital infrastructure. A bond measure requires 60 percent approval from a minimum 40 percent of the number of voters who participated in the last general election. The term of the bond can be no longer than 20 years.
The district could also raise a non-vote approved bond by a vote of commissioners. If they took this route, the maximum they could borrow is 3/8s of 1 percent of the total assessed value of Point Roberts. At the current assessed value of $935,096,921, the maximum the district could borrow would be approximately $3.5 million.
The district essentially has the choice between raising the levy lid or by taking out a GO bond for a period of up to 20 years, or a combination of both. Carleton, who appears to be leaning towards simply raising the lid, presented commissioners with scenarios ranging from collecting an additional $0.20 to $0.50 per $1,000 assessed value of property.
A property worth $500,000 that currently pays $346.73 to the fire district would go to $546.73 annually with a 40¢ increase. A property worth $750,000 that currently pays $520.09 would go to $820.09 annually with a 40¢ increase.
A million-dollar property, currently paying $693.46 a year would see its bill increase to $1,093.46 annually. Those same properties would annually pay $596.73, $895.09 and $1,193.46, respectively with a 50¢ increase.
At the May 22 meeting, commissioner Norm Katz asked Carleton to present even higher levies for consideration at the next meeting. As of May 23, the district had not prepared projections of income and the impact on reserve levels based on the different levy lift levels it is considering.
A financial analysis prepared by the All Point Bulletin using the same assumptions as the fire district (annual increases in income and expenses of 1.7 and 4 percent, respectively) illustrate the hole the district would find itself in if it attempted to fulfill the CFP without a substantial increase in income.
At minimum, the district would need to increase its levy by 40¢ per $1,000 (to $1.09 from $0.69) to end up in 2036 with a positive reserve balance but even then, there would be five years in which the district would theoretically run at a negative balance. However, the district could bridge the gap through re-ordering its schedule of acquisitions or by taking out a GO bond. (The servicing of the loan would need to come from the general fund and is not included in the analysis.)
Comparison with other districts
At its current levy rate of .69345, the Point Roberts fire department’s tax rate ranks 11th among the county’s 13 districts. Fire district # 8 (Marieta) has the highest rate with a combined levy and M&O rate of 1.597 while district # 4 (Van Wyck) is lowest at .62519.
Should the district increase its rate by 40¢ per $1,000 assessed valuation, it would be ranked fifth most taxed district in the county. At 50¢, it would be fourth highest, behind number 3 ranked Lummi Island with its 1.2536 levy. These figures exclude the impact of an additional taxpayer-approved GO bond which would assess an additional and separate tax line item; a limited, non-voter approved bond would be repaid out of general fund revenue.
At present, the district does not have a formal reserve policy. While reserves are meant to cover both operational and infrastructure costs, the way in which fire districts manage reserves varies considerably. Some districts feel that having two or three months’ worth of operational costs is sufficient, others insist on a minimum of 12 months.
In an interview with the All Point Bulletin May 23, Carleton said he intended to discuss the various levy and bond possibilities with the commissioners during the next special meeting. He stressed that while the CFP calls for a specified timetable of infrastructure purchases and improvements, the plan is “a living document” where changes can and will be made depending upon circumstances.
Also complicating the picture is uncertainty about future operating costs. Carleton has mentioned in recent meetings that he anticipates some older local volunteers will be retiring from the district within the next few years. He believes that it will then be necessary to replace them with paid employees. Balancing the future needs of the district for labor along with servicing potential debt and paying for new equipment will require prudent balancing of the needs of the department against those of taxpayers.
The next special meetings will be held at 4 p.m. on Tuesday, June 6, and Monday, June 12. The commission meetings are open to the public either in person or on Zoom. To view the 2023-2036 CFP or to view meeting links, go to wcfd5.com/newsflash.
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