Basalt ﬁre district plans to seek tax increase in November
July 13, 2012
BASALT – The Basalt Fire Department plans to ask voters to approve a property tax increase in November to make up for the loss of revenues caused by the recession and slow recovery.
“We’re not asking for more money than we ever had. We’re asking to replace the money we lost because our assessed values have gone down,” said Fire Chief Scott Thompson.
The assessed values of residential property took a dive of anywhere from 25 to 45 percent in the mid-Roaring Fork Valley during the recession. Because of the delay in revaluations by the state government, taxing districts didn’t start feeling the pinch of reduced property taxes until last year.
The Basalt and Rural Fire Protection District’s revenues from property taxes fell about 37 percent, said Bob Guion, president of the board of directors.
“We think that will continue to go down,” he said.
Real estate experts have told the fire district to expect the assessed value to drop another 20 to 30 percent at the next revaluation, which will affect property tax collections for 2014 and 2015.
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The Fire Department, like most special taxing districts, is almost entirely dependent on property taxes. It charges fees for transporting medical patients in ambulances.
Guion said the district needs to increase revenues or consider dropping services. It can’t make do with current revenues and offer the same level of service, he said.
While revenues are falling, calls for service are increasing. There were 20 percent more calls in 2011, and another double-digit increase appears likely for this year, Thompson said.
To get out of the quandary, the fire district’s five-member board of directors recently voted unanimously to pursue the tax hike, Guion said. The move was recommended by a special committee composed of residents of the fire district and board members.
“We need to have relief from our taxpayers,” Thompson said.
The ballot question is still being crafted, but the fire district will likely seek a mill levy increase of 3.5 mills, Guion said. The district currently gets 4.9 mills for operations and a total of 5.7 mills when repayment of a debt is added in.
An additional 3.5 mills would raise an estimated $1 million in 2013. That revenue projection will go down in 2014 and 2015 based on how low property valuations fell. There is a lag between market prices and the assessed value used by the government. So, even though property values have stabilized, the taxable amount is likely to go lower for the 2014 and 2015 tax years.
If the tax hike is approved, the district will replace two fire engines dating from 1983 and ’84 and replace an older ambulance, Thompson said. The district hasn’t replaced fire engines since 2005.
Some funds would be necessary to return the operations budget to pre-recession levels, he said. The fire district’s revenues for the operating budget fell from $1.85 million in 2008, before the crunch of the recession was felt, to $1.68 million in 2012.
Scraping by on older equipment threatens to hit residents of the district in the pocketbook – if the tax-hike proposal goes down to defeat. The fire district’s insurance rating is updated about every 10 years. The insurance industry assesses the district’s ability to fight fires. The age of its equipment factors into the rating.
If the rating is lowered because of older equipment, insurance companies will charge higher premiums for coverage of property in the district, Thompson said.
If a tax hike isn’t approved, there won’t be an immediate “doom and gloom” scenario, Guion said. The district had about $1 million in reserves heading into this year. Roughly $750,000 will be left after this year. The district could maintain the current level of services in 2013 but probably would have to consider service cuts in 2014 without new revenues, according to Guion.
The board of directors wanted to approach voters before the reserve is depleted.
“We want to bring this to the electorate before there’s an emergency,” Guion said.
The only legal requirement for the district is to suppress house fires. However, in reality, wildland fires pose the biggest risk in the sprawling, rural district. The biggest demand is for medical services, which comprise 60 to 70 percent of the district’s calls.
The district has one paramedic on duty 24 hours per day, seven days per week. It currently has two paramedics on duty during the day because of the traditional volume of calls. It plans to extend service to two paramedics on duty around the clock.
The district eventually will have to decide which services to eliminate or reduce if the tax hike fails, Guion said. Thompson said he doesn’t believe district residents will want medical services pared.
“When they call 911, they expect a paramedic at that door,” he said.
The district’s board of directors is made up of John Young, Mark Kittle, Ed Van Walraven and Robert Woods, in addition to Guion. Those who served on the advisory committee were businessman Randy Colman, Basalt Town Manager Bill Kane, former Basalt Mayor Leroy Duroux and banker Scott Garcia.