Basalt fire district splitting its windfall
November 23, 2009
BASALT – Midvalley residents will get a partial break from the Basalt and Rural Fire District when their property tax bills arrive next year.
The district’s five-member board of directors voted unanimously Thursday night to accept about half of the financial windfall created by higher property valuations this year. The board voted to cut the tax rate from 4.858 mills to 4.181 mills. The reduction means the district will collect nearly $333,000 less than it could from property tax assessments.
“We think that’s pretty significant,” fire district board member John Young said.
The total possible windfall generated for the district by the higher property valuations was $648,000. The $315,000 the district will keep will go into reserves, Young said. The district’s operating expenses will be flat next year compared to this year.
The compromise on the windfall was financially based rather than politically motivated, according to board member Bob Guion. While the board realized taxpayers can use any relief they can get, members also had to consider the financial health of the district.
Young and Guion said the board balanced the district’s mission of life safety with its fiduciary responsibility to taxpayers. Members pledged during the budget process that they wouldn’t reduce the department’s firefighting and medical service.
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“Our mission is holy, almost,” Young said.
By keeping half of the windfall and socking it away, the board of directors is trying to ensure that the district can survive a possible ongoing recession, Guion said. Taxing districts run a risk of lowering their mill levies too much now and paying later. The state will require a property revaluation in 2011, and values could be significantly lower. That means the same mill levy would generate less in taxes.
“The hardest thing to come to is what’s going to happen,” Young said. “We don’t know. There was clearly a temptation to take the whole amount.”
If the recession and the real estate sales slump continue, the district could eventually find itself in a position where it must make cuts, Young said.
But Guion said the district has built enough reserves and has done enough advance planning that it could maintain current levels of service through 2013 even with a 40 percent drop in property values and tax collections.
The fire department’s operating budget will remain flat at $1.85 million in 2010, according to district Finance Director Jen Lemke. Capital improvements have been whittled to almost nothing in 2010 by deferring some equipment purchases and replacement.
The district will complete construction of affordable housing at its Basalt fire station. It spent $800,000 on the project this year and will spend another $600,000 next year. The funds for the project were stockpiled in previous years and aren’t tapping next year’s windfall.
The district’s 13 paid staff members, who range from emergency medical technicians to the fire inspector, will face a salary freeze next year. The modest benefits for the 70 volunteers, which consist mostly of equipment and training, will be maintained.
The board of directors made a symbolic move by suspending their $100 per month per member salary. That reduced an obligation of about $7,000 to taxpayers.
The board of directors is scheduled to give final approval to the budget next month.