HomeMy WebLinkAboutItem 01 Fire Special Levy Renewal AGENDA ITEM SUMMARY Meeting Date: 5/26/2015
Meeting Type: Work Session
Staff Contact/Dept.: Bob Duey Staff Phone No: (541) 726-3740
Estimated Time: 30 Minutes
S P R I N G F I E L D C I T Y C O U N C I L Council Goals: Provide Financially Responsible and
Innovative Government Services
ITEM TITLE:
FIRE SPECIAL OPERATING LEVY RENEWAL
ACTION REQUESTED:
Provide direction to staff by establishing a recommend rate per thousand for the preparation of a ballot title and explanation to be presented at a public hearing and
set for final adoption by resolution for the renewal of the City’s special fire operating levy.
ISSUE STATEMENT:
The current Fire Special Operating Levy passed by voters in November of 2010
provides for the staffing of an engine crew at Springfield’s Station #3 and will
expire on June 30, 2016. After discussion in work session on May 11th, Council directed staff to prepare a ballot title and explanation that provided options for
considering a renewal rate that ranges from the current rate of $0.36 per thousand to a new rate of $0.40 per thousand. Included with these options should be summary of the fiscal or potential service impacts of the renewal of the levy at a rate that is
less than the amount required to fully finance for the entire five year levy period a three person engine crew at Station # 3. A recommended rate by the Council is necessary for the preparation of the ballot title and explanation.
ATTACHMENTS:
1. Council Briefing Memorandum
2. Draft Ballot Title
DISCUSSION/ FINANCIAL IMPACT:
See Council Briefing Memorandum
Attachment 1 Page 1 of 3
MEMORANDUM
Date: 5/15/ 2015
To: Gino Grimaldi COUNCIL
From: Bob Duey, Finance Director BRIEFING
Subject: Fire Special Operating Levy Renewal MEMORANDUM
ISSUE:
The current Fire Special Operating Levy passed by voters in November of 2010 provides for the staffing of an engine crew at Springfield’s Station #3 and will expire on June 30, 2016. After
discussion in work session on May 11th, Council directed staff to prepare a ballot title and explanation
that provided options for considering a renewal rate that ranges from the current rate of $0.36 per thousand to a new rate of $0.40 per thousand. Included with these options should be summary of the
fiscal or potential service impacts of the renewal of the levy at a rate that is less than the amount
required to fully finance for the entire five year levy period a three person engine crew at Station # 3. A recommended rate by the Council is necessary for the preparation of the ballot title and explanation.
COUNCIL GOALS/MANDATE Financially Responsible and Stable Government Services
BACKGROUND
In 1995, Springfield voters approved a general obligation bond issue that included funding to construct a fifth fire station for the City. The station was designed and scheduled to be opened in 1999. As a result of the passage of Measures 47 and 50, the City lost the financial feasibility of
staffing all five stations and chose to re-locate the fire engine staffing from Station #3 to the newly constructed Station #5. Station #3 remained without an engine crew until 2003. In November 2002,
voters approved a thirty-six cent per thousand 4-year special operating levy. This levy provided an
equivalent of 12 FTE personnel for the operation of the fire engine crew. The following table is a record of the three special operating levies for fire services since that time:
Levy Date Duration Levy Rate Yes % No% November 2002 4 years $0.36 60.70% 39.20%
November 2006 4 years $0.40 58.28% 41.72% November 2010 5 years $0.36 70.47% 29.53%
At the Council work session on May 11, Council and staff discussed the importance to the City of having the fifth engine company staffed and operational for both the number of runs made out of
Station #3 and critical role it plays in overall coverage for the City. Service Provided
Fire Operations provides fire, rescue and emergency medical response to citizen calls for a variety of emergencies. This program provides the personnel, training, specialized vehicles, and equipment to
respond to calls for assistance in our community that threaten life, property, and the environment. This
includes fires, rescues, natural and man-made disasters, hazardous material incidents, medical emergencies, and ambulance transportation.
Attachment 1 Page 2 of 3
Failure to pass the levy, with no replacement revenues identified, would probably produce a 20% reduction in fire suppression, rescue and emergency medical first response capacity for the City and its
three contract fire protection districts. At the same time, we can expect no reduction in calls for
service. This would result in fewer response resources being spread more thinly across the entire service area which will adversely affect the safety of our community and firefighters.
The Levy supports the engine company at Fire station #3, on 28th Street, which is instrumental in delivering needed services. During 2014 there were 13,249 calls for service in the City of Springfield.
Fire Station #3 alone responded to 2,037, 15% of the volume. The Levy provides $1.5m in revenue
which is 8.4% of the Fire & Life Safety department’s FY16 budget. Loss of funding for staffing this engine company would result in operational changes to maintain coverage in this response area.
Financial Requirement Staff also presented at the May 11th work session information related to establishing a renewal
rate for the levy that took into considered two primary factors:
1) The City’s Taxable Value - The City’s Real Market Value (RMV) declined by almost 13% from 2009 to 2012. Since 2012 there has been a small recovery in the housing market but as
of 2014 the RMV is still 7% lower than it was in 2009. This reduction in taxable value within the City and the estimate for future increases has a large impact on the rate required to
generate the property tax revenue necessary to fully fund a 3 person engine crew
2) The expenses within the levy that provides the 5th engine crew within the City is primarily labor costs. 85% of the annual requirements are estimated to be for personnel with the remaining 15% material and services. Estimates have been made for these costs from July 1,
2016 through June 30, 2021
From the two calculations described above staff related to Council that the tax rate to fully fund
the engine crew at Station #3 for the 5 year period beginning July 1, 2016 was estimated to be $0.445 per thousand of assessed valuation.
FUTURE LEVY DISCUSSION Council asked staff to prepare a review of other possible rates for the levy that ranged from the existing rate of $0.36 per thousand to $0.40 per thousand as alternatives to the calculated rate of
$0.445. Criteria expressed by Council included:
• Creating a greater reliance on levy funding for provide resources for a core service.
• Pre-recession interest was to consider alternative ways to be able to eliminate the additional operating levy in the future and wanting that effort to remain possible at some
point in the future
• Compression under the $10 cap is becoming more of an issue and increasing the levy
would bring greater financial impact on other existing levies
• Strong desire to keep overall property taxes at a reasonable rate for taxpayers, citing the
retirement of the City’s 2005 general obligation bonds this year and the potential to lower
rates for next year’s taxes by $0.23 per thousand.
Staff responded that an option for reducing the levy rate was to not fully fund the 12 full time
equivalent staff required for 24/7 engine crew from the levy and to move that obligation to the City’s General Fund. The General Fund currently provided for the staffing of the other 4 engine crews for
the City. It is estimated that moving 1 engine crew member from the levy would reduce the rate by
approximately $0.04 per thousand while moving 2 engine crew members would reduce the levy by approximately $0.08 per thousand.
Attachment 1 Page 3 of 3
The current projections for the General Fund already show a projected deficit of about $700,000 for the first year of the levy and no current resources are available to put towards the additional FTE.
If a rate that is lower than the original estimate of $0.445 is selected by Council for the November
2015 election, staff will update its projections accordingly and begin in budget preparation process for 2016/17 with the following information
Levy Rate $0.445 $0.40 $0.36
Avg Annual Levy Requirement $2.0M $2.0M $2.0M
Avg Annual Funding Levy Deficit $0 ($160,000) ($340,000)
Current Gen Fund Projections ($700,000) ($700,000) ($700,000)
Updated Gen Fund Projections ($700,000) ($860,000) ($1,040,000)
It should be noted that the projections identified do not reflect the recent decision by the Oregon Supreme Court overturning the majority of the 2013 PERS reform legislation and that additional updates will need to be completed to accurately reflect the eventual increase in PERS funding
requirements.
Attached also for the May 26th work session is the ballot title and explanation from November
2010. Currently it has been altered only to reflect the impacts of the updated dates and eventual number changes. It may eventually need to be updated in its explanation as the final rate is determined to more accurately reflect the funding level being provided by the levy for the 5th engine crew.
CONCLUSION
Staff has scheduled for June 15 a public hearing and adoption by resolution the necessary action
for an election to be called in November for the renewal of the fire special operating levy. The
wording of the explanation with the ballot title does not need to be completed at the May 26th work session as staff can develop the final recommendation language in conference with the Secretary of
State’s office. A necessity from the May 26 work session will be the inclusion of a rate directed by Council. At the conclusion of the public hearing on June 15 the Council could decide to alter the rate.
Ballot Title CITY OF SPRINGFIELD
BALLOT MEASURE XX-XX
Caption: RENEWAL OF FIRE AND LIFE SAFETY SERVICES LOCAL
OPTION LEVY
Question: Shall Springfield levy $0.?? per $1,000 of assessed value for five
years beginning 2016/17 to staff fifth fire engine crew? This measure
renews current local option taxes.
Summary: The current $0.36 levy, which expires on June 30, 2015, funded
personnel to increase the number of fire engines serving the City from
four to five. All five engines are staffed with firefighter/paramedics
that respond to calls for emergency medical services and fire
suppression.
The renewal of the levy at $0.?? would continue staffing of a full-time
equivalent of 12 firefighter/paramedics to maintain and staff one fire
engine. Approval of this measure would continue staffing and
operation of the fifth fire engine. The staffing and operation costs include wages and benefits, safety equipment, material and services
and required fire academy training.
A home in Springfield with an assessed value for tax purposes of
$116,000 pays $41.76 in property taxes to support the current $0.36
levy. At the proposed rate of $0.40 a house assessed at $116,000
would pay $46.40 in the first year of the levy. Total estimated
payments over the 5-year life of the special levy would be $232.
The estimated total amount of the money to be raised by this levy
each year are 2016/17 - $Insert Number; 2017/18 - $Insert Number;
2018/19 - $Insert Number; 2019/20 - $Insert Number; 2020/21 -
$Insert Number for a total of $Insert Number.
Attachment 2