County Wants Input On Fire Dept. Funding

 

March 8, 2018



Property owners in the Lake Toxaway Fire Rescue district currently pay the lowest tax rate in the county — 4.79 cents — for those services, while those in the Cedar Mountain Fire Rescue pay the highest — 13.78 cents.

The method that determines those and six other fire tax rates in the county is partly based on the total property values in each district. Those values range from $55.5 million to $1.6 billion and so impact the variance in fire tax rates that residents pay.

It means that each fire department receives differing fund amounts, resulting in varying service levels in regards to equipment, manpower and resources. (The Transylvania County Rescue Squad is funded out of the county’s general fund budget and not via a fire tax.)

In January, the Board of Commissioners asked county staff to provide the different options for funding fire and rescue services “equitably” countywide.

During last week’s regular commissioners’ meeting those options were provided (see options below).

Now, the commissioners want to hear feedback from the public and each of the fire/rescue departments about the options.

During the meeting, commissioners reiterated that no decisions have been made and that “rumors” of a county department or departments being abolished are untrue.

Commission Chairman Larry Chapman said the county is not going to do anything that will “deteriorate” the services provided or cause any more “heartburn.”

“(We are) just looking at what is the most equitable way to provide the excellent service that you provide to all of our citizens here at an equitably shared price,” he said.

The fire/rescue departments are contracted with the county to provide fire services. Each department submits a budget request annually and that request is reviewed by staff and commissioners.

Staff also provided the following information to address several related questions:

•Changing the method to collect funding does not change how the fire departments operate.

•No change to district/response lines.

•No decrease to current funding levels proposed.

•No decreases in volunteers.

•No changes in contracting with existing fire departments.

•No changes to fire department boards, officers or the chain of command.

•No changes to fire insurance ratings. (The state Fire Marshall does not prefer any legal funding method over another method.)

•There is not a new tax being proposed.

•With general fund or flat tax options, most citizens would see a tax decrease, but some who would see an increase are those now paying the lower range of fire district taxes.

Information about the options may be viewed on the county’s website, as well as a place to leave comments.

Each fire/rescue department will be asked to submit input on the pros and cons of each option in writing. After a month, all the information will be compiled for commissioners.

(scroll down to see proposed funding options at the end of this article)

In other action at last week’s meeting:

•Finance Director Gay Poor gave a semi-annual financial report:

General Fund Revenues

—Revenues reached 54.1 percent of the amount budgeted.

—78.2 percent of current year ad valorem taxes had been collected, versus 76.5 percent through December 2016; increase amounts to $763,673.

—Sales tax revenues up 4.5 percent over 2018 fiscal year projections and 7.4 percent over 2017 fiscal year actuals for first three months of distribution.

—Real property excise tax surpassed last year’s actuals and budget expectations.

—Building permit and inspection fees under the prior year’s as commercial construction fell to a more normal level.

—Other revenues, mainly intergovernmental revenues and fees, only 22.9 percent of budget due to delay in disbursements and transition to direct payments for child care providers and Medicaid transportation recipients; corresponding decrease in expenditures.


—Overall, 2018 fiscal year revenues exceeded 2017 fiscal year through second quarter by $937,429.

General Fund

Expenditures

—Expenditures were 42.9 percent of budget and 3 percent less than last year.

—Personnel expenditures were 47.6 percent of budget and $89,308 more than 2017 fiscal year for same period.

—Fuel and utilities running below budgeted levels.

—One-third of the budgeted capital spent, mostly for vehicle replacements; remainder on building improvements that are underway.

—Appropriations for school system at 50 percent of budget.

—Debt service only 31.3 percent of annual appropriation since largest bond payment not due until third quarter

—All other budgeted expenditures only 30.2 percent, but more than 2017 fiscal year by $355,901 due to increase in appropriations to school system and in pass-through lottery funds

Self-Insurance Fund

—Lag time between the time claims are incurred and the time they are processed.

—Claims costs at 32.9 percent of budget; less than 2018 fiscal year projections and less than first six months of claims for 2017 fiscal year.

—Administrative costs on target, but 10.6 percent more than last year, reflecting increase in stop loss premium charges.

Solid Waste Fund

—Operating revenues totaled 52.2 percent of budget, exceeding projections and ahead of the previous year by 10.8 percent.

—Expenditures at 37.4 percent of budget, with 44.8 percent of the operating budget and 45.1 percent of the capital budget used during first six months.

—Through December 2017, Solid Waste realized income of $188,785 versus loss of $117,589 through December 2016.

Poor also gave a recap of budget amendments for the first half of the current fiscal year:

—Budget amendments increased the budget by $3,411,187, with $2,718,300 attributable to funds moved from the general fund to Golden Leaf Foundation-Light Industrial Building Project Fund.

—Most of the remaining fund balance appropriations of $439,573 were made from the fund balance assigned for specific purposes: air conditioning at Recreation Center gymnasium and legal action.

—Appropriations were also made from the unassigned fund balance and included funds to cover: costs incurred by Sheriff’s Office, Communications and Emergency Management during fugitive manhunt last July; new social worker program manager in Department of Social Services (DSS) and remodeling of office space in DSS building.


—Carry forwards from previous years for purchases and projects initiated in 2017 fiscal year but not completed prior to year-end (Sheriff’s Office Federal Equitable Sharing Program, radio system for Animal Services, security access to CS Building).

—Increases in state and federal funds and local grants for DSS, Public Health and Historic Preservation projects.

—Donations to Animal Shelter.

With these amendments, the 2018 fiscal year second quarter budget closed at $54,655,160.

•Commissioners approved the following budget amendments:

—Proceeds from insurance claims for repairs to ambulance and two Sheriff’s Office vehicles, restoration and repairs for water damage at library and Tax Administration/Register of Deeds, and repairs to Rosman Community Park due to vandalism.

—Donations to Sheriff’s Office for acquisition of law enforcement dogs and associated officer training.

—Fund balance assigned for Health Department Medicaid cost settlement payments to cover payback of cost settlements required by Division of Medical Assistance for 2013 fiscal year.

—Fund balance restricted for Hemlock Restoration Project, including grant funds and county’s match.

—Interim valuation of other post-employment benefits (OPEB) to meet Government Accounting Standards Board (GASB) 75 requirements for disclosure of OPEB liabilities.

—From estate of Lois Maxine Gibbs to provide hearing aid loops at Silvermont.

The amendments increased the general fund budget by $101,059, bringing it to a total of $55,150,555. The budget for the Silvermont Fund is $10,000.

•The Transylvania County Honor Guard gave a presentation on the organization. Commander Howard “Sarge” Thiele and Doug Poad, the Guard’s secretary/treasurer, gave the presentation.

The Honor Guard is a nonprofit that has 28 current members representing all service branches. The Honor Guard provides services at a veteran’s service, when the family requests it. The Guard averages 45 to 50 a year. It also takes part in patriotic events, such as Memorial Day and Veterans Day. It relies on fundraising, local government grants and public support for its activities. For example, in 2017 the Honor Guard raised $7,245, and received $3,800 in grants and another $3,673 in donations.

•The Transylvania Family Resource Center’s grand opening in the former Board of Elections building opposite the library will be held at 2:30 p.m., March 20.

•Commissioners heard a report from representatives from First Citizens Bank on the county’s investment portfolio.

In December 2016, commissioners authorized entering into an agreement with First Citizens to invest idle funds in a portfolio consisting of treasury securities, agency bonds and up to 10 percent commercial papers, with a maximum maturity of three years.

Commissioners also approved investment of funds set aside for closure and post-closure landfill care costs. The county entered an agreement with First Citizens in January last year and transferred $3.323 million to the investment account.

•Frances Bradburn and Lisa Sheffield were reappointed to the Personnel Board.

•The third annual Upper French Broad Riverfest will be held June 23 on the grounds of Rosman Town Hall.

Proposed Funding Options

Option A: Fires Service District Tax (Current Method)

Used by eight counties in North Carolina

Pros: Relatively easy to establish a service district (already established in Transylvania County). Districts can be modified by Board of Commissioners (must meet statutory requirements). Tax rate can be adjusted annually by commissioners based on approved fire department budget requests. Commissioners are statutorily responsible for setting tax rate and authorizing distribution of funds based on each fire department’s approved budget request. Districts with high property valuations able to access better equipment and resources, including ability to fund staffing while maintaining relatively low tax rate.

Cons: Variations in property valuations within each service district resulting in inequitable tax rates (currently, 4.79-13.78 cents). Potential variations in level of service and services provided within each individual service district. Limited ability to address needs in districts with lower property valuations due to revenue shortage without significantly higher tax rates. Unable to utilize fire district funds derived from one district (area within the county) to support needs in areas with lower property valuations (departments are interdependent for mutual aid, so if one department can’t sustain due to funding it impacts others). Tax office required to parcel out properties based on respective fire districts and questions on tax bill related to fire district the property lies within. Funding is tied to operational response lines even though mutual aid also applies.

Fire Tax Bill For $250,000 home: $119.75- $344.50 annually, depending on the district the citizen resides in.

Option B: Rural Fire Protection District

Used by 31 counties in North Carolina

Pros: Tax rate can be adjusted annually by commissioners based on approved fire department budget requests. Commissioners are statutorily responsible for setting tax rate and authorizing distribution of funds. Districts with high property valuations able to access better equipment and resources, including ability to fund staffing while maintaining relatively low tax rate.

Cons: Variations in property valuations within each district resulting in inequitable tax rates. Potential variations in level of service and services provided within each individual service district. Limited ability to address needs in districts with lower property valuations due to revenue shortage without significantly higher tax rates. Unable to utilize funds derived from one district (area within the county) to support needs in areas with lower property valuations (departments are interdependent for mutual aid). Methods to establish the district require a petition and referendum that can be costly. More difficult to alter district lines to serve the citizens (improve insurance rates or response areas related to changes in resource/stations in neighboring districts) The money factor impacts best response plans for emergencies. Process for changes to service district lines is more complicated. The 35 percent of residents to get in a referendum is a high bar to achieve 

Fire Tax Bill For $250,000 home: $119.75- $344.50 annually, depending on the district the citizen resides in.

Option C: Fund from General Fund

Used by 36 counties in North Carolina

Pros: Tax rate can be adjusted annually to meet budget needs as approved by commissioners based on fire department’s budget requests. Commissioners are statutorily responsible for setting tax rate and authorizing distribution of funds based on the fire department’s budget requests. Every property owner pays the same rate (like Rescue Squad). Funding method is consistent with fire departments dependence on mutual aid from other departments in the county, with funding going to more than a single department. Removes the tax valuation limitation when determining the best response plans, so operational needs drive decisions. Funding fire and rescue from general fund more easily allows for the county to make sure coverage is equitable and standardized, with a goal of equity in price and coverage to all citizens. A citizen may be in an incident/accident in an area outside his/her home district. Continue to contract with local fire departments for fire and rescue services. Simplify process for tax office and reduce workload.

Cons: Perception of taking from “rich” to give to “poor” districts. City of Brevard citizens pay city taxes, some of which go to support fire protection in the city limits. General fund property taxes tax municipal residents too, so this could create a claim of double taxation. Changes creates anxiety and opposition. Perception that change in funding method represents attempt to change current contractual agreements with volunteer fire departments serving their respective communities or to take control of operations (Funding method does not give additional authority). Perceived loss of local volunteer fire department serving its community/district status (although method of collecting funding does not impact that). A reserve fund is not guaranteed for fire services under this method.

Fire Tax Bill For $250,000 home: $150 annually. The 2018 fiscal year tax would be 6 cents for all residents, including within the City of Brevard.

Option D: Fund from Single Countywide Service District/Tax Rate

Used by five counties in North Carolina

Pros: Tax rate can be adjusted annually to meet budget needs based on approved fire department’s budget requests. Every property owner in the county pays the same rate. Funding method represents fire departments dependence on mutual aid from other fire departments in the county. Removes the tax valuation in a district as the limiting factor when determining the best response plans so operations drive decisions. Reserve fund specifically for fire services would be required, so that anything collected above approved budgets would be used for fire specifically and no other purpose. The single service district more easily allows for equitable and standardized coverage and allows the county to address deficiencies or gaps in coverage areas. Method recognizes that a citizen may require service outside of the district in which they live. Simplify process for tax office and reduce workload. Continue to contract with local fire depts for fire and rescue services. City residents do not pay both city and county for fire services

Cons: Perception of taking from “rich” to give to “poor” districts (two tax districts would have an increase in rate and six rates would decrease). Changes create anxiety and opposition. Perception that change in funding method represents attempt to change current contractual agreements with volunteer fire departments serving their respective communities. It does not change the authority commissioners currently have to approve fire department budget requests. Perceived loss of local volunteer fire department serving its community/district status (although method of collecting funding does not impact that). Perception that this is a ‘new’ tax when it is not.

Fire Tax Bill For $250,000 home: $180.75 annually. The 2018 fiscal year tax would be 7.23 cents for all residents, excluding the city of Brevard.

 
 

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