Fiscal Health of Fire Protection Districts...1) Common funding sources for fire districts and their...

April 16, 2015

Moderator• Oxana Wolfson, Policy Consulting Associates,

PrincipalSpeakers

• Jennifer Stephenson, Policy Consulting Associates, Principal

• Chief Steve Kovacs, Professional Management Associates, Principal

• Elliot Mullberg, Solano LAFCo, Executive Officer

1) Common funding sources for fire districts and their limitations,

2) Challenges faced by fire districts in maintaining adequate and sustainable financing sources,

3) Options to address these challenges, 4) Examples of successful innovative

approaches to address funding constraints, and

5) Ways in which these challenges impact governance options.

$1,000,000,000

$1,500,000,000

$2,000,000,000

$2,500,000,000

$3,000,000,000

$3,500,000,000

FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12

Revenues Expenditures

Source: State Controllers Office Special District’s Report FYs 03 - 12

• Property taxes, • Special taxes or benefit assessments, • Service charges (includes permits, licenses, fines

etc.), • Intergovernmental funds

and grants,• Facility and development

impact fees,• Use or sale of money

and property, and• Fundraising efforts.

Revenues %Taxes and Assessments

Current Secured and Unsecured (1%) 65.6%Voter Approved Taxes and Assessments 6.1%Special Assessments (Mello/Roos, Mark/Roos) 0.1%Prior Year and Penalties 0.0%

Licenses, Permits, and Franchises 0.7%Fines, Forfeits, and Penalties 0.2%Revenue From Use of Money and Property

Interest Income 0.3%Rents, Concessions, and Royalties 0.1%

IntergovernmentalFederal 1.6%State 2.0%Other Governmental Agencies 4.5%

Charges for Current Services 17.2%Other Revenues 1.7%Total Revenues 100%

Source: State Controllers Office Special District’s Report FY 11-12

$-

$200,000,000

$400,000,000

$600,000,000

$800,000,000

$1,000,000,000

$1,200,000,000

$1,400,000,000

$1,600,000,000

$1,800,000,000

$2,000,000,000



• Economy (foreclosures, lower housing values, little or no growth)

• Statewide initiatives passed by voters• County development policies• City annexations/FPD detachments• Property tax sharing agreements

$-

$20,000,000

$40,000,000

$60,000,000

$80,000,000

$100,000,000

$120,000,000

$140,000,000

$160,000,000

$180,000,000



• Voter threshold for special tax• State responsibility area (SRA) fee• Development limitations (economy,

policies, and infrastructure)• Rural land uses and densities• Not guaranteed to renew after sunset

• EMS and ambulance services

• Contract services• Strike teams• Inspections• Building plan

review• Operating permits

• Non-residents• Specialty

emergency services• Training fees• Fines and penalties

for code violations and negligent fires

• Many others…


$-

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

$300,000,000

$350,000,000

$400,000,000

$450,000,000

$500,000,000


• Often invoices go unpaid• Significant public opposition• Can only recoup “estimated reasonable cost of

providing the service”


$-

$20,000,000

$40,000,000

$60,000,000

$80,000,000

$100,000,000

$120,000,000

$140,000,000


Federal State Other Sources

• Counties can share Prop 172 funds with FPDs at their discretion

• Of 28 counties sampled, 7 share Prop 172 funds with FPDs with either a formulated ratio or by capital contributions

• FPDs that receive Prop 172 funds are more likely to operate within revenues

• Greater push by FPDs in recent years to receive a portion of these funds

• Unpredictable from year to year• Grant writing requires

expertise and is time consuming

• More challenging for those in need to qualify

• Counties unwilling to share Prop 172 funds

• Property Tax• Special Taxes• Benefit Assessments• Bonds• Fees for Service

• Agency must decide on their philosophy regarding charging the public.

• Some fees require passage of an ordinance by the agency.

• Compliance with Propositions 218 and 26.• Purpose and levels of services provided.• Must decide if services are going to be enhanced or

simply maintains current levels.• Be creative – STOP doing business as usual!

• Charging for Responses• Statewide Mutual Aid – Fire Apparatus and Overhead• Standby Fees• Plan Check Fees• Inspection Fees• First Responder Fees – BLS or Paramedic • Paramedic Transport

• GEMT

• Be Careful – Can only recoup actual costs.

• Teaching Fees• CPR/First Aid• Host Regional Training Classes

• Facility Rental• Community Meeting Room

• Fee Schedule• May require the passage of an ordinance – Check

with Legal Counsel

• Contract for Services• Federal Agency Contracts

• Forest Service• BLM• BIA• NPS• Military Base

• Cal Fire Assistance By Hire (ABH)• Private Contracts

• Casino• Industry

• SAFER Grants• Staffing• Volunteer Recruitment and Retention

• OTS – Office of Traffic Safety• AFG - Assistance to

Firefighters Grants• VFA – Volunteer Fire

Assistance Grants (50/50)• Private Corporations

• Don’t underestimate this resource• Do your homework

• Are they a 501(c)3 Non-Profit?• Raffles• Yard Sales• Drive-Through Dinners• BBQ’s• Pancake Breakfast• Community Event Fundraiser• Partner with another Organization• GoFundMe.com

• Be Proactive!• Service Clubs/Groups• Donations of Usable Items

• Keep for the fire district• Donations of Items to Sell

• Sell to the public.• Bottom Line – ASK!!!

• Fees for New Development• Mitigation Impact Fees• Mello-Roos• Square Footage Tax• Must Comply With Prop. 218 and 26!!

• Regional Training Location.• Partner with Community College.• Classes for the Public.

• Cost Sharing with other Fire Districts or Governmental Entities.

• Resource Sharing with other Agencies.• Shared Services.• JPA’S/Consolidation of Services or Districts.• Regionalized Specialty Services or Resources.

• Think outside the box.• Be creative.• Ask Questions!

11%

73%

8%

1%7%

1%1%

Revenue AllocationAverage

Fees –svcs

Property Tax

Grants

Impact Fees

Special tax

Interest

Donations/ Other

7%

25%

23%4%

39%

1% 1%

Revenue AllocationCordelia FPD

Fees –svcs

Property Tax

Grants

Impact Fees

Special tax

Interest

Donations/ Other

• City Fire Department is new service provider

• Districts lose revenue sources • Property taxes • Fees • Special taxes

• Some District costs are fixed - if revenues reduced significantly sometimes cannot reduce cost significantly

• Purpose - Mitigate the loss of property tax revenues

• Basis – Gov’t Code Section 56668(c)

• The effect of the proposed action and of alternative actions on adjacent areas, on mutual social and economic interests, and on the local governmental structure of the county.

• Goal - no significant negative effects on the County or neighboring agencies

• Applicant works with affected agencies to mitigate loss

• Agreement • Included in terms and conditions

• No agreement • Commission sets mitigation

• 1) Does LAFCO have the legal authority to impose mitigation or detachment fees?

• LAFCO is required to consider the impact on adjacent agencies by GC 56668(b) and (c).

• LAFCO can impose conditions GC 56885.5 and GC 56886 but not regulate land use

• Payment of mitigation does not place direct restrictions on land use

2) Is LAFCO prohibited or preempted by CKH or the Revenue Code from imposing the mitigation?

• Payment of a fee does not mean the district has continuing jurisdiction complies with GC 57350

• Used to mitigate adverse impact of granting a change of organization not a tax so no conflict with Revenue Code Section 99

3) Is LAFCO prohibited or preempted by Prop 218 or due process from imposing the mitigation?

• Fee applies to a voluntary decision by property owner so not a tax and not a property related fee subject to Prop 218

• Does not violate due process since similar to impact fee and is proportional to public impact

4) Does LAFCO have the authority to require the applicant to seek approval of the affected special district?

• No - requiring an agreement effectively delegates LAFCO’s authority to the affected agency.

• Property owner and district can agree voluntarily

• If they don’t agree the Commission must determine the appropriate mitigation fee.

• LAFCO can impose mitigation

• Not prohibited by other applicable laws

Project Annex to Acreage Affected Agency Mitigation Term Amount

2009-04 Dixon 71.3 Dixon FPD Perpetuity $1,240.77 with annual CPI adjustment

2102-02 Dixon 18.82 Dixon FPD Perpetuity $174.01 with annual CPI adjustment

2012-06 Fairfield 2972 Vacaville FPD 20 Years $6,256.27/year

2012-10 Fairfield 1044 Vacaville FPD 25 Years $38,465.08/year

2014-03 Vacaville 272 Vacaville FPD 1 time lump sum $93,000 (totals approx 25 years)

2014-11 Fairfield 0.2 Suisun FPD 15 years $69.51/year

• Oversight – once the annexation is recorded LAFCO has no ability to enforce the mitigation

• It is up to the district to enforce it

• How long is the mitigation term?

• How long does it take to recover the loss of revenues?

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

0 5 10 15C

hang

e in

Per

cent

FY 04 to FY 14

Dixon FPD

-6.00%

-4.00%

-2.00%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

0 5 10 15Cha

nge

in P

erce

nt

FY 04 to FY 14

Cordelia FPD

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

% C

hang

e

Year

Solano County Change in Secured Value

• In the process of developing guidelines for terms of mitigation

• Based on the assumption that growth in property taxes will eventually equal or exceed lost revenue

• Considerations • Percentage of the property tax that is lost• Economic cycles

Fiscal Health of Fire Protection Districts...1) Common funding sources for fire districts and their...

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