FIN 2019-08-12 Item 2C - Discussion - Source of Revenue for Fire Departments

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INFORMATIONAL MEMO Page 3 their own EMS levy. Rather, King County collects this levy to fund the Medic One program. The City, along with other participants in this program receive a distribution from this levy. Distribution is based on call volume. 2. Fire Benefit Charge (FBC) The FBC is a fee that is based on the benefit of having fire -based services. It considers that those who benefit more from fire protection services should pay more for that service. The charge is applied to improvements to real property but does not apply to land. It is a fee based on size of the structure, use, and risk. This revenue source is only available to districts and RFAs. Cities do not have authority to impose an FBC. 3. Grants State and Federal grants are available to cities, districts, and RFAs to fund a variety of expenditures including capital, equipment, and staffing. Grant funds received are restricted to the expenditures specific to the purpose of the grant and cannot be used to supplant other funding sources for expenditures approved by the grant. 4. Other Taxes and Fees (not specific to fire) Unlike districts and RFAs, cities have the ability to levy other taxes and fees to fund fire services. For the City of Tukwila, sales, admissions, and utility taxes, as well as business license fees and miscellaneous revenue can be used for any service provided by a city, including fire services. These taxes and fees are not available to districts and RFAs. 5. Contract for Services Cities, districts, and RFAs, can enter into contracts with other entities to provide fire and EMS services. Contracts for services can be used to regionalize services, resulting in economies of scale while still providing a high level of service. 6. Fines and Penalties Fines and penalties for fire are typically associated with false alarms. Many fire entities will levy a fine or penalty for false alarms in an effort to reduce the number of false alarms. False alarm fees are generally not a major source of revenue. 7. Fire Impact Fees Impact fees are used to offset the increased costs of providing services due to development. Impact fees are a funding option for cities. Districts and RFAs cannot levy impact fees, they can only receive impact fees if they provide services within city boundaries. 8. Local Improvement District Local Improvement Districts (LIDs) can be used to fund capital needs within a specific area, typically an area smaller than the entity's borders. An example where LIDs could provide funding would be to construct a fire station. The area that benefits from the fire station would form the LID and provide the funding for the project. 9. Other Revenue Sources There are other revenue sources available to fund fire services but are immaterial in nature. Some of these sources include interest earnings, proceeds from sale of assets, fire insurance premium tax, and rental revenue. 29