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HomeMy WebLinkAboutRFA 2015-06-10 MinutesCity of Tukwila MINUTES Regional Fire Authority Annexation Steering Committee June 10, 2015 Call to Order Co- Chairs Seal and Wilson called the meeting to order at 1734 hours. Committee Members Verna Seal, City Council member; David Cline, City Administrator; Moira Bradshaw, Senior Planner; Vicky Carlson, Deputy Finance Director; Chris Flores, Tukwila Interim Fire Chief; Merle Brooks, Tukwila firefighter, Alan Codenys, Tukwila firefighter; Dawn Judkins, Captain, Union President of Tukwila firefighters; Mike Denbo, Commissioner, board member of Kent RFA; Ray Shjerven, Captain Kent RFA, Union President; Brian Snure, Attorney for Kent RFA board; Mark Segale, Segale Business Park; Genevieve Christensen, Assistant General Manager for the Westfield Mall; Roxanne Knowle, Senior Real Estate Manager for CBRE; Jessica Jerwa, Tukwila citizen representative; Jerry Thornton, Tukwila citizen representative; Kathleen Wilson, Tukwila citizen representative. Comparison of City and RFA budgeting processes Vicky Carlsen presented a general overview of the municipal budgeting process and the RFA's budgeting process. A. Municipal Budgeting Tukwila is a full service City supporting many, varied services such as police, fire, public works, parks and recreation and community development. Some services are contracted for by the City, such as jail service, dispatching, animal control, library service. The 5 primary goals of the Strategic Plan developed in 2012 provide guidelines for the budget process for the next several years. These goals helped to determine the priorities for City's 2015 -2016 biennial budget. Sales tax accounts for 30% of the City's general fund revenue sources, property taxes account for 25.2 %, and utility tax for 10.2 %, with the rest accounted for by business license and RGRL fees, other taxes, other government agencies, and other smaller categories. Although the sales tax is the highest revenue source, it varies with the economy, and the sales tax revenue being distributed to the City has been affected by the destination -based reporting that the State adopted, with the sales tax going to the locality at the end point of shipping, not the purchasing point. Of the local 0.95 cents sales tax generated 1 Regional Fire Authority Annexation Steering Committee Minutes Page 2 of 5 June 10, 2015 in the City, only .084 cents per dollar is actually distributed back to the City. The utility tax is capped at 6% by State law. State law also provides caps to the property tax that can be assessed. Long term projections indicate that if there are no changes to the City's revenue base or services provided (costs), revenue and expenditures will even out in 2019. Services to the community, with the biggest being police and fire, comprise 73% of the City's total budget. This is one of the reasons the City is considering merging the fire department with the KRFA. B. RFA Budgeting The KRFA (Kent Regional Fire Authority) also has a strategic plan which is updated every year thru their annual budget process. Fire and emergency medical services account for 66.7% of their operating budget. Supportive services, prevention, IT, fleet management, logistics, emergency management and administration account for the rest of their budget. Property tax accounts for 31.4% of their revenue, the fire benefit charge accounts for 37.6 %, and the EMS levy, interlocal agreements and miscellaneous contracts account for the rest. Sales tax is not an option for regional fire authorities and there are no business taxes. Small Group Discussion The committee formed three smaller discussion groups to consider the following three questions and then presented their group's findings to the entire committee. The following is a summary of the three groups. 1. Was there anything that surprised you about the Level of Service presentation? What is one thing you remember from the Level of Service presentation that you think the community should know? • Regarding Level of Service, they concluded that there are similar response times for Tukwila and Kent RFA for first responders with Tukwila being slightly faster. There are similar times between the two organizations for a full response. • There are more resources available as part of a larger regional fire authority. For example Tukwila has firefighters doing tasks that Kent RFA has special units perform and the RFA has a separate logistics and maintenance staff. • The number of community members who frequently call and use 911 is astounding and the RFA has developed the FDCares program that responds with appropriate resources rather than in Tukwila where a ladder truck may need to be sent if the dispatch is from Station 54. • The larger RFA also has data analysis and planning analytics that are not available to the smaller Tukwila Fire Department. 2. With what you have heard so far, what are the pros and cons of annexing to the RFA? PROS • There was a general consensus that the RFA could provide better service because they are a larger organization. • They are able to specialize and provide more support for their firefighters and community. • FDCares Will the FD Cares be expanded to Tukwila after consolidation? Do we know how many Tukwila calls might qualify as non - emergent? How is it budgeted currently? 2 Regional Fire Authority Annexation Steering Committee Minutes Page 3 of 5 June 10, 2015 ■ The RFA is nationally accredited. • Municipal boundaries are somewhat arbitrary when it comes to dispatching and organizing so a larger organization /regional provider (although it's boundaries are still somewhat arbitrary) can be more efficient just because of the larger size, that is, there would be an economy of scale with the RFA. • In a disaster, the RFA would already be part of a regional effort. • The Kent RFA tends to be able to spend time planning for issues rather than Tukwila which is more often reacting to situations. Can the Chiefs expand a little more on this concept? • The RFA is more data driven and has more substantial statistical analysis. They also can offer depth and breadth of service and experience because of their size. • Training consortium (although Tukwila already participates in the South King County Training Consortium.) • Because of the state limitation on increasing property taxes, the City will have difficulty financially sustaining the current level of service if it retains the fire department; whereas the RFA can use the FBC for up to 60% of their operational needs. CONS • The Committee doesn't know yet how the Fire Benefit Charge will impact businesses and residents. There will be a transition period and we don't know if the RFA really has the capacity to take on Tukwila and if it will get too big? Can the Chiefs expand on this? • The need to return to the voters every 6 years for a significant portion of their funding is tough but on the other hand it can be a positive because it keeps a better link with the community. • There is a certain loss of control and identity by the City for the fire and emergency medical service. Does the RFA have any thoughts on this? 3. What additional information would you like to have prior to making your recommendation to Council? • What will the cost be for residents and businesses if Tukwila joins the KRFA? We don't know the fire benefit charge yet. • Need to know the equity of the fire benefit charge for homeowners, apartments, types of businesses -how will the charge be weighted? • What will the transition /merger /schedule look like? • What will happen to the City's finances without a municipal Fire Department? • What are the existing deficiencies and future costs of the current Tukwila Fire Department and how will that be included in the community debate? For example, can't assume that the existing Tukwila Fire Department budget is adequate going into the future. ■ How are ambulances used for transportation if not for first response and does that impact this overall service analysis? • How will the emergency response work, how many and what type of apparatus will respond to each type of incident? • Is Tukwila adequately prepared for an emergency, most communities are not. • Because the fire benefit charge levy is voted on every 6 years, what will happen if the fire authority loses that funding? Fire Benefit Charge Overview 3 Regional Fire Authority Annexation Steering Committee Minutes Page 4 of 5 June 10, 2015 David Cline stated that the finance subcommittee will deliver a presentation on the costs of the fire service to the steering committee at the July meeting. Vicky Carlsen then went through a presentation on the basics of a fire benefit charge. The fire benefit charge (FBC) is a fee, not a tax. It is a funding mechanism not available to cities. The FBC formula is based on several factors including the combined square footage of all structures on the property, what kind of structure it is and any unusual hazards that exist in the structure. Per law the formula shall be reasonably proportioned to the measurable benefits to property. There are few exceptions to the FBC: churches, if the property is used for religious purposes; low income senior exemptions and property that is subject to a contract for fire services. The formula can be adjusted so that properties that need the most services and have the most call -use will pay according. Initially, the FBC requires a 60% voter approval; however, only 50% voter approval is required to join an existing RFA. Every six years 60% voter approval is needed to renew the FBC which makes it responsible to the voters. The maximum property tax levy is $1.50 per 1,000 assessed value if the FBC is not utilized. The FBC takes the place of the third 50 -cent portion of the property tax levy, reducing the levy to $1.00. The FBC revenue collected cannot exceed 60% of the annual operating budget of the RFA. The FBC is administered by the RFA, whose board of commissioners can approve a change to the formula. The FBC is added to the property tax bills by the county, who then charges a 1`)/0 collection fee. The Tukwila Finance subcommittee will analyzing the existing FBC formula as their research proceeds. Possible revisions may be an added retail factor or creating a factor for zones that have a high concentration of calls. The State does not mandate how the formula has to look. If the City decides to go with the KRFA, the KRFA will determine the total cost of service, and then the City will have input as to the final determination of the FBC formula to make sure that it is fairly apportioned. The KRFA could have one formula but different areas of the region could have different zones used in the factoring of the formula. The fire authority can increase the formula as long as the total revenue collected is not more than 60% of the fire authority's annual operating budget. The FBC is examined every year and can increase or decrease. The voters only approve the authority to levy the FBC. If Tukwila voters approve annexation to the KRFA, the FBC could take effect in 2017. Property Tax Overview Several taxing districts, such as the county, city, state school fund, port, EMS, library, floor control, local schools and the metropolitan park district, can affect the property tax bill. Voter - approved bond levies also affect the property tax bill. An FBC charge would not be located under the Fire line, but would be listed as a fire fee in the other charges section of the property tax bill. Taxing districts have regular levy authority which is non -voted with the exception of voter - approved lid lifts. However, there are a lot of limitations since RCWs specify maximum regular levy rate limits for port, state schools, road, library, and metropolitan park district. Regional fire authorities are limited to $1.00 per 1,000 of assessed value if they utilize the FBC. Tukwila's property tax levy rate equals 1,000 x city property tax revenue /assessed value. Currently, the City's maximum levy rate for 2015 is $3.37753, but the actual levy rate is $2.84188 because state law limits regular levies to 101 % of their highest levy rate since 1985 plus new construction assessed value plus relevy of prior year refunds. Voted regular levies are not governed by this limit in their first year after the vote. If the City joins the KRFA, the RFA actual levy rate would be subtracted from the City's maximum levy rate which would result in a maximum levy rate of $2.42774. If the City was 4 Regional Fire Authority Annexation Steering Committee Minutes Page 5 of 5 June 10, 2015 currently annexed to the RFA, the City's calculated levy limit would be less than the allowable levy using the 101% limit, so the maximum levy rate would be $2.42772 rather than the 101% limit. The maximum levy rate for the RFA is $1.000. If they annex with Tukwila, their total assessed value would increase because of their expanded borders. General Discussion David Cline stated that although the City may not collect as much tax revenue if the KRFA annexation happens, there will be more City funds available to allocate to other City services since City funds will not be going to support the operations of a fire department. The City will be transparent throughout the entire process. Some questions still to be considered are: Is annexing to the KRFA a good benefit to the community, what will the cost be to property owners, what services will they receive, and if the annexation doesn't work, what will happen? Chief Flores asked Mark Segale how their properties in Kent were affected by KRFA. Mr. Segale said that there was a large increase because of the fire fee (FBC) and no decrease in property insurance rates, although the buildings were new with modern protection systems. Captain Shjerven pointed out that one of the buildings contained a hazardous materials warehouse, which would require a lot of resources to mitigate any incidents at that location, and that would cause an increase in the FBC formula factors. Roxanne Knowle said that there was a minimal increase in this year's FBC charge for CBRE's buildings in Kent. David Cline said that tonight's presentation was intended as a high level overview of the financing issues, and that more information on the costs and the impact to different properties would be presented at the July and August meetings. He also stated that the City Council would be receiving an update on the RFA Annexation process on Monday night the 15th of June. A communications plan will be presented as well as progress at the Steering Committee level. Members of the Committee are welcome to attend and speak to the Council. Adjournment At 1939 hours the Co- Chairs declared the Regional Fire Authority Annexation Steering Committee meeting adjourned. Minutes taken and prepared by Norita Deckard, Admin. Support Tech. 5