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HomeMy WebLinkAboutRFA 2015-11-18 Item 3 - Final 10/14/15 MinutesCity of Tukwila MINUTES Regional Fire Authority Annexation Steering Committee October 14, 2015 Call to Order Co -Chair Verna Seal called the meeting to order at 1730 hours. Committee Members David Cline, City Administrator; Moira Bradshaw, Senior Planner; Vicky Carlsen, Deputy Finance Director; Chris Flores, Tukwila Interim Fire Chief; Jim Schneider, Kent RFA Chief; Larry Rabel, Captain Kent RFA; Joe Duffle and Verna Seal, Tukwila Councilmembers; Jessica Jerwa, Jerry Thornton, and Kathleen Wilson, Tukwila citizen representatives; Merle Brooks and Alan Codenys, Tukwila firefighters; Dawn Judkins, Captain, IAFF Local 2088 President; Mike Denbo, Commissioner, board member of Kent RFA; Ray Shjerven, Captain Kent RFA, IAFF Local 1747 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. Also present: Dennis Robertson, Tukwila City Councilmember. Citizen Comments Eric Bernard, Kent resident, stated that since the Kent RFA started, residential property taxes have increased $500 -1,000 per year. In 2011 his FBC (fire benefit charge) was $500, in 2013 it was $700 and in 2014 it was $800. He is a 78 year -old Kent resident who is being taxed out of his home. He stated that there has been an increase to taxpayers than wouldn't have been there if the Kent RFA had not been created. He is concerned about the impact to SHAG (Senior Housing Authority.) Economic evictions are on the rise. He said Chief Schneider promised economy of scale and that the 60% maximum FBC would not be needed. There has not been any measurable benefit in services. Leroy Stevenson, Covington resident, opposed the Kent RFA when it was initially on the ballot. The only voter information available to him came from the Kent RFA. His house is 960 sq. ft. and at the beginning of the RFA he paid $235 for fire service, now he pays $325. That is a 35% increase in 5 years. If he was still serviced by Fire District #37 and paid $1.50 per $1,000 assessed value, his property tax would be $240. He said his insurance company told him that there were very few house fires now -a -days, water damage claims are more likely. He stated that literature from the Kent RFA said there would be a reduced cost to residents and that their insurance rates would go down, but that has not happened. Businesses ultimately pass their increased costs on to the citizens. The Kent 53 Regional Fire Authority Annexation Steering Committee Minutes Page 2 of 7 October 14, 2015 RFA said there would be economy of scale and efficiencies, but since labor and compensation are the primary costs, the only way to reduce costs is by job or benefit cuts which has not happened. Cities are giving up their sovereignty and the right to give direction to the fire department. He thinks that it would not be a good idea for Tukwila to join the Kent RFA, that interlocal agreements can accomplish economy of scale for equipment and apparatus purchases. Cost Comparison Update of City and RFA Budgets Vicky Carlsen, Tukwila Deputy Finance Director, presented an update to the Tukwila Fire Department costs with actual data from the first three quarters of the year so that there is a more accurate "apples to apples" comparison with the Kent RFA budget. She handed out the Cost Comparison Worksheet. Within the Fire Department's budget are additional costs that the City would retain, the LEOFF1 retirees' medical and the cost for the firemen's' pension. The City will also retain the indirect costs of $797,070 for the services provided to the Fire department from other City departments like Finance, IT, etc. Included on the cost comparison worksheet is an equivalent levy rate, because the source of funds to pay for the City fire department are mixed from a number of different sources. The City uses a "pay as you go" system to fund capital requirements by issuing debt and using money from the general fund. In order to create a comparison, the City and the RFA each estimated what the annualized cost would be for the Fire Department capital. The cost comparison for total operations and capital is $12.54 M with a levy equivalent of $2.50 for the City and $12.72 M with a levy equivalent of $2.53 for the RFA. The difference is a levy equivalent of $0.03. For example, using the equivalent levy rate to calculate the taxes and charges for a house with a $250,000 assessed value would result in a cost increase for the home owner of approximately $17. Potential Contractual Costs for Prevention, Investigation, EM The City would continue to be responsible for fire prevention, investigation, and emergency management services regardless of the annexation decision. Currently, the projected fire - related 2015 actual costs are $793 K for fire prevention and $321 K for emergency management for a total cost of $1.11 M and an equivalent levy rate of $0.22. If the City contracted with the RFA for these services, the proposed RFA budget would be $902 K for prevention and investigation and $339 K for emergency management for a total cost of $1.24 M and an equivalent levy rate of $0.25. The total difference for both services is $128 K and an equivalent levy rate difference of $0.03. The primary reason for the cost difference between the City and the RFA are the salary and benefit costs. The total City 2015 projected actual cost for operations, capital, prevention, investigation and emergency management is $13.65 M with an equivalent levy rate of $2.72. The total RFA proposed 54 Regional Fire Authority Annexation Steering Committee Minutes Page 3 of 7 October 14, 2015 budget cost is $13.96 M with an equivalent levy rate of $2.78. The difference is $307 K with a levy equivalent of $0.06. Capital Improvement Plan Capt. Larry Rabel, from the Kent RFA, gave a presentation on Tukwila's capital improvement needs and the RFA's proposed capital improvement plan of $39.9 M. The RFA's 20 -year capital plan provides funding for replacement and remodeling of the 4 fire stations, as well as capital funding for all apparatus and equipment and a capital reserve of $4.9 M in 2035. The RFA cannot absorb the total cost so there will be a cash flow issue the first 10 plus years, consequently there will be a debt expense of approximately $2.5 M for a $10 M bond. The RFA's proposed capital plan is to replace Tukwila Fire Station 51 by 2021 and Station 52 by 2023. Station 51 would be a concentration station housing a lot of resources to not only support the other Tukwila stations, but also provide support for area within Kent. Stations 52, 53 and 54 would be staffed to meet distribution need. Since Station 53 is located at the north end of the service area, and it would be more difficult for other station crews to reach the area in a short time period, it may need more staffing. The timeline for completing the remodeling of Station 53 and Station 54 would be by 2030 -2033. Station 53 will need maintenance and possible expansion. Station 54 will be difficult to remodel because of its existing construction type, so one possible solution would be to combine Station 54 and the north SeaTac Station 47 since it also needs to be replaced. The timing for this is more complicated and difficult because it involves coordination with the City of SeaTac. City Administrator Cline noted that a study commissioned by the City showed that Stations 51, 52 and 54 were seismically deficient and need improvements. The significant cost difference on the capital costs appears in apparatus, which is explained by the different replacement schedule for heavy -duty apparatus between the two agencies. If the annexation occurs, the RFA anticipates that an additional aid car will be needed around 2022 and an additional engine around 2025. All of the costs for the anticipated future needs are embedded in the 20 year RFA plan. Fire Benefit Charge Overview Capt. Larry Rabel presented an overview of the fire benefit charge (FBC.) The primary funding for the Kent RFA is $1.00 property tax levy plus a FBC as specified by RCW 52.26.240. Tukwila is a unique service area because its geography of hills and river. The built environment of freeways, high service retail areas with high traffic and employee and shopper volumes, creates limits on the reach from fire station service areas. Because of these factors, Tukwila needs more fire stations than other areas; therefore, the cost of operations is higher. The FBC formula will be the same throughout the RFA; however, the factors in the formula have been adjusted specifically for Tukwila. FBC formula: Square Root of Area x 18 x Category x Response x Risk x Discount x Fire -flow factor. 1. Square root of area = Size of structure 55 Regional Fire Authority Annexation Steering Committee Minutes Page 4 of 7 October 14, 2015 2. 18 This is a number that comes from the insurance services office and when multiplied by the square root of the area determines the amount of water (fire -flow) needed to put out a fire. 3. Category There are four categories of structure: • one and two unit residential dwellings, • mobile homes, • apartments; or • commercial /industrial 4. Response This factor is based upon what resources, i.e. firefighters, fire engines, special haz -mat rigs, ladder trucks, etc., would be needed to put out a fire. 5. Risk This factor includes 2 hazard factors that increase fees to structures that contain highly combustible or flammable uses or storage and 4 "Regional" retail factors to help offset the cost to Tukwila residents of providing services to shoppers and employees of regional retail and services that are located in Tukwila. Business that will see this "Regional" factor applied include: high traffic retail, restaurants, fast food, and heavy industrial uses. These factors are used to offset costs for the different types of commercial businesses. The Kent RFA used response data to compare call volumes in Tukwila to call volumes in the Kent RFA. This data was used to determine risk factors for some of the regional commercial differences like the Westfield Mall. 6. Discount Is given for low income qualifying seniors and disabled persons owning their own homes, and for structures with sprinkler and alarm systems. 7. Fire -flow factor This number is unique to the Tukwila service area. The fire -flow factor allows the revenues to match operational and capital needs. The three factors that will vary from the RFA's factors outside of Tukwila are the category types, which shifts greater cost to the commercial and multi - family structures; risk (because of Tukwila's regional influx of population), and the fire -flow factor. Hazard factors are already built into the original formula. Mark Segale asked for an explanation of the fire -flow factor. Capt. Rabel explained that the factors used to determine fire -flow are how many gallons of water would be needed to handle the problem, how many personnel and resources would be needed to deliver that water, and what would be needed to maintain those resources. As an example, for a house fire, a fire hose delivering 50 gallons per minute would require two firefighters on the attack line, one firefighter manning the pump, one at the hydrant, two on the outside of the structure, one on situation assessment and one in command. A small commercial structure with front windows would have low rates because a fire there would be easy to put out and use fewer personnel. A larger commercial structure would use a 2 1/2 hose line instead of a 1 1/2 line, which would automatically increase the gallons per minute water flow. Fighting that fire would also require more personnel. Roxanne Knowle asked if one tenant in a multi- tenant building had several risk factors, how that would affect the FBC calculation. Capt. Rabel explained that the entire square footage of the parcel would be assessed the higher risk factor because of that one tenant. 56 Regional Fire Authority Annexation Steering Committee Minutes Page 5 of 7 October 14, 2015 Genevieve Christensen asked if the fire -flow needed was how much water was needed for the fire? Capt. Rabel explained that the fire -flow factor was the cost to deliver water to the fire. That cost included the cost of personnel and equipment. In the Kent RFA the factor was .32; in Tukwila the factor was .49. Alan Codenys pointed out that Tukwila has high water pressure, 160 #'s at Tukwila's hydrants. In Tukwila one sprinkler head would flow 95 gallons per minute. Mark Segale asked if a building with ESFR sprinklers would have a lower rate. Capt. Rabel said it would receive a sprinkler discount, although they were still working to elaborate how much to reduce the risk factors since ESFR was not currently separate from the sprinkler discount factor. Mark Segale asked if there are automatic increases in the FBC. Chief Schneider replied that the RFA evaluates the budget on a yearly basis to see how much they will be getting from the $1.00 levy. That tells them how much the FBC needs to be to reach the correct budget amount. In the future, the RFA will be receiving impact fees, which will reduce the taxpayers' fees. Mark Segale asked if it is possible to do a snapshot of the FBC valuation if it varies yearly. Chief Schneider replied that when assessed property values decreased, the RFA had to raise the FBC since they were limited by the 1`)/0 tax levy. He said that when assessed property values decreased, the cities had banked money that they could use to continue services. However, the RFA didn't have bank capacity to rely on when property values decreased. Councilmember Robertson said the RFA has fewer revenue sources than cities to pay for services. The RFA's revenue sources are primarily assessed value and the FBC. Just recently, the City of Kent adopted impact fees. The RFA recalculates the FBC every year to account for revenue disparities. When the voters vote on the FBC, they are voting on the idea of larger structures and those requiring higher cost resources paying more and not the actual FBC amount. The FBC is based on square footage of improvements and the cost of maintaining resources to protect those improvements which can change from year to year. The FBC measures the cost to deliver fire service to a location and the overall risk if there are a lot of building occupants or higher risk storage or uses. Figuring the FBC is a very complicated process. Chief Flores said the dollars have to make sense. Voters need to look at the big picture which is sustaining and stabilizing fire service in the region. Roxanne Knowle asked what would happen if the voters voted no on the FBC in six years, and if the RFA could continue to run the FBC election? Chief Schneider replied that funding would go back to the $1.50/1,000 of assessed value and services would have to be cut. Brian Snure said that they could continue to run the FBC election, but if the FBC was not approved in the year cycle, services would have to cut. Eric Bernard said that the Kent RFA raised the FBC 15% this year, which is more than CPI. General Discussion Councilmember Seal asked what process the committee would like to follow to reach a decision and recommendation for the City Council? Moira Bradshaw explained that the Steering Committee needed to make a "yes" or "no" recommendation on whether or not the City should proceed with the RFA annexation. 57 Regional Fire Authority Annexation Steering Committee Minutes Page 6 of 7 October 14, 2015 Mark Segale said he would like to see examples of the FBC formula calculated for particular types of properties. City Administrator Cline summarized that the Committee wants to see cost - comparisons for a cross - section of properties. Capt. Judkins asked what other issues, such as contracting for fire prevention and emergency management, might affect the cost comparison. Moira Bradshaw explained that contracted costs for prevention and emergency management would not affect the FBC since the contracted costs would always be paid for by the City. Roxanne Knowle asked what would happen to the dollars in the City's budget that currently to go to the fire department. Moira Bradshaw explained that the City Council is currently discussing that issue. They discussed the revenue implications of a number of options including the RFA annexation at a special work session on September 15 and are having a follow up discussion on November 10. The Steering Committee could provide a qualifier in their recommendation if they think that is an important issue in their decision. Councilmember Seal said it would take time for the City Council to discuss all of the issues involved in an annexation and the Council would welcome qualifiers or committee suggestions. The Council needs to apply due diligence and not rush their decision. The voters will be the ultimate decision makers. Councilmember Robertson said there are a variety of ways to reassign the budget money that currently goes to the fire department. Individuals will have the opportunity to give input to the Council. After the Steering Committee makes a recommendation, the City Council will need to discuss the proposal and decide whether to put it out for a vote. The Kent RFA Board also has to decide on the proposal. Moira Bradshaw asked about the level of cost/revenue detail the committee would like available for the October 28th meeting? Genevieve Christensen would like to have definitions of structures, categories, risk factors and the discount categories. Roxanne Knowle would like to know which properties would fall into which hazard categories. Jerry Thornton needs more concrete information in order to answer voter questions. Kathleen Wilson wants to know what would happen to the Tukwila Fire Department if Tukwila keeps the status quo. Mark Segale wants to know the apparatus costs for the Tukwila Fire Department for the past few years. Mark Segale wants to know if it would be better for the City to contract for fire prevention and emergency management or hold on to those services. City Administrator Cline said Tukwila prides itself on its services to commercial customers. Questions to consider are the long term costs and the type and quality of services between the two options. The City exists for public safety and it needs to make sure the City is being served. If the City contracts for these services and it is not working, the City can take those services back. The RFA would be more accountable, because the City can take the contract away. Roxanne Knowle asked if there are other groups that need to be contacted for input about whether or not to contract for these services? Genevieve Christensen asked about adding more staff versus using overtime. She noted that there is over $100,000 in cost increase to contract. City Administrator Cline explained that fire prevention 58 Regional Fire Authority Annexation Steering Committee Minutes Page 7 of 7 October 14, 2015 currently has five staff members, so if one person is out, staffing is down 20 %. There currently is no backup. The benefit with a larger organization is that there would be backup personnel. He said the Kent RFA and the Tukwila Fire Department have different philosophies about staffing and what activities they do. The same holds true for suppression. There have been staffing issues because there is less backup. Is it better to have more staff or use overtime? Capt. Judkins pointed out that one of the factors impacting fire prevention's workload is a lot of growth in the City. After the buildings are built, suppression is impacted. Kathleen Wilson said that overtime can have a major negative effect on staff performance due to fatigue. City Administrator Cline summarized that the Committee needs to make recommendations on whether to contract for fire prevention and emergency management, and if they agree with the governance plan that has been proposed. He asked if it would helpful for the committee to have City staff summarize some of the decisions and answers. Councilmember Seal summarized that it was her understanding that for the next meeting the committee would like to see more detailed cost comparisons between the City and the RFA, and if the City contracts for fire prevention and emergency management, or if the City does nothing. Moira Bradshaw said there are three Sections of the Plan that the committee still needs to review: Finance, Administration and Contract services. Councilmember Duffie stressed that the committee needs to make a decision that will benefit the citizens and the businesses. Capt. Judkins asked if the Committee would have enough time to work thru the last three sections of the Plan. Moira Bradshaw said there would be another meeting on October 28th and then on November 5th. If the committee needed more time, November 18 is reserved as an additional meeting, if needed. Councilmember Seal said the Council wants to vote on the annexation before the end of the year. City Administrator Cline thanked the finance committee for their hard work. He offered to organize a sub - committee meeting so that the commercial representatives on the Committee could see FBC cost comparisons for a cross - section of various commercial properties. Adjournment At 1931 hours Co -chair Kathleen Wilson declared the Regional Fire Authority Steering Committee meeting adjourned. Minutes taken and prepared by Norita Deckard, Admin. Support Tech. 59