By John Colson
Sopris Sun Staff
Voters who live in the Carbondale & Rural Fire Protection District will be asked in the fall to extend a tax hike approved in 2015 that provided an increase to the district’s bottom line, which had been badly weakened by the Great Recession of 2008-2009.
The district’s board of directors voted unanimously on Aug. 9 to ask for a 1.75 mill levy override for the coming three years, to keep the district’s property tax revenues from declining once the two-year, 2015 tax hike expires at the end of this year.
The fire department depends almost entirely on property taxes levied against homes and businesses in the 323-square mile district, which comprises territory in three counties — Garfield, Pitkin and Gunnison — and includes six different fire stations.
Property valuations are recalculated every two years by county tax assessors, and the tax rate can vary in relation to property values. The base tax rate, minus the mill-levy override granted in 2015, is 5.9 mills. A mill is one-thousandth of the taxable value of property, and the fire district’s base tax rate translates to about $177 in taxes on a home valued at $300,000. With each two-year revaluation, if property values rise then taxes can increase without a rise in the tax rate.
The district’s need for funds has been a constant refrain ever since 2011, when fire district officials won a temporary tax hike from voters after seeing property tax revenues plummet by approximately 40 percent due to the recession.
At that point, the district had drastically cut annual expenditures and was dipping into its cash reserves to keep from taking a hit in the level of service provided to the taxpayers in ambulance services as well as fire fighting. The district also froze salaries and hiring, and at one point laid off three paid fire fighters to keep the budget in the black.
Voters rejected a fire-district tax increase proposal in 2013, largely because the district sought a relatively large increase that had no “sunset clause” or expiration date, then said okay to the 2015 tax increase (technically a “mill levy override”) of 1.75 mills — the same amount proposed this year.
As a result, in 2014 the district was forced to cut more than $500,000 in expenses from the budget, and withdraw $700,000 from reserves to make ends meet, leaving the reserves at a level that district officials felt was dangerously low.
By 2016, the district’s general fund cash reserves were back up to $1.3 million (a level considered barely adequate to keep the district solvent in the event of an unforeseen fiscal emergency) and the annual general fund budget (which covers day-to-day operations) had rebounded to about $2.7 million.
The 2015 mill levy override was good for $595,000 in 2017, which allowed the district to afford raises for its paid employees and some equipment purchases, as well as letting the board continue the slow process of building up its cash reserves, which had dipped below $1 million as the annual general fund budget shrank following the recession.
If approved, a new mill levy override would bring in roughly $640,000 in additional revenues in 2018, bringing overall revenues up to more than $3 million rather than the roughly $2.5 million anticipated if the tax question is not approved.
Without the voter-approved override, Fire Chief Ron Leach told the fire board on Aug. 9, the impact on the budget would be “severe.” He said that the resultant budget would be sufficient to pay basic costs, such as for personnel, fuel and insurance, but not much more.
Without those added funds, Leach told the board, rising costs would force the district to dip into its reserves again, and drop them from nearly $1.2 million at the end of this year, to about $476,000 at the end of 2018 — well below the level needed to fund six months of district operations as required by district policy.
With added funds from the override, Leach said, the district would still need to withdraw from the reserves account, but to a much lesser degree.
There is considerable uncertainty in the numbers at this point, Leach told The Sopris Sun, because the assessors from the three counties touched by the district will not issue final revaluation numbers for this year until Aug. 25.
Once those figures are released, Leach indicated, the district will be able to firm up its numbers relating to the 2018 budget and the mill levy override.
Among the expenses Leach predicts for next year, he told the board, is around $350,000 for new vehicles to replace aging and outmoded equipment, and at least $50,000 for new communications equipment to replace radios that at present are not able to communicate with new equipment used by some county dispatchers.
“We are simply asking for a maintaining election,” Leach said to the board, meaning for an extension that will keep the district essentially on its present financial footing for the next three years, until 2020.
At that point, he said, the district can again ask for more tax revenues if property valuations have not risen to the point where a higher tax rate would not be needed.