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HomeMy WebLinkAboutItem B - Fire DistrictEUGENE CITY COUNCIL AGENDA ITEM SUMMARY Work Session: Possible Formation of a Fire District Meeting Date: March 7, 2005 Agenda Item Number: B Department: Fire and Emergency Medical Services Staff Contact: Tom Tallon www. cl. eugene, or. us Contact Telephone Number: 682-7115 ISSUE STATEMENT In December 2003, the City of Eugene considered pursuing (or joining the City of Springfield in pursuit of) formation of a fire service district. The City Council took no action at that time, other than to request a follow-up report in approximately one year. That report is the purpose of this work session. BACKGROUND In response to impending fiscal constraints due to ballot measures 5/47/50, and the possibility of municipal service reductions, the City of Springfield in 2003 proposed annexing to the Willakenzie Rural Fire Protection District for purposes of funding and delivering fire services in the city. Eugene declined to participate. On February 5, 2004, the Lane County Local Government Boundary Commission rejected Springfield's proposal in a unanimous vote, declaring it inconsistent with the Eugene-Springfield Metropolitan Area General Plan. Later in 2004, the City of Springfield indicated interest in contracting with the Lane Council of Governments to develop Metro Plan amendments that would allow for provision of urban services by special districts. The Eugene City Council discussed this proposal on June 28, and adopted the following motion by a 6:2 vote: "...to inform the City Manager and ask the manager to inform Lane County and the City of Springfield that Eugene is not interested in pursuing a Metro Plan amendment regarding special districts or urban service delivery alternatives at this time." Councilors Pap~ and Solomon voted against the motion. The proposal to contract with LCOG was not pursued further by Springfield. At the present time, Lane County has proposed a Metro Plan amendment that would allow formation of a countywide district to provide public safety services. The Eugene City Council discussed this proposal on a preliminary basis with County Commissioner Bobby Green and then-County Sheriff Jan Clements at a City Council work session on September 15, 2004. The proposed amendment was the subject of a public hearing before the three jurisdictions' Planning Commissions, meeting jointly, on February 1 of this year. The Eugene Planning Commission discussed the proposal on February 28 and agreed to forward it to the City Council with a favorable recommendation, but also with a request that the council adopt wording such that the amendment could L:\CMO\2005 Council Agendas\M050307\S050307B.doc not be construed so as to allow the formation of other types of districts. It is not clear whether the amendment as originally written could have had that effect. Lane County staff has stated that this would not be the case, as Metro Plan policies providing that cities should be the providers of urban services accommodating growth would remain intact. Ultimately, however, should an urban fire district be proposed in the future under an amended Metro Plan, this question would be subject to Boundary Commission interpretation. However, initial fiscal analysis by City staff (Attachment A) indicates that formation of a Eugene fire district offers no advantage from a service or fiscal standpoint, and may actually be fiscally disadvantageous, especially in the longer term. Meanwhile, the City's land use planning analysis (Attachment B) reiterates the need for substantive - perhaps even fundamental - amendments to the Metro Plan before special districts can be allowed to serve cities. The Planning staff memo also notes that the existing Metro Plan principle (that cities are the logical providers of urban services) supports the State's land use planning program, which seeks to control urban sprawl. The Metro Plan requires that amendments of the type now proposed by Lane County be evaluated against two criteria: 1) consistency with statewide planning goals, and 2) preservation of the internal consistency of the Metro Plan itself. The County's proposed amendment would add to the Metro Plan's policies providing that cities are the logical providers of urban services, and the original wording was as follows: "Notwithstanding the above provisions of this policy and all other related policies and text in this Plan, a district or zone of benefit may be created and maintained to provide preventive and reactive public safety services, including but not limited to, adult and youth corrections services, crime prevention, prosecution, detention, supervision, mental health and alcohol and drug services, victim services, drug court, interagency narcotics enforcement, patrol, investigation and arrest." The Eugene Planning Commission's action on February 28 included adding the words "single, countywide" before the word "district," in order to help make clear that the amendment would not be intended to allow other types of districts. Elsewhere in Oregon, voters in the City of Gresham will be asked on March 8 whether they favor annexation to Multnomah County Fire District # 10. Proponents of the annexation state that there will be no change in service, but concede that Gresham residents will pay more in property taxes overall. Tax rate compression is not an issue for Gresham in the short term. RELATED CITY POLICIES The policy issues are as they were a year ago: 1) Would there be an improvement in service? 2) Would there be a tax savings? 3) Does the City continue to adhere to the Metro Plan principle that cities are the logical providers of urban services (and that fire protection is a key urban service)? The Metro Plan remains the major policy document relative to this issue. This issue also involves the City Council's 2003-2004 goals of a safe community and fair, stable, and adequate financial resources. L:\CMO\2005 Council Agendas\M050307\S050307B.doc COUNCIL OPTIONS 1. Direct staff to monitor the Lane County proposal to amend the Metro Plan, analyze any impact to the City resulting from the outcome, and report back to the council if it appears that Metro Plan obstacles to formation of a city fire district have been removed. 2. Direct staff to work with Lane County and Springfield to pursue Metro Plan amendments that clearly allow formation of fire districts serving cities. 3. Take no action. CITY MANAGER'S RECOMMENDATION The City Manager recommends that the council take no action at this time (Option 3). SUGGESTED MOTION No motion is suggested. ATTACHMENTS A. Memorandum from Larry Hill dated February 24, 2005 B. Memorandum from Kurt Yeiter dated November 19, 2004 FOR MORE INFORMATION Staff Contact: Tom Tallon, Fire and EMS Chief Telephone: 682-7115 Staff E-Mail: tom.j.tallon~ci.eugene.or.us L:\CMO\2005 Council Agendas\M050307\S050307B.doc Finance & Court Services Financial Services City of Eugene 100 W l0th Avenue, Suite 400 MEMORANDUM Eugene, Oregon 97401-2793 (541) 682-5021 (541) 682-5802 FAX Date: February 24, 2005 To: Mayor Piercy and City Council From: Larry Hill, 682-5722 Financial Analyst Subject: Preliminary Comparison of Cost of Delivery of Fire & Emergency Medical Services A question has been asked by Council as to whether urban-level fire and emergency medical services now provided by the City of Eugene to its citizens may be delivered more efficiently through a rural fire protection district (RFPD). This memo presents a preliminary comparison of costs of delivery of fire and emergency medical services by three cities and one rural fire protection district, using readily available budget data adjusted to achieve an 'apples to apples' comparison. In addition this memo reviews the processes of formation, annexation, governance and financial capabilities of a RFPD. Tax revenue compression resulting from increased general government taxation is also discussed. High quality urban-level fire and emergency medical services may be provided by cities or by rural fire protection districts in Oregon. With voter approval both cities and RFPDs may establish permanent tax rates and local option levies to generate revenue to fund fire and emergency medical service operations. Cities and RFPDs are subject to the same constitutional limit on general government taxation and are subject to tax revenue compression when this limit is exceeded. Factors affecting costs of delivering these services include the size and characteristics of the area served, the area's population and the level and quality of service delivered. Simple cost-of-service comparisons may act as a rough measure of relative efficiency for similar jurisdictions delivering similar services. Costs must be adjusted to achieve a reasonable comparison among jurisdictions. Review of FY05 adopted budgets shows that Salem, Eugene and Springfield fire and emergency medical services delivered within each city's limits cost about the same on a per capita basis, while Tualatin Valley Fire & Rescue RFPD has a higher cost per capita. The difference in per capita costs may be largely explained by the different characteristics of the areas served. This is only a simple initial analysis. A more in-depth analysis looking at detailed cost of services and using a range of performance measures would require a much greater investment of time but would provide more accurate information on relative efficiency of delivery of fire and emergency medical services under city or RFPD structures. In addition modeling of the tax compression effects of formation of a special district and resulting losses to the General Fund and local option levies should be done as part of any further analysis. Comparison of Per Capita Cost of Fire and Emergency Medical Services The cities of Eugene and Salem are similar in area, population, and level of urban development, and so offer a reasonable basis for comparison of costs of fire and emergency medical services. Springfield is smaller but in other regards it is similar to Eugene and Salem. Tualatin Valley Fire & Rescue RFPD provides services to a much larger and more diverse territory. It covers ten cities as well as unincorporated urban and rural areas with various levels of development, and with a much larger total population than Eugene, Salem, or Springfield. The following table shows the FY05 budgeted costs for each jurisdiction's fire and emergency medical services, adjusted to include only costs of common program elements. Adjusted, comparable costs include personnel, material & services, central administrative and capital outlay costs for preventative and emergency response services within the jurisdiction's limits. Costs of delivering emergency services outside the cities' boundaries under contracts with neighboring districts are excluded, as are non-emergency ambulance transport, budgeted grant expenditures, capital construction and debt service. Estimated Cost per Capita 2004 Population Comparable FY05 Budgeted for Services within within Jurisdiction Costs within Jurisdiction Jurisdiction Salem Fire Department 143,700' $ 17,292,020 ** $ 120 Springfield Fire & Life Safety 55,350* $ 6,599,074** $ 119 Tualatin Valley Fire & Rescue 418,000 $ 59,445,167 $ 142 '* excludes population of contracted service areas outside city limits; **excludes contractual services outside city limits) This brief analysis shows similar per capita costs of delivering fire and emergency medical services within the cities of Salem, Eugene and Springfield. However, delivery of services by Tualatin Fire & Rescue RFPD is more expensive on a per capita basis. The much greater distances and diversity of area served by the RFPD may be reasons for this higher per capita cost in comparison to the cities' per capita cost. Background on Rural Fire Protection Districts A rural fire protection district is a special district permitted under ORS Chapter 478. A RFPD can provide fire protection and emergency medical services to both rural and urban areas. Incorporated areas may be included within the district with the consent of the city council. An existing RPFD can expand through annexation of territory, or a new district might be formed, to provide services to a city. An elected five-member board of directors governs rural fire protection districts, which are independent municipal corporations. Formation of a district with a permanent tax rate limit for operating revenues is subject to the constitutional double majority requirement or it may be placed on a general election ballot in an even-numbered year. In the case of annexation of city territory to a district that already has a permanent tax rate limit the current district tax limit is extended to the newly annexed area to support the extension of district services to the new area. A vote on the annexation will be required if requested by petition. Formation, annexation and other boundary changes for this type of district in Lane County are under Lane County Local Government Boundary Commission jurisdiction. The Eugene-Springfield Metropolitan Area General Plan (Metro Plan) policies control the formation of special districts within the boundary of the plan. A proposal to form or annex to a rural fire protection district will require the approval of the Lane County Local Government Boundary Commission. Since the current Metro Plan is not favorable to new special districts serving incorporated territory, Metro Plan amendments must be completed before the Boundary Commission can be expected to act affirmatively on any such proposal. Numerous rural fire protection districts serve the suburban and rural fringes of Eugene and Springfield (e.g., Goshen, Coburg, McKenzie, Mohawk Valley, Bailey-Spencer, Eugene #1, Lane Rural, Santa Clara, Zumwalt, Pleasant Hill, and Willakenzie). Effective July, 2003, the Southern Lane RFPD merged with the Creswell RPFD, and the territory of the City of Creswell has also been annexed to the Southern Lane RFPD. Tualatin Valley Fire and Rescue, the second largest fire department in Oregon, is a well-known RFPD serving incorporated and rural areas. It provides fire protection and emergency medical services to over 418,000 citizens throughout its 210-square-mile jurisdiction. The district's service area includes the cities of Beaverton, Durham, King City, Oregon City, Rivergrove, Sherwood, Tigard, Tualatin, West Linn, and Wilsonville, as well as unincorporated areas within Clackamas, Multnomah, and Washington Counties. Constitutional General Government Tax Rate Limit and Tax Compression Measure 5, which was passed by voters in 1990, limits the combined tax rate for "general governments" to $10 per $1000 of real market value (RMV). General governments include cities, counties, urban renewal districts, and any non-school special districts. At the time that Measure 5 was passed, assessed value (AV) and RMV for properties were essentially equal. Measure 50, which was passed by voters in 1997, changed the tax system so that properties are taxed on the basis of an AV that is generally lower than the RMV for the property. In FY05, AV is only about 80% of RMV on average, with some properties having an AV closer to or equal to RMV. For most but not all properties it is possible for the total general government tax rate on a property to exceed $10 per $1000 of AV and still be within the $10 per $1000 of RMV tax rate limit. When the taxes for general government services on an individual property do exceed $10 per $1000 of RMV, the taxes on that individual property are compressed. This occurs in a two-stage process for each individual property. First, any local option levies are proportionally reduced until either the $10 tax rate limit is no longer exceeded, or until the local option levies are reduced to zero for that property. If the local option levies are reduced to zero and the tax rate remains above $10, then taxes on the city, county, urban renewal districts and non-school special districts are reduced proportionally until the limit is no longer exceeded for that individual property. Once the total general government tax rate exceeds $10 per $1000 of AV, properties that have an AV equal to the RMV will be in compression and will not have to pay taxes that exceed $10 per $1000 of AV. In FY05 the City of Eugene is expected to lose about $80,000 in revenue from the Youth Local Option Levy and Library Local Option Levy as a result of compression. If the tax rate is raised to a higher level in the future, as from imposition of a new tax under a special district, in addition to crowding out the local option levies, the General Fund could experience a revenue loss as a result of compression. This factor will have to be considered as a cost to the city in any financial feasibility study concerning a new special district. Planning & Development Planning City of Eugene 99 West 10th Avenue MEMORANDUM (541) 682-5377 (541) 682-5572 FAX www. ci.eugene.or, us Date: November 19, 2004 To: Fire Chief Tom Tallon From: Kurt Yeiter, Principal Planner Subject: Metro Plan Guidance for Service Delivery This memorandum describes guidance provided by the Eugene-Springfield Metropolitan Area General (Metro) Plan regarding service delivery and actions that would be necessary if regional services were desired that are contrary to the Metro Plan directives. One of the basic themes in the Metro Plan is that Eugene and Springfield should be the providers of services inside their Urban Growth Boundaries. "The Metro Plan is based on the premise that Eugene and Springfield, the two existing cities, are the logical providers of services accommodating urban levels of development within the urban growth boundary." Plan Principles, Metro Plan page II-1 This theme is reinforced by the following objective: Identify methods of establishing an urban transition program which will eventually reduce service delivery inefficiencies by providing for the provision of key urban services only by cities." Plan Principles, Growth management and the urban Service Area, Objectives, Metro Plan page II-B-3 (emphasis added). "Key Urban Services" are defined by the Metro Plan as including, at a minimum, the following: wastewater service, stormwater service, solid waste management, water service, fire and emergency medical services, police protection, citywide parks and recreation programs, electric service, land use controls, communication facilities, and public schools on a district-wide basis (in other words, not necessarily within walking distance of all students served). A full range of urban services, as defined by the Metro Plan, would also include urban public transit, natural gas, street lighting, libraries, local parks, local recreation facilities and services, and health services. The updated 2004 Metro Plan (currently under appeal) would also add 'transportation' to this definition. There are other policies throughout the Metro Plan that support these basic principles. For example, the Metro Plan states a preference for property to annex to a city prior to development, which sets up the city as the service provider. The Lane County Boundary Commission recently acknowledged these directives, collectively, as a basic principle of the Metro Plan by denying an application of the City of Springfield to annex their urban fire services to the Willakenzie Rural Fire Protection District. The Boundary Commission found the use of this special service district, whose boundaries exceeded the city's urban growth boundary, to be inconsistent with the Metro Plan. The Metro Plan's directive that only cities should provide urban services supports the state's land use planning program, which limits the amount of growth outside urban growth boundaries. Since most city services are provided only within the City limits, properties must be within a City's urban growth boundary and eligible for annexation in order to receive the services necessary to develop at urban levels. If urban services were provided by special service districts whose boundaries and services extended outside the urban growth boundaries, there would be less control over urban sprawl, depending, of course, on whether the services provided by the district enable development (e.g., water and sanitary sewer). Ballot Measures 5/47/50 significantly altered the property tax structure after the Metro Plan was adopted. Lately, there has been interest expressed by elected officials of both Metro cities and the county to revisit the Metro decisions to avoid special service districts. The Boundary Commission's decision makes it clear that the most successful method would be to amend the Metro Plan's basic principles. Metro Plan amendment(s) would likely take the form of either of the following: 1. Many small text changes so that all the directives limiting service provisions to the cities have one or more exceptions, or 2. A more comprehensive change in which a new basic principle for services were adopted. Because urban services are closely associated with the state's growth management strategy, a more comprehensive amendment may be preferable. In this manner, the Metro Plan's partner agencies could decide which services contribute to growth outside the urban growth boundaries, which services should be provided by the cities and which could be provided by special districts or other means, whether special district boundaries should be coterminous with the urban growth boundary, and a host of other issues that have bearing on the region's growth. There are also existing special service districts providing services to city residents, such as Willakenzie Parks District and Rainbow Water District, that could be acknowledged and accommodated in a new set of comprehensive policies. The Metro Plan amendment procedures are outlined in each jurisdiction's land use codes. In summary: · Text amendments as described above are a "Type 1 amendment" and may be initiated by either city council at any time. · A non-site specific text amendment must be approved by all the Metro Plan's three governing bodies. · A joint hearing of the three Planning Commissions is required. Each must make a recommendation to their governing body. · The three governing bodies must hold a joint public hearing. Their decision must be based on the evidence collected by the Planning Commissions. · The governing bodies can modify the procedural requirements for a government-initiated amendment. · If the three governing bodies do not adopt identical ordinances, the Metropolitan Policy Committee will act to resolve conflicts. The amendment can be denied due to Committee inaction or lack of consensus. · The amendments must not make the Metro Plan internally inconsistent and must be consistent with Statewide Planning Goals. The amendments will be subject to state approval as a post acknowledgement plan amendment (PAPA). Amendments to the Metro Plan typically take 6-12 months, or more, depending on the level of government agreement and the amount of public input.