New 'Fire Benefit Charge' would rate properties - and annual charges - according to size, use

Committee for proposed Regional Fire Authority is considering a new model for funding the combined Tumwater-Olympia fire departments

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During the Regional Fire Authority (RFA) Planning Committee meeting on Monday, July 11, consultant Karen Reed presented a new financial model that could increase revenues for the first seven years of the RFA operations.

A “Fire Benefit Charge” (FBC), according to Reed, is a fee based on anticipated fire-response needs of a structure. It would rate individual properties according to whether they are commercial or residential and the size of the structures. Different from the existing property taxes, which currently fund city fire departments, the FBC would not be based on the assessed value of the property.

Because it would be designated as a fee rather than a tax, an FBC would not be subject to the 1% collections cap that limits property tax increases in Thurston County.

The Fire Benefit Charge could be used to bring some $13.5 million in additional funds to the RFA in 2024, according to the consultant, who described it as “a revenue stabilization tool. “

The financial model she presented identified categories of structures with corresponding weights that would be used in FBC formula, for example, mobile home, single family, residential, multifamily, small commercial, medium commercial, or large commercial.

She said a 10% discount could be given to properties that have sprinklers.

Reed gave a brief overview of RFA's primary revenue sources:

  • If EMS allocation and Fire levy of $1.50 per $1,000 assessed value (AV) are not sufficient, a FBC could increase revenue collection.
  • To compensate for instituting an FBC, the maximum fire levy could drop by one-third to $1 per $1,000 in assessed value.

An example

In an example given to the committee members, a homeowner pays $1,973 in property tax for a single-family residential home in Olympia with an assessed value of $685,000 in 2022, before RFA implementation. If the RFA were in place this year, the homeowner would have paid an additional $442 for FBC.

Change in taxing capacity

In the commission's previous meeting in June, Reed raised the possible change in legal maximum property tax capacity that would incur for both Olympia and Tumwater if the voters approve the RFA.

Reed said the Washington State statute allows cities to charge a maximum of $3.60 per $1,000 of assessed value. 

"If you were to go and impose as much property tax as you possibly could and already doing that, you were up at the state legal limit. You would have to roll that back by $1, or you would be imposing more than the state statute would allow," Reed told the RFA planning committee members, most of whom are council members of Olympia and Tumwater.

Increased level of service

Olympia councilmember Jim Cooper inquired what enhancement of service the community would get from the increase resulting from FBC.

"It is really important that we have a better thing to say about changing the level of service with that increase," he said.

He was hoping they could assure the community of building a fire station for people that is too far away. "We need at least one [new fire station] in Olympia."

Tumwater City Manager John Doan said, "this [RFA] is creating the capacity to add those things on at some point in the future, which neither of the jurisdictions could do without them going to the voters again. Olympia would have to go to the voters to create that additional station capacity and staffing. The RFA will have to do the same thing. If the RFA can do that in a timeframe earlier than seven years, that would be great," Doan said.

Cities are engaged in this discussion

Tumwater spokesperson Ann Cook told The JOLT that, “a business storing pressurized gas products would pay a larger FBC than an office building of the same size. A new house and an older house of the same size will typically pay the same amount. Eligible low-income senior citizens and disabled persons would typically receive the same percentage discounts on their FBC as they currently do for property taxes.”

Olympia’s spokesperson Kellie Purse Braseth told The JOLT that “conversations about FBC are still ongoing, so I don’t want to get ahead of the RFA Committee’s work by speculating … about the possible structure of a potential FBC.”

Voter approval would be required

Before the Regional Fire Authority can be established, it would proceed from this committee to both city councils and then to voters, potentially in 2023. It would require 60 percent approval to pass.  The cities could choose to send two ballot measures out to the public, one that would establish the RFA itself, the other to authorize the financial model that includes the FBC. 

“The FBC funding mechanism requires approval of not less than 60% of the voters and must be re-approved by voters every six years,” according to Cook.

Comments

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  • C K

    Seriously, enough with fees, taxes, and extorting citizens of their hard-earned income. All levels of government need to be reduced. STOP finding more ways to extort fees from citizens. enough is enough.

    Saturday, July 16 Report this

  • olyhiker

    This is outrageous. We know that there is money out there being spent unwisely. Let's not add to the taxpayer burden. Vote these people out!

    Saturday, July 16 Report this

  • Bobwubbena

    Consolidation of fire departments is good IF you can demonstrate efficiency and benefit. This program is suggesting a20% increase in cost with taxes as a base. How much of the annual tax goes to the Fire Department. The increase to the home and business owner could be over100% This is either poor policy or slight of hand to take the public out of future “fee and rate “ decision. Make a better case for this with some public check points. Otherwise you just increased the cost of housing more. The owner and the renter will be paying this 100% or more increase

    Saturday, July 16 Report this

  • JulesJames

    Did anyone bother to ask for fire history statistics to support the "Fire Benefits Charge"? I suspect one would find much lower likelihood of fires in more expensive residential structures. Did anyone bother to ask what percentage of the Fire Department responses are to non-structural fires and medical aid and what percentage are for fire fighting? I suspect the "Fire Benefits Charge" would be based on less than 10% of the fire department's cost. The "Fire Benefits Charge" is the worst idea I've heard in municipal governance in quite some time! And that is quite the accomplishment.

    Saturday, July 16 Report this

  • Dibromin

    I laughed out loud when I read, that "...$1,973 in property tax for a single-family residential home in Olympia with an assessed value of $685,000 in 2022." A $685,000 house would pay over $7,000 in property tax. This is ludicrous! How much more money can they drain from us?

    Sunday, July 17 Report this

  • Panagringo

    Dibromin, I was wondering how they came up with that number also.

    Sunday, July 17 Report this

  • kspence4

    Does anyone know how much they are paying the consultant? Shouldn't there be someone qualified in the planning department? I mean come on, look at what a great job they did to acquire the property that the current city hall is sitting on, and let's not forget the wonderful consulting contract involved in constructing the 4th Ave bridge.

    Monday, July 18 Report this

  • Citizen

    All real property taxes paid by a home owner in Tumwater assessed at $605,000.00 are $7,139.00 for Y-2022 & one assessed at $729,400.00 are $8.600.00 Y-2022. Perhaps the state real property tax is correctly stated, however, failing to cite all of the real property taxes paid by a homeowner is misleading. It gives the reader a false impression of taxes paid, raises the issue of honesty by the proponents or shows that the proponents of a regional fire authority are uninformed. All of which should cause citizens to consider voting against the proposal.

    Tuesday, July 19 Report this

  • Citizen

    Bottom line, the committee should give real examples of the new costs to homeowners based on actual taxes paid.

    Tuesday, July 19 Report this

  • jimlazar

    Several commenters clearly do not understand the nature of property taxes in Washington State.

    My total property tax is $7,152.

    But, most of this goes to the State, School District, County, Port, Library, and Metropolitan Park District. Only $1,397 goes to the City of Olympia. That's the basis of the analysis in this news story.

    Yes, the RFA SHOULD be able to REDUCE taxes, by consolidating the districts, improving efficiency, adding economies of scale in things like fire equipment maintenance, and having only one Executive structure. So I will be very skeptical of any proposal that raises, rather than lowers taxes.

    But people should understand that only about 20% of their property tax bill goes to the City.

    Thursday, July 28 Report this