RFA committee discusses possible FBC adjustments

Regional Fire Authority planning committee members are considering six options to adjust the Fire Benefit Charge (FBC) formula.

At the RFA planning committee meeting held Monday, September 12, consultant Karen Reed said they looked at the classification and weight for the potential adjustment of the FBC formula.

FBC is a proposed annual fee on structures based on the estimated fire-fighting resources needed to combat a fire.

The options discussed were:

• Option 1: FBC is distributed proportionately to the square footage of each building class. For example, 66% of total square footage is single-family residential, so single-family residential pays about that same % of FBC, including sprinkler data for apartments and commercial.
• Option 1-A: Residential sprinkler data added. Revenue lost to the sprinkler discounts shifted to residential properties, resulting in a slight increase in the Residential Building Class Weight – increasing to .582 from the original .58.
• Option 2: Residential sector share reduced by 6%; commercial sector share increased by 6%.
• Option 3: Divide residential into three classes, weights increasing with square footage. Breakpoints at 2,000 and 3,000 square feet. Residential and commercial shares are the same as Option 2.
• Option 4: Major reduction for small residential (1,500 square foot maximum) and small commercial (1,000 square foot maximum). Total residential share lowered by 8%, and commercial share increased by 8%.

According to Reed, the adjustment is a reality-based formula. "You have to weigh in. Does it make sense given the assets you have to buy to serve your community? Does it makes sense to ask the commercial – especially the larger buildings – to pay a little bit more and try to give the residential folks an ability to pay a little bit less?"

Olympia Firefighter union president Steven Busz expressed concern about adjusting the weights based on the size of homes. He said if there is a residential fire, the responses will be the same – the same amount of engines regardless of the house size.

Reed warned that these adjustments would change the RFA budget.

In previous meetings, Reed said the FBC could bring some $13.5 million in additional funds to the RFA in 2024.

Changing FBC formula

Committee member Michael Althauser inquired if there would be legal implications in amending the FBC formula.

"I understand other people have done it differently. Is there legal implication... or is there a degree of confidence that we could be subjecting this to legal liability if we sort of play outside the box?" Althauser said.

Olympia city attorney Mark Barber explained they could encounter uncharted territory with a formula that other RFAs have not used. He said the committee would need to justify how they came up with the new formula that has not been used in the Washington State RFAs.

"It would create issues and challenges," Barber commented.

Committee member Jim Cooper is open to writing a new formula or adjusting the FBC structure.

"If you will write a brand-new formula, my advice is you would want to step back for a year and do a test case to make sure it would work. Because the last thing you want is to have the voters approve it and then have the RFA tossed out. That beyond 35% of your revenue is not valid. That's an option… We can slow this down and take a long time to build something new, do the homework, and figure out how we can improve it. That is a possibility, but it does not sync up with your timeline," Reed commented.

Reed said their target is to present the draft RFA plan to the city council in late October to November.

By the end of November, they expect that Olympia City and Tumwater City councils will take action on the RFA plan - either approve, modify or reject.