The Regional Fire Authority planning committee is exploring a new Fire Benefit Charge (FBC) to address its "regressivity."
The FBC is an annual fee structure based on a formula designed to fund the new fire authority.
The suggestion is to have an FBC calculation without Fire Flow and would charge per square foot for the residential, apartments, and commercials.
The current FBC formula that other RFAs have used in the state is:
Fire Benefit Charge = Fire Flow x Cost Per Gallon Factor x Bldg. Weight Factor x Hazard Reduction Factors x Hazard Increase Factors x Exemption/Discount Factors
To get the Fire Flow factor: Fire Flow = Square Root (Total Square Feet) x 18
To get the Cost per Gallon factor: Cost per Gallon = Total FBC ÷ Fire Flow x .01
To get the Building Weight factor: Building Weight = weight for building type/size
At the RFA planning committee meeting on October 3, Blindheim presented a table reflecting FBC fees in residential, apartments, and commercials with a square foot in the formula.
Blindheim described the proposed new FBC formula as less regressive, giving a break to smaller residences and favoring small businesses. However, he said they might have a legal problem if they adopted purely square feet in the formula and did not include Fire Flow – which they say is regressive by nature - as part of the computation.
"It looks clean to use the flat square footage. It feels more equitable in the residential and commercial when I look at the total costs. But I don't know if we still think that's legally right," committee member Jim Cooper said.
Olympia City Manager Jay Burney commented on the new formula, which uses measurements in square feet, something that has never been used before, which he said would set "a precedent which would open for the opportunity to challenge us legally."
Olympia City attorney Mark Barber said using a new method – based on square footage – would increase the legal risk.
"The other RFAs have used the formula that we have been discussing, that takes into account Fire Flow and the formula that we have so many questions about. At least, we would be consistent with other RFAS that have been formed in the Washington State," Barber said.
Barber explained a possible scenario of having the RFA underfunded if the FBC formula was challenged, based on square foot, and found invalid. "I don't necessarily think that if the fire authority was created by the requisite number of voters required that would invalidate the creation of the district, but it would be seriously underfunded. RFA then could move forward and try to find another funding method."
Barber said the RFA might turn to a levy lift lid for funding, but it would take time. "During that time, RFA would operate at a severe disadvantage because of insufficient revenue."
If there is no legal risk, committee member Michael Althauser said using a square foot in the formula would be easier to digest and less regressive.
However, when he weighed on the legal risk, Althauser – a lawyer – said the new fire district would be burdened with potentially 18 months of litigation to the tune of half a million dollars.
"If they fail, they would lose a significant chunk of revenue. It will be the cities that are the backstop because we are not going to let the services be inadequate," he added.
Althauser said he would like to focus more on a formula that would take Fire Flow in the calculation because "it seems to be safe legal footing."
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