The Idyllwild Fire Protection District Finance Committee is considering a $91 increase to its current unit fee of $65 property owners currently pay, bring the unit fee to $156 annually. At its April 20 meeting, the committee expects to make a specific proposal to the fire commission, which will meet Tuesday, April 26.
Increasing the fee by 140 percent should generate about another $2.3 million over the next seven years, according to the calculation Idyllwild Fire Capt. Mark LaMont presented to the committee.
During its meetings about the tax measure, the committee has discussed several uses for the added revenue. Pay raises were an initial topic and more recently, the Capital Improvement Program has been discussed.
Committee members Calvin Gogerty and Susan Weisbart have urged their colleagues to also consider deferred maintenance and the unfunded pension and post-employment benefits.
The committee did not arrive at the current tentative proposed increase from a list of funding needs. Committee member Mark Lonsbury asked. “Isn’t [the recommendation] the total of all the things the department needs to operate? What do we need, not what feels good or what the public will accept.”
Committee Chair and Commissioner Nancy Layton replied, “If I weren’t part of the department, I wouldn’t blink at a 140-percent increase.” She and Weisbart argued that the proposed new fee increase is about equal to what Idyllwild residents currently pay for the convenience and presence of the county transfer station ($116 annually).
In essence, Layton and Weisbart argued the fee level is “What will the market bear?”
LaMont presented a budget forecast from 2015-16 through 2022-23. He assumed property tax revenue would grow about 3 percent annually, as well as all expenses, except for salaries, which were forecast to increase 4 percent annually.
These assumptions produced $2.2 million in revenues and $2.3 million in costs in the final year, 2022-23. Over the seven years, the net cumulative deficit, without any more revenue, would be about $210,000. However, no funds would be invested in capital projects during this period.
The Capital Improvement Plan, which Chief Patrick Reitz recommended to the committee, would add another $718,000 to expenses.
Without more revenue, the operating budget’s deficit and the Capital Improvement Program could generate a cumulative deficit approaching $1 million by the end of fiscal year 2022-23.
Early in the meeting, the committee reviewed a budget that included only a $123.50 unit fee or a 90-percent increase. This would eliminate the accumulated deficit, allow for the full capital investment and generate a cumulative $550,000 surplus for other purposes, such as reserves.
While discussing an appropriate reserve level, Reitz recommended a goal for reserves of 25 percent of the operating budget. To achieve that goal, LaMont presented the budget with a $156 unit fee instead.
This fee level would generate a cumulative $1.37 million surplus. To fully finance the capital program would require another $114,000 to replace an ambulance and breathing equipment. LaMont estimated this would yield a balance for reserves of about $1 million after seven years. At the end of fiscal year 2022-23, reserves would be 43 percent of the 2022-23 operating budget.
When asked if that exceeded the optimal reserve level, which the chief recommended, LaMont suggested that the commission would always have the authority to adjust the fee downward as the desired reserve level was approached.
Several years ago, reserves totaled about $200,000, which now have been depleted. About half was used to purchase the two new ambulances last year and another $40,000 to repair and replace the motor on the brush truck.
“The previous cash reserves were spent to keep the doors open,” Layton stressed. “One of our charges is the responsibility to re-establish the reserves.”
As the meeting ended, the committee stressed that the proposal to increase the unit fee from $65 to $156 was tentative. A final recommendation from the committee to the commission is expected to be approved at the April 20 finance committee meeting.
But even if the commission approves the increase as the committee recommends, it must still come before the voters as a tax increase — and two-thirds of the votes will be needed to pass it.