By QUINTON SMITH/YachatsNews.com
The Yachats Rural Fire Protection District is a financial mess.
So after years of financial missteps and inattention, it’s asking voters to help solve the problem by raising taxes on themselves.
It is an expensive request – one that would add almost $450 a year onto the tax bill of someone owning property worth $300,000.
Some board members say if a levy is not passed in November or next May, then it will have to begin looking closer at layoffs and whether to end providing staff for South Lincoln Ambulance, a private, nonprofit controlled by two fire district administrators.
“The people in the district need to figure out what they want,” said longtime board member Ed Hallahan of Yachats, who has been spearheading the low-key effort to pass the levy.
Ballots arrived over the weekend and are due back to the Lincoln County elections department before 8 p.m. Nov. 2.
The district’s board is asking voters to approve a five-year levy of $1.59 per $1,000 assessed property value. If the new levy is approved, after one year the board says it intends to let a current levy of 59 cents per $1,000 expire – slicing $177 off the tax bill of someone with $300,000 in property and dropping the increase to $300 a year.
Hallahan has admitted the board made mistakes by letting its finances get out of hand. But the district was hesitant to ask for increases on one or both existing levies in the past 8-10 years because they knew the district would be asking voters to approve a bond for a new fire station. Voters did just that – okaying a $7.7 million bond in 2016.
“Just after the bond was approved we were hesitant to ask for more and were able to survive by borrowing,” Hallahan said in a “briefing sheet” to the board. “Now the time has come to pay the piper.”
But the board and district administrator Frankie Petrick have not outlined how it will use the $944,000 the new levy would bring in its first year. Nor has it specified how it will use the $338,000 in one-time proceeds it got last month for the sale of its former station in downtown Yachats.
Hallahan and board member Drew Tracy have previously said the district wants to hire 1-2 more firefighter/paramedics – it has six now – to help staff its station up the Yachats River and to cut overtime costs when a firefighter is on vacation, sick or in training. The total cost of one firefighter is about $100,000 a year.
The board indicated during budget deliberations in June that it needs to put money into reserve to replace or repair equipment – there’s just $25,000 in there now – and to establish a cash carryover to lower the $350,000 to $500,000 it has been borrowing each year to cover operating costs.
“That’s what’s kept us alive,” Hallahan told YachatsNews. “But we have to get out of that hole.”
How the fire finances work
The district’s current operating budget is $1.63 million a year and comes from a permanent tax base and two voter-approved levies. Here’s the rundown:
- The district’s permanent tax base, established in 1997, is 29 cents per $1,000 assessed property value;
- A three-year levy that started in 1999 carries a tax rate of 61 cents per $1,000 of assessed property value; it was last renewed in 2019 by a 3-to-1 vote ratio;
- A three-year levy that started in 2008 is 59 cents per $1,000; it was last approved in May 2018 by a 3-to-1 ratio;
- In total, the three levies add up to a tax rate of $1.49 per $1,000 assessed property value or $447 a year on property assessed at $300,000.
The district also has the building bond for its new fire station just north of Yachats that carries a tax rate of 68 cents per $1,000 assessed value. That costs the owner of property assessed at $300,000 an additional $204 a year. But bond money can’t be used for year-to-year operating costs.
So currently, the owner of property assessed at $300,000 pays $650 a year via the tax base, two levies and building bond to support the fire district.
The Nov. 2 request is for a five-year levy of $1.59 per $1,000 assessed property value – or an additional $477 per year on property assessed at $300,000. If approved, a district resident with property assessed at $300,000 would pay a total of $1,128 a year for fire services.
For its first year the new $1.59 levy would be in addition to the district’s current operating levies of 61 cents and 59 cents per $1,000. If voters approve the levy in November, the current board intends to let the 59 cent levy expire in July 2023.
Hallahan said keeping the 59 cent levy until 2023 should solve the district’s immediate money problems.
“The one year overlap is what’s going to get us out of our financial hole,” he said in June when the board voted to put the levy on the ballot.
How the district got here
Board members are trying to pull the district out of a financial spiral that has been getting progressively worse the past four years as its costs outpaced revenue.
But the district has also made some financial missteps and despite the increasing number of questions continues to staff the private South Lincoln Ambulance service with its firefighter/paramedics. Ambulance calls now make up three-quarters of most alarms to the district.
The district has been borrowing $350,000 to $500,000 a year mid-way in its budget cycle to make ends meet before repaying the loan when property taxes flow in each November. But these calendar-year loans spill over to the next fiscal year, which begin each July. That means the district has to use new operating money it receives in November to pay off the old loans before the end of December.
It is legal for a government agency to take out loans to cover operating costs in anticipation of an influx of property taxes in the fall. But most local governments have what’s called a “cash carryover” from budget to budget to take them through the 3-4 months before property taxes are paid.
Yachats Fire has not been able to put money aside for one, forcing it to take out the line of credit. It is also costing them up to $25,000 a year on the loan’s 5.25 percent interest.
The shortage of funds in the fire district’s yearly budget is due to several factors:
- It was forced to use $125,000 out of its operating funds in 2018-2019 to repay interest taken out of a savings account where it had co-mingled money from the two property tax levies and the $7.7 million building bond.
- It spent $423,000 out of yearly operating funds – $85,000 to $95,000 a year for five years – to buy land for the new fire station, instead of using bond proceeds as is usually done elsewhere. The last of monthly payments were made in early 2021. Board members now admit using operating funds to buy the land was a mistake.
- The two property tax levies that fund much of the district’s operations have not been increased since they were first approved in 1999 and 2008.
- While income has remained flat, costs – everything from employee wages, to insurance, to the increased cost of operating the new station – have risen.
The district did get a one-time infusion of cash in September when it sold its old station in downtown Yachats. After paying fees and giving the city of Yachats $115,430 for the land it owned under part of the station, the district was able to put $338,000 into its accounts.
Board members have said they intend to use the funds to help with operating costs, but have not specified exactly how – whether to pay monthly bills, beef up the equipment replacement fund, or begin developing a cash carryover.
Pass or fail, what’s next?
While the fire board has not detailed how it will spend the infusion of money should the levy pass, there are also differing statements – and no discussion – of what they might do should it fail.
In an “explanatory statement” in the county voter’s pamphlet included with each ballot, Hallahan ends it by saying the district will likely have to lay off three firefighter/paramedics and end its relationship with South Lincoln Ambulance if voters turn down the levy request.
But in his “board briefing” memo from August, Hallahan said if the levy fails in November the district should try again in May before making any cuts.
The board, which meets monthly and rarely has anyone but a YachatsNews reporter attend, has never publicly outlined or discussed as a group what it will do should the levy pass or fail.
In an interview, Hallahan said that district administrators and board were focused on the 2016 bond campaign and three-year effort to build the new fire station before realizing how its finances had deteriorated. But it also did not reach out to find an expert – either locally or via the statewide organization that helps special service districts – to give it financial guidance.
“I’m not sure where we would have found that person and at what cost,” he said. “I don’t know if they exist.”
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For further reading and background, here are YachatsNews stories from this year on the Yachats Rural Fire Protection District’s money issues:
June 30: Yachats fire board asks voters in November to help pull district out of financial spiral with $1.59 per $1,000 tax levy. Story here.
June 17: Committee OKs 2021-22 budget for Yachats fire district, but asks board to resolve questions before seeking tax increase. Story here.
May 18: Longtime Yachats Fire board member says district is in financial trouble and should ask voters in November for bigger levy. Story here.
April 15: Worried about finances, Yachats Fire board turns down requests to buy used engine and give longevity contributions to two volunteers. Story here.
April 8: In search of money and savings, Yachats Fire Board members begin to question district’s relationship with nonprofit ambulance service. Story here.
March 4: Yachats Fire District again using bank loans to make ends meet as board readies old station for sale and discusses increasing tax levy next May. Story here.
Jan. 28: Yachats Fire District board wants more financial data, planning before deciding to ask voters to approve another operating levy. Story here.
Relying on those paying property taxes to fund all these “needy” projects are driving people out of their homes. It never ends. Vote no.
I only have details based on these articles, but I have questions before I would feel comfortable voting yes for new taxes.
– FLAT INCOME?? how is income “flat” when the tax levies are based on house assessments which have been rising each year? When a house assessment rises by 3%, the tax levy revenue also increases by 3%. Plus the area has grown bringing in more revenue from new residents.
– BOND PAY FOR LAND?? Is it possible to payback the operating fund from the bond money for the $423k purchase of the land? Can the Fire Department “sell” the property to the bond or switch accounting since bond money was for the acquisition of a new fire building?
– NO FORWARD SPENDING PROJECTION?? how was the requested new taxes calculated if a tentative budget in how the monies would be spent hasn’t been created? How do you know how much is truly needed?
Why do we have essentially two fire chiefs? Frankie was grooming her successor, Shelby Knife, to be chief. He is now paid as an administrator since she didn’t retire. He is more than qualified. She settled out of court for improper use of equipment and resources and paid some fines to “make it go away”. There are so many inconsistencies that continue, the fire chief and her ex-husband have ownership ties to the ambulance. If that ambulance goes on a call, two firefighters are out of service until that call is completed, leaving neighboring agencies to cover. This is not ideal, as it creates added chaos since other fire districts already have mutual aid plans in place, and a separate contracted ambulance service. Before handing over more money, Katherine Guenther is correct in asking for a closer look at the relationships of the chief and department.
I recently watched a documentary on the Paradise fire- it could easily happen here. I live in the Yachats Valley River Road, – fire is our enemy. I worry we are not prepared for this type of a desperate situation. Looks to me like we have fewer people here interested in volunteering- maybe due to us being a “retirement” community”. I suggest soliciting our younger citizens to help, giving us new ideas, working on the board and becoming volunteers. Here are some easy ideas I found on line so residents can help to prevent loss, everyone needs to help in this effort.
https://www.readyforwildfire.org/prepare-for-wildfire/get-ready/hardening-your-home/
Thank you for the in depth coverage about the Fire District. Is it true that the fire chief’s ex-husband and former fire chief owned the land that was sold to the district for the new fire station? I also understand that he along with the fire chief owns the ambulance service. With all the mismanagement, plus crying the blues that they need more money, they are not trustworthy and therefore get a no vote from me. Our community would be better served contracting with Fire-Med for ambulance coverage which includes both ground and air ambulance for around $100 a year. That would be way better than a tax levy that is going to cost me hundreds of dollars.
Working in municipal government, an independent audit and plan to being solvent needs to be conducted and spelled out prior to the voters approving any such levy. The mismanagement of the district is inexcusable and the chief should resign …
It is disingenuous to say they are in financial straits and then ask to add staff. If that is the case, the levy should have been structured in a phased in approach to rectify the previous gaffes and then say year three a potential growth of the station.
I will be voting no until there is a wholesale clearing of the current administration and a new administration is brought in to end the “good ol’ boys” club. Waldport just did this with its chief and is in a great direction going forward.
Whoa whoa whoa, please before you even think about a levy please think about having a full investigation as to how the department is managed, its operational statements, its philosophy, its creed.
Please look back at what happened at Devils Churn on Sept. 9 and insist on an investigation as to the proper procedures and proper protocol. Do you really want these people running the failing business? What kind of training is involved with the first responders? Are there physical tests? Comprehension tests? Crowd control training? Is there practice and training happening regularly? Just what is your money being used for?
One more point that I would like to make since you are referring to us as “big city folk who watch too much tv!” I realize Frankie Petrick wasn’t there but your first responders were physically there, but that’s it. If you were there what you would have seen is the “big city folk” risking their own lives attempting to save someone else’s. Somebody they didn’t know. The people from the rural, local town did nothing. So you tell me who has the misconception — you or us? At least in “the big city” when someone does show up they do something.
So my recommendation is have a thorough investigation into where and how the money is spent. An investigation into the training, the processes and protocol for emergency responders, and it needs to be done to get down to the causes and conditions of the financial instability. The causes and conditions that an entire group of bystanders who were unknown to each other at the time have gotten together to call for a thorough investigation.
The public wants an investigation. The locals want an investigation. Only one board member wants an investigation. The only ones who don’t want an investigation are the two members in charge. Funny how that works.