We are happy to discuss this with our community. If you have questions, please ask us.
Contact: 360-376-2331 or pio@orcasfire.org
Additional Resources
Announcement
The Board of Fire Commissioners has decided to put the proposition for a levy lid lift before voters in the November Election.
The levy lid lift would increase its regular property tax levy to $1.06/$1,000 of assessed valuation in 2023. The current levy was approved by voters in 2014 at $1.05/$1000. Due to the rapid increase in property values and the statutory 1% limitation on annual property tax (I-747), the current levy rate has decreased to approximately $0.58.
For more information, email pio@orcasfire.org.
Resolution No. 2023-09
Press Release - May 17, 2023
The Board of Fire Commissioners has decided to put a proposition for a levy lid lift before voters in the August primary.
The funds available under the current tax limit are insufficient to maintain the current level of service provided by Orcas Island Fire & Rescue. There is an increase in the response standards and demand for fire and emergency medical services. At the same time, inflation causes a considerable increase in the cost of these provided services.
This levy is the primary funding source for fire and emergency medical services provided by Orcas Island Fire & Rescue. Without these funds, the response time to an emergency would drastically increase.
“The increase in revenue allows the District to budget for the continued fire engine and ambulance refurbishments and replacements, as well as keeping up with the increased cost of doing business based on recent inflation,” says Assistant Chief vanSchaick. “We want to maintain the current response level and provide funding integral to volunteer recruitment and retention.”
The levy lid lift would increase its regular property tax levy to $1.06/$1,000 of assessed valuation in 2023. The current levy was approved by voters in 2014 at $1.05/$1000. Due to the rapid increase in property values and the statutory 1% limitation on annual property tax (I-747), the current levy rate has decreased to approximately $0.58.
For more information, email pio@orcasfire.org.
Resolution No. 2023-07
Excerpts from the Financial Sustainability Plan
Presented at the OIFR BOFC Meetings | March 20, 2023, April 27th, 2023, & May 15, 2023
Annie Sieger, Project Manager, Emergency Services Consulting International
Data and Explanation from Annie Sieger - ESCI (July 19, 2023)
Calculated estimates for a ten-year time horizon, 2023 to 2033 (did not include 2034).
Projected other revenue sources (including other taxes, intergovernmental revenues, charges for goods and services, and miscellaneous revenues) based on historical revenues and did not include irregular or insecure sources.
Because revenues are in nominal dollars (that is, reflect the actual dollars to be collected in any given year rather than being in 2023$, which would reflect their purchasing power in 2023), we also needed to put expenditures into nominal dollars. This includes using an inflation factor. We used the average inflation based on the implicit price deflator (IPD). IPD measures the price of a much wider group of goods and services than the consumer price index and is, therefore, commonly used by the Washington State government to adjust state economic and revenue data. Expected inflation based on IPD is 4.33% year over year. I cannot predict what inflation will be in the future; however, given the current inflationary environment, my professional opinion is that the 4.33% factor is appropriate.
Regular operating expenses will increase due to ongoing increases in demand for services, not just inflation. My analysis assumes that per capita service costs will stay the same but that the total cost will increase with population and development. Washington State Office of Financial Management and San Juan County expect Orcas Island’s population to continue to increase over the next ten years, so demand for services will increase commensurately.
OIFR is currently in a position where they have a large amount of near-term apparatus needs to pay for in a short period of time. This is challenging for them and the public because it means more dollars than average are needed to address those needs in this window. Many governments smooth those costs over time by reserving funds to pay for those needs in the future rather than needing to come up with cash or financing. ESCI’s analysis includes annual contributions to apparatus reserves that amortizes the cost of those investments over their lifecycles (that is, you would reserve “1/years of life * apparatus replacement cost” per year up until its replacement, at which time OIFR would have reserved its full replacement cost.
Based on these results, we see in L26 that the cumulative surplus in the levy is only estimated at about $400,000. This is a tiny surplus on the overall levy collections (less than 1%). Given the assumptions in the model, this is almost too precise (that is, it isn’t enough contingency). However, because OIFR currently has $624,904 in projected ending fund balance for 2023, I was comfortable moving forward with this slim margin.
It is important to recognize that financial modeling is intended to generate planning level estimates that rely on assumptions. These assumptions are, by definition, uncertain and different assumptions will lead to different results.
Municipal governments, including Fire Districts like OIFR are financially constrained by limited revenue sources and a number of tax-limiting measures
- Passage of Initiative 747 in 2001 established the “101% levy limit” which limits growth of property tax revenues by 1% annually (plus proceeds from any new construction)
- Even over the last ten years, with historically low inflation, 1% is generally less than the necessary growth of government expenditures, creating a fiscal imbalance
OIFR has, historically, relied on voted-levy lid lifts to address this fiscal imbalance
OIFR’s most recent levy lid lift expires in 2024
- As a temporary levy lid lift, it will also reduce OIFR’s property tax revenues, further exacerbating its fiscal imbalance
- OIFR has faced historical fiscal imbalance that will worsen if and when it falls of the “levy lid lift cliff.”
In April 2014, OIFR asked voters to enact a “single-year levy lid lift" to $1.05, with a 10-year term.
- Passed with 62.22% of the vote.
- Only increased revenues very slightly over the ten-year period.
- The ballot measure did not state that it is a permanent lift, which means it is subject to the levy lid lift cliff.
- If a new levy lid lift is not enacted in 2024, OIFR’s levy will revert to what it would have been without the lid lift prior to 2014.
Revenue With & Without the 2014 Levy Lid
Historical Revenues, 2008 to 2022 (2023$)
Historical Expenditures, 2008 to 2022 (2023$)
Historical Revenues vs. Expenditures, Total and Per Capita, 2010 to 2022 (2023$)
Revenue Sufficiency Analysis Limitations:
- 15-year historical period was exceptional and may have limitations in supporting projections for the future.
- 10-year period may vary significantly from the historical period due to inflation, labor economics issues, and the potential for economic correction.
- The 10-year Master Funding Plan considers near-term operations and maintenance needs, as well as capital replacement for apparatus that will meet the end of its lifespan over the 10-year period.
Revenue Sufficiency Analysis Methodology
- Developed population estimates for a ten-year period (2024 to 2033).
- Estimated and projected baseline revenues based on “levy lid lift cliff” and considering historical trends for other revenues.
- Estimated and projected baseline operating costs based on the 2023 budget and considering historical trends related to expenditure growth. Cost-of-service
projections also considered:- Fixed, mixed, and variable costs
- Economies and diseconomies of scale
- 10-year Master Funding Plan
- Estimated near-term capital expenditures based on 10-year Master Funding Plan.
- Estimated long-term capital expenditures based on apparatus lifecycle costs.
- Indexed the analysis to inflation based on the historic Implicit Price Deflator (IPD) as used by the Washington State Department of Revenue.
10-year Master Funding Plan Investments, 2024 to 2033 (2023$)
(projections from ESCI presentation on May 15th, 2023 may be updated at any time and do not represent final numbers)
- The 10-year Master Funding Plan has been updated to include
- $250,000 for a comprehensive recruitment and training program that provides two regularly scheduled annual academies and more flexible ongoing training.
- Health insurance/benefits for volunteers
- Additional general equipment purchases
- Reflects only near-term capital investment needs and does not consider long-term investment needs.
- Added long-term capital investment needs for apparatus through the development of a reserve/sinking fund for apparatus replacement based on lifecycle costs.
- Does not consider long-term investment or reserve/sinking fund needs for facilities but assumes those needs are likely out of the 20-year horizon.
- All data are estimates and projections and may not represent final numbers.
10-year Projected Revenues vs. Operating and Near- and Long-term Expenditures, 2024 to 2033 (YOE$)
Projected population growth based on historical compound annual growth rate of 1.58% in the historical period.
Revenue Sufficiency Findings
- Current revenues are insufficient to fund even regular operating expenditures
- Beyond regular operating expenditures, additional operating expenditures and near-term capital expenditures are needed to support OIFRs ongoing activities
- Additional recruitment and retention expenditures, as well as health insurance for volunteers are essential to maintaining a volunteer force; replacing the volunteer force with paid, professional staff would be even more costly
- Replacing apparatus at the end of its lifecycle is essential to maintaining insurance rating
- Not increasing revenues to support these expenditures would lead to OIFR having to provide a much lower level of service than what Orcas Island residents expect and desire
Revenue Sufficiency Analysis Limitations:
- 15-year historical period was exceptional and may have limitations in supporting projections for the future.
- 10-year period may vary significantly from the historical period due to inflation, labor economics issues, and the potential for economic correction.
- The 10-year Master Funding Plan considers near-term operations and maintenance needs, as well as capital replacement for apparatus that will meet the end of its lifespan over the 10-year period.
For the complete presentation, click here.
Historic Millage Rates for OIFR, 1964-Present
Volunteer Recruitment & Retention
In the news...
Did you know?
OIFR Station 21 in Eastsound is staffed 24/7 with one Paramedic Firefighter and one EMT Firefighter. This staffing means an Advanced Life Support (ALS) ambulance team is ready to respond to medical emergencies on Orcas Island. All other outlying stations hold apparatus for the Volunteers to respond in. Having Volunteers and apparatus closer to your home may reduce your home insurance rates. For more information, visit the Washington Surveying & Rating Bureau.
According to the US Census Bureau 10.5% of San Juan County residents under the age of 65 are without health insurance coverage. This is a substantial increase as compared to the Washington State average, which is 7.5%.
OIFR would like to both meet the specific needs of our community and recruit and retain volunteers by offering health insurance benefits based on response availability and training participation. The time involved in initial and continued training is hard to balance with full-time jobs and family. Some self-employed business owners or under-employed community members may benefit from health insurance options through volunteering, and the community at large will benefit from increased volunteer staffing.
The practice of offering health insurance for volunteers is a well established method of Recruitment and Retention (R&R), and is one of the grant categories available under FEMA SAFER grants to fire departments. In order to reduce the impact on our budget, OIFR administration has applied for a region wide grant for this specific R&R activity. It is unknown at this time if the grant will be awarded. If awarded, the grant period would be 12 to 48 months. Whether awarded or not, OIFR has budgeted to be able to continue this program for the long term.
Our volunteers are essential to operations of our fire department. Making volunteering work for them works for all of us.
Continuous Training Program
Recruiting volunteers and providing quality training programs for structural firefighters, emergency medical technicians, wildland firefighters, apparatus operators, and rescue technicians is a priority for OIFR.
- The current level of state required training - both initial and ongoing - for these specialties can be prohibitive for community members who would like to volunteer, but have busy personal schedules of their own.
- Developing a consistent and regular training program, with the ability to provide one fire academy and one EMT academy every year is essential to capturing those interested in volunteering while they are feeling motivated.
- This levy lid lift also budgets for development of a training program that conducts such academies on a regular and predictable schedule, while also providing additional flexibility in ongoing training, and continuing to unite the career and volunteer staff in the training environment.
Capital Expense Details
