Mountain View Fire Rescue seeks mill levy increase

Officials from the Mountain View Fire Protection District are asking for public input on a proposed mill levy increase that they say will help offset the costs of serving a rapidly growing population in east Boulder and south Weld counties over the next ten years.

At a July 17 public information meeting at the Niwot Fire Station, Assistant Chief Keith Long and Finance Director Tonya Olson made a case for the potential tax hike, which will fund what they described as urgently needed equipment upgrades, as well as the construction of three new stations in the eastern part of the District.

“If you look at Erie, it’s exploding,” Long said to the dozen residents in attendance. “So is Mead. With all these people coming in, what do you think is going to happen to our response model? It’s also going to change.”

The District hopes to place a measure on November’s ballot asking for an increase of up to 4.5 mills, which translates to an additional $32 of annual property tax per $100,000 of actual home value for residents. For non-residential property (commercial, industrial, mining, and agriculture), the higher levy would cost another $130.50 annually per $100,000 of actual value.

According to Long and Olson, the additional levy is needed to address the District’s two biggest budget challenges: growing demand for services and a shrinking pool of revenues.

Currently, the MVFPD provides emergency response and other critical services in a 184-square mile area that spans two counties. Eight stations—six of them staffed 24 hours per day— serve an estimated 59,400 residents, up 22% since 2010 (48,604).

The influx of new people and their structures means more medical emergencies, accidents, and fires. In 2017, the District responded to 4,234 emergency calls, up nearly 12% from its average of 3,784 calls during the four prior years.

At the same time, an adjustment in Colorado’s residential property tax rates led to a $700,000 revenue shortfall in the District’s 2018 budget, putting even more pressure on finances.

Unlike its municipal counterparts in Longmont and Boulder, MVFPD does not receive a share of sales or income tax from any of the local governments it serves. Instead, the vast majority of its funding (87%) comes from the 11.747 mill levy on property within its boundaries. (By comparison, the St. Vrain Valley School District levy is 56.394 mills.)

In theory, the recent robust growth in the area’s housing sector should have created a healthy and growing property tax base, but that doesn’t always happen, thanks to a taxpayer-friendly provision in the Colorado constitution. Passed by voters in 1982, the Gallagher Amendment capped the residential share of aggregate property tax collections at 45 percent of total property taxes, with the remaining 55 percent to come from taxes on non-residential property. It also fixed the non-residential assessment rate at 29 percent but allowed the residential assessment rate (RAR) to fluctuate in order to maintain the 45-55 percent ratio. The assessment rate is the percentage of actual market value that the mill levy is applied to in determining property taxes. When Gallagher was passed, taxes on residential property made up 45 percent of the total, but increases in residential property values have far outpaced commercial property value increases, resulting in a 25-75 percent ratio today.

The measure aimed to shield residential property owners from tax shocks during periods when housing values increase faster than non-residential property, and it has worked as designed. When Gallagher was first adopted in the early 1980s, the statewide RAR was 21 percent. By 2018, it had dropped to 7.2 percent, and it is expected to fall to 6.1 percent after the next reappraisal period.

This has been a boon for Colorado homeowners, but less so for those agencies that rely on their property tax payments for operating revenue, like the MVFPD. The District does have other sources of revenue, such as federal grants, impact fees from developers, and other taxes, but those fall far short of covering the gap.

“Growth does not pay for itself,” Olson said. “The amount of increase that we get in revenue doesn’t cover the cost of providing services to that many people, especially with the rate dropping.”

In order to “protect response times” in the face of this, Long detailed what he termed the MVFPD’s “highest priority needs” over the next ten years, including an integrated communication system, new breathing equipment, new tender and brush trucks, and extensive repairs and improvements to existing facilities. The District also hopes to build and staff a new maintenance facility and new stations in Erie (2020), Dacono (2022), and Mead (2027). In total, the MVFPD projects it will need to fill 50 new full-time positions.

Long and Olson acknowledged that the planned improvements seem to disproportionately benefit newer developments at the expense of more established areas such as Niwot and north Longmont, but added that the new resources will be available to all residents in the District.

“When you look at the District as a whole, it’s true that certain parts are growing much faster than others,” Olson said. “But you have to think of it as a unit. If we have an area over here that’s growing, it’s pulling resources from the other communities. When all of the areas are well-serviced, then you’re well-serviced.”

The District expects to make a final decision about whether to place a mill levy increase on the ballot and the amount to be requested by next month.