By Rusty Bradshaw
While the Sun City Fire District was able to replace old equipment and get a new fire station, operational funding will remain one of the biggest challenges for fire officials.
The new fire station, 13232 N. 111th Ave., Youngtown, and four new fire engines were added using monies gains from a Sun City voter-approved $10 million bond and savings realized from tighter operations. But officials will continue to struggle with funding for day-to-day operations due to restraints placed on fire district funding by statewide legislation.
“The district’s revenues have been significantly impacted by Arizona’s legislative statutes, the variability of the values of the properties within the district and the methods used to calculate the real and personal property tax valuations,” Ron Deadman, Sun City fire chief, stated in an email.
Arizona property receives two valuations — full cash value and limited property value. The Arizona Constitution requires the FCV of all property valued by the county assessor be reflective of market value, according to Mr. Deadman. Since the FCV fluctuates with the market, there is no limit on the amount it can increase each year, he explained. Through tax year 2014, growth in the LPV is limited to the greater of 10 percent over the previous year or 25 percent of the difference between the current year’s FCV and the previous year’s LPV, with the stipulation that LPV cannot exceed FCV. Beginning in tax year 2015, Proposition 117 mandated that a property’s LPV be the foundation for property tax valuations, Mr. Deadman stated.
“That really hampers us in our ability to deal with growth in the district,” Dave Scott, Sun City Fire District board president said during a November meeting. “Our demand for services keep going up, but our revenue is capped so we can’t keep up.”
Legislation passed in Arizona that impacts fire district revenue includes Senate Bill 1421, passed in 2009, that limits the increase in the tax levy for fire districts to be no more than 8 percent over the prior year’s actual levy; Arizona Revised Statute 48-807, which caps the maximum tax rate per $100 of assessed property tax value at $3.25; House Bill 2001, passed in 2011, which reduced assessed valuation of class one commercial and centrally valued properties from 25 percent in 2006 to 18 percent by 2016, and reduced class two vacant land values by 1 percent per year through 2016; and Proposition 117.
Voters passed Proposition 117 in November 2012 amending the Arizona Constitution by setting a limit on the annual percentage increase in property values used to determine property taxes to be no more than 5 percent above the previous year starting in tax year 2015, and establishes a single LPV as the basis for determining all property taxes on real property also starting in fiscal year 2016-17. Personal Property, other than mobile homes, will be computed at FCV.
There have been recent signs of potential improvement in the district’s residential housing market, according to Mr. Deadman. Zillow is forecasting home values in Sun City to increase 4.1 percent and Youngtown 4.3 percent, respectively, during the next fiscal year. The S&P/Case-Shiller Phoenix Home Price Index reflects an overall increase of 5.81 percent in home values in the greater Phoenix housing market during calendar 2018. But that may not be good news for the Sun City department.
The Sun City District relies almost entirely on tax revenue based on the NAV to fund its emergency medical, fire and social services for the community, according to Mr. Scott. The estimated fiscal year 2018-19 budget’s growth is capped at 5 percent based on Proposition 117.
“Even with the projection of the maximum potential increase, it will take until fiscal year 2026-27 for the district to recover from the recession that began in fiscal year 2009-10,” Mr. Deadman stated. “While, to date, most business and residential property tax bills still have not equaled what was accessible in 2009. The demand to do more with less has simultaneously occurred while the demand for fire and emergency medical services has increased steadily each and every year.”
Since the 2008 economic downturn, Sun City Fire officials cut, reduced and eliminated all non-essential services, according to Mr. Scott. The new equipment purchased with bond and savings replaced antiquated apparatus that were costing the district large costs to maintain and keep in-service. During that time, firefighters and other personnel accepted a reduction in staffing, benefits and went six years without any pay raises, according to Mr. Deadman. The district was awarded two FEMA grants, which enabled officials to return to original staffing levels and replaced antiquated medical equipment, he added.
“We have partnered with 10 other cities, towns and fire districts to provide benefits through a self-administrated trust, which dramatically reduced these costs and helps us control future increases,” Mr. Deadman stated. “We are partnering with other fire districts to preform joint purchasing.”
District officials are also researching the possibility of merging with the Daisy Mountain Fire District. The study is designed to see if there are financial benefits and cost reductions in such a joining, Mr. Deadman explained.
District officials also support legislative initiatives in the Public Safety Personnel Retirement System to reduce future costs and stabilize the fund, he added.
“Fire Districts are the only special taxing districts limited by a tax levy cap,” Mr. Deadman said. “We will continue to press the legislature to remove this cap. We will continue to research new forms of revenue that can be used to support a very much ‘slimmer’ Sun City Fire and Medical Department.”
In addition, fire officials will take other measures to address revenue challenges, including continuing talks with Daisy Mountain officials and continue facility repairs and upgrades with the primary focus on Fire Station 131, 17017 N. 99th Ave.