Fire Districts, Taxpayers Face Increasing Costs Due To Mismanagement

[Sedona Fire District Facebook photo]

Across Arizona, communities like Sedona are dealing with the escalating costs associated of fire districts. While some districts look for ways to rein in the costs, others are demanding taxpayers open up their wallets wider.

Multiple factors have led to the rising costs. From the staggering failures of the Public Safety Personnel Retirement System to flat land valuations, districts are faced with daunting expectations and limitations. Some districts, like the Rio Rico, Tubac and Green Valley fire districts, are looking for creative ways to keep the quality of service at a reasonable price.

In the case of the Rio Rico, Tubac and Green Valley fire districts, a merger just might be the answer. Each district comes to a possible merger with unique issues. “For instance, Rio Rico and Tubac have been experiencing a decrease in property taxes while Green Valley has seen an 8-percent increase in recent years. In terms of benefits, Green Valley’s firefighters are paid significantly more, but the district pays far less for benefits. At the same time, Green Valley’s state pension liability is more than $11.6 million, while Tubac’s is $2 million and Rio Rico’s is just over $500,000,” reported the Nogales International in late September.

It is unlikely that all three districts will end up merging. A merger of just Rio Rico and Tubac is the likely result, but the conversation alone has been beneficial to all of the involved communities according to residents in southern Arizona.

Then there is Sedona

From the Arizona Attorney General’s Office: 

“Fire districts are political subdivisions of the State charged with providing fire services within specified areas. See generally A.R.S. § 48-805. Three-, five-, or seven member boards manage the districts. A.R.S. § 48-803(A). The board members are elected under the procedures outlined in A.R.S. § 48-802.”

In 2013, the Legislature created a committee to study the performance of Arizona’s fire districts and to recommend ways in which the districts might be improved. See 2013 Ariz. Sess. Laws ch. 104, § 1. Based in part on these recommendations, the Legislature made a number of changes to the management of fire districts. See 2014 Ariz. Sess. Laws ch. 252 (S.B. 1387); see also Ariz. H.R., House Summary as Transmitted to the Governor for S.B. 1387, 51st Legis., 2d Reg. Sess. (4/23/14), at 1. These changes were deemed “emergency measure[s] . . . necessary to preserve the public peace, health or safety” and went into effect immediately, on April 30, 2014, upon signature by the Governor. See 2014 Ariz. Sess. Laws ch. 252, § 15 (S.B. 1387)

Arizona Liberty, a Sedona-based group, just released a video exposing the Sedona Fire District’s mismanagement as voters are being asked to approve a bond measure.

According to the group in a letter that appeared in the Sedonaeye.com, Sedona “Fire District taxpayers have received their 2017 county tax statements. In checking with residents, this year’s Fire District property taxes are approximately 9% higher than 2016 and more than double those paid in 2011. Fire District taxes are about 27% of the total tax bill and are more than School District taxes.”

The group claims in the letter that “from 2011 through 2017, the Fire District’s “covered area” and “population protected” have not increased. During the same period, while consumer prices (CPI) have increased only 7%, the Fire District’s operations employees (excluding administrative staff) have increased 13%; personnel expenses (salaries and benefits) have increased 31% and total expenses have increased 47%. More than 15 times of your taxes ($78 million) are spent for personnel expenses than for capital outlays ($5 million), excluding the more than $2 million spent to build the Chapel Area Station #6.”

The Sedona Fire District Governing Board is filled with appointees, who in a 3-2 vote, recently approved a $17 million annual operating budget. The $18 million bond issue, which with interest comes to $21 million, will “finance projects, including almost $9 million to demolish and rebuild the Uptown Sedona Station #4 and relocate the Oak Creek Canyon Station #5 inside the Slide Rock State Park.”

“If approved, bond proceeds will also be used to build a new dedicated maintenance facility; build additional parking; repair heating, ventilation, and air-conditioning systems; and renovate kitchens, work spaces, day room areas and training rooms,” wrote the head of Arizona Liberty, Dwight Kadar.

Kadar argues that some of the projects included in the bond “could have been completed using annual operating budget monies instead of continually paying higher salaries and benefits.”

Kadar disputes claims by bond supporters that the current structures are “crumbling.” Even the Red Rock News has stated its opposition to the bond.

Supporters of the bond claim that because past boards have rejected spending money on capital improvements in the past, the repairs and new construction are vital. They argue that a failure to approve the bond will end up costing voters more in the end in finance costs.

With only 23 percent of the Sedona Fire District employees residing in the District, the bond has little to no chance to succeed. That has prompted supporters to engage in fear-mongering about risks to life and limb should administrators not get money to spiff-up their offices with a sizeable chunk of the bond money.

And then there is PSPRS

In July 2017, the head of the Public Safety Personnel Retirement System (PSPRS), Brian Tobin, who is the brother of former Speaker of the House and current Arizona Corporation Commissioner Andy Tobin, issued a public statement of apology. “We sympathize with the many local governments and entities across Arizona that are struggling to keep up with their public safety retirement expenses,” began Tobin.

Tobin then attempted to defend the reckless behavior of PSPRS, which includes paying the “highest percentage of its investments in fees for outside investment management among the 73 largest public retirement systems in the country,” according to the Arizona Republic.

Hearing of the House Ad Hoc Study Committee on the Public Safety Personnel Retirement System
WHEN: Tuesday, October 3rd at 5:00 p.m.
WHERE: Globe City Hall Council Chambers
150 North Pine Street, Globe, AZ 85501

Ever since 2013, when Andy successfully blocked pension reforms in the Legislature, apologies and excuses are the taxpayers have received except increasingly high tax bills. As a result, a House Ad Hoc Study Committee was formed this year to study PSPRS. This Tuesday, the Committee will meet in Globe to hear from the public.

An uncertain future

With any luck, the Arizona Legislature will come up with some solutions to the problem. Counting on luck, say opponents of Sedona Fire District’s bond, is irresponsible. Should solutions be found, remedies can take a while to bring about real change.

Related article:

PSPRS House Committee Hearings Begin In Flagstaff