The Lewis County Fire District 6 station on Jackson Highway just south of Chehalis is also home to the Chehalis Fire Department as the two departments continue to explore consolidating into one agency.
After years spent considering the prospect of consolidating their fire departments, the City of Chehalis and Lewis County Fire District 6 appear poised to determine once and for all whether such a move would make sense for the citizens they serve.
Chehalis City Council and Fire District 6 Board of Commissioners have each approved a contract with William Cushman, a financial consultant, to complete a feasibility study of the potential annexation of Chehalis into Fire District 6, according to Cushman. He will be tasked with creating a model that stakeholders can plug different variables into, such as changes to the combined assessed value of properties in District 6 and Chehalis. Property tax revenues make up the vast majority of revenues for fire districts in the state of Washington.
Leaders of both entities, including Chehalis Mayor Dennis Dawes, have long been proponents of combining the two departments for the purpose of greater efficiency of resources, both operational and financial, without sacrificing the level of service provided to citizens. Should the two sides merge, the resulting fire district would stretch from west of Adna to northeast of Onalaska.
The feasibility study is expected to take about six months to complete, though Cushman said the time frame depends largely on how quickly Chehalis and District 6 provide the information he requests of them. Once the study is done, the completed model will be given to the City of Chehalis and District 6 for their exclusive use. Summary reports may be distributed to the public, per contract documents.
“It’s all about weighing the costs and the needs,” said Jim Martin, who chairs the District 6 Board of Commissioners. “We’re going to make sure that our citizens are protected and covered, because that’s our responsibility for the district, as I’m sure that’s what the city is trying to do also … My opinion — my opinion now — is that I don’t want to do anything that would be detrimental to the district in the long run, if that makes sense. So, we’re moving forward cautiously and making sure that everything looked at is projected out five, 10, 20 years.”
Cushman has worked with dozens of fire agencies across Washington State on numerous issues, including the combination of departments. His most recent study formed the basis for Snohomish County Fire Districts 7 and 8 to put the question of consolidation to their constituents in the form of a ballot proposition in August. Based on his experiences to date, he said the most basic task ahead of him has to do with dollars and cents.
Because Fire District 6 would be annexing the ground covered by the Chehalis Fire Department in the scenario Cushman is tasked with fleshing out, the number at the core of his study will be the combined value of the properties within both coverage areas, multiplied by the tax rate paid by residents of District 6.
According to a list of 2019 tax levies in Lewis County published by the Lewis County Assessor’s Office, that amount comes to $1.128 per $1,000 of assessed value for regular fire services and $0.22 per $1,000 for an emergency medical services levy. Residents of Chehalis pay about $2.65 per $1,000 for a litany of public services that includes fire and EMS.
“Finances dictate the necessity of consolidation, whether it’s by merger or annexation,” Cushman said. “Because taxing districts can only raise their levy amounts by 1 percent a year, if the cost of labor goes up by 3 percent or healthcare goes up 8 percent, well that’s just too bad. The model I provide is an outlook that covers seven years. We match the projected expenses up with the property taxes and operating revenues to create a total cash flow and hopefully, when you’re all done, you’ll have at least what you started with seven years before, if not a few dollars more. If you don’t, the consolidation is doomed right from the start.”
Many of the consolidation efforts assisted by Cushman, including Snohomish Fire Districts 7 and 8, require the absorbing district to pose the question of a levy lid lift to its voters in tandem with those in the other district voting to approve or deny annexation.
Voters can allow taxing districts to remove the one-percent limit on annual levy increases up to the maximum rate allowed for that particular jurisdiction, before the rate begins to track back down towards the 1 percent limit as property values increase. This results in fire districts asking voters to approve levy lid lifts every few years, said Cushman.
Districts can also use banked capacity accrued during the years when they did not collect the maximum possible levy amount to jumpstart an increase.
“The model I create allows you to plug in different variables, allowing for ‘what if’ analysis,” Cushman said. “Agencies have the option of adjusting their projected expenses and revenues to see how it affects the outcome, though the latter should be a number that does not represent an overly optimistic increase simply for the satisfaction of saying ‘we have enough revenue.’ What we want to determine is whether there is a reasonable expectation of cash flow over the first seven years after consolidation, such that deficits do not occur, reasonable reserve accounts are established and there is due consideration given to the cost of labor and benefits.”
