The city of Black Diamond is inching closer to deciding how its residents will receive fire and emergency services in the near future.
During its last meeting of 2020 on Dec. 17, the city council sat down with the FCS Group to go over a fire services study the city commissioned during the summer.
The fire study was commissioned due to a multi-year disagreement between the city of Black Diamond and Mountain View Fire and Rescue, which has been providing the city with emergency services since 2006. The disagreement is over how much Black Diamond pays Mountain View.
The city paid Mountain View roughly $615,000 last year, according to the FCS study; however, the fire department claims that costs to serve the city actually exceed $1 million. The difference has been affecting Mountain View’s bottom line so much, officials have said, that in 2019 the fire department actually moved to terminate its contract with Black Diamond in 2023 unless more money from the city flowed into Mountain View’s coffers.
This left the city council with a tough decision to make, given that even in good financial times, reallocating several hundred thousand dollars to the fire department would have a major impact on its annual budget. That’s when the city hired FCS, whose job it is to determine what options the city has, and what the financial cost will be.
OPTION ONE: CONTINUING A CONTRACT
In short, Black Diamond has FCS Group looking at four options: either continuing to contract with Mountain View, get annexed into Mountain View’s fire district, annexing into the Puget Sound Regional Fire Authority’s fire district, or forming its own fire department.
Much of the Dec. 17 presentation focused on maintaining a contract with Mountain View, and included what sort of metrics Black Diamond should use to determine how much money it needs to pay the fire department.
For example, the city could pay Mountain View about $922,000 a year based on the average cost per call per capita; however, FCS noted that per capita calls for service may not be an accurate metric to use, given that it doesn’t account for other factors like age; older populations are more likely to use emergency services than younger populations.
Another metric looked at paying Mountain View based on the increase of calls coming out of Black Diamond. According to FCS, calls for services within the city grew from 250 in 2017 to 387 in 2019, whereas calls in the rest of the district remained relatively flat those three years. If Black Diamond were to pay Mountain View based upon that service call increase, a contract would be worth just over $1.25 million.
The average cost of any metric used was just around $1.04 million.
This is by and large the cheapest option for the city, with a net dollar change of around $500,000 a year.
OPTION TWO AND THREE: ANNEXATION
While one of Black Diamond’s options is simply to pay Mountain View more money, another option is to give the fire department the power to tax city residents itself — this would be done through annexation.
Basically, Washington cities can have a maximum property tax levy of up to $3.60 per $1,000 in assessed property value. However, if those cities were to join a fire or library district, those district agencies instead collect their own property tax, leaving less for the city to collect.
For example, Black Diamond is already part of the King County Library System, which is a library district that can levy a property tax of up to 50 cents on Black Diamond residents. This reduces the city’s maximum property tax rate to $3.10.
Currently, the city’s property tax levy is at $1.88.
Becoming annexed into Mountain View’s fire district would have a dramatic effect on that levy, as fire districts can collect a maximum of $1.50 in property tax. Unless Black Diamond were to “lift” its levy amount and tax residents more, becoming annexed into Mountain View would reduce its property tax levy to just 38 cents, FCS reported — an 80 percent reduction in tax collection, going from $1.9 million in revenue in the 2020 budget to just $380,000.
According to FCS, this would affect nearly a quarter of Black Diamond’s 2020 general fund operating expenditures.
However, the city could choose to annex with the Puget Sound Regional Fire Authority, which already serves Covington, Kent, Maple Valley, and SeaTac. Doing so would be less costly than annexing with Mountain View, as the PSRFA can only levy up to $1 in its property taxes.
This would reduce Black Diamond’s property tax levy to 88 cents, a 53 percent reduction that leaves the city collecting just about $880,000 at 2020 levels. According to FCS, this would affect about 15 percent of the city’s general fund.
OPTION FOUR: CITY-OPERATED FIRE DEPARTMENT
The last option available to Black Diamond is running its own fire department.
According to FCS, this would include having a fire chief, two lieutenants, two fire fighters, a secretary, and a public information officer, all operating out of Station 98.
The consulting group estimated it would cost the city $1.2 million per year to operate its own fire department; FCS noted that the majority of cities like Black Diamond do not run their own fire departments, and choose to contract instead.
The city council will be continuing to discuss its fire and emergency services options with FCS, and another presentation — this time taking a look at forecasted property tax revenues, various other revenue options, and timelines for implementing various options — is scheduled for Feb. 11 at 6 p.m.
However, FCS ended its presentation with a final warning about the need for the city to increase its property taxes on residents.
“Regardless of [the] scenario, a new revenue source (property tax levy lid lift) will be required to pay for either renewed contract with MVFD, operate own FD, or to address loss of property to revenue due from annexation,” the report reads.