Gypsum fire says it doesn’t want more money, just what was already approved
September 23, 2018
GYPSUM — Two years ago, voters in the Gypsum Fire Protection District approved a property tax increase with the understanding the additional money would beef up the paid firefighter corps and replace aging equipment.
But before the department could even allocate those dollars, they disappeared courtesy of Colorado's Gallagher Amendment.
Approved by Colorado voters in 1982, the Gallagher Amendment governs the way homes are appraised for property tax purposes. It mandates that the amount of property taxes collected on residential properties must be lower than the amount of property taxes collected on nonresidential property. Specifically, Gallagher stipulates that residential property taxes reflect 45 percent of the state's total property tax revenue. Nonresidential property taxes comprise the other 55 percent.
The law complicates matters for small, residential property tax dependent entities such as the Gypsum Fire Protection District. The 45/55 split is a statewide calculation and right now it reflects the residential building boom that is happening along Colorado's Front Range. But the Gypsum district hasn't seen the residential growth that is spurring the assessment rate decline and the entity doesn't have a large enough nonresidential base to offset the lower residential tax rate.
The numbers tell the tale. In 2017, the state's residential properties were assessed at 7.96 percent. In 2018 and 2019, Gallagher dropped that rate to 7.2 percent. In 2020 and 2021, the residential assessment rate is expected to drop to 6.11 percent.
That downward trending rate means Gypsum's district will lose the extra money approved by the voters in 2016. The impact is estimated to be roughly $76,000 each in 2018 and 2019. That figure jumps to more than $206,000 annually beginning in 2020.
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To halt that trend, the district is going back to the voters this fall with Ballot Issue 7E.
"First off, we want to thank the citizens for passing our 2016 ballot question," said Gypsum Fire Chief Justin Kirkland. "This fall, we are not asking for more money, we are asking to keep what was promised."
Ballot Issue 7E asks that the district's annual property tax mill levy "be adjusted annually so that to the extent possible the district's net tax revenues shall remain as previously authorized by district voters." The question also contains language that will exempt the district from future Gallagher property tax assessment rate declines. However, if local property values decline — such as they did during the Great Recession — the district's budget will be affected.
"If our assessed value goes down, so will our budget. We will have to ride it out with everyone else," Kirkland said.
He noted the district understands that the economic condition of the local economy will affect its budget. But Gallagher impacts are a different issue, Kirkland said.
"Places that are residential and rural see more impact than places that have more commercial properties," he said. The Gypsum fire district is a prime example.
The boundaries for the Gypsum Fire Protection District and the Greater Eagle Fire Protection District predate development of the Airport Gateway area in the town of Gypsum. For that reason, while the commercial area that includes Costco is in the town of Gypsum, it is part of the Eagle district. The Eagle County Regional Airport, which is a sales tax generator for the town of Gypsum, is government property that doesn't generate much property tax for the fire district.
Its heavy dependency on property taxes prompted the district's 2016 ballot question to raise its mill levy. At that time, an outside consultant recommended the district ask for a 13.5 mill levy, but the fire district opted to go for a smaller amount — 10.8 mills.
"We didn't want to be greedy. We only wanted what we needed to survive, but that is all being undone by the Gallagher Amendment," Kirkland said.
Following the 2016 election, the district hired additional paid staff. But even then, the looming impact of Gallagher prompted careful spending. Two paid firefighters now provide round-the-clock coverage at the Gypsum station.
"But we were supposed to have three full-time firefighters. Already Gallagher has taken away a responder from our community," Kirkland said.
That's not the only spending decision the district had to delay.
"We still have these big needs," Kirkland said. "Our primary engine has been out of service for three weeks now while we are waiting for a replacement part. We are running our ladder truck on all our calls."
On top of that, the district has some big bills. Remember all the wildland fires this summer?
It cost nearly $90,000 for Gypsum Fire to respond to wildlfires in 2018. At Lake Christine, for example, two crew members and a truck were on scene for 30 hours. That meant paying overtime hours.
"And we still had to have a crew here in Gypsum to make sure we could respond to our own community," Kirkland said.
Eventually, the department will be reimbursed for costs associated with mutual aid responses to fires on national land. But the department has to pay the up-front costs. Then there was the price tag for the Trail Gulch fire, which burned 27 acres north of Gypsum in late July. The fire was located within the district so no reimbursement is forthcoming. The estimated cost for that two-day event is roughly $8,000.
"When we are working these fires, it's not free," Kirkland said.
Along with the added costs of fighting wildland fires during a hot and dry summer, the district also has to absorb the same budget hits that affect other governments, businesses and individuals. Health insurance premiums are rising and so are worker's compensation costs.
"Our worker's comp costs increased 15 percent this year and we had no claims. That's just an industry standard," Kirkland said.
Even going to the voters — which will cost an estimated $28,000 — is an expense the district hates to take on.
"We don't want to come back but the reality is if something doesn't happen, something is going to have to change. Our service levels are directly tied to our revenues," Kirkland said.
He noted it is difficult for the district to be in a situation where its voters agreed to fund a certain level of service only to have that approval negated by the Gallagher Amendment. He hopes the district's voters will understand the complex issue when they cast ballots this fall.
"We aren't asking for more. We just need to stay with what was approved," Kirkland concluded.