Our fire departments need help. Many firefighters are working 2 or more days in a row, stressed out and surviving on catnaps. Equipment needs to be replaced, and fire stations need improvements. Response times are getting longer, now approaching or exceeding 9 minutes. This is well in excess of the recommended standard of six minutes for a fire and 4 to 8 minutes for surviving a heart attack. When you are having a medical emergency or your home or business is on fire, minutes matter. Proposition 1 will position our communities for a future with high quality fire and medical response. Vote yes if you really want to save our fire departments.
I grow weary of the echo chamber criticizing the fire benefit charge formula (FBC). With this article I will try to respond to myriad of misconceptions and criticisms leveled by the critics, understanding it will likely not convince the critics as their real agenda appears to be to confuse the voter into voting no. While I agree some refinements to the calculation will likely be necessary as the FBC is implemented, overall, I think the Regional Fire Authority (RFA) Planning Committee and their consultants have done a good job coming up with a fair way of allocating a portion of the costs of protecting our communities through a fire benefit charge.
As a preface to the following discussion, I worked as an environmental engineer for nearly 40 years and have used formulas far more complex than the FBC formula. But I’ll start by admitting that, although I have talked to many firefighters about their work and spent many hours pondering the literature backing up the formula, I’m not a firefighter or fire insurance adjuster. I am also no expert in property tax, but one of my first jobs was as a tax assessor, and as a long time homeowner and elected official, I have a good idea of how property tax works and the baggage that comes with it.
The FBC Formula is Fundamentally Sound
The FBC formula is a relatively new way of paying for fire departments. While I agree the terminology used in the formula is a bit awkward and not easy to understand, it appears to me to be to be fundamentally sound. It does not calculate the cost of water to put out a fire, as some have implied. Rather, it estimates the proportion of the community’s fire resources (and associated cost) needed to protect a structure from fire. Fire resources include the cost of the fire station, fire trucks and other vehicles, equipment, and most importantly, firefighters.
While it is true only a small percentage of the calls our firefighters respond to are actual fires, the lion’s share of our fire department’s resources (and its associated costs) are dictated by being able to respond to those fires. That’s because these calls take a lot of resources to respond to when they do happen. This is no different than our water systems, which are over-designed to supply sufficient water to extinguish a fire, even though we typically don’t need that much water or pipes big enough to deliver that water for everyday use.
Those same firefighting resources are also used to respond to a myriad of other calls. In fact, if you look at the data on the percentage of calls for fires, false alarms, crashes with the potential for fire, etc. that need firefighters in a fire truck to respond, it is roughly 25% of the calls, which coincidentally, is the percentage of the regional fire authority budget that would be paid for with the fire benefit charge. So basing a portion of the RFA’s revenue on the cost to respond to fires makes sense.
The consultant calculated that the amount of money that will be collected through the fire benefit charge is the equivalent to a property tax levy of about $0.50 per thousand valuation. This, plus the $1 per property tax authority that the cities are required by state law to transfer to the Regional Fire Authority, is equal to or less than the $1.50 per thousand valuation that residents in nearby fire districts are paying for their fire departments. This is a fair charge for the substantial benefits we will receive by merging our two fire departments.
Fire departments use the same resources (fire trucks and personal) to respond to medical emergencies as they do for fires because they are often running from call to call. Over time, our fire departments have become the visiting doctor for many residents. They’ve done this because doctors no longer make house calls and when the public calls for help, our firefighters are the only department with the resources and training to respond to these calls. Requiring the sick and elderly to pay more because they use our fire departments more isn’t fair. We have a larger societal responsibility for everyone to support those residents most in need of these services. The FBC is a way of proportioning those costs amongst everyone in our community. It also diversifies the RFA’s sources of revenue, so they are not relying solely on property tax to cover their costs.
The key part of the formula is based on a similar approach used by insurance companies to determine the fire risk posed by a structure. While there are a variety of formulas that can be used, from what I can see the two most important factors in determining fire risk are the size of a building and its use (residential vs. commercial). These are taken into account in the FBC formula. Yes, there are lots of other factors that could be included like how close the structure is to a fire hydrant, how close it is to other buildings, building materials, what’s inside the building, etc. but it would take a lot more administrative expense to add those factors and it would make the formula even more complicated and difficult to administer. So, the formula simplifies the calculation, much like is done in many other engineering formulae.
The opponents seemed fixated on the fact that the formulae doesn’t take into account chemical storage within a building. My understanding, after discussion with firefighters in our community, is that our community is fortunate to not have an oil refinery or big manufacturer with large amounts of chemical storage. Small businesses that do have stored chemicals like auto-body shops are closely inspected and have been found to be well managed, so it was decided not to include this in the initial calculations. If this is determined to be an important factor in the future, this factor can be added to the formula.
The square root component of the formula is the same as that used by insurance companies to calculate fire risk. This is a way of mathematically taking into account the fact that that the amount of fire risk posed by a structure, and fire resources needed to protect that structure, does not increase directly proportionate with the size of the building. For example, a typical 2,500 sq ft house requires 15 firefighters and associated equipment to respond to a fire. A small commercial building that is 10 times larger at 25,000 sq ft in size doesn’t require 150 firefighters and 10 times as many fire trucks. The square root component of the formula takes this into account. And, from the early literature on estimating fire resources, the square root of the floor area, being roughly equivalent to the length of a side of the building, appears to be a way of approximating how far a firefighter has to traverse within a building to put out a fire.
The Fire Benefit Charge is not regressive
I have calculated the fire benefit charge for dozens of actual buildings in our service area, including homes, businesses and apartments. If you agree with the fundamental principle behind the formula that the proportion of the community’s fire resources (and associated cost) needed to protect a larger structure is more than that for a smaller structure, the formula appears to work well.
For example, Figure 1 is a graph I created of the estimated fire benefit charge per year for a range of single family homes in Tumwater (the same charge would apply in Olympia). This charge works out to be on average about 6% of the total property tax paid on these same homes. Note that smaller houses pay less; bigger houses pay more. This is the definition of a fair and progressive fee. Doesn’t that make sense? For reference, according to the Thurston Regional Planning Council, the average sized home built in Tumwater and Olympia over the last 20 years has been just under 2,200 sq ft. This equates to an estimated fire benefit charge of $251/year or about $21/month for most homeowners.
The opponents have distorted the FBC by expressing the charge on a square foot basis, claiming that smaller homes pay more per square foot than larger homes and that property tax is fairer. I decided to test this claim by calculating the FBC and property tax per square foot for this same set of homes. Figures 2 and 3 illustrate the result of this calculation. Note that the vertical scales are considerably different:
From Figure 2 you can see that, with some minor variations, nearly all sized houses pay about 10 to 12 cents per square foot in fire benefit charge. Even the extremes vary by only a penny or two per square foot from this norm. This is very consistent across a wide range of house sizes.
From Figure 3 you can see that property tax per square foot is not only much more variable, it is more regressive (per the opponents’ definition) in that some smaller houses can pay up to $1 more per square foot than larger houses. There are of course, many factors that affect a home’s valuation and thus property tax, including location, condition of the structure, and the size of the lot the structure is located on.
The point of this analysis is to demonstrate that if you use cost per square foot as a measure, property tax, which the opponents advocate for, is actually much more variable and more regressive than the FBC. Furthermore, homeowners have little control over their valuation (and property tax), as this is largely determined by what other comparable homes are selling for in the neighborhood, a factor homeowners have no control over. The size of a home, which the FBC is based on, doesn’t change over time, unless the homeowner adds a new addition onto the home. In other words, the FBC is much more stable and fair than property tax.
The FBC and Mobile Homes
The RFA Planning Committee decided to exempt mobile homes from paying the FBC. My understanding is that the justification for this exemption was primarily that the vast majority of mobile homes are owned by low income families and seniors. I know from my experience working with a local nonprofit that this is true and thus I believe this exemption makes sense. Given that these units represent a small percentage of the total structures in our community, this exemption will not significantly impact revenues.
The opponents have implied this exemption differentially benefits Tumwater residents, because Tumwater has more mobile homes than Olympia. This is not true. According to data from the Thurston Regional Planning Commission, Olympia has more mobile homes than Tumwater. (about 900 in Olympia vs. 700 in Tumwater)
The FBC and Apartments
Figure 4 is a graph I created of the estimated fire benefit charge per year for a range of different sized apartment complexes in Tumwater (the same charge would apply in Olympia). Again, you can see that the charge is progressive, with smaller apartment complexes paying less, and larger apartment complexes paying more. Isn’t this fair?
The opponents have also claimed the FBC is regressive, with apartments paying more per unit and per square foot than single family homes. Figure 5 is a graph of the estimated FBC expressed as a charge for each apartment unit for the same apartment complexes as in Figure 4.
Figure 6 is a graph of the estimated FBC expressed on a per square foot basis for the same apartment complexes as in Figure 4. I should note these numbers are theoretical, as rents are market driven (currently running an average of over $1,500/month), not driven by minor fees like this. In other words, apartment owners may not pass on the FBC to tenants or do so in the manner prescribed by these calculations.
As you can see from these graphs, the typical apartment unit will pay about $60/year ($5/month) or less, or on average about $0.07/s.f. Given that most apartments are considerably smaller than most houses, this makes sense. There is one issue I agree with the opponents about – very small apartment complexes appear to pay somewhat more per unit (and square foot) than larger apartment complexes. This is simply because there are fewer units to spread the costs over. Also, some of these smaller apartment complexes are older and have larger apartments. Should Proposition 1 pass, this is an issue the Regional Fire Authority should examine in more detail and make adjustments as appropriate. If an adjustment is made, this shouldn’t have a significant impact on revenue collected as there are only a small number of these small apartment complexes in our community.
I should note that this analysis does not consider ownership (condo vs. apartments) or whether the building is solely residential or a mix of commercial and residential. Some of the concerns of the fees paid by these types of buildings could very well be valid. This is another issue the RFA should examine. Again, if an adjustment is made, this shouldn’t have a significant impact on revenue collected as there are relatively few of these structures in our community.
I also haven’t included an analysis of businesses, although I have done those calculations as well. The FBC for commercial buildings follows similar patterns to those discussed here. For the businesses I looked at, the estimated FBC is generally running about 10 to 15 cents/s.f., or about 5% of the property tax.
Conclusion
The fire benefit charge is a fair and progressive way of paying a portion of the costs for fire protection in our community. It will help diversify the sources of revenue for the regional fire authority and will be less volatile to individual property owners than property tax. While the FBC will likely require some refinement during implementation, the basic foundation for this charge is fundamentally sound and makes sense.
If you find the calculator is providing you with an estimate that appears to be substantially inconsistent with this analysis, I recommend you contact the City to confirm the correct FBC for your structure.
Pete Kmet served as mayor of Tumwater from 2009 to 2021 and as a councilmember from 1992 to 2009.
EDITOR'S NOTE: The opinions expressed above are those of Pete Kmet and not necessarily of The JOLT or its staff or board of directors.
Further, if you'd like to express your opinions, please write them up and send them to us. If you've got questions about what would be acceptable, please call Danny Stusser on 360-357-1000 x1.
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Larry Dzieza
I'm looking at this closely and will provide a full reply as soon as possible.
In the mean time, Go to SaveOurFD.org for the facts.
Sunday, April 23, 2023 Report this
jimlazar
This post misses the entire issue that is being decided in this election.
There are two issues we are voting on, in one vote. Approval or rejection of the formation of the RFA and the associated 31-page "Plan" which includes the FBC formula. And the voter's pamphlet not only did into include the plan, it did not even have a link to the Plan. Finding the Plan is not a trivial task: It's only available as an attachment to the agenda packet for the meeting when the City Council voted to put this measure on the ballot. Not at all easy to find.
I found it. I read it. I think it is a TERRIBLE plan that will severely impair the quality of our emergency service over the next seven years. Our population is going up at 2% a year, 14% over seven years. The RFA Strategic Plan does not add a single fire fighter or a single paramedic over the entire seven year plan. This is shown on the RFA STRAT tab of a spreadsheet entitled TORFA_STRAT_PLAN_22.10.14_LK That's not exactly transparent. The staffing plan is hard to find. But there are no added staff for seven years, despite a large expected growth in population.
The FBC formula that Pete Kmet defends is fundamentally flawed. A building that contains 100 apartments, each 1,600 square feet, would pay a tiny fraction of what the exact same building would pay if it contained 100 condominiums, each 1,600 square feet. Huh? If title to the building is held by one owner, a 1,600,000 square foot apartment building would pay a fee based on the square root of 1,600,000, which is 400 . If they are separately owned condos, each condo would pay the square root of 1,600, which is 40 for each condo, times 100 condos, or 4,000 for the building. In the first case, the "fire flow charge" is multiplied by 400; in the other, it's 4,000. Ten times as much, simply because the ownership form is "condo" versus "apartment." That discourages home ownership, and encourages corporate ownership of housing. Is that in the public interest? I think not.
This is a huge subsidy to large corporate apartment owners, at the expense of individual homeowners and (mostly local) owners of small 5 - 10 unit apartment buildings. The "square root of the square foot" is a fundamentally flawed formula, and should be rejected by the voters. And THAT is what we are actually voting on. But the Olympia City Attorney, who wrote the "explanatory statement" for the ballot, did not even mention that it's a big increase in our property tax bills. THAT is what we are actually voting on.
The RFA would add $10.5 million in additional costs to our property tax bills, without adding a single firefighter, fire engine, or fire station in the seven-year Strategic Plan.
Big new fees. No new service. Vote NO. Keep your fire service local.
Sunday, April 23, 2023 Report this
JW
Thank you for a cogent and comprehensive counterpoint to the echo chamber. But watch out: the Jolt isn't big enough for two people with extensive experience with formulas and data--Larry's gargantuan ego won't allow room for that.
I would have appreciated Jim Lazar's "Big new fees. No new service. Vote NO. Keep your fire service local." type of attitude when he was at the PUD. His PUD gobbled up my local water system and I got "big new fees" and "no new service" out of the deal. I didn't even get the opportunity to vote no.
Sunday, April 23, 2023 Report this
Citizen
Most of us non-fire fighters, must work more than 2 days in a row every week. Most of us non-fire fighters, do not earn salaries at or near $100,000.00. Most of us non-firefighters do not have lavash benefit packages. Most of us can not add a fee to our neighbors to fund better work conditions, higher salaries, and better benefits.
Please, a common way to raise money from the taxpayer is with a bond issue. A bond issue by public vote not a new bureaucracy with the ability to raise fees on us without a vote.
Vote no to Prop 1, the RFA. Vote no to keep your local fire department. Vote no to preserve your right to vote on increased taxes masarading as fees. Vote no to preserve public accountability on your local government.
Monday, April 24, 2023 Report this
Larry Dzieza
The Benefit Charge is fundamentally UNsound
I have written a well-documented response to Mr. Kmet that contains videos and links to source documents that provides the readers with information to demonstrate the many ways in which the FBC is an unsound and legally risky formula.
I urge that Mr. Kmet take the time to read it with an open mind as I believe it presents information and background that he probably was not aware of.
Please go to SaveOurFD.org/response to read the response.
Monday, April 24, 2023 Report this
TonyW33
Two comments,
First, the link that LarryJz posted is not functional look instead at https://www.saveourfd.org/ and then to the response tab. And Larry, if you can, some of that should be posted here too. It is astute, well documented and valuable to all voters on this issue. The videos are particularly telling as they demonstrate the lack of respect for elected government that the consultants bring to the table.
Second, Mr. Kmet, I for one am offended by your condescending and patronizing attitude here. We are thoughtful voters and property owners with skin in the game here. Your consultants cannot say that. We are not an echo chamber as you termed our comments collectively. Further, in several places in your piece you admit to the flaws in the proposal. Fix those flaws and then we can revisit a vote. For now, anyone that votes for the proposal as presented will rue the day that they did.
Monday, April 24, 2023 Report this
Larry Dzieza
Thank you TonyW33 for helping people reach the website.
The solution to the problem you identified to get to the website works fine but is an example of why just pasting my comments to Mr. Kmet's editorial from the website is sub-optimal: The comments don't allow for active links. So that means the links to the videos and documents won't work in a "comments" post.
I'll post some of the response in the comments as you suggest but folks will have to copy and paste the links to the videos to see them or just go to the website as you wrote: https://www.saveourfd.org/
Monday, April 24, 2023 Report this
Larry Dzieza
Excerpted from https://www.saveourfd.org/
The RFA Pro Side intends the FBC to be increased
When Mr. Kmet writes that the first year FBC of $10.5 million is equal to $0.50 of a property tax levy he fails to mention is that the FBC can go up to $50 million in the second year of operation by a simple majority vote by an unelected RFA Board. If you “do the math” you can see that amount the FBC can be raised without a vote is equal to a property tax of $2.25.
It is time to quit misleading the public about this. The consultants have said it, the RFA members have said it, the real reason for the RFA is to gain access to the FBC. They call it a “pathway” and a “platform” and “sustainable” funding for improving services in the future. Yes, you are not going to get improved services in today’s plan (see Pat Cole article in JOLT). The improved services the proponents speak about only come after they make large non-voter approved fee increases. Unlike the property tax that can only grow at 1% a year without a vote, the FBC’s increase can be quadrupled by the RFA Board. But cities don’t get to use the FBC under state law, so they are creating the RFA.
If they really intended the FBC to be funded at the $10.5 million level, equal to $0.50 on the property tax, they could have exercised the option of not doing the FBC at all and set the rate at $1.50, which is permitted in state law by simple majority vote. In fact, the last financial plan showed how easy it would be to do. As the chart from the RFA financial plan below shows from 10/1/2023 titled “Department Organization & Financial Planning Strategies”, the $1.50 levy would be sufficient to fund the planned budget throughout the 7-year period. Ok, yes, the cities would need to add a small additional $300,000 to the $10 million loan in the first year, but there is more than enough capacity to pay that back.
And they could have done that without requiring the 60% majority that they need with an FBC. Why did the legislature put that super majority requirement in? Because the FBC is such a powerful revenue tool and they wanted to make triple sure that the voters knew what they were getting into before they entrusted their elected officials with that extraordinary taxing power.
But we all know the intent is not to leave the charge at $10.5 million. The intent is to raise the FBC and by a lot.
If Olympia annexes the SE side around Yelm Highway as planned, it will need to be raised.
If they want to build more fire stations that you already know you need, you need to raise it.
If they want to hire the firefighters to reduce the hours of the current firefighters, they need to increase the FBC.
If they want to buy more fire trucks than are already being paid for without the RFA, you need to raise the FBC.
The RFA Committee created a “bare bones” budget in the words of Councilmember Cooper, providing just enough money to inflate the firefighters pay and cover the additional overhead to run the new level of government.
Here is a video of Tumwater Councilmember Althauser saying that to get the improvements not funded in the plan that were spelled out by IAFF Local 2409 Lieutenant James Osberg earlier in the meeting, the FBC would need to be at least $20 million. Althauser didn’t propose leveling with the voters about that reality and changing the plan. Rather he assured the other RFA members that the plan creates the “mechanism” and a “pathway” to get there. Not that is a but that is not a message he wants to share with voters. There will be time after the RFA is approved for the FBC to be increased. Watch it go down here: https://youtu.be/I0NZDR3Hqfs
Monday, April 24, 2023 Report this
Larry Dzieza
(Continued from above)
If I had time, I would address the specific problems with Mr. Kmet’s “it isn’t regressive” argument but his argument does not stand up to scrutiny. You can go to the SaveOurFD.org website and click on the regressive page. Or you can watch this and see the FBC expert say the formula is “by its nature, regressive” in response to the overwhelming desire by the committee to get rid of the regressive effect of the square rooting of square footages. https://youtu.be/-F-wqQ5vLv
But beyond regressive, the formula is very likely violates the RFA laws that call for the formula to "...be reasonably proportioned to the measurable benefits to property resulting from the services afforded by the authority." - RCW 52.26. There is no better case that the proposed formula is unreasonable as when the alleged foundation for it is based on the physics of "fire flow" is undermined by the type of ownership the building. Somehow the amount of fire fighting resources required is less when the same building is an apartment versus when the same building is converted into a condominium. How the fire knows this, remains a mystery.
Even worse is the inherent and more pervasive problem that the fire behaves differently depending upon how many buildings are on the parcel. The FBC is a parcel based calculation. Three buildings on a single parcel are calculated as a single entity. With the square root in the formula, that means that those three buildings' total square footage are added together before the square root is applied. The result is that they are charged less, much less, than if each building was on its own parcel. This absurdity would never pass the test of reasonable apportionment.
Finally, we need to drill into the fiction of the the "Building Category Factor" in the formula. The RFA says its "based on the building size and use". It is the weighting that assigns a 1.5 multiplier to the charge for apartments, one of three multipliers for houses and one of six multipliers ranging from .6x to 5x for commercial buildings.
Throughout the RFA's formula development process these multipliers were manipulated based on the desired outcome for revenues and decisions on what group will bear the burden. Not even the slightest tip of the hat to fire science.
For these reasons, the RFAs FBC formula is vulnerable to legal challenge and huge revenue delays and losses and delays and losses that would make all of us vulnerable to losing the protection of our great fire departments.
Your No Vote is the most important vote you will make in terms of our community's public safety in a generation.
Monday, April 24, 2023 Report this
Larry Dzieza
Cost per Gallon
When Mr. Kmet says, “It [the RFA FBC] does not calculate the cost of water to put out a fire, as some have implied.” You may wonder who would be so deceptive to imply that the cost per gallon is connected to water on a fire?
I found the culprit, and it turns out the call is coming from inside the house!
This is the actual language on page 27 of the current plan that is before the voters:
“The primary factors of the [FBC] formula are the amount of required “fire flow” or water needed to extinguish a fire, and the type and size of structure being assessed”.
But of course, the description in the Plan is also bogus. The Cost per Gallon is intended to sound like an important objective measure. Rather it is just a budgetary device to set the FBC to match whatever amount the RFA wants to spend. Again, don’t believe me, believe the other RFAs with an FBC.
As the Renton Regional Fire Authority writes: “Fire Flow Factor/Cost per Gallon (CPG). The relative cost of providing the required fire flow per gallon during a fire incident. CPG is a balancing factor used as an adjustable multiplier to finely tune the FBC calculation across all properties to reach the desired target FBC amount.”
Here is the NorthShore Fire District, “The “Cost per gallon” is the multiplication factor that when used with the modified fire flow calculations will produce a value equal to the desired benefit charge collection”. https://shorelinefire.com/wp-content/uploads/2020/01/FBC-FAQ.pdf
Monday, April 24, 2023 Report this
JulesJames
The RFA is snake oil salesmanship: explanations and formulas in ever-increasing complexity to confuse common sense. By the standards of common sense: "fees" are taxes the voter cannot directly vote upon; ten Columbia Towers worth of commercial office space suddenly discovered in November by the RFA is enough loss of credibility to send this whole scheme back to Square One, and "regional" without Lacey's participation isn't regional. Common sense sees the RFA does not propose new fire stations, fire equipment, and increase in actual firefighters. It also proposes no immediate overall increase of taxes/fees to the taxpayer -- which we know can't be true even by Year 2. Common sense indicate a NO vote on the RFA is in the best interest of all (but the consultants).
Monday, April 24, 2023 Report this
BevBassett
Pete Kmet, your untruths and misrepresentations of the true facts of this scam have caused me to lose any respect that i may have had in the past. You do the people of our community a deep injustice with your false words. Where is your shame.
Tuesday, April 25, 2023 Report this
TonyW33
Looks like it's back to the drawing board on this one. Can it be fixed with a levy lid increase by November? We'll be watching and listening.
Wednesday, April 26, 2023 Report this
Terrilovesanimals
NOT
Wednesday, July 12, 2023 Report this