There is drama in the Cloquet Area Fire District. The status of the fire chief is uncertain, and recent board meetings have included debates over a large tax increase for ambulance district residents (and the resignation of one board member as a result).

Matt Ashmore, who was hired to lead the district in November 2020, was placed on paid administrative leave Nov. 11, while the board investigates claims against him, at least some of them regarding failure to follow Covid protocols established by the district. (See Page 18 for more.)

Meanwhile, many Thomson Township residents were shocked when they opened up their proposed taxes for 2022 last week to find their fire district taxes had more than tripled.

According to figures given at a September CAFD board meeting, a $200,000 home in Thomson Township or other areas served by CAFD ambulance (but not fire) would see the CAFD portion of its property taxes go from $39 a year to $146 next year, an increase of $107. On the other hand, someone owning a $200,000 home served by both fire and ambulance would see an increase of $57 to their CAFD levy in 2022.

The tax increase resulted from of two factors:

1. The state legislature passed a law allowing local government units to create fire protection special taxation districts (along with the existing ambulance districts) that gave such districts property tax levy authority with no caps starting in 2022. That’s important, because the previous cap on the ambulance district for CAFD was .019 of estimated market value (EMV).

2.CAFD has historically not been allowed to charge ambulance-only property owners as much as it should have to cover costs, so CAFD members that use both fire and ambulance services were paying a larger tax burden.

Costs are also increasing because the 2021 budget is going up, with an expected 14.5 percent increase in expenses: that means a 17.8 percent total increase to the overall tax levy. The rise includes the addition of four new full-time employees at a cost of $428,000 and $421,000 to go toward motor vehicles and other equipment purchases, among other things.

At this point the taxes are not set in stone, and residents are invited to attend the CAFD truth in taxation hearing set for 7 p.m. Thursday, Dec. 9 at the Scanlon Community Center, 2801 Dewey Avenue.

Overdue, says CAFD

CAFD doesn’t only provide fire service: it provides fire protection to 170 square miles and ambulance service to a state-mandated area of more than 250 square-miles in Carlton County and southern St. Louis County. Unlike many rural ambulance services, CAFD provides advanced life support, which requires substantially more training and equipment for its staff.

When the state legislature first authorized the formation of CAFD in 2009 as the state’s first fire district, they didn’t allow the fire district to tax anyone served by the ambulance district, according to retired CAFD chief Kevin Schroeder.

In 2013, CAFD got the funding language for EMS added in 2013, but it wasn’t enough. A lot of townships fought against paying anything, Schroeder said, so the legislature compromised and put in a cap of .019 percent for CAFD. “That was half of the .048 percent of EMV that every other EMS district got automatically,” Schroeder told the Pine Knot in a phone interview earlier this week.

Since 2013, CAFD officials had been working to get that cap raised. “The goal was always to equalize costs among everyone receiving service,” Schroeder said.

CAFD Board Chair Bob DeCaigny said it more bluntly in the September meeting: “For the last 10 years they’ve been getting a bargain,” he said about ambulance district residents.

It’s not only Thomson Township residents who are affected by the shift in tax burden: it’s all ambulance district residents, which also extends to some rural areas of St. Louis County.

Jeanne Vogt of Ehlers Financial presented the 2022 budget highlights and property tax levy information to the board — made up of both elected officials from member entities and local residents — at the September meeting.

“There had been discussion of raising the caps, but the legislature removed caps altogether,” Vogt told the board. “This is great news. Now you can function like any other (well, most of them) taxing authority, therefore when you’re looking at your budget then the communities are paying for what they actually use.”

The million dollar question, she said, is how to split the costs?

At the end of the day, Vogt did that by calculating how fire district calls broke down from 2011-2020 by percentage, which was roughly 80 percent ambulance, 20 percent fire. She identified what revenues and expenses are fire or EMS only. Then she calculated fire district (which provides both fire and EMS) and ambulance district tax rates separately.

Board members debated whether to put the entire ambulance district increase on next year’s taxes — in a “rip-the-bandaid-off'' approach — or phase it in over two years.

Jason Paulson, an elected Thomson Township supervisor who had served on the CAFD board for several years, objected to the large tax increase.

He and Scanlon board member Marshall Johnson recalled a deal that would phase-in the increase, an argument that eventually carried the day.

However, Paulson’s request to table the vote on the preliminary budget and tax levy was denied, even though the board didn’t know the estimated market value (EMV) percentage of its increases. Less than a month later, Paulson resigned from the board.

Overly large, township says

When the estimated proposed 2022 property tax statement hit mailboxes recently, even Thomson Township board chair Terry Hill was surprised by the amount of the increase. He has asked township attorney Dave Pritchett to look into any past agreements with CAFD.

“As a board, we’re disappointed for Thomson Township and its residents,” Hill told the Pine Knot News this week. “We want to be clear how we got to this point and what our options are, if any.”

Not on the 2022 proposed taxes was phase two of the CAFD increase for taxes due in 2023, which would increase the CAFD portion to $250 total on a $200,000 (median value) home in an ambulance district.

Schroeder confirmed that there was a prior agreement with Thomson Township — negotiated in late 2016 or early 2017 — to get their support for legislation to increase the ambulance district cap for CAFD to the .048 percent of EMV that every other district got. Getting from .019 to .048 would have been phased in over three years from 2018-2020, but it never passed.

Minnesota state representative Mike Sundin, who lives in Thomson Township, drafted that bill. He stressed that there were caps in his CAFD bill, versus the one passed by the legislature this spring that removed all caps for all fire districts.

“My proposal had reasonable limitations,” Sundin said. “The state, I guess, went a little overboard.”

While Sundin and Hill are disappointed, Paulson is furious.

He submitted a letter of resignation from the CAFD board in October, alleging that CAFD board members — many who reside in the fire district — voted to decrease their own tax burden at the expense of the ambulance district residents. The board is made up of residents and elected officials from other entities, but the board itself is unelected.

In his letter, Paulson resigned because he said he planned to work to move the boundaries of the Thomson Township ambulance service area to within the township, telling the Pine Knot he’d advocate for the township to start its own ambulance service. “Never again will an outside, unelected board have the ability to raise Thomson Township property taxes so substantially,” he wrote.

Hill said the increase would be discussed at the township meeting Thursday and probably future meetings. Additionally, any residents served by the fire district can share comments and concerns with the CAFD board at its Truth in Taxation meeting at 7 p.m. Thursday, Dec. 9 at the Scanlon Community Center.

Editor's note: This is a longer version of the story that ran in the print issue of the Dec. 3 Pine Knot, which had to be edited for length.