Outrage grows over tax increase

The fact that Cloquet Area Fire District taxpayers have been paying more than their share of ambulance expenses for over a decade didn't pacify Thomson Township residents Thursday during the CAFD truth-in-taxation hearing.

Close to two dozen people attended the CAFD hearing, nearly all of them township residents, most of them shocked and angry that their proposed ambulance district taxes showed a more than threefold increase from the previous year.

"I look at my proposed tax statement and I see an increase of 322 percent," said Esko's Jim Nynas. "That's a huge increase. I do not know of any governmental body that has ever passed on a levy increase of that nature ... And I know that's only half of it," he added, referring to plans to increase taxes in the ambulance district by a similar amount for 2023. At the heart of the issue is recouping costs for service.

In 2009, the state legislature didn't allow the state's first and only fire district to tax property owners in the ambulance public service area. In 2013, CAFD got funding language for EMS added, but the legislature put in a cap of 0.019 percent of estimated market value for CAFD, even though every other EMS district automatically got a cap of 0.048 percent.

Earlier this year - with an eye toward encouraging the formation of more combined fire districts like Cloquet's - the state legislature removed all levy caps for any fire district starting in 2022. Most CAFD board members jumped at the chance to right-size payments.

"For the first time, the district can really allocate cost of services as they really are, as opposed to being limited by this cap that was in place," explained Jeanne Vogt of Ehlers Public Finance Advisors, who was hired to calculate the ambulance and fire costs for CAFD this year.

Vogt ultimately recommended an increase of 0.132 percent of estimated market value (EMV) for ambulance district property owners, almost three times the 0.048 percent that CAFD had fought for in the past. Spread out over two years, that put the first year (2022) at 0.075 of EMV and the second year at 0.132 percent of EMV.

Vogt's most recent numbers put the dollar impact on a $200,000 home at an increase of $81 the first year for ambulance only. The same size home receiving both fire and EMS would see a decrease of $103 for 2022. Property owners in the fire district itself still pay higher overall taxes to CAFD - at $289 in 2022 for fire plus EMS, vs. $126 for EMS only - if the board approves the revised budget and levy allocations.

"I know you don't like to hear this news for people that have taxes going up, but the reality of the matter is: from the district's inception in 2009 to this next year, you've been getting a bargain," CAFD board chairman Bob DeCaigny told the crowd. "Quite frankly, a lot of those services have been on the backs of other taxpayers and all that is going to be equalized. I know that's a tough pill to swallow."

A former Carlton County board member and Cloquet city councilor, Nynas praised the CAFD service, but expressed concern over the direction of the fire district. "I would hate to see the actions of this group have a negative effect on the services that we're all currently experiencing," he said. "That's what I'm afraid will happen. We've got a good thing going, we just have to take care of the finances in a fair and equitable manner."

Outrage

Many of the citizen comments last week centered on the massive jump in the cost of the ambulance service and suggestions for calculating the tax levy differently or escaping from the ambulance primary service area (PSA) altogether.

Ted Klein, a Culver Township resident, wanted the nursing homes and assisted living facilities in his township to pay a larger share of the costs, since they are the primary users of the ambulance service. He also wanted to know why property owners have to pay for the ambulance service through taxes, when there is a charge for using the ambulance.

Vogt suggested he think of it like insurance. "You may never need them, but if you call them, they will be there," she said.

"That sounds like double dipping," he said.

"It's not double dipping because it is a balanced budget," she said. "The ambulance revenues are factored in as part of the budget but they may not cover 100 percent of those costs."

Medicare and Medicare pay half- to two-thirds of actual costs for service in many cases, and private insurance often follows that trend, battalion chief Jesse Buhs told the crowd.

Others suggested the fire district calculate how much money it receives in insurance payments each year from each area it serves and bill taxpayers for the difference.

It doesn't work that way. "All of the ambulance revenues just go back into the pot to offset the ambulance costs," Buhs said, explaining that a homeowner in Culver Township pays the same percentage of taxes as one in Thomson Township.

Buhs tried to explain the costs that go into having ambulance crews offering advanced life support ready when they're needed, with the proper equipment and extensive training versus the basic life support offered in Carlton, for example. "There is a significant cost to readiness," he said.

The number of ambulance calls is ever increasing, Buhs said, so costs are rising. Over the past 10 years, there were roughly 27,000 total calls. Looking forward 10 years, they expect closer to 33,000 calls. "We have to budget and be prepared for," he said.

Rebellion

More than one person pushed for the CAFD board to let them out of the ambulance PSA, set by the state's Emergency Medical Services Regulatory Board.

The PSA issue is complicated, and not an appropriate topic for the truth-in-taxation hearing, DeCaigny reminded citizens more than once.

Thomson Township supervisor Jason Paulson - who resigned from the CAFD board in October over the increases - asked the board to either reduce its levy increase to the ambulance district residents to 0.048 percent as discussed in years past or release the PSA to Thomson Township "so we may establish our own service and the township members may be able to hold elected officials accountable for the taxes that are levied."

Thomson Township supervisor Tony Compo, a longtime Esko volunteer firefighter, accused CAFD of using the ambulance district to subsidize the fire service. DeCaigny responded that people should study the budget that was available there, as it contained accurate information.

After more discussion of costs, Compo asked to read the resolution of "non-support" for the CAFD tax levy increase that the township board passed during its meeting Dec. 2. DeCaigny said no, so an upset Compo handed out copies.

Esko resident and Carlton County commissioner Marv Bodie wanted to know if the CAFD model of fire and ambulance was the most expensive in northeast Minnesota - the board didn't know - and he also asked if citizens will be able to vote in a bond referendum for the proposed new Station No. 1 building.

Paulson brought up the fire district plans for the $14 million station and other capital plan expenses adding up to $21 million total. "You will levy to pay for that on top of all this," Paulson said.

DeCaigny responded, saying they do have plans, but they are still only plans. The district is trying to get legislation passed that would pay half the costs of a new fire station in Cloquet/Scanlon.

"We can throw numbers around all day," DeCaigny said. "But the fact of the matter remains, this fire district is providing an essential public safety service. We, as board members, as volunteers, are doing our best to do it as economically as possible."

Former CAFD board member Eric Rish said Thomson residents should have been at meetings sooner. He is opposed to starting a new ambulance service and likes the service they get from CAFD, but ...

"I would implore that they do whatever they can between now and the 15th to take one last look at this and understand they're in it for hundreds of percent increase," he said.

They are doing that.

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Board tables levy; chair resigns

The Cloquet Area Fire District Board lost its leader on Tuesday, Dec. 14, then delayed a final vote on the 2022 budget and tax levy for a week during a meeting Wednesday, Dec. 15.

Board member Sheila Lamb motioned to table and the vote passed 4-1, with Lamb, Gary Harms, Bruce Blacketter and Linda Way voting yes and Marshall Johnson the lone "nay" vote.

Vice chair Way ran Wednesday's meeting, following the resignation of CAFD board chair Bob DeCaigny the day before. DeCaigny told the Pine Knot News he got a call Tuesday from Cloquet city administrator Tim Peterson, who said the council was requesting DeCaigny resign due to complaints received. DeCaigny had served on the CAFD board since its inception, except for a one-term break when the council didn't reappoint him in 2017.

"I am extremely disappointed neither the Council or Tim asked for my side of the story to address the specific complaints or allowed me a chance to correct whatever was perceived as issues," he said.

The timing couldn't be worse, DeCaigny said. The board was already down by two members: the Carlton County rep - usually from Thomson Township - and a St. Louis County rep, and the CAFD fire chief recently resigned after an investigation.

"At a time when the District needs all hands on deck more than ever, more prudence was warranted on the City's part," DeCaigny said.

The CAFD finance committee will meet Monday to try to reduce the budget and levy even more. The vote on the final budget and levy numbers was set for 6 p.m. Wednesday, Dec. 22 at the Scanlon Community Center.

-Jana Peterson / Pine Knot News