All is quiet on fire service taxes front

What a difference a year makes. Last December, nearly two dozen upset Thomson Township residents attended the Cloquet Area Fire District truth-in-taxation hearing, many of them to address the board about a more than 300-percent increase in their proposed ambulance taxes.

This month’s fire district truth-in-taxation hearing saw only four audience members, with only one — former CAFD board member Eric Rish — from Thomson Township. While Rish used the Dec. 8 meeting to ask several questions about how other communities supplement coverage of ambulance costs, no one questioned the numbers presented at the hearing, or the fact that the ambulance levy will roughly double from 2022 to 2023.

The only other question came from Cloquet’s Del Prevost, who asked if property owners pay the same for ambulance service regardless of whether they also receive fire services from CAFD. They do, although the actual amount varies depending on the value of the property.

On Wednesday, Dec. 21, CAFD board members unanimously approved a total tax levy of roughly $3.64 million, with fire district members (who also receive ambulance service) to pay $2.66 million and ambulance-district-only residents to pay $860,440. An additional ambulance bond payment of $118,000 is paid by everyone living in the ambulance primary service area. The remainder of the funding comes from ambulance billing for individual calls, a contract for fire service with the Fond du Lac Band and grants.

The CAFD budget for 2023 was set at nearly $6 million — up from almost $5.4 million in 2022. The increases included costs related to the purchase of a new fire engine (due to arrive later in January) and increased personnel costs: including cost of living increases, benefits and higher insurance prices, plus full year with three additional staff who came on board in July 2022. There was good news on the revenue side, as Medicare and Medicaid reimbursements will go up by 8.7 percent, which helped lower the levy from the proposal in September.

Fire chief Jesse Buhs said fire district member communities will see “a teeter totter” effect on their taxes, with ambulance costs going up, and fire going down.

In terms of percentages, property owners living in an ambulance-only district would see their portion of fire district taxes go up by 100 percent, while those who receive both fire and ambulance would see the ambulance increase offset by a decrease in fire costs for a total increase of 7.6 percent, according to documents presented Dec. 8.

The impact of the levy increase will vary depending on what services a property owner receives from the fire district. A home valued at $200,000 will see its ambulance levy increase from $45 a year to $90 a year. The fire levy for the same home would decrease slightly, from $387 in 2022 to $375 in 2023.

Buhs was surprised to see only four people at this year’s truth-in-taxation hearing, and no one at Wednesday’s vote on the budget and the tax levy.

“I think the difference is we’ve been very transparent and open this year, and we hired Fitch & Associates to explain how we are accounting for the differences [in fire and ambulance costs]. ... We’ve been communicating a lot more with the townships,” Buhs said.

“The goal is to make sure the community is satisfied with the services we provide,” he said.

Getting here

Following last year’s fierce objections to what felt like an arbitrary shift of costs between fire and ambulance services for some taxpayers, consultant Bruce Moeller helped the fire district figure out a “rational and transparent process” for determining cost allocation.

A retired fire chief and a senior consultant for the Missouri consulting firm Fitch & Associates, Moeller considered potential demand in the community (risk), plus the actual demand for services, or how many, where and what type of calls were made. He also looked at workload (time on task) for fire or ambulance calls; the population and what percentages are covered by what services, and property values within those different areas.

The report shows ambulance calls took up 14 percent of staff time and fire calls took up 4 percent, leaving 82 percent of time that staff aren’t actively responding to a situation.

Moeller recommended a 50/50 split of costs for instances where it wasn’t clear if it was a fire or ambulance expense, and also in the case of staff time not spent on call.

“Because you don’t know what the next call will be, and the men and women of CAFD can respond to both,” he said.

Overall, Moeller recommended a cost allocation of roughly 60 percent for ambulance services and 40 percent for fire services.

The other option for dividing staff time not spent on calls would have been to apply the percentage of time on task, which he said would have shifted the burden significantly toward increasing ambulance costs, and recommended against it. Moeller noted that 84 percent of all calls over the past three years were related to medical emergencies, which generally took close to 90 minutes to complete, versus an average of one hour for fire-related incidents. That’s fairly typical, he said, adding that 70-80 percent of emergency calls around the country are medical versus fire.

Service shift

Moeller said the Cloquet Area Fire District isn’t the only place struggling with increased costs and changes to service demands, pointing out that over the past three decades in the U.S., the incidence of structure fires has been reduced by almost 50 percent, while response to emergency medical incidents run by fire departments has increased 300 percent.

“There’s been a shift in the community and what people need,” Moeller said. “The cost allocation simply aligns the demands of the community and the way that you fund it on an equal basis. ... People benefiting from having the service available and those people benefiting from actually receiving the service pay their proportional costs.”

The shift in tax levy ends what had been an excessive burden on those paying for fire services, because they have been supplementing an ambulance levy that fell far short of what it costs since 2009, due to legislative constraints that were lifted in 2022.

Results of a Thomson Township study on ambulance service options hasn’t been released. The township hasn’t appointed a representative to the CAFD board since Jason Paulson stepped down in August. No board members attended the CAFD meetings this month.