Let's Keep Our Money!

In last week’s chat I voiced a few concerns about the movement to consolidate fire districts within El Dorado County and the potential financial impact on El Dorado Hills.  As mentioned, the Rescue Fire Protection District Board of Directors and our fire board have just voted to explore the merits of EDH Fire annexing Rescue Fire.  Of course it will take some time for both staffs to evaluate all of the issues surrounding this annexation, develop a plan, get their respective board’s approval, EDC Board of Supervisors approval and then LAFCO approval to proceed, but just like the Latrobe Fire annexation, the wheels are set in motion.

I first have to ask the Rescue community:  why support an annexation if there is no elimination of the two fire service special assessments voted for previously?  Similar to Latrobe, Rescue property owners pay special assessments to augment ad valorem property tax fire funding because of their low AB 8 rate.  However, now that the AB 8 rate can be increased as part of the annexation to EDH Fire, why not ask to have the special assessments eliminated as a condition of the annexation?  This takes the form of double taxation if not – paying special assessments for fire service and now fire receiving substantially more property tax funding because of annexation. Rescue Fire receives over $365,000 in special assessments annually.  Would Rescue vote for these special assessments now knowing their AB 8 rate is lifted to a level that would provide the fire service they always wanted?  I think not.

It doesn’t take a CPA to know that migrating to a fully paid firefighter workforce in these outlying areas has a significant financial impact.  Rescue is however a fully paid 24/7/365 firefighter workforce but others like Latrobe are not.  Regardless, although initial annexation staffing projections might mitigate some financial burdens over the first five years, they will begin to become materially significant down the road as increased coverage, OT, retirements and higher salaries plus pension costs start to take hold. Just ask El Dorado County Fire District why they don’t annex anyone into their district.  Unless someone can tell me that these outlying areas will grow in proportion to El Dorado Hills or expense management follows the actual property value growth trajectory in those areas, then EDH is the financial loser in these acquisitions.

It would seem after a Rescue annexation, possibly Diamond Springs/El Dorado down the road (yes that has been brought up too) and Garden Valley not possibly liking a Georgetown marriage, that we could truly become the El Dorado Hills “County” Water District as our actual founding name so states.  It’s also fascinating that the EDC Board of Supervisors is willing to match our 17% AB 8 rate for others, and possibly approve even higher, even when they have a financial crisis of their own.  Truth be told, our funding rate was first established based on the district providing water storage, distribution and water rights to the community and “ancillary” fire protection services (did you notice how our founding name above only includes “water” and not “fire”). 

So, once the district realized they could pawn off the significant expenses of providing water services to EID, all of the funds were freed for just fire services.  Since the funding rate couldn’t be modified downward without the dissolution of the district, EDH went along with all of the money flowing back to the community for fire services alone.  Forget now that we pay EID substantial fees for water and sewer service (geez, did I mentioned anything about double taxation before), throw in the meteoric growth and rise in property values in EDH, and you have one of the best paid fire departments in California.  Should these mostly rural fire districts join this lucrative compensation party?  Seriously, how could this be good for our own firefighters allowing others to take a piece of our financial pie?

Not to use fear inappropriately but it certainly is conceivable that all annexed fire district voters could readily support their own slate of candidates for our fire board at a future election, and take majority control.  I seriously doubt El Dorado Hills wants to wake up one morning and find their substantial fire district cash reserve funds being used to build out new stations in Latrobe and Rescue as well as replace all of their aging fire engines and apparatus to boot.

If we want to be serious about doing what’s right for El Dorado Hills, then let’s explore the merits of consolidating with our own CSD (they have all the governmental powers to provide fire, police and emergency services to our community) and let our tax dollars “subsidize” within the El Dorado Hills community, not beyond.  Frankly, let’s just stick with shared contracts for services with these other fire districts and stop the annexation empire build!