Fire Territory Hearing Held

Read and analyze carefully--here is how the Times-Union reported last night's council meeting:

Fire Territory Hearing Held

Jennifer Peryam
Times-Union Staff Writer

Monday night at Warsaw city hall, a public meeting was held to discuss a proposed fire territory between Warsaw, Wayne Township and Winona Lake.

Paige Gregory, certified public accountant for Umbaugh & Associates, presented an overview of the advantages and the estimated impact to the taxing units in establishing the proposed fire territory.

Warsaw Mayor Ernie Wiggins said, in order to have the tax rate established for 2010, the establishing ordinances must be adopted prior to March 1 by Warsaw, Wayne Township and Winona Lake.

Winona Lake Town Council Tuesday will vote on whether it will join the fire territory. Wayne Township Advisory Board and Warsaw will make their decisions Feb. 17. If enacted, the ordinance will establish the Warsaw Fire Territory with Warsaw as the provider unit, Wayne Township as a unit and Winona Lake as a participating unit.

Gregory said advantages of establishing a fire territory would be that the territory would provide an alternate funding source; the fire protection costs would be spread over a larger tax base; the territory would allow for a uniform tax rate where all tax payers in the territory will pay the same rate for fire services; the territory would promote cooperation and communication; and would facilitate streamlined operations. Other advantages would be that the territory would reduce response times; improve efficiency and firefighter safety; reduce homeowner's insurance; and there would be a cost savings through pooling of resources.

Gregory said combined, all participating units are at the maximum levy. They are levying approximately $1.5 million for fire operating services: Warsaw, $1.35 million; Winona Lake, $15,500; and Wayne Township, $146,000. They are collecting an additional $1 million in additional revenue resources for total combined revenues of $2.5 million.

The estimated combined disbursements for fire services for 2009 is approximately $3.04 million that includes all of the participating units, Gregory said.

The current funding deficit is $576,000 based on receipts of $2.5 million and less disbursements of $3.36 million.

She said a fire territory would offer an option to bridge the gap between receipts and disbursements. She said current state law allows fire territories to request permission from the department of local government finance to levy property tax in the first year of operation.

Gregory said the fire territory spreads the cost of the fire services over a larger tax base because the assessed value is being used by the entire fire territory.

In 2009, it is estimated that taxpayers in Warsaw will pay a rate of $0.14 for fire services; Winona Lake residents will pay $0.78; and Wayne Township will pay $0.057 cents. The estimated tax rate of the fire territory for 2009 would be $0.15.

When the fire territory is put into place, all of the people in the entities will pay the same tax rate so it equalizes the rate, Gregory said. The property tax revenue generated from those three rates is $1.7 million.

The proposed fire territory's tax rate would be spread across the assessed value of the entire fire territory, which is approximately $1.7 billion.

If the tax rate is $0.048 and it's applied to the $1.7 billion, the fire territory would be able to generate approximately $2.5 million in property taxes.

Gregory said that is a 48 percent increase over the current property tax collection for fire services.

A person who has a $100,000 residential home value currently pays $35 for its tax bill that goes to fund fire services; Wayne Township residents at that home value currently pay $14; and Winona Lake residents at that home value currently pay $2 to fund fire services. If a fire territory took effect, all residents at the $100,000 home value in the fire territory would pay $37.

The estimated levy reductions for Warsaw would be $1.3 million; Winona Lake, a reduction of $15,500 eliminated from its maximum levy; and Wayne Township would have $301,500 in levy reductions.

The law permits the establishment of a fund to accumulate monies for the purchase of capital items related to fire protection such as equipment and housing for future capital projects.

Establishing a fire territory is an involved process that requires cooperation of two or more taxing units, Gregory said. All participating units must understand and concur with the establishing agreement. Participating units must be willing to evaluate both the negatives and positives to determine if a fire territory may benefit their communities.

"The fire territory allows taxing entities to come together, consolidate services, share resources, and provide the same level of fire protection without having to eliminate services," Gregory said.