Paradise Valley fire-safety fee will not be reduced in new fiscal year

The Phoenix Fire Department is pursuing cost increases to services rendered to the Town of Paradise Valley, which is being fueled by unfunded public safety pension liability, that will leave the fire-safety fee flat this upcoming fiscal year. (Submitted photo)

Town of Paradise Valley residents won’t see a change in their fire-safety fee this upcoming fiscal year.

Paradise Valley Town Council deliberated the issue Thursday, April 27 at Town Hall, 6401 E. Lincoln Drive, where city leaders discussed the possibility of offering residents a 5 percent reduction in the fire-safety fee, which appeases tenets of a 2006 intergovernmental agreement with the city of Phoenix.

But after discussing the pros and cons of possibly lowering the fees 5 or even 10 percent, the council opted to leave the current fees in place, at least for now.

The Phoenix Fire Department provides emergency coverage to the Town of Paradise Valley.
Paradise Valley Town Council in November 2006 voted unanimously to institute a fee structure — a computation based on the amount of dwelling structures within town limits rather than the actual square footage of those structures. Residents began paying the fees in January 2013.

The proposed fee schedule states, among other things, any residential home less than 3,000 square feet will pay a monthly fee of $30 while a home greater than 6,000 square feet will pay $50 a month.

Homeowners who own property in between those sizes, which town officials say is about 60 percent of the community’s 5,600 homes, will pay a fee of $40, the fee schedule states.

All homeowners must contract for fire protection with a licensed provider approved by the Town of Paradise Valley — in this case, the Phoenix Fire Department — or they will be in violation of town code, Town Attorney Andrew Miller told the Independent in 2006.

Dawn Marie Buckland

“We have been planning to present to council a recommendation to reduce the fire service fee by 10 percent based on our projections,” said Dawn Marie Buckland, the town’s director of administration and government affairs.

“Because they (the city of Phoenix) are also working though a very significant unfunded pension liability — their costs are actually going up by 12.5 percent. This is simply a 5 percent reduction in ‘18 and holding that rate flat for the years that follow.”

However, offering that discount to residents would have resulted in a $165,863 subsidy from the General Fund, which is used to pay for the day-to-day operations at the municipality.

With the 5 percent reduction, the town’s General Fund could be required to provide more than $300,000 by fiscal year 2022-23 to cover costs of the Phoenix Fire Department IGA.

Ms. Buckland points out if no fee reduction were to occur, the General Fund subsidy would be about $24,000 this upcoming fiscal year and by 2023 that number will swell to $185,000.

The tentative Paradise Valley municipal budget sits at a total amount of about $52 million while the town’s General Fund is pegged at $29.7 million.

The Town of Paradise Valley — like all other Arizona cities and towns — is facing its own public pension dilemma as the municipality is attacking its liability at the Public Safety Pension Retirement System and is expected to allocate a $5 million payment to that fund in the first of a three-year pay-down model that begins this July.

Town leaders say the effort will save the municipality $11 million over the life of the liability through the defined contribution model at PSPRS for retired public safety employees.

Paradise Valley Mayor Michael Collins says the local fire-safety fee has always been a moving target.

Michael Collins

“It’s unfortunate we aren’t able to do that 10 percent reduction,” he said at the onset of the work session discussion. “We did always anticipate that our fire service costs were a variable — we knew that it was very likely that those costs may increase.”

Mayor Collins says resident chatter has surrounded the fire-safety fee levels in recent weeks.

The mayor says residents question the need for a fire-safety fee when they see the town spending money on other projects.

Paradise Valley Councilwoman Julie Pace says a reduction in the fire service fee — one that would result in a few dollars of savings for residents — is not worth the hundreds of thousands needed to subsidize the fee structure over the next several years.

“I like the concept of giving the 10 percent back when we could, but I am little bit uncomfortable with the feel-good moment for one year giving the 5 percent back and the very next year it is going into a deficit for hundreds of thousands of dollars,” she said.

“I know we are fiscally conservative and I know we love to give money back but I have a hard time voting for something that is going to cause us to go into a deficit with that fund.”

Ms. Buckland confirms “we will be in a structural deficit starting next year” with or without the 5 percent reduction.

Councilman Scott Moore aligned with Councilwoman Pace on this issue.

“I’m with Julie on this: leaving the fee where it is, I don’t think that will cause heartburn for our residents,” he said. “I would not want to see the fee go up but I am in support at leaving it here given the possibility for increased costs.”

Mayor Collins says the fee structure will remain in place for fiscal year 2017-18.

“We will not have a five percent reduction this year but it is also the majority feeling that we would not pursue an increase in future years,” he said.

Northeast Valley Managing Editor Terrance Thornton can be contacted at tthornton@newszap.com

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