Agenda Date: 05/13/2025
Subject:
Title
South Metro Fire Rescue Revenue Discussion
Body
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From: |
James L. Becklenberg, City Manager |
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Prepared by: |
Kathleen Osher, Deputy City Manager |
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Presentations: |
Jim Albee, Board Chair, South Metro Fire Rescue |
PURPOSE:
South Metro Fire Rescue is seeking Council feedback on options to address financial challenges due to rising costs and declining revenues.
LONG-TERM OUTCOME(S) SERVED:
Safe Community
DISCUSSION:
Recent property tax legislation, including HB24-1001, resulted in the reduction of revenues to special districts like South Metro Fire Rescue. At the same time, South Metro Fire and Rescue District (SMFRD) reports that the cost of equipment, supplies, facilities, apparatus, and other aspects of operating the fire district have increased. Together, SMFRD claims that those scenarios have resulted in the immediate need for a solution to the revenue/expenditure gap. Potential strategies SMFRD is considering include service reductions, an increase in property taxes, and the implementation of a sales tax. The board of directors has not decided on a specific solution and is seeking feedback from City Councils and the broader community.
Revenues are estimated to decline by about $16M in 2026 and then about $270M over the next 10 years. The revenue shortfall coupled with rising costs and future needs results in a shortfall of about $50M annually
BACKGROUND:
South Metro Fire Rescue is a full-service department providing fire and emergency medical response and community risk reduction services to residents and businesses with thirty stations across 287 square miles. SMFR has 800 personnel serving 571,500 residents. The number of residents in the SMFR service area is anticipated to grow to 595,000 by 2029. The SMFR current mill levy has been in place since 2004, then expanded through fire district consolidations such as Littleton in 2018.
When the City of Littleton joined the SMFRD, the City transferred all assets of the City’s Fire Department, including real property, all fire apparatus, and equipment. When the “Inclusion” (merger) ballot measure was approved, the residents of Littleton began paying SMFR’s district-wide mill-levy rate of 9.25 mills. Simultaneously, the City reduced its mill levy from 6.662 mills to 2.000 mills, with the difference roughly correlating to the amount of revenue received and spent by the City for the City’s fire department services. Therefore, the net increase in the cost for fire services to Littleton residents at the time was an increase in property taxes, citywide of approximately 4.6 mills. In terms of 2024 property values, this amount would be approximately $6 million.
Prior Actions or Discussions
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FISCAL IMPACTS:
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STAFF RECOMMENDATION:
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ALTERNATIVES:
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