| In April, Mayor Carl Wilkes announced the appointment of an Exploratory Committee to research the possibility of consolidating fire services within Merriam with Johnson County Consolidated Fire District #2. The committee, composed of elected officials and appointed staff from the City of Merriam and Consolidated Fire District No. 2, met and researched topics including budget impact for both entities, service levels, response times, employee transition, service differences, equipment plans, public involvement and process of consolidation. The committee findings were released on Friday, May 11th in a report for review by City Council, Fire District board, employees and the public in their consideration of consolidation. To view a copy of the Exploratory Report, click here (PDF, 5.8MB file). - on July 17, 2007 the Exploratory Committee released a Supplemental Report that addresses the five items identified by the committee in the Exploratory Report as requiring additional attention. The supplement also provides staff recommendations and financial projections for both CFD2 and the Merriam Fire Department. To view a copy of the supplement report, click here (PDF, 359KB file). To view a copy of the July 23rd City Council Presentation (answering many FAQ's regarding consolidation of fire services), click here (PDF, 131KB). FREQUENTLY ASKED QUESTIONS - During the presentation to Council on July 23rd, frequently asked questions (FAQ) and comments were presented. The responses are repeated below with others added.
- How much would the City’s mill levy drop if we join the CFD2?
It is anticipated that the city’s mill rate would drop at least 10.26 mills, the equivalent of the anticipated CFD2 mill, thus leaving the total tax burden for 2009 the same or less than 2008 (21.181 mills). The ultimate mill levy decision is up to City Council each year during the budget process. The costs associated with the MFD are more than the drop in revenue resulting from a reduction of the mill levy. The remaining dollars allow for the funding of other city costs or a reduction in tax burden.
- Why do the reports talk of costs for fire services in terms of mill levy equivalences?
The reports use mill levy equivalence for two reasons. First, CFD2 receives a majority of their tax revenues as a result of their mill levy. CFD2 assesses a mill levy across the district at the current rate of 9.335. To accurately compare the tax burden, the costs associated with MFD operations are converted to mill levy equivalent.
Second, one of the few sources of revenue that Council has complete control over is the city’s mill levy. All other revenue sources are dependent on other factors most of which are outside Council’s control. For example, sales tax revenues which constitute over 50% of the city’s revenues are dependent on market trends, disposable income and economy. During budget discussions, this is the reason much emphasis is placed on the mill levy rate even though property tax revenues generated from the mill levy only constitute 16% of total city budget (2007).
- How much does this really save?
The cost savings are illustrated on the attached charts. The charts complement the analysis on pg. 7 of the Supplement Report and show cost savings from the perspective of the average household and the budget impact to the city in 2009.
- Will the Merriam fire station be closing?
No. CFD2 will lease the Merriam station through at least 2018. The current station location is ideal to provide fire services to Merriam and provide access to major traffic corridors.
- The projections are not realistic and the district will raise our taxes after consolidation.
Just as the City Council determines the city’s mill levy rate each year, the CFD2 Board determines tax levy with review by the Johnson County Board of Commissioners. While there are no guarantees, CFD2 staff and financial consultant estimate a mill levy rate of 10.26 will be sufficient through 2018 to provide fire services to the district. CFD2 mill levy rate has remained very stable during the last five years, as shown below, and the Fire Board is very aware and responsive to concerns of tax burden.
CFD2 mill levy:
2006 9.335
2005 9.419
2004 9.239
2003 9.237
2002 8.007
- What is the City going to do with the extra money?
Fire services provided by CFD2 will cost less than the MFD operations. The cost savings will result in less tax dollars in Merriam allocated to fire services.
The costs associated with the fire department exceed that of the drop in revenue resulting from a reduction of the mill levy (see question #1). The remaining dollars allow for the funding of the other city services or a reduction of tax burden. The approach and amount will be determined by the City Council during future budget years.
- Will the City be making annual payments to CFD2?
No. Under the current considerations, there would not be a transfer of cash or payments between the CFD2 and Merriam after the first year. The merger of employees, equipment and vehicles would take place in the beginning of 2008. The City would transfer to the district their share of the Motor Vehicle tax in 2009 due to mill levy adjustments. The district will lease the Merriam station and credit the city for the value. Merriam would contract with CFD2 in 2008 to provide fire services until the district is established in January 2009.
- Why not wait until others have merged? Why is Merriam the first one to do it?
Merriam would be the 10th municipality to join CFD2 for fire protection services. CFD2 has a long history of over 60 years in NE Johnson County.
- What will be the future mill-levy of the City?
The future mill levy is difficult to predict due to dependence on a variety of factors many of which are outside of the city’s control. Factors include state legislative actions, economy, property appraisals, council priorities, capital and maintenance needs and petroleum prices.
The City Council is set to approve the 2008 budget which holds the mill levy constant at 21.181. Each year the City Council sets the mill levy for the next year’s budget.
If consolidation is pursued, it is anticipated that the City would roll back the city’s mill levy at least 10.26 mills, the equivalent rate of the CFD2 district mill. The ultimate rate would be set by City Council after considering the priorities, costs and revenues.
- Why is the City merging the vehicles / equipment?
The merger of the equipment and vehicles is a part of the resolution of the funding gap identified in the Exploratory Report. If Merriam joins CFD2, the property tax revenue generated from 10.26 mills in Merriam is less than the funding needed to operate the Merriam consolidated station. The difference in revenue and expenditure for CFD2 is called the funding gap. The gap narrows in 2015 and by 2018 Merriam is a positive cash-flow for the district.
To narrow the gap in the early years, several strategies were examined including the transfer of all MFD equipment and vehicles. All the vehicles and equipment were paid for by Merriam taxpayers to provide fire protection in Merriam and the intended purpose will continue. The transfer of equipment is similar to what occurred when the Mission fire district merged with CFD2.
For additional information, contact the Merriam Finance & Administration Department at 913-322-5500. |
