Fire consolidation, service charge go before city council

Discrepancies over asset transfers seem to be ironed out, so the McMinnville City Council will try again to push forward plans to consolidate the city and rural fire districts at its meeting tonight at Kent Taylor Civic Hall.

Two big issues were settled recently, as the city council agreed last month to include the First Street fire station and property in the transfer to a newly formed McMinnville Fire District, and the rural fire district board voted last week to keep approximately $800,000 in reserve funds in the transfer.

The council will vote tonight to petition the Yamhill County Board of Commissioners to place the measure on the ballot in 2023, eliminating the need for a public petitioning process, according to city documents.

Although ballot measures typically require gathering 1,000 signatures from voters, city council can skip that step by asking the county commission for an order of formation, which would initiate the process for adding a measure to the May 17 election.

Consolidation requires a ballot measure because it will establish a new tax rate and service area. A resolution, county formation order, and feasibility study for moving the issue to the ballot are preferred steps over the citizen petition process, according to the staff report.

“This will provide more time for educating the citizens rather than using the lengthy citizens’ petition process,” the report states.

The council planned to approve the petition at its Sept. 27 meeting but was sidetracked over the issue of the fire station. The city mulled a total transfer, a 10-year lease or a 100-year lease for the facility, which was built in 1986 and will need nearly $2 million in maintenance over the next 10 years.

Councilor Adam Garvin successfully argued that the station and property should be included in the transfer to give the new district a real asset that could potentially be used to fund future substations. Changing plans at the “eleventh hour” isn’t in the best interest of the new district, he said.

Garvin was also on hand at last week’s Rural Fire District Board meeting to make a similar argument over what to do with approximately $800,000 in rural reserve funds.

Plans call for the transfer of the funds to the new district to be earmarked for the construction of new substations.

Board member Phil Frischmuth argued the money should stay with the rural community and proposed allocating $400,000 as a credit for residents and giving the rest to the new district.

Board chair Steve Leonard said the plan has always been to use the money for the construction of substations, dating back to 2018 when the board decided to save extra tax revenue for future projects instead of lowering the tax rate.

Wording was added to the resolution that the funds be exclusively used for a substation for rural residents and Frischmuth’s plan to reimburse residents would be a “logistical nightmare,” Leonard argued.

“The intent of the new district and its tax rate is to improve fire services to the area,” he said. “If we divert those funds away from a substation, we will delay its construction.”

Garvin made a similar push to “stick to the game plan” and not make changes that could potentially delay the consolidation from May to a likely issue-laden November ballot. The city did their part by including the fire station and there is no need to play a “tit for tat scorecard game” when both sides should be concerned about the sustainability of the new district, Garvin said.

“To be frank, the city block of this building is worth a lot more than your reserve fund,” he told Frischmuth.

The rural board voted 4-1 to keep the full $800,000 allocated for rural substations, with Frischmuth opposed.

Also at the council meeting:

The council will decide on the rate for the city service charge that was approved in September to address a $1.8 million shortfall in the city’s general fund and ensure funding for city services in the future.

City staff will recommend a rate of $13 a month for single family residences (with discounts for multi-family units and low income residents), which will generate $1.1 million for the general fund in the first six months.

Due to a delay in implementing the charge, the $1.1 million will be approximately $500,000 less than forecasted in the budget, so council will also be given the option to implement a higher fee to make up the difference.

City documents indicate 9,361 residents would pay the full fee, while approximately 3,000 in multi-family dwellings would receive a 25% discount and 1,000 low income residents would receive a 90% discount.