By Frankie Freeman
MENLO PARK, California - Despite the economic downturn, revenue from property taxes, which accounts for 92 per cent of Menlo Park Fire District’s operating budget, has grown by 3 per cent this year and is estimated to grow next year, albeit only by $233,200 - just under 1 per cent.
The value of the 10,072 parcels in Menlo Park has risen by 3.98 per cent and the 2,622 parcels in Atherton, 6.58 per cent.
The effects of Proposition 13 may be a factor in the apparent increase in value of Menlo Park and Atherton properties, as valuable properties change hands, calling for a tax reassessment. “The majority of houses in the district are not assessed at market value,” says John Wurdinger, president of Menlo Park Firefighters’ Association. “However, when they do come on the market, we are sometimes seeing a ten-fold increase in tax revenue for that property.”
Although stable, this year’s district budget hardly reflects a booming economy. The increase in property tax revenue has been capped at 3 per cent, a low rate compared to previous years; the growth rate of secured property taxes in the district averaged 9.2 per annually for the past five years. Last year, the growth rate dropped 2.2 per cent to 7 per cent, reflecting instability in the wider economy.
According to Wurdinger, this stability is, in part, down to the affluence of parts of the district, which covers Menlo Park, Atherton, East Palo Alto as well as unincorporated land. “Menlo Park and Atherton are very desirable places to live,” he says. “Housing in these areas is holding its value better than in other areas of the country.”
In the wider Menlo Park city budget, increasing revenues from property and hotel taxes are weighed against losses in the city’s sales tax revenue streams, which are down $480,000. Within the city budget, property taxes make up 33 per cent of revenue, while sales tax accounts for 18 per cent. Funding for the police department, which account for the largest chunk of city expenditures (37 per cent) has risen 5 per cent this fiscal year, as opposed to a 13 per cent decrease in funding for community development
In between that high and low, expenditures on firefighter training in the Menlo Park Fire District have been cut by 11.8 per cent this year, a decrease of $240,700. Similarly, fire prevention expenditures have dipped 6.4 per cent, dropping from $3.1 million to just under $2.9 million.
A dark cloud also looms on the horizon in the form of State of California’s potential request for a loan of 8 per cent of the fire district’s revenue.
On July 28 this year, Governor Schwarzenegger approved the suspension of Proposition 1A, a measure that protected the property tax revenue of local governments. If the state decides to request a loan from the district, it will face a revenue loss of between $2 million and $2.5 million for this fiscal year.
The problem with the suspension of Proposition 1A, Wurdinger says, is not so much the loss of revenue – the state will pay the district back, with interest – but the district’s lack of prior warning. “We are fairly confident that the state will take the loan, but we don’t know when. It is an unknown.”
The most notable expenditure increase on this year’s budget is for firefighter overtime pay. Whereas, in FY 2008-2009, just over $1.6 million was allotted for overtime, this year, that figure has risen by 38 per cent to $2.3 million. At the same time, expenses for staff salaries have declined by 3 per cent from almost $13 million to just under $12.6 million.
According to Wurdinger, this figure reflects Menlo Park’s status as a Special Fire District, a classification that demands that the district attend federal deployments as well as serving the local area. “When our guys go out on a federal deployment – for instance, to the hurricanes the past two years – if they’re gone for two weeks, they’ll be working 14 days more than they usually would in a 21 day period. Those 14 days will get paid as overtime.”
Menlo Park Fire District also has contracts with the United States Forest Service as well as Calfire, requiring them to provide services in Southern California during periods of wildfires.
“What doesn’t get included in the budget summaries,” says Wurdinger, “is that, while our firefighters are on deployment, working overtime, the state must reimburse our stations for their loss of staff and engines, running up costs further.”
In order to save money, Wurdinger suggests that Menlo Park consider moving to a “constant staffing” model – currently in place in Fremont and Contra Costa County - in which existing staff members work overtime to cover the leave of their colleagues, saving the district from employing extra members of staff.
“To run a battalion, you need a staff of 23 firefighters, captains and engineers available at any one time,” says Burdinger. “The easiest way to achieve this is to have 69 staff spread over three shifts.”
However, since staff are entitled to vacations and other leave, cover is often needed. In the past, the fire district has addressed this by employing extra staff, which pushes up costs for salaries and benefits. “Last year, we had around 29 firefighters working per shift, which is far too many,” says Burdinger. “It is fiscally cheaper to allow existing staff to work overtime than to employ a new member of staff entirely.”
Following several years of tension between the MPFFA and the Menlo Park Fire Protection District board - often centering on issues of firefighter pay and benefits - Burdinger expresses hope for future relations between the two bodies. Since the Nov. 3 board election, “things are definitely getting better,” he says.
With improved communication, Wurdinger hopes that the two sides can work towards a solution to their past differences. “It is in our interests to support a fiscally healthy district,” he says. “An unsustainably budget would affect the security of our salaries and pensions. I don’t want to find out in twenty years time that there isn’t enough money left to pay my pension.”
