Hundreds of Central Coventry Fire District residents joined employees, board members and Special Master Richard Land at Monday night's public meeting held at Coventry High School.
Land explained to the crowd that up until last week, he had intended on presenting budgetary information to be voted on by taxpayers, but as the much-anticipated meeting drew near, he decided that presenting his findings regarding the district's financial status would be the ultimate goal of the evening.
Fire District and Personnel
Land, accompanied by Chief Andrew Baynes and advisor John Murray, worked their way through a 53-slide presentation over the course of the nearly 4-hour meeting. The presentation (attached) began with a summary of the fire district's apparatus and station locations, response time goals, and diagrams showing how response times and coverage areas would be effected if specific stations or the entire district were shut down.
According to Land, a reduction of paid personnel would negatively affect emergency services and although the possibility of a volunteer staff does exist, the cost of insurance, shift compensation, training and outfitting volunteers would also need to be taken into consideration.
When touching upon the possibilities of closure, liquidation, merger or take-over, Land explained that it would not be practical to rely on neighboring districts for long-term coverage, and that all options would require other entities to get involved and contract/legal issues to be dealt with, making for a very long process, diminished resources and delayed emergency response.
During the financial portion of the meeting, Land referred to the $2 million in liabilities that the district has accrued. He explained that an assessment error had been made for CCFD in 2010 regarding a Commerce Park property, assessing it at $226,867,140 - $217,285,200 more than the Town of Coventry's assessment of $9,581,940.
He went on to explain that the error resulted in about $800,000 in revenue that was over-budgeted for and when the district was level funded the following two years, the problem was replicated twice, leaving a deficit of more than $2 million. Included in the problem was a 100% tax collection assumption, which Land explained to be quite rare, stating that the district's historical rate is closer to 95%.
"The error was made in the first year but was apparently not communicated well and was unfortunately carried over for two more years," said Land. "I can understand your frustration and anger about this. I can tell you what happened and I can tell you how I think we can work through it , but I cannot speak to why a board or anybody else made a decision not to do something about it."
When several taxpayers inquired about the accountability of the error, Land said that the issue will be looked into, but that the current focus is to be able to pass a budget to move the district forward.
Because of the error, the fiscal 2012 tax assessment was overstated by more than $217 million for commercial property, totaling $2,375,098,468 when combining the amount with residential and tangible assessments.
Going forward, the adjusted fiscal 2013 tax roll has been adjusted to total $2,165,1098,480. Had the error not occurred, fiscal 2012 tax rates would have been (per $1,000 value) $2.29 for residential, $4.58 for commercial and $2.29 for tangible.
A 2012 adjusted single tier tax rate was also presented, showing rates without the over-assessment and using a single class of property that comes to $2.62 per $1,000 of value. This number reflects a 44% increase for residential and tangible taxes and a 28% decrease for commercial. (See attached Slide #36 for tax rate examples.)
Land explained that the fire district's charter has never legally allowed for multi-tiered taxation, essentially meaning that an illegal tax rate has been used up until now. Residential taxpayers who paid less than what they would have had to with the proper taxation will not be billed for the difference, but the issue of whether or not commercial property owners will be reimbursed for what they "overpaid" may have to be presented to the court in the future.
When a resident asked if receivership proceedings would eliminate the possibility of taxpayer reimbursement, Land said that it would be a possibility, but is something that will be looked into. Also being determined is if the fire district has "errors and omissions" insurance and if its charter can be amended through legislation to legally allow for a tiered tax rate going forward.
2013 Budget Going Forward (Slide #39)
Land explained that if the preliminary fiscal 2013 budget had been approved, it would have resulted in a loss of approximately $361,000. The revised budget would show a slight surplus, but at a significantly higher revenue for taxes.
"I want you folks to understand that when we do present the budget that we're asking you to vote on - and it won't be tonight because I want you to have time to absorb this information - we're looking at a significant increase in your taxes, there's no question about it," said Land.
He also stressed that CCFD firefighters appear willing to discuss contract modifications to try and lessen the burden on taxpayers but that all parties need to be willing to sacrifice in order to resolve the problem.
"We've had two months with this information and I have demonstrated that it's not easy, that problems run deep and that every time we turn a corner, we see new problems," said Land. "The information we have right now is not necessarily perfect, but we're doing the best with what we've got and will continue to work on it."
An upcoming meeting likely to be held in February will hopefully afford Land the opportunity to present a budget to be voted on by taxpayers. The goal of an approved budget would be to get the district through the upcoming fiscal year and allow for a long-term plan to be devised.
"I want to use the right process to do this because I don't want you to make this decision in a vacuum," said Land as he concluded the meeting. "We will provide more information in the coming weeks as we continue to fine tune this and I think by the next meeting we will have a budget for you to consider."