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Extracted from Consolidated Report

This investigation was originally published as part of a larger consolidated report containing multiple investigations. View the consolidated PDF for the complete document.

Placer County Grand Jury • 2012-2013

Newcastle Fire Protection District, Fire Station & Finances

32 pages
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Note: Missing finding numbers detected: F7, F10

Findings 10 findings

F1 Page 89
Measure F was intended to (among several items) provide firefighter benefits. However, this did not occur until the March 2012 passage of Measure B.
F2 Page 89
The language of Measure F is unclear in some situations and there is a need for clarification by the NFPD. Areas of Measure F requiring clarification include: 70 2012 - 2013 Placer Grand Maximum tax rates There is confusion as to whether to apply a $100 maximum tax (plus CPI adjustments) to all parcels. For example, in 2012 for the first time a consultant was used to calculate tax rolls. Their initial tax roll submittal to the County Auditor erroneously applied the $100 maximum limit to all parcels. a.) Businesses on residential properties There are parcels on which there are both businesses and residences which are only charged the single unit parcel rate. There is confusion as to whether if a residential property also contains a separate business (i.e. welding shop, boarding stable, etc) it should be assessed as both residential and business. b.) Application of Improved Parcel Acreage Rate on parcels over 4.7 acres The NFPD was inconsistent throughout the years in charging the Improved Parcel Acreage Rate for Business unit parcels and for multiple-family unit parcels. In reviewing the past levies, the Grand Jury found the District in some cases charged extra for acreage over the average of 4.7 acres for multiple-family unit parcels. c.) Business units In the Business category there has been a significant change in tax levies since 2006/2007. In 2006/2007 some parcels which had multiple businesses were charged for each business. The Grand Jury noted major drops in tax levies for those same parcels in subsequent years and that currently the parcels are only being charged for each building that contain businesses, not for each business when there are two or more businesses in a building. d.) Exemptions Although Section XIII addresses how to request an exemption, criteria (if any) to be used in exempting properties from Measure F taxes are not addressed. However, there have been several exemptions which have been granted. At least one homeowner's association's common area consisting of several acres has been classified as exempt even though it is entitled to fire protection. Other properties 71 2012 - 2013 Placer Grand have been exempted because they are considered "undevelopable" or too small. In addition, there are examples of businesses on "exempt" parcels that have not been assessed a Measure F tax levy and other examples of businesses on "exempt" parcels that are being assessed the Measure F tax. e.) Use of Assessor's Records Updated Assessor records are not available by March 1st. If these records are used for determining the improvement values of structures for the purposes of establishing whether a parcel is unimproved or improved the records may be as much as a year out of date.
F3 Page 91
There are no written guidelines or Policies and Procedures on how to apply Measure F. Personnel charged with calculating assessments have changed throughout the years. Accordingly, interpretation of Measure F has been inconsistent.
F4 Page 91
Different parcel owners, when challenging their assessments, found difficulty in getting answers as to why their particular assessments have changed from year to year, and how to appeal their charges. A few citizens complained about being "bounced around" from NFPD to the Assessor, Auditor and to the Tax Collector. In the property tax bill from the Tax Collector, next to the Direct Charge line item, there is a phone number provided to call with regards to questions about that Direct Charge. In smaller districts such as NFPD, it is very easy for the person most knowledgeable in answering those types of questions not to be available. Also, if there is no written guideline, that person may not give a well thought out or consistent response.
F5 Page 91
The 2012 Board approved a Resolution for the 2012-2013 tax levy for Measure F before the levy was ready for submittal. The tax roll was later corrected prior to the tax bill being sent out.
F6 Page 91
The NFPD does not have checks and balances to assure accuracy of its tax levies. 72 2012 - 2013 Placer Grand Conclusion The Newcastle Measure F, passed in 1997 by the voters of the NFPD, is not clearly written. Based on our review of the ballot language and a sampling of special taxes, the Grand Jury encountered contradictions, uncertainties and issues that Measure F does not address. As a result, we found a number of inconsistencies in taxes levied and differences in interpretation of the Measure. There is a degree of subjectivity in the interpretation of the Measure.
F8 Page 112
NFPD's allocation of Prop 13 taxes is among the lowest offire districts within the County thereby exacerbating its financial condition. There is a perception that other fire districts in the surrounding area (which receive a higher percentage of Prop 13 tax allocation) are not interested in consolidation with NFPD because its share of Prop 13 taxes is so low.
F9 Page 112
The percentage allocation of Prop 13 property taxes to special districts is generally limited to the percentage the geographical area collected prior to 1978, when the NFPD was all voluntary. Although there is great debate occurring at the State level on the fairness of Prop 13 allocation of collected tax dollars, there currently is very little latitude for the Auditor-Controller to change this percentage allocation. Some other County Boards of Supervisors have found other (non-Prop 13) sources of revenue to supplement special fire districts which are on the lower end of the Prop 13 property tax allocation.
F11 Page 112
The reason for rejection of the property donation for a new fire site was not adequately articulated to members of the public. 92 2012-2013 Placer County Grand Jury F 12 The 2004 LAFCo Report provided a very useful analysis in the review of facts and issues facing special fire districts in Placer County within the 2004 time frame. The LAFCo review has not been updated since that report. Conclusion The NFPD has experienced a rapidly declining financial condition, which is based in part on increased operating costs, lower development fees (because of real estate development downturn) and lower Prop 13 taxes (because of declining real estate values). Also, much of the financial deterioration can be attributed to costs associated with the delay in dealing with Station 41's physical problems. This inaction, whether intentional or by misunderstanding, resulted in imprudent and reactive decision-making by the NFPD. Ultimately, NFPD did need to take action to increase its revenues, but did so in a way that alienated some of its constituents. There is a completely new Board which has to address some hard decisions going forward, particularly as it relates to a long-term solution to its fire station. It appears they are off to a good start.
F12 Page 113
The 2004 LAFCo Report provided a very useful analysis in the review of facts and issues facing special fire districts in Placer County within the 2004 time frame. The LAFCo review has not been updated since that report. Conclusion The NFPD has experienced a rapidly declining financial condition, which is based in part on increased operating costs, lower development fees (because of real estate development downturn) and lower Prop 13 taxes (because of declining real estate values). Also, much of the financial deterioration can be attributed to costs associated with the delay in dealing with Station 41's physical problems. This inaction, whether intentional or by misunderstanding, resulted in imprudent and reactive decision-making by the NFPD. Ultimately, NFPD did need to take action to increase its revenues, but did so in a way that alienated some of its constituents. There is a completely new Board which has to address some hard decisions going forward, particularly as it relates to a long-term solution to its fire station. It appears they are off to a good start. Recommendations The Grand Jury recommends: R1 NFPD complete immediate "permanent repairs" to Station 41 and continue to explore the prospects of a new fire station, including any possible land donations. R2 NFPD Board adopt a five year financial plan identifying financial resources required to maintain Fire Station 41 in the short-term, along with a task timeline and projected dollar amounts needed to address a new fire station. R3 NFPD implement the recommendations in the 2012 Financial Statement by the County Office of Auditor-Controller as it relates to updating its capital assets records as well as formulating a plan for replacement of aging fire fighting equipment. 93 2012-2013 Placer County Grand Jury R4 NFPD should seek legal advice as to whether the lease agreements for the trailers are void based upon long term obligations not being agendized, voted upon and approved by way of a Board resolution at a public Board meeting. R5 NFPD should verify whether it can, or should, collect Emergency Service User Fees to offset expenses it incurs in responding to transient emergency incidents along Highway 1-80. ESU fees are intended to be collected from persons whose actions along transient corridors such as Interstate-SO result in the need for emergency response, or from their insurance companies. R6 NFPD seek advice as to whether there is a legal or practical basis to explore with the Auditor-Controller, County Board of Supervisors or any other necessary entity as to the possibility of supplementing its low allocation of Prop 13 taxes so that it is on par with other fire districts. R? NFPD contact other fire districts to explore other sources of revenue. RB NFPD work with the Board of Supervisors to update a review by LAFCo which would include a review for potential beneficial consolidation of fire districts within Placer County. Request for Responses NFPD Board of Directors I# R1-R8 Due by September 10, 2013 P.O. Box 262 Newcastle, CA, 95658 Placer County Board of Supervisors I# R8 Due by September 10, 2013 175 Fulweiler Ave. Auburn, CA 95630 94 2012-2013 Placer County Grand Jury Copy Sent To: Auditor-Controller Attn: Andrew Sisk 2970 Richardson Drive Auburn, CA 95603 LAFCo Attn: Kristina Berry 145 Fulweiler Ave. Suite 110 Auburn, CA 95603 Community Development Resource Agency Attn: Tim Wegner, CBO 3091 County Center Dr. Auburn, CA 95603 95

Recommendations 6