Fire District Finances 101 (updated 10/7/09)

Typically, those of us who own property go through a ritual twice a year where we send a substantial amount of money to the county for our property taxes. On your tax statement is a list of government services that get a piece of the pie. The Fire District is on that list and relys on property taxes for about 95% of its operating budget. The following is a brief explanation of how your fire and emergency medical services are funded. 

Fire District 45 has an annual budget of more than $2.5 million. Property within the fire district is given an assessed valuation (AV) by the County which is adjusted each year. State law allows the Fire District to collect up to $1.50 per $1000 (this is the tax levy amount) of assessed valuation from most property owners (non-profits and government agencies do not pay property taxes) each year to support regular operations.  However, several factors affect the actual amount collected. 

Laws are in place that limit the total amount the Fire District can collect above the previous year’s total. Prior to 2002, the Fire District was limited to collecting a maximum of 6% more than the total amount collected the previous year. In 2001, voters statewide approved Initiative 747 which limited the increase to 1% over the previous year. So, each year the County determines the total amount that can be collected (the previous year’s total plus 1%) and divides that into the total AV for the Fire District to determine the actual amount per $1000 of AV for each individual taxpayer (this is the tax levy lid for that year). In 2007, that amount was about $1.12 per $1000 or $448 for a house and property assessed at $400,000. Clear as mud? 

Since 2000, the total AV of the Fire District has increased each year an average of about 10%, partly due to increased assessments of existing property and partly from new construction. In 1998, the voters approved a levy lid lift which put the tax levy back up to the maximum of $1.50 per $1000 AV. So, in 1999, the Fire District collected at $1.50 per $1000 AV from each property tax payer. Since then, property values and AV have climbed steadily. Because of the 6% and then 1% limits, the amount per $1000 AV collected has decreased each year to the $1.12 in 2007. In 2008, the amount was $1.02. 

So how does this all affect your individual tax bill? Again, several factors impact the amount you pay. The 1% additional that the Fire District collects each year is spread amongst all the taxpayers. Individual property valuations change at different rates. If the value of your property went up more than the average, your tax increase will be more than average. If there is a lot of new growth in an area, the overall increase in tax is spread between more taxpayers so individual amounts are less. 

The implementation of the 1% limit with Initiative 747 in 2001 has created some real challenges for the Fire District. As you are probably aware, annual cost of living indices for this region have typically increased 3 to 4% per year since 2001. Some expenses such as health insurance have risen at much higher annual rates. Obviously 1% per year does not cover these increases. Fortunately, taxes from new construction are not included in the 1% limit and substantial amounts of new construction, primarily in the City of Duvall and a small piece of Trilogy that is in the Fire District, were added to the tax rolls over the last few years. This has allowed the Fire District to maintain service levels and grow incrementally even with the 1% limit. However, a multi-year building moratorium in the City and minimal new construction in the unincorporated areas due to zoning laws resulted in one of the lowest new-construction collection levels this decade for 2008. The present economy and its effect on housing has brought growth in the area to a near standstill. Additionally, present home values have decreased and now the County's assessments are reflecting this.

In 2008, the voters approved a levy lid lift that allowed the Fire District to maintain service levels and make incremental improvements in 2009. The tax rate for 2009 is $1.35 per thousand of assessed valuation. However, 2010 will bring us a very different scenario not seen for many years.

King County figures indicate that the District's AV has dropped by about 16% in 2009. Instead of the already relatively lean 1% increase in revenue that the Fire District has seen, a decrease of over 7% will be in store next year. This will equate to well over $200,000 less revenue than we would have received for 2010 had the AV gone up at least 1%. It also means we will be collecting at the State-mandated maximum of $1.50 per thousand of AV. The good news is that most District residents will see their property tax payment for fire services decrease in 2010. The bad news is that the over $200,000 lost is a significant impact on the Fire District budget. Salaries will show a contract-required increase of 2% and health insurance premiums are increasing substantially! Even with cuts in most other areas of the budget, there will be at least some impact on staffing and service delivery in 2010. The worse news is that housing prices are still decreasing which will likely result in no increase and potentially a further decrease in AV affecting the 2011 budget. This loss of revenue could have a more profound negative impact in service delivery as there will be no other areas in the budget to cut.

The District is facing several more very lean years as are most government entities and many businesses and individuals. The 2010 budget has been trimmed by almost 2% in an effort to position the District to weather the coming years with minimal impact on primary services. We will continue to be diligent in finding the most efficient and effective ways to use the resources available to provide the best possible emergency services for the community. 

If you have questions, please contact me at 425-788-1625 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

John S. Lambert, Fire Chief