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Sun City fire officials study merger options

Posted 4/25/17

By Rusty Bradshaw

Independent Newsmedia

Sun City Fire District officials are studying the possibility of a merger with another North Valley district.

Sun City firefighters put away their …

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Sun City fire officials study merger options

By Rusty Bradshaw
Independent Newsmedia

Sun City Fire District officials are studying the possibility of a merger with another North Valley district.

Sun City firefighters put away their equipment after a minor incident in the community. Sun City fire officials are studying a potential merger with another North Valley fire district.

The Sun City fire board approved having Gabe Baldra, the district’s contracted finance director, to conduct a study of the feasibility and potential benefits or disadvantages of merging with the Daisy Mountain Fire District. Daisy Mountain officials also have someone looking into the possibility.

“This is not to say we will merge, we are just looking at the possibility,” said Mike Thompson, Sun City fire chief.

Both fire districts have experienced financial restrictions since the 2008 housing market crash that created what some call an economic depression. That, combined with Proposition 117, a limitation on property tax approved by state voters in 2012, reduced revenue to entities dependent on that resource for funding, like fire and school districts.

Mike Thompson

“We will be looking at all aspects to see if a merger would be more efficient,” said Mark Nichols, Daisy Mountain fire chief.

Daisy Mountain serves areas including New River, Anthem, Cave Creek, Carefree and Desert Hills, all north of Carefree Highway. The district also serves Black Canyon City after Daisy Mountain consolidated with BCC.

“We are trying to keep things afloat without going to overrides,” Mr. Thompson said.

The Sun City chief said Arizona legislators have passed and are considering more laws to make it easier for districts to merge. State lawmakers also in 2016 approved law that allows fire districts to seek a tax rate override that would increase the cap from $3.25 per $100 of assessed value to $3.50. An override, if approved, would be in place for five years.

“Legislators did this to give themselves time to study alternative funding formulas for fire districts,” Mr. Thompson said. “But the way they are pushing mergers, I don’t think they are really interested in finding a different formula.”

Sun City fire officials rejected seeking an override last year because they were already asking taxpayers to approve a bond to build a new fire station and replace aging equipment.

Mark Nichols

“We did not want to burden the taxpayers any more than we had to,” Mr. Thompson said.

Voters approved a requested $10 million bond, although Sun City Fire and Medical District had a bonding capacity of up to $19 million.

If the study finds merger is not the best option, the two districts will continue with intergovernmental agreements that include shared staff and purchasing — and others could be added. Mr. Nichols also said the district boards could also consider a joint powers authority.

“We could see some increased efficiencies with a merger,” Mr. Thompson said. “But a merger may not be the best way to go; instead it might be shared services. That is what this study will tell us.”

Mr. Nichols said the study will be geared toward financial issues, most prominantly retirement programs. Sun City Fire Department’s sworn firefighters participate in the Public Safety Personnel Retirement System and non-sworn employees, including office staff and ambulance personnel, participate in the Arizona State Retirement System. Daisy Mountain is a PSPRS participant only.

“We are a young department, personnel-wise,” Mr. Nichols said. “So that means the dual pension system may not work as welll for us.”

He added the IGAs — shared maintenance and purchasing — between Daisy Mountain and Sun City are working out well so far.

“We have managed things well, so we don’t have to rush into anything,” Mr. Nichols said.

He shares Mr. Thompson’s pessimism there will be legislative reform of fire district funding.

“Anything that revolves around property tax no one is willing to take on and make adjustments,” he said.

That could spell doom for fire districts as the pressure to continually cut budgets to match shrinking revenue remains. Mr. Nichols said under current conditions it would take his department until 2028 to regain funding levels it had in 2008. Mr. Thompson said the Sun City department’s date to reach those levels is only slightly less.

Progress and setback

In an effort to continue its savings trend, the Sun City fire board approved another IGA for purchasing.
The district will enter the agreement with Central Arizona Fire and Medical Authority.

“This will allow us to do central purchasing with Yavapai,” Mr. Thompson explained.

District officials could see as much as a 40 percent savings on purchases through the IGA compared to transactions on their own. However, that savings would be limited to office supplies, according to Mr. Thompson.

“We get that same kind of savings on equipment and medical supplies through our other arrangements,” he said.
District officials are also looking to contract with a billing agent after terminating their contract with Intermedix.
“I believe we can get someone for about $75,000 per year compared to about $110,000 we would be paying a billing company,” Mr. Thompson said. “We would also have direct control.”

District officials terminated the agreement with Intermedix after a number of ambulance billing problems.
The district did have a setback earlier this month when $52,000 worth of equipment was stolen from the Conex storage area at Station 131, 17017 N. 99th Ave.

Sun City firefighter Rob Smitz said crews were returning to the station after a call and noticed a white Ford pickup and a man entering it backed up to the gate leading to the rear of the station. The gate is locked unless vehicles are going into the lot behind the station.

“We didn’t think much of it at first, thinking someone was just parked there or checking on something in the area,” he explained. “But as he was pulling out we saw the reflectors on turnouts in the back of the truck.”

Fire personnel called Maricopa County Sheriff’s Office immediately, but deputies were not able to find the pickup. Mr. Thompson said most of the equipment stolen was used in extracting victims at vehicle accidents.

“He (the suspect) must have jumped the fence, and it was obvious he made several trips to get all the stuff in the truck,” Mr. Smitz said.

Mr. Thompson said a week later his nephew had some tools stolen and he went to a swap meet to buy some more. A bag he purchased had “Property of Sun City Fire Department” written on it.

“So that equipment is starting to show up,” he said.