When voters in Addison Township go to the polls Aug. 5, they will be asked to approve two taxes, totalling 1.5 mills, which are vital to the operation of their fire department.
‘We need the millages so we can still provide the services that we’ve been providing for folks,? said Fire Chief George Spencer. ‘We would really appreciate everybody’s support.?
On the primary election ballot is a six-year, 0.75-mill property tax for fire department operations and ambulance service, plus an eight-year, 0.75-mill levy for the department’s capital fund, which is used for everything from purchasing new trucks to paying off the construction debt on the department’s main station in Leonard.
Both millages are set to expire with the December 2008 levy.
‘Do we need the millage? Yeah. Do I like to impose taxes on people? No, nobody does,? Spencer said. ‘But if we’re going to continue to run the same level of quality service that we have, we’ve got to be funded.?
Both millages are technically considered increases because the department is asking voters to approve the tax rates at their original levels before rollbacks from the state constitution’s Headlee Amendment reduced them over a period of many years.
The operating millage was originally approved by voters in November 1988 at a rate of 0.75 mill. However, Headlee rollbacks since then have reduced it to its current 0.5716 mill.
As for the capital millage, what’s proposed on the Aug. 5 ballot is the combining of two previous taxes into one.
Addison’s voters originally approved a 0.5-mill capital tax in 1972 and a 0.25-mill capital tax in November 1988. Since then, the two have rolled back to 0.4261 mill and 0.2129 mill, respectively.
Spencer said the fire board combined the two because ‘they wanted to make it simpler so we didn’t have as many millages out there.?
Currently, the department is supported by five millages ? three operating and two capital. Should the two proposed millages pass next month, there will be four fire taxes.
So, how important are these millages to the department?
On the operating side, each millage represents roughly one-third of the revenue, which totals $705,000 of the this year’s $850,000 operating budget.
‘If we lost that millage it would significantly impact the type of services that we could deliver to the community,? Spencer said.
On the capital side, the two millages proposed to become one, makeup nearly all the department’s capital budget and generated $219,000 for this year’s budget.
Without the capital millage, the department would have no dedicated funds to purchase new equipment as the old wears out or breaks down.
More importantly, the department also uses money from the capital millage to help pay off the new main station in Leonard, which opened in 2004.
Every year the department pays about $100,000 toward the debt, which won’t be paid off until May 2012.
Spencer noted the amount by which these two proposed millages could raise people’s property taxes ? if the township decided to levy the full rates ? is relatively minor in comparison to how much the fire department has recently saved the community in homeowners insurance premiums.
The fire chief did some research and the average home in Addison is valued at $237,400. This means the average taxable value is approximately $118,700.
If both millages were approved and levied at their maximum rates of 0.75-mill each, the operating tax would cost the average homeowner an additional $21.18 a year and the capital millage would increase the tax burden by $13.18 annually.
Contrast these average increases with the fact that thanks to the fire department, Addison’s Public Protection Classification from the Insurance Services Office was recently lowered from a Class 9 to a Class 5 and Leonard’s from a Class 9 to a Class 3 (the biggest drop in state history).
These ratings are used by most insurance companies as the starting point to build their premium structures for homeowners insurance.
Greg Clay, owner of the Curtis Insurance Agency in Oxford, said based on his review of accounts in Addison, insurance rates in the township could go down by 14-30 percent while rates in Leonard are expected to decrease by approximately 25 percent.
Steve Craft, of the Craft Insurance Company in Clarkston, told Spencer ‘a drop from a (Class) 9 to a 5 usually saves the average homeowner between $200 and $400 a year.?
‘I’m just really happy that the fire department was able to do something to help reduce everybody’s cost,? said Spencer, noting these new ISO ratings are typically good for 15 years, so it’s not just a onetime thing.
It should be noted that the possibility of an average tax increase of $34.36 is assuming the township board decides to levy the full 1.5 mills, if approved by voters.
Historically, officials have in some instances levied less than the rate authorized by voters.
This year the board was authorized to levy a combined 0.6713 mill in fire capital millages, but instead chose to levy 0.6390 mill.
Could that happen with these millages should voters approve them?
‘It depends on what the board’s perception of the needs of the fire department are,? Spencer said. ‘Quite honestly, I don’t know who our board is going to be (after the August election). I don’t have a good feel for what’s going to happen with that.?
When asked why the department is asking voters to reauthorize the millage rates as originally approved years ago, Spencer replied, ‘I think it gives the government leaders some flexibility if they do want to build in some type of operating reserve.?
‘The fire department’s pretty slim right now as far as having an operating reserve,? Spencer explained. ‘I think it’s good to model government operations after private business. Most private businesses have some type of cash reserve for emergency situations that come up.?
From increases in health care costs to unfunded state and federal mandates, there are a variety of unexpected expenses that could arise and require some extra cash.
‘It’s critical to have a little bit of cushion there to avoid any cutbacks in service,? Spencer said. ‘It’s a tight budget we run. Everything’s accounted for.?
Spencer said he understands that ‘times are tough for everybody,? but ‘the fire department has a very good track record of being very prudent when it comes to our fiscal management.?
‘We’ve been very prudent stewards of everyone else’s money,? he said. ‘It’s probably the most important thing that we do besides providing the service that we do.?
Recently, the department took possession of a brand new $330,000 rescue pumper truck.
Instead of going into debt to purchase it or asking voters to approve a bond issue, the department saved up for it between 1999 to 2007.
‘It’s been in the budget for quite a long time,? Spencer said.