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NSFD formula showdown could cause Glendale to leave department

Brunner criticizes proposal, threatens veto

Oct. 17, 2013

Reminiscent of a 2007 showdown, clashes over a proposed funding formula could cause Glendale to withdraw from the North Shore Fire Department.

On Monday, Fox Point Village President Mike West made the official request that the NSFD Board consider a new funding formula, which would take effect in 2016, at its November meeting. Since the agreement between the NSFD member communities requires a unanimous vote to amend the formula, any community can in effect veto a change.

Citing a likely increase in River Hills' annual NSFD cost and calling the proposed formula a "bailout" for Glendale, River Hills Village President Bob Brunner says he plans to use the veto power if the board calls a vote in November.

"I would say that the chance of this proposal being approved, as it is, is not very good," Brunner said. "...I won't be supporting it."

Glendale Mayor Jerome Tepper, on the other hand, says River Hills hasn't been paying its fair share and Brunner should compromise. Otherwise, he said, he will recommend to the Glendale Common Council that it approves a withdrawal notice, which if approved by the end of the year would separate Glendale from NSFD beginning in 2016.

"If (River Hills) wants Glendale in the department, that's fine. If they want River Hills (in the department), that's fine," Tepper said. "But if they want both, they have to cooperate. They've been the naysayer. They're the ones who have objected to the changes."

A continuing issue

The standoff resembles turbulent formula negotiations in 2007 when Glendale was on the brink of leaving and only emergency compromises kept the department together. At the time, the recent reconstruction of the Bayshore Town Center dramatically increased the overall property value of Glendale, which as a result increased Glendale's share of the NSFD budget. However, since Bayshore is part of a tax incremental financing district, Glendale didn't receive an increase in tax revenue to mitigate the increased cost of NSFD service.

Glendale only agreed to come back to NSFD after the board of directors agreed to freeze each member community's percentage of NSFD costs, a move which insulated Glendale from a big swing in its NSFD contribution. That freeze lasted through 2012, at which point the NSFD board, largely bargaining amongst itself over each community's share of the overall budget, approved a three-year agreement that increased Glendale's share and distributed the difference among the other six communities.

As West quipped in December 2012, when the board hired Public Policy Forum President Rob Henken to mediate formula discussions, they needed someone good at "holding our feet to the fire" to produce compromise. Since then, Henken has gone back and forth with administrators from the member communities to come up with a formula he proposed to the NSFD board last week. In an informal vote, all of the NSFD board except Brunner approved the new formula in concept, signaling their intent to vote on it in November.

Shifting weights

The current formula in use by NSFD today splits each community's share of the department's budget three ways, based on population, usage and equalized property value. Under the current formula, commercial and industrial properties are counted extra, based on the assumption that those types of properties cost more to protect.

"It kind of tells you what kind of good deal (River Hills) had," Tepper said of the property value weighting, which has made NSFD pricier for communities like Glendale and Brown Deer, which together have the majority of commercial property value and the entirety of industrial value.

The proposed formula does away with the weighting and counts all property at face value. Henken described the practice of weighting the values as "an anachronism." Fire Chief Robert Whitaker has agreed, pointing to changes in firefighting technology, and a change in NSFD's primary service from fire protection to emergency medical services, as reasons why the weighting is no longer valid.

The proposed formula would also emphasize each community's historical usage of NSFD service, basing each community's share 40 percent on usage, 30 percent on population, and 30 percent on property value.

To a certain degree, Henken noted, the unweighting of property values and emphasis on usage offset each other, since the communities with the majority of nonresidential property are also NSFD's biggest users.

An example calculation by Henken, based on 2012 data, shows Glendale, Fox Point and Brown Deer's shares all decreasing while the other communities see an increase. Among the communities, Fox Point had the biggest decrease in percentage (0.81) while Bayside had the biggest increase (0.31). As a percentage of their current share, River Hills had the biggest increase at 10 percent, as Brunner pointed out.

"I mean, 600 families can't share in that kind of disparity," Brunner said. "...It's interesting that the people who want this rushed ahead are the people who benefit the most, particularly in Glendale and Fox Point."

West said village officials were making a compromise when Fox Point agreed to the current formula in 2012. The original formula from the mid-1990s, which would have automatically gone in to effect if negotiations had failed, would have made Fox Point pay less.

"You have to have a formula that's based on good policy," West said. "(Henken) told us this is based on good policy."

Meanwhile, Tepper has begun preparations for Glendale to separate from NSFD, with the intent of submitting a withdrawal notice by the end of the year if the proposed formula is rejected. Since the NSFD service agreement requires a two-year notice, Glendale would break from the department in 2016.

"If he's going to propose this kind of issue, I don't know what options that leaves for us," Tepper said. "Bankruptcy would be an option, or maybe we could stop picking up the garbage, or plowing the streets. We can't provide full services for our citizens and continue to supplement River Hills."

The board will consider the formula at 7:30 a.m. Nov. 12 at Shorewood Village Hall, 3930 N Murray Ave.

FORMULA COMPONENTS

Bayside

Coverage area population Residential prop. value Commercial prop. value Industrial prop. value Usage
6.76% 7.52% 3.51% 0.00% 6.27%
Brown Deer 18.63% 9.52% 21.86% 33.72% 20.51%
Fox Point 10.26% 13.57% 5.28% 0.00% 7.34%
Glendale 19.78% 14.10% 50.45% 66.28% 38.29%
River Hills 2.46% 6.55% 0.22% 0.00% 2.39%
Shorewood 20.34% 19.21% 12.70% 0.00% 15.91%
Whitefish Bay 21.78% 29.53% 5.98% 0.00% 9.31%

Alternate Formulas

Below are the percentages each community would contribute in 2013, based on the formula the department created in the 1990s, the formula the department uses now, and the proposed formula being debated.

NSFD cost based on proposed formula
Current formula, 2013-2015 Original 1990s formula Proposed formula
Bayside 6.20% 6.32% 6.51% $744,974
Brown Deer 17.68% 17.87% 17.52% $2,006,223
Fox Point 10.31% 9.31% 9.50% $1,088,193
Glendale 28.16% 28.72% 28.00% $3,205,201
River Hills 2.94% 3.01% 3.23% $369,514
Shorewood 17.45% 17.56% 17.74% $2,031,291
Whitefish Bay 17.26% 17.21% 17.50% $2,003,513

 

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