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Wed, Oct. 16

CAFMA approves $25.5M budget for next year

The Central Arizona Fire and Medical Authority District Board gave final approval to a $25.5 million budget for next year, which is about a 10 percent increase over last year.

The approval was not without some dissent from two members of the Central Yavapai Fire District (CYFD) — the Central Arizona Fire and Medical Authority (CAFMA) is the operational arm of the Chino Valley Fire District and the Central Yavapai Fire Districts that levies the taxes to cover the proposed budget — over how the money is to be spent and who pays the bill.

CYFD member ViciLee Jacobs voted against contributing $16.9 million to the final tally. Member Tom Steele said he doesn’t see why CYFD pays 80 percent of the costs of CAFMA when it only has 70 percent of the operation. Jacobs said she would trim costs on equipment and certain non-essentials so as to pay more to paramedics.

The financing for CAFMA has been under fire for some time by members of the community, who suggest the reason to create the entity two years ago was to save money that has yet to be realized.

Prior to the budget votes, CAFMA Fire Chief Scott Freitag offered a detailed background about the finances he said have been publicly misstated because the budgeting process for Chino Valley Fire District and Central Yavapai Fire District prior to the creation of CAFMA were not “apples and oranges.”

Both of those agencies experienced similar financial difficulties during the recession, and as a result of the state pension program that has been under fire for several years, he said. He also noted that in fiscal year 2013-14 the budgets for those two agencies were created by different, and unconnected individuals who opted for different strategies to make up for lost revenues.

In his explanation, Freitag said as the Chino Valley Fire District chief coming into the 2014-15 fiscal year, his approach was to spend only what the district was able to collect. The Central Yavapai Fire District instead relied on capital reserve funds to cover its operational budget. Freitag suggested that CYFD kept taxes artificially low while spending some $3.5 million in reserve funds “that would have otherwise been collected by tax levy prior to the recession.”

“This kept taxpayers somewhat mollified, but resulted in a form of deficit spending and set the district up for years of future tax increase,” Freitag said.

Steele suggested Freitag still has not adequately explained why it is that Central Yavapai pays 84 percent of the total CAFMA budget, but only has 70 percent of the fire stations, and Chino Valley is only taxed at 16 percent. Freitag noted it is actually an 80/20 split.

“I listened to you with great respect,” Steele said after Freitag completed his explanation. “But you made hash out of yesterday’s steak and potatoes.”

Steele suggested Freitag still has not adequately explained why it is that Central Yavapai pays 84 percent of the total CAFMA budget, but only has 70 percent of the fire stations, and Chino Valley is only taxed at 16 percent.

Freitag said CAFMA corrected the last deficit spending for Central Yavapai Fire District last year, but at the same time was hit with a 9 percent increase in the Arizona Public Safety Personnel Retirement System (PSPRS).

Freitag noted that Chino Valley was identified in 2014 as having a long-term problem with revenue versus costs. And as the district was nearing its tax rate cap of 3.25 percent the option to hike taxes any further was not an option. So, Freitag said, the only choice was to cut costs, and the district eliminated three positions through attrition.

“This action kept revenue and expenses in line with a modest buffer for unexpected occurrences like PSPRS increases,” he said.

Freitag noted there are only two ways to balance a budget: cut costs or raise revenue. Central Yavapai opted to raise taxes to compensate for decreased savings, and so as not to severely impact public service; Chino Valley cut costs so as to keep taxes under the collect cap that were lower than the other district that now make up the authority, he said.

Even with the forming of the authority, Freitag said it was always made clear to the public that Central Yavapai’s tax rates would continue to increase, but at a slower pace and eventually would level off under the new legal entity.

But he admits there are community members who think the pace is too slow.

If Central Yavapai was operating as a solo enterprise, Freitag said tax increases would be higher. The proposed tax rate is .07 cents below what it would have been if the district was operating alone.

Freitag said there has been talk of merging the two districts. He suggested a merger plan has been explored and it was deemed not to be in the best interest of taxpayers.

So he and his staff’s recommendation was to “stay the course.”

Follow Nanci Hutson on Twitter @HutsonNanci. Reach her at 928-445-3333 ext. 2041.

Editor's note: This story has been updated with a change in the ninth paragraph.

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