Minutes-11/18/1998

Cost sharing to fund fire departments by MARY SWALLA HOLMES, FS1 RESEARCH AND DEVELOPMENT PROGRAM Fire departments in Iowa fund their operations from three main sources: funding from cities, taxes levied from townships and fund-raising. The percentages are different in almost every one of the 870 departments, but there are some general trends, as reported in A Profile of Iowa's Fire Service - Statewide Edition, Career/Combination Department Report and The Role of Townships in Iowa's Fire and Emergency Medical Services. Each of these reports is available upon request from the Fire Service Institute. Volunteer departments (90 percent of the departments in Iowa) are likely to provide one or two cities and one to five townships fire protection and emergency medical services, and are likely to rely on the townships for more than half of their funding. Sixty-eight percent of the volunteer departments that serve populations under 5,000 derive 26 percent of their budget from fund-raising. All career departments (4 percent) are the only departments likely to be funded fully by the city in which they are located, with no additional funds from townships or fund-raising. The question, "How can we determine a fair and equitable way to divide the cost of emergency services?" is often asked by cities and townships. One way is to use a formula devised at Iowa State University Extension's Fire Service Institute. This formula uses three variables to determine each entity's share of the cost of protection. Taxable value of each area served, annual total calls to each area served, and the population of each area served are added for a total, then divided by the number of entities for a percentage of the total. Then, each entity adds the three percentages, and divides by three (the number of variables) for their percentage of the total cost. The use of this formula relies on several factors. The fire department must present a projected budget, with line items and explanations of planned expenditures, and all entities must review and approve the budget. This agreed upon budget total is the figure that each percentage will be multiplied by to find the dollar total owed by each township and city. Also, the fire department must be willing and able to provide the number of calls responded to in each entity in the previous years. The county auditor can provide the taxable values of the areas, and the populations can be found in Census data. For split townships, the township trustees should estimate the populations for the portion that is served. For townships, once the fair dollar portion is determined, divide it by the taxable valuation and move the decimal three places right to get the levy figure. A township may legally only levy $.60750 per thousand of assessed value, unless the township is in a county of more than 300,000 or contracting with a paid fire department. If the amount exceeds the allowable limit, some way must be determined of making up the difference in the budget. Currently, less than 10% of the townships are levying the full allowable amount, with the statewide average for township levies for fire / EMS being only $.353. At a time when fire / EMS departments are positioning themselves to provide continuing services into the next century, it is important that all of the entities understand and are responsible for their fair share of the cost of providing services. Please contact George Oster, research and development program manager, at (888) 469-2374 with questions or comments on using this cost sharing formula. Cost Sharing Formula for Emergency Response Systems Use this formula to determine the fair portion for cities and townships to pay for shared emergency response services. When using this formula to determine cost share, the formula should be included in the contractual agreement, along with a specific time period for updating the contract. SHARE OF COST = \( \frac{\% TV + \% TC + \% POP}{3} \) WHERE: TV = Taxable Value of Area Served* TC = Annual Total Calls of Area Served** POP = Population of Area Served NOTES: * value of agricultural land may be removed from calculation **total calls may be averaged over a number of years