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Wednesday, December 29, 2010

MFPD boasts lowest blended tax rate from '06 to '10

Board plans to keep tax rate lowest in county, Hilmer says

December 29, 2010 - Of the 24 fire protection districts in St. Louis County, the Mehlville Fire Protection District has had the lowest blended tax rate from 2006 to 2010, according to MFPD Chief Financial Officer Brian Bond.

An analysis of blended tax rates for county fire protection districts performed by Bond also found Mehlville had the second lowest blended tax rate for 2005 — within 1.3 cents — and the district had the fourth lowest blended tax rate for 2004 — within 2.3 cents. Mehlville's blended tax rate for 2004 was 90.4 cents.

The blended tax rate is not assessed, but is a combination of four tax rates — residential property, commercial property, agricultural property and personal property.

Board of Directors Chairman Aaron Hilmer and board Treasurer Bonnie Stegman first took office in April 2005 after running a reform campaign in which they pledged to eliminate fiscal waste and roll back Proposition S, a 33-cent tax-rate increase approved in November 2004. At that time, the district's tax-rate ceiling was $1.22.

During a recent interview, Hilmer told the Call he was pleased with Bond's analysis, saying, "I think the numbers speak for themselves, but if one wanted to look into the numbers a little more, then the key number to look at is 2005. If you would add the 33 cents that the voters approved in November of '04 and the then-board had already begun to spend — they set a budget in December of '04 for '05, predicated on spending that 33 cents — and they had begun on that path.

"And then in April of '05 after Bonnie and I were elected, in August of that year we did not levy the 33 cents. So if that would have been levied, instead of being the second or third lowest, they'd have been the ninth or 10th lowest,'' he said. "And No. 2, while we were 1.3 cents in second place in 2005, we'd really only been in office for less than five months before we set that rate. We really didn't have a chance to get in there and start our reforms. So if you'd given us another month, we'd have been No. 1 for 2005.''

In an effort to make permanent what the board had been doing on a voluntary basis since it set the the district's tax rate in August 2005, board members voted in January 2009 to place Proposition 1 and Proposition 2 on the ballot that April. Proposition 1 asked whether the district's general-fund tax-rate ceiling should be permanently reduced by 36 cents per $100 of assessed valuation while Proposition 2 asked whether the district's pension-fund tax-rate ceiling should be permanently reduced by 4 cents per $100.

A previous effort to place a measure before voters to reduce the district's general fund tax-rate-ceiling was removed from the ballot in February 2007 after a legal challenge from Dennis Skelton of Concord, who later ran unsuccessfully as a write-in candidate for the Board of Directors.

A legal challenge by Skelton to remove Proposition 1 and Proposition 2 from the April 2009 ballot was unsuccessful.

District voters overwhelmingly approved the two propositions, resulting in the district not being able to collect more than $10 million in tax revenue annually.

"... We're sitting here today talking about how the Mehlville Fire Protection District the last five years has had the lowest tax rate of any fire district in St. Louis County and I'm not using that as an excuse to ask you for more money. In fact, we're saying we're really proud of that,'' Hilmer said. "In fact, we were so proud of how we were able to bring spending under control and increase your services that in April of '09 voters actually took 40 cents off what we could levy — a $10 million a year tax decrease — forever. And that is tremendous.

"So when people see that Mehlville's tax rate is the lowest in the county, it will forever be the lowest in the county unless voters approve any more increases, and that's something comforting. Certainly the current board will never have any plans to put a tax increase on the ballot.''

Mehlville's blended tax rates, by year, are:

• 2004 — 90.4 cents.

• 2005 — 86.5 cents.

• 2006 — 70.1 cents.

• 2007 — 60.9 cents.

• 2008 — 56.3 cents.

• 2009 — 59.2 cents.

• 2010 — 67.1 cents.

In his analysis, Bond found the gap between Mehlville's blended tax rate and the average blended tax rate for all county fire districts has steadily increased over the past seven years — the difference was 42.4 cents below the average in 2004 and increased to 70.2 cents below the average for 2010.

"While other districts have gone for tax increases and bond increases, we've lowered our tax rate. Now we can hold ours steady and what you can see is our tax rate is half of the county average tax rate. And I think that's pretty telling that we've been able to hold it steady,'' Hilmer said.

"If somebody wanted to look deeper into those numbers, what have we done with the money that we have brought in? And I think that's what really separates us from not only other fire districts, but school districts or any government entity in St. Louis County — the tremendous improvements we've had in service and infrastructure we've done in the last five years while maintaining the lowest tax rate. I would challenge anybody in St. Louis County to show me a government agency that's done it, but not just in St. Louis County, the state of Missouri or the United States, to show us someone who's done the kind of improvements we have while we've cut our tax rate in half.''

Mehlville's tax revenue has gradually decreased from roughly $16.79 million in 2004 to $15.75 million in 2010 — a 6.2-percent decrease over the 2004 revenue, according to Bond. During that same period, Bond calculated that the average tax revenue of all county fire districts has increased to roughly $7.09 million in 2010 from about $5.86 million in 2004 — a 21-percent increase over 2004 revenue.

Specifically citing the fact that lower interest rates have impacted the district's ability to earn money off its reserves, Hilmer said, "We have accomplished a lot with basically flat revenue and people will wonder: How have you done that? Because we went in there and made tough structural reforms. Reforms that made a lot of — I don't want to say a lot of people mad — a lot of employees mad, but those reforms we did, we were ahead of the curve. Work comp, health insurance, pension — all cutting-edge things that at the time in 2005 and 2006 were decried as Draconian cuts. But history has proved us correct in those and now taxpayers can reap the fruit of them.

"Look at the environment in which we accomplished them. This wasn't some Pollyannaish walk through the park. I mean we went through the toughest opposition possible be it through multiple lawsuits filed by the firefighters' union and still to this day you have a faction of employees out there who are hellbent on destroying the district and tearing it down. But I will say at this point there are so many employees who have bought into our system and they're seeing the fruit from it and so are the residents. So it's a real good collaborative effort going on now I believe.''

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