Consent 1.G.
Regular City Council Meeting
- Meeting Date:
- 02/08/2021
- Title
- BUFSA Contract Amendment
- Presented by:
- Andy Zoeller
- Department:
- Finance
RECOMMENDATION
Staff recommends approval of the BUFSA agreement amending the funding formula.
BACKGROUND (Consistency with Adopted Plans and Policies, if applicable)
City Council has directed staff to review all costs and charges associated with Police and Fire services. This has resulted in a review of multiple items including the Fire Charges for Billings Urban Fire Service Area (BUFSA.) The current BUFSA agreement was approved by City Council 6/25/2018.
The contract between the BUFSA and the City requires the same level of service is provided to the BUFSA as provided to the City. Section 8 says “Except for increase in costs of providing services to the BUFSA which are beyond the control of the CITY and which are solely attributable to providing services to the BUFSA, any increase in charges to the BUFSA must be in direct proportion to increase in costs incurred by the CITY in providing the same services to CITY residents.”
The current formula uses the equivalent of 10 firefighters (Payroll & Operation & Maintenance) and “Direct BUFSA Charges” to calculate the full charge for BUFSA fire service. Items included under “Direct BUFSA Charges” are typically associated with wildland fire suppression, but they are not exclusively used within the BUFSA.
Our review of the funding formula has determined that the cost share is not proportionate between the City and the BUFSA.
City staff presented this information to the BUFSA Board (Yellowstone County Commissioners) on March 5th, 2020 and again on October 14th, 2020 and have recommended a modification to the funding formula to be phased in over two years.
We are recommending the following formula be used:
Total Prior Year Fire Department Costs minus 911/Dispatch Charges = Total Allocable Costs
City Taxable Value plus BUFSA Taxable Value = Total Fire Area Taxable Value
BUFSA Taxable Value divided by Total Fire Area Taxable Value = BUFSA Proportionate Share
BUFSA Proportionate Share times Total Allocable Costs = Annual BUFSA Fee for Service
This approach more equitably shares costs, in recognition of the substantial construction growth within the BUFSA area. Therefore, an increase in the annual BUFSA Fee for Service in appropriate. The increase in FY21 would be $396,146. The county negotiated a phased implementation of 75% in the current year and 100% for FY22 and beyond.
All other items pertaining to the contract between the City and the BUFSA would remain in place.
The contract between the BUFSA and the City requires the same level of service is provided to the BUFSA as provided to the City. Section 8 says “Except for increase in costs of providing services to the BUFSA which are beyond the control of the CITY and which are solely attributable to providing services to the BUFSA, any increase in charges to the BUFSA must be in direct proportion to increase in costs incurred by the CITY in providing the same services to CITY residents.”
The current formula uses the equivalent of 10 firefighters (Payroll & Operation & Maintenance) and “Direct BUFSA Charges” to calculate the full charge for BUFSA fire service. Items included under “Direct BUFSA Charges” are typically associated with wildland fire suppression, but they are not exclusively used within the BUFSA.
Our review of the funding formula has determined that the cost share is not proportionate between the City and the BUFSA.
City staff presented this information to the BUFSA Board (Yellowstone County Commissioners) on March 5th, 2020 and again on October 14th, 2020 and have recommended a modification to the funding formula to be phased in over two years.
We are recommending the following formula be used:
Total Prior Year Fire Department Costs minus 911/Dispatch Charges = Total Allocable Costs
City Taxable Value plus BUFSA Taxable Value = Total Fire Area Taxable Value
BUFSA Taxable Value divided by Total Fire Area Taxable Value = BUFSA Proportionate Share
BUFSA Proportionate Share times Total Allocable Costs = Annual BUFSA Fee for Service
This approach more equitably shares costs, in recognition of the substantial construction growth within the BUFSA area. Therefore, an increase in the annual BUFSA Fee for Service in appropriate. The increase in FY21 would be $396,146. The county negotiated a phased implementation of 75% in the current year and 100% for FY22 and beyond.
All other items pertaining to the contract between the City and the BUFSA would remain in place.
ALTERNATIVES
City Council may:
- Approve, or;
- Disapprove
FISCAL EFFECTS
The change in the funding formula results in approximately $400,000 more revenue to the Public Safety Fund related to BUFSA services. The total charge for FY21 will be $1,646,610. Future years will be charged at the full amount. The full is anticipated to be closer to $1.8 million until additional fire stations are added to the system. The table below demonstrates the historical difference between the new formula and the actual historical amounts charged for BUFSA services:
| Fiscal Year | 2019 | 2018 | 2017 | 2016 | 2015 |
| Total Prior Year FD Costs | 19,737,033 | 17,580,695 | 17,040,861 | 15,829,779 | 15,423,130 |
| 911/Dispatch Charges | -2,875,892 | -2,749,238 | -2,526,019 | -2,339,990 | -2,194,457 |
| Total Allocable Costs | 16,861,141 | 14,831,457 | 14,514,842 | 13,489,789 | 13,228,673 |
| City Taxable Value | 204,836,165 | 203,842,992 | 195,176,172 | 192,045,981 | 166,858,266 |
| BUFSA Taxable Value | 22,570,972 | 22,023,065 | 20,309,343 | 19,667,042 | 17,261,448 |
| Total Fire Area TV | 227,407,137 | 225,866,057 | 215,485,515 | 211,713,023 | 184,119,714 |
| BUFSA Proportionate Share | 9.9% | 9.8% | 9.4% | 9.3% | 9.4% |
| Total Allocable Costs | 16,861,141 | 14,831,457 | 14,514,842 | 13,489,789 | 13,228,673 |
| Annual BUFSA Fee | 1,673,529 | 1,446,141 | 1,368,013 | 1,253,131 | 1,240,204 |
| Acutal Historical BUFSA Fee | 1,248,858 | 1,176,255 | 1,143,882 | 1,108,050 | 1,066,946 |
| Difference | 424,671 | 269,886 | 224,131 | 145,081 | 173,258 |