VERNON TOWNSHIP — As officials prepare for a final public hearing and vote on creating a new fire territory, they’re also bracing for the hits their budgets are expected to take.
Leaders of Vernon Township, Fortville and McCordsville have been considering a fire protection territory as a way to fund 24/7 fire protection and ambulance service. The township can’t sustain that level of service for much longer under its current financial structure.
A fire protection territory would set a maximum property tax levy to fund its operations. In its first year, the territory would cause Vernon Township’s district tax rate to increase 24.1%; Fortville’s would rise 16.3%; and McCordsville’s would go up 19.3%.
It would raise taxes for properties in those districts that aren’t at their tax caps. It would also redistribute certain sources of tax revenue for other taxing units in the county, resulting in some getting less that what they’re used to.
Residential homestead properties in Indiana are capped at 1% of their gross assessed value; farmland, residential rental and other non-homestead residential are capped at 2%; and commercial and all other property are capped at 3%.
If tax rates call for an amount higher than a cap, taxing units lose out on those funds. Mt. Vernon Community School Corporation, for instance, is estimated to miss out on almost $2 million next year because of tax caps.
When a tax rate increases, as they would from the creation of a fire protection territory, that increases the amount of funding taxing units lose out on even more. If the territory is created, Mt. Vernon’s losses incurred by tax caps in 2021 is estimated to be almost $3 million, according to a financial impact analysis prepared by Baker Tilly Municipal Advisors.
At the second of three public hearings for the fire protection territory in late May, Mt. Vernon superintendent Jack Parker said the school corporation is projecting $9.5 million in operating expenses this year. Last year, the corporation started developing a multiyear sustainable budget plan and made expense reductions close to $1 million to prepare for the upcoming loss of extra funding provided from the state, he continued.
In 2012, the state’s Distressed Unit Appeals Board granted Mt. Vernon funding from its Rainy Day Fund, which allowed the school district to refinance debt obligations and transfer revenue to its operations for 10 years.
Parker said the fire protection territory coupled with the loss of that assistance would lead to operations fund decreases of an additional $1.073 million in 2021, $3.1 million in 2022 and $4.4 million in 2023 relative to the 2020 operations fund.
“While the district and board can develop strategies to mitigate this loss for a short term, that’s just one year,” Parker said. “We do not have the means to manage this substantial decrease in funding for an extended period of time without utilizing solutions found outside of our control.”
A solution for the continual loss of revenue in the district’s operations fund can only be addressed through legislative action, Parker continued, like a public question on the ballot or action from governmental administrative agencies.
“We continue to work to solve these future problems and will provide further updates to the community in the coming months,” Parker said.
Fortville is estimated to lose out on more than $228,000 because of tax caps in 2021 without a fire territory. With one, the estimated figure rises to more than $358,000. For McCordsville, the loss is more than $278,562 without a territory and $509,188 with one.
Barry Wood, president of McCordsville Town Council, said at the hearing that the seriousness of the financial challenges created by the COVID-19 pandemic and now the proposed fire territory aren’t lost on him, but that fire protection has to be a priority.
“We’re going to have to tighten our belts and see what we can do,” Wood said. “I think everyone’s in agreement that fire protection needs to be upgraded.”
Fritz Fentz and Gary Sharrett, presidents of the Fortville Town Council and Vernon Township Board, respectively, agreed.
“We’ve been working consistently trying to get this final step in there and hopefully… we can move forward and put this all behind us and build for the future,” Sharrett said.
Florence May, Vernon Township Trustee, said she understood the school district’s and towns’ concerns.
“None of us want to see money taken from any of your organizations that are working so hard,” she said. “We recognize that the town of Fortville has incredible infrastructure issues that they’re trying to deal with. We recognize the town of McCordsville is trying to put in a town center and to do smart development for the future. We recognize how very, very hard our school system has worked.”
The final public hearing on the proposed fire protection territory is at 6 p.m. Wednesday, June 17 on the free videoconferencing platform Zoom. The meeting ID is 892 0097 3831 and the password is 834524. May said it’s intended that the Vernon Township Board, Fortville Town Council and McCordsville Town Council will separately vote on the creation of the territory after the hearing. Majorities of all the bodies would have to vote in favor in order for the territory to move forward.
“This is a very, very important step in terms of fixing an important piece of our infrastructure,” May told the Daily Reporter.
The school district in the township has full-time educators and its two towns have full-time law enforcement officers, but the township does not have full-time firefighters, she continued.
“We don’t have a structure that is in balance and matches with the infrastructure of the rest of the community,” she said. “And I think everybody recognizes that.”
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WHAT: Public hearing for proposed Vernon Township fire protection territory
WHEN: 6 p.m. Wednesday, June 17
WHERE: Zoom
- Meeting ID: 892 0097 3831
- Password 834524
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