Pendleton and Fall Creek and Green townships last week took another step along the path to creating South Madison Fire Territory, with one of its key goals being a core of paid firefighters, even as the final vote on the proposal was pushed back.
The second of three public hearings on the fire territory — which as outlined would be phased over three years and would serve an area about 10 miles east to west and seven miles north to south in southwest Madison County — took place Wednesday, Feb. 23, at Pendleton Fire Station.
Town and township government officials attended; Pendleton Fire Chief Chris Nodine and Paige Sansone, a consultant with Indianapolis-based Baker Tilly Municipal Advisors, presented most of the information, similar to what was presented at the first hearing in January.
A third hearing is set for 6 p.m. Tuesday, March 8, at the fire station.
Sansone said the there has been one key change to the original timetable; a final vote on the territory will not take place on March 8.
“We found out recently, like last week, that the state, the Department of Local Government Finance, is interpreting a statute, this statute, to say that yes, we need the three public hearings, we knew that, but they told us that we would not be able to adopt the fire territory at the third public hearing — we have to do that at least 10 days after that third public hearing.
“So, we are still going to have our three public hearings, but sometime after March 18 the fiscal bodies will adopt this fire territory, and the deadline for them to do so is March 31,” Sansone said.
The meeting for the fire territory vote is set for 6 p.m. Tuesday, March 29, at Pendleton Town Hall, 100 W. State St. Sansone said it will be a public meeting.
Nodine, who has been chief for about a year, said establishing a fire territory has been in the works for several years.
He said it has become necessary to provide top ’round-the-clock fire protection services in the face of twin challenges: population growth and a drop in the number of volunteers.
He showed a chart of fire and EMS runs trending upward between 2015 and 2021, from about 1,500 runs annually to about 2,200.
He also showed expected population growth in South Madison County from 24,900 in 2019 to 48,900 in 2029.
With volunteerism on the decline, he said, “there’s not enough volunteers to protect the community; there’s not.”
The fire territory, would start with 10 to 12 full-time paid firefighters in 2023, supplemented with volunteers.
The goal of establishing a fire territory is to be “proactive instead of reactive,” Nodine said.
Sansone gave an overview of the costs of the fire territory, which she said is a form of fire services consolidation made possible by legislation enacted in 1994. She said there are about 60 fire territories in the state.
“The No. 1 reason a fire territory is established in this current environment is just the lack of volunteers,” Sansone said. “Volunteerism is down all over the state of Indiana. We work on a lot of fire territories every year, and that’s really the No. 1 reason, is to get full-time staffing. And so to get the full-time staffing, you need additional revenue to fund that.
“Another reason is to spread the cost of fire services equally over the entire tax base, so that everyone is paying the same tax rate for fire services.”
Sansone said Pendleton and both townships would have to approve the plan, and if that happens, they would need to file a petition with the Department of Local Government Finance to ask for a property tax levy to fund fire services, as well as a rate for an equipment replacement fund.
The Town of Pendleton would handle the collection of the tax and payment of expenses, as well as accounting and budgetary functions, she said.
Sansone said the funding requirements for the fire territory during the proposal’s three-year phase-in are $2,115,400 in 2023, $5,141,216 in 2024, and $6,636,302 in 2025.
The funding sources — comprised of property taxes, local income tax, contractual payments from Ingalls and vehicle excise taxes — are estimated to be $2,135,958 in 2023; $4,485,828 in 2024 and $5,638,105 in 2025.
The shortfalls between the territory’s funding requirements and the estimated funding sources in 2024 and 2025, if they materialize, will be addressed through the budgeting process, Sansone said.
Factors such as net assessed value of property and property tax caps impact the tax collected. If local assessed values in the area continue to increase as they have been (7% to 14%), the funding shortfalls will be less than appear in the projections, because they are based on an increase of just 5%, she said.
Figuring out the impact on individual tax bills depends on whether a property has hit its tax cap, and if not, applying the established rate increases for the property’s taxing district. Maximum tax increases would be 9.3% in 2021, 13.6% in 2024 and 5.3% in 2025.
Sansone gave an example of a residential home with a $100,000 assessed valuation in Fall Creek Township Taxing District 12. If not at the 1% tax cap, that property would see maximum increases of 7.7% in 2023, 12.9% in 2024 and 5% in 2025. That would amount to increases of $50 in 2023, $90 in 2024 and $40 in 2025.
She said people can figure their individual increase by looking up their tax bill, checking to see if they are at the tax cap (indicated by the presence of a circuit breaker credit), and if not, applying the percentage increase for the district.
Sansone said the fire territory would have an impact on tax revenues generated for various other entities, such as Pendleton, townships, South Madison Community School Corp. and Pendleton Community Public Library.
It’s estimated the Town of Pendleton would receive about $300,000 less during the first year with a fire territory than without, but then would receive $717,000 more in the third year.
The townships would lose funding with a fire territory, but then they would no longer have the expenses associated with fire services, because those have shifted to Pendleton, Sansone said.
The library would lose almost $60,000 across the three years.
South Madison schools would lose the most funding — more than $600,000 across the three years, with most of the losses occurring in the first two years.
Several people in the audience expressed concern about the schools.
Superintendent Mark Hall spoke, reiterating that the district understands the need and is not against establishing a fire territory, “it just has a financial impact on us.”
He said he wanted to address a question from a patron about the possibility of a conducting a referendum, which would occur via election ballot, to approve a tax increase to make up the shortfall.
Hall said such a move is allowed by law, but there are many issues involved with pursuing that.
The fire territory does not include the whole school district, so it might be difficult to get support for a referendum in Adams Township, when those residents wouldn’t be receiving any additional fire or school services, he said.
Also, he said, two-thirds of households in the school district do not have children younger than 18. It might be challenging to convince those people to agree to additional taxes.
Furthermore, a fire territory would reduce funding beginning in 2023, but because of the election calendar and the time it takes to be implemented, a successful referendum wouldn’t result in new monies reaching the district until 2026.
