The Lacey Fire District 3 Board of Fire Commissioners on Thursday gazed into its financial future, weighing four financing options for an upcoming bond issue.
The district seeks to raise about $20 million to spend on a recently fire commission-approved capital facilities and equipment plan for four of the district’s five stations. About half of that amount will be spent on Station 34 on Steilacoom Road, a station that is more than 25 years old.
The building doesn’t meet current seismic regulations, and it doesn’t meet the needs of female firefighters because the station has only common dorms, Fire Chief Steve Brooks said. The district plans to build a new station on that site, then renovate the existing station into a training center. They plan to expand the on-site vehicle repair facility.
The district has settled on a bond issue to replace some bonds that were issued nearly 20 years ago. Now, the fire commission needs to figure out a financing plan for those bonds — and its impact on property owners — and pick a date when the bond levy will go before voters.
Brooks said the commission is leaning toward the November general election.
Jim Nelson, a senior vice president with bond underwriter and financial services company D.A. Davidson, gave the financing presentation Thursday night. Of the four financing options he presented, they had an average bond levy rate of about 13 cents per $1,000 of assessed valuation, or $2.78 per month on a single-family residence valued at $260,000.
Nelson pointed out that there will be some overlap between the old bond issue and the new issue, which will cause the levy rate to temporarily spike.
“The levy rates start out a bit lower, then jump when they overlap and then tail off after that,” he said.
Nelson, at times, framed the presentation in terms of a tax increase, but Commissioner Frank Kirkbride took issue with his use of that word.
“It’s not an increase,” Kirkbride said. “It’s a new tax replacing the old tax.”
Nelson also explained that the district, based on the strength of the local economy, has a good chance to see its credit rating move up to “AA” from “A-plus.”
Working in the district’s favor: It is now audited every year, year-end cash reserves have increased to an appropriate level and the district is focused on a new financial management policy.
That’s needed, Nelson said, because credit-rating agencies such as Standard & Poors or Moody’s, are assigning more weight to those policies.
In a related move, the district had petitioned Lacey to annex its Mullen Road station into the city, so that three of its stations would be in Lacey. Brooks argued that would have streamlined the building permit process once renovations were underway.
But Lacey City Council rejected the request, saying the proposed parcel did not generate enough tax revenue to justify the cost.