American Fork Ballot: Fire Station Bond Issue

One of the items on American Fork voters’ ballots right now is the question of approving a general bond issue in an amount up to $8.5 million, to purchase land for a new fire station in the northeast quadrant of the city, to build that station, and to purchase land for a third fire station on the south side while land prices are still only very high, so we don’t have to buy land later, when we’re ready to build and the prices are truly ridiculous.

I’ve had my eye on this issue since before it was publicly announced, but I’ve spent my limited blogging and politics time on other things, including the city council race and a proposal that isn’t on the election ballot, to fund and build a citywide fiber optic utility.

The fiber proposal is understandably controversial, and it’s complex enough, with enough different interests and considerations needing to be balanced, that I’ve said publicly more than once that it’s “not a no-brainer.”

By contrast, the fire station bond is very nearly a no-brainer. I’ll summarize my thoughts about it here, point you to some other sources which are doing a nice job publicizing the matter, and finally, at the end, geek out a little on the ballot language for this proposal, which may be the most-read material on the subject but is hardly transparent.

We Need a Second and Soon a Third, but Not Five

If you’ve had your eyes on American Fork’s city government for very long, you likely know that we passed the point where one fire station is enough some years ago. Even if you’re not watching and listening that carefully, it probably shouldn’t surprise you that a city of 30,000 residents and over 600 business locations needs more than one fire station. Our one current fire station is the busiest in Utah County, in terms of call volume, but there’s a more important metric: response time. If the ambulance and fire engines can’t get to you quickly enough, the damage to property and to human life and health is substantially greater. And as Councilmember Kevin Barnes, an insurance agent by trade, has explained, everyone’s insurance rates go up.

For years it’s been generally accepted that American Fork would need a total of five fire stations, to maintain good response times citywide at build-out. One of the things that pleases me most about the current proposal is that the City has figured out how to do it with only three stations, located strategically on major thoroughfares, some of which either don’t exist quite yet, but are about to be built, or haven’t yet been expanded to their planned capacity. The savings in not building, staffing, and equipping those extra two fire stations (#4 and #5) is in the millions, if not tens of millions, of dollars in the foreseeable future.

Smart: No Tax Increase

Fire stations aren’t free. We have to pay for them. But the City has waited patiently until now, so that payments on the proposed bonds will simply replace payments on the bonds for the current fire station, because that bond will shortly be retired. (The bonds for the police and courts building will be retired a year later.) True, if we did nothing, our taxes could be reduced, because we won’t be making payments on the old bonds – but I’m content that our taxes don’t have to increase to build one of the new fire stations we already need and to buy the land for one more.

City Administrator David Bunker pulled out a map this week and showed me some of the possible locations for the second fire station, which will improve response times to the northern and eastern parts of the city. In fact, when Canal Boulevard is completed along the north side of the city, response times to the northwestern part of American Fork will be faster from the northeast than from downtown.

One prime location is not inside the boundaries of American Fork. It’s in the county, but would be annexed if selected.

The Cedar Hills Contract

The fiscal picture is even happier than I’ve described so far, because Cedar Hills recently contracted with American Fork for fire and paramedic services. They had been part of the Lone Peak Fire District but were displeased with its level of service. (Cedar Hills has had a similar contract with American Fork for police protection for years.)

As Mr. Bunker explained to me, this new fire station and the needed staff and equipment are all things we need anyway; we wouldn’t acquire them just to serve Cedar Hills. But Cedar Hills will pay about half of the increase in our operational costs, according to a contract which automatically renews every year, unless one party or the other chooses to terminate it.

Likely to Pass

Our need for the additional station is such that, if the bond issue proposal fails, the City will have to find some other way to fund it. This would likely include a tax increase. I have no polling data on the ballot issue, but I think American Fork voters are sufficiently sensible and mature that it will pass by a comfortable margin.

It’s about as smart a deal as we’re likely to see from a local government. We’ll be getting something we already need on very favorable terms.

Some Folks’ Reasons to Oppose

There are a few people around who think fire protection should be privatized. There are others who want to stop the city’s population growth, even to the point of obstructing the growth of needed services. There are some who will think this is some sort of a scam on taxpayers, because they suspect everything government does, and they think fire stations don’t really cost that much, or we already have one and don’t need another. There may be a few who will vote against it because they want to punish the City for considering – not yet approving, just considering – the fiber proposal.

The city council reflects this to a degree. One member of the council, Rob Shelton, was critical of the proposal the City sent in response to Cedar Hills’ Request for Proposal (RFP), when our neighbor city was shopping for fire services. He subsequently quibbled about the terms of the contract the City negotiated, but didn’t seem to get much traction with the rest of the council.

Other Discussion

The American Fork Fire Department itself, some interested citizens, and even the Daily Herald have done a good job making the case for the bond issue. Here are some links:

Ballot Language

We’ll look at the ballot’s language for this proposal a paragraph at a time. Here’s the first paragraph:

“Shall American Fork City, Utah, be authorized to issue General Obligation Bonds in a principal amount not to exceed $8,500,000 and to mature in no more than 21 years from the date or dates of issuance of such bonds for the purpose of paying all or a portion of the costs of purchasing real property, acquiring, constructing, and equipping a new fire station (“Station”) and related improvements?”

Translation: The City wants to borrow up to $8.5 million for a new fire station. (Not mentioned is that the intent is to build one fire station and acquire land for a third, before prices go up even further.) Is that okay with you?

Here’s the second paragraph.

“If the Bonds are issued as planned, without regard to the taxes currently levied for outstanding bonds that will reduce over time, an annual property tax to pay debt service on the proposed bonds will be required over a period of 21 years in the estimated amount of $38.94 per year on a $300,000 primary residence and in the estimated amount of $70.80 per year on a business having the same value.”

Translation: All else being equal (which is isn’t; see below — or above), bond payments will require a property tax increase estimated at $38.94 per year for a home valued at $300,000, and $70.80 per year on a business with the same value. Note that the property tax on a business is calculated by multiplying the tax rate by the assessed value of the business. For a primary residence, you do the same calculation, then multiply it by 0.55, or 55 percent.

All else isn’t equal because the bonds for the City’s current fire station will be retired next year, and the new bond payments would simply replace the old bond payments, with no tax increase. For that matter, the bonds for the police and courts building will be retired the following year. Which brings us to the third paragraph.

“The City has other outstanding bonds for which a tax decrease would occur upon the retirement of such bonds, which may not occur if the proposed bonds are issued.”

Translation: Taxes could go down with the retirement of the bonds that are about to be paid off, but if this fire station bond issue proposal passes, they may not go down, because the new payments will replace the old. (Which we knew.)

The final paragraph says:

“The foregoing information is only an estimate and is not a limit on the amount of taxes that the City may be required to levy to pay debt service on the bonds. The City is obligated to levy taxes to the extent provided by law in order to pay the bonds.”

Translation: Number are estimates. Numbers change — including bond interest rates. And the City has to make the payments, even if the numbers come out a little higher than the estimates here. (Which is common sense.)

I’m Voting Yes

For me, as I said, it’s very nearly a no-brainer. I think we’re getting a good deal on something we clearly need.

It may not be so clear to you. That’s okay. Vote as you think best. But I’ll be voting for “the issuance of bonds,” as my ballot puts it.

Thanks for reading.

(Photo by An Errant Knight, used without modification under Creative Commons Attribution-Share Alike 4.0 International license.)

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.