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CCFD #1 plans to terminate its contract with Oregon City, and the dispute over rates has far-reaching implications for the whole district
A four year old agreement between Oregon City and Clackamas County Fire District #1 has broken down and will terminate on June 30, 2008 - a development that would leave the city without fire protection or emergency medical services.
District Chief Ed Kirchhofer delivered a letter with that dire news to city officials on Thursday, setting in motion a search for alternatives which could see the city annexed to CCFD #1.
'We're very committed to being the service provider to Oregon City, and to continuing to provide a high level of fire and emergency medical services to its citizens,' he said, adding: 'The current contract is flawed, and we need to address that as a question of equity.'
As Kirchhofer described it, the essential problem is that, under the terms of the agreement, Oregon City is paying substantially less for service than citizens elsewhere in the district - such as Milwaukie, which annexed to CCFD #1 in 2005.
'When the contract was originally negotiated, it was a rate-based contract right up until the agreement was finalized. It would have been exactly the same as all of the other ratepayers in the district,' he said. 'Then, at the eleventh hour, it changed to a fee-based contract, and that fee amount was to be adjusted annually based on the Portland urban consumer price index.'
The problem is that the CPI has risen at an average rate of 2.41 percent per year for the last three years, while Oregon City's assessed valuation has gone up by 7.28 percent per year over the same time period.
'If you look at infill within the city, new developments and subdivisions and new commercial properties, none of that increased value or expanding demand for service has resulted in any additional income for the fire district,' said Kirchhofer.
The rate paid by the citizens within the fire district proper is $2.40 per $1,000 of the assessed value of their properties. The fee paid by Oregon City to the fire district is now the equivalent of $1.59 per $1,000 of assessed value.
The drain on the district's resources has become even more severe as Oregon City's boundaries have expanded to include previously unincorporated land.
'That situation results in three different negative impacts on the fire district,' Kirchhofer explained. 'If it's a $2 million piece of property that we are taxing, we immediately lose that revenue. The fee paid to us by the city doesn't go up at all, and if a subdivision is built on that property, we see an increased demand for services.'
Ratepayers outside the district are also supplementing service in Oregon City with their support to Station 9 on Holcomb Road. Built on unincorporated land in the 1970s, Oregon City's boundaries expanded over the years to include the station, which now responds primarily to emergency calls from the city itself.
Kirchhofer expressed his hope that his letter would prompt a serious discussion about the possibility of the city annexing to CCFD #1.
'It's a win-win solution,' he said. 'If the city is part of the fire district, that gives us the ability to plan long-term to meet its needs. When you're working under a contract, it makes it difficult to do that.
'Also, a successful annexation vote would generate enough funds to open the South End fire station and provide higher levels of service throughout he city.'
Confronted with the chief's letter, City Manager Larry Patterson said, 'It's not unexpected. This issue has been developing for quite some time. The contract had flaws in it from the get-go, and I think it's a credit to all concerned that we've kept it going as long as we have.'
He added: 'There aren't a lot of options for the city to consider. We're going to need to look at annexation, or paying for fire protection out of the general fund - which wouldn't leave over money for much else - or living in a city without fire or emergency medical services.'