Prior to its regular meeting, the Lebanon Fire District Board of Directors met with the Budget Committee to review and approve the budget for fiscal year 2026/2027 on Tuesday, April 14.
Fire Chief John Tacy, acting as budget officer, presented a rough draft of the $15.9 million budget for the next fiscal year.
Tacy explained the budget package this year includes some new pages, including an expenditure summary chart showing “the outpacing of our resources to our expenditures,” and a list of “unfunded needs” showing foreseeable needs the district will not be able to fund at this time.
Those needs include an oxygen concentrator, replacement ambulance (medic unit), six personnel for a medic unit, replacement vehicle, radios for drone pilot communications, drone battery backup, replace 15-year-old portable radios, drone pilot mapping, generator for Station 32, engine refurbishment, replacement engine for Station 35, security cameras, appliance replacements, roof replacement for Station 34, recuse mini boat, vehicle extrication kit and shore trench kit. The full expected cost for the list totals approximately $3.3 million.
With the district’s limited permanent tax rate of $2.26 per $1,000 assessed value, the budget officer expects a structural budget deficit of approximately $931,961 for the next fiscal year. In his budget message, Tacy reported “this deficit is structural, meaning expenses consistently outpace revenues” due to rising operational costs, increased demand for services and limited revenue growth.
The fire district’s revenue comes from four primary sources – property tax, ambulance fees, grants and the ending fund balance. State law restricts property tax increases, and many ambulance reimbursements “fall significantly short of the actual cost,” especially due to Medicare and Medicaid.
Budget Committee Member Allen Forster asked what more could be done to encourage a positive response, should the fire district decide to attempt another levy measure that would alleviate financial strain, given that a May 2024 levy measure was turned down.
Tacy said the first thing is to better educate the public on how governmental budgets work, which appears to have hindered the 2024 election results because of “misinformation” regarding the appearance of a “hyper-inflated” budget from line items pertaining to the recent build of Station 31.
Other issues he touched on included hindrances from increased development in the city, campaigning, and the “political climate.”
Still, he suggested, the district should consider trying for a levy again.
“I think the district would have some serious impacts and changes to this district and how it operates, and to the service delivery that it provides to the community, at some point if we do not come up with another revenue resource,” Tacy said.
As district staff have been talking to strategists regarding a second go on a levy measure, they are considering placing it on the May 2027 ballot, but, Tacy said, they have to also be careful to try to avoid a tax anticipation loan.
Budget Committee Member Alesanne Dugan noted the budget’s comparison to previous years.
“You guys did a good job this year of being tight with your expenses and trying to have money for cash carryover into the coming year,” she said.
Tacy pointed out they tried to simplify the budget to “make it a little more reader friendly.”
Board Director Matt Herb expressed the need to be able to explain the difference between an “adopted” budget and an “estimated” budget. Board Director Wyatt King expressed gratitude for the work put in to the budget.
“It shows, with the estimated versus adopted, that we’re being tight with the purse strings,” King said. “I like the conservative approach that we’re not overcounting our chickens before they hatch on our resource side, we’re being conservative on the expenditure side…. Even though we’re at a deficit, even though times are tough, we’re still being forward-thinking, we’re putting in money to have available at a beginning balance so we avoid the tens of thousands in interest in a tax anticipation note. We’re still putting away for refurbishments and building maintenance.”
During the regular board meeting, Tacy mentioned that, while there may be “low hanging fruit” that provides funding in one way or another, it’s not a source of “stable, consistent, reliable funding.”
“A lot of these things really are gonna take constitutional changes within the state,” he said.
Some time ago, districts used to be able to take tax anticipation notes and invest them in order to actually make extra money, but the state has since limited a government’s ability to do that. But Tacy has his eye on another idea.
“The fire district here at Lebanon sat very good until Measure 5 and 50 came along,” he said. “I think that, what it’s really gonna take is the courage of lawmakers to make constitutional change that emergency services are pulled out of that Measure 50 provision (which limited annual increases in taxable value to 3%).”
He reminded the board that voters approved tax rates when the district was formed prior to measures 5 and 50, suggesting the district should be allowed to raise its rates based on the original intent of the vote.
Touching on the idea of forming a separate ambulance district, which would allow that particular district to also collect taxes, Tacy pointed out it would compete with taxes collected for the fire district, based on compression rules. Still, despite the amount of time and money it would take to form an ambulance district, Tacy said he believes it’s still worthwhile to look into that as an option, “because I think at some point that might be the only thing that keeps a reliable, consistent, community-based EMS program in place.”