Mo. fire dept. dispute with city may result in drastic budget cuts
The Robertson Fire Protection District said Hazelwood's contract cancellation was illegal and that the city owed the district at least $3.2 million
By Nassim Benchaabane
St. Louis Post-Dispatch
HAZELWOOD, Mo. — City officials here and those of a fire district that serves part of the city both say a dispute over their longtime agreement could have dire budget consequences.
In December, the city canceled its 23-year-old pact with the Robertson Fire Protection District, saying the contract’s rising cost was jeopardizing other city services.
The cancellation prompted the fire district to file suit in St. Louis County in February, alleging that the move was illegal and that the city owed the district at least $3.2 million.
Each side faults the other for a lack of communication or cooperation to resolve the conflict. The fallout came after the two entities had spent weeks discussing a merger between the district and the city’s fire department. They jointly spent about $28,000 to study the proposal.
Mayor Matthew Robinson said that Hazelwood had made several attempts to negotiate with the fire district but that its top brass refused to work with city officials.
“There was no negotiating with them,” Robinson said. “They don’t even talk to us. We pay half of their revenue, and they don’t want to tell us what they’re doing with their money.”
But the district’s attorney, Charles Billings, said the contract cancellation had come out of the blue and violated a court order from 1995.
“They never attempted to modify the court order, they just decided to ignore the court order,” Billings said. “We had no indication that they were choosing this route.”
The Robertson Fire District formed in 1949 and now has about 40 firefighters and two fire stations. The district covers a 14-square-mile area that includes parts of Hazelwood, Bridgeton and unincorporated St. Louis County.
In the 1990s, Hazelwood annexed three tracts and made a deal with the Robertson and Florissant Valley fire protection districts, which were serving the areas. The new city residents would still be protected by the fire districts, not Hazelwood’s fire department, but they would pay taxes for fire protection only to the city. In return, Hazelwood would pay the residents’ portion of taxes to the fire districts.
Hazelwood officials have since been critical of the annexation agreement as tax increases approved by voters in the Robertson district raised the city’s bill to $3.55 million in 2017 from $1.16 million in 1995.
Meanwhile, rising costs and financial setbacks from, among other things, declining property values, put the city budget in the red, officials say.
The city had a budget deficit of $985,084 in 2016 and a deficit of $729,070 last year, according to court documents.
Had the city not canceled the fire district contract, it would have been looking at a deficit of about $2 million, City Manager Matthew Zimmerman said.
If the city loses the lawsuit filed by the fire district, it could derail the cash-strapped city’s finances, Zimmerman says.
“Our whole budget is at risk,” he said. “We would be making cuts in all departments.”
In its response to the suit, Hazelwood alleges that the fire district breached their agreement by charging the city fees based upon invalid tax levies, noting that residents were allowed to vote to increase taxes they themselves would not pay.
The city also claims the district withheld details about its finances and has retained millions in excessive cash reserves over the years. The city also says the district failed to operate in a “reasonable, prudent, efficient and businesslike manner.”
Hazelwood’s annual payment makes up about half the fire district’s operating budget.
“That is the funding of our district, we rely on that,” Billings said.
He denied the district’s budget was inflated.
“The costs are what it costs,” he said. “We have a very professional fire district. That’s paying for the firefighters and paramedics, that’s providing the services. Without those funds we can’t respond to calls.”
In its suit, the district claims Hazelwood’s cancellation of the agreement violates a 1995 court order. The order affirmed the annexation but required the city to pay the fire district to continue servicing the newly annexed area.
The district also claims it misses out on millions in funding from Hazelwood because of abatements or tax assistance that city officials have given businesses in the area. It claims to have lost out on a total of about $12 million from those tax-related measures.
Billings said the district would be open to “de-annexation” of the area in the city of Hazelwood that it serves, allowing the district to levy property taxes.
“If they don’t want to pay us the funds, that’s fine with us, just de-annex us and undo what you did in 1995 and we’ll go back to getting our tax dollars from the people as opposed to Hazelwood,” Billings said. “We serve the same territory and perform the same services either way.”
When City Council members approved the new fiscal year’s budget last month, they voted to use about $476,000 of the money they would have paid to Robertson to give city employees a long-awaited raise. Employees’ paychecks will start reflecting the 1.75 percent pay increases this month.
“I believe the employees know the position we’re in, and they know we’re doing the best we can,” Robinson said.
Asked if lawmakers could have set the money aside in a reserve fund, Zimmerman said it would have been unnecessary.
“Our position is, we terminated the contract,” he said. “We clearly have every right to do so, so there’s no need to set (the money) aside.”
The resolution the City Council approved in December that cancels its contract with the district calls for the city fire department to take over service for all property with the city limits as of Jan. 1, 2019.
The takeover would include hiring up to 18 firefighter/paramedics and taking title to the district’s firehouse and station. This would not affect the third fire district in the city, the Florissant Valley Fire Protection District.
City officials anticipate being able to provide fire services for about $2.8 million less a year than the upwards of $3.5 million it would be paying Robertson, Zimmerman said.
The Robertson district has continued serving Hazelwood residents. It dipped into its reserve fund to do so, but claims the fund — which was about $2.352 million as of February — will be depleted if the city doesn’t start paying.
“We’ll be fine for the short term, but we can’t go on very long like this,” Billings said. “This is half our budget. And we need the reserves for emergencies. That’s the money we have to stay afloat.”
A trial date for the lawsuit has not yet been set.
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