The clock is ticking for the City of Warsaw to proceed with the bond issuance for the Warsaw-Wayne Fire Territory fire station 3 for this year.
Wayne Township Board on Thursday approved a memorandum of understanding with the City of Warsaw for the township to contribute to the payment of the annual debt service on the bonds, subject to the township’s annual review and approval.
However, the township board only gave the city until Tuesday to approve moving ahead with the bonding.
The city council meets at 7 p.m. Monday in the council chambers and is expected to address the issue.
Township board member Erin Rowland made the motion to approve the memorandum “with a deadline for acceptance by the city of Dec. 6.”
“So that would mean if the city does not approve the bond at that meeting, this memorandum will be null and void at that point,” Board President Rob Bishop said.
“Umbaugh (& Associates) made it very clear that there were financial advantages to all the residents of Wayne Township; if we’re going to do this, to go ahead and get it done. The residents of the City of Warsaw are almost entirely also residents of Wayne Township, with the exception of a few people living in Plain Township to the north. So when we vote on an issue like this, we’re covering people not only in the unincorporated area of Wayne Township, but the safety of the City of Warsaw. And, I’m convinced that if we’re going to do this, and that vote is up to the City of Warsaw, it’s better to do it (now). So I would be in favor of that,” Bishop stated.
Board member Gordy Nash provided the second to Rowland’s motion and it was unanimously approved.
After introductions of Township Trustee Sheila Burner and the board, Bishop started the meeting with comments about the fire station from the township’s standpoint. Many of the issues about the fire station were discussed at the Nov. 21 city council meeting, Bishop said.
“For many years before the territory was created, Wayne Township paid both Warsaw and Winona Lake for fire territory coverage,” Bishop said. “At some point it was decided to look at doing a fire territory. Initially, that was looked at between Warsaw, Wayne Township and Winona Lake, and then Winona Lake decided they didn’t want to be involved and it went forward with both Warsaw and Wayne Township.”
He said the stats are “staggering” for the Wayne Township residents. For unincorporated Wayne before the formation of the fire territory, the tax rate per $100,000 assessed valuation for fire protection was $0.14. “After, the Umbaugh report indicated it was going to go to $0.69. So the tax rate, essentially, for the unincorporated Wayne Township, went up five times what it was before,” Bishop said.
Taking information from Umbaugh, he said since the territory was put into place, “the very first year the residents of unincorporated Wayne Township paid – in addition to what they’ve been paying for – an increase in taxes of $954,713.”
Bishop said Wayne Township has been doing its part in the fire territory. The agreement between the city and the township in forming the fire territory was that a fire station would be built in the unincorporated area of the township to make up that difference.
“Obviously, the city has collected for the fire department almost $7 million, and has not yet built the fire station, and that was their word. That was their bond, that was their handshake,” Bishop said.
He also talked about how the city’s Insurance Services Office rating, which is a rating of the quality of fire coverage, is a 4. The scale is 1 to 10 with 1 being the best. The township rating is 8.
“So for those people in unincorporated Wayne Township, we’re not getting nearly the level of fire protection service but paying the same taxes as the people in incorporated City of Warsaw,” Bishop said.
If the rating would drop from an 8 to a 7, “We would see a 20 percent decrease in the fire protection portion of your homeowner’s insurance. Not your total homeowner’s insurance, just the fire protection portion of that,” Bishop said.
For 2017, he said the township will contribute $250,000 to help with the initial cost of the bond. That money comes from a change in the EMS service.
After that, Bishop said the township “will do what it can.” Township budgets are due in large part to poor relief. If there’s not a huge need for poor relief and the township has money left over, the township will provide that toward the bond. Bishop said the Department of Local Government Finance will not allow the township to pad its budget.
“We’ll do what we can. But, again, we’ve been paying almost $1 million a year from the time the territory was instituted in return for a station. So we’ve been doing our part,” Bishop said.
The fire territory was established in 2010, according to Fire Chief Mike Wilson.
Rowland said, “And I would note, that no matter what happens, the property tax levy for Wayne Township unit of government will not be affected.”
Bishop said that was correct because the township can’t levy for it. He said Mayor Joe Thallemer believes the tax rate for the City of Warsaw will not change as a result of this as a bond is going off as the fire station bond comes on. The fire territory’s tax rate will go up, but Bishop said that wasn’t just because of the new fire station, but also because of some “budgetary issues.”
Nash said the city used some of the funds from the township over the last seven years to purchase equipment for the fire station so no new equipment is needed for the fire station.
Burner said she had no comment other than, “I just want it built.”
The meeting was open to the public, and property owner Chad Zartman asked several questions clarifying what Bishop had stated about the money the township paid to the city already. In his responses, Bishop said the township also pays the city $70,000 toward its parks.
Renee Mellott asked how much the fire station would cost. Wilson said the preliminary design is less than $3.9 million, with the structural design of that cost being an estimated $3.2 million. Once the city council approves the bond issuance, the architect will put the project out to bid. Wilson said those dollar figures don’t represent what they’re going to be, but are approximate numbers based on the 2010 building design.
Kyle Babcock asked what the “fixation” was with bonding for the money over 15 years instead of borrowing it with a six-year loan, which he said the township could do. Bishop said Umbaugh went over that as one of the options, and the problem with that was paying for it over six years instead of 15 because that money would have to come out of the equipment fund to replace trucks.
Karen Burner asked if they could build two fire stations for close to the same amount of money because the north end of the city needs one.
Wilson responded if something was going to move north as a replacement station, currently the Main Street station is a three-bay six-truck station with quarters, and the replacement station would have to be the same amount. Drawings for station 3 currently is a two-bay station with living quarters, so to build two of them would be about $9 million.
“To me, it sounds very expensive for south of town,” Burner said. She agreed something was needed down there, but a station also was needed for north of town.
