Black Diamond’s new city council is taking steps to ensure its residents will continue to have fire and emergency services in the near future.

The council met with Mountain View’s board of commissioners Jan. 9 to continue talks that began in March 2019, when the fire department approached the city with a new interlocal agreement that, among other items, requested the city pay the department a sizeable amount more than Black Diamond has spent in the past.

The reason for the increased cost of services, Fire Chief Greg Smith and the department’s commissioners say, is the city has been underpaying for fire and emergency services for years, subsidized by the rest of Mountain View’s district.

But with prices continuing to climb, it’s time for Black Diamond to make some hard choices, or Mountain View will make those decisions for them; although this issue was broached last spring, the department’s commissioners felt discussions had stalled, leading Mountain View to officially declare last November of its intention to not renew its contract with the city on Jan. 1, 2023.

Three years may seem far away for some, but none of Black Diamond’s options — from signing the proposed agreement to finding a new fire service to protect the city — can be made quickly or cheaply.

That’s why the council voted unanimously during its Jan. 16 meeting for Mayor Carol Benson to select an outside consultant to study the council’s options and each of their associated costs.

Councilwoman Tamie Deady said a study would help Black Diamond residents see that their council is looking at all the options available to them.

“Hopefully by the end of this year, we’ll have a clear and concise direction, and everybody with Mountain View and with the city all know where we’re going,” she said.

THE SITUATION: MOUNTAIN VIEW INCHING INTO THE RED

Mountain View was paid about $539,000 in 2019, a figure that is calculated by starting with a flat rate plus an annual increase based on the All Urban Consumers Price Index.

But the department believes it’s spending roughly $1 million to serve the city, and is asking the council to find some way to pay Mountain View that difference by the three-year deadline.

It’s difficult to accurately calculate how much the department spends on Black Diamond alone, since every call is different and incurs a unique cost. Additionally, Mountain View’s budget isn’t calculated based on the number of calls that come out from one area versus another.

But by taking the department’s estimated costs for 2019 — roughly $6.2 million — and divide it by the total number of calls they received that year — 2,165 — Mountain View estimated each call cost an average of nearly $2,900, department documents show.

With that in mind, there were 387 calls in Black Diamond last year, meaning Mountain View estimates it spent over $1.1 million responding to emergencies, close to twice as much as the department was paid in 2019.

This discrepancy has had the department “burning through [their] reserves,” one commissioner said, and will be in the red in a few years’ time if the pattern continues, hence Mountain View’s intent to no longer serve Black Diamond unless the city agrees to pay the department more.

THE LIKELY OPTIONS: LEVY LID LIFT, ANNEXATION, OR BUDGET REARRANGEMENT

While there are a number of options Black Diamond has in addressing this issue, only three stand out as likely: going to a ballot for a public safety levy lid lift (or another sort of levy), getting annexed into Mountain View’s fire district (which also requires a public vote), and re-arranging the city budget to find the additional $500,000 the fire department is requesting.

The least expensive option — at least for residents — appears to be moving some funds around in the city’s future budgets, but that can come at the expense of other services.

One place the money could come from is the Black Diamond Police Department’s budget, since both the police and Mountain View share a $3.2 million pot of public safety money with the city’s court; that revenue is collected from general property taxes, utility taxes, and court and police service revenue and charges.

The BDPD budget is easily the largest within the city at $2.3 million, and uses the majority of that $3.2 million pot of public safety funds. A shifting of priorities could cause the BDPD budget to shrink to allow for more money to go to Mountain View.

However, several council members both past and present have stated this issue shouldn’t be defined as police services against fire services, and that both should be fully funded.

Opposite the first option, a levy lid lift would put the burden of paying for fire services on the taxpayer.

According to the city’s 2020 budget, Black Diamond is expected to bring in roughly $1.89 million in general property taxes through a levy of $1.87 per $1,000 in assessed property value, revenue that makes up for than half of the $3.2 million public safety pot.

That $1.87 levy decreases in value every year, since state law mandates cities (and other property tax-funded entities) can only collect 1 percent more in revenue from the previous year; for example, Black Diamond’s levy rate in 2013 was closer to $2.83 cents and collected $1.4 million in revenue, but increasing property values have forced the levy rate to devalue to its current $1.87.

The study the Black Diamond City Council wants done will confirm exactly how much the general property tax would need to increase by in order to collect an additional $500,000 for the fire department, and likely more for the future as the city grows.

But by using Black Diamond’s estimated total assessed valuation of more than $1.01 billion in 2020, the levy would have to increase from $1.87 to around $2.38 in order to increase general property tax revenue from $1.89 million to $2.4 million, which would cover the department’s request.

Based on Black Diamond’s median home valuation of $386,000, according to the Seattle Times, that translates to the median resident’s tax bill increasing from $721 to $918, if individual home values and the city’s total valuation remained constant.

Although the actual levy amount will vary depending on future home valuations and additional construction in the Ten Trails development, it will almost surely be a tax increase, something Black Diamond residents could vote down on a ballot, likely forcing the city to rearrange its budget.

But however expensive lifting the levy could be, getting annexed into Mountain View’s fire district could be even pricier for both residents and the city.

In 2015, an ad hoc committee of Black Diamond council members and Mountain View commissioners sat together to assess several of these same options.

According to this committee, cities have the power to tax their residents with a general property levy up to $3.60.

However, for cities like Black Diamond that have a library district (meaning it’s part of the King County Library System, as opposed to running its own library), that maximum levy rate decreases to $3.10, and the library then collects a maximum levy of $0.50 per $1,000 in assessed property value.

Additionally, cities that are a part of a fire district, like Enumclaw, have their levy maximums shrink further to a total of $1.60, with the fire district then able to collect a maximum of $1.50 per $1,000 in assessed property value.

This means if Black Diamond is annexed into Mountain View’s fire district, that not only means the city’s levy would decrease from $1.87 to $1.60 — meaning less revenue for the city’s public safety budget — but residents could also be hit with an additional $1.50 levy from Mountain View, meaning their combined maximum levy rate could be as high as $3.10.

ONE STEP AT A TIME

Mountain View has made it clear that it doesn’t expect Black Diamond to come up with the money straight away, or that it wants it all in a lump sum.

Commissioner Jim Farrell has repeatedly stressed the department just wants to see the city make a good-faith effort toward moving in the right direction.

That’s why, in the department’s last proposed contract, Mountain View suggested stair-stepping into higher levy rates.

In that proposed contract, the department wanted to be paid through a levy-like structure — $1.50 per $1,000 in assessed property value by 2023.

But the city — and, in turn, residents — wouldn’t have to pay that full amount for three years; the proposed contract would have Black Diamond first pay $1 per $1,000 in assessed value in 2020. It would then increase to $1.10 in 2021, $1.20 in 2022, and then hit the $1.50 marker in 2023.

Farrell said Mountain View would do its best to allow Black Diamond to gradually work up to paying the fire department the requested funds, no matter what solution is decided.