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The RFA will put us all at risk as it experiences the "growing pains" of a new organization.
Olympia Tumwater RFA Planning Committee - June 27, 2022
Tumwater City Manager Doan -
"I'll be honest though, it is going, because it has to stand up as an organization. It is going to be a bumpy three or four or five years initially for the organization. There is not a whole lot we can do about that other than you know, raising the benefit charge to numbers that are that would probably be scary..."
The proponents keep saying, without evidence, that the RFA will be more "sustainable" revenues. Yet, it has fewer sources of revenue to rely upon. "A much more narrow pile of revenues". No sales taxes, no B&O taxes and non-existent fund balances and requires big loans from the cities to stay alive in the first five years.
MORE Risks...
Excerpt from "Regional Fire Authority Pros/Cons" by Olympia City Manager Jay Burney:
Cons
Loss of Control Over Portion of Public Safety Programs
Risk Initial Loss of Class 2 Rating
More Expensive Initially For Community With FBC
Unlike today, an unhappy electorate can suddenly devastate fire and emergency services as happened last year when the West Thurston County fire district vote failed.
Fire stations will close and fire fighters will be laid off.
We should not take that risk with our safety.
The FBC formulas has never been validated by a court. It would be a financial disaster if a court rejected the formula as not following the state law.
Note that there is nothing in the state law that mentions using square roots of square footage or "fire flow" nor allowing exemptions from the charge just because you want to further a policy goal. What if the RFA's Plan doesn't pass the "reasonable or capricious" test?
There is no reason to believe that the current formula being used by existing RFAs are legal under existing law. They have never been tested in court and there is no mention in the state law that refers to its elements like fire flow or square roots. The absence of a law suit doesn't prove its legal.
Olympia and Tumwater's fire departments could be one court case away from a disaster.
More Risk Costs More Money
When you put all of these higher risks together it results in higher financing costs. It will be more costly when the RFA floats a bond for a new fire station or equipment than if it was left with the cities.
Credit rating agencies will assess the credit worthiness of the RFA which will be a new entity, with borrowed reserves that it must pay back, with a narrower set of revenues than cities and little track record in terms of ongoing support by the voters for its continued existence. This kind of financial risk results in a higher interest rate. A 20-year bond sold by this new agency will result in a higher interest rate that the taxpayers will have to pay than if it was left with the cities.
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