A presentation to the Warsaw Common Council Tuesday on increasing the maximum property tax levy for the fire protection territory included estimated dollar amounts and expenditure priorities.
No action was taken by the council at Tuesday’s meeting. If the council decides to act on the levy increase, a formal petition will go before the council at their March 4 meeting for first reading and, if the petition is approved March 4, the second reading will be March 18.
Before the presentation began, Mayor Jeff Grose said that under current Indiana code, a fire protection territory may petition the Department of Local Government Finance (DLGF) for an increase in the maximum permissible property tax levy based upon the change in population within the territory. For budget year 2025, the petition must be submitted to the DLGF no later than March 31, 2024.
“The Warsaw Common Council may elect to limit the increase in rate or levy each year through the annual budget process,” Grose said.
Paige E. Sansone, certified public accountant and partner with Baker Tilly, Indianapolis, said they did an impact analysis of filing the levy appeal.
“This is, basically, your ability to petition the state of Indiana, the (DLGF), to permanently increase your fire territory operating levy,” she said. “This is a new appeal. It was passed by the General Assembly in 2022. There’s been a few fire territories that have already filed this appeal in the state, so it is relatively new.”
What the appeal basically does, she said, is it looks at the territory’s change in population over a 10-year period. For this particular appeal, the DLGF has them look at the change in population from 2013 to 2022.
“We looked at it last year and you were qualified, but you were only qualified for about $600,000. This year, moving the dates just one year, you are now qualified for about $1.1 million,” Sansone stated.
The state statute requires four different steps. The first is to look at the percentage increase in population over the 10-year period in the territory. Then it needs to be determined if that percentage increase is above 6% because the territory would not qualify if the increase was less than 6%. Sansone said the WWFT’s percentage increase was above that 6%.
“It allows you to appeal for a rate increase that is equal to your actual growth minus the 6%, but you can not exceed 15%,” she said.
The final step of the calculation is to look at if the territory has ever filed for the appeal in the past. If the answer is yes, that amount has to be deducted.
Looking specifically at the calculations for the city of Warsaw and the unincorporated area of Wayne Township, Sansone said the population of both of those areas was 23,226 in 2013. It increased to 26,009, or 11.98%, by 2022. So the territory qualifies.
“The amount you qualify for, again, is the difference between the 12% and the 6%, so it’s about 5.98%. ... So you qualify for a rate increase of 5.98%,” she said. That’s 5.98 cents per $100 of assessed value.
The territory’s 2024 net assessed value is $1,861,267,505. Applying that 5.98% rate increase, Sansone said she gets a property tax levy of $1,113,038.
“This report is based on the current net assessed value. You, obviously, had net assessed value growth over the last few years. Should the net assessed value come in higher, that’s going to increase the levy amount that you get, but it’ll drop the rate impact down,” she stated.
The maximum amount of an increase a taxpayer would see to their tax bill, if they’re currently not at the tax cap, would be 3.9%. Sansone said that’s primarily in the Wayne Township unincorporated area.
The levy increase would affect four different taxing districts - Warsaw Plain, Wayne, Warsaw and Warsaw Prairie.
“If your property is located within the city limits, you’re all going to be impacted the same. So if you are not currently hitting the tax caps ... you could see a maximum increase of 2.4% on your tax bill. That’s the total annual increase. If your property is located in unincorporated Wayne Township, the maximum you could see is a 3.9% increase to your tax bill,” she said. Warsaw and Warsaw Prairie also would be 2.4%.
She gave the council “very specific” examples within the four taxing districts.
For residential homesteads, which are capped at 1% of the gross assessed value, a $75,000 residential homestead in Warsaw Plain would see an increase to the tax bill of $12, or $1 per month. A $200,000 home would see no increase because it’s already hitting the tax cap.
In Wayne Township, Sansone said there are very few properties there hitting the tax caps. A property in Wayne Township would have to be valued at over $1.5 million to hit the tax cap. A $75,000 home in the township would see an increase in their property taxes of $12, while a $200,000 home would see a $59 increase.
She also gave examples for the other taxing districts, as well as farmland, other residentials, commercial and all other properties.
“This process is to approve the petition, and you can approve the full amount of the petition, and then when you get to the budget process, you may decide how much of that levy to take,” Sansone said.
After her presentation, Councilman Josh Finch asked a question a resident wanted him to ask. It was stated at another meeting that the levy hadn’t been increased since the territory was formed in 2008-09. The net assessed value has increased, so the rate overall, or the amount of income, has increased since 2008 “pretty significantly,” he said, so the question was, “because the assessed value has gone up significantly, even though the levy has not increased, there should still be more revenue. He’s asking why there is a shortfall.”
Sansone replied, “That’s definitely a misconception that’s shared by a lot of taxpayers, I think. The growth in net assessed value does not cause you to get additional revenue, unless you file for an appeal. That’s it. So what’s going to happen is, as your net assessed value goes up, your tax rate is going to go down because it takes a lower tax rate to get that maximum levy. Your maximum property tax levy is based on an annual statewide growth factor. Every taxing unit in the state gets the same growth factor no matter how quick your net assessed value is growing, how much your population is growing, how much development you have.”
She said the fire territory has been receiving increases to its maximum levy by 3 to 5%, varying by how well the economy is doing, but in the past the council has not permitted the fire territory to get the full maximum levy. She said there’s been a little bit of growth every year, but not like they would have seen if they would have received the maximum levy every year.
Grose said since the fire territory was created in 2008-09, he can not remember ever going through a petition to increase the levy.
Fire Chief Brian Mayo gave the second half of the presentation, which was on the details of why the levy increase was needed. He said the fire department is an efficient one and the past job the city councils and administrations have done were good.
“We’re talking (here) about an operational budget increase. We also have the equipment replacement fund, which is part of the territory’s budget,” he said. The new $1.8 million ladder truck that was ordered comes out of the equipment replacement fund, which doesn’t get a rate increase and is flat and not part of the current discussion. He said the equipment replacement fund is what it is and they have to work with that every year.
The operational fund is the budget fund they actually can have some input on.
Since the 10-year population increase in the territory was mentioned, Mayo said what might also be interesting for the council to know is the increase in the fire territory’s run volume. It’s gone from 2,783 runs in 2018 to 3,590 in 2022, or roughly a 28% increase in call volume in just four years. They also have about a 30% overlap in calls, which means while the fire territory is on one call, another call comes in.
They have four daytime personnel Mondays through Fridays, which includes the fire chief, assistant chief, EMS chief and fire marshal. There are three shifts consisting of 12 personnel. That’s 12 people authorized for the shifts, but with vacations, sick time, bereavements, etc., he said it’s rare they have 12 people on duty. Some of the deficiencies that need addressed, he said, include personnel.
As for the spending, Mayo said six firefighters/EMTs at $110,000 per member, which includes gear, training, salaries, retirement, etc., would give him two per shift at a total of $660,000. A training chief would be $120,000; inspector position, $110,000; and the two CARES positions would be at $90,000 and $85,000 once the grant funding expires. Just in personnel costs alone, that would over $1 million total.
Then there’s other expenses like training expenses, part-time and backfills firefighters and firefighter physicals that would increase the total costs to over $1.2 million.
Of those costs, he said his highest priorities would be to put two firefighters on a shift, the CARES coordinator and assistant, the training funding, the firefighting backfill and the firefighter physicals. Those priorities would total about $565,000.
Councilwoman Cindy Dobbins asked about the breakdown of calls they respond to. Mayo said about 80% were medical calls, with the other 20% being fire calls.
Councilman Juergen Voss asked when the tax rate would go into effect and when would the money be available to the fire territory if the levy increase petition was approved by the council. He was told June 2025.