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Othello seeks contract mediation with ACFD 5

by GABRIEL DAVIS
Staff Writer | May 15, 2024 3:00 AM

OTHELLO — The city of Othello is seeking third-party mediation for contract negotiations with Adams County Fire District 5 after giving two-year notice May 8 that the city will be terminating its current contract due to increasing costs. 

Othello Mayor Shawn Logan said in the May 8 announcement that ACFD 5 has been unwilling to negotiate with the city. He said the mediation process is written into the city’s contract with the fire district, a five-year contract was implemented in Feb. 2018.

“That third-party mediator will hear their side, will hear our side, and then we'll go back and forth and try to reach an agreement,” Logan said.

Fire District 5 Chief Gary Lebacken said the district received the two-year termination notice May 8. The district has not yet commented on the city’s termination notice or announcement. 

“We took this action in order to protect the citizens of Othello and the taxpayers of Othello from future extremely large increases in payments to the fire district without any appreciable service demand,” Logan said.

According to the city’s statement, its contracted rate with ACFD 5 is $0.65 per $1000 of assessed property tax valuations in the city. Within the last year that assessed valuation has significantly increased, leading to an additional $300,000 above what the city budgeted for the 2024 contract — about $465,000 — for a total of approximately $765,000.

Logan said negotiations for the contract’s remaining two years are still on the table.

“2024 is not over yet, and (2025), it's certainly on the table,” Logan said, “and beyond if we can come to some kind of an agreement.”

According to the city’s announcement, during a meeting between the two entities in March, ACFD 5 refused the city’s offer of $524,000 — about $60,000 more than what the city had budgeted for the 2024 contract — and asked for the full amount required in the contract. 

ACFD 5 and the city first met to negotiate in February, after the city found out about the increased contract costs in December 2023.

“We had discussed this with (ACFD 5), and that this was a possibility, and we wanted to renegotiate, and that the process might be more than what the city could budget for,” Logan said. “They seemed very amenable to that. They talked about whether that amount would be collectible, according to the latest assessor’s estimates, and they were all very agreeable, right up until they surprised us right around Christmas time.”

The city’s May 8 announcement stated that Adams County Commissioner Jay R. Weise, who also serves on the ACFD 5 Board of Commissioners, said the time to negotiate for 2024 has passed. According to the city’s statement, ACFD 5 has also hired a consultant to do a study on whether the city is paying enough to the fire district, and won’t have the results until summer. 

Othello residents inside city limits do not pay taxes directly to ACFD 5, so the main financial impact on the public comes from the expenses taken from the city’s budget for the contracted services, which could draw funds away from other departments and projects.

“Every entity, whether it's a fire district, a county or a city, when it allocates funds in its budget, and then it has an unexpected expense,” Logan said, “that means things are going to have to get cut in order to delete that expense.”

Logan said the city won’t know whether its tax revenues will go up comparably to the property tax assessed valuation until they receive the first payment, which he said should come in the next couple of weeks. 

“We haven’t explored all our options yet,” he said.

Logan said the city is hoping a new contract fee would be based on more data points than just the city’s assessed valuation. 

“One of the data values was population, one of the data values was the square mileage of the city and another data value was assessed valuation,” he said. “Those were some of the basic ones, just to make it a more equitable amount.”

According to the city’s statement, the city of Quincy and Grant County Fire District 3 renegotiated their contract earlier in the year in a similar manner, expanding to five different data points that, according to the statement, “allowed for the growth of the fire district revenues and gave the City a more predictable financial budgeting mechanism.”

“As the city grew and the assessed valuation and the population and the size of the city continued to grow, it assured the fire district that they would continue to grow through their revenues in order to meet any current and future demand,” Logan said. “That's what we really, ultimately, are looking for in a mediation with our fire district.”

Logan said it is too early to tell what the expense of terminating the ACFD 5 contract will look like. The May 8 announcement said the city is still the legal owner of the Fire Hall building and all the local fire trucks and equipment, and that the Othello City Council directed Logan and staff to look into the option of the city managing its own fire department. 

Gabriel Davis may be reached at gdavis@columbiabasinherald.com.

    Several Adams County Fire District 5 firefighters, pictured, were honored recently at the district’s annual banquet in January.