Costs of change high

When Millwood officials decided not to annex to the Spokane Valley Fire Department in 2001, the town was in a very different financial position.

Voters overwhelmingly passed bond and levy measures to hire three full-time firefighters, build a new station and buy equipment.

Just a few years ago, it wasn’t unusual for Millwood to end the year with a healthy surplus of $250,000. This year, the town will have a tough time to end the year in the black, longtime Councilman Dan Mork said in an interview last week. Millwood’s 2004 budget was around $700,000, with money spent on the fire department making up about 40 percent of that.

The added expense of full-time firefighters and a new station weren’t what changed Millwood’s financial picture. But it gave the town less wiggle room when other expenses increased.

The town cited a financial shortfall when it decided to lay off firefighter Tony Perry in December. Perry returned to work on Tuesday.

In recent years, Washington voters have approved tax-limiting initiatives. Costs to contract with the county for law enforcement and animal control have increased sharply. Tax revenue has dropped.

“We always had money and we don’t now,” Millwood Mayor Jeanne Batson said in December.

Annexing to Valley Fire would get rid of Millwood’s need to worry about how to pay for fire protection.

But it could end up costing Millwood residents more in taxes, although it remains unclear how Millwood’s levy rate would change if the town annexes to Valley Fire.

Millwood residents currently pay $3.15 per $1,000 of assessed valuation for the town’s levy rate and bond, according to the county assessor’s office. That includes money spent on the fire department and for all other town expenses, such as law enforcement and park maintenance. If it annexes to Valley Fire, Millwood’s levy rate would likely decrease.

Yet if annexed, residents would have to pay taxes to Valley Fire, which currently charges $3.19 per $1,000, according to the assessor’s office.

Even without the fire department, other expenses continue to increase for Millwood.

Just a few years ago, Millwood paid the Spokane County Sheriff’s Office $75,000 a year. For that, the town got a minimum of 215 hours of patrol time each month. If deputies were called to Millwood more than that, the town wasn’t charged extra.

But things changed when towns like Liberty Lake and Spokane Valley incorporated. Spokane County commissioners decided they’d been giving small towns bargain prices. The towns needed to pay the actual cost of the county services they used, commissioners decided.

That led to major cost increases for Millwood.

The contract costs for law enforcement jumped to approximately $176,000 for 2004. The cost is projected to increase again to $241,000 in 2005, according to figures from the Sheriff’s Office.

The cost of Millwood’s animal control contract with the county has also more than doubled, to approximately $11,300.

Millwood has also lost some tax revenue in recent years.

In 2002, Inland Empire Paper Co., the town’s biggest taxpayer, had its taxes adjusted. The paper company had been reporting its personal property incorrectly and ended up overpaying for many years. The re-adjustment led to a $33,800 decrease in property taxes to Millwood.

Late last year, the paper company had its taxes again adjusted downward because of a $16.5 million accounting error made by the Spokane County Assessor’s Office in 1988. The assessor’s office taxed some of the paper company’s equipment as both real and personal property. The company had paid too much ever since.

The town had to pay the paper company $137,000, but gets the money back this year by an assessor’s initiated refund levy.

Inland Empire Paper Co. is again asking the county to examine the way it is taxed, said chief deputy assessor Ralph Baker. The issue has gone to a state board of tax appeals. For now, the mill’s taxes will remain the same. But the board’s decision could mean another change to how the mill is assessed and how much it pays in taxes, Baker said.

Inland Empire Paper Co. is a wholly owned subsidiary of Cowles Publishing Co., which also owns The Spokesman-Review. President Wayne Andresen could not be reached for comment Monday.

Several citizens and officials wonder whether Millwood will eventually disincorporate. Besides its own fire department, Millwood used to have a branch library, a post office and a district court branch.

Dan Mork has been on the Millwood council since the early 1980s. He’s working on crunching numbers to figure out how much the town will ask Valley Fire to pay for its station and equipment.

“I don’t want to see that happen,” Mork said of disincorporation.

He doesn’t think it would happen in the near future. Yet Mork said he’s has always felt that Millwood needs to provide better services to its residents for less money than they would pay if the town didn’t exist.

So far, Millwood has been able to do it, Mork said. Millwood has better streets than the rest of the Valley, an excellent water system, a good sewer system, a good growth-management plan, free pickup of leaves in the fall.

But those services might be changing because of increasing costs.

“I don’t think people should be paying premium living here,” Mork said.

Janis Langdon has lived in Millwood for 14 years and voted in favor of a 2001 bond and levy which were used to build the station and hire new firefighters. She was worried about the news that Clifford had been placed on administrative leave on May 25 and that nearly all of the town’s volunteers had quit in response. Langdon came to the town council meeting June 7 to hear the council’s explanation.

Instead, she listened, shocked as the council approved a takeover by Valley Fire. The decision was made without any public meetings or chance for public input, Langdon said.

“They should’ve been honest and said they were in over their heads,” Langdon said of the council.

She thinks the community would’ve rallied around the council and found a way to continue the volunteer department.

Langdon worries that losing the Millwood Fire Department is the first step to being absorbed into Spokane Valley. She wonders whether the deal can still be stopped, but doubts it.

“I feel like my identity is being taken away without anything to say about it,” Langdon said.