How MOFD Can Spend Orinda’s Tax Dollars in Orinda
When asked to form MOFD back in 1997, Orindans (and Moragans) were promised that their tax dollars would be used locally: Orinda tax dollars in Orinda and Moraga tax dollars in Moraga. However, MOFD never kept track of where its tax revenue came from or went to so that promise was not kept.
It is time to correct that oversight and it is not difficult to do.
Over the years the burden of financing MOFD has fallen to a greater and greater extent on Orinda’s shoulders. But Orinda has major financial commitments, wildfire prevention and infrastructure. It cannot afford to continue subsidizing Moraga’s service from MOFD. The solution to this problem is not complicated.
Orinda taxpayers are paying MOFD $21.9 million a year for service. It “only” costs MOFD about $16.6 to provide the service, $5.3 million less than what Orindans pay. That $5.3 million is needed for services the residents do require, namely wildfire prevention: fuel mitigation and home hardening.
The argument against using all of Orinda’s tax dollars in Orinda is that MOFD does not have a $5.3 million a year surplus to spend on additional service to Orinda. Why not? If Orindans are paying too much, and MOFD is not wasting money somewhere, then someone must be paying too little. Since there are only two partners in MOFD, then Orinda’s partner Moraga (and Canyon), must be underpaying. They should either pay more for the service they are receiving or MOFD has to figure out how to reduce costs to a level Moragans can afford.
What the numbers show
MOFD serves 36,600 people and takes in $33.2 million in property tax. Orinda (population 19,500) property taxpayers provide $21.9 million, an average of $1,120 per capita. Moraga (population 17,100) property taxpayers provide $11.3 million, $660 per capita, 60% of what Orindans pay.
How can MOFD rectify the difference?
MOFD’s budget for 2023/24 shows a $2.0 million surplus, excluding the funding of the replacement for Moraga’s Station 41 from the General Fund (which could be funded by long-term debt) and the one-time gain from the East Bay Hills Fire Break grant. Without the surplus, the need for tax revenue from Orinda and Moraga is reduced from $33.3 million to $31.3 million.
53% of Orinda’s 17 firefighters (9 of 17) are stationed in and serve Orinda. 53% of MOFD’s resident’s-served live in Orinda (19,500 out of 36,600 total). 53% of MOFD services go to Orinda. Orinda should pay 53% of MOFD’s tax revenue, $16.6 Million. But this year Orinda is projected to pay $21.9 million, $5.3 million more than is required to provide it with service.
Is it unreasonable for Orinda, and MOFD and Moraga to expect that Orinda only pay $16.6 million instead of the $21.9 million it is projected to pay? Last year, the County received $14.8 million from Lafayette property taxes for the same three stations with nine firefighters as serve Orinda. Lafayette also receives ambulance service from AMR (Orinda firefighters cross-staff their own ambulances). $16.6 million from Orinda is not unreasonable, at least not unreasonably low.
But MOFD projects that it will only receive $11.4 million from Moraga when it needs $14.7 million from Moraga (47% of the total $31.3 million). How would it replace the $3.4 million shortfall?
First, it would charge Moraga an additional $1.9 million in parcel tax that Moragans agreed to before MOFD was formed.
Second, it would staff Moraga’s two-person ambulance with paramedics, not paramedic firefighters, as Moraga, apparently, does not have the money to support eight paramedic firefighters. Note: The firefighters on the ambulance never function as firefighters, only as paramedics. This would save the district about $1 million a year.
Additional Moraga-specific savings to cover the final $500,000 could be difficult. For every “general” dollar in savings, only 47 cents is for Moraga’s “account”. So, to save an additional $500,000 would take $1 million in gross savings.
Maybe Orinda would need to continue to pay the district an additional $500,000. But this would not need to be a subsidy to Moraga. The pension deficit could be bifurcated between Orinda and Moraga and temporarily Orinda could start paying down its share faster than Moraga’s until the district could figure out how to allow Moraga to pay for its own service costs.
How ever the $500,000 is accounted for, it would still leave Orinda with $4.8 million in additional services.
How would it receive those services? There are options.
One way to reduce up to $600,000 in excess funding is to reduce the Orinda Parcel tax. As long as there are demands in Orinda for deferred maintenance (vegetation removal), this is not probably option #1.
The easiest way to provide for extra services to Orinda, but which the city itself has no control over, would be for MOFD to provide them.
In the past, MOFD has provided Orinda with two additional firefighters, staffing a full time Orinda ambulance. That would cost about $2 million a year. But seeing as there are only about 1,300 emergencies per year in Orinda; about 3.5 per day; which means a little over one per station-crew daily, adding a fourth crew is probably a waste of money.
The highest priority currently is wildfire prevention. Including home hardening, Orinda could easily spend $4.8 million per year for several years to clean up a century of built-up vegetation. But at some point, the initial cleanup (deferred maintenance) will be completed and annual maintenance will be required which would be cheaper.
Another option for using Orinda’s excess funding to MOFD would be to transfer some of the share MOFD is receiving from Orinda property tax to the City. This is a viable and legal option. MOFD receives about 22.6% of Orinda’s property tax. The City receives about 7.4%. Next year, each 1% of tax will be about $970,000. The full $4.8 million could be returned to Orinda with a suspension of the $600,000 parcel tax and a transfer of a little more than 4% of the ad valorem tax: MOFD’s share drops from 22.6% to 18.6% and Orinda’s increases from 7.4% to 11.4%. The money to Orinda would then go into the general fund which Orinda could use for anything it wished.
Obviously, the “options” could be mixed and matched (some parcel tax reduction, some additional service from MOFD, some transfer of tax from MOFD to Orinda).