South King Fire and Rescue will consider layoffs, early retirement incentives and shrinking its footprint as solutions to cut spending and preserve tax revenue.

The fire district’s board of commissioners, at a special meeting Nov. 15, voted unanimously to allow Chief Allen Church and legal counsel to enter into talks with unions about layoffs and retirement incentives.

The commissioners also voted to move forward start a plan to withdraw a one-square mile piece of the district to avoid a conflict with limits on local property tax levies, called pro rationing.

Church said that 2011 would be a year of making “tough decisions” about the district’s finances and personnel. Church said that 88 percent of the budget is composed of personnel costs.

Both Church and board chairman Bill Gates cited the failure of Proposition 1 in August for the need to make cuts.

“The voters said, ‘you need to find a way to live within your budget.’ We’ve taken that to heart,” Church said, referring to the failed ballot measure.

Proposition 1 would have reduced the district’s levy from $1.50 to $1 charged to each property owner per $1,000 of assessed property value, but added a “benefit charge” — an amount each property owner would pay based on the square footage and fire risk of their property.

The commissioners passed a $22.6 million budget for 2011 at the Oct. 21 meeting, which is a 2.68 decrease from the 2010 budget, according to budget documents. Church cut $650,000 from the budget by:

• Cutting overtime in half;

• Shutting down one aid car — a vehicle that carries EMTs — and making another part time;

• Leaving four positions vacant;

• Freezing administrative salaries at 2010 levels;

• Reducing public education programs;

• Continuing a hiring freeze;

• Cutting all capital expenditures — money used to build buildings — except paying debt;

• Cutting non-mandatory expenses related to Community Emergency Response Team training.

Church also said that he’s contracting with a human resources expert to identify positions in the department that could be eliminated. He said after the Nov. 15 meeting that he would begin talks immediately with the International Association of Fire Fighters Local 2024 about cutting personnel costs.

Union President Ryan Herrera said that the department has weathered a bad economy with good financial practices, but that it just keeps getting worse.

“Layoffs are definitely something that are a possibility, and this is allowing us to sit down and begin to discuss how can we contain costs a little better to lessen the impact as we move into the possibility,” he said.

He pointed out that the union recently moved toward a self-insured health care plan, which could save between $231,000 and $571,000 per year. He said that the cost-cutting measures mostly stem from the failure of Proposition 1.

“As revenues continue to decrease, it forces us to look outside the box,” he said.

Hererra said that the number of union workers is down to around 128 due to retirements. He said that one or two firefighters may retire in the upcoming year.

Property puzzle

The one-square mile piece that could go away is at the very northeastern tip of the district. The area is bound by SR 167, 288th Street, the Green River, Lake Fenwick Road, 272nd Way and 55th Avenue South.

This area is overlapped by a hospital district levy. Because property values have been decreasing, a variety of local levies have increased to make up the difference. This also means that levies are getting closer to their legal limits. Levy rates must be even across the district, so if the levy limit is reached in the one-square mile area, it could cause the tax rate to be reduced districtwide. This could result in the loss of $5 million over several years.

The district has a 25-cent buffer against pro rationing, but it, too, is bound by levy limits. State law prohibits the total levy from exceeding $10 per $1,000 of assessed value. With state taxes included, the total levy in the district is $9.50. If another taxing entity raises its rates, the 25-cent buffer could be reduced or vanish.

The district would enter into contracts with each individual property owner to provide fire protection. The area is mostly farmland, though housing developments exist along Star Lake and Lake Fenwick roads.

Deputy Chief Michael Knorr said the department would set up public meetings with citizens in the affected area. The contract amounts with each homeowner would not exceed what the rest of the residents in the district pay in taxes. Knorr said no homeowner would be denied service in an emergency, regardless of their payment status. He said there are 64 parcels and 43 property owners in the area.

Chief’s contract

Also on Nov. 15, the commissioners approved an extension of Church’s contract, but no salary increase. Church’s contract will last until 2018, and will not include a clothing allowance for 2011. Gates said the contract did not rule out a salary increase or return of the clothing allowance after 2011. Commissioners Mark Freitas and John Rickert voted against the renewal. Freitas said he had not had enough time to review the new contract; Rickert asked before the vote for more time to look at the contract, which was denied.

Neither Gates nor Church could provide a copy of the contract until the chief signs it.

“We’ll continue to provide the best level of service. That’s number one,” Church said.