Rules for Missouri Fire Protection Districts - Page 8
Parenthetical numbers in the text refer to sections of the current Revised Statutes of Missouri, abbreviated as RSMo.
Petition to become part of an FPD
Several options for changing FPD boundaries are set out in the statutes (321.300). The procedures for expanding boundaries to include, or annex, an area are as follows:
- A petition to be included in the FPD must bear signatures equal to 25 percent of the most recent gubernatorial vote in the area asking to be included. If a city is partly in and partly out of the FPD, the entire city may choose to go either way. The petition follows the form for initiative petitions (see Chapter IV. Initiative, Referendum and Recall). The petition must include either property legal descriptions or, if more than 25 owners or registered voters sign, the addresses of the signers.
- All owners of land adjoining the FPD may file a petition to be included. No minimum number of signatures is required in this case. “All” of the owners of the property described could be just a single owner. In either case, signing the petition is presumed to give the consent of the owner to be annexed.
Special rules govern annexation for a city that is partly in and partly out of St. Louis County, where an FPD serves only part of that city.
The petitions are filed with the FPD board, which determines whether serving the petitioning area is practical and in the FPD’s best interest. The board may, if it decides doing so serves the FPD’s best interest, exclude part of the area petitioning. Upon granting the petition, the board files it with the court that incorporated the FPD, through the circuit clerk. An “all-owners” petition automatically gets a court order. A “25 percent” petition must go through an election of those residing in the area proposed for annexation and receive a simple majority vote to pass.
(See Petitions in Chapter IV. Initiative, Referendum and Recall for information about why the petition process should be taken seriously.)
Protest to an annexation
“Any person aggrieved” by the decision to grant an annexation petition can appeal the board’s decision to the circuit court within 30 days after the board makes its decision. The court then hears the arguments and decides.
Annexation by a city
For many years, it has not been clear whether the FPD or the city is to provide fire protection and emergency medical services to property within the FPD that is annexed voluntarily into the city. The conflict results from the existence of two potentially applicable statutes, Sections 72.418 and 321.320, RSMo, because application of each yields a different result.
Section 72.418 provides that FPDs serving an area shall continue to provide fire protection and emergency services to an area annexed by a city with a fire department, while Section 321.320 does not. It should be noted that both sections permit the FPD to levy taxes on the property to pay bonded indebtedness that existed prior to annexation.
The Missouri Supreme Court resolved the question with an opinion handed down on March 17, 2009 (South Metropolitan, Res v. city of Lee’s Summit, App, SC89558). The court held that Section 321.320 excludes from an FPD any property located in an FPD’s boundaries and annexed by a city with at least 40,000 inhabitants that is not wholly located within an FPD. In order to harmonize the conflicting sections and give both meaning, the conflict was resolved by applying Section 321.320 to counties without a boundary commission and Section 72.418 to counties with a boundary commission. St. Louis County is currently the only county with a boundary commission.
In its opinion, the court also stated that the population language contained in Section 321.322.3 excludes its application in St. Louis County, currently the only county with a boundary commission. Other specific language contained in Section 321.322.4, in effect, authorizes Section 72.418 to apply to Harrisonville, a city in a county with no boundary commission. This application was drawn narrowly, providing further evidence that Section 72.418 is intended primarily to apply in counties with a boundary commission.
For cities with a population between 2,500 and 65,000, and which do not fall within the provisions of 321.320, consult section 321.322.
Petition for exclusion
Any owner of either real or personal property may file a petition with the board to be excluded from an FPD (321.310). A property description and a deposit sufficient to cover proceeding costs must accompany the petition. The board publishes a legal notice and sets a hearing date. The notice includes information about how to file a written protest against granting the request (321.310).
At the time set, the board hears the petition and any objections that may have been filed. The board considers whether the property can be served as a practical matter and whether excluding it is in the FPD’s best interests. The board may decide the matter either way. If exclusion is granted to the petitioning property, a certified copy of the board’s order is filed with the circuit clerk and the county clerk of each county affected. The circuit court has authority to reverse the board’s decision if it finds the board acted improperly. The matter may be appealed in a circuit court action filed within 30 days (321.310 ).
The owners of excluded property remain responsible for the portion of the FPD levy committed to payments on loans (debt-service levy) in effect at the time of exclusion. The property is exempt from being included in any bonded debt incurred after the exclusion (321.330)
Consolidation and shared services
Consolidation can be a way for FPDs to maintain or increase levels of service as well as more effectively and efficiently use taxpayer resources. Instead of full consolidation, some FPDs consider shared services arrangements — sort of broader mutual aid agreements (321.220.4; 321.600.4). Governmental agencies sometimes receive administrative support through nonprofit corporations that can provide services under a contract. Under Missouri law, these are considered quasi-public entities, at least to the extent of their assistance with governmental functions.
Shared services can even be provided by a quasi-public organization set up by the FPDs (see Management contracts in Chapter XIX. Ambulance and Emergency Medical Services regarding potential voter approval for contracting for fire service).
Except for FPDs located in a first class county, two or more FPDs with at least a common boundary may consolidate by following this process:
- Each FPD board included in the proposed consolidation adopts an FPD consolidation plan with the proposed consolidation name, legal description of the boundaries, outstanding bond amounts, list of firehouses and names of the FPDs to be consolidated (321.460.2).
- The FPD’s boards, separately or jointly, file a certified copy of the adopted FPD consolidation plan, signatures of those FPD directors that voted in favor of the FPD consolidation plan and a petition for consolidation with the circuit clerk, and pay a $50 filing fee against court costs (321.460.3).
- If the circuit court finds the FPD consolidation plan has been duly approved by the boards of the FPDs proposed to be consolidated, then the circuit court submits the question to the voters, including the property tax levy ceiling(s) of the proposed consolidated FPD, along with an election for three directors of the proposed consolidated FPD (321.460.5-321.460.7).
- If a majority of voters favor the FPD consolidation, then the circuit court approves the FPD consolidation and designates the first board of directors of the consolidated FPD, with the director candidate collecting the highest number of votes receiving a six-year term, the director candidate collecting the second highest votes receiving a four-year term, and the director candidate collecting the third highest votes receiving a two-year term (321.460.4; 321.460.8).
For FPDs wholly located in a first class county, but not in St. Louis County, two or more FPDs with at least a common boundary may consolidate by following this process:
- The board of directors of each FPD passes a joint resolution to consolidate and submits the question to the voters.
- The consolidation, if approved by the voters, becomes effective the following Jan.1, unless approved at a November election, in which case it becomes effective on the Jan.1 of the following calendar year (13 months later).
- The board consists of all present board members of the prior FPDs, but may be reduced in size to not less than five as director’s terms expire.
- The resulting tax levy of the consolidated FPD is capped at the lowest levy rate of the constituent districts prior to consolidation.
For FPDs located in St. Louis County, two or more FPDs with at least a common boundary may consolidate by following the normal process in 321.420, except that 321.687 specifies the new board shall have five members, with terms allocated according to vote totals.
All the properties, rights, assets and liabilities of the consolidating FPDs become the properties, rights, assets and liabilities of the consolidated FPD (321.465; 321.688.4). The circuit court directs the circuit clerk to transmit certified copies of its order for filing to the county clerk(s) and recorder(s) of deeds, for which each clerk and recorder receives a $1 filing fee (321.470).
Economic development impacts
Although borders are not changed, some economic development projects can affect FPDs by taking property tax revenue away from the FPD and giving the monies to cities, counties and developers. FPDs need to determine if such economic development truly benefits the community or if it will result in undue hardship — which in the case of an FPD, means protecting the economically developed property without all its tax money to do so. In either case, the FPDs would be well-advised to seek legal counsel that specializes in economic development law.
There are three types of economic development projects for which the assessed valuation is frozen for years, even though through development, property values increase — in affect taking property tax revenue from the FPD.
The first type of economic development project is called Tax Increment Financing (TIF) in which the incremental tax revenue — from property value increases due to the economic development — is used for up to 23 years as part of the economic development of the property (99.800-99.865). TIF projects are meant to redevelop “blighted” properties, which in theory would not be developed without tax incentives. Decisions about a TIF project are made by a nine-member commission that conducts studies, holds hearings and then creates an overall redevelopment plan, which is then sent to the city or county for its approval. The TIF law is loaded with exceptions and alternatives, but what follows is the most generic application of TIF law to school districts and so-called “other taxing districts” such as FPDs.
The school districts in the redevelopment area agree on two members to be on the TIF commission. All other taxing districts in the redevelopment area agree on one member to be on the TIF commission. The six remaining members of the TIF commission are appointed by the chief elected officer of the city or county, for example, the mayor.
Once the redevelopment project is completed, or the redevelopment plan is approved by the TIF commission, the TIF commission appointed by the city or county can terminate the existence of the three members of the TIF commission representing the school districts and other taxing districts. However, school districts and other taxing districts need to pay attention as one metropolitan school district found out when it learned there was an attempt by a city to use leftover TIF project monies to build a soccer complex instead of distributing the leftover monies to the school district — monies the school district believed to be theirs, not the city’s.
Prior to 2004, taxing districts received none of the incremental tax revenue from property value increases due to the economic development during the 23-year life of a TIF project. Now, taxing districts such as FPDs receive at least 50% of the incremental tax revenue from property value increases in the district due to economic development (99.848). Further amendments in 2018 leave the boards of emergency service districts, such as ambulance and FPDs, the ability to receive up to 100% of the revenues lost to TIF. The new provision allows the board authority to determine the percentage of reimbursement annually, if that amount is set prior to payment being made into the TIF special allocation fund for the year. At first glance, one might wonder why a board would ever set the rate at less than 100%. This authority and flexibility, however, ought to give FPDs a greater voice in the initial formation of the TIF district, including the terms of the underlying development agreement, and perhaps even the total authorized duration of the TIF.
There are provisions for payments to the other taxing districts in lieu of property taxes (99.845.1) as well as for surplus incremental tax revenue not used for redevelopment to be distributed to the taxing districts (99.820.1[b]).
The second type of economic development project is called an Enterprise Enhancement Zone (EEZ) in which 50% or more of the taxes on real estate property improvements is abated for anywhere from two to 25 years if those improvements create sustainable jobs in targeted industries in “blighted” areas (135.950-135.973).
Decisions about an EEZ are made by a seven-member board that “conducts the activities necessary to advise” the city or county on the EEZ. The school districts in the EEZ agree on one member for the EEZ board, and all other taxing districts in the EEZ agree on another member — both board members serve an initial five-year term. The chief elected officer of the city or county — the mayor, for instance — appoints the five remaining members of the EEZ board.
The third type of tax diverting development tool is Chapter 100. In this process, a local government “owns” a development project for a specified period and leases it back to the developer. This causes the property to be removed from the tax rolls altogether for the life of the financing. Amendments adopted in 2018 give emergency service districts like FPDs the right to require reimbursement for up to 100% of lost revenues (100.050). The overall economic impact of the development to the affected community, and associated increases in other tax bases, ought to be considered and discussed early in the process between the FPD and the entity considering Chapter 100 incentives. Again, this new authority should give the FPD a place at the negotiating table when development agreements are being considered.