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Recommendation for approval of an amendment to the Milwaukee County agreement for providing fire services to the buildings located on the former County Grounds
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Submitted by:
John Ruggini, Alan Kesner and James Case
Department:
Finance, City Attorney and Fire Departments
A. Issue
Since 1980, the City of Wauwatosa has provided fire service to the facilities located on the former County Grounds including the hospitals at the Milwaukee Regional Medical Campus. Given the private ownership of nearly all buildings, demolition or transfer of all County facilities on the hospital grounds and changing property tax status of the hospitals, the County and City have reached a proposed agreement for winding down the County’s financial commitment and relieving the City of operation restrictions.
B. Background/Options
In 1980, Milwaukee County and the City of Wauwatosa entered into an agreement for providing and funding first-line fire protection services to county-owned buildings and properties as well as the Private Geographic Members (PGM’s) of the Milwaukee Regional Medical Center located on the Milwaukee County Grounds, all of which were at that time exempt from the payment of property taxes which would ordinarily support the provision of such services, coinciding with the dissolution of the Milwaukee County Fire Department which had previously provided such services. The City of Wauwatosa took on the responsibility for providing those services and the County agreed to pay for the construction of a new fire station (Station 53 on Watertown Plank Road) and to fund the provision of those services for 60 years. The City agreed to minimum staffing requirements at that fire station.
Over the past three decades, the County has been divesting itself of responsibilities and facilities on the County Grounds, including the sale of the former County Hospital which became Froedtert. In 2020, the County sold the land on which the PGM’s had constructed their facilities to each of the PGM’s themselves, as well as the property utilized for the County’s Behavioral Health Division, moving the properties into private ownership and causing the properties owned by the PGM’s to become partially subject to ad valorem property taxes, resulting in a significant reduction in County-owned land and facilities requiring Fire Protection Services as provided by the County through the Agreement.
As a result of the land sale, the PGM’s now pay property taxes on a portion of the properties they own, thus removing the ongoing necessity for additional funds to support tax-exempt functions on lands formerly owned by the County. In addition, there significantly fewer County owned buildings on that property which also removes a significant justification for the funding by the County.
The parties have expressed a desire to wind down the County involvement in fire protection services on the County Grounds and allow the City to independently operate its Fire Department in a manner most appropriate for the City and all of its residents and taxpayers but to do so in a way that minimizes the budgetary stress on the City of Wauwatosa. In the attached agreement there is a proposed 13-year wind down with the annual decreases in the payment from the County to the City. The large decrease in 2023 and 2024 is funded through property tax dollars already set aside from the increase in tax revenues associated with the hospitals. The large decrease in 2028 is when the money the City has been setting aside for this purpose, by cashing financing fire capital, is no longer committed to a capital project. In all other years, the decrease has the effect of increasing the City’s budget gap. The estimated loss revenue stream for the City over the next 19 years has a present value of $18,815,911.
There is a strong benefit to the City by eliminating the staffing mandates imposed on Fire Station 52.
In addition, the County agrees to waive the requirement that the City purchase the Fire Station at a market price and instead will sell it to the City for $1. We commit to always using it for a fire station, even after the agreement expires. We can use it for other purposes in the future with the County's permission. If we sell it for private development we will pay them the then-market value of the land alone.
C. Strategic Plan (Area of Focus)
Priority Area Two: Public Safety
Priority Area One: Economic Development and Financial Resilience
D. Fiscal Impact
There is no fiscal impact on the 2023 or 2024 Budgets because they already assumed a decreased payment consistent with the attached schedule. The present value of the “lost” revenue through 2040 is $18,815,911. In addition, we would have to deduct from this revenue stream the market value of the land which would have to be purchased as well as consider the impact of the operating constraints the contact puts upon the Fire Department.
E. Recommendation
The Fire Chief, City Attorney and Finance Director recommend adoption of amendment number 2 to the Agreement Between the City of Wauwatosa and Milwaukee County related to the provision and funding of fire services.
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