MOFD Forces Orinda to Subsize Moraga with $4 Million for Another Year
Orinda property owners pay $2,900 annually to MOFD for service that costs MOFD $2,500 to provide. Moraga property owners pay $1,900. The effect is that Orinda residents pay $4 million too much and Moraga residents pay $4 million too little (are subsidized by Orinda). Each year MOFD sets rates for a parcel tax that could help levelized the cost by charging Moraga more so that Orinda’s excess could be used for additional services (wildfire prevention) in Orinda.
The Board failed to do so as it has failed for two decades. The “discussion” of how to vote lasted only 8 minutes. 5 minutes were taken up by a monologue from recently elected Director Mike Roemer “representing” 2,700 Orinda families, explaining how making Moraga residents pay more than two thirds of what Orindans pay would be unfair to them.
Below is a letter sent to the MOFD Board explaining why Director Roemer is wrong. If you want to listen to his speech, you can hear it HERE starting at time stamp 2:10:15.
MOFD was formed because both Orinda and Moraga wanted to use their taxes in their respective communities (Orinda’s in Orinda and Moraga’s in Moraga). This desire, which the voters were “promised” would happen if they formed MOFD, has never been followed through on. Only MOFD can control it but they have not even accounted for where the money is coming from or going to. And the Orinda and Moraga Councils have never held the agency they created accountable.
Someday the inequity will get so large that someone will say “enough” and move to dissolve MOFD. That will be a shame.
MOFD Board Members:
I listened to the MOFD Board’s 8 minute “discussion” of Fire Flow Parcel Tax Rates for next year (6/21/23 agenda item 10.4) (audio time stamp 2:09:30 - 2:17:45). I was glad I was not there to make a public comment because I could not start to unwind the misinformation and misunderstandings presented by Director Roemer in his 5-minute monologue (2:10:15 - 2:15;15) in the allotted 3 minutes I would have had to refute his contentions. The fact that the Board, once again, has made Orinda a less safe place by refusing to charge Moraga what it costs to serve them, thus using Orinda tax dollars to subsidize that service instead of enhancing Orinda’s service, cannot be blamed completely on Roemer’s lack of knowledge and misperception of his role in representing Orinda residents at MOFD. This has been going on for years, actually decades. Roemer is the latest in a long line of directors throwing their constituents' well-being under the wheels of the bus.
I will start with the facts.
Roemer stated that the fire flow tax rate under discussion, 6 cents for the Orinda parcel tax and the Moraga parcel tax, was 6 cents per $1,000 assessed value. The parcel tax has nothing to do with assessed value. It is based on the “fire flow” required to extinguish a structure fire and is based on the square footage of the structure and whether or not it has a fire suppression (sprinkler) system. Orinda’s assessed property values per-capita and per-firefighter-serving-the-city are far greater than are Moraga’s values (which is the crux of the problem). But fire flow parcel taxes for structurally-equivalent homes are equivalent in the two communities, differing only by the “rate” set by the MOFD Board.
Romer was correct that the parcel tax is a very small percentage of the total property tax collected by the district. Based on the assessed values as of 7/1/2022, Orinda property owners “contribute” $20.1 million of ad valorem tax to MOFD and only $615,000 in fire flow parcel tax (2.97% of the total tax). Moraga property owners “contribute” $10.2 million of ad valorem tax to MOFD and only $480,000 in fire flow parcel tax (4.49% of the total tax). However, while Orinda’s parcel tax rate is capped at the 6 “cents” generating the $615,000 in parcel tax), the Moraga rate cap is 30 cents (agreed to by the Moraga voters before MOFD was formed, because they wanted superior service). If that rate was increased from 6 cents to 30 cents, the parcel tax on Moraga properties would increase to $2.4 million which would be 19% of the total tax paid, no longer a very small percentage. But that is closer to what it costs MOFD to provide them with the superior service they desire.
It was stated at the meeting that the Orinda parcel tax and Moraga parcel tax were about equal ($550,000 in Orinda and $540,000). This is true. Roemer stated, however, that some Orinda homes pay the Moraga tax and some Moragans pay the Orinda tax. Again, a misunderstanding on Roemer’s part. No one in Moraga pays the Orinda tax. However, 760 homes in South Orinda (designated Tax Rate Area 18012) pay $61,000 of the Moraga tax. The reason for this is that this area, the Ivy Drive neighborhood, is equally well served by Orinda’s Station 44 and Moraga’s station 41. The homes at the south edge of 18012, including Miramonte Highschool, are three minutes from the Orinda station and the north edge three minutes from the Moraga station. This is probably the best served area in the entire district. When the homes were developed, they chose to be serviced by Moraga because Moraga provided superior service (paramedics on the engines and a paramedic ambulance). But this was not because Moragans were paying more and therefore could afford better service. At the time MOFD was formed, Moraga was collecting about $3.4 million in taxes for fire protection, including the parcel tax, which equates to $425,000 for each of its 8 firefighter positions. At the same time Orinda was collecting $5.2 million (without a parcel tax), $575,000 for each of its 9 firefighter positions. Orinda could have had as good, in fact better service than Moraga if the County had not been using its funds elsewhere in the County. This was the reason Orinda left the county service and partnered with Moraga, to use Orinda’s tax dollars in Orinda to provide superior service.
Even though Orinda was already paying 35% more per firefighter than Moraga, even without an Orinda parcel tax, Orinda had a large capital equipment deficit (another “gift” from the county). So, Moraga insisted that Orinda also have a parcel tax but Orinda insisted that the rate cap be 6 cents, not the 30 cents the Moraga tax had. The Orinda voters were told that after the equipment deficit was cured the parcel tax would no longer be required. It only took three years for Orinda to pay about $2 million more than its “fair” share, which would cover the deficit, but the Orinda’s elected representatives apparently did not “get the memo” and the parcel tax was never reduced.
The next comment made by Roemer is that the “basic” property tax allocation (dividing the “pie” which is 1% of assessed value in total), which was set in 1978 when Prop 13 was put in place, cannot be changed. This is mostly true. But there is one way it can be reallocated. The state is divided into hundreds of Tax Rate Areas (TRA). There are nine TRAs in incorporated Orinda and eight in incorporated Moraga. There are also 21 in unincorporated TRAs apparently serviced by MOFD (some are in Oakland up on Skyline). Four are served by Orinda stations and 11 by Moraga stations (Canyon, Bollinger, S. Moraga). Within each TRA, one agency can “transfer” some of its allocated property tax to another agency in that TRA. So, if it is only costing MOFD 90% of what Orinda’s taxes are providing to service Orinda, and MOFD does not want to provide Orinda with extra service for that extra money, MOFD could “transfer” 10% of its property tax allocation to the City of Orinda within each of Orinda’s nine TRAs. This would be a one-time transfer (not a year-by-year allocation), which Orinda could transfer back if MOFD expenses rose. I am unclear of the exact mechanism and who needs to get involved (County BOS? LAFCO?), but the option exists.
Roemer did not bring this up, but the parcel tax is a “top up” tax; a supplemental tax to supplement the regular tax. When MOFD was formed, Orinda had a substantial capital equipment deficit. The supplemental parcel tax was supposed to cure that deficit. It did but was never abandoned after the deficit was cured. Over time, as Orinda’s property values increased faster than Moraga’s (333% increase over 25 years in Orinda vs. 252% in Moraga), while service remained constant, the parcel taxes should have been adjusted to supplement the regular tax. This was never done. Now the discrepancy in regular tax exceeds the ability of the parcel tax compensate but the district also has a total tax surplus which it could use to enhance Orinda’s service, since it cannot reduce its tax by more than the parcel tax.
Then there is the issue of “fairness” which Roemer brings up. Charles Porges’ comment mentioned fairness (Moraga is paying less than its “fair” share). Roemer’s response included “life is not always fair”. I certainly hope that is not his guiding light. True, life is not always fair but that does not mean our elected officials should not try to make things as fair as possible under any legal constraints they may have to comply with. He brought up the fact that new buyers into Orinda and Moraga are paying much higher property taxes than long existing residents, due to the indexing aspect of Prop 13, but I don’t see how pointing out one “unfairness” justifies another. It is not like all the new home buyers are in Moraga and not Orinda. In fact, the new home buyers in Orinda are paying a lot more property tax than those in Moraga.
The reality is that the taxation and service levels in Orinda and Moraga should have nothing to do with fairness. It should be based on why MOFD was formed in the first place. That was, from both Orinda’s and Moraga’s perspective, to use local taxes in their local community. Orinda taxes in Orinda and Moraga taxes in Moraga. The voters’ pamphlets for forming MOFD are very clear on this. Orinda’s a little clearer than Moraga’s but they both address the issue.
In the Orinda pamphlet, the proponents (arguments for) included all five members of the City Council. The formation of MOFD was an official City of Orinda act. The clearest statement of intent came from the Mayor, Sarge Littlehale, who stated “we must never again let the Supervisors spend $2.8 million of Orinda’s money elsewhere in the County, ignoring Orinda’s needs.” Other statements include “insure that fire protection dollars Orindans pay will stay in Orinda”; “Our tax dollars will be used in our city, now, and in the future”; and “the County has neglected our fire protection needs, while squandering millions of Orinda taxes on fire services in other cities.” Using Orinda tax dollars in Orinda, not Walnut Creek or Concord or Moraga, was the entire reason Orinda left the service of ConFire and partnered with Moraga to form an independent agency outside the control of the county.
The Moraga pamphlet was authored by residents, not members of the town council. It was more focused on service and independence from the county than money, but it did state “bring control of Moraga’s tax money back to Moraga”. Note that it’s “money woes” was not the misallocation of $2.8 million like in Orinda but $150,000 to the County for “administrative services.” But Moraga did insist on Orinda’s parcel tax because it did not want to pay for Orinda’s equipment upgrades.
Both cities wanted to use local money locally. Not elsewhere in the county, not even in each other’s city / town. But they only put one safeguard into the formation documents to guarantee that this would happen: Creating MOFD would “make local fire commissioners responsible for local needs”. And by “local”, the Orinda City Council meant that the MOFD Board members voted for by Orindans and representing Orindans would act in Orinda’s best interests, even if those were in conflict with Moraga.
What does Director Roemer say about this? (time stamp 2:14:00) “There is an issue with regards to who the five of us represent. It is my position that legally and morally and politically we have an obligation to keep this community united. Not to divide our community. And represent everyone in the area. And as a fundamental matter of fairness, if we were considering doubling or tripling or quadrupling the taxes Moraga citizens pay, we should talk with them.”
A great speech. How does it work with the facts?
* The MOFD directors are elected by division, not at large (like the Orinda Council is). There are five divisions with each division’s director representing 20% of the district. Director Roemer is director of Division 4, which is 100% in Orinda. Yes, his decisions impact all of the residents served by MOFD, but he is elected by and represents approximately 7,000 Orinda residents. He does not represent EVERYONE IN THE AREA (meaning the district). If he has to be “unfair” to Moragans so he can be “fair” to Orindans, he needs to choose Orinda’s best interests (safety) over Moraga’s (money).
* He believes he has an obligation to keep the community united. In 1997, $2.8 million of Orinda’s taxes were being used outside of Orinda and because of that Orinda was receiving sub-standard service. The response by the City Council and a group of citizens, and eventually the voters, was to detach from the service provided by the County and set up its own fire district. Currently, $4 million of Orinda’s taxes are being used outside of Orinda and because of that Orinda is receiving sub-standard service. It needs that $4 million to fund a robust wildfire prevention program. By using Orinda’s taxes to subsidize Moraga’s service, because MOFD will not charge Moraga what it costs to provide them the service they desire, Director Roemer is putting Orinda at risk. This will eventually drive Orinda away from Moraga in search of another provider and destroy the Orinda-Moraga partnership. By putting Moraga’s needs (cheap fire protection services) ahead of Orinda’s needs (wildfire prevention), Roemer is not preserving unity but threatening it. Sometime “tough love” is required. Yes, Moraga, you may temporarily get cheaper service, but in the long run it is going to cost you.
ConFire provides Lafayette with three stations, nine firefighters plus ambulance service, for which Lafayette pays the County $15 million annually. ConFire thought this was a good enough deal that they rebuilt Lafayette’s Station 16 so Lafayette would stop considering joining MOFD. Orinda is paying MOFD $21 million for less service (three stations with nine firefighters but no additional ambulance service; the firefighters provide that service which they have the capacity do since they only respond to about one emergency per response unit per day). The reason Orinda is paying an extra $6 million to MOFD is mostly because we are also subsidizing Moraga and partially because 25-station ConFire is more efficient (but not locally controlled) than 5-station MOFD.
Roemer’s and the Board’s inaction in considering the fairness to Orinda, while focusing on the “fairness” to Moraga, will eventually destroy MOFD which is a great organization.
* Are we talking about “doubling or tripling or quadrupling the taxes Moraga citizens pay” as Roemer claims? Increasing Moraga’s parcel tax rate from 6 cents to 30 cents will increase Moraga’s total property tax by $1.9 million. Their current tax to MOFD is $10.7 million. The $1.9 million increase is not double, triple or quadruple, it is an 18% increase in taxes to MOFD. And it is only a 3.5% increase in their total property tax; and this is a one-time increase. If MOFD had started the increase 20 years ago like they should have, it would have been a tiny, unnoticeable increase per year. The annual increase per household is $340, about one dollar a day. Property owners in a town with a median household income of $168,000 a year can afford this, if they want the superior service they apparently do.
Director Roemer and the other Orinda representatives to MOFD need to reevaluate whom they represent. The Orinda Council, which represents us to “outside” entities like MOFD, needs to remind our MOFD representatives whom they represent. When the Orinda Council handed 23% of our property tax dollars to an independent agency it had no control over, it should have known that a situation like this could occur. The Council needs to take responsibility for its predecessors’ lack of foresight. It is well and good for Roemer to touch base with residents of Moraga to see what they consider is in their best interest, but he needs to give them all of the facts. If the Orinda City Council reaches the same tipping point that the 1996 Council reached and detaches from MOFD in search of another service provider that gives us more service for our tax dollar, Moraga is going to be left high and dry. They will have $12.7 million with their full 30 cent parcel tax which equates to $1.58 million per firefighter. MOFD currently spends $1.85 million per firefighter and that is with five stations, not just two. ConFire charges Lafayette $1.65 million per firefighter so Moraga could probably afford service from ConFire but then it would lose local control. It could not afford to run MOFD by itself without scaling back service. Roemer and his compatriots should consider the long-term consequences of their actions, or inactions, if they really want to keep the partnership together. Years ago, Alex Evans, at his last meeting as a director of MOFD, said that this issue, Orinda subsidizing the cost of Moraga’s service, is what would destroy MOFD. It is just a matter of time. The tipping point will come.
Don’t just take my word for all of the above. Below are some articles from the Orinda News.
* Summer 1996. Council Member Joyce Hawkins - “That’s one reason why we’re sitting down with Moraga and talking merger: so we can keep the money here in Orinda.”
* Summer 1997. Editor Lynda Leonard - “The essential reason for a merger of Orinda and Moraga fire districts is tax money and control over how that money is being spent.”
* Summer 1997. Orinda Fire District Commissioner John Wyro - “Two cents would cover Orinda’s share of administrative costs. Two cents would go into an equipment replacement fund. Two cents would be used for seismic retrofitting and possibly for improved water supply.”
These uses were examined in 2009 after 12 years of service. During that time the Orinda Fire Flow Tax generated about $5.6 million. In those 12 years $2.3 million was spent on equipment replacement in excess of equipment replaced in Moraga; $400,000 was spent on seismic retrofitting but nothing was spent on improved water supply (to fire hydrants). $2.7 million total. As for the 1/3 ($1.9 million) that was supposed to go to administrative costs, in those 12 years Orinda’s property tax base increased by 123% while Moraga’s only 98% (6.9% annually vs. 5.8%). The assumption before formation, when the parcel tax was agreed upon, was that the two tax bases would grow at the same rate (3%). The excess growth by Orinda caused Orinda to generate $6.7 million more revenue than anticipated, completely nullifying the need for a $1.9 million parcel tax for administrative costs.
In total, parcel tax plus excess regular taxes, Orinda “contributed” an additional $12.2 million over the first 12 years of MOFD operations to pay for only $4.6 in expenses; a $7.6 million overpayment (subsidy to Moraga). And it has gone “downhill” for Orinda taxpayers ever since. And neither the MOFD Board nor the Orinda Council made any effort to audit whether the promises made to Orinda voters were being followed through on. And now Director Roemer wants to make sure the residents of Moraga, who have received over $40 million in subsidies from Orinda’s taxpayers over the past 26 years, are treated fairly.
Steve Cohn
Orinda resident and property taxpayer