South Metro Fire Rescue warns of long-term revenue gap, outlines possible tax options

South Metro Fire Rescue board chair Jim Albee told Arapahoe County commissioners on May 20 that the fire protection district is facing a multi‑year revenue shortfall and is beginning community outreach to explore revenue solutions.

Albee said the district’s primary concern is maintaining current service levels — response times, staffing of four firefighters per apparatus and capital replacement for stations and apparatus — while meeting rapidly rising costs and replacement timelines for costly equipment. "We have to be ordering things now and spending money that we may or may not have, to get those at the right place at the right time in 2029," Albee said.

The district, which covers roughly 287 square miles and serves about 577,000 residents from 30 fire stations, told the board that roughly 80% of its revenue comes from property taxes and about half of those property‑tax dollars originate in Arapahoe County. Albee presented a 10‑year projection contrasting an orange revenue line (the district’s forecast under current law) and a blue line (what revenue might have looked like without last year’s House Bill 1001). He said the green line for spending grows faster than projected revenue, and that the cumulative difference implies roughly a $500 million shortfall over ten years — roughly a $50 million annual gap at present assumptions.

Albee explained the revenue impact in plain terms: "Most of our revenue, about 80% of our revenue does come from property taxes," and he said changes in state law and assessment caps enacted last year flattened the district’s growth in property tax receipts. He noted the district has no debt but said borrowing would only smooth timing, not solve a structural shortfall: "We don't believe that we would have the future income in this scenario to repay it."

How the district would plug the gap remains undecided. Albee presented three broad options being discussed: 1) reduce service by lowering staffing and deferring capital; 2) seek a property‑tax increase (he estimated a roughly 3‑mill increase would raise about $50 million annually); or 3) seek a district‑wide sales tax (the district could seek a half‑percent sales‑tax measure to raise about the same amount). Albee said public polling the district conducted in January showed 66% likely or very likely support for a sales tax and 57% for a property‑tax increase, and that the district will continue outreach and run another survey in June.

The district emphasized its costs are driven by personnel (roughly 80% of operating expenses), vehicle and apparatus price inflation (apparatus costs have risen sharply and delivery lead times can be several years), and recurring replacement schedules (personal protective equipment, SCBAs and vehicle fleets). Albee said that a new engine currently costs roughly $1.3 million and that ordered units may not be delivered until 2029, which creates unavoidable capital timing demands.

Commissioners pressed the South Metro delegation on choices the district has made to reduce costs and on the merits of debt financing. Commissioner questions also focused on how the county’s portion of the district’s tax base and the mix of residential versus commercial property affect revenue. The district said it has already identified savings, deferred capital, adjusted benefits and extended equipment replacement schedules where prudent, but that further cuts would affect response capacity and times.

Albee said the district is not asking Arapahoe County to take action but is seeking feedback as it develops a calendar for a voter measure: "We're here to just kinda tell the story, raise awareness. We're here to get some feedback." He said the ultimate decision whether to place a measure before voters will rest with the district’s elected board; if a revenue measure becomes a referendum, voters would decide the outcome.

Ending: South Metro Fire Rescue said it will continue targeted outreach to municipalities, stakeholders and residents, publish updates at engagesouthmetro.org, and run additional polling this summer. Commissioners asked to be kept informed and flagged the district’s plans for follow‑up meetings with county staff and elected officials.