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Newcastle fire district asks Placer County for $100,000 loan

District has not applied to county in more than a decade
By: Amber Marra, Journal Staff Writer
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The Newcastle Fire Protection District has applied to Placer County for a $100,000 loan to make it through until December.

Yvonne Lewis, chairperson of the Newcastle fire district board of directors, said the use of the loan is straight forward.

"To pay bills," she said.

The fire district's application for "temporary borrowing of treasury funds for dry period financing" must be approved by the Placer County Board of Supervisors.

Kimberly Hawley, chief deputy treasurer for Placer County, said Newcastle's application for a $100,000 loan will be considered at the Nov. 6 meeting of the board of supervisors.

Newcastle's application will be considered alongside another from the North Tahoe Fire Protection District for $1 million. Placer Hills Fire Protection District had a loan approved by the board of supervisors at their Sept. 25 meeting.

"Dry period financing is utilized by schools and fire districts alike. It's not unusual," Hawley said.

The Newcastle Fire Protection District has not approached Placer County for a loan of any amount in the past decade, according to Hawley.

Newcastle's request for a loan comes during the lull between residents paying into Measure B and when the district will actually see those funds sometime in December. The district will receive another payment in April.

Measure B was passed during a special election in March and imposes an annual $146.46 parcel tax on property owners that can be increased up to 3 percent annually to pay for a new firehouse and wage increases and benefits for firefighters.

Outrage over the cost increase of Measure B spurred a group of residents to put a counter measure called Measure K on the November ballot. If Measure K passes on the November ballot, Measure B will be reformed and the parcel tax will be $146.46 per year for the first three years and then it will be reduced to $30 per parcel after three years and the 3 percent increase will be abolished.

"The fire district's fiscal year begins July 1 and the first distribution of revenue is not received by the district until December. This cash flow financing method helps fire districts manage until they receive their property tax revenues in December," Hawley said in an email on Monday.

The "dry period" between the district receiving revenues from Measure B and Measure F, which was passed in 1997 and imposes a $74.18 parcel tax with a 2 percent cost-of-living increase per year, is the reason for the district to apply for the loan. The district recently approved wage increases and benefit packages for firefighters.

"We've been living on less than $500,000 for years and years now and we're still staying within that budget, it's just not here yet," Lewis said.

Hawley describes the loan as more of a line of credit. The fire protection district can spend up to $100,000 and the loan is repaid directly out of those revenues the district is set to receive in December.

"The fire districts receive funding through those direct charges in December and April and that sometimes creates cash flow problems for them since they are in operation the whole year, so the treasurer, under approval from the board of supervisors, can get them past those cash flow problems until they get their funding twice per year," Hawley said.

Contact Amber Marra at amberm@goldcountrymedia.com. Follow her on Twitter @Amber_AJNews.