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Fire authority financially viable, consultants say

An agreement that would unite Hellsgate and Payson fire services would not increase taxes, but would remain financially stable for at least the next five years — while possibly increasing revenue from wildland firefighting.

An independent financial group says beyond five years, the Rim Country Fire and Medical Authority will end up with a bigger fund balance, thanks to a projected 4 percent annual growth rate.

The proposed agreement puts Payson, Hellsgate and Houston Mesa, located in Mesa del Caballo, under the authority of a central separate legal entity through a joint powers agreement (JPA).

Payson would shift 26 percent of its combined gross revenue to the fire authority, roughly $4 million. That’s about what the town spends on the fire department now. Meanwhile, Hellsgate and Houston Mesa would contribute the money they collect from a $3.25 per $100 property tax levy. That works out to roughly $900,000 for Hellsgate and $152,000 for Houston Mesa.

The unpaid, six-member board managing the fire authority would include three Payson Town Council members, two Hellsgate fire board members and a member from Houston Mesa’s board.

That would give Payson majority control.

Safeguards built into the contract would prevent one organization from reducing or eliminating services to another community. If Payson directors wanted to close the Hellsgate fire station in Star Valley, for example, the two Hellsgate board members would have to agree. If not, the station would stay open.

The same goes for Houston Mesa and Payson. Houston Mesa and Hellsgate board members could not remove all of the firefighting equipment from the Main Street station, for example, and put it in Star Valley.

So, any decision to reduce services would require a majority vote and a yes vote from the representatives affected by the vote.

“In the event that either of these requirements is unmet, the vote shall be considered to have failed,” the agreement reads.

Town Manager LaRon Garrett said he is concerned the town will be contributing roughly 80 percent of funding to the fire authority budget but will not have “control” over how that money is spent.

“We have a responsibility to look after taxpayer money,” he said. “And we are turning over several million dollars a year (to the fire authority).

While Garrett is leery about turning over financial control to this new entity, Hellsgate Fire Chief John Wisner points out Payson council members will comprise the majority of the JPA governing board.

“Payson will have enough positions on the governing board to stop any proposal that it sees could harm Payson, but the partners will need to work together to pass a proposal,” Wisner said. “The JPA must have a governing model that causes the partners to work together for the benefit of emergency services in the region.”

Asked why Payson is contributing most of the money, Wisner explained:

“Each partner in the JPA contributes a percentage of the JPA funding based on what it costs that partner to provide those services today and based on the amount of JPA services the partner is predicted to continue consuming. Payson consumes about 80 percent of the budget so therefore they would need to pay about 80 percent of the JPA.”

Besides the governance model, Garrett said he is also concerned about some of the numbers in the five-year financial model.

The capital reserve fund will have decreased from $233,236 in year one to $43,547 by year five.

This is due to Hellsgate’s federal Staffing for Adequate Fire & Emergency Response (SAFER) grant ending. The consultants assumed the authority would use reserves to cover the salaries the SAFER grant had been covering.

Wisner says by this time the JPA will be fully funded.

“Revenues are expected to continue increasing faster than operational costs as property values in the fire districts increase and sales tax revenues continue to increase in the Town of Payson,” Wisner said. “Beyond year five, the JPA should have enough revenue increases to offset operational cost increases. The good news is that by the JPA continuing to look five years ahead, we can make any needed adjustments to avoid changes in our service delivery model.”

In addition, the fire authority will have built up a contingency fund of $300,000 by year five as well as a reserve fund thanks to efficiencies due to the partners working together.

“We know from the experiences of our financial consultant that virtually all of the other JPAs in the state have realized efficiencies which we have not accounted for,” he said. “Also, we have not taken into account other potential revenue sources such as grants and state cooperator revenues.”

The financial model does not take into account income from fighting wildfires. Hellsgate makes about $231,000 annually essentially renting crews and equipment to the federal government to fight wildfires.

That could increase if the JPA sends more firefighters out to help on wildland fires. Payson currently does not send firefighters to outside wildfires because they do not have enough staff.

However, Garrett said wildland revenue is not guaranteed.

Payson Mayor Tom Morrissey said he is open to the JPA, but has many questions and is waiting for the Jan. 8 work-study session to hear more about how the fire authority will work.

“The devil’s in the details,” he commented.

When asked to vote, 92 percent of firefighters in the local union supported the creation of the new fire authority. In Hellsgate, 100 percent of firefighters are part of the union and in Payson, 95 percent of all firefighters.

The open vote took place at a recent union meeting. Those not in attendance called in their votes.

Morrissey said he would like to see the vote taken again, but this time done anonymously.

Union President Rick Heron said prior to taking the vote, Union Vice President Thorry Smith asked the members present if they wanted to vote by secret ballot or by a show of hands.

The group agreed to vote by hand and “not one member felt a secret vote was necessary.”

“As a local group, we have never had conflict over our votes. We stand beside each other as a union regardless of our personal opinions,” he said. “While we appreciate the input from the mayor, as the local firefighter group, we know the feeling of our members and that the vote was valid.”

Garrett said Payson firefighters are taking a risk because they will no longer be town employees, but employees of the fire authority.

Still, Garrett sees merits with the JPA.

“They have worked hard on this and I can see positives. If we can get northern Gila County into one unit, than there are benefits to all of them,” he said. “As long as it is done right.”

Wisner and Payson Fire Chief David Staub said they have spent the better part of a year to make sure that happens.

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Photo courtesy of Joshua Lott  

A view of the Wallow Fire is pictured in the distance seen along State Route 180 as smoke fills the sky in Luna, N.M. June 6, 2011.

Biomass plants would protect Rim Country, White Mountains

The Arizona Corporation Commission’s effort to create a market for forest thinning biomass could save both White Mountains and Rim Country communities from the kind of catastrophe that has razed whole towns in California.

Moreover, the decision could lead to a big expansion of the struggling forest products industry in the White Mountains.

The Arizona Corporation Commission by February plans to adopt a new rule requiring the state’s utilities to produce 90 kilowatts of power annually from burning small trees, branches, brush and other biomass.

The mandate would provide a market for enough biomass to clear 50,000 acres of overgrown forests annually.

The mandate should also spur the construction of two or three new power plants — each employing perhaps 150 people and providing spinoff economic benefits.

Payson would seem a natural location for such a power plant, sitting right in the middle of some 2 million acres targeted for thinning by the Four Forest Restoration Initiative (4FRI).

But don’t count on it, cautions Novo Power President and CEO Brad Worsley.

It’s not the location.

It’s the water.

A biomass plant capable of producing about 30 megawatts of power by burning the brush and small trees cleared from 15,000 acres would need a million gallons of water every day to keep the boilers cool, he said. That’s about 3 acre-feet of water every day or 1,000 acre-feet annually.

Payson will have plenty of water once the C.C. Cragin pipeline starts gushing water this spring. Payson currently uses 1,800 acre-feet of water annually from its underground aquifer — but the pipeline will deliver an additional 3,000 acre-feet. However, the pipeline and the existing aquifer produce high-quality drinking water.

By contrast, the huge Coconino aquifer atop the Rim mostly has salty, mineral-laden water not fit for drinking, but perfectly fine for cooling a biomass power plant, said Worsley.

On the other hand, the existing Novo Power Plant near Snowflake could handle a huge mass of brush and small trees culled from the thick, overgrown, fire-prone forests around Payson and other Rim Country communities, said Worsley.

A biomass plant can generally make money on wood hauled roughly 70 miles to a new power plant or perhaps 120 miles to the existing Novo Power plant in Snowflake, said Worsley.

Worsley said his company has already done all the groundwork for an additional 50 megawatt power plant it could build in Snowflake. The company has located a mothballed biomass power plant in Texas. The company could have that plant moved and up and running in Snowflake within about 20 months at a cost of $100 million, said Worsley.

By contrast, a study by Arizona Public Service estimated it would cost $500 million to build a new biomass plant from scratch.

Worsley said building a second plant near Snowflake would save time on permits and site preparation, since the facility already has air quality permits, water rights and waste treatment facilities.

Moreover, a biomass power plant would gain efficiencies from locating near other wood processing operations, like sawmills.

Once the ACC approves a biomass mandate, other companies may seek to build biomass plants throughout the 4FRI area, which stretches from the Grand Canyon to the New Mexico border.

Forest restoration backers at last week’s ACC hearing argued against an attempt to include provisions that would require the construction of new power plants — rather than allowing an expansion of the of the existing Novo plant in Snowflake.

The imposition of a mandate could increase interest in building such power plants. However, when APS put out a request for proposals previously, the only bidder was Novo Power.

Worsley said potential locations for additional biomass plants include Winslow, an additional plant in Show Low and perhaps Camp Navajo, federally owned land near Flagstaff.

Worsley noted that a biomass plant in either Winslow or Snowflake could accelerate the thinning of the forests in both the White Mountains and in much of Rim Country.

The existing Novo biomass plant in Snowflake can produce 28 megawatts from the brush and trees cleared from 15,000 acres annually. This has proved essential to the pace of thinning in the White Mountains, where most of the thinning has so far taken place.

A plant in Snowflake could handle biomass from the ponderosa, pinyon and juniper forests around Payson. Pinyon and juniper burns hot and produces a lot of ash, but makes for a good fuel when mixed with pine, said Worsley.

So the biomass mandate could dramatically accelerate the thinning of forests throughout the region, even if Payson doesn’t get its own facility, he said.

However, complications remain.

For instance, the critical watershed of the C.C. Cragin Reservoir lies just outside the range of a plant in Snowflake, due to the time it takes to haul the biomass out on the network of dirt roads.

Payson, the U.S. Forest Service, Salt River Project and the Forest Foundation have teamed up to thin the 64,000-acre watershed of the reservoir, which holds the key to Payson’s water future. The Forest Service hopes to find contractors to thin the watershed from perhaps 800 trees per acre to something like 100 trees per acre. However, the lack of a market for the biomass will likely slow those efforts.

Thinning an acre of ponderosa pine forests produces about 26 tons of logs from trees between 8 and 18 inches in diameter. It also produces about 25-40 tons of biomass, from the brush, small trees and branches.

Worsley detailed the complicated calculus of turning such woody debris into electricity.

Crews cut the trees, strip the branches and turn the saplings, brush and trimmings into wood chips on site. They then load the biomass onto one truck and the logs onto another truck.

Once the logs get to a mill, another 20 or 30 percent of the log gets turned into biomass, as the mill squares off the trunks and strips off the bark. That’s another reason it makes sense to put a biomass plant next to a mill.

“If you want to increase your haul distance from 70 miles to 120 miles, you’re going to pay an extra $100 an hour in trucking costs. If you’re on the highway, this gives you more range than if you’re on a dirt road. That extra 50 miles is going to add $200 going and coming. So that’s going to increase the cost $38 to $40 a bone-dry ton to something in the $45 to $50 a ton range.”

That calculation determines how far you can afford to haul the biomass — and therefore will determine where any additional biomass plants will end up.

Creating a market for biomass will have another huge advantage, besides reducing the risk of crown fires and boosting rural economies.

Air quality

Burning biomass in a power plant reduces the potentially dangerous pollutants contained in the smoke of a wildfire by about 98 percent, said Worsley.

“When we burn it, you don’t see smoke, you don’t smell smoke.”

Assorted national studies have demonstrated the smoke from wildfires — especially high-intensity megafires — has a huge potential impact on human health as well as shifts in the climate.

Biomass also has a big advantage over emissions from coal and natural gas power plants.

All three types of plants produce similar emissions, with pollution controls removing much of the sulfur.

Fortunately, biomass plants actually have a big advantage over coal-fired and natural gas plants when it comes to meeting federal regulations on carbon dioxide emissions, the most common greenhouse gas.

Biomass plants are considered “carbon neutral” since the trees would either burn in a wildfire or die and decay anyway. Coal and natural gas present an entirely different picture. Mined coal and natural gas have been buried for millions of years. So when it’s pulled out of the ground and burned, it adds carbon to the atmosphere.

“If you compare biomass to open air burning, there’s no comparison — you have a 98 percent reduction in particulates,” said Worsley.

“Natural gas and coal are using sequestered carbon — as if they are adding carbon into the atmosphere. It’s been sequestered — and they’re pulling it back up and burning — that’s where biomass becomes carbon neutral,” said Worsley.


Provided photo  

The Novo BioPower facility near Snowflake.

Courtesy of BLM  

Engine that powers Novo Power Plant.

By Hailey Roberson 

Students from Lani Hall's first grade class hold props that illustrated a program more than 35 years old.

Another holiday tradition – year-end contributions for tax purposes

As the year comes to a close, one of the season’s many traditions is deciding what tax deductible donations to make. In Arizona we can do deductible gifts to 501(c)(3) organizations by the end of the year and also make contributions to Qualifying Charitable Organizations for a tax credit.

Ask your favorite charity if it is a 501(c)(3) when making a donation.

The individual income tax credit is available for contributions to Qualifying Charitable Organizations that provide immediate basic needs to residents of Arizona who receive temporary assistance for needy families (TANF) benefits, are low income residents of Arizona, or children with a chronic illness or physical disability.

The maximum credit allowed is $800 for married filing jointly and $400 for single, heads of household, and married filing separate filers. You can also claim an additional credit for Qualifying Foster Care Charitable Organizations.

The tax credit is claimed on Form 352. The maximum credit allowed is $1,000 for married filing joint filers and $500 for single, heads of household, and married filing separately.

Other tax credit programs are:

• Credit for Kids donations to public schools (district and charter) are $200 for an individual and $400 for a couple.

• Donations to the Military Family Relief Fund tax credit are the same as for public schools — $200 from and individual and $400 from a couple.

• Private schools may also receive a tax credit contributions for tuitions.

Among the area’s Qualifying Charitable Organizations listed on the Arizona Department of Revenue website under tax credits are:

• Dueker Ranch, Inc., Star Valley

• Payson Area Habitat for Humanity

• Payson Christian Clinic

• Payson Community Kids, Inc.

• Payson Helping Payson

• Payson Lions Charitable Foundation

• Payson Senior Center

• Pine Strawberry Food Bank

• Rim Country Rotary Club Foundation

• Time Out, Inc.

• U-Turn for Christ — Arizona

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