The meeting of the Fire District 1 Board of Commissioners Thursday evening was a standing-room-only gathering as the board, Chief Larry Hess and concerned residents argued whether to roll the district’s share of property tax millage forward or back.

In the end the board struck a compromise and rolled the millage forward to 30 mills, an 11 percent increase from last year’s millage rate of 27.04 mills. Though it was a tax increase for district property owners, it was still less than the 18.5 percent increase proposed by Hess and the whopping 31 percent increase if the millage had been increased to 35 mills, the maximum allowed by the St. Tammany Assessor’s Office for 2009.

Board Chairman Calvin Kline said he was happy to see so many residents at the meeting, but he added their presence was “a bit of a mystery.” The residents in Fire District 1 were there to voice their disapproval of any sort of roll up of the millage. Most are already suffering from an increase in property taxes because of the 2008 property reassessment recently released by Assessor Patricia Schwartz Core.

Some residents, like George Smith, saw his property assessment go up by 200 percent and didn’t understand why he and others would be saddled with an increase in fire protection millage.

“If more money is being collected, why don’t you roll it back?” Smith wondered.

Hess explained the fire district, which covers Slidell and Eden Isles, is strapped for cash to operate, and with a roll back, he warned he might have to close two fire stations to stay within the 2009 budget. The two stations, in Eden Isles and on Robert Road in Slidell, would mean a cutback in services.

And though he said he would not lay off personnel, closing stations would affect response time, and the Property Insurance Agency of Louisiana would increase the fire risk rating on the district, which could lead to an increase of fire insurance premiums of $380.

Hess said the current rate of 27.04 mills would generate $9.2 million for the district, but that would put the residents’ safety at risk and reduce the ability of the district to buy new equipment, putting firefighters at risk. It would also put the district at risk financially because it would not be able to pay off its obligations.

The biggest debt, Hess said, is the $5.3 million loan from the Federal Emergency Management Agency. FEMA loaned the money after Hurricane Katrina because of the devastation to the fire district.

“FEMA saved our bacon after Katrina,” Hess said.

But the loan comes with a big balloon payment in 2011 that the district will not be able to meet without additional revenue. Hess admitted FEMA would not start confiscating equipment if the loan is in default, but failure to pay back the loan would mean the district could not go to the federal government for loans in the future. Hess said FEMA might forgive the loan, but he won’t know for another 10 months.

Hurricane Katrina affected the district financially in other ways, according to Hess. Because the assessor made a lot of properties exempt for the past three years, Fire District 1 saw a 25 percent decrease in revenue. Hess said the district’s budget is planned around an expected annual 5 percent in natural tax growth. That figure has decreased since Katrina, putting the district in a financial pinch.

Add to that the fact the district has to lop off 8 percent right off the top of collected revenues, Hess said.

By law, the district has to give 3 percent to the state’s retirement system, the remaining 5 percent is considered uncollectable, or as Hess said, “ghost money.” Then there is the 12.5 percent of firefighters’ salaries that is put into the Firefiighters Retirement System, plus by state law, the district has to give a 2 percent cost of living raise every year. All that has given the district a $1 million deficit.

Hess recommended the board roll up the millage to 32.06. After voting to roll back the millage to 27.04 mills, Hess’ recommendation was voted on. However, there was a tie vote of 2-2, and even though Kline broke the tie with a vote for the increase, the motion failed because it lacked a two-thirds majority.

After the board voted on the 2009 budget and tabled a resolution to give fire personnel a 2.5 percent cost of living raise until the issue of the millage was decided, another motion to roll up the millage to 30 mills was put forth. The board unanimously passed the increase.

Hess said he understands and sympathizes with the taxpayers, but the public has to know what would happen without the increase.

With the roll up to 30 mills, the budget will go up to $10.7 million, but the district will still be operating under a $1.09 million deficit.

“It was a compromise we had to make,” said Commissioner Wynn Williams. “If we rolled it back, it would be a double whammy — less services and an increase in insurance costs.”

Kline said the assessor was to blame for putting the commission in a situation of making the tough choices.

Oak Harbor resident Bob Beck, a financial planner, also blamed Core for the increased assessments and millage, which has strained everyone’s wallet,

“She has created an economic Katrina,” Beck said.