Current Situation: Why is Hazelwood going bankrupt?
Many citizens in the area have heard about the Robertson Fire Protection and Hazelwood dispute, but few have a full and complete understanding of what is going on? How did we get here? Was it the tax rates? Was it the TIFs? Here is the run down. Including a brief history, the budget crisis, negotiations between the City and the District, arguments about tax increment financing and where we stand today.
Read this page to get informed about all the topics surrounding this issue or watch the presentation to get a quick rundown of the current situation and corruption.
Presentation: The Hazelwood Robertson FPD Service Dispute. What we’ve learned and how we fix this.
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Brief History & Overview of the Current Situation
Annexation: Before the annexation the city of Hazelwood consisted of one Fire Department that provided fire and emergency services to all city residents. That is known today as the Hazelwood fire department, HFD. It is fully funded through tax revenue collected by the city and all residents have a vote on the budget and activities of the fire department through the elected mayor and Council Members.
Hazelwood then annexed and agreed to provide fire and emergency services to two areas that were in a Fire Protection District, which caused them to lose control of their budget. The city must pay the district what it would have levied in taxes and this payment structure that is bankrupting the city.
The City of Hazelwood pays Robertson Fire Protection District directly:
The payment is a contracted rate equal to the amount residents and businesses in the service area would have paid the RFPD in taxes.
The Robertson FPD residents and businesses do not pay an additional tax rate for their fire protection district directly like they would if located in any other fire protection district.
Hazelwood pays a tax rate higher than what it takes in through its own tax rate. This is what is causing the City’s deficit.
You are paying Robertson FPD taxes through Hazelwood. In other words, YES, Robertson FPD uses YOUR tax dollars to run.
Division of Fire Service: Currently Hazelwood Fire Department serves about 57% of the residents. The two districts are Robertson Fire Protection District known as RFPD which provides for about 19% and Florissant Valley Fire Protection District known as FVFPD provides for about 24%.
This means all residents have control over the budget and activities of the HFD, 24% have control of the FVPD and 19% of the residents have control over the RFPD. As of 2020, the cost for fire and emergency services per resident in Hazelwood varied from $227 to $881 depending on what area in the city you live.
Robertson FPD Tax Rate Increase: Starting in 1996 the RFPD and their board, which is elected by the district residents, began to approve budgets and activities and asking the voters for more money by placing measures on the ballot that passed. This meant the whole city was responsible to pay the higher rate however only 19% of its residents were allowed to vote on it (See Tax Rates 101).
Hazelwood argues this gap between payments to Robertson and what residents pay is the main reason for the budget deficit.
Hazelwood tries to Curb Deficit: The city has made other attempts to increase the income and decrease debt, such as raising the city tax rate from 33¢ to 99¢ per 100 dollar assessed value for all residents, cutting Hazelwood fire and emergency services, police services, street department and eliminated some city services in attempt to keep up with the rising debt. At the end of 2017 the city attempted to cancel the agreement resulting in RFPD suing for breach of contract.
Tax Increment Financing & Tax Abatements: As the rate went higher the city began to look at ways to build their tax base to increase future income, they did this by using Tax Increment Funding, known as TIF as well as other forms of tax abatements. This brought new business to the area which built their tax base while temporarily deferring the cost of the district.
One business being the STL Mills Mall which has a TIF that expires at the end of 2021. Starting in 2022 the city will collect an additional $314,000 and pay Robertson approximately $823,000 leaving the city with a net loss of about $509,000, bringing the city closer to insolvency.
The passing of Section 870B in 2018 has eliminated the ability for the city to offer a TIF in a fire district.
Want to see a list of the tax abatements given by the city of Hazelwood? Click the button below.
