As families in Weed move toward recovery in the wake of the Boles Fire, loss of revenue and costs associated with recovery have created a difficult situation for the city itself.

Only a small fraction of the 143 residences destroyed in the fire have been rebuilt so far. Many in those households have temporarily relocated out of the Weed City limits. Some have moved permanently.

This has reduced the city’s utility, sales tax and property tax revenue.

The State of California has provided large amounts of funding for critical fire response and recovery efforts, but the financial contribution to which Weed is committed for those efforts will come due, and the sum to date is not insignificant – particularly in light of lost revenue.

The city acknowledged at the March city council meeting that it does not have the funds to contract with CAL FIRE for the administrative captain position the agency has staffed in the Weed Fire Department for more than 10 years.

City manager Ron Stock said at the meeting that the city was looking into grant funding and other sources to continue that contract, citing revenue loss following the Boles Fire as the major factor in the need to look outside the city’s budget to help fund the position.

Finance director Kelly McKinnis said the city will know more precisely what revenue gaps exist and how they will be handled when the city begins budget workshops in the coming months.

Utilities/sales taxes

In the days following the fire, Weed City’s financial department put together a spread sheet that included every utilities account the city lost when homes were destroyed.

McKinnis said the total revenue lost immediately was about $104,000 – more than seven percent of the 2013/2014 fiscal year’s revenue figures for water, sewer and garbage payments to the city.

“That amount is wiped off the books until houses have been rebuilt on those lots,” McKinnis said, “but we still have overhead to pay on those systems for operations and personnel.”

Of less impact is the loss of sales tax that would have been collected by the city on taxable purchases by residents who now are gone, either temporarily or permanently.

“We know that most of our sales tax comes from visitors motoring through,” McKinnis said, but he added that residents contribute a portion of sales tax revenue. “We’ll know more about those figures over time.”

Property taxes

Shortly after the Boles Fire, Siskiyou County Assessor Mike Mallory assessed the lots on which homes had been lost.

He said a total of about $10 million in property value came off the tax rolls in Weed due to residential property destruction in the fire.

One percent of that, or $100,000, would have been collected in property taxes. The City of Weed would have collected about six percent of those property taxes, or $6,000.

Mallory valued the lots at 35 percent below the actual base land value due to the debris and hazardous materials present.

“We’ll put that value back on for next year now that things are cleaned up,” he said.

He is in the process of reassessing the Roseburg property now, and estimates that the company will get relief for about half the tax year during which the fire occurred. Mallory anticipates the general range of reduced property taxes for that time will be about $50,000, of which Weed would have received about six percent, or $3,000.

Mallory said his office anticipates that only 70 to 80 percent of residential homes burned in the Boles Fire will be rebuilt. He noted also that some lots have been divided between neighboring property owners, meaning that there will be fewer lots on the tax rolls.

For those who do rebuild, Proposition 13 ensures that the old property values will carry over as long as the new home is about the same square footage as the original, he said. Homes rebuilt more than about 25 percent larger will see tax increases only on the square footage increase.

Recovery costs

The state of California recognized quickly that Weed was a very small rural community without the resources to contend successfully with a catastrophe of such magnitude as the Boles Fire.

In key areas related primarily to the Boles Fire response itself, the state discarded its standard “75/25 percent” funding commitment, wherein the state reimbursed 75 percent of a disaster-related cost, leaving the municipality to cover the remaining 25 percent.

Money for urban renewal, police equipment replacement, water tank replacement, a new well, fire response and mutual aid costs, and debris removal as well as fire house repairs and equipment replacement was granted by the state at 100 percent – a total of more than $13 million, according to figures publicized by Weed City Manager Ron Stock in late January and confirmed by McKinnis this week.

The costs which Weed is responsible to cover at 25 percent include money for tree removal on public right of ways, sidewalk and water line repair, drainage improvements, sign replacement, sewer line capping and cleaning, and roadway restoration, which together total $766,500.

Weed’s share of that total is close to $200,000, according to Stock’s January figures.

McKinnis said the figures could change. “We’re still working on this with federal and state agencies,”