Voters will be asked to increase property taxes to fund the Durango Fire Protection District in November.

The Durango City Council unanimously voted Tuesday to ask city voters to raise taxes by 2.5 mills to fund the district. The city needs an additional source of revenue to generate the $1.37 million needed to pay its share of the mill increase, which is why a property tax increase within the city is necessary.

Later this month, the district board is likely to vote on whether to put the question on ballots for voters who live outside city limits, fire Chief Hal Doughty said. County residents within the district boundaries would be asked to increase their taxes from 5.7 mills to 8.2 mills, which would generate about $1.35 million.

If the tax increase fails in one of the jurisdictions, it will not take effect anywhere.

Doughty said the district needs additional tax revenue to hire more staff, pay for training and build new stations. Since 2010, the district has cut its budget annually, while the 911 call volume increased, he said.

The financial problem will only worsen if the property tax measure fails.

“We’ve tightened our belt to the point where we’ve been cut in half,” Doughty said.

The fire district covers 325 square miles in central La Plata County and along U.S. Highway 550.

Most district funding comes from three major sources: a third of the district’s funding comes from city sales taxes, 28 percent from its ambulance service and 30 percent from property taxes paid in the county.

City residents would see their city property tax double from 2.5 mills to 5 mills. But the additional dollar amount due would be the same for residents inside and outside city limits because the mill increase is 2.5 mills across the board. For example, a resident with a $400,000 home would pay about $72 more each year. For a business with property worth $1 million, the increase would be about $725.

At Tuesday’s special public hearing, Al Harper, owner of the Durango & Silverton Narrow Gauge Railroad, spoke in favor of the property tax increase and pledged to fund a campaign in support of the ballot issue.

“I am 110 percent behind this and will work with whatever groups want to support the fire district,” he said.

Some of the additional funding could be used to rebuild Fire Station No. 2, which is near the intersection of Camino del Rio and 12th Street. Harper said he supports that effort.

“It’s a deplorable situation,” he said.

The council decided Tuesday not to tie the location of a rebuilt Station No. 2 to any ballot question to allow for more community discussion on potential sites, among other concerns.

The council previously favored building the new $9 million facility in the Durango & Silverton Narrow Gauge Railroad parking lot, which is owned by the city. But some people in the community would like to see a performing arts and convention center built on the site.

“We really need to step back and have the community conversation,” Mayor Dick White said.

The council had considered asking voters to approve an extension of the city’s contract with the fire district that would align with the term of the financing for the new station and name a location.

However, a debt ceiling set by the city’s charter will allow the city to increase the fire district’s funding only through a 2.5 mill increase for 11 years, which is the term of the existing contract, the city’s contract attorney Dee Wisor told the council.

If voters approve the tax increase, the city would be obligated to pay the fire district with the property taxes, and that counts as debt even though the city is not taking out a bond.

The debt ceiling in the city charter also prevents the city from financing other projects through property tax right away, Wisor said.

The property tax debt ceiling is 10 percent of the assessed value of the property in the city, which is about $52 million this year. However, every year the city pays the fire district, it frees up an equal amount of bonding ability, Wisor said.

The city can also pay for large projects with sales taxes or other revenue sources, City Attorney Dirk Nelson said.

mshinn@durangoherald.com