As Estes Valley voters consider a 0.5% sales tax to provide a stable funding source for the Estes Valley Fire Protection District, the district has completed an accounting review of a $900,000 capital reserve fund established nearly a decade ago. The review addressed questions about what happened to the original funds, how the money was spent, and whether the district properly accounted for the expenditures, according to Sandra Smith, EVFPD president.
The findings indicate the district primarily used the money for firefighting equipment, vehicles, and facilities. One exception identified was a $92,146 transfer in 2018 to establish a Length of Service Award Program (LOSAP) retirement benefit for volunteer firefighters. The capital reserve account, which has received additional deposits and earned interest over the years, currently holds a balance of $681,536, Smith said.
The review coincides with voters deciding on local Ballot Issue 6D in the Nov. 3 election. This measure proposes a district-wide 0.5% sales tax projected to generate approximately $3.5 million annually. These funds would support firefighting operations, training, equipment, and capital expenses.
The proposed sales tax would significantly alter the fire district's funding model. Since 2009, the Town of Estes Park has allocated 7% of its sales tax revenue to the fire district, providing about $1.3 million annually. Town officials aim to redirect this funding to construct a new public safety facility for the Estes Park Police Department, concluding an arrangement that has financed fire protection services for over 15 years. While the fire district also receives property tax revenue through an existing mill levy, district officials have stated these combined revenues are insufficient to meet long-term capital replacement and operational needs.
If Ballot Issue 6D passes, the new sales tax would apply across the entire Estes Valley Fire Protection District, extending beyond the Town of Estes Park. This would distribute the funding responsibility for fire protection services across the District's broader sales tax base, providing a dedicated revenue stream for operations and major equipment purchases.
Among the district's most significant anticipated expenses is the replacement of Ladder 71, purchased in 2018 and expected to need replacement around 2030. A new ladder truck could cost nearly $5 million. Other funding priorities include enhancing wildland firefighting capabilities, supporting firefighter training, upgrading emergency communications equipment, and replacing aging apparatus. The district’s existing capital reserve account, with its current balance of about $682,000, falls substantially short of the estimated cost to replace a single ladder truck. Questions about the District’s existing reserves have gained importance as voters evaluate the approval of a new revenue source.
The original $900,000 was initially set aside from the District’s general operating account. On March 29, 2017, the funds were transferred into a Colorado Surplus Asset Fund Trust (C-SAFE) account, an investment pool for public entities. In 2019, some funds were moved to a C-SAFE Core account, designed for strategic reserves. Smith explained that the review tracked expenditures using bank records, invoices, wire transfers, board meeting minutes, and accounting documents. The review identified approximately $2 million in capital expenditures through the account since 2017. As these expenditures exceeded the original deposit, the district supplemented the account over time and combined reserve funds with operating accounts for purchases. For instance, records show a $500,000 payment from the reserve account contributed to Ladder 71.
The review identified the $92,146.07 transfer on Jan. 26, 2018, into the Hero Plus Length of Service Award Program (LOSAP) as the only non-capital expenditure. This transfer followed a board decision approved on Jan. 24, 2018, Smith confirmed. LOSAP is a tax-deferred benefit designed to recruit, retain, and acknowledge volunteer firefighters for their service. Rick Spear, a longtime volunteer firefighter who oversees the District’s pension board, clarified that LOSAP operates differently from a traditional pension. Volunteers earn awards based on their years of service, with a graduated schedule that provides smaller awards early and larger amounts for longer service. While Colorado law allows annual awards up to $3,000, the district employs a more conservative schedule. Funds accumulate in individual accounts, disbursed as a lump-sum payment upon retirement or resignation. The district also maintains a separate pension program for qualifying volunteers, with partial benefits after 10 years and full benefits after 20 years, starting at the applicable retirement age.
Smith noted that the examination involved several district officials and its outside accounting firm. Participants included Smith, district Treasurer Ryan Leahy, administrative staff member Rebecca Gelsinger, Fire Chief Kevin Nunn, board member and former fire chief Scott Dorman, and Ben Archer-Clowes, managing partner of the District’s accounting firm. The District’s auditor also participated. Smith compiled a table tracing transactions and supporting documentation but did not attend working meetings with other board members to avoid violating state law without a properly noticed meeting. Smith stated she had "the receipts," indicating records link transfers from the account to equipment purchases and decisions made by past boards. This examination was a retrospective accounting review with professional assistance, not an independent forensic audit. The review was partly prompted by questions about the District’s capital reserves during discussions surrounding Ballot Issue 6D, specifically concerning the adequacy of reserves for replacing aging firefighting equipment. Smith clarified that maintaining a capital reserve account is distinct from having sufficient funds to cover all future expenses, noting that replacing Ladder 71 alone could require nearly $5 million by 2030. Smith underscored that the review aimed to provide the community with an accounting of the $900,000, distinguishing the provision of factual financial information from advocating for Ballot Issue 6D. She stated that reviewing records and making factual information publicly available can help residents assess the District’s financial position.