North Lyon County Fire Protection District, the City of Fernley and representatives of Victory Logistics appear to be moving toward agreement over fire protection for the developing industrial area north of Interstate 80, but questions remain about who will pay the ongoing cost of staffing and operating the new fire station.
Those questions are expected to surface Wednesday, Oct. 7, when the Fernley City Council considers both creation of the proposed Fernley Power District and a conditional use permit for the proposed Victory power generation facility.
Fire Chief Brian Bunn sent a new letter to Mayor Neal McIntyre and the City Council on Monday asking the City to address long-term fire and emergency medical service funding as part of the Power District proposal.
Bunn said discussions among the Fire District, City staff and counsel, and the applicant have been productive and that the parties agree on the basic objective: a staffed and equipped fire station must be operating before the proposed power plant begins commercial operation.
The remaining question is how that service will be paid for over the long term.
Station 63 is being constructed to serve the Victory Logistics area. Under the existing Victory development agreement, the developer is responsible for construction of the station, while the City is obligated to provide or cause fire service to be provided from the facility.
North Lyon Fire would ultimately provide that service, but the district says its existing tax base cannot absorb the cost of operating another station.
In his Oct. 5 letter, Bunn said the district is already at its statutory tax-rate limit and would need additional personnel, apparatus, equipment and specialized training to serve industrial and power-generation facilities in the area.
Rather than asking the City to delay creation of the Fernley Power District, Bunn is asking the Council to use revenue generated by the new municipal electric utility as part of the solution.
The district wants a portion of Power District revenues dedicated to fire and emergency medical service within the service area and distributed to North Lyon through an interlocal agreement. Bunn also proposed that the operator of any generation facility enter into a fire protection services agreement providing recurring funding directly to the district.
The district argues that capital costs and operating costs need to be treated separately.
Construction of fire facilities, equipment and other infrastructure may be addressed through development agreements, improvement districts or impact fees. But impact fees cannot be used to pay continuing operating expenses such as firefighter salaries, benefits and station operations.
Victory representatives have similarly distinguished between construction of the station and the cost of operating it.
In an analysis provided to the Reporter, Victory has maintained that Mark IV is responsible for constructing the station but that ongoing fire service is ultimately a responsibility to be resolved between the City and Fire District.
Victory has also pointed to projected new revenues generated by development in the area, including property and sales tax revenue to North Lyon Fire and future franchise-fee revenue to the City from large power users.
The disagreement has increasingly shifted from whether Station 63 needs to be staffed to how and when those revenues can be converted into a dependable source of operating money.
Bunn is asking that fire-service funding be established for the life of the generating facility rather than relying on an annual appropriation that could later be discontinued.
A second issue before the Council Wednesday involves the procedure for CUP26005, the conditional use permit for the proposed Victory power plant.
The Fernley Planning Commission considered the application Sept. 9 but tabled it without making a final decision.
North Lyon Fire argues that because no Planning Commission decision was made, there is nothing for the City Council to hear on appeal and the CUP should return to the Planning Commission for another public hearing.
The district also notes that CUP26005 appears on Wednesday's Council agenda as a staff report rather than as a public hearing and is asking the City Attorney to address whether the required public hearing and notice procedures have been satisfied before the Council takes action.
Bunn said the district is not raising the issue to delay the project but to make sure an approval is not later vulnerable to challenge because of a procedural problem.
Victory representative Rick Nelson said the company opposes returning the application to the Planning Commission because it does not believe it can receive a fair hearing there, citing what he described as conflicts and bias among commission members. Nelson said Victory considers its appeal to the City Council the appropriate process for obtaining an independent review of the application.
Nelson also references potential legal challenges because of procedural problems with the way the Planning Commission handled the matter.
At any rate, the tone of the latest correspondence is notably different from the district's Sept. 22 letter, which raised broad concerns about whether adequate fire-service capacity had been demonstrated for Victory development.
The Oct. 5 letter describes ongoing negotiations and outlines what the district sees as a workable path forward.
“The District, the City, and the applicant want the same outcome,” Bunn wrote. “Development in this area should be served by fire and emergency medical response meeting the standards the City adopted in 2018.”
The Fernley City Council meets Wednesday, Oct. 7.
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