Elmwood Township is moving closer toward establishing a special assessment district that would erase budget strains caused by increased expenses to fund fire and rescue services.

Taxes, however, would increase to make up the shortfall.

The Township Board at a special meeting Monday heard input on a proposal to shift the funding mechanism for the township fire and rescue department from a property tax to a township-wide assessment district, according to clerk Connie Preston.

If approved, the change could be felt as soon as December, when tax bills received by residents would not include a .3765 mill property tax dedicated to the fire and rescue department. In its place could be an assessment bill equivalent to a 1.19-mill property tax.

The township is considering the change, Preston said, to avoid increasing drains on its General Fund. The present fire millage is expected to only generate $88,600 in 2007 — far less than the expected $269,000 price tag to fund township fire and rescue operations. The difference, she said, is being pulled from the General Fund fund balance.

The budget for fire and rescue services increased nearly 48 percent from 2005 and 2007. One reason: the department hired two full-time responders who are stationed at the fire hall.

The assessment district rate likely would increase in 2008, Preston said, to pay off an anticipated 5-year loan needed to buy a new fire truck.

Under the system being considered, the clerk added, the millage rate would adjust each year based on a fire and rescue budget approved by the board that included expected operational and new equipment expenses. A cap of 10 mills was discussed at the meeting, which was attended by 30-40 residents, she said.

The present system requires voters to approve property taxes for a set number of years.

Under an assessment district, voters would have no say in the amount of the assessment levy, which would require only Township Board approval.

Also, property taxes paid to local governments are deductible on income taxes; assessment district payments are not tax deductible, Preston confirmed.

Approval could come as soon as a special meeting set for May 16. If the district is approved, Preston said, electors would have the option of gathering signatures to force an election to decide the issue.