In 2012, when the Town of Paradise Valley needed a new way to pay for fire and emergency medical service, the council turned down a primary property tax. The September 27, 2012 Town Council minutes explain one of its main reservations. Property tax revenue "is deposited in the General Fund to be used for any purpose and once the tax has been adopted it cannot be eliminated."
The fee the council chose instead could be eliminated. Fourteen years later, Town leaders are discussing whether to do exactly that. The rates have stayed the same since 2013 while the cost of the service has kept rising. That turns a small line in a Paradise Valley owner's carrying costs into an open policy question.
A Fee That Replaced A Sales Tax That Replaced A Subscription
Paradise Valley's fire service has changed funding sources several times. According to the Town's Fire Service Fund presentation, the private company Rural Metro used to provide fire and EMS, and property owners paid the company directly. The Town then signed an intergovernmental agreement with the City of Phoenix to get faster response times and more resources. At first, the Town paid for that agreement out of its General Fund. It then moved to a dedicated sales tax that took effect August 1, 2011 and expired August 1, 2014.
Three replacements were considered: a fire district, a primary property tax and a fire service fee. The council approved the fee on November 15, 2012. The 2012 minutes say the fire district was rejected because it would come with its own board and administrative resources, which the council considered "duplicative and unnecessary."
How The Fee Is Priced
The original rate schedule took effect January 1, 2013. It sets single-family fees at $30, $40 or $50 a month, depending on the home's square footage in Maricopa County records. Vacant lots are $10 a month. Commercial property is converted into "equivalent homes" based on leasable square footage, and each one is charged the $360 base residential rate.
The Town's March 2025 finance memo shows how many properties fall in each tier:
| Category | Annual fee | Count | Revenue | Share |
|---|---|---|---|---|
| Homes 3,000 sq ft and under | $360 | 764 | $275,040 | 9% |
| Homes 3,001 to 6,000 sq ft | $480 | 3,359 | $1,612,320 | 52% |
| Homes over 6,000 sq ft | $600 | 1,603 | $961,800 | 31% |
| Commercial, per equivalent home | $360 | 649 | $233,482 | 7% |
| Vacant land | $120 | 347 | $41,640 | 1% |
The top tier has no ceiling. A 15,000-square-foot estate on a hillside lot pays the same $600 a year as a house with 6,001 square feet. Because of that cap, the fee grows much more slowly than home size. The 1,603 homes in the top tier produce 31% of fee revenue.
Thirteen Years At The Same Price
When the fee began, the Town said the fund was meant to be "Business Like," with rates set to recover about $3.0 million a year in program costs. The rates have not changed since 2013. Costs have. Here is how the Town's presentation describes the change since 2014:
"Revenues have increased by 7%, but expenses have increased 54% since 2014 (average 4.9% per year for 11 years)."
The fund has run a deficit every year since FY2018. In FY2025 it collected $3,322,705 and spent $4,564,507, a one-year shortfall of $1,211,763. The cumulative deficit reached $4,188,072. The March 2025 memo says fees covered 74% of the cost of fire service in FY2024, and that share will keep falling if rates stay where they are.
Most of the increase comes from the Phoenix contract. The agreement makes up about 80% of the fund's costs. Its annual increases have varied, reaching as high as 15.1%, and averaged 5.5% a year over the last five years. The contract cost $3,461,241 in FY2025, compared with $2,859,031 in FY2021. Staffing accounted for $3,293,067 of the FY2025 total. In other words, the fee is fixed, and the main cost it pays for rises every year.
Hotel Guests Help Cover The Gap
The General Fund has made up the difference since FY2021. The FY2025 subsidy was about $1.2 million, and the Town expects it to grow every year. With no town primary property tax, one of the General Fund's biggest sources is visitors.
The Town's bed tax rate is 3.4%. In FY2024 it brought in $6,224,568. After $2,156,142 in fees paid to Experience Scottsdale, the Town kept $4,068,426. That money comes from guests at the resorts along Lincoln Drive and the rest of the corridor. In practice, part of the fire service for Paradise Valley homes is now paid for by people staying in Paradise Valley hotels.
The finance memo says bed tax alone, after the Experience Scottsdale payments, is not enough to cover the full cost of fire service. It also says the revenue "will fluctuate with the economy as it is based on Tourism," and that about $30 million in additional sales would be needed to raise bed tax revenue by $1 million. The bed tax swings with tourism: net receipts fell to $1,952,438 in FY2021 before more than doubling the following year. The Phoenix contract has no comparable dips.
The Three Paths The Council Heard On October 22
Chief Financial Officer Leslie DeReche brought these numbers to an October 22, 2026 study session. It followed up on a March 12, 2026 session where the council asked for the fee's history, its collection costs and the budget impact of dropping it. Staff laid out three options:
- Keep subsidizing. The fee stays the same and the General Fund covers a gap that is projected to grow every year.
- Move the full cost into the General Fund and drop the fee. At the time, the cost was about $4.5 million. Fire would become a regular Town expense, and its costs are projected to keep rising.
- Raise the fee to cover the cost. The increase could happen all at once or in steps over several years. Staff also described an escalator tied to the Phoenix contract. A lagging adjustment could make rates swing sharply from year to year. An averaged adjustment would leave the fund balance moving up and down with actual costs.
The Paradise Valley Independent reported that several council members supported eventually eliminating the fee and paying for fire service out of the General Fund. The October 8 staff report describes the session as a way to "facilitate Council feedback," which means a study session for discussion, not a vote.
Option two would match what the council said it wanted in 2012. That council chose a fee in part because a property tax could not be removed once adopted. Its successors are now discussing removing the fee. If they do, Paradise Valley would pay for fire service much as some 2012 council members wanted to avoid, out of a General Fund that pays for many things, with tourism revenue doing much of the work.
What It Means For A Purchase Here
For a buyer comparing Paradise Valley with Scottsdale or Phoenix, the fire fee is small next to the price of a home. It is still a useful example of how the Town pays for services without a primary property tax. For FY2025, the fee covered roughly three-quarters of the cost of the service. The rest came from a fund that depends heavily on resort occupancy.
That leaves the line in a carrying-cost estimate open to change in either direction. If the fee is eliminated, it comes off the budget. If rates go up to match the cost, the FY2025 figures suggest revenue would need to be about 37% higher than it was that year, and the escalator option would tie future increases to a Phoenix contract that has risen an average of 5.5% a year. A seller of a large home has paid $600 a year since 2013. A buyer pricing the same home today is budgeting against a rate the Town has said does not cover its costs.
This post is general information, not legal, tax or financial advice. Confirm your own property's obligations with the Town and with your own advisors.
A Few Questions We Hear Often
Does a bigger home pay a bigger fire fee? Only up to 6,000 square feet. The schedule uses Maricopa County square footage records to set three tiers, and every home above 6,000 square feet pays the top rate of $50 a month.
Who actually responds to a call in Paradise Valley? The City of Phoenix provides fire and EMS under its intergovernmental agreement with the Town. Most of the fund's costs go to that contract, and most of the contract cost goes to staffing.
Do vacant lots pay? Yes, $120 a year. The number of vacant-land bills fell from 500 when the fee started to 335 in the Town's 2026 count.
If you're estimating what a Paradise Valley home will cost to own each year, Mick and Melissa at Kapanicas Group can go through the Town-level costs with you, including the fire fee and what the council does next. Schedule a Free Market Consultation and we'll review those numbers with you before you commit.
