Fort Walton Beach Council agenda — 06-03-08 workshop agenda — reading text

by $ 427K at the current millage rate of 4. 1986. Although the City has not received taxable assessed value information from the Property Appraiser, departments have been directed to prepare a FY 2008 -09 budget that is 8% less than the FY 2007 -08 budget in light of declining revenues and the anticipated reduction from property tax reform. An 8% reduction in the fire department translates to $ 243K. The City recently concluded negotiations with the Fire Union. Wages were adjusted 3. 38% effective 10/ 01/ 07 and will be increased 5% effective 10/ 01/ 08. Union members were also converted from a 17- step to 9 -step pay table, effectively increasing the annual anniversary adjustment from 3. 5% to 7. 12 %. The cost of these adjustments along with modifications to add pays, is estimated to cost $ 165K in FY 2007 -08. As part of the General Fund, the fire department' s operations are supported in large part by ad valorem taxes. Though ad valorem proceeds are not earmarked for specific expenses, approximately fifteen percent of the City's millage rate goes toward funding the fire department' s $ 3, 042, 013 budget for FY 2007 -08. Currently, residential properties of similar size pay differing amounts for the same level of fire protection service due to the Save Our Homes Amendment, which results in similar properties paying very different property taxes. A fire protection services charge would enable the department to continue to provide its current level of fire services, while fairly apportioning the cost between the recipients of fire services rather than burdening only ad valorem taxpayers in proportion to the taxable value of their property. 1 of 4 Discussion Staff first began evaluating a fire protection services charge in 2002 in conjunction with the expansion of Fire Department services from basic life support to non -transport advanced life support. A fire protection services charge can only fund services that benefit property ( fire) and not services that benefit people emergency medical). However, collection of a fee for fire services would free ad valorem and other General Fund revenues to continue advanced life support services. Due to appreciation in property values, the City has thus far been able to fund the advanced life support program without increasing the millage rate or reducing service levels elsewhere in the General Fund. As the City begins the process of developing the FY 2008 -09 budget in an environment of reduced state shared revenues and property tax reform, staff believes it is prudent to again evaluate the feasibility of a fire protection services charge. METHOD OF APPORTIONMENT A tiered fire protection services charge is the fairest apportionment method relative to property size, property type, and fire services demand. The assessment is levied based on equivalent residential unit or non -residential square footage. The following information is needed to calculate a fair apportionment: Property Category for a given parcel ( i. e. single family, multi -family, commercial, industrial /warehouse, church, government, vacant) is determined using Department of Revenue property use codes ( DOR Code) from the Property Appraiser's office. Assessed Cost is the dollar amount to be generated by the fee. This dollar amount may or may not be the full cost of providing fire services. Demand Percent is the percent of fire responses ( non -EMS related) to the property category determined using the Fire Department's Incidence Report. Total Dollar Amount ( the revenue to be generated by each property category) is the assessed cost multiplied by the demand percent for each property category. Per Unit Residential Cost is the total dollar amount for the property category divided by the number of units in the property category. Per Building Non -Residential Cost is the total dollar amount for the property category divided by the aggregate square footage for the property category, multiplied by the total square footage in the size category, and divided by the number of buildings in the size category. The square footage relates only to non -residential property and is used to categorize buildings by size within each property category. The number of units /buildings is the quantity of parcels in each category per information from the Property Appraiser's office. F. S. 170. 201( 2) provides " Property owned or occupied by a religious institution and used as a place of worship or education; by a public or private elementary, middle, or high school; or by a governmentally financed, insured, or subsidized housing facility that is used primarily for persons who are elderly or disabled shall be exempt from any special assessment levied by a municipality to fund any service if the municipality so desires." It is staff's recommendation to exempt properties as permissible by state statute from the fire protection services charge. METHOD OF ADOPTION In order to implement a fire protection services charge, the following actions need to occur: Resolution of Intent —obtain City Council concurrence to move forward Identify Full Cost of Fire Protection Services ( exclude ALS) — use budget and actual information Develop a Method of Apportioning the Costs —use property information and call reports Determine Preliminary Revenue Requirements — identify revenue amount to be achieved by assessment Develop Assessment Roll Database —use tax roll to develop assessment database Apply Apportionment Methodology to Database — evaluate if assessment database is fair and valid Calculate Preliminary Schedule of Rates —use database to develop assessment schedule Fire Protection Services Assessment Ordinance — authorize assessment apportionment methodology and amounts, and collection method 2 of 4  Initial Assessment Resolution - implement policy, special benefit, and methodology Final Assessment Resolution - adopt the fire protection services assessment rates Rate Adoption - first class notice to citizens, public hearing Billing - mail separate bill, include on utility bill, or conform with requirements to include on tax bill in order to use the tax bill method of collection, the City must adopt a resolution at a public hearing prior to January 1 or, if the property appraiser, tax collector, and local government agree, March 1). FIRE PROTECTION CHARGES AROUND THE STATE Staff has gathered information on the annual single family residential fire protection services charge that municipalities throughout the state are levying. Coconut Creek 72. 03 North Port 78. 00, + $ 0. 05 /sqft > 1500sgft Cooper City 64. 33 Oakland Park 149. 00 Coral Springs 91. 62 Ocala 144. 00 Dania Beach 93. 57 Pembroke Pines 74. 99 Davie 104. 00 Pompano Beach 75. 00 Deerfield Beach 99. 00 Southwest Ranches 148. 00 Fort Lauderdale 94. 00 Sunrise 97. 50 Hallandale Beach 70. 00 Tallahassee 156. 00 Hollywood 109. 00 Tamarac 141. 00 Lauderhill 143. 00 West Manatee 148. 22, + $ 0. 089 /sqft > 1000sgft Lighthouse Point 61. 00 West Park 196. 00 Margate 105. 00 Weston 218. 00 Miramar 107. 00 Wilton Manors 119. 23 North Lauderdale 186. 00 POSSIBLE FIRE PROTECTION CHARGES FOR FWB Approximately 86% of the department' s FY 2007 -08 $ 3M budget is attributable to fire protection services that directly benefit real property ( i. e. improved, not vacant property). Any or all of the expense could be funded from a fire protection services charge. The table below outlines preliminary calculations for Fort Walton Beach' s annual fire protection services charge, assuming churches, government- owned, and vacant properties are exempt. 100% of Fire 75% of Fire 50% of Fire 18% of Fire Protection Budget Protection Budget Protection Budget Protection Budget Total Assessed Cost $ 2, 619, 183 $ 1, 964, 387 $ 1, 309, 592 $ 463, 334 Millage Equivalent 1. 8731 1. 4048 0. 9366 0. 3442 Single Family Residential 141. 34 $ 106. 00 $ 70. 67 $ 25. 00 Multi Family Residential 209. 08 $ 156. 81 $ 104. 54 $ 36. 99 Commercial - sqft increments or 324. 10 - $ 16, 205. 00 243. 08 - $ 12, 153. 75 162. 05 - $ 8, 102. 50 57. 33 - $ 2, 866. 67 Commerical - cost per sqft 0. 25 /sqft 0. 19 /sqft 0. 12 /sqft 0. 04 /sqft Indus/ Warehouse - sqft increments or 60. 92 - $ 3, 046.21 45. 69 - $ 2, 284. 66 30. 46 - $ 1, 523. 11 10. 78 - $ 538. 87 Indus/ Warehouse - cost per sqft 0. 05 /sqft 0. 04 /sqft 0. 02 /sqft 0. 01 /sqft In order to keep the rates manageable for residents and businesses, staff proposes levying a fire protection services charge that recovers 18% of the fire protection services budget. If the 18% recovery method is chosen, single family properties would pay $ 25 per year, multifamily properties would pay $ 37 per year, 81% of commercial properties would pay $ 287 or less per year, and 84% of industrial /warehouse properties would $ 108 or less per year. Staff proposes to exempt property owned or occupied by a religious institution and used as a place of worship or education; by a public or private elementary, middle, or high school; or by a governmentally financed, insured, or subsidized housing facility that is used primarily for persons who are elderly or disabled as permitted by state statute. IMPLEMENTATION FY 2008 -09 - Adopt a Resolution of Intent and then direct staff to prepare the Assessment Ordinance, which provides the City with the flexibility to impose and collect the fire protection services assessment using a separate mailing or the tax bill collection method. An initial Assessment Resolution and public hearing would then be needed to implement the City' s policy decisions and proposed methodology in conformance with the Assessment Ordinance. A subsequent final Assessment Resolution and public hearing would adopt the final assessment rates. For FY 2008 -09,