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Home My WebLink About2008 01 17 Add On Regular 601 Fire Assessment Program Update - January 17, 2008 Date: January 17, 2008 This was provided to the City Commission by Staff at the January 17, 2008 City Commission Special Meeting during ADD-ON Regular Agenda Item "601". \. n -. ,.,. " < -. 1 ro 0 )> ~ (f) :E (f) ro (f) -. (f) ::J 3 ,.,. ro tD :::J ., L..I rt OJ -0 en :::J 1 -c C 0 OJ lO ., 1 1 -. -< OJ. ::I ........ 3 ~ ~ c fn ...... N\J 00.. o~ 00 ro What has the Commission Approved? D On September 24/ 2007/ the Commission was presented seven (7) options for funding the Fire Department as follows: . 3 Assessment Options. . 2 Non-Assessment Options. . 2 Hybrid Options. 2 What has the Commission Approved? D As shown, the Commission unanimously approved Option "e" of the three Assessment Options. Fire Assessment Ootions A B C Fire A~sessment Revenue 2,606,000 2,758,000 2,758,000 Expenses Fire Operations 2,412,000 2,356,000 2,356,000 Fire Truck -0- 208,??oo 208,000 Assessment Administration 194,000 194,000 194,000 Tolal Expenses 2,606,000 2,758,000 2,758,000 Fire Assessment Rate 203 223 223 - - Reculiu. Millage 3.()696 -. 2.9986 3.0696 Voted Millage .1022 .1022 .1022 TOlal Millage 3.1718 3.1008 3.1718 General Fund Operating Surplus $345,654 $178,251 $329,654 Vote Required Simple Simple Simple Majority Majority Maiority Operating Rcvellue Neutral Yes Yes Ycs Fin: Trllck Neutral --- Yes No 3 What has the Commission Approved? D As shown, the Commission was advised of the break-even points and (cost)/savings in $100,000 increments. Fire Assessment "Break-Even" Table -- Net Savin (Cost) -- Scenario FA-A FA-B FA-C Hyb-A Hyb-B Fire Fee Amount 203 223 223 62 78 Home Taxable Value: (94) (101 ) (26) (42) 41 36 164 165 144 46 "Break-Even" amounts are shaded. 4 What has the Commission Approved? D Based upon this data, the Commission unanimously approved: . To move to the next step of refinement of assessment rates based upon 0.1800 mills for exemptions. . To approve a 1.0423 operating millage reduction to make the new assessment revenue neutral to the City. 5 What has the Commission Approved? o On January 7, 2006 the City's assessment consultants provided the City Commission with six assessment rate options, inclusive of exemptions, ranging from $216 to $256. Ei SG ...101: FY 2007.08 Budgel $256 PIU$FlraTruek (portion $2S6,~26) PII,_StatlJ.tory Discount ($176.367) ctorCommisslonl$17,637} tation costs 1:$116.560\ G S G CITY OF WINTER SPRINGS FIRE DEPARTMENT ASSESSMENT PROGRAM WORKSHOP Rate Scenarios (can't) January 7, 2008 C S G Scenario 5: FY 2007.08 Budget $227 . No Fire Truck . Plus StatutOl'Y Discount ($162.056\ . No Tali Collector Commission . 'No Stu<ly Impl&i'ner,tation cost':, . Tota! $3.403.157 6 What has the Commission Approved? o From this discussion, the Commission: . Established a maximum assessment rate of $256 for purposes of development of the Implementing Ordinance and Initial Rate Resolution. . Set a date of January 14, 2008 for first reading of the Implementing Ordinance, and January 28, 2008 for the second reading of the Implementing Ordinance and adoption of the Initial Rate Resolution. 7 What has the Commission Approved? o On January 14, 2008 the Commission: . Approved the first reading of the Implementing Ordinance. . After considerable discussion, directed the City Manager to review rate impact data and to develop alternatives for the Commission to consider. 8 What has the Commission Approved? D The City Manager and staff have reviewed the impact data and concluded: . That the calculations, with minor exceptions, are correct. . That the difference in break points are subject to the addition of exemption costs to the original estimates, which did not include those exemption costs. Staff Brea k @ $223 rate $182,443 Point (to include exemptions) @ $223 rate $213,950 Citizen - Presented Break Point @ $216 rate $205,000 Staff Revision of Citizen - Presen ted Btea k Poi nt @ $216 rate $205,695 9 What has the Commission Approved? o The City Manager and staff have reviewed the impact data and concluded: . That the differences in (cost)/savings to homeowners are as follows: :11 Staff Revised. $223 Staff Revised $ 2 1 6 Taxable Original Rate (to include Rate (inclu d ing Value Ii. $223 Rate exerrrpti()ns) exemptio ns) $ 1 0 0 , 0 0 0 ( 1 0 1 ) ( 1 1 9 ) ( 1 1 1 ) $ 2 0 0 , 0 0 0 2 1 ( 1 5 ) ( 6 ) $ 3 0 0 , 0 0 0 1 44 9 0 99 10 Mitigation Strategies o There are two mitigation strategies that can be applied to the fire assessment fee as follows: . Hardship Exemption. . Installment Payment Plan. 11 Hardship Exemption o This exemption can be applied to reduce the impact on persons of very low income. The funds lost by the exemption have to be replaced by General Fund revenues. o The exemptions are normally based upon poverty guidelines established by the Federal Government. o The Federally established poverty level today is $10,210. 12 Hardship Exemption D An example of how this exemption can be applied is as follows: Income Brackel Income ExemptIon Poverty level & below $ 10,200 1000/0 1250/0 of poverty level $ 12,750 750/0 1500/0 of poverty level $ 15,300 500/0 1750/0 of poverty level $ 17,850 250/0 2000/0 of poverty level $ 20,400 00/0 D Income would have to be verified by income tax returns, etc. 13 Installment Proposal Plan o Florida Statutes allow the tax collector to collect non ad valorem assessments in four equal installments. o For example, the City could offer a similar installment plan for this year. I;;;)ue D .L. j!;! Amou nt .Balanc:.e 'n'I~""'+ Ju ne $50 $ 1 50 J u Iy $50 $ 100 Aug ust $50 $50 Septem ber $50 $0 14 What Alternatives are Available? D The question remains: In light of continuing pressures in property taxes, how does the Commission desire to fund the Fire Department costs? . Fire Assessment Fee? . Property Taxes? . Some Combination? 15 What Alternatives are Available? o Fire Assessment fees provide for: . A more equitable system for funding the Fire Department. . A known and protected source of revenue. 16 What Alternatives are Available? o Property Taxes: . Are vulnerable to anti-tax pressures. . Can be spent for any General Fund purpose. . Require 250/0 of the residential taxpayers to pay 470/0 of the cost and allow some people to pay nothing. 17 Alternative 1 o Adopt the assessment fee at the $225 level which includes: . Operating Budget $ 1,973,000 . Fire truck $ 208,000 . Statutory Discount $ 176,000 . GSG Costs $ 117,000 . Collection Costs $ 77,000 o and implement the mitigation measures which include: . Hardship Exemption. . Installment Payment Plan. 18 Alternative 2 o Adopt the assessment fee at some lower level and implement the mitigation measures which include: . Hardship Exemption. . Installment Payment Plan. 19 Alternative 2 D Rate Options: Rate if Revenue Millage Equivalent $ 25 $ 264,375 0.1190 $ 50 $ 528,750 0.2380 $ 150 $ 1,586,250 0.7141 $ 200 $ 2,115,000 0.9521 $ 225 $ 2,379,375 1.0712 $ 250 $ 2,643,750 1.1902 20 Alternative 3 D Do not implement the fire fee, and D Consolidate the City Fire Department with the County which would result in the department being funded from the County's Municipal Services Taxing Unit (MSTU) at a current millage of 2.3299 mills. Rceq.uir@d (Zity County Fire Op@rat;il1~lY1illag@ IVISTU lVIi Ilage 0 p e ra ti n 9 M I I I a 9 e Rce d u cti 0 n 1 0 4 2 3 2 32 9 9 Ad d I ti 0 n a I M I I I a 9 e Rce d u cti 0 n 1 0 8 1 7 0 Tota I FY 2 0 0 8 Rce d u cti 0 n 2 1 2 4 0 2 3 2 9 9 21 Alternative 4 D Do not implement the fire fee, acquire a loan to operate the department in FY08 that could be paid back in 15 years, re-establish the millage reduction provided for this year in FY09. D We do not know what additional limitations the legislature may place on us in its next session. D If no additional restrictions are adopted by the legislature, a unanimous vote would be required to restore the millage. This could be very difficult to accomplish two months before an election. 22 Alternative 5 D Implement the fire assessment fee at a nominal amount to get it established, borrow the $2.4 million needed to fund the fire department this year, which could be paid back over 15 years, and restore the millage in the FY09 Budget. D We do not know what additional limitations the legislature may place on us in its next session. D If no additional restrictions are adopted by the legislature, a unanimous vote would be required to restore the millage. This could be very difficult to accomplish two months before an election. 23 Alternative 6 D Implement the fire fee at a reduced amount for the first year and increase it over the following years. The lost revenue could be made up from loans and restored property taxes in future years. D We do not know what additional limitations the legislature may place upon us in future years. D If no additional restrictions are adopted by the legislature, a unanimous vote would be required to restore the millage. This could be very difficult to accomplish two months before an election. 24 Alternative 7 D Implement a Mobile Home Fire Fee Category which would be lower than the regular residential fee. 25 How much do we need to cover the Fire D"ept. Budget? D Required Assessment Rate = $225. 1 "mount Fire Operations $ 1,973,000 Fire Truck 208,000 Consultant Cost 81,000 Notice & Billing Costs 36,000 Collection Costs 77,000 Total $ 2,375,000 26 City Manager Recommendation o Required Assessment Rate = $194. ~i> One-Time ~i Requi>fed Assessment Prope rty General Fund >> Reven ue Fee Taxes Reserves Fire Operations $ 1,973,000 $ 1,973,000 Fire Truck 208,000 $ 208,000 Consultant Cost 81,000 81,000 Notice & Billing Costs 36,000 36,000 Collection Costs 77,000 77,000 Hardship Discount 100,000 $ 100,000 Total $ 2,475,000 $ 2,050,000 $ 100,000 $ 325,000 . Hardship Exemption. . Installment Payment Plan. . Mobile Home Fee Category. 27