Fire Rescue Assessment Study March 30, 2017 Agenda Introduction to - - PowerPoint PPT Presentation

Alachua County, FL Fire Rescue Assessment Study

March 30, 2017

Agenda

• Introduction to Stantec
• Fire Special Assessment Background
• Methodology Discussion
• Preliminary Assessment Calculations
• Property Impact Analysis
• Next Steps
• Open Discussion & Scenario Analysis

Introduction to Stantec

Introduction to Stantec

• Formally Burton & Associates
• Served as Assessment, Utility Rate and

Municipal Financial Consultants in Florida for 29 years

• Project Team:
• Mike Burton – Principal
• Erick van Malssen – Managing Consultant
• Vita Paltridge – Consultant
• Peter Napoli – Analyst

Fire Special Assessment Background

Fire Special Assessment Background

• Non-Ad Valorem Fire Special Assessments are an

alternative revenue mechanism used to directly fund fire suppression services

• By law, assessment revenues must be used for fire suppression

services funding only

• Any costs not recovered by the Assessment (i.e. exemptions,

EMS costs) must be funded by other sources

• The County currently funds Fire suppression services through

Ad Valorem taxes via a Municipal Services Taxing Unit (MSTU)

• Supplemented with other revenue sources such as:
• Utility Public Service Taxes (PST)
• Communication Service Taxes (CST)
• A Fire Assessment program would replace the MSTU with a

Municipal Services Benefit Unit (MSBU)

• Supplemental revenues would continue to be required

even at full cost recovery (exemptions and EMS costs)

Fire Special Assessment Background

• Why would the County consider a Fire Special Assessment?
• Provides a diversified revenue source
• Not subject to external variable forces such as

property value fluctuations

• All property owners receiving benefit from the fire

suppression service provided by the County will pay a fair share of the costs as defined by the calculation methodology

• Relieves millage cap space for the County and

Incorporated areas currently within the MSTU

Municipality Operating Millage Law MSTU Fire MSTU Total Millage Archer 5.2549 2.4342 1.7705 9.4596 Hawthorne 5.3194 2.4342 1.7705 9.5241 Waldo 7.4180 0.0000 1.7705 9.1885 FY 2017 Fire MSTU Participants

Fire Special Assessment Background

• Legal Requirements for all assessment programs
• Two pronged test
• The property assessed must derive a special benefit

from the service provided

• The assessment must be fairly and reasonably

apportioned among the properties that receive the special benefit

• Due process before the assessment is imposed
• Mailed and published notice
• Initial and Final Public hearings
• Exclusions: rights-of-way, submerged lands, etc.
• Required Exemptions: governmental & vacant

agricultural properties

• Optional exemptions: churches & non-profits

Fire Special Assessment Background

• How would it work?
• All parcels in the MSBU would pay their fair share of the

costs of Fire Service that are included in the assessment

• The assessments will be included on property owner’s

annual tax bill

• The Fire Special Assessment can be adopted at 100%

recovery of eligible fire costs or at any lower percentage desired

• Example 1: Adopt at a cost recovery level to

recover the same revenues generated by the current or projected MSTU Ad Valorem Millage rate (Revenue Neutral)

• Example 2: Adopt up to 100% cost recovery to fully

fund Fire services through the Assessment program

• Some revenue support from other revenues

required to offset exempted properties, early payment discounts, etc.

Methodology Discussion

Methodology Discussion

• “Availability” Methodology
• Based upon the benefit conferred on all parcels by the

availability of fire protection service whether or not a request for service is ever made

• Utilizes publicly available parcel data from the Alachua

County Property Appraiser

• Simple, Two Tier rate structure for all parcels
• Does not differentiate between property classes
• Administratively easier to maintain than other

methodologies

• No call/incident data to update every 3 years
• Requires significantly less data analysis to prepare

annual roll updates

• Self-Updating as parcels develop
• Methodology has been validated by the Florida

Supreme Court

Methodology Discussion

• Availability-based cost apportionment with two

tiers of benefit

• Tier 1 Benefit – Availability – Apportioned to all parcels,

improved and un-improved

• All properties are charged the Tier 1 rate
• Single fee per parcel
• Tier 2 Benefit – Protection from loss of structures –

Apportioned to improved parcels only in proportion to the value of the structures on the parcel

• Only developed properties are charged the Tier 2

rate

• Charge per every $5,000 of structure value on parcel
• $5,000 of structure value = 1 Equivalent Benefit

Unit (EBU)

• Structure value represents the depreciated

replacement cost of buildings and extra features, not taxable or assessed value

Methodology Discussion

• The special benefits conferred in each category above

include the following:

• Response Readiness Availability – all properties
• Availability of immediate response to fire
• Enhanced property value
• Enhanced marketability of and/or ability to develop

property

• Protection from Loss of Structures – improved properties
• All of the above benefits, plus
• Protection from the loss of structures on the property

due to fire

• Ability to obtain fire insurance and to obtain that

insurance at attractive rates

• Protection from loss by the availability of fire

suppression service provided by the County

FY 2018 Preliminary Assessment Calculations

Note: All calculations are preliminary at this time and may change slightly as data is updated throughout the study process.

Preliminary FY18 Assessment Calculations

• Primary Data Source: 2016 Parcel databases

provided by the Alachua County Property Appraiser support the preliminary calculations

• Database will be updated in June when the

preliminary 2017 data is available

• Taxing Districts included in Analysis:
• Unincorporated Areas (Suwanee & St. Johns)
• Incorporated Areas currently in the Fire MSTU:
• Archer
• Hawthorne
• Waldo
• Other incorporated Areas included in

assessment:

• Alachua
• LaCrosse

• The Initial Assessment Calculations presented herein are

designed to be revenue neutral to the projected FY 2018 MSTU Ad Valorem tax revenues

Preliminary FY18 Assessment Calculations

FY18 Estimated Property Valuation

5,499,081,069 $

FY17 Adopted Millage

1.7705

FY18 Est. Ad Valorem Revenues

9,249,317 $ Calculation of FY18 Revenue Neutral Target & Millage

Plus: FSAA

1,500,000 $

Plus: Personnel Cost Increases

693,784 $

Plus: Fund Stabilization

400,000 $

Total Ad Valorem Revenue Required*

11,843,101 $

Millage Increase

0.4965

Required Millage to Fund

2.2670

Revenue Neutral Assessment Goal*

11,843,101 $

*Does Not Include: Enhancements or the Implementation of the Master Plan

Preliminary FY18 Assessment Calculations

Total FY 2018 Allocated Assessment 13,726,416 $ Required Governmental Exemptions (967,332) $ Required Agricultural Exemptions (290,526) $ Billed Assessment After Exemptions 12,468,558 $ Less: Early Payment Discount & Contingency 5.00% (623,000) $ Estimated Net Collected Revenue (Rounded) 11,846,000 $ Projected FY 2018 Revenue Target 11,843,101 $

Revenue Summary

Assessment Tier Allocation % Assessment Allocation Allocated Units Tier 1 - Per Parcel 31.84% 4,370,491 $ 54,879 Tier 2 - Structure Value 68.16% 9,355,925 $ 1,241,595 Total 100.00% 13,726,416 $ 1,296,474

Allocation Summary

Property Category Assessment per Unit Unit Type Billed Revenue Tier 1 - Per Parcel 79.64 $ Parcel 3,996,893 $ Tier 2 - Structure Value 7.54 $ Structure EBU 8,471,665 $ Total 12,468,558 $

Assessment Results

Example: Average Single Family Home

Total Structure Value of Avg SF Home: $134,900 Rouned down to nearest $5,000: $130,000 Structrue Value EBUs (Rounded value/5,000): 26 Average Single Family Home Assessment Calculation Tier 1 Rate (per parcel): $79.64 Tier 2 Rate (per structure value EBU): $7.54 Annual Assessment Bill Calculation: Tier 1 Charge: $79.64 Tier 2 Charge (rate x EBUs): $196.04 Total Annual Assessment: $275.68 $ Difference compared to MSTU: $5.91 Assessed Home Value: $169,000 Less: Homestead Exemption:

• $50,000

Taxable Value: $119,000 FY 2018 Target MSTU Millage: 2.2670 FY 2018 Estimated MSTU Taxes: $269.77 Average Single Family Home MSTU Calculation

Single Family Residential Impacts

$0 $100 $200 $300 $400 $500 $600

Single Family - 1st Quartile Single Family - 2nd Quartile Single Family - 3rd Quartile Single Family - 4th Quartile Average Single Family Home

$110 $223 $313 $494 $276 $57 $160 $277 $594 $270

Fire/Rescue Assessment (Residential) - Methodology Bill Comparison Assessment Ad Valorem

Non-Residential Impacts

$0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000

$555 $600 $336 $4,196 $600 $4,868 $1,045 $615 $899 $1,179 $957 $11,780 $1,057 $7,703 $0 $0

Fire/Rescue Assessment (Non-Residential) - Methodology Bill Comparison Assessment Ad Valorem

Next Steps

Assessment Process – Next Steps

• Proceed with MSTU or MSBU?
• Finalize Assessment Rates based upon:
• Revenue Goal:
• Revenue Neutral to Ad Valorem
• Full Cost Recovery
• Other Levels
• FY 2018 Budget & Program Decisions
• FSAA
• Fire Master Plan

Assessment Process – Next Steps

• Key Dates to be Set:
• Additional workshops at the County
• Incorporated Area workshops
• Incorporated Areas Adopt Consent

Ordinances (MSBU)

• County Adoption of Initial Assessment

Resolution

• First Class Mailing of Notice to Property Owners
• 20 days before Final Assessment Resolution Hearing
• Adoption of Final Assessment Resolution
• Deliver final Assessment roll to Tax Collector by

September 15, 2017

• If TRIM notice is to be used, not-to-exceed rates

must be finalized by early July

Discussion and Scenario Analysis