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Minutes 12-11-01SUMMARY OF MEETING AMONG MEMBERS OF CITY STAFF AND MEMBERS oF THE COALITION TO PROTECT THE RIGHTS OF SMALL BUSINESS HELD IN CONFERENCE ROOM B, CITY HALL, ON MONDAY, DECEMBER 10, 2001 AT 11:00 A.M. RE. CITY'S FIRE ASSESSMENT City Representatives Present: Kurt Bressner, City Manager Jim Cherof, City Attorney Bill Bingham, Fire Chief Jim Ness, Deputy Fire Chief Diane Reese, Director of Financial Services Barkley Garnsey, Information Communications Coordinator (Fire Department) Call to Order Mr. Bressner opened the meeting at 11:00 a.m. and distributed a sign-in sheet (original attached to the minutes). A copy was furnished to everyone. Mr. Bressner requested that people introduced themselves. Coalition Representatives Present: Mary Law, Law Real Estate, 625 S. Federal Highway Lloyd Powell, Alpine Florist, 1112 N. Federal Highway Butch Miller, Sir Electric, Inc., 1401 Neptune Drive Dom Desiderio, Atrium Place, 2755 S. Federal Highway Mr. Bressner referred everyone to the Memorandum-dated December 7, 2001, which had been furnished to him by Mr. Desiderio, setting out the items for today's meeting. Purpose and Intent of Meeting Mr. Bressner would like to organize a team to develop some rate alternatives for calendar year 2002 regarding the City's Fire Assessment. The rate structure approved by the City Commission for 2001/2002 must go forward. This billing is scheduled for January 2002. E~efore the County does the billing for calendar year 2002 in November of next year, the City has to provide the rates to the County by September 15, 2002. Mr. E~ressner stated that today's meeting will focus on determining if there are more equitable methods for calculating the rates for subsequent years. The fire assessment rates are subject to review and approval by the City Commission on an annual basis. Even though the estimated life span of the fire assessment is Meeting Minutes Coalition to Protect the Rights of Small Business December 11, 2001 seven years, if the City Commission so desires, it could be for only one year. A seven-year sunse[ clause was adopted in the resolution. Discussion Mr. Desiderio requested that he be furnished with a full copy of unsanitized tapes of the meeting, and Mr. Bressner stated that they would be provided. Mr. Desiderio stated that the costs assessed to small businesses were not assessed fairly. He said that the assessment is illegal because it is not fairly apportioned. Mr. Desiderio, who owns Atrium Place, said his assessment is $3,090. If his property were one square foot smaller, the assessment would only be $1,545. Again, Mr. Bressner reiterated that the 2001 rate has been established by resolution and cannot be changed. Mr. Desiderio inquired if they would have to seek a court order in order for the rates to be changed. Attorney Cherof responded that the City believes that the apportionment is fair and legal and that the Commission adopted it. Administrative staff has no authority to change the assessment in any way whatsoever. Staff, however, can work with the Coalition to change the assessment for next year. Over the next six months the committee could work together to communicate their feelings and wishes to the City Commission so that the Commission could understand their point of view. If the Coalition decided to bring the issue to court it could take a much longer period of time, plus a great deal of money. Attorney Cherof urged the Coalition to work with staff in coming to a conclusion that would be suitable to both sides. Ms. Law felt that the assessments for the businesses were never really disclosed at the meetings and that the business owners were referred to a firm in Tallahassee for clarification. Attorney Cherof responded that the City followed the required statutory process to adopt an assessment. There were many public hearings, documents were provided to the public, and residents were informed that they could contact the rate consultant in Tallahassee that developed the actual rates. Mr. Powell stated that there were many more citizens that were against the assessment than those that were for it. He questioned why the City Commission did not take into account the comments of the citizens made during the public hearings. He felt the reason that the Commission passed the assessment was because they didn't want to see all the work that staff put into the assessment go down the drain and, further, that they really didn't care about its citizens. Mr. Powell would also like to have the not-for-profit agencies included in the assessment since they too pay for fire insurance, He also pointed out that the Commission excluded community clubhouses because the residents are paying for their individual residences. He felt that this was not fair. Mr. Powell pointed out that he pays an annual $75.00 fee for fire inspection that does not apply to residences. Mr. Powell stated that the rates were illegal, and were not commensurate with property values or based upon any type of fairness. 2 Meeting Minutes Coalition to Protect the Rights of Small Business December11,2001 Mr. Miller inquired if the only alternative available to them is a lawsuit. Mr. Bressner did not agree with this statement. He would like the City Commission and staff to be informed of any valid business and inequity concerns that they may be unaware of. This would be the time to develop an understanding of where the Coalition feels'-the inequities exist and to work toward a common ground. Mr. Bressner stated that the City feels their methodology is legal. There are other communities that have adopted a square footage basis and this is something that could be looked at. Mr. Bressner noted there are two issues. The first one is that there are members of the Coalition that do not want any kind of fire assessment. The second one is that there are members of the coalition that agree a fire assessment may be necessary, but would like it to be more equitable. The reality is that the City Commission has approved the 2001 fire assessment. It would be to everyone's best interest if an amicable solution can be found. Even though the participants today cannot agree with each other 100%, it would be good for the City to learn about the Coalition's perspectives. Mr. Powell acknowledged that the City probably needs a fire assessment, but he would like the assessment to be equitable. Mr. Powell felt that there must be a way that the Commission could cancel the fire assessment, if it really wanted to. Mr. Bressner requested that Attorney Cherof address Mr. Powell's comments. Attorney Cherof stated that the fire assessments are renewable annually and the City Commission is required by law to go through the process in order to extend the assessment. If the Commission so desired, it could reverse its decision beginning October 1,2002. Mr. Miller inquired why the excess funds in the Utility Fund could not be used for the fire needs. Mr, Miller wished to go on record that their Coalition also represents residences, as well as businesses. Attorney Cherof did not feel that the City Commission would do away with the fire assessment next year and that it was adopted for a few years in order to complete the intended projects for the Fire Department. Mr. Miller requested that the assessment issue be brought back to the Commission for more review. Attorney Cherof acknowledged that if the issue were brought to a court for a decision, the assessment could be overturned or it could also be upheld. The Commission spent a great deal of time looking at enacting an assessment and then decided to do it. The Commission relied upon outside firms on how to do the assessment and listened to the public as well. Mr. Desiderio stated that the Commission did not listen to the people. The apportionment is wrong and unfair. Attorney Cherof stated that the public's input 3 Meeting Minutes Coalition to Protect the Rights of Small Business December 11, 2001 was not disregarded and a great deal of questioning about the methodology employed by the consultants transpired. Mr. Powell inquired how the consultants actually came up with their methodology of using the square foot, tier formula. Mr. Powell noted that both the residential and condominiums had their proportions reduced, but no one re-examined the square foot formula applied to businesses, He asked if anyone knew what the true cost would be for putting out a real house fire. Mr. Bressner responded that the rates were calculated upon the number of fire calls and regardless of the type of call, the City basically would incur the cost of a unit to respond to an address, whether there was a fire or not. The formula used was to take the number of fire calls by property classification. The total number of calls resulted in a ratio determined by type of property. This resulted in a percentage of calls allocated by property type. Mr. Bressner was unaware of any fire assessments that were based on assessed value and fire assessments are either based upon square footage or number-of units. Mr. Poweli asked how many fire calls were made last year to a 2,000 square foot building. Chief Bingham did not have this information at this time. Mr. Powell said that all the commercial property was categorized as one classification and then the size and square footage was broken down. Chief Bingham confirmed that this was the formula used. Chief Bingham stated the Fire Department does not keep records of response to properties based upon the square footage of the property. The records are kept on the type of occupancy. Chief Bingham said he could supply how many times the Fire Department responded to a residential property, a mUlti-family property, commercial property, industrial property, nursing home property, and others. Ms. Law inquired how many rites there were in the City last year and Chief Bingham stated there were 2,100 and that he could provide the breakdown between residential and commercial. Mr. Bressner responded that last year there were 2,118 fire-rescue incidents, Mr. Powell questioned why fire rescue was included. Mr. Miller noted that at the October 16th Commission Meeting, the presentation given by the Fire Department stated there were 6,600 calls. Chief Bingham responded that last year there were 6,397 EMS calls last year. Chief Bingham felt that staff was very careful not to combine the EMS calls with the fire calls and last year there was a total of 9,674 calls. The consultants were well aware that the fire calls had to be segregated from the EMS calls. Chief Bingham stated that of the approximately 10,000 calls received by the Fire Department each year, approximately 65% are EMS related. 4 Meeting Minutes Coalition to Protect the Rights of Small Business December11,2001 Chief Bingham explained that if there were no EMS services offered and there was only a Fire Department in Boynton Beach, this would account for 63% of their existing budget today to maintain a Fire Department to provide fire services. Mr. Miller inquired if EMS services would operate from the new fire stations. Chief Bingham saiCl there would be EMS services from the new fire stations. Mr. Miller asked how the funds could be separated if the assessment only applies to fire services. Mr. Bressner pointed out that there are other funds that are not under the umbrella of the assessment that are being utilized to complete the project. The fire assessment is not providing 100% of the funding. The additional funds would come from the General Fund, plus the additional $2.8 million allocated for capital costs by the Commission. These funds actually brought the fire assessment figures down. The money to construct the stations includes the $2.8 million, which can be attributable to the EMS portion of the construction. Mr. Miller asked for clarification of the classification of properties used in the assessment. · Mr. Bressner responded that there were six categories in the fire assessment: v' single family, v' multi-family, v' commercial, v' industrial/warehouse, v' institutional, and v' nursing homes. · Ofthe 2,118 fire calls-- 712, or 33% were to single family residences; 522, or 25% were to multiple family; 476, or 22% were to commercial; 67, or 3% were to industrial; 175, or 8% were to institutional; and 166, or 8% were to nursing homes. · The operating budget for the fire department was $5.1 million or 63%. · The total operating budget was $8 million. Also, the breakdown of the calls would not reveal whether the fire responses were to an actual fire or a so-called "hot plate". However, the Fire Department responds to all these calls. Mr. Powell would like to see a breakdown of the commercial responses by square footage of the building. Mr. Bressner said that they do not have this information available, but will determine if this data is obtainable from the Palm Beach County Assessor's Office. Mr. Powell said that the property tax structure in Florida is also not fair, since the first $25,000 is exempt from property taxes. People who pay no taxes receive the 5 Meeting Minutes Coalition to Protect the Rights of Small Business December 11, 2001 same public safety services as people who do pay taxes. Attorney Cherof pointed out that the whole point to a fire assessment is to ensure that everyone pays their fair share of receiving these services. Mr. Miller wanted to know if there is a message today to the Coalition that they should go get an attorney or is the City prepared to do something. Mr. Bressner reiterated his previous statements regarding the 2001 rates being set and that the 2002 rate assessments could be revisited. Mr. Bressner replied that there has been no ultimatum given today. Mr. Powell mentioned Vice Mayor Weiland's comments at the last Commission meeting about whether the costs of construction had been inflated. Vice Mayor Weiland indicated that he had spoken to some contractors and architects and Mr. Bressner said that staff would like to speak to those same persons. The City is also examining the costs of new fire stations that have been built recently by the County. Mr. Bressner responded if there are ways to save money, the City would be open to this. It is the City's intent to build good and working new fire stations. Mr. Powell would like assurances that if it were necessary for the City to acquire land to build the new fire stations, that they not pay an astronomical price for the property to insure that the real worth of the station would be the building and not the land. Mr. Desiderio inquired if the $8 million fire budget is an increase over the previous year. Chief Bingham stated the budget figure is less than the previous year. The decrease was the result of the early buy-out of high salaried employees. Of the $8 million fire budget, $5.2 million or 63% is for fire-rescue. Mr. Powell asked the following questions: (1) Where the $75.00 fire inspection fee goes? (2) How much in transporting fees the Fire Department received last year?. (3) What does the City receive from other municipalities for fire protection and EMS services? Chief Bingham responded that all these funds go into the General Fund and are revenues that the Fire Department generates. Mr. Bressner furnished a copy of the budget that presented a breakdown of these figures. Chief Bingham had prepared and furnished a fact sheet setting forth the particulars of the Interlocal Agreements between the City and the Town of Hypoluxo, the Village of Golf, and the Towns of Ocean Ridge and Briny Breezes. A copy is included with the original minutes. The salient points were reviewed. Fire Protection Services are not provided to Ocean Ridge and Briny Breezes. The 6 Meeting Minutes Coalition to Protect the Rights of Small Business December 11, 2001 City collects the fire inspection/plan review fees for Hypoluxo and the Village of Golf. Mr. Miller was informed that these four towns are not included in the fire assessment. The CPI formula is used to increase the fees each year. Mr. Bressner inquired if the fire assessment could be applied. Attorney Cherof responded that the City could adjust the rates that the municipalities are charged, but the City cannot force the assessment on properties outside the City limits. Mr. Desiderio stated that Commissioner Ferguson supplied him with a breakdown of the properties within the City as follows: · There are 16,000 single-family homes, or 57% of the units that receive 34% of the fire calls. · Mr. Desiderio construed that there are 10,920 multi-family or 39% of the units that receive 25% of the fire calls. · Commercial/warehouse and institutional accounts for 4% of the units that receive 40% of the calls. Mr. Desiderio questioned the accuracy of these figures and asked if there were more accurate figures available. Mr. Bressner stated there are 16,182 single family and 14,363 multi-family units in the City. Mr. Desiderio said that if there were 16,182 single family homes paying $70.00 per year and 14,363 multi-family homes paying $58.00, this amounts to almost $2 million per year. Mr. Bressner explained that this is not the formula. The formula for the assessment is the number of calls by property classification. If the number of commercial units increases or decreases that would only affect the dollar figure of the budget, which is apportioned only to commercial property. It would have no effect upon the residential. Therefore, each property use represents a percentage of the overall budget, which is the revenue need based upon the assessment. For residential, the multiplier used is the number of units. Commercial is based upon the size of the units, utilizing a tier system. Mr. Bressner suggested re-examining the 476 calls to determine if there is a disproportionate burden placed upon the smaller commercial units. Mr. Bressner felt by utilizing the GIS system, together with the County's assessment data, staff would be able to glean the square footage data. This information will assist the Commission to determine whether the tiered system of calculating the rates for commercial property was done in an equitable manner. If the figures show that there is a disproportionate number of calls to small businesses, perhaps a different rate should be charged to smaller businesses. Ms. Law suggested having the same price per square footage for all the commercial sites. She also suggested including the clubhouses and not-for-profit businesses in the commercial category. 7 Meeting Minutes Coalition to Protect the Rights of Small Business December 11, 2001 Houses, apartments and condominiums could then be assessed the same as condos. Mr. Miller would like to see the fire assessment based upon the tax base. Attorney Cherof responded that basing the fire assessment upon the tax base has not been approved by:ar~y court and would more than likely be challenged. Attorney Cherof requested to return to the purpose of the meeting. He pointed out that the administrators of the City could not agree today (a) what the assessment methodology would be (b) when it would go into affect, or (c) how it would be altered. This can only be done legislatively by the City Commission and has already been done for this fiscal year. It is not possible for the administrators in attendance at this meeting to change anything today. The City is in the process of looking at the methodology for next year. The administration today is prepared to make a commitment to involve the Coalition in this process over the next six months through the budget process. Mr. Desiderio noted that the City Commission is greatly influenced by the recommendations of staff and has great input on what the Commission does through legislation. Attorney Cherof responded that the advice given to the legislative body is based upon meetings with citizens such as today's meeting. Mr. Miller said that the City should have waited until the court cases involving other municipalities were resolved before instituting the fire assessment. Attorney Cherof responded that the court cases before the Supreme Court would not have an impact upon the City's fire assessment. The City's assessment only collects for fire services, whereas the issue before the court is whether the fire and EMS services could be combined. In formulating the assessment, the City segregated the fire services and that is all the citizens of the City have been assessed for. Conclusion Mr. Miller quoted Ordinance 01-34 that calls for a logical use and he does not see any logic in the Ordinance. The tier effect employed for commercial property was not logical because the bigger the property, the less they pay. Mr. Bressner stated that they might be able to determine this after the 476 commercial calls are studied and analyzed, and what the relative level of engagement was for smaller businesses. Mr. Powell asked for the definition of institutional versus nursing homes. Chief Bingham stated he would supply this information. Mr. Miller inquired why multiple rigs responded to an EMS call. Chief Bingham explained that the City operates out of three fire stations and serves a population of 60,000 people. The calls to a city the size of Boynton Beach are very high and the City has had to make a transition from only having fire trucks respond to fire 8 Meeting Minutes Coalition to Protect the Rights of Small Business December 11, 2001 calls and only ambulances respond to EMS calls by combining resources. This method insures that an adequate number of personnel would be at the scene of an emergency. Sometimes a fire truck responds to a heart attack call because the EMS truck is busy on another call. Mr. Desiderio calculated from the figures supplied today, that: 16,182 single family homes @ $70.00 = $1,132,740 14,363 multi-units @ $58.00 = $ 833,054 Total: $1,965,794 Mr. Desiderio inquired what the target figure is from the assessment of all the commercial properties considering residential generates almost $2 mitlion per year. Mr. Bressner responded 22.47% of the total budget of $5.1 million or $1.1 million, which was reduced by the Commission because other resources were located. The original estimate of $5.1 million was reduced by the Commission to approximately $3.8 million. The final figure came to $3,369,000, the commercial share of which still remained at 22.47%. Mr. Bressner will verify these figures. Mr. Powell inquired what the percentage would be for warehouses and institutions. Mr. Bressner responded it was 3.16% for warehouses and 8.26% for institutions; however, there was a set aside since not-for-profit institutional were exempted. Mr. Miller questioned why clubhouses were exempted. Mr. Bressner responded that the Commission decided not to include clubhouses since residents were paying for their individual residences. Chief Bingham reported there was only one call made to a clubhouse. Ms. Reese read the revenue figures in the budget as follows: Fire and life safety fee~ - Fire service contracts - ALS transport services - $230,000 595,000 515,000 $1,340,000 Mr, Desiderio requested how the tier system for the commercial properties was derived to come up with the figure of $741,000. Mr, Bressner said he would follow through on this. Mr. Desiderio asked what the percentage was for nursing homes and Mr, Bressner stated it was 7.84% based upon 166 calls. Mr. Bressner will furnish the following: 1. Copies of the tapes of the meeting; 2. Minutes of the meeting; 9 Meeting Minutes Coalition to Protect the Rights of Small Business December 11, 2001 3. The numbers of Calls and the analysis. After receipt of these documents, the Coalition would have to make a decision on whether it wants to sit down again and talk. Mr. Miller asked about the timing. Mr. Bressner said that another meeting could not be scheduled until after the holidays. The meeting concluded at 12:45 p.m, Barbara M. Madden Recording Secretary (two tapes) (December 11, 2001) 10 , The City o Boyr*on Beach OFFICE OF THE CITY MANAGER I00 E. Boynton Beach Bouleuard P.O. Box 310 Boynton Beach, Florida 3342.5-0310 City Manager's Office: (56I} 742-6010 FAX: ($61) Z42-6011 e-mail: city. manage a~.boynton-beach¥1, u$ wu~. cl. boyntor~-beach.fI, us To: From: Date: Mr. Dom Desiderio, Coalition to Protect the Rights of Small Businesses (via Fax at 561-243-4781) Kurt Bressner, City Manager~~ December 7, 2001 Subject: Agenda for Meeting on Fire Assessment Options for 2002 Thank you for sending me a copy of the items the Coalition wished to discuss at our meeting on Monday, December 10th at 11 AM. The meeting will be held in the conference room on the second floor of City Hall. Meeting participants will need to sign in at the desk in the lobby of City Hall. The agenda items you requested are acceptable to the City and we look forward to meeting with you on Monday. My hope is that we can develop a smaller working team to develop specific rate options for the City Commission's revie~v. I have attached another copy of your memo for the information of the City Commission. In addition, the City Commission is scheduled to continue discussion of the Federal Highway Land Use and Zoning Amendments on December 18th. These recommendations came from the CRA and represent a proposal to review the land use plan and zoning for part of the Federal Highway. The geographic area affected includes the area along Federal Highway from the C- 16 Canal to the North and Woolbright Road to the South. I will provide you with a complete staff packet of the recommendations and options next week. I believe the material should be ready by Wednesday afternoon. Thank you. Cc: City Commission James Cherof William Bingham Diane Reese Quintus Greene TO: Kurt Bressner FROM: "Coalition to Protect the Rights of small Business" "CoaLition Against Assessment" "Boynton Beach Al]Jnnce" .... phone ($61) 276-9765 · fax (561) 243-478! DATE: DeCember 6th, 2001 Agenda for the Meeting of December 10th, 2001 at 11:00 a.m. PurPose of the meeting is to r'~olve the unequal apportionment of t!hc fire assessment as it pez~cuins to Commercial ~perty, etc. Florida case law requirements for a valid special assessment include: The service provided must coufer a special benefit to the Property being assessed and The cost assessed must be fairly and reasonably apportioned among the properties that receive the special benefit. AGE-N~DA ri'EMS TO BE DISCUSSED: In flrder to m~et the seeond requirement for a fair and legal apportionment aH commercial and warehouse properties must be assessed equall~ by one of the following methods: or Eliminate the current tier system and assess by cents per square f~. Impose the fire assessment based on the nsesssed value of the Property as per the valuation currently established by the Palm Beach County Froperty Appraiser's da~n. Under the current assanment Condo Clubhouses and Non Profits are exempt from the fire assessment. Eliminate this exemption to iuclude both. The total annual fire assessment revenue to be collected is estimated to be S4,352,899. Hypoluxo, Ocean Ridge, Village of Golf and Briney Breezes utilize our fire rescue services. ~ow and how much will these communities be assessed so that they pay their fair ~ narc toward the new fire assessmen~ RECEIVED DEC - 6 001 CITY MANAGER'S OFFICE Fire Rescue Contract Services (Inter-local Agreements) Town of Hypluxo 7-year agreement Effect: 10/01/98- 09/30/05 Fire/EMS Start $230,000 10/01/01 $240,655.36 Responses 2,000: Fire 2 / EMS 93 / Other 59 / Total 154 Village of Golf 7-year agreement Effect: 10/01/98 - 09/30/05 Fire/EMS Start $92,500 10/01/01 $93,452.75 Responses 2000: Fire 1 / EMS26 ! Other 13 / Total 40 Ocean Ridge 5-year agreement Effect: 10/01/99 - 09/30/04 Start $102,500 10/01/01 $107,248.58 Responses 2000: EMS 89 EMS only Briny Breezes 5-year agreement Effect: 10/01/99 - 09/30/04 Start $35,628 10/01/01 $35,994.97 Responses 2000: EMS 39 EMS only CONSISTENT LANGUAGE IN ALL AGREEMENTS Formula for annual increase: ...divide the comparison year CPI by base year CPI multiplied by the sum of the initial payment (i.e. if base year CPI was 150 and comparison year CPI is 160 the formula is 160/150 X 230,000 (Hypoluxo) or $245,333.) We also pick up all fee for fire inspections/plan review etc for Hypoluxo and Village of Golf. We apply our Fire and Alarm Codes per the Agreement. TERMINATION - Either party may terminate upon minimum of one-year written notice to the other party, such termination to be effective at the end of the first complete fiscal year (September 30) after receipt of notice. AMENDMENT TO AGREEMENT - Agreement shall not be amended or modified except by in writing executed by the parties and approved by resolution of the governing body of each party. ~2.. bo~ 0