Loading...
Minutes 06-19-01 (2)SPECIAL CITY COMMISSION WORKSHOP ON NON-AD VALOREM CITYWIDE TAX ASSESSMENT FOR FUNDING FIRE SERVICES HELD IN COMMISSION CHAMBERS, CITY OF BOYNTON BEACH, TUESDAY, JUNE 19, 2001 AT 5:00 P.M. Present Also Present Gera~d Broening, Mayor Ronald Weiland, Vice Mayor Mike Ferguson, Commissioner Charlie Fisher, Commissioner Mack McCray, Commissioner Kurt Bressner, City Manager Jim Cherof, City Attorney Janet Prainito, City Clerk Mayor Broening opened the workshop at 5:00 p.m., stating that it was a special workshop convened to consider the Fire Rescue Special Assessment. He introduced Ms. Camilla Tharpe, Vice President of Government Services Group, Inc. (GSG) and Ms. Virginia DeLegal, Attorney at Law, who would be presenting a report on the subject topic. Each member of the Commission had a copy of the report and there were copies on the back table for interested persons. Mr. Bressner expressed the hope that after the Commission reviewed the report, it could make some preliminary decisions as to numbers, amounts, percentages, what could be included in the budget, ~buy-downs, or outright exemptions of certain classifications of properties. These decisions would lead to the actual rates on the various classes of properties. Virginia DeLegal, Attorney with Nabors, Giblin & Nickerson, P.A., in Tallahassee, offered to answer any questions about their report and give guidance on how the City could best implement a non ad valorem special assessment to fund Fire services. This would provide a dedicated revenue source and the Commission would have a choice as to the rate on an annual basis. One of their guiding principles had been the issue of special benefit to property. A recent court decision ruled that emergency medical services did not constitute any special benefit to property; therefore, they had deleted the cost of providing emergency medical services from the Fire Budget. The other principle they followed was to apply the assessable costs in a fair and reasonable manner. They then applied the non-EMS fire calls to the various property use categories. This had no relation to the value of property or risk factors on properties. Camille Tharpe, Vice President of Government Services Group, Inc., in Tallahassee, reported that there had been 2,018 non-EMS fire protection or suppression calls in the year 2000. She went on to explain the apportionment methodology they used to determine costs and rates. Based on the number of non-EMS fire calls, each category of property (such as Single Family Residential, Multi-Family Residential, Commercial, Industrial/VVarehouse, Institutional, and Nursing Homes), was given a percentage of the total calls and a portion of the total pro forma budget amount of $5M. For example, the Single-Family Meeting Minutes Fire Tax Assessment Workshop Boynton Beach, Florida June 19,2001 Residential category had 712 incidents for 33.62% of the total calls, giving that category a $1,721,527 portion of the budget. Ms Tharpe explained that in the institutional category there were Government properties, Churches, and Not-for-Profit organizations such as Kiwanis and Elks. Their study revealed that Single Family residences generated the most calls for service, followed by Multi-fa mily Residential and Commercial. Once they determined what each category of property should pay they had to determine what each individual parcel should pay. They determined that the appropriate billing unit was a dwelling unit in the Single-family Residential category. If a person had a duplex on a parcel of property it was considered two dwelling units. If there were an apartment building with 100 apartments, it was considered 100 dwelling units. They looked at the square footage of buildings for the non-residential categories. Ms. Tharpe p~esented four schedules of preliminary rates for each category for Fiscal Year 2001-02 based on a percentage of assessable costs broken down by 100% of assessable costs, 85% of assessable costs, 75% of assessable costs, and finally, 65% of assessable costs. The 85% of assessment scenario nets the City $4.3M, 75% nets $3.8, and 54% nets $3.3M. The Commission had the choice of funding anything from 0 to 100% of the budget. Commissioner Fisher asked for the break-even point and this was not yet known because they had not determined how much millage was used for fire. Another similar question was how much people paid in taxes for fire services now and how much they would be paying with the assessment. GSG responded that they determined that a single-family house at 100% of the budgeted figure would pay $106.00. A multi-family dwelling unit would pay $113.00 per dwelling unit. The rates were displayed for the different square foot classifications of the Non-Residential Property Use Categories. Possible Exemptions/Rate Modifications 1) 2) 3) Nursing Homes Institutional - Tax-Exempt Government Ms. Tharpe explained that nursing homes generated only 8% of total fire calls and that there were 12 such buildings in the city. Those twelve buildings would bear an exorbitant amount of the cost of fire service. Even at the 65% rate, nursing homes would pay as much as $40,000 if they were greater than 50K square feet. They asked for guidance from the Commission on how this issue could be addressed. There were some properties that were Institutional and tax-exempt such as churches and not-for-profit organizations that typically did not pay taxes. Although they generate some of the fire calls, GSG wanted to know if there was a need to make them pay their share. Government properties were also an issue. They could be sent a bill but they could not be forced to pay. Once the Commission had given the go-ahead for the tax assessment, they would move into the implementation phase. There would be a first reading of a procedural ordinance and that would be on July 3. The second reading of that ordinance would happen on Meeting Minutes Fire Tax Assessment Workshop Boynton Beach, Flodda June 19,2001 July 17 and at that same meeting, the Commission would be asked to adopt an initial assessment resolution which would include preliminary rates. On August 28, the Commission would be asked to adopt a final assessment resolution. This all had to happen before September 15 and the final resolution and rates would be for one year. Since the City was going to use the tax bill collection method if it decided to go ahead with the program, there were statutory requirements that had to be met. After the initial assessment resolution was adopted on July 17, the Commission would direct the City Manager to authorize GSG to prepare a mail notice for every property owner. That would be about 27,000 notices, one sent to every property owner. These notices would inform property owners of their individual assessment and invite them to a public hearing on August 28, at which time they could give comments about the program and their assessment rates. That mail notice would be mailed on August 6 - it was required to be mailed twenty days prior to the public hearing. Since there were 27,000 hearing notices going out, they recommended having the meeting in a larger place. Due to the statutory language in the mail notice, GSG suggested that an informational brochure be sent along with the mail notice. They also recommended that the City have a phone bank of City staff to answer questions. GSG would also have people available to insure that the first person and the last persons calling the phone bank would all be getting the same answer(s). They would be training the phone bank people. Commissioner Fisher asked what amount the Fire Department needed on an annual basis and Mr. Bressner responded $5.121M. Commissioner Fisher asked if that would take care of any of the capital improvements they had discussed? Mr. Bressner said it would not and what they would have to add to that would be the cost of three major capital improvements: 1) Land acquisition costs for a new southeast quadrant fire station with an annualized cost of $34K; 2) Cost of the building, including construction, equipment and furnishings with an annualized cost of $153K; and 3) Rehabilitation of Fire Station #2 with an annualized cost of $94K. The last component would be a quint engine to go into the new station. They cost about $550K and have a life span of seven years. The annualized cost would be $96K. The second wave of capital improvements was not included in this scenario because they had not been designed yet. This would be the replacement station for Fire Station #2. Mr. Bressner did not believe this would come into play for another two and a half or three years. Rather than start collecting dollars for that now, the rates could be adjusted annually based on new costs that had come in. Vice Mayor Weiland asked Mr. Cherof if the referenced Ordinance had to be read at consecutive meetings. Mr. Cherof said they could skip a regular Commission meeting but the schedule for final adoption would be impacted. Vice Mayor Weiland stated he would not be in town for the second reading and public hearing on July 17 and believed that on a matter of this importance, all five Commissioners should be in attendance. There was a discussion about how the timing could be juggled to accommodate Vice Mayor Weiland's request. Ultimately, the date for the second reading and public hearing on the Ordinance was set for July 13, 2001 at 1:00 p.m. 3 Meeting Minutes Fire Tax Assessment Workshop Boynton Beach, Florida June 19,2001 Ms. DeLegal said there was a special act that affected the Property Appraiser and his TRIM Notice. This act required anyone in Palm Beach County imposing a non ad valorem assessment to get the preliminary rates to the Property Appraiser by August 1. Therefore, the special assessment resolution would have to be adopted prior to August 1. Mr. Bressner said that in addition to going to the Property Appraiser, the rates would be mailed to all the property owners. The target for that was August 7 with a public hearing scheduled for August 28. Ms. Tharpe offered an answer to the break-even question. On a 100% budget with a $106 single family rate, a house would have to have a taxable value of $21K. (This would mean the value of the house would be $46K if there were a Homestead Exemption.) If you assumed that all of your millage was going towards tire, it would take 5 mills. Five times the $21K of taxable value would get close to the $106.00. The break-even point was on $21K of taxable value. Mr. Bressner asked if the proposal was to reduce the millage and Ms. Tharpe said this was just for purposes of understanding the numbers. Commissioner Fisher mentioned that he had not been told that this would be an increase but that he would be paying the same amount of money, and that it would just go to two different places. Ms. Tharpe said that it would be a policy decision for the Commission to lower the millage so someone's bill could, in the end, be less. Mr. Bressner suggested that it might be possible to extract out the amount of the millage that actually went for emergency medical services as opposed to fire. Commissioner Fisher reiterated his understanding that this assessment would cover improvements in the fire system such as response time, facilities and so forth that his current taxes did not cover and this was affirmed as correct. Commissioner Fisher also said he understood that this assessment was in lieu of borrowing the $5M that was needed to fund the fire service improvements. Mr. Bressner agreed but said that the staffing costs were not included because the new station would not be on line for another 18-24 months. Vice Mayor Weiland asked where the money for staffing would come from and Mr. Bressner responded that it would have to come from this revenue stream as well. Rather than apportion out dollars now, prematurely, it was not included. The 24 full-time personnel that would be necessary to staff the fourth station would be close to $1.3M. Mr. Bressner said this number needed to be refined by staff and that staff could come back to the Commission with those numbers. Commissioner Fisher asked Mr. Bressner if they needed a revenue stream of $370K a year to do the capital improvements or $5M and Mr. Bressner responded that they needed a revenue stream of $5M to run the fire department, if the Commission decided to run the fire suppression portion of the fire department from this revenue stream. The Commission would have to give the City Manager direction as to whether they wanted the City to reduce the General Fund or a portion thereof for expenses that are now being substituted with the Fire Assessment. Mr. Bressner advised that the overall net effect, based on the 100% allocation and assuming that everybody paid their share (including the nursing homes, churches and all other groups), would be that the single family home would be paying $106, regardless of whether or not they had Homestead Exemption. They would also pay property taxes 4 Meeting Minutes Fire Tax Assessment Workshop Boynton Beach, Florida June 19,2001 based on their assessed value. Some classes of property were now paying "0" in property taxes because they were under the $25,000 assessed value and they would now be paying $106, for example. Commission Discussion on Rates and Discounts Commissioner Ferguson preferred staying with the 85% of assessable cost scenario. He thought the nursing home rates were too steep and needed to be lessened. He favored moving them into the institutional classification. Vice Mayor Weiland did not favor taxing churches and not-for-profit groups, particularly since they had already been assessed on the stormwater ERU. Mr. Bressner brought up the nursing home situation where there were a small number of properties but a very high number of fire calls. He thought they might want to consider moving nursing homes to the institutional class with a warning about their need to reduce their false alarm calls. Commissioner Fisher favored charging nursing homes the full rate the first year with the notice that if they greatly reduced their false alarm calls, their rate could be reduced. He believed this would give them an incentive to lower their number of false alarms. Commissioner McCray remarked that fire and police protection was one of the duties of government. He was concerned about hardship cases and how they would be managed. Ms. Tharpe said that citizens could apply for relief to the Tax Collector since the assessment would be part of the tax bill. There were various methods such as applying by a certain date to be able to pay quarterly. At certain levels of age and income, entire tax bills could be deferred. They would not have to pay until such time as the property was actually passed on to someone else or sold. The City could also adopt an Ordinance and mirror the practices of the Tax Collector if it so desired. Commissioner McCray was concerned about the training for the phone bank participants and Ms. Tharpe replied that they would have a couple of hours of instruction. GSG would be there for the first day of calls and by the end of the first day, most of the questions would be answered. Commissioner McCray asked if the Commission would have an opportunity to sign off on the brochure to be sent to the public and Ms. Tharpe affirmed that they would. Commissioner Fisher hoped the Commission would look for a dollar figure that it actually needed. He did not favor the 100% of assessable cost scenario unless absolutely necessary. Mayor Broening reminded everyone that the Ordinance was only an enabling device that would allow the Commission to do the actual resolution that set the rates. He favored moving ahead on the Ordinance. Vice Mayor Weiland was against taxing institutions. Mayor Broening pointed out that if they exempted one they would have to exempt all. Vice Mayor Weiland said that 99% of government was not going to pay and the Commission would be setting a precedent that Meeting Minutes Fire Tax Assessment Workshop Boynton Beach, Florida June 19, 2001 government would not pay, yet the City expected the churches and not-for-profits to pay. He believed this needed more thought. Commissioner Fisher stated that the nursing homes were using services and he was not in favor of discounting them until they could demonstrate a major reduction in their false alarm calls. The Institutional Category used services 175 times in the year under study. Vice Mayor Weiland said that with 121 buildings in the Institutional' category, that came out to barely over one call per building in a year's time. Commissioner Fisher said that if they were considering charging someone on a limited income in a house with a Iow dollar valuation then they should have the same rule for institutions. They were still using the services. Mr. Bressner asked Ms. Tharpe if the deciSion of the Commission was to give relief to a particular category, would it be by direct discount or by moving them into a different classification? Ms. Tharpe said it was basically a discount on a rate and they would not move into another classification. Mayor Broening believed the Commission was in fundamental agreement on moving forward with the tax assessment. He asked GSG if they could produce a matrix, showing the various schemes and their impact on revenues and on homeowners and institutions? Ms. Tharpe said they would do so. Also, Ms. DeLegal said she could draft language for the resolution that would go with each of the scenarios, depending on what the Commission decided when they adopted the initial assessment resolution. Mayor Broening also believed that the process could move forward towards the Ordinance now that they had reached agreement to proceed. The meeting ended at 6:10 p.m. Ma~or / ATTEST: (two tapes) e°mmiss.i°ner (06/22/01) 6