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2016-07-19 (Fire Assessment Workshop)CITY OF OKEECHOBEE JULY 19, 2016, CITY COUNCIL WORKSHOP 55 SE 3RD AVENUE * COUNCIL CHAMBERS * OKEECHOBEE, FL 34974 SUMMARY OF COUNCIL ACTION AGENDA CALL TO ORDER — Mayor July 19, 2016, City Council Fire Assessment Workshop, 5:00 P.M. II. MAYOR, COUNCIL AND STAFF ATTENDANCE — City Clerk Mayor James E. Kirk Council Member Noel A. Chandler Council Member Mike O'Connor Council Member Gary Ritter Council Member Dowling R. Watford, Jr. City Administrator Marcos MontesDeOca City Attorney John R. Cook City Clerk Lane Gamiotea Deputy City Clerk Bobbie Jenkins Police Chief Denny Davis Fire Chief Herb Smith Public Works Director David Allen Finance Director India Riedel III. NEW BUSINESS — Mayor A. Presentation and discussion of Fire Assessment Study and implementation — Burton & Associates COUNCIL DISCUSSION Mayor Kirk called the July 19, 2016, Workshop to order at 5:00 P.M. City Clerk Gamiotea called the roll: Present Present Present Present Present Present Present (entered at 5:08 P.M.) Present Present Present (entered at 5:29 P.M.) Present Present Present PAGE 'I OF 3 On June 7, 2016, the City Council entered into a contract with Burton & Associates, Inc., to provide the necessary study, information, and documents required to implement a non ad valorem Fire Assessment on properties within the City Limits. The purpose of this workshop is to review the draft copy of their study and take public input on the issue. Mayor Kirk yielded the floor to Mr. Erick van Malssen, Consulting Manager for Burton & Associates, to make his presentation. Mr. van Malssen acknowledged the other members of his team, Mr. Mike Burton, Technical Advisor and Mr. Peter Napoli, Consulting Analyst. Draft copies of the City Fiscal Year 2017 Fire Rescue Assessment Study Presentation of Results were distributed. The Study began with some background information. City Fire services are currently tunded through property taxes and other general fund revenue. Implementing a Fire Assessment provides the City with an alternative funding mechanism. The assessment would apportion costs amongst property owners by the benefit received for services. Costs will be more wide -spread to those who benefit. There are fewer exemptions than those allowed through ad valorem providing a more predictable source of revenue. However, the study must be updated and costs can shift. The assessment rates can also be adopted at any level at or below 100 percent of the cost recovery. JULY 19, 2016 - FIRE ASSESSMENT WORKSHOP - PAGE 2 OF 3 559 AGENDA III. NEW BUSINESS CONTINUED. A. Presentation and discussion of Fire Assessment Study and implementation continued. COUNCIL DISCUSSION The methodology for the rates and cost recovery has been tested and verified in the Florida Court system. The law provides there must be a logical relationship between the services and facilities provided and the benefit to real property assessed. Further, the costs associated with providing the services and facilities must be reasonably apportioned to the properties that receive a benefit in proportion to the benefit received. The calculations recommended within this Study were developed so that costs incurred by the City to provide fire service would be recovered through assessments to properties, in proportion to the benefit received by the demand for service as reflected in the calls for service (over the last four years) from each respective property class. However, Emergency Medical Service (EMS) calls and costs had to be excluded since Okeechobee County already has an EMS assessment on properties within the City. Property owners cannot be assessed twice for the same service; the City does not provide EMS service, only Fire services and prevention. The property classes are: residential to be assessed per dwelling unit, non-residential (commercial and industrial uses) assessed based on the square footage of structures on the property, and vacant (no structures) assessed per parcel. It is required that the Assessment provide an exemption for government and agricultural properties. The City Council can consider other exemptions, such as churches and non -profits. Specific exemption language could be addressed when the final assessment resolution is adopted at a public hearing. The Projection of Fire Service Net Revenue Requirement was discussed. The information within the Study covered five Fiscal Years beginning October 1, 2016 and ending September 30, 2021. The main focus was on Fiscal Year 2016-17, and lists the following expenditures: personnel services $1,467,076.00, operating costs $151,641.00, capital improvement costs $334,000.00. Add expenditures for the Assessment calculation: mailing of notices $2,000.00; administrative fee for the Property Appraiser's Office (estimated at 2 percent of net revenue) $42,000.00, administrative fee for the Tax Collector Office (estimated at 2 percent of net revenue) $42,000.00; and non -collection and/or contingency (estimated at 5 percent of net revenue) $105,000.00. Expenditures total $2,143,716.00. Then deduct $50,000.00 for the Fire Insurance Premium and $2,400.00 for the Firefighters' Supplement, leaving a Net of $2,091,216.00. When asked by the Council, Mr. van Malssen explained, the Fire Insurance Premium is a fee paid through property insurance to the State, who then administers the amount through a statuary formula, and paid directly to the Firefighters Pension Fund. The Firefighters Supplement fee is an amount paid to the City by the State to provide individual firefighter personnel who have earned an Associate's Degree or higher with a monthly income supplement. The percentage to allocate each property category was presented as follows: 46.6 percent for Residential, 49.2 percent for non-residential, and 4.2 percent for vacant property. To provide 100 percent cost recovery would calculate to: Residential $974,547.00 divided by 2,054 dwelling units, equals $474.00 per dwelling. Non -Residential $1,029,366.00 divided by 3,163,967 square feet equals $0.33 per square foot; Vacant $87,303.00 divided by 695 parcels equals $126.00 per parcel. Those assessed through square footage are calculated up to 140,000 square feet as the maximum structure size. The information used within the Study was acquired from the Property Appraiser's web site. The property owner can address disputes. 560 JUI_Y 19.2016 - FIRE ASSESSMENT WORKSHOP - PAGE 3 OF 3 AGENDA III. NEW BUSINESS CONTINUED. A. Presentation and discussion of Fire Assessment Study and implementation continued. IV. ADJOURNMENT — Mayor Please take notice and be advised that when a person decides to appeal any decision made by the City Council with respect to any matter considered at this meeting, he/she may need to insure that a verbatim record of the proceeding is made, which record includes the testimony and evidence the appeal is to be based. Ci Clerk media are for the sole purpose of backup for official records of th erk. ATT ST: James E. Kirk, Mayor Lane amiotea, MC, City Clerk COUNCIL DISCUSSION The Study then offered an alternative to implementing the full recovery cost (for projected FY 2016-17 amounts) by spreading the amount over four years. The amounts are adjusted for the required exemptions only. The first year would equal 25 percent of the total recovery cost, the second year would be 50 percent, the third year would be 75 percent, and then in four years it would be 100 percent. The following table was provided: Effective 25% Effective 50% Effective 75% Effective 100% Residential (Per Dwelling Unit) 10/1/2017 $119.00 10/1/2018 $237.00 10/1/2019 $256.00 10/1/2020 $474.00 Non -Residential (Per Square Foot) $0.08 $0.16 $0.24 $0.33 Vacant (per Parcel) $31.00 $63.00 $94.00 $126.00 Now that the City Council has the suggested rate information, the final steps to implement the proposed assessment are to adopt the Initial Assessment Resolution, which is proposed tonight during the regular meeting. This Resolution will address the proposed rates, set the Public Hearing date to adopt the Final Assessment Resolution (recommended to be held August 23, 2016), issue the authorization for notices to be mailed to each property owner and authorize the City Clerk to advertise the Public Hearing. The Resolution is to be adopted and submitted with the Assessment Roll to the Tax Collector no later than September 15, 2016. The Mayor and City Council asked several questions throughout the presentation. It was clarified that should the City adopt the maximum rate, it does not mean that the City will levy the maximum rate; both need to be addressed in the Initial Assessment Resolution. However, by adopting the maximum rate projected for Fiscal Year 2020-21, the City would not have to go through the expense of another Study and mail individual notices. They would however, have to adopt the amount each year at a public hearing, just as they do for the residential rates for solid waste collection. The consensus of the City Council was to lean towards implementing the 25 percent assessment, so long as the millage rate could be reduced. Additionally, when special exemptions are considered, Council Member O'Connor requested that Veteran property owners be included. A resolution will be considered during the regular meeting of July 19, 2016, at 6:00 p.m. There being no further discussion, Mayor Kirk adjourned the workshop at 5:45 P.M. L: 2 f 7-� (et, Okeecho441M 107 SW 17th� IsANDEPENDENTOkeechobee,974863-76NEWSMEDIA INC. USA, STATE OF FLORIDA COUNTY OF OKEECHOBEE Before the undersigned authority personally appeared Katrina Elsken, who on oath says she is the Publisher of the Okeechobee News, a three times a week Newspaper published at Okeechobee, in Okeechobee County, Florida, that the attached copy of advertisement being a in the matter of in the 19th Judicial District of the Circuit Court of Okeechobee County, Florida, was published in said newspaper in the issues of Affiant further says that the said Okeechobee News is a newspaper published at Okeechobee, in said Okeechobee County, Florida, and that said newspaper has heretofore been published continuously in said Okeechobee County, Florida each week and has been entered as second class mail matter at the post office in Okeechobee, in said Okeechobee County, Florida, for a period of one year next preceding the first publication of the attached copy of advertisement, and affiant further says that she has neither paid nor promised any person, firm or corporation any discount, rebate, commission or refund for the purpose of securing this advertisement for publication in the said newspaper. Katrina Elsken Sworn to and,subscribed befca me this i day of AD Notary Public, State of� Florida at Large ANGIE BRIDGES *. MY COMMISSION # FF 976149 *: T .a '•';� F: °,".•° Bonded EXPIRES: Apf420,2020 Thtu Notary Public Underwriters 0 PUBLIC NOTICE CITY COUNCIL WORKSHOP NO I.S HEREBY GIVEN that the City Council for the City of Okeecho- bee vr�I`conduct a Workshop on Tues, July 19, 10,210 PM, or as soon thereafter as possible, at Gty Hall, 11 SE 3rd Ave, Rm Okeechobee, FL The p ryy�e of this workshoois to 354isplennr entinq_a non -ad valorem Fire Asp sm ne L Including proposed cites for m and on or in within the Gtv Umits The public is invited and encouraged to attend. The agenda may be obtained from atyofokeechobee.com or by calling the Office of the City Administrator, 863-763-3372 z212. ANY PERSON DECIDING TO APPEAL any cl d' Wn made by the Gty Council with respect to any matter considered at this meeting will need N ensure a verbatim record of the proceeding Is made and the record Includes the testinwny and evidence upon which the appeal will be based. In accor- dance with the Americans enth Disabilities Act (ADA), any person with a disability as defined by the ADA, that needs special accommodation to par- ticipate In this proceeding, contact the Gty Clerk's Office no later than two business days prior to proceeding, 863-763-3372. BE ADVISED that should you intend to show any document, picture, video or items to the Council In support or opposition to any item on the agenda, a copy of the document, picture, video, or Item MUST be provided to the Gty Clerk for the City's records. , PBy: Mayor lames E. IGrk 4 688 ON 7113R016 CITY OF OKEECHOBEE 55 SE 3RD AVENUE ♦ COUNCIL CHAMBERS ♦ OKEECHOBEE, FL 34974 JULY19)2016 FIRE ASSESSMENT WORKSHOP OFFICIAL AGENDA PAGE 1 OF 2 CALL TO ORDER - Mayor: July 19, 2016, City Council Fire Assessment Workshop, 5:00 p.m.- (nth I! Lk-K MAYOR, COUNCIL MEMBERS, AND STAFF ATTENDANCE - City Clerk Mayor James E. Kirk Council Member Noel Chandler E? Council Member Mike O'Connor Council Member Gary Ritter 1� Council Member Dowling R. Watford, Jr. City Administrator Marcos Montes De Oca City Attorney John R. Cook N, L* c\j_� 5:b�5('�-' City Clerk Lane Gamiotea P Deputy Clerk Bobbie Jenkins Police Chief Denny Davis }—r,�',ac) Fire Chief Herb Smith -P Public Works Director David Allen P Finance Director India Riedel -P III. NEW BUSINESS - Mayor A. Presentation and discussion of Fire Assessment Study and implementation - Burton & Associates [rcc4 v0A fYbJsptisL�-Utrvq M Pry � �� u�� pCv w7 5fuclC (JC `�o P�a� IV. ADJOURN WORKSHOP - Mayor PLEASE TAKE NOTICE AND BE ADVISED that if any person desires to appeal any decision made by the City Council with respect to any matter considered at this proceeding, such interested person will need a record of the proceeding, and for such purpose may need to ensure a verbatim record of the proceeding is made, which record includes the testimony and evidence upon which the appeal is to be based. City Clerk recordings are for the sole purpose of backup for official records of the Clerk. In accordance with the Americans with Disabilities Act (ADA), any person with a disability as defined by the ADA, that needs special accommodation to participate in this proceeding, contact the City Clerk's Office no later than two business days prior to proceeding, 863-763-3372. BE ADVISED that should you intend to show any document, picture, video or items to the Council in support or opposition to any item on the agenda; a copy of the document, picture, video, or item must be provided to the City Clerk for the City's records. Q5��, -7 1 Cas4s oto &ML-dnoltow 4a 6n ta- OW4�u I v r, k, pp, qqj Vac&4 Emm Mwwi. Elf mil ovi vw,),ka OLQA 40 (M" ID uu _ 2 -oLo s - r, n DOrg -IQ q c,,L& Rfw-,::C a) _ -10 rZ '1 j Iqj I In Fire A6scssme-n+ Wo rkshc{o 5:0) Maksm (gf:fi C, vafi A�� 00ton � S f S+ ' S Res � o �I ['dak 3-5 rs as deco jgh,cs Mle, 5:0 J6hn W&KPXIkr-� CM Klls F Ws ale 4P.iuded by law ohou h Vacan4- prggr� �Wjs jvjtish � vamfif dqg . 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Fire Study Draft �:ity of Okeechobee, FL Fire Rescue Assessment Study Presentation of Results July 19, 2016 Presented by: BURTON& ASSOCIATES Introduction Burton & Associates Mike Burton —Technical Advisor Erick van Malssen — Consulting Manager Peter Napoli — Consulting Analyst Agenda Fire Assessment Background Methodology Calculations Property Impacts Next Steps for Implementation Discussion BURTON & ASSOCIATES no M I ffmal,=s City Fire Rescue Services currently funded through Property Taxes and other General Fund Revenues Fire Rescue Assessments Alternative Funding Mechanism to Property Taxes Apportions costs amongst property owners by the benefit received for services Costs are more wide -spread to those who benefit Less Exemptions More predictable source of revenue However, study must be updated and costs can shift Can be adopted at any level at or below 100% cost recovery BURTON & ASSOCIATES Fire Rescue Assessment Methodology Calls for Service Methodology Tested and verified in the Florida Court system Allocates costs of Fire Service to property classes based upon historical demand for services Calls for Service Analysis 4-Years of call data Fire/First Responder calls only EMS Calls and Costs are excluded Property Classes: Residential Assessed per Dwelling Unit Non -Residential Assessed per Structure Square Footage Vacant Assessed per Parcel BURTON & ASSOCIATES Exemptions Fire Rescue Assessment Requires Exemptions to: Government owned properties Agricultural properties Certain property uses are exempt from the payment of ad valorem taxes under Chapter 196, Florida Statutes. Ex. churches, non -profits Those property uses may be subject to special assessments Some communities make a policy determination to exempt churches and non -profits from the fire assessment Such discretionary exemptions are paid for by other legally available funds of the city BURTON& ASSOCIATES FY 2017 Fire Rescue Assessment Calculation PROJECTION Fire Expenditures by Category FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 Personnel Services $ _ 1,467,0761 $ 1,621,119 $ 1,696,169 $ 1,775,146 $ 1,858,295 Operating Costs $ 151,641 $ 155,432 $ 159,317 $ 163,300 $ 167,383 Capital Costs $ 334,000 $ 334,000 $ 334,000 $ 334,000 $ 334,000 Total Fire Expenditures $ 1, 17259 6 $ 2,110,550 $ 2,189,486 $ 2,272,446 $ 2,359,678 Plus: Assessment Notice Mailing Costs $0.75 $ 20001$ - $ - $ - $ - Plus: Assessment Costs - County Property Appraiser (2) 2% $ 42,000 y $ 45,000 $ 47,000 $ 49,000 $ 51,000 Plus: Assessment Costs - Tax Collector (3) 2% $ ) 42,0001 $ 45,000 $ 47,000 $ 49,000 $ 51,000 Plus: Assessment Costs - Non -Collections & Contingency (4) 5% $ 105,0001 $ 113,000 $ 117,000 $ 122,000 $ 127,000 Total Fire Expenditures for Assessment Calculation 1 $ 2,143,716 i $ 2,313,550 $ 2,400,486 $ 2,492,446 $ 2,588,678 Less: Fire Insuranse Premium 1 $ (50,100)1 $ (50,100) $ (50,100) $ (50,100) $ (50,100) Less: Firefighters Supplement $ (2,400�1 $ (2,400) $ (2,400) $ (2,400) $ (2,400) Net Revenue Requirement for Assessment $ 2,091,2161 $ 2,261,050 $ 2,347,986 $ 2,439,946 $ 2,536,178 (1) - Assessment Notice Mailing Costs are only imposed in the first year of the new Assessment Program. Estimated at $0.75 per billed parcel. (2) - Estimated at 2% of Net Revenue Requirement, rounded (3) - Estimated at 2% of Net Revenue Requirement, rounded (4) - Estimated at 5% of Net Revenue Requirement, rounded BiURTON & ASSOCIATES FY 2017 Fire Rescue Assessment Calculation Property Category % Allocation $ Allocation Allocated Units Unit Type jAssessment I per Unit Residential 46.6% $974,547 2,054 Dwelling Unit $474.00 Non -Residential 49.2% $1,029,366 3,163,967 Scl Ft $0.33 Vacant 4.2% $87,303 695 Parcel 1 $126.00 Total 100.0% $2,091,216 i 1 BURTON& ASSOCIATES Assessment Calculation ESTIMATED NET COLLECTED. Allocated Costs Less: Shortfall for Exemptions ASSESSEMENT COST RECOVERY LEVEL 100% 75% 50% $ 2,091,216 $ 1,568,412 $ 1,045,608 $ $ (162,000) $ (121,000) $ (81,000) $ 25% 522,804 (40,000) Net Billed Revenues $ 1,929,200 $ 1,447,400 $ 964,600 $ 482,800 Less: Assessment Notice Mailing Costs (1) $ (2,000) $ (2,000) $ (2,000) $ (2,000) Less: Assessment Costs - County Property Appraiser (Z) $ (39,000) $ (29,000) $ (19,000) $ (10,000) Less: Assessment Costs -Tax Collector (3) $ (39,000) $ (29,000) $ (19,000) $ (10,000) Less: Assessment Costs - Non -Collections & Contingency (4) $ (96,000) $ (72,000) $ (48,000) $ (24,000) Estimated Net Collected Revenues $ 1,753,000 $ 1,315,000 $ 877,000 $ 437,000 Residential Rate per Dwelling Unit $ 474.00 $ 356.00 $ 237.00 $ 119.00 Non-Residenital rate per Square Foot $ 0.33 $ 0.24 $ 0.16 $ 0.08 Vacant Rate per Parcel $ 126.00 $ 94.00 $ 63.00 $ 31.00 Note: All figures except allocated costs are rounded to the nearest thousand dollars (1) -Assess ment Notice Mailing Costs are only imposed in the first year of the new Assessment Program. Estimated at $0.75 per billed parcel (2) - Estimated at 2% of Net Revenue Requirement, rounded (3) - Estimated at 2% of Net Revenue Requirement, rounded (4) - Estimated at 5% of Net Revenue Requirement, rounded BURTON & ASSOCIATES Property Impact Examples Examples of basic methodology wherein Residential Properties (Apartment buildings, duplexes, mobile home parks, etc.) are assessed on a per dwelling unit basis. Non -Residential properties assessed on a square footage basis. Rate per�z Parcel Type Property• Unit - 1 t' , s a Cost Single Family Home - Low Value Residential Dwelling 1 Recovery $474.00 $474 $40 Single Family Home - Average Value Residential Dwelling 1 $474.00 $474 $40 Single Family Home - High Value Residential Dwelling 1 $474.00 $474 $40 Duplex Residential I Dwelling 1 2 ! $474.00 $948 $79 Single Mobile Home Residential Dwelling 1 $474.00 $474 $40 50 Unit Mobile Home Park Residential Dwelling 50 $474.00 $23,700 $1,975 80 Unit Apartment Complex Residential Dwelling 80 $474.00 $37,920 $3,160 Retail/Office Non -Residential Sq Ft 2,000 $0.33 $660 $55 Fast Food Restaurant Non -Residential Sq Ft 4,000 $0.33 $1,320 $110 Light Manufacturing Non -Residential Sq Ft 15,000 $0.33 $4,950 $413 Office Complex Non -Residential Sq Ft 30,000 $0.33 $9,900 $825 Big Box Store Non -Residential Sq Ft 100,000 $0.33 $33,000 $2,750 Vacant Lot Vacant Parcel 1 $126.00 $126 $11 9 BURTON & ASSOCIATES FY 2017 Fire Rescue Maximum Assessment Calculation PROJECTION Fire Expenditures by Category FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 Personnel Services $ 1,467,076 $ 1,621,119 $ 1,696,169 $ 1,775,146 $ 1,858,295 Operating Costs $ 151,641 $ 155,432 $ 159,317 $ 163,300 ? $ 167,383 Capital Costs $ 334,000 $ 334,000 $ 334,000 $ 334,000$ 334,000 Total Fire Expenditures $ 1,952,716 $ 2,110,550 $ 2,189,486 $ 2,272,4461 $ 2,359,678 Plus: Assessment Notice Mailing Costs (1) $0.75 $ 2,000 $ - $ - $ - $ - Plus: Assessment Costs - County Property Appraiser (2) 2% $ 42,000 $ 45,000 $ 47,000 $ 49,0001 $ 51,000 Plus: Assessment Costs - Tax Collector (3) 2% $ 42,000 $ 45,000 $ 47,000 $ 49,000 j $ 51,000 Plus: Assessment Costs - Non -Collections & Contingency (4) 5% $ 105,000 $ 113,000 $ 117,000 $ 122,000 $ 127,000 Total Fire Expenditures for Assessment Calculation $ 2,143,716 $ 2,313,550 $ 2,400,486 $ 2,492,446 $ 2,588,678 Less: Fire Insuranse Premium $ (50,100) $ (50,100) $ (50,100) $ (50,100)� $ (50,100) Less: Firefighters Supplement $ (2,400) $ (2,400) $ (2,400) $ (2,400)—$ (2,400) Net Revenue Requirement for Assessment $ 2,091,216 $ 2,261,050 $ 2,347,986 $ 2,439,946 $ 2,536,178 (1) - Assessment Notice Mailing Costs are only imposed in the first year of the new Assessment Program. Estimated at $0.75 per billed parcel. (2) - Estimated at 2% of Net Revenue Requirement, rounded (3) - Estimated at 2% of Net Revenue Requirement, rounded (4) - Estimated at 5% of Net Revenue Requirement, rounded BURTON & ASSOCIATES FY 2017 Fire Rescue Maximum Assessment Calculation MAXIMUM RATE CALCULATION Max I Calculated Allocated Assessment FY 2017 Property Category % Allocation $ Allocation Units Unit Type per Unit Assessment Residential 46.6% $1,181,908 2,054 Dwelling Unit; $575.4.2 $474.00 Non -Residential 49.2% $1,248,391 3,163,967 Sq Ft $0.40 $0.33 Vacant 4.2% $105,879 695 Parcel $152.34 $126.00 Total 100.0% $2,536,178 BiURTON & ASSOCIATES Next Steps for Implementation Finalize Initial Assessment Resolution Variables: Cost Recovery Percentage, Rate or Revenue Target Maximum Assessment Rate Additional Exemptions beyond Requirements Adoption of Initial Assessment Resolution July I 9,h Hearing Date First Class Mailing of Notices to Property Owners 20 days before Final Assessment Resolution Hearing Adoption of Final Assessment Resolution Proposed Hearing Date: August 23 rd Submit Assessment Roll to Tax Collector September 15 Deadline BURTON& ASSOCIATES Discussion BURTON & ASSOCIATES City of Okeechobee, FL FY 2017 Fire Rescue Non -Ad Valorem Assessment Study Draft Report J u ly s, 2016 Prepared By: BURTON& --_ AssocIATES A Hawksley Consulting Company Burton & Associates 200 Business Park Circle, Suite 101 • St Augustine, Florida 32095 • Phone (904) 247-0787 • Fax (904) 241-7708 E-mail: mburton@burtonandassociates.com BURTON & AssocIATES A Hawksley Consulting Company July 8, 2016 Ms. India Riedel Finance Director 55 SE 3rd Ave Okeechobee, FL 34974 Re: FY 2017 Fire Rescue Non -Ad Valorem Assessment Study — Draft Report Dear Ms. Riedel: Burton & Associates is pleased to present this Draft Report of the Fire Rescue Assessment Study that we have conducted for the City. The intention of this draft is to present the initial results of the assessment calculations, and for the project team to have documentation, for their review and comment, of all assumptions and data that feed the study results. Please distribute this draft to the appropriate City staff for review. Once the City has provided guidance for further action we will issue the Final Report. We appreciate the fine assistance provided by you and all of the members of City staff who participated in the analysis. If you have any questions, please do not hesitate to call me at (904) 247-0787. Very truly yours, 7 ` \ Michael E. Burton President Burton & Associates 200 Business Park Circle, Suite 101 • St Augustine, Florida 32095 • Phone (904) 247-0787 • Fax (904) 241-7708 E-mail: mburton@burtonandassociates.com TABLE OF CONTENTS SECTION1. INTRODUCTION.........................................................................................................................I 1.1 OBJECTIVE AND SCOPE..........................................................................................................................1 1.2 STUDY PROCEDURES..............................................................................................................................1 1.3 METHODOLOGY.......................................................................................................................................2 SECTION 2. CALCULATION OF NET REVENUE REQUIREMENT.......................................................7 2.1 BUDGET ALLOCATION...........................................................................................................................7 2.2 PROJECTION OF NET REVENUE REQUIREMENT...............................................................................................7 SECTION 3. CALCULATION OF FIRE RESCUE ASSESSMENTS...........................................................9 3.1 ASSESSMENT PROPERTY CLASSIFICATIONS....................................................................................................9 3.2 CALLS FOR SERVICE ANALYSIS......................................................................................................................9 3.3 APPORTIONMENT OF NET REVENUE REQUIREMENT......................................................................................10 3.4 ASSESSMENT ROLL AND PROPERTY DATA ANALYSIS...................................................................................1 1 3.5 ASSESSMENT RATE CALCULATION...............................................................................................................16 SECTION 4. SUMMARY OF RECOMENDATIONS...................................................................................20 SECTION 5. FY 2017 FIRE RESCUE ASSESSMENT ROLL.....................................................................21 Burton & Associates 200 Business Park Circle, Suite 101 • St Augustine, Florida 32095 • Phone (904) 247-0787 • Fax (904) 241-7708 E-mail: mburton@burtonandassociates.com City of Okeechobee, FL FY 2017 Fire Rescue Non -Ad Valorem Assessment Study 1. Introduction SECTION 1. INTRODUCTION This report presents the draft results of an analysis to develop a new Fire Rescue Non -Ad Valorem Assessment Program for the City of Okeechobee, Florida (the City). This study intends to create a Fire Rescue Assessment program that would recover the full or partial costs associated with providing Fire Rescue service to the City. The methodology uses current property, cost and calls for service data to create a fair and equitable assessment structure that achieves this goal. The term "Fire Rescue" as used in this study refers to the twenty-four hours per day, seven days per week service for fire suppression provided by the City to properties located within its limits, including first responder service. This study was conducted by Burton & Associates, a firm that specializes in providing rate and assessment consulting services to local governments. 1.1 OBJECTIVE AND SCOPE The objective of this study is to calculate a Fire Rescue Non -Ad Valorem Assessment Program resulting in assessment rates that will recover the full cost requirement of providing Fire Rescue service to properties within the City limits for FY 2017 and subsequent years in proportion to the benefit received from the Fire Rescue service provided by the City. 1.2 STUDY PROCEDURES The study first identifies the full Fire Rescue cost requirements for Fiscal Year (FY) 2017 that recognizes the high level of service traditionally provided by the City. This was accomplished by acquiring the full City Fire Rescue Department Budget. At the time of this study, the FY 2017 City Fire Department budget had been created in draft form based upon the FY 2016 Amended Budget, and it was used as the basis for the computation. We projected the annual cost requirements for providing Fire Rescue service in each year of a multi -year projection period from FY 2017 through FY 2021. To accomplish this, we reviewed cost escalation rates based upon historical trends and City staff knowledge and applied them to the FY 2017 operating budget. The Capital Improvement Plan provided by Staff was also factored in to project the future cost requirements. The projection of costs through FY 2021 calculates the necessary annual adjustments to the Fire Rescue Assessments in order to maintain 100% cost recovery throughout the projection period. This phase of the analysis is used to calculate the maximum assessment rate that could potentially be adopted alongside the FY 2017 assessment rates. The maximum assessment rate is intended to provide the City with the means of adjusting the Fire Rescue Assessments in future Burton & Associates, a Hawksley Consulting Company Draft Report Specialists in Governmental Economics City of Okeechobee, FL FY 2017 Fire Rescue Non -Ad Valorem Assessment Stud 1. Introduction years in order to maintain 100% cost recovery without having to undergo the special notification and hearing procedures instituted for initial assessment adoption, methodology updates or rates adoption beyond the current maximum adopted rate. The FY 2017 Fire Rescue service Net Revenue Requirement identified in the budget allocation and projection process was then apportioned to each property class based upon National Fire Incident Reporting System (NIFRS) calls for service data provided by the City's Fire Department. A property parcel and structure database as provided by the Okeechobee County Property Appraiser was used as the primary data source for assigning assessment units to each parcel. Property classifications were based upon the Property Use Codes for each parcel as maintained on the Property Appraiser's database. Once the allocation to property classes was complete, the Fire Rescue Assessment rate structure was developed and specific Fire Rescue Assessment rates for each property class were developed, the results of which are presented herein. 1.3 METHODOLOGY The development of a Non -Ad Valorem Assessment to fund Fire Rescue services requires that the services and facilities for which properties are to be assessed confer a special benefit upon the property burdened by the special assessment. Simply stated, there must be a logical relationship between the services and facilities provided and the benefit to real property assessed. In addition to the special benefit requirement, the costs associated with providing the services and facilities must be reasonably apportioned to the properties that receive a benefit from Fire Rescue service in proportion to the benefit received. Therefore, the recommended Fire Rescue Assessments calculated in this study were developed such that the costs incurred by the City in providing Fire Rescue service will be recovered through assessments to properties in proportion to the benefit received by the demand for service as reflected in the calls for service from each respective property class. This part of the report describes the assessment methodology used to develop the Fire Rescue Assessments. The first section discusses relevant Florida Law regarding Special Non -Ad Valorem Assessments, followed by sections discussing how Florida Law has been applied to the determination of special benefit and the apportionment of the annual revenue requirements of the Fire Rescue Assessment to benefitting properties. Burton & Associates, a Hawksley Consulting Company Draft Report Specialists in Governmental Economics 2 City of Okeechobee, FL FY 2017 Fire Rescue Non -Ad Valorem Assessment Study 1. Introduction 1.3.1 SUMMARY OF RELEVANT FLORIDA LAW GOVERNING SPECIAL ASSESSMENTS This section discusses relevant Florida Law regarding special non -ad valorem assessments as it relates to the City's proposed Fire Rescue Assessment program. The discussion covers how Florida law relates to special benefit and proportional benefit. Special non -ad valorem assessments are a revenue source available to local governments in Florida to fund capital improvements as well as operations and maintenance expenses for essential services such as roads, drainage, Fire Rescue services, utilities, etc. Florida case law has established two requirements for the imposition of a non -ad valorem special assessment. These two requirements have become known as the "two -pronged test". They are 1) the property assessed must derive a special benefit from the improvement, service or facilities provided, and 2) the assessment must be fairly and reasonably apportioned among the properties that receive the special benefit. In considering special benefit, the following question must be considered, "Can a special benefit be derived from Fire Rescue service by all properties within the City to meet the first prong of the two pronged test, even if all properties are not improved and/or do not receive calls for service?". The answer is yes, based in part upon the Florida Supreme Court determination in City No. 1 of Polk City v. Jenkins, a sufficient special benefit is derived by the availability of fire services to justify the imposition of the special assessment. Also, in Meyer v. City of Oakland Park, the Court upheld a sewer assessment on both improved and unimproved property, stating that the benefit need not be direct or immediate but must be substantial, certain and capable of being realized within a reasonable time. Also, In City of Hallendale v. Meekins, the Court indicated that the proper measure of benefits accruing to property from the assessed improvement was not limited to the existing use of the property, but extended to any future use which could reasonably be made. 1.3.2 PROPORTIONAL BENEFIT It is well settled under Florida law that local governments are afforded great latitude regarding legislative determinations of special benefit and reasonable apportionment of costs (as evidenced by the Florida Supreme Court finding in City of Boca Raton v. State of Florida), that the apportionment of benefits is a legislative function, and that legislative determinations as to benefit and apportionment will be upheld unless the determination is arbitrary — that is, if reasonable persons may differ as to whether the land assessed was benefitted by the local improvement, the findings of the City officials must be sustained. In City of Boca Raton v. State of Florida, the Florida Supreme Court also determined that the manner of the assessment is immaterial and may vary, as long as the amount of the assessment for each tract is not in excess Burton & Associates, a Hawksley Consulting Company Draft Report Specialists in Governmental Economics 3 of the proportional benefits as compared to other assessments on other tracts. Accordingly, while any number of methodologies may be available for a given service or improvement, the community imposing the assessment is at liberty to select the methodology which provides the best fit in terms of local needs and circumstances. 1.3.2.1. SPECIAL BENEFIT — THE FIRST PRONG OF THE TWO PRONGED TEST Based upon discussions with City staff about the extent and nature of the Fire Rescue Services provided, we have concluded that all developed parcels within the City receive a special benefit from the Fire Rescue Services provided by the City. A map of the City was provided by City staff and is presented on the following page and shows the fire stations distributed throughout the City. Burton & Associates, a Hawksley Consulting Company Specialists in Governmental Economics 4 Draft Report a a z O H a F— N w w LL H W H N z J LL N Q: 0 x u N N 0 0 4 Y tf c C. E 0 u to 4-1 0 U T Y 3 s t/f a) 0 Ln a 0 1 in m City of Okeechobee, FL FY 2017 Fire Rescue Assessment Study Section 1. Introduction In considering special benefit, it is important to consider that the City maintains its Fire Rescue resources at a level that provides a response readiness condition to respond to calls for service throughout the City at relatively equal levels of service. When needed, responses are made to calls for service without discrimination as to the property type, size, location within the City, or any other factors specific to the property requiring the service. Therefore, all developed properties receive a special benefit from the City's Fire Rescue service. The special benefits provided to all improved parcels by the availability of Fire Rescue Service provided by the City include: • Availability of immediate response to fire, • First responder medical aid to protect the life and safety of occupants, • Containment of liability for emergency incidents on the subject parcels and the spread of fires to other property, • Enhanced property value, and • Enhanced marketability of property. Therefore, the first prong of the two pronged test (the property burdened by the assessment must derive a special benefit from the service provided by the assessment) is met because all developed properties in the City receive a special benefit from the City-wide Fire Rescue service provided by the City. 1.3.2.2. FAIR APPORTIONMENT — THE SECOND PRONG OF THE TWO PRONGED TEST In considering the assessment methodology, the second prong of the two pronged test requires that the costs of the assessment must be fairly and reasonably apportioned among the properties that receive the special benefit. The Fire Rescue services apportionment methodology used in this study allocates assessable costs on the basis of the demand for Fire Rescue services by classes of real property use as identified on the real property assessment roll prepared for the levy of ad valorem taxes. First, the assessable Fire Rescue costs are allocated among real property use categories based upon the historical demand for these services (cost apportionment). This demand is identified by examining the past five years of fire incident/calls for service data as reported by the City to the State Fire Marshal's office. Second, the costs attributed to each property class are apportioned among the parcels on a per dwelling unit basis for Residential uses, a square footage basis for Non -Residential uses, and a per parcel basis for Vacant parcels (parcel apportionment). Burton & Associates, a Hawksley Consulting Company Draft Report Specialists in Governmental Economics 6 City of Okeechobee, FL FY 2017 Fire Rescue Assessment Study Section 2. Calculation of Net Revenue Requirement SECTION 2. CALCULATION OF NET REVENUE REQUIREMENT This section presents the basis and results from the calculation of the FY 2017 Net Revenue Requirement (NRR) that will fund 100% of the costs for Fire Rescue services for the City. The NRR will be the basis for the FY 2017 Fire Rescue Assessment calculations presented in Section 3 of this report. In addition to the FY 2017 NRR, this section also presents the projection of costs through FY 2021 in order to identify the assessment rates necessary to fully fund Fire Rescue services throughout the projection period. 2.1 BUDGET ALLOCATION Florida case law requires that the imposition of a special assessment for Fire services may only fund Fire Rescue services and first response rescue services. A Fire Rescue Assessment may not fund Emergency Medical Services (EMS), including transportation (Florida Supreme Court opinion in City of North Lauderdale v. SMM Properties). Okeechobee County provides Emergency Medical Services to properties within the City's boundaries and levies a special assessment via a Municipal Services Benefit Unit (MSBU) to recover the costs associated with such services. Through discussions with City staff, it was determined that the nature of City Firefighter response is limited to Basic Life Support, as opposed to Advanced Life Support. In addition, City staff has indicated that the cross -trained Firefighters do not receive increased pay nor does the department incur additional costs to have the Firefighters cross trained as Firefighter/EMT, and does not employ costs for Firefighter/Paramedics. As such, no costs in the Fire Department budget were identified as related to EMS, and 100% of the FY 2017 preliminary budget was included in the Net Revenue Requirement for the Fire Rescue assessment. 2.2 PROJECTION OF NET REVENUE REQUIREMENT In order to calculate the FY 2017 Net Revenue Requirement (NRR) for Fire Rescue services, the FY 2017 Fire Rescue draft budget was used as the basis for the calculation. The projected Capital Improvement Program was also provided by City Staff, and as such the Fire Rescue allocated Capital items were included in the budget projection. Schedule 1 of Appendix A presents the line item projection of the allocated Fire Rescue budget, and Schedule 2 of Appendix A details the projected Capital Improvement Program. The projected budget was then used to develop the Net Revenue Requirement (NRR) to be allocated amongst the property classes for the FY 2017 Fire Rescue Assessment calculations. In each year of the projection period, offsetting revenues from other sources were deducted from Burton & Associates, a Hawksley Consulting Company Draft Report Specialists in Governmental Economics 7 City of Okeechobee, FL FY 2017 Fire Rescue Assessment Studv Section 2. Calculation of Net Revenue Requirement the previously identified expenditure requirements. In addition, a 2% cost to reimburse the County Property Appraiser for assessment data services, 2% cost covering Tax Collector Expenses for administering of the Non -Ad Valorem Assessment bills, and a 5% allowance for contingency and non -collections was included to determine the annual assessment Net Revenue Requirement. In the first year of the projection period (FY 2017), the costs for administering the First Class mailing notices of the Assessment adoption were estimated at $0.75 a parcel. The draft projection Fire Rescue Net Revenue Requirement for FY 2017 — FY 2021 is presented in Table 1 below. The Net Revenue Requirement in FY 2017 is the 100% Cost Recovery or Maximum Allocated costs for the assessments calculated herein. Fire Expenditures by Category FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 Personnel Services $ 1,467,076 $ 1,621,119 $ 1,696,169 $ 1,775,146 $ 1,858,295 Operating Costs $ 151,641 $ 155,432 $ 159,317 $ 163,300 $ 167,383 Capital Costs $ 334,000 $ 334,000 $ 334,000 $ 334,000 $ 334,000 Total Fire Expenditures $ 1,952,716 $ 2,110,550 $ 2,189,486 $ 2,272,446 $ 2,359,678 Plus: Assessment Notice Mailing Costs jt) $0.75 $ 2,000 $ - $ - $ - $ - Plus: Assessment Costs - County Property Appraiser (2) 2% $ 42,000 $ 45,000 $ 47,000 $ 49,000 $ S1,000 Plus: Assessment Costs - Tax Collector 13) 2% $ 42,000 $ 45,000 $ 47,000 $ 49,000 $ 51,000 Plus: Assessment Costs - Non -Collections & Contingency (4) 5% $ 105,000 $ 113,000 $ 117,000 $ 122,000 $ 127,000 Total Fire Expenditures for Assessment Calculation $ 2,143,716 $ 2,313,550 $ 2,400,486 $ 2,492,446 $ 2,588,678 Less: Fire Insuranse Premium $ (50,100) $ (50,100) $ (50,100) $ (50,100) $ (50,100) Less: Firefighters Supplement $ (2,400) $ (2,400) $ (2,400) $ (2,400) $ (2,400) Net Revenue Requirement for Assessment $ 2,091,216 $ 2,261,050 $ 2,347,986 $ 2,439,946 $ 2,536,178 (1) - Assessment Notice Mailing Costs are only imposed in the first year of the new Assessment Program. Estimated at $0.75 per billed parcel. (2) - Estimated at 2% of Net Revenue Requirement, rounded (3) - Estimated at 2% of Net Revenue Requirement, rounded (4) - Estimated at 5% of Net Revenue Requirement, rounded Burton & Associates, a Hawksley Consulting Company Draft Report Specialists in Governmental Economics 8 City of Okeechobee, FL FY 2017 Fire Rescue Assessment Study Section 3. Calculation of Fire Rescue Assessments SECTION 3. CALCULATION OF FIRE RESCUE ASSESSMENTS This section presents the results of the Fire Rescue Assessment calculations and our recommendations based upon those results. 3.1 ASSESSMENT PROPERTY CLASSIFICATIONS This assessment study will utilize four property classifications as the basis for all apportionments to property classes. These property classifications are the common assessment classifications used throughout the state in Fire Rescue assessment calculations. The property classifications utilized in this study are as follows: • Residential • Non -Residential 0 Vacant 3.2 CALLS FOR SERVICE ANALYSIS The costs identified in this study are apportioned to property categories based upon an analysis of the calls for service data provided by the City Fire Department. The call/incident data identified the number and type of calls made by City Fire Rescue and EMS vehicles for a period of January 1, 2012 — December 31, 2015. The call/incident data is extracted from the National Fire Incident Reporting System (NIFRS). The data field containing the type of incident was used to separate calls determined to be for EMS, and those that are Fire Rescue or First Responder. Only calls with non -EMS incident types were used for the apportionment of the Fire Rescue Assessments. Schedule 1 of Appendix B presents the full list of unique incident types in the data set provided by the City, and the identification of each incident type as being either Fire Rescue or EMS for the assessment calculations. The call data represented 2,605 calls over the four year time period. Of these calls, 1,705 were identified by incident type as Fire related, 900 were identified as EMS or Non - Specific. Beyond identifying the action type, we then allocated the Fire calls using property types as coded in the call data. Schedule 2 of Appendix B presents each unique property use code in the NIFRS data, and the application of the property categories to each code as utilized in this study. Of the 1,705 calls identified as Fire related, 1,030 were calls to real property and specific property uses. Burton & Associates, a Hawksley Consulting Company Draft Report Specialists in Governmental Economics 9 City of Okeechobee, FL FY 2017 Fire Rescue Assessment Studv Section 3. Calculation of Fire Rescue Assessments The remaining 675 calls were to non -real property or non-specific property and were therefore excluded from the apportionment analysis. The remaining 1,030 calls were assigned to the assessment property classifications. Table 2 below illustrates the assignment of calls to the property categories identified in the previous subsection. The percentages identified in the Fire Calls to Real Property are used to allocate the FY 2017 Net Revenue Requirement to each property class. Property Classification # of Fire Calls % of Calls Residential 480 28.2% Non -Residential 507 29.7% Vacant 43 2.5% Non -Specific 675 39.6% Total 1,705 100.0% FIRE CALLS TO REAL PROPERTY Property Classification # of Fire Calls % of Calls Residential 480 46.6% Non -Residential 507 49.2% Vacant 43 4.2% Total 1,030 100.0% 3.3 APPORTIONMENT OF NET REVENUE REQUIREMENT The next step in the Fire Rescue Assessment calculation is to allocate the Net Revenue Requirement amongst the property classes. This is done by utilizing the allocations of Fire calls to real property as identified in the previous section. Featured below, Table 3 contains the apportionment of the Net Revenue Requirement to the identified property classes. Property Class % Allocation $ Allocation Residential 46.6% $974,547 Non -Residential 49.2% $1,029,366 Vacant 4.2% $87,303 Total 100.0% $2,091,216 Burton & Associates, a Hawksley Consulting Company Draft Report Specialists in Governmental Economics 10 City of Okeechobee, FL FY 2017 Fire Rescue Assessment Stu Section 3. Calculation of Fire Rescue Assessments 3.4 ASSESSMENT ROLL AND PROPERTY DATA ANALYSIS The basis for creating the FY 2017 Assessment calculations and associated assessment roll is the full property parcel and structure database as provided by the Okeechobee County Property Appraiser. The property database identifies 2,778 parcels within the City. Each parcel was assigned a property classification for the assessment calculations based upon the property use category assigned by the Property Appraiser. Schedule 3 of Appendix B presents each property use code and the assigned assessment class by code. 3.4.1 EXEMPT AND EXCLUDED PROPERTIES Certain parcel types are exempt by State statutes or case law from non -ad valorem assessments such as this Fire Rescue Assessment. Other parcels are typically excluded from such assessments because they receive no benefit from Fire Rescue Services, such as lake bottoms, marshes, and other property types that will likely never develop. The excluded properties are identified by the property use codes contained in the Property Appraiser's database. These excluded properties are contained in the schedule of property use codes in Schedule 3 of Appendix B. This study has assumed the required exemptions for City, County, State, Federally owned properties. In addition, newly required exemptions for Agricultural properties are included and described in subsequent sections. The exempted parcels are included in the cost apportionment, but will not be billed an assessment. The unrecovered revenue must be funded through other City revenue sources. The property use codes provided by the Property Appraiser were utilized to identify the exempt parcels. Schedule 3 of Appendix B contains a list of all uniquely identified property use codes and the exemption status for each code applied to this study. 3.4.2 PROPERTY CLASSIFICATION AND ASSESSMENT UNIT IDENTIFICATION The specific methodology and underlying assumptions for the parcel apportionment within each category of property use is generally described in this section. The apportioned costs to each property category are divided amongst the assessment units by category to create the Assessment Rate. Table 4 below presents each property classification and the associated Assessment Unit used in creation of the Assessment Rate. Burton & Associates, a Hawksley Consulting Company Specialists in Governmental Economics 11 Draft Report City of Okeechobee, FL FY 2017 Fire Rescue Assessment Study Section 3. Calculation of Fire Rescue Assessments Property Class Assessment Unit Residential Per Dwelling Unit Non -Residential Per Bldg Square Footage Vacant Per Parcel 3.4.2.1. FY 2017 PARCEL ASSESSMENT UNIT IDENTIFICATIONS The following steps were taken in order to populate all assessment units for the FY 2017 Assessment Rate calculations: 1. All parcels located within the City were identified by the full parcel database by using the Taxing District code. Tax District code 50 was identified as the City Taxing district. 2. Parcels were assigned a property class based on their Property Use Code 3. All parcels categorized as "Residential" were assigned dwelling units according to the provided property structure/building data. 4. All parcels categorized as "Non -Residential" were assigned building square footage according to the provided property structure/building data. 5. Any parcel that had no identifiable structures was labeled as a Vacant parcel 3.4.2.2. RESIDENTIAL DWELLING UNITS The following assumptions support findings that parcel apportionment applied in the Residential Property Use Classification (including single-family, condominiums, duplexes, triplexes, apartment complexes, cooperatives, mobile homes etc.) is fair and reasonable. • The size or the value of a single family home does not determine the scope of the required Fire Rescue response. The potential demand for Fire Rescue services is driven by the existence of a residential parcel. • Apportioning the assessed costs for fire rescue services attributable to the residential property use category on a per dwelling unit basis is required to avoid cost inefficiency and unnecessary administration and is a fair and reasonable method of parcel apportionment based upon historical call data. • For purposes hereof, the term "dwelling unit" shall mean a building, or portion thereof, which is lawfully used for residential purposes, consisting of one or more rooms arranged, designed, used, or intended to be used as living quarters for one family only, including a mobile home. Burton & Associates, a Hawksley Consulting Company Draft Report Specialists in Governmental Economics 12 City of Okeechobee, FL FY 2017 Fire Rescue Assessment Study Section 3. Calculation of Fire Rescue Assessments 3.4.2.3. NON-RESDIENTIAL UNITS To assess the amount of special benefit equitably amongst parcels within the Non -Residential category, it is necessary to relate each property's proportional special benefit to the special benefits of all other properties within this category. A direct apportionment of each Non - Residential property's total building square footage was used, in which the assessment rate calculated for each Non -Residential class will be charged for every square foot of developed space identified by the property data. The following assumptions support findings that the parcel apportionment applied in the Non - Residential categories is fair and reasonable: • The assessment of Non -Residential structures based upon square footage is fair and reasonable forthe purposes of parcel apportionment because the demand for Fire Rescue availability and the resources expended in combating an actual fire event vary in proportion to the size of structures and improvements within benefited parcels. • The fire flow capacity anticipated at the fire scene under the level of service provided by the assessable costs limits the benefit provided to a structure beyond a certain size. Therefore, it is fair and reasonable to place a cap on the square footage classification of benefited buildings within the Non -Residential property use categories. For each Non -Residential parcel, the square footage of all buildings in the parcel was added. Maximum Structure Size The City works with Okeechobee County to supply mutual aid to the service area. In the event of a first alarm fire within the City to a large non-residential structure, the combined mutual -aid pumping capacity of all fire apparatus is the limiting factor for the maximum structure size that would benefit from fire protection service. The County has previously identified in its Fire Rescue Assessment study that the mutual aid pumping capacity, based upon national firefighting standards, would limit the structure benefit to 140,000 square feet. As such, all buildings with a number of square feet exceeding 140,000 were included in the calculation at 140,000 square feet. This sum reflects an aggregate square footage area for each Non -Residential Property Use Category used in the computation of the Fire Rescue Assessments. 3.4.2.4. SPECIAL CONSIDERATIONS FOR RV AND MOBILE HOME PARKS Section 166.223, Florida Statutes, provides that special assessments imposed by a municipality on a recreational vehicle park regulated under Chapter 513 shall not be based on the assertion Burton & Associates, a Hawksley Consulting Company Draft Report Specialists in Governmental Economics 13 City of Okeechobee, FL FY 2017 Fire Rescue Assessment Study Section 3. Calculation of Fire Rescue Assessments that such park is comprised of residential units. Accordingly, the Fire Rescue Assessment for each parcel comprising a recreational vehicle park (or portion thereof comprised of recreational vehicle spaces) shall be computed on a non-residential, square footage basis. Section 513.01, Florida Statutes, sets forth definitions which distinguish mobile home parks (which may be assessed on a residential or per dwelling unit basis) from recreational vehicle parks (which must be assessed on a non-residential basis in accordance with section 166.223, Florida Statutes). The Florida Department of Health (DOH) maintains a database of parks in each county, as well as the number of spaces in each occupied by either mobile homes or recreational vehicles. A survey of the (DOH) database reveals that of the several parks within City limits contain spaces reserved for or occupied by both mobile homes and recreational vehicles. Accordingly, in order to observe the limitations set forth in section 166.223, Florida Statutes, it is reasonable to assess such "mixed -use" parks on a bifurcated basis, with spaces reserved for or occupied by mobile homes assessed on a per dwelling unit basis, and recreational vehicle spaces assessed on a non-residential, square footage basis. The determination as to the number of spaces, as well as the use of each space by either mobile home or recreational vehicle, can be made through reference to the DOH database, site inspection by City staff and/or input from affected property owners. • Section 320.01, Florida Statutes lists various types of recreational vehicles including a "park trailer." Park trailers are defined therein as transportable units designed to provide seasonal or temporary living quarters, the total area of which does not exceed 500 square feet when constructed to United States Department of Housing and Urban Development Standards, which is the maximum square footage specified for any of the listed types of Recreational Vehicles. It is fair and reasonable to utilize a benchmark of 500 square feet for calculating the Fire Rescue Assessment imposed upon parcels offering spaces for recreational vehicles, including park trailers. • The Fire Rescue Assessment for each parcel comprising a recreational vehicle park regulated under Chapter 513, Florida Statutes, shall be computed as follows: (number of recreational vehicle spaces) x (500 square feet) x (rate of Assessment for Commercial properties). • The Fire Rescue Assessment for each parcel comprising a mobile home park shall be computed as follows: (number of Mobile Home spaces) x (rate of Assessment for Residential properties). • The Fire Rescue Assessment for each parcel with spaces occupied by both recreational vehicles and mobile homes (regardless of whether such parcel is categorized by the property appraiser or DOH as a mobile home park or recreational vehicle park) shall be Burton & Associates, a Hawksley Consulting Company Specialists in Governmental Economics 14 Draft Report City of Okeechobee, FL FY 2017 Fire Rescue Assessment Studv Section 3. Calculation of Fire Rescue Assessments computed as follows: ((number of recreational vehicle spaces) x (500 square feet) x (rate of Assessment for Commercial properties)) + ((number of mobile home spaces) x (the rate of Assessment for residential property)). 3.4.2.5. VACANT PROPERTY Based upon the historical demand for Fire Rescue services for City vacant properties, call volume supports a separate assessment class for vacant parcels. Vacant Parcels are benefitted by the availability of Fire Rescue services and by the containment of fire incidents originating on such parcels which otherwise could spread beyond the parcel boundary, with the potential to spread and endanger the value of structures, buildings and occupants of nearby property, thereby limiting liability. As such, for all parcels that do not contain developed structures identified by the full property and structure database provided by the Okeechobee County Property Appraiser, an assumption of 1 vacant unit was assigned per parcel. 3.4.2.6. MIXED PROPERTY USEES For Non -Residential parcels that contain a Residential dwelling unit, the number of dwelling units located on the parcel was multiplied by the Residential per dwelling unit charge to compute the parcel's residential Fire Rescue Assessment. This assessment was then added to the parcel's Non - Residential Fire Rescue Assessment. 3.4.3 IDENTIFIED ASSESSMENT UNITIS Following the assumptions and data points listed within this section, Table 5 identifies the unit counts per property class that will be used to divide the costs allocated to each property class for the Assessment Rate calculations: Property Class Assessment Unit Units per Class Residential Per Dwelling Unit 2,054 Non -Residential Per Bldg Square Footage 3,163,967 Vacant Per Parcel 695 Burton & Associates, a Hawksley Consulting Company Draft Report Specialists in Governmental Economics City of Okeechobee, FL FY 2017 Fire Rescue Assessment Studv Section 3. Calculation of Fire Rescue Assessments 3.5 ASSESSMENT RATE CALCULATION 3.5.1 FULL COST RECOVERY RATE CALCULATION To calculate the FY 2017 Fire Rescue Assessments we utilized the apportioned costs and total units per property classification as identified in the previous sections of this report. The amount of assessable costs allocable to each property class was divided by the number of assessment units identified in each property class to compute the Fire Rescue Assessment to be imposed against each parcel. While the full cost FY 2017 Net Revenue Requirement is apportioned to all non -excluded properties, exempted property is included in the apportionment but cannot be billed/assessed. Table 6 below presents the calculated FY 2017 Fire Rescue Assessment Rates at full (100%) cost recovery, as well as the estimated net billed assessment revenue for each property category: Allocated Assessment Property Category %Allocation $ Allocation Units Unit Type per Unit Residential 46.6% $974,547 2,054 Dwelling Unit $474.00 Non -Residential 49.2% $1,029,366 3,163,967 Sq Ft F $0.33 Vacant 4.2% $87,303 695 Parcel $126.00 Total 100.0% $2,091,216 3.5.2 PARTIAL COST RECOVERY RATE CALCULATION In order to provide the City with multiple options of program financing, we have calculated the assessment rates and estimated revenues at various cost recovery levels. Tables 7-9 below present the calculated rates and estimated revenues at 75%, 50% and 25% cost recovery levels, respectively. Burton & Associates, a Hawksley Consulting Company Draft Report Specialists in Governmental Economics 16 City of Okeechobee, FL FY 2017 Fire Rescue Assessment Studv Section 3. Calculation of Fire Rescue Assessments Assessment PropertyAllocated •. per Unit Residential 4..' 00 Non-Residential4' •. 6. .. 00 Total 00 0'. Allocated Assessment Property Category % Allocation $ Allocation Units Unit Type per Unit Residential 46.6% $487,274 2,054 Dwelling Unit $237.00 Non -Residential 49.2% $514,683 3,163,967 Sq Ft P $0.16 Vacant 4.2% $43,652 695 Parcel $63.00 Total 100.0% $1,045,608 Assessment PropertyAllocated .• per 695 Parcel $31.00 Total 000', $522,804 3.5.3 ESTIMATED NET REVENUES While the full cost FY 2017 Net Revenue Requirement is apportioned to all non -excluded properties, exempted property is included in the apportionment but cannot be billed/assessed. In addition, certain costs are born by the assessment itself such as the First Class mailing requirements in the first assessment year, 2% cost for Property Appraiser expense, 2% costs for Tax Collector expenses, and a 5% estimation for contingency and non -collections. Table 10 Burton & Associates, a Hawksley Consulting Company Draft Report Specialists in Governmental Economics 17 City of Okeechobee, FL FY 2017 Fire Rescue Assessment Study Section 3. Calculation of Fire Rescue Assessments below presents the estimated net billed assessment revenue for each scenario, less exemptions and assessment costs at various cost recovery levels. ASSESSEMENT COST RECOVERY LEVEL 100% 75% 50% 25% Allocated Costs $ 2,091,216 $ 1,568,412 $ 1,045,608 $ 522,804 Less: Shortfall for Exemptions $ (162,000) $ (121,000) $ (81,000) $ (40,000) Net Billed Revenues $ 1,929,200 $ 1,447,400 $ 964,600 $ 482,800 Less: Assessment Notice Mailing Costs (t) $ (2,000) $ (2,000) $ (2,000) $ (2,000) Less: Assessment Costs - County Property Appraiser (2) $ (39,000) $ (29,000) $ (19,000) $ (10,000) Less: Assessment Costs - Tax Collector (3) $ (39,000) $ (29,000) $ (19,000) $ (10,000) Less: Assessment Costs - Non -Collections & Contingency (4) $ (96,000) $ (72,000) $ (48,000) $ (24,000) Estimated Net Collected Revenues $ 1,753,000 $ 1,315,000 $ 877,000 $ 437,000 Residential Rate per Dwelling Unit $ 474.00 $ 356.00 $ 237.00 $ 119.00 Non-Residenital rate per Square Foot $ 0.33 $ 0.24 $ 0.16 $ 0.08 Vacant Rate per Parcel $ 126.00 $ 94.00 $ 63.00 $ 31.00 Note: All figures except allocated costs are rounded to the nearest thousand dollars (1) - Assessment Notice Mailing Costs are only imposed in the first year of the new Assessment Program. Estimated at $0.75 per billed parcel (2) - Estimated at 2% of Net Revenue Requirement, rounded (3) - Estimated at 2% of Net Revenue Requirement, rounded (4) - Estimated at 5% of Net Revenue Requirement, rounded 3.5.4 MAXIMUM ASSESSMENT RATES The City may adopt a continuing assessment for future years that can be designed to maintain the cost recovery percentage, with the actual annual adjustments to be determined by the City based upon need as determined by updating the financial management plan in subsequent years. If the City wishes to adopt a maximum Assessment Rate at the time of adoption of this Study, we have identified the maximum rate based upon the five-year projection shown in Table 11 below. Burton & Associates, a Hawksley Consulting Company Draft Report Specialists in Governmental Economics 18 City of Okeechobee, FL FY 2017 Fire Rescue Assessment Study Section 3. Calculation of Fire Rescue Assessments Fire Expenditures by Category FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 Personnel Services $ 1,467,076 $ 1,621,119 $ 1,696,169 $ 1,775,146 $ 1,858,295 Operating Costs $ 151,641 $ 155,432 $ 159,317 $ 163,300 $ 167,383 Capital Improvements $ 334,000 $ 334,000 $ 334,000 $ 334,000 $ 334,000 Total Fire Expenditures $ 1,952,716 $ 2,110,550 $ 2,189,486 $ 2,272,446 $ 2,359,678 Plus: Assessment Notice Mailing Costs jt) $0.75 $ 2,000 $ - $ $ $ Plus: Assessment Costs - County Property Appraiser (2) 2% $ 42,000 $ 45,000 $ 47,000 $ 49,000 $ 51,000 Plus: Assessment Costs - Tax Collector (3) 2% $ 42,000 $ 45,000 $ 47,000 $ 49,000 $ 51,000 Plus: Assessment Costs - Non -Collections & Contingency (4) 5% $ 105,000 $ 113,000 $ 117,000 $ 122,000 $ 127,000 Total Fire Expenditures for Assessment Calculation $ 2,143,716 $ 2,313,550 $ 2,400,486 $ 2,492,446 $ 2,588,678 Less: Fire Insuranse Premium $ (50,100) $ (50,100) $ (50,100) $ (50,100) $ (50,100) Less: Firefighters Supplement $ (2,400) $ (2,400) $ (2,400) $ (2,400) $ (2,400) Net Revenue Requirement for Assessment $ 2,091,216 $ 2,261,050 $ 2,347,986 $ 2,439,946 $ 2,536,178 (1) - Assessment Notice Mailing Costs are only imposed in the first year of the new Assessment Program. Estimated at $0.75 per billed parcel (2) - Estimated at 2% of Net Revenue Requirement, rounded (3) - Estimated at 2% of Net Revenue Requirement, rounded (4) - Estimated at 5% of Net Revenue Requirement, rounded Using the Net Revenue Requirement of the maximum year (FY 2021), the Maximum Assessment Rates at full cost recovery for the projection period are presented in Table 12 below. Max Calculated Allocated Assessment FY 2017 Property Category % Allocation $ Allocation Units Unit Type per Unit Assessment Residential 46.6% $1,181,908 2,054 Dwelling Unit $575.42 $474.00 Non -Residential 49.2% $1,248,391 3,163,967 Sq Ft $0.40 $0.33 Vacant 4.2% $105,879 695 Parcel $152.34 $126.00 Total 100.0% $2,536,178 Burton & Associates, a Hawksley Consulting Company Draft Report Specialists in Governmental Economics 19 City of Okeechobee, FL FY 2017 Fire Rescue Assessment Studv 4. Summary of Recommendations SECTION 4. SUMMARY OF RECOMENDATIONS Based upon the results of the analysis presented herein, we recommend the following: 1. If the City wishes to fully fund or supplement funding of Fire Rescue services through an Assessment program, we recommend the Assessment Rates presented herein to be adopted by the City for FY 2017 at or below the full cost recovery calculation. 2. In order to provide the City the ability to adjust the adopted Assessment Rates to fund 100% of future Fire Rescue costs, we recommend the City adopt the maximum projected rate at the time of the FY 2017 rate adoption. 3. We recommend the assessment calculations are updated approximately every five years to keep pace with ongoing changes in costs, call allocations and property demographics. Burton & Associates, a Hawksley Consulting Company Draft Report Specialists in Governmental Economics 20 City of Okeechobee, FL FY 2017 Fire Rescue Assessment Study 5. Assessment Roll SECTION 5. FY 2017 FIRE RESCUE ASSESSMENT ROLL We developed a Fire Rescue Assessment Roll (FY 2017 Roll) of all parcels within the City that will receive a Fire Rescue Assessment. This Roll includes specific information for each parcel, including the recommended FY 2017 Fire Rescue Assessment. The FY 2017 Roll is being delivered to the City electronically. Burton & Associates, a Hawksley Consulting Company Draft Report Specialists in Governmental Economics 21