CITY COUNCIL AGENDA ITEM
Memo Date: July 19, 2024
Agenda Date: August 13, 2024
Prepared By: Lora Howell, Deputy Finance Director
Through: Stockton Whitten, City Manager and
Rebecca Bowman, MBA, CGFO, CGFM, Finance Director
Requested Action:
title
Approve the Preliminary Assessment Resolution 2024-071 for Fire Protection, for Fiscal Year 2025. End
body
BACKGROUND:
On May 9, 2006, City Council approved Ordinance 20-2006 (“Ordinance”) that adopted a fire protection assessment to partially fund the provision of fire protection and first response medical services (“rescue”) (collectively “fire protection services”) to properties within the City. Each year as part of the budgeting process, City Council must adopt the fire assessment rate schedule for the upcoming budget year.
In May 2013, the City entered into a contract with Stantec (Burton & Associates, Inc.), to conduct a study for purposes of updating the City’s fire protection assessment using a revised methodology that is based upon the availability of fire protection services to all parcels within City limits and the protection from loss of structures on improved parcels within City limits. In addition, the new methodology was used to develop a rate structure that will partially fund the City’s cost to provide fire protection services consistent with the authority set forth in the Ordinance. The results of the Study and recommendations are reported in the “FY2014 Non-Ad Valorem Fire Protection Assessment Study Final Report” dated August 7, 2013, which was presented to City Council on August 13, 2013.
The Study was updated in July 2015 with the objective to develop an updated methodology that will result in assessment rates that will recover a portion of the full cost of providing fire protection service to properties within the City limits in proportion to the benefit received and to more equitably apportion the cost to vacant properties. Calculations to determine the rate structure include all appropriate costs to operate the City’s Fire Department except for distinct costs attributable to emergency medical services, as required by law. Revenue from the fire protection assessment will be utilized to sustain the current level of service and to partially fund construction of new fire stations in future fiscal years.
The Final Assessment Resolution for FY2017 was approved by City Council on September 6, 2016 with the recommendation of a 3% increase to the Fire Assessment rate, which was incorporated into the General Fund Sustainability Analysis. Based on this analysis, it was determined that the rate increase would provide sufficient revenues for projected operations, maintenance costs, and the Fire Department’s capital improvement plan.
During the FY2018 Budget Workshop on June 29th, 2017, City Staff presented to City Council, Stantec’ s (Burton and Associates) recommendation of a proposed 5% increase to the Fire Assessment rate, which was incorporated into the General Fund Sustainability Analysis. Based on this analysis, it was determined that the rate increase would provide sufficient revenues operations, maintenance costs, and the Fire Department’s capital improvement plan. The additional 2% over the projected 3% which equals the proposed 5%, provided for the full amount of debt service incurred for the construction of the City’s three (3) fire stations. The original debt service was projected at $425,000 per year; however, after securing the debt the annual debt service amounted to approximately $465,000 per year. On September 5, 2017, City Council approved Final Fire Assessment Resolution 2017-78, with the recommended 5% increase.
At the September 5, 2018 City Council meeting, Staff recommended that the City Council approve the Final Fire Assessment Resolution inclusive of a 3% increase. For the purposes of this non-ad valorem assessment, benefited parcels are all parcels within the jurisdictional limits of the City of Cocoa except for Brevard County public schools, governmental parcels, rivers, lakes, rights-of-way/buffers and other properties exempted by law, agreement, or other lawful action of the City Council. Additionally, parcels, or portions thereof, that are jurisdictional wetlands are exempt from the assessment.
On September 11, 2019 at the City Council Meeting, Staff recommended a 3% increase to Fire Assessment Rates for the FY2020 Budget. The rate increase was approved and the Final Assessment Resolution was Adopted by City Council, which supported 43% of the Fire Departments Budget.
On September 9, 2020 at the City Council Meeting, Staff recommended a 3% increase to Fire Assessment Rates for the FY2021 Budget. The rate increase was approved and the Final Assessment Resolution was Adopted by City Council, which supported 42% of the Fire Departments Budget.
On September 14, 2021 at the City Council Meeting, Staff recommended a 3% increase to Fire Assessment Rates for the FY2022 Budget. The rate increase was approved and the Final Assessment Resolution was Adopted by City Council, which supported 44% of the Fire Departments Budget.
On August 23, 2022 at the City Council Meeting, Staff recommended a 3% increase to Fire Assessment Rates for the FY2023 Budget. The rate increase was approved and the Final Assessment Resolution was Adopted by City Council, which supported 43% of the Fire Departments Budget.
On August 22, 2023 at the City Council Meeting, Staff recommended a 3% increase to Fire Assessment Rates for the FY2024 Budget. The rate increase was approved and the Final Assessment Resolution was Adopted by City Council, which supported 39% of the Fire Departments Budget.
At the July 10, 2024 Budget Workshop, City Council approved the recommendation by Stantec and City Staff, to build in a 3% increase to Fire Assessment Rates within the FY24 Budget. Per Ordinance it is required that the City Council first approve a Preliminary Assessment Resolution, which is attached to this agenda. After the approval of the Preliminary Assessment Resolution, the City Council is required to hold a Public Hearing, in accordance with the Ordinance and Florida Statutes, for purposes of adopting a Final Assessment Resolution formally approving the fire assessment rates. The Final Assessment Hearing will be held on August 27, 2024 at 6:00P.M., in City Council Chambers. The final approved rates are then submitted to the Brevard County Property Appraiser and Tax Collector for purposes of collecting the fire assessment on the annual non-ad valorem assessment portion of the annual property tax bill, no later than September 15, 2024.
For the purposes of this assessment, the assessment for benefited parcels shall be determined based upon the availability of fire/rescue services to all parcels and the protection from loss of structures on improved parcels.
The current fire protection assessment rates adopted by City Council last year are as follows:
Fiscal Year 2024:
|
Benefit Tier |
Equivalent Benefit Unit (EBU) |
Applicable to |
Rate per EBU |
Maximum Rate per EBU |
|
Residential total assessment |
Per Dwelling Unit |
Improved non-exempt residential parcels |
$242.69 |
$306.12 |
|
Non-residential: |
|
|
|
|
|
Response Readiness Availability |
• Improved Property - Per parcel • Un-improved Property - Per parcel or parcel equivalent (Parcel EBU) |
All improved and un-improved non-exempt parcels |
$171.59 |
$216.45 |
|
Protection from Loss of Structures |
Per $5,000 of structure value, rounded down to nearest $5,000. (Structure EBU) |
Improved non-exempt parcels |
$10.75 |
$13.55 |
Proposed Fiscal Year 2025 is set forth below:
|
Benefit Tier |
Equivalent Benefit Unit (EBU) |
Applicable to |
Rate per EBU |
Maximum Rate per EBU |
|
Residential total assessment |
Per Dwelling Unit |
Improved non-exempt residential parcels |
$249.97 |
$306.12 |
|
Non-residential: |
|
|
|
|
|
Response Readiness Availability |
• Improved Property - Per parcel • Un-improved Property - Per parcel or parcel equivalent (Parcel EBU) |
All improved and un-improved non-exempt parcels |
$176.74 |
$216.45 |
|
Protection from Loss of Structures |
Per $5,000 of structure value, rounded down to nearest $5,000. (Structure EBU) |
Improved non-exempt parcels |
$11.07 |
$13.55 |
Annual adjustments to this assessment, including increases, may be implemented and the maximum assessment rates presented above are authorized to provide sufficient future revenues (in addition to other legally available funds) to fund fire/rescue services at appropriate levels of service including, but not limited to, providing continued availability of fire insurance at favorable rates due to ISO rating, protection from loss of property due to fire, and preservation of property values by virtue of the availability of fire/rescue services provided by the City of Cocoa
STRATEGIC PLAN CONNECTION:
Fiscal Sustainability is part of the City’s strategic plan. The recommended rate structure will recover a portion of the cost of providing fire protection service to properties within the city limits for FY2025 and subsequent years in proportion to the benefit received from the fire protection service provided by the City. Costs not covered by the fire protection assessment must be met by other revenue sources within the General Fund
BUDGETARY IMPACT:
The total amount gross revenue in FY2025 from this proposed fire protection assessment is estimated to be $3.67 million dollars, which is ~38% of FY2024 proposed budgeted fire protection services. Fire assessment budgeted at 95%, $3.49 million dollars, which is ~37% of the FY2025 proposed budgeted fire protection services.
PREVIOUS ACTION:
On May 9, 2006, City Council approved Ordinance 20-2006 that adopted a fire protection assessment to partially fund the provision of fire protection and first response medical services to properties within the City.
In reliance upon the Ordinance, the City Council has approved an annual fire assessment to fund a portion of the annual Fire Department budget since 2006
RECOMMENDED MOTION:
Recommendation
Approve the Preliminary Assessment Resolution 2024-071 for Fire Protection, for Fiscal Year 2025.