fire rescue & property tax reform march 18, 2008
TRANSCRIPT
Fire Rescue & Property Tax Reform
March 18, 2008
Alternative Funding Alternative Funding StrategiesStrategies
Follow-up on EMS Follow-up on EMS PresentationPresentation
Outline
June 2007June 2007 Special Session B – Special Session B –
Property Tax ReformProperty Tax Reform
JulyJuly Budget WorksessionsBudget Worksessions
SeptemberSeptember Budget HearingsBudget Hearings
OctoberOctober Implemented Statutory Implemented Statutory
ChangesChanges
BackgroundBackground
Jan. 2008Jan. 2008 Constitutional amendment passesConstitutional amendment passes
MarchMarch Fire MSBU Fire MSBU
EMS transport EMS transport
April/MayApril/May Fire Rescue operational review Fire Rescue operational review
Consequences of not constructing Consequences of not constructing new fire stations new fire stations
• JulyJuly Budget WorksessionsBudget Worksessions
BackgroundBackground
Fire Rescue BudgetFire Rescue Budget
31st largest in the country31st largest in the country
44thth largest in the state largest in the state
Serves a population of Serves a population of approximately 700kapproximately 700k
Total number of dispatch Total number of dispatch alarms >100Kalarms >100K
42 fire stations42 fire stations
6:27 average response time6:27 average response time
Fire Rescue’s BudgetFire Rescue’s Budget
Where does Fire Rescue’s operating Where does Fire Rescue’s operating revenue come from?revenue come from?
Property Taxes Property Taxes 89%89%
Other Other 11%11%
Fire Rescue BudgetFire Rescue Budget
Personal Svs. – 66%Personal Svs. – 66%Operating – 28%Operating – 28%Capital Outlay – 6%Capital Outlay – 6%
Where did Fire Rescue’s operating Where did Fire Rescue’s operating expenditures go?expenditures go?
MSTU millage rate = 2.5862MSTU millage rate = 2.5862
MSTU millage rate = 2.5862MSTU millage rate = 2.5862
2.24372.2437
Fire Rescue BudgetFire Rescue Budget
Impact of Property Tax ReformImpact of Property Tax Reform• Statutory CutStatutory Cut $20$20• ConstitutionalConstitutional AmendmentAmendment $11$11• TotalTotal $31$31
*In millions*In millions
Fire Rescue BudgetFire Rescue Budget
• Additional property Additional property tax cutstax cuts
• Economic slowdownEconomic slowdown
• Taxation and Taxation and Budget Reform Budget Reform CommissionCommission
Alternative Funding Alternative Funding StrategiesStrategies
Follow-up on EMS Follow-up on EMS PresentationPresentation
Outline
Alternative Funding Alternative Funding StrategiesStrategies
Follow-up on EMS Follow-up on EMS PresentationPresentation
Outline
EMS Transport Discussion EMS Transport Discussion on Oct. 9, 2007on Oct. 9, 2007
Board extended existing Board extended existing provider agreement with provider agreement with Rural Metro through Rural Metro through October 1, 2008October 1, 2008
Effective October 1, 2008 Effective October 1, 2008 Fire Rescue to extend its Fire Rescue to extend its EMS transport services, EMS transport services, subject to fiscal analysis by subject to fiscal analysis by the County Administrator the County Administrator and Comptroller’s Officeand Comptroller’s Office
EMS TransportEMS Transport
Fire Rescue & Property Tax Reform
March 18, 2008
Fire Rescue’s BudgetFire Rescue’s Budget
Fire Rescue is operated as a Fire Rescue is operated as a stand alone entity with its own stand alone entity with its own dedicated fundingdedicated funding
Fire Rescue is a separate Fire Rescue is a separate MSTU millage assessed in the MSTU millage assessed in the unincorporated areaunincorporated area
Additional revenue from EMS Additional revenue from EMS transport, interlocal fire transport, interlocal fire service, impact fees and other service, impact fees and other feesfees
Fire Rescue BudgetFire Rescue Budget
Impact of Property Tax ReformImpact of Property Tax Reform• Statutory CutStatutory Cut $20$20• ConstitutionalConstitutional AmendmentAmendment $11$11• TotalTotal $31$31
*In millions*In millions
Fire Rescue BudgetFire Rescue Budget
• Growing urban fire Growing urban fire departmentdepartment
• Opened two new fire Opened two new fire stationsstations
• Personnel and operating Personnel and operating costs are going upcosts are going up
Strategy for Dealing with Property Tax CutsStrategy for Dealing with Property Tax Cuts
• Short-termShort-term
• Cut expenses to conserve cashCut expenses to conserve cash
• Postpone equipment purchasesPostpone equipment purchases
• Postpone capital projectsPostpone capital projects
• Utilize reservesUtilize reserves
• Long-termLong-term
• Develop a new option for a sustainable Develop a new option for a sustainable funding modelfunding model
Fire Rescue BudgetFire Rescue Budget
Long-Term OptionsLong-Term Options
• Adjust MSTU rateAdjust MSTU rate
• Implement MSBU Implement MSBU optionoption
• Make operational Make operational adjustmentsadjustments
• Other feesOther fees
Fire Rescue BudgetFire Rescue Budget
MSBU StudyMSBU Study
MSBU StudyMSBU Study • Funding SourcesFunding Sources
• MSTU – Ad-Valorem TaxesMSTU – Ad-Valorem Taxes
• Impact FeesImpact Fees
• GrantsGrants
• Fees for ServicesFees for Services
• Funding OptionFunding Option
• MSBU – Non-Ad Valorem AssessmentsMSBU – Non-Ad Valorem Assessments
$
Definition:Definition:
Special assessments are charges Special assessments are charges assessed against the assessed against the propertyproperty of of some particular locality because that some particular locality because that property property derives some derives some special special benefitbenefit from the expenditure of the from the expenditure of the money.money.
Special AssessmentsSpecial Assessments
SimilaritiesSimilarities
• Both generate revenue to pay Both generate revenue to pay for services and facilities.for services and facilities.
• Both are mandatory and may Both are mandatory and may be collected through be collected through enforcement of liens on enforcement of liens on homestead.homestead.
Taxes vs. AssessmentsTaxes vs. Assessments
Taxes vs. AssessmentsTaxes vs. Assessments
DifferencesDifferences
TaxesTaxes AssessmentsAssessmentsNeed not benefit Need not benefit propertyproperty
Must specifically Must specifically benefit propertybenefit property
Authorization by Authorization by general lawgeneral law
Authorization by home Authorization by home rule powersrule powers
Legislature must Legislature must prescribe a tax baseprescribe a tax base
Local Governments may Local Governments may develop the rate of develop the rate of assessment and assessment and method of apportioning method of apportioning costscosts
Special Assessments Special Assessments
• Special Benefit to Special Benefit to PropertyProperty
• Fair and Reasonable Fair and Reasonable
ApportionmentApportionment
Case Law Requirements
Special Benefit ExamplesSpecial Benefit Examples
• Fire ProtectionFire Protection
• Street ImprovementsStreet Improvements
• Parking FacilitiesParking Facilities
• Downtown RedevelopmentDowntown Redevelopment
• Solid WasteSolid Waste
• Water and Sewer ImprovementsWater and Sewer Improvements
• StormwaterStormwater
No Special BenefitNo Special Benefit
Case law:Case law:
• Public Hospitals Public Hospitals
• Public Health UnitsPublic Health Units
• Emergency Medical Emergency Medical ServicesServices
• Enhanced Law EnforcementEnhanced Law Enforcement
Not litigated yet:Not litigated yet:
• Parks and RecreationParks and Recreation
Fair and Reasonable Fair and Reasonable ApportionmentApportionment
• A logically and factually driven A logically and factually driven method must be developed to method must be developed to fairly spread the costs among fairly spread the costs among the benefited properties.the benefited properties.
• Does method of apportionment Does method of apportionment make sense in terms of what is make sense in terms of what is being provided?being provided?
• Legislative opinion receives Legislative opinion receives judicial deference.judicial deference.
Why Use Assessments?Why Use Assessments?
• Benefit based, not value basedBenefit based, not value based
• Tax equity toolTax equity tool
• Revenue diversificationRevenue diversification
• Dedicated revenue sourceDedicated revenue source
• Establishes cost per billing unit Establishes cost per billing unit for services and facilitiesfor services and facilities
• Annual decisionAnnual decision
• Pledgeable for debt without Pledgeable for debt without referendumreferendum
Fire Assessment StudyFire Assessment Study
• Service DeliveryService Delivery
• Fire BudgetFire Budget
• Call/Incident Data (Based on Call/Incident Data (Based on historical demand for fire historical demand for fire services)services)
•Non-EMSNon-EMS
• Ad Valorem Tax Roll Ad Valorem Tax Roll
Data Components & Analysis
Future ConsiderationsFuture Considerations
• Flexible methodologyFlexible methodology• Identifying stake holders Identifying stake holders • Public meetings/educationPublic meetings/education• Strategies for:Strategies for:
• government propertiesgovernment properties
• institutional, tax-exempt propertiesinstitutional, tax-exempt properties
• hardship exemptionshardship exemptions
• economic developmenteconomic development
Fire Special AssessmentsFire Special Assessments
• GSG has completed fire special GSG has completed fire special assessment studies and programs for assessment studies and programs for over over 7070 cities and counties since 1996 cities and counties since 1996
• Of the programs implemented,Of the programs implemented,
fire assessment fire assessment ratesrates range from $50 to range from $50 to $206, with an average of $120$206, with an average of $120**
* * Every study is unique and involves different rate Every study is unique and involves different rate producing factors; e.g., not all agencies chose to fund producing factors; e.g., not all agencies chose to fund 100% of the budget, resulting in lower rates.100% of the budget, resulting in lower rates.
Source: Rate information compiled from 21 GSG studies
BackgroundBackground
Property Tax ReformProperty Tax Reform
Fire Rescue BudgetFire Rescue Budget
MSBU StudyMSBU Study
SummarySummary
Outline
TimelineTimeline
Phase I (Dec. 2007 – March 2008)Phase I (Dec. 2007 – March 2008) • Develop full cost of fire servicesDevelop full cost of fire services• Develop property categories & apportionmentDevelop property categories & apportionment
Phase II (March – Nov. 2008)Phase II (March – Nov. 2008)• Develop assessment roll and ratesDevelop assessment roll and rates• Notice of intent resolutionNotice of intent resolution
Phase III (Nov. 2008 – Oct. 2009)Phase III (Nov. 2008 – Oct. 2009)• Community meetingsCommunity meetings• Public hearingsPublic hearings• ImplementationImplementation
SummarySummary
Fire Rescue has some long-Fire Rescue has some long-term financial challenges term financial challenges
Currently evaluating:Currently evaluating: MSBU optionMSBU option EMS transport option EMS transport option
Future DiscussionsFuture Discussions Operational reviewOperational review Issues with not constructing Issues with not constructing
fire stationsfire stations
Fire Rescue & Property Tax Reform
March 18, 2008