Fire Rescue & Property Tax Reform

1. Fire Rescue & Property Tax Reform March 18, 2008

2. Outline • Alternative Funding Strategies • Follow-up on EMS Presentation

3. June 2007 Special Session B – Property Tax Reform July Budget Worksessions September Budget Hearings October Implemented Statutory Changes Background

4. Jan. 2008 Constitutional amendment passes March Fire MSBU EMS transport April/May Fire Rescue operational review Consequences of not constructing new fire stations July Budget Worksessions Background

5. Fire Rescue Budget • 31st largest in the country • 4th largest in the state • Serves a population of approximately 700k • Total number of dispatch alarms >100K • 42 fire stations • 6:27 average response time

7. Fire Rescue’s Budget Where does Fire Rescue’s operating revenue come from? Property Taxes 89% Other 11%

8. Fire Rescue Budget Where did Fire Rescue’s operating expenditures go? Personal Svs. – 66% Operating – 28% Capital Outlay – 6%

9. MSTU millage rate = 2.5862

10. MSTU millage rate = 2.5862 2.2437

11. Fire Rescue Budget Impact of Property Tax Reform • Statutory Cut $20 • Constitutional Amendment $11 • Total $31 *In millions

12. Fire Rescue Budget • Additional property tax cuts • Economic slowdown • Taxation and Budget Reform Commission

13. Outline • Alternative Funding Strategies • Follow-up on EMS Presentation

14. Outline • Alternative Funding Strategies • Follow-up on EMS Presentation

15. EMS Transport Discussion on Oct. 9, 2007 Board extended existing provider agreement with Rural Metro through October 1, 2008 Effective October 1, 2008 Fire Rescue to extend its EMS transport services, subject to fiscal analysis by the County Administrator and Comptroller’s Office EMS Transport

16. Fire Rescue & Property Tax Reform March 18, 2008

17. Fire Rescue’s Budget • Fire Rescue is operated as a stand alone entity with its own dedicated funding • Fire Rescue is a separate MSTU millage assessed in the unincorporated area • Additional revenue from EMS transport, interlocal fire service, impact fees and other fees

18. Fire Rescue Budget Impact of Property Tax Reform • Statutory Cut $20 • Constitutional Amendment $11 • Total $31 *In millions

19. Fire Rescue Budget • Growing urban fire department • Opened two new fire stations • Personnel and operating costs are going up

20. Fire Rescue Budget Strategy for Dealing with Property Tax Cuts • Short-term • Cut expenses to conserve cash • Postpone equipment purchases • Postpone capital projects • Utilize reserves • Long-term • Develop a new option for a sustainable funding model

21. Fire Rescue Budget Long-Term Options • Adjust MSTU rate • Implement MSBU option • Make operational adjustments • Other fees

22. MSBU Study

23. MSBU Study • Funding Sources • MSTU – Ad-Valorem Taxes • Impact Fees • Grants • Fees for Services • Funding Option • MSBU – Non-Ad Valorem Assessments $

24. Special Assessments Definition: Special assessments are charges assessed against the property of some particular locality because that property derives some special benefit from the expenditure of the money.

25. Taxes vs. Assessments Similarities • Both generate revenue to pay for services and facilities. • Both are mandatory and may be collected through enforcement of liens on homestead.

26. Taxes vs. Assessments

27. Special Assessments Case Law Requirements • Special Benefit to Property • Fair and Reasonable Apportionment

28. Special Benefit Examples • Fire Protection • Street Improvements • Parking Facilities • Downtown Redevelopment • Solid Waste • Water and Sewer Improvements • Stormwater

29. No Special Benefit Case law: • Public Hospitals • Public Health Units • Emergency Medical Services • Enhanced Law Enforcement Not litigated yet: • Parks and Recreation

30. Fair and Reasonable Apportionment • A logically and factually driven method must be developed to fairly spread the costs among the benefited properties. • Does method of apportionment make sense in terms of what is being provided? • Legislative opinion receives judicial deference.

31. Why Use Assessments? • Benefit based, not value based • Tax equity tool • Revenue diversification • Dedicated revenue source • Establishes cost per billing unit for services and facilities • Annual decision • Pledgeable for debt without referendum

32. Fire Assessment Study Data Components & Analysis • Service Delivery • Fire Budget • Call/Incident Data (Based on historical demand for fire services) • Non-EMS • Ad Valorem Tax Roll

33. Future Considerations • Flexible methodology • Identifying stake holders • Public meetings/education • Strategies for: • government properties • institutional, tax-exempt properties • hardship exemptions • economic development

34. Fire Special Assessments • GSG has completed fire special assessment studies and programs for over 70 cities and counties since 1996 • Of the programs implemented, • fire assessment rates range from $50 to $206, with an average of $120* • * Every study is unique and involves different rate producing factors; e.g., not all agencies chose to fund 100% of the budget, resulting in lower rates. Source: Rate information compiled from 21 GSG studies

35. Outline • Background • Property Tax Reform • Fire Rescue Budget • MSBU Study • Summary

36. Timeline • Phase I (Dec. 2007 – March 2008) • Develop full cost of fire services • Develop property categories & apportionment • Phase II (March – Nov. 2008) • Develop assessment roll and rates • Notice of intent resolution • Phase III (Nov. 2008 – Oct. 2009) • Community meetings • Public hearings • Implementation

37. Summary • Fire Rescue has some long-term financial challenges • Currently evaluating: • MSBU option • EMS transport option • Future Discussions • Operational review • Issues with not constructing fire stations

38. Fire Rescue & Property Tax Reform March 18, 2008