1. Fire Assessment Fees: Process and Considerations in Florida Local Governments
February 25, 2016

2. Outline of Presentation
General Information on Fire Assessments
Benefits of Using Fire Assessments
Fire Assessment Methodologies
Collection Options and Implementation Procedures
Tools for Implementing and Updating Existing Assessment Programs

3. What is a Fire Assessment?
A fire assessment is a charge imposed against real property to pay for fire services provided by the local government
Fire services includes such things as:
Fire suppression
Hazmat response
Fire prevention
Emergency response and disaster preparedness
Safety education
Does not include EMS services above first responder

4. Is a Fire Assessment a Tax?
No.
Similarities
Both generate revenue to pay for services and facilities
Both are mandatory and can be collected on the tax bill
Differences
Assessments must benefit property; taxes need not
Authorization for special assessments come from the Home Rule powers of the local government; taxes must be provided by general law
Local governments may develop the rate of assessments and the manner of apportioning costs; taxes must be prescribed by Legislature

5. Case Law Requirements Special benefit to property
Fire services provide a special benefit to property
EMS services above “first responder” services do not provide a special benefit to property
First responder services include traditional fire protection services and first response medical aid considered one of the routine duties of a firefighter and requiring 40 hours of training
Fair and reasonable apportionment
Logically and factually driven method must be developed to spread the costs among the benefited properties
Does method of apportionment make sense in terms of what is being provided?
Legislative determination receives judicial deference
Talk here about mistake in Avon Park

6. Why Use Assessments?
Cost-effective and financially stable means of funding fire services and facilities
Dedicated funding source
Preserves level of service
Accountability
Direct correlation
Establishes cost per billing unit for services and facilities
Revenue diversification
Tax equity tool
Tax “Inequities”
Save our Homes
Homestead Exempt Property
Real Estate Factors
Non-Homestead Property
Annual decision

7. Example of Inequities 7

8. Court-Approved Methodologies
Historical Demand Methodology
Historical demand is the driving factor
Most widely adopted – cities, counties, fire districts
Based on initial response; therefore, treats all calls equally
Logical and easy for lay person to understand
Availability/Protection from Loss: Tiered Methodology
Two tiers of benefit
Service available equally to all parcels
Protection from loss represented by the cost value of the structures
Predominantly implemented in cities
Initial implementation requires bond validation proceedings

9. Data Components Required for Both Methodologies
Fire Department Budget
Allocation between Fire and EMS*
Ad Valorem Tax Roll Data
Use different data from tax roll
Building/Property Use
Dwelling Units and Square Footage or Ranges
Structure Value
Assessable Parcels/Acres
* In June 2000, in the case of SMM Properties, Inc. v. City of North Lauderdale, the Fourth District Court of Appeals concluded that EMS did not provide a special benefit to property; however, it reaffirmed that fire suppression, fire prevention, fire/building inspections and first response medical services do provide a special benefit to property. Methodology was upheld by the 4th DCA in July 2010 in Desiderio Corporation, et al. vs. The City of Boynton Beach, Florida, et al., Case Nos. 4D09-58 and 4D (Fla. 4th DCA Jan. 2010).

10. Proforma Planning Budget (3 or 5 Year Budget)
Adopted/Proposed Fire Department Budget for planning and projection purposes
Make sure Budget Includes
Vacant positions
Civilian support staff
Fire Services Expenditures that may be captured in other Divisions, such as
Dispatch/Communication Services
Division of Forestry Costs
Fire Prevention - any costs included in Building Dept.
Fire Hydrant Testing & Maintenance – Water Dept.
Fire Prevention/Public Education
Training
Etc.
Other Non-Department Costs
Indirect Costs
Capital Improvements
Replacement equipment/apparatus
Station maintenance/repairs
Enhanced services
Anticipated new station(s)
Increased staffing
Other Costs As Appropriate
Budgetary Practices
Collection Costs
Study Costs
Adjustment for Uncollected Assessments
Net Recurring Revenue
Inspection Fees
Grants?
Impact Fees
False Alarm Fees?
Full Cost – Recurring Revenue = Assessment Funding Requirements

11. Allocation of Budget Between Fire and EMS
Direct Allocation
Bunker Gear – Fire
Medical Supplies - EMS
Administrative Factor Allocation – staffing
Personnel Costs
Operational Factor Allocation – incidents
Dispatch costs
Fuel

12. Allocation of Budget Between Fire and EMS
Factor
Proposed Budget
Assessable Budget
Operating Expenditures
Contract Services
admin
$25,950
$14,701
Travel
$3,000
$1,700
Communication
$9,800
$5,552
Postage
$400
$227
Utilities
$87,000
$49,286
Rentals
$2,250
$1,275
Internal Fleet Lease
direct
$92,724
$56,998
Insurance
$27,523
$15,592
Repairs & Maintenance - Machinery & Equipment
$150,746
$85,398
Reparis & Maintenance - Building
$10,000
$5,665
Reparis & Maintenance - Equipment
$27,500
$15,579
Printing & Binding
$1,200
$680
Promotional Activities
$3,450
$1,954
Minor Furniture/Equipment
$38,000
$21,527
Operating Supplies
$58,900
$33,367
Uniforms
$76,850
$61,287
Fuel Purchases
operational
$52,500
$9,098
Publications & Memberships
$2,950
$1,671
Training
$40,000
$22,660
ALS Equipment (Lifepak 15) Replacement Schedule
EMS
$15,000 $0
Extrication Rools 5-year Replacement Schedule
fire
$25,000
Extrication Tools - L5
$2,500

13. 5-Year Proforma Assessable Budget
FY Proposed Budget
FY Assessable Budget
FY 15-16
Proposed
FY Assessable
FY Proposed
FY Assessable
FY Proposed
FY Assessable
FY Proposed
FY Assessable
5-Year Average Proposed
5-Year Average Assessable
Expenditures
Salaries & Wages
4,721,475
2,663,386
4,603,438
2,596,801
4,488,352
2,531,881
4,376,143
2,468,584
4,266,740
2,406,869
4,491,230
$2,533,504
Operating Expenditures
710,743
404,214
692,974
394,109
675,650
384,256
658,759
374,650
642,290
365,284
676,083
$384,503
Total Operation & Maintenance
$5,432,218
$3,067,600
5,296,413
2,990,910
5,164,002
2,916,137
5,034,902
2,843,234
4,909,030
2,772,153
5,167,313
2,918,007
Capital Improvement Program
New Fire Station #5
100,000
56,650
20,000
$11,330
Fire Station #3 3rd bay for ARFF
300,000
169,950
60,000
$33,990
ALS Equipment (Lifepak 15) Replacement Schedule
30,000
12,000 $0
Extrication Tools 5-year Replacement Schedule
$12,000
Extrication Tools - L5
6,000
$6,000
Thermal Imaging Camera
10,000
Fire-Breathing Apparatus Loan
43,205
8,641
$8,641
Total Capital Improvement Program
113,205
83,205
500,000
296,600
124,641
$77,961
Total Expenditures
$5,296,413
$2,990,910
$5,277,207
$2,999,342
$5,044,902
$2,853,234
$5,409,030
$3,068,753
$5,291,954
$2,995,968
Revenues
Fire Supplemental Comp
$19,000
$10,764
19,000
10,764
ALS-Lake County
$115,000
115,000
Total Revenues
$134,000
134,000
TOTAL EXPENDITURES
5,291,954
TOTAL REVENUES
TOTAL NET EXPENDITURES
$5,298,218
$3,056,837
$5,162,413
$2,980,147
$5,143,207
$2,988,579
$4,910,902
$2,842,470
$5,275,030
$3,057,990
$5,157,954
$2,985,204
Miscellaneous Assessment Expenditures
Study Costs
22,500
$4,500
Implementation & Annual Maintenance Costs
9,500
7,500
$6,400
First Class Notice Costs (7,900 x 1.35)
10,665
100
$2,193
Collection Costs (TC - 2%)
69,322
$67,543
$67,450
$64,160
$69,012
$67,497
Collection Costs (PA - 2%)
Statutory Discount & Undercollection (4% & 1%)
178,777
$174,189
$173,949
$165,466
$177,979
$174,072
Total Misc. Assessment Expenditures
339,920
$329,439
$316,448
$301,387
$323,603
$322,159
TOTAL ASSESSABLE COSTS
$3,396,756
$3,309,585
$3,305,027
$3,143,857
$3,381,592
$3,307,364

14. Historical demand methodology

15. Data Components of the Historical Demand Methodology
Service Delivery
Staffing
Apparatus
Service area
Response protocol
Call/Incident Data
Calls or Man Hours
Ad Valorem Tax Roll Data
Building/Property Use
Dwelling Units and Square Footage or Ranges
Land Parcels/Acres

16. Service Delivery ALS without transport 4 Stations Station 1
2 Lieutenants
2 Engineers
4 Firefighters
Station 2
Lieutenant
Engineer
Firefighter
Station 3 (Airport)
ARFF
Station 4
Apparatus and Fire Flow (gpm)
15,000 gpm (no non-residential sq. ft. cap based on NFPA standards)
Response Protocol
Agreements

17. Cost Apportionment Methodology
Develop Call and Incident Profile
One or More Years Call Data
Determine Appropriate Property Categories
Residential
Single Family
Mobile
Multi-Family
Non-Residential
Commercial
Hotel/Motel
Industrial/Warehouse
Institutional
Nursing Home
Land (if applicable)
Utilize Net Assessment Budget
*Does FFIRS data include EMS calls or only Fire Department Calls?

18. Sample Cost Apportionment: Based on Historical Demand for Fire Services

19. Parcel Apportionment Category Parcel Apportionment
Residential Category
Residential
Dwelling Unit
Non-Residential Categories
Commercial
Industrial/Warehouse
Institutional
Square Footage
Vacant Land
Parcel/Acre

20. Parcel Apportionment Methodology
Determine total billing units per category
Residential – dwelling units
Non-residential – square footage
Land (if applicable) – acres/parcel
Calculate rate per billing unit
Apply rate/billing unit to each building based upon parcel/building classification
Sample
Category
# of Incidents
Percentage
of Calls
Assessable Costs
Number of Units
Dwelling Units/Square Feet
Rate Per Unit
Residential
723
44.99%
$2,699,440
Dwelling units
Rate per dwelling unit
Commercial
516
32.11%
$1,926,571
Square feet
Rate per square foot
Industrial/
Warehouse 18
1.12%
$67,206
Institutional
259
16.12%
$967,019
Land 91
5.66%
$339,764
Acres
Rate per acre
Total
1,607
100%
$6,000,000

21. Assessment Rate Calculations Maximum Rates
Category
Number of Incidents
Percentage
of Calls
Proportion of
5-Year Average
Assessable Costs
Billing Units
Per Unit Rate
Residential
723
44.99%
$2,699,440
10,475
$ year
$21.50 month
Commercial
516
32.11%
$1,926,571
7,544,933
$0.26
Industrial/Warehouse 18
1.12%
$67,206
2,885,820
$0.03
Institutional
259
16.12%
$967,019
1,775,963
$0.55
Land 91
5.66%
$339,764
272,350
$1.25
Total
1,607
100%
$6,000,000
Estimated Gov. Buy-down
$318,432
Estimated Inst. Tax Exempt
$422,660
Total Estimated Net Revenue
$5,258,903

22. Fire Assessment Rate Scenarios
38.5%
50%
75%
100%
Residential Property Use Category
Rate Per Dwelling Unit
Residential
$100.00
$129.00
$194.00
$258.00
Non-Residential Property Use Categories
Rate Per Square Foot
Commercial
$0.10
$0.13
$0.20
$0.26
Industrial/Warehouse
$0.01
$0.02
$0.03
Institutional
$0.21
$0.28
$0.41
$0.55
Land Property Use Category
Rate Per Acre
Vacant Land
$0.49
$0.63
$0.94
$1.25
Total Estimated Gross Revenue
$2,310,000
$3,000,000
$4,500,000
$6,000,000
Total Estimated Government Buy-down
$121,594
$162,082
$237,453
$318,432
Total Estimated Institutional Tax Exempt Buy-down
$161,379
$215,172
$315,074
$422,660
Total Estimated Net Revenue
$2,027,027
$2,622,746
$3,947,473
$5,258,908

23. Availability/protection from loss methodology

24. Tier 1 Cost Apportionment
Tier 1 Costs - Response Readiness Availability
Provision and maintenance of the facilities, equipment and personnel necessary to provide 24 hour a day, seven days a week, year around fire protection service to all parcels in the jurisdiction
Tier 1 costs are the fixed costs of the system that are not discretionary and that are not deployed in the actual response to calls. These costs include:
The personnel costs that must be incurred independent of calls for service (total personnel costs less the portion of personnel costs involved in actually responding to calls for service), plus
Lease payments and capital expenses.

25. Tier 2 Cost Apportionment
Tier 2 Costs - Protection from Loss of the Value of Structures
Includes all costs that are not included in the Tier 1 - Response Readiness Availability
Tier 2 costs are the allocated and variable costs of the system that are deployed in the actual response to calls. These costs include:
The allocated portion of personnel costs involved in responding to calls for service, plus
Other variable operating costs that are incurred relative to variable expenses, such as fuel, equipment maintenance, etc.

26. Example of Cost Apportionment Between Tier 1 and Tier 2
Application of the distribution of Tier 1 and Tier 2 cost recovery is as follows:

27. Sample Calculation of Tier 1 Rates
Calculation of the Tier 1 annual assessment rate per parcel:

28. Sample Calculation of Tier 2 Rates
Calculation of the Tier 2 annual assessment rates:
IBU = Improvement Billing Unit is measured in terms of each property's structure value rounded down to the nearest $1,000 and then divided by $1,000.

29. Combined Assessment Rates
The recommended assessment rates by property type, including both Tier 1 and Tier 2 rates are as follows:

30. Sample Calculation – Developed Parcel

31. collection options and Implementation procedures

32. Collection Options: Pros and Cons

33. Implementation Procedures
Tax Bill
Separate Bill
Utility Bill
Resolution of Intent
Notice to Proceed
Assessment Report with Rates
Public Education
Home Rule Ordinance
Initial Assessment Resolution
Public Notice (mailed and newspaper)
Public Notice (as determined)
Final Resolution to Adopt Rates
Certify Assessment Roll to Tax Collector
Collected on Tax Bill
Collected on Separate Bill
Collected on Utility Bill

34. Tools for Implementing and Updating Existing Assessment Programs

35. Tools/Strategies
Assessment Report and Rates constitute small portion of project deliverables
Need expertise in all aspects of project
Understanding of case law requirements
Comprehension of fire service delivery components
Expertise with statutory requirements and timeframes
Knowledge of ad valorem tax roll data
Funding strategies
Not funding 100% of costs
Earmark for certain budget items (strategic plan, improving ISO, funding CIP)

36. Tools/Strategies Flexible methodology
Variations to Historical Demand Methodology
Type and Number of Property Use Categories
Residential Dwelling Units (based on size of dwelling unit - within “tiers”)
Residential Rates per Square Foot
Billing Units Used for Non-Residential Properties
Caps on Building Sizes
Call Weighting
Service Zones

37. Tools/Strategies Identifying stakeholders Education/Public Information
Large land owners
Hardship exemptions
Government properties
Institutional, tax-exempt properties
RV/Mobile home parks
Economic development strategy
Education/Public Information
PowerPoint presentations
Workshops
Town Hall Meetings
Phone Bank
Websites
FAQs