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

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

3. l June 2007Special Session B – Property Tax Reform l JulyBudget Worksessions l SeptemberBudget Hearings l OctoberImplemented Statutory Changes Background

4. l Jan. 2008Constitutional amendment passes l MarchFire MSBU EMS transport l April/MayFire Rescue operational review Consequences of not constructing new fire stations JulyBudget Worksessions Background

5. Fire Rescue Budget l 31st largest in the country l 4 th largest in the state l Serves a population of approximately 700k l Total number of dispatch alarms >100K l 42 fire stations l 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 Personal Svs. – 66% Operating – 28% Capital Outlay – 6% Where did Fire Rescue’s operating expenditures go?

9. MSTU millage rate = 2.5862

10. 2.2437

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

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

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

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

15. l EMS Transport Discussion on Oct. 9, 2007 l Board extended existing provider agreement with Rural Metro through October 1, 2008 l 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 l Fire Rescue is operated as a stand alone entity with its own dedicated funding l Fire Rescue is a separate MSTU millage assessed in the unincorporated area l 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 Statutory Cut$20 Constitutional Constitutional Amendment$11 Amendment$11 Total$31 *In millions Total$31 *In millions

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

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

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

22. MSBU Study

23. MSBU Study MSBU 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 $

24. 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. Special Assessments

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

26. Differences TaxesAssessments Need not benefit property Must specifically benefit property Authorization by general law Authorization by home rule powers Legislature must prescribe a tax base Local Governments may develop the rate of assessment and method of apportioning costs

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

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

29. No Special Benefit Case law: Public HospitalsPublic Hospitals Public Health UnitsPublic Health Units Emergency Medical ServicesEmergency Medical Services Enhanced Law EnforcementEnhanced Law Enforcement Not litigated yet: Parks and RecreationParks 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. 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? Does method of apportionment make sense in terms of what is being provided? Legislative opinion receives judicial deference. Legislative opinion receives judicial deference.

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

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

33. Future Considerations Flexible methodologyFlexible methodology Identifying stake holdersIdentifying 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

34. Fire Special Assessments GSG has completed fire special assessment studies and programs for over 70 cities and counties since 1996 GSG has completed fire special assessment studies and programs for over 70 cities and counties since 1996 Of the programs implemented, Of the programs implemented, fire assessment rates range from $50 to $206, with an average of $120 * 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. l Background l Property Tax Reform l Fire Rescue Budget l MSBU Study l Summary Outline

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

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

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

39. Cost Apportionment Example: Residential 7,850 / 78% * Commercial 1,250 / 12% * Industrial/ Warehouse 350 / 3% * Institutional 550 / 5% * * Land not shown; typically accounts for 0-3%

40. Parcel Apportionment ResidentialDwelling Units ResidentialDwelling Units Non-Residential Square Footage of Improvements Non-Residential Square Footage of Improvements Hotel/Motel Square Footage & RV Parksof Improvements Hotel/Motel Square Footage & RV Parksof Improvements Land/AgriculturalAcreage Land/AgriculturalAcreage