Item No: 5E.
Meeting Date: July 8, 2013
From: William Spinelli, Finance Director, CPA
Subject: Resolution authorizing approval of a contract with Willdan Financial Services for specialized services in evaluating and implementing a non-advalorem assessment program to fund fire rescue services within the City of Leesburg (Fire Assessment Project).
Staff recommends approval of a professional services agreement with Willdan Financial Services (WFS) to provide specialized services in evaluating and implementing a non-advalorem assessment program to fund fire rescue services within the City of Leesburg (Fire Assessment Project) for $62,500.00.
Since the General Fund is currently providing the Fire Department with approximately 65% of the general government funding supplied by the utility funds, it is prudent to analyze and contemplate an alternative funding mechanism for fire services. As the City contemplates keeping the utility rates as low as possible and maintaining the current utility transfer rates to the General Fund, this alternative funding mechanism for providing general government services without sacrificing service provision is a viable option. This will help to ensure the City will be able to maintain the current levels of fire services given the uncertainty concerning the General Fund yearly deficits. This will also allow the City to reduce its reliance on future utility transfers to the General Fund. If implemented, a comparable reduction in utility rates is intended to offset the fee for fire services.
Special Assessments for Fire Services are authorized by the Florida Constitution, are Florida court tested, and are currently being utilized by many local governments throughout Florida to fund fire services. Special Assessments for Fire Services may be used by local governments because fire services provide a special benefit by protecting property. Special Assessments for Fire Services are valid in Florida as long as they confer a special benefit to the property being assessed and the cost assessed is fairly and reasonably apportioned among the properties that receive the special benefit. The adoption of a Special Assessment for Fire Services will enable the City to gradually reduce transfer payments from the City’s Utility Funds and to pay for general government services with property tax as the City increases its taxable values. Revenue collected through the fire assessment may only be used to fund fire services and not EMS services.
The City would like to retain WFS to develop an annual recurring special assessment program so that it is capable of funding all of the assessable costs associated with providing fire services. If the program is adopted by the Commission, the annual assessment will be collected commencing Fiscal Year 2014-15 by using the property tax bill collection process provided in section 197.3632, Florida Statutes. Because the fire assessment will be collected using the Uniform Method, the data on the ad valorem tax roll will be used to develop the Fiscal Year 2014-15 assessment program, as well as the subsequent years’ programs.
The fire non-ad valorem assessments must meet the Florida case law requirements for a valid special assessment. These requirements are:
1) The service provided must confer a special benefit to the property being assessed; and
2) The cost assessed must be fairly and reasonably apportioned among the properties that receive the special benefit.
The objective of the WFS study is to evaluate the data that will be obtained from the City and from the State Fire Marshal’s database to develop a fire assessment program that focuses upon the proposed Fiscal Year 2013-14 assessable cost calculations. The WFS study objectives will include:
Ø Ensure that the recommended assessment rates and parcel classifications conform to the statutory requirements of the Uniform Method.
Ø Determine the relative benefit anticipated to be derived, by categories of property use within the City, from the delivery of fire services.
Ø Determine the full costs of providing fire services within the City of Leesburg.
Ø Review such final cost determination with the City to determine which elements provide the requisite special benefit to the assessed property values.
Ø Recommend the fair and reasonable apportionment of assessable costs among benefited parcels within each category of property use.
Ø Calculate assessment rates and parcel classifications for Fiscal Year 2014-15 based on the proposed Fiscal Year 2013-14 assessable cost calculations.
City staff believes the fire assessment is a good thing for our city because:
1) We have a critical need to build our tax base. The City cannot sustain the level of services that have been provided in the past without a significant improvement to the tax base. This will allow the City to keep the millage rate at 4.3179.
2) We have an opportunity to secure funding source for one of the City’s fundamental services, the fire protection service. There have been two waves of tax reform, and there is talk of more tax reductions. The second wave, when coupled with the poor condition of the economy, has shrunk our tax base. In the face of rising prices for goods and services that the fire department needs to operate, a secure revenue stream is needed.
3) Many people feel that assessments are preferable to taxes. An assessment is directly related to the cost of providing the specific service to the benefited property. The income from assessment must be used only to pay that cost. Tax receipts are not specifically designated. Tax receipts can be used for a wide variety of expenditures, and they are levied with no relation to the cost of providing specific services. The proposed fire assessment rates are based on the actual cost to provide fire protection services to the specific types of property being assessed.
Purchasing and Accounting:
On January 31, 2013, the City entered into a professional services agreement with WFS for the analysis of the City’s General Fund in support of the 2013 Capital Improvement Bonds. WFS provided the City an Excel-based financial model for use by City staff in the evaluation of the General Fund in the future. During the course of the General Fund evaluation WFS worked with the City to identify alternatives for incremental General Fund revenue sources. WFS will use the knowledge and experience gained during the General Fund evaluation to develop proposed fire assessment. WFS will also work with the City to revise the General Fund evaluation by incorporating the projected revenues from the fire assessment. WFS specializes in government finance and taxation issues by working with cities, counties, special districts and state agencies to develop funding and service delivery solutions for critical infrastructure and service needs. WFS has developed significant experience in structuring and implementing alternative revenue solutions.
Staff has negotiated a contract with WFS for special assessment development services in the amount of $62,500.
1. Approve the contract with WFS as presented; or,
2. Such alternative action as the Commission may deem appropriate
Since this is not a budgeted expense in the current year a budget adjustment of $62,500 will be necessary in the General Fund to appropriate fund balance.
Prepared by: ______________________
Attachments: Yes____ No ______
Advertised: ____Not Required ______
Attorney Review : Yes___ No ____
Reviewed by: Dept. Head ________
Finance Dept. __________________
Deputy C.M. ___________________
City Manager ___________________
Account No. _001-1295-589-3410__
Project No. ___________________
WF No. ______________________
RESOLUTION OF THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA, AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE AN AGREEMENT WITH WILLDAN FINANCIAL SERVICES FOR A FIRE ASSESSMENT STUDY FOR THE TOTAL AMOUNT OF $62,500; AND PROVIDING AN EFFECTIVE DATE.
BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA:
THAT the Mayor and City Clerk are hereby authorized to execute an agreement with Willdan Financial Services, whose address is 200 South Orange Avenue, Suite 1550, Orlando Florida 32801.
THAT this resolution shall become effective immediately.
PASSED AND ADOPTED by the City Commission of the City of Leesburg, Florida, at a regular meeting held the _8th____ day of ___July______ 2013.