April 25, 2008 Workshop
Apr 25 2008
MINUTES OF THE MEETING OF THE BOARD OF COUNTY COMMISSIONERS
BREVARD COUNTY, FLORIDA
April 25, 2008
The Board of County Commissioners of Brevard, Florida, met in special session on April 25, 2008, at 1:05 p.m. in the Government Center Florida Room, Building C, 2725 Judge Fran Jamieson Way, Viera, Florida. Present were: Chairman Truman Scarborough, Commissioners Chuck Nelson, Helen Voltz, Mary Bolin, and Jackie Colon, County Manager Peggy Busacca, and County Attorney Scott Knox.
FIRE ASSESSMENT CONSULTANT REPORT/PRESENTATION, RE: BURTON &
ASSOCIATES, INC.
County Manager Peggy Busacca advised Mike Burton and several of his associates are present, and are the County’s fire assessment consultants; they are going to talk today about the apportionment methodology; they will be asking for some Board direction; and the Board still has a second workshop that will be in a couple of weeks. She noted staff understands this is preliminary and the Board will have some questions; and the workshop is very much intended to be the first of two workshops.
Mike Burton, President of Burton and Associates, Inc., introduced Andy Bernam, Vice President of Burton and Associates, who serves as Project Director; Eric Grau, the Consultant doing a significant amount of work on the revenue requirements part of the analysis; and Kevin Krueger, Consultant doing work with regard to the parcel manipulation and developing the assessment roll. He advised his Company has a presentation which he will provide to the Board; the results are preliminary; he would like to receive the Board’s input and any redirection it may want to provide; stated he is going to go through the methodology and then the preliminary results; and the numbers may change some due to some refinements, but the order of magnitude will provide a sense of how the two methodologies will play out compared to the County’s current methodology. He stated he believes the Board will receive some substantive information today, but it is still an open process; and he looks forward to the Board’s input. He advised of the presentation outline, including the scope of study, cost identification process, cost apportionment with regard to property classes and benefit cost pools, and the special assessment calculation methodology. He stated the discussion will include a presentation of the preliminary results of the study which are in the presentation, but are not in the one that was printed out; and the scope of the study is to recommend alternative cost apportionment methodologies.
Chairman Scarborough inquired if copies of the presentation are available to the audience; with Assistant County Manager Stockton Whitten responding staff is making additional copies. Ms. Busacca advised some copies were provided.
Mr. Burton stated the first element of the scope is to recommend alternative cost apportionment methodologies on a square foot basis within class and on a building value basis, to calculate for services assessments for the two methodologies, and to provide assessment rates by property class on the two methodologies; included will be an evaluation of the impact on various types of properties of going to one of the two assessments from where there current assessment is; and there will not be a final one today, but he hopes to have one before the next workshop, which is how it would be compared to the ad valorem approach under the MSTU. Mr. Burton stated in identifying costs it has been determined fire services are provided throughout the County by County forces; stated he met with Chief Farmer and went through a map of the system; and he has a very good understanding of the type of service and the extensiveness of the service that is provided throughout the County. He stated detailed costs are available in the current budgeting and financial reporting systems; he has been working very closely with Chief Farmer’s department; and EMS costs are excluded from the cost to be included in the fire assessments. He stated costs must be apportioned to properties based upon benefit received; and that is one of the requirements of case law of non-ad valorem assessments. He stated primarily, residential and non-residential property classes need to be looked at; stated his company has designated costs that go into different benefit cost pools because the costs derive benefit to properties in different ways; one is a per-parcel benefit; and he has allocated billing collection and some administrative costs into that. He advised when fees are collected for all the parcels it costs about the same per-parcel independent of whether it is a large or small parcel; therefore, they should be allocated equally per-parcel and they are approximately five percent of the cost. He stated there is a calls-for-service benefit, which allocate the marginal cost of making calls into the cost pool, and is allocated based upon the call incidents; marginal costs are relatively small, with the majority of the cost being three percent in that cost pool; and the remaining costs fall in the watch-standing cost pool. He stated the primary benefit people receive in the County is that the Fire Department is equipped, ready, and able to bring proper equipment within a proper response time to be able suppress fires; that benefit is derived to a great extent independent of the calls-for-service; and the cost of making the calls-for-service is really just for the fuel. Mr. Burton stated if the Fire Department had significantly less calls-for- service, it would not close any Fire Stations, it would not get rid of equipment, and it would not get rid of any of the people, because it is there for the watch-standing requirement; therefore, he determined the average length of a trip, average type of equipment, number of pieces of equipment used on the trip, average miles, miles per-gallon, and the cost of the fuel to run the equipment; and it was determined the cost represents about three percent of the overall cost of service. He stated calls-for-service are calls to things other than real property, such as traffic, residential real property, and non-residential real property; out of the three percent costs allocated in calls-for-service those allocated as other than real property have been excluded from the assessment amount and are not burdening the assessment; these calls will have to be funded from another source because they are not benefiting real property; and the remainder of calls are allocated to real property based upon the percentage of incidents with residential and commercial property. He stated the watch-standing benefit is allocated to properties based on the total square footage of residential space, the total square footage of non-residential space, and the percentage of each of those; and the grand total the allocated costs in the two methodologies. He stated the equivalent concept is used for residential; assessments are developed by ranges of square feet of improved space per dwelling unit; and the assessment would be applied to the space per dwelling unit, whether the unit is a single-family home, a condo, or an apartment. He stated using an apartment as an example, the total square footage of the parcel divided by the number of units gives the average; the average would then be found on the equivalency scale; if it is smaller it would get a smaller assessment; if it was larger it would get a larger assessment; and the same would be true on the value. Mr. Burton stated they are either ranges of square feet of improved space, or ranges of building value that the assessments are assigned to; the lower the value, the lower the assessment; and the higher the value, or size, the higher the assessment. He stated Burton and Associates does not convert non-residential units to equivalent residential units; square footage of improved space is added; space is looked at on the parcel and is derived into the ranges; and the same is done on the building value. He displayed a chart showing the cost apportionment schematics. He stated fire service costs is the first cost pool that is allocated into the parcel benefit cost pool, which is building collection and some administrative costs; stated next is Marginal cost of calls-for-service, in which the parcel benefit is about five percent; calls-for-service is three percent of calls; and the remaining costs are watch-standing benefit costs, which are the primary costs driving the assessment. Mr. Burton indicated both the watch-standing benefit and calls-for-service benefit are allocated into a residential and commercial or non-residential cost pool; the watch-standing benefit is allocated based on square feet of developed space, which is the square feet alternative; and the calls-for-service benefit is first allocated out to non-real property, then it is allocated to non-residential and residential based on calls-for-service. He stated the three cost pools are residential, parcel benefit and non-residential; the residential costs are then divided by square feet of developed residential space to come up with a total cost of per thousand square feet, and it is then converted into a equivalent residential unit value based upon the average square feet associated with the single-family units. He advised non-residential is divided into 1,000 square feet and then equated in terms its ERC equivalency, then it is put back into the square-foot ranges, which is a separate analysis than what is done for the residential; parcel benefit costs are divided by the number of parcels to come up with cost per-parcel; and it is then added to other costs associated with residential and non-residential to come up with the total assessment for each parcel. He stated the difference in the value-based schematic is that the value of the improvements is the criteria for allocating watch-standing benefit, instead of the square feet of the improvements. Mr. Burton advised the costs have to be openly allocated into parcel benefit, residential, and non-residential costs; there is an intermediate step by saying some of them can be allocated directly to parcel benefit, which are costs of billing and collection, and administrative costs; and calls-for-service benefit are the marginal benefit costs of making the calls, which is fuel associated with the 8,000 calls that were made. He stated costs are allocated to non-residential and residential based on the value of improvements; if the value of improvements is “X”, and the value of non-residential is “Y”, then “X” is the percentage of “X” plus “Y”; and that is how it is calculated. He stated with calls-for-service it first has to be determined how many calls were to non-real property or traffic accidents; those are no longer in the assessments; and they have to be funded from another source. He noted the remaining calls are allocated to residential and non-residential based on the percentage of calls that could be identified as residential or non-residential.
Commissioner Voltz inquired if Mr. Burton looked into the possibility of the Fire Department charging insurance companies for out-of-state accidents on I-95; with Mr. Burton responding no, as it would be outside the purview of Burton and Associates.
Mr. Burton advised the total parcel benefit is divided by the total number of parcels, including residential and commercial, to come up with cost per-parcel; added residential cost is divided by the building value of all improvements on the residential parcels to come up with a cost per $1,000 of improvement value; if the average single-family home has a value of $100,000, ERC would be determined based upon the calculation, which would be the assessment for an average single-family home; and the same analysis is used in calculating non-residential properties. Mr. Burton stated as he shows more detail, the process will become clearer. He stated Burton and Associates developed “bins” or “ranges” that properties were apportioned to, and then determined what kind of a fractional equivalency factor the lower-valued properties should get, and what kind of multiplier factor the higher value properties should get. He displayed the square foot-based calculation; stated there is a $27.3 million revenue requirement; but that is not the revenue the assessments will recover; and the assessments are going to recover the same in 2009 as they recovered in 2008. He stated the number of parcels is looked at when allocating the cost, which is the billing and administrative cost; residential and non-residential was allocated based on the number of parcels; and then the number of parcels were divided to come up with the sum rate of $15.17 for each one.
Commissioner Voltz inquired if $15.17 is per square-foot; with Mr. Burton responding it is per-parcel. County Manager Peggy Busacca advised it costs the same amount, regardless, to do the mailing. Commissioner Voltz noted the chart reads square foot-based calculation. Mr. Burton replied it would be exactly the same in the value-based calculation; the first parts are the same; and it is done per parcel.
Commissioner Bolin inquired what is excluded; with Mr. Burton responding he was given a list of properties the County would like to have excluded from the assessment, but that are not necessarily statutorily exempt; if that is done the cost has to be taken that would be attributable to those parcels and not burden the remaining parcels with them; and they would have to be funded from another source. County Manager Peggy Busacca advised it includes churches and schools. Commission Voltz stated the Board wanted to be sure the rest of the citizens were not getting the burden.
Mr. Burton stated the next component is the service component, which is three percent of the system cost representing $823,000; however, out of 65,000 calls-for-service, 55,000 were to non-real property, which is approximately 84%; and so $693,000 of $823,000 has to be excluded, and will not be included in the assessment. He advised the assessment will only recover $130,246; stated of the calls that were allocated specifically to residential and commercial properties, 36% were to residential, and 62% were commercial, so the cost was allocated according to those percentages; $130,000 is allocated to residential and commercial; and $3,200 would be excluded. He stated the watch-standing component is the remaining 92% of the cost at $25.13 million; the total number of square feet of developed space on the residential parcels is $188 million, and the commercial is $32 million, which is 88% percent and 14% respectively; that is how costs are allocated in residential and commercial on the chart; and excluded properties are the same idea. He advised the watch-standing costs and the service costs were added together to come to $25.26 million, with $21.39 as residential, $3.67 million is commercial or non-residential, and $543,000 is excluded; and the total assessment is approximately $26 million. He stated the ERU’s (Equivalent Residential Unit) on the residential side equate to $98,541; on the commercial side, when converted to ERU’s to make the calculation it is $16,000; when divided, it is $213 or $214 for the residential and $21 for commercial; but added back is the per-parcel charge of $15.17; and the average on both, if the commercial was equated to ERU, it would be for $228.68 for residential, and $236 for commercial. He stated the revenue reconciliation shows the assessment revenue would have $693,000 for calls-for-service to non-real property incidents that would have to be recovered somewhere else; stated excluded parcels would be $548,000 of approximately $1.2 million that would have to be recovered from some other source besides the assessment; and the assessments would be recovering $26 million including the costs associated with it, for a total of $27.3 million, which matches the total at the top of the charts. Mr. Burton displayed the preliminary results on the residential property for the square-foot basis; stated Burton and Associates did an analysis and developed some histograms of how parcels are distributed within the bins, and tried to come up with a rational curve; but it did not want any bins overly burdened or too wide or too small; and the company tried to come up with a rational and somewhat statistically based method of determining what the bins should be and the ranges. He stated in terms of size, the average property falls in the midpoint of the bin between 1,700 and 2,200 square feet; the ERC equivalent unit factor is one; and the new fee would be $15.17 plus one times $213. He stated because of their size, the other properties would still receive 76% of the $213, so the total fee would be $177; in the other bin it is only 52%, so their fee is only $126 compared to $229; and on the other bins it happens the same way, but it goes higher, so there is a proportioned ratio in terms of how much larger they are than the average and it affects the cost when applied to the proportional cost and then add the ERC cost to it. He stated the range goes from $126 up to $1,208; that is the number of parcels that fall within the bins; stated approximately 50% of the residential parcels would have a decrease, a substantial number would have a slight increase, and the remaining parcels would have an increase; and it is interesting to note the average parcel has an 8% increase when it has the same revenue that is being recovered, which is because there is a slight shift from the non-residential to the residential because of the difference in the way it was done before. He stated the next chart shows the non-residential on the square feet analysis; non-residential properties were evaluated to try to develop a rational distribution within the bins that made sense; and there are not nearly as many non-residential properties, but the Board can see how they are distributed throughout the bins. Mr. Burton stated the ERU factors for each bin has a relationship of the average in each bin to the average in the system, there is not as much distribution on the low end as there was on the residential side; but in any event the fee goes from $166 on the smallest properties up to $34,786 on the three very largest properties in the County; and there is a number of properties in between. Mr. Burton stated it is difficult to have a comparison because the bin structure is different and there are hazardous codes; and it is almost impossible to have as clear a comparison like there was on the residential.
Commissioner Voltz inquired about condos and apartment buildings, which are residential units. Mr. Burton replied a condo has its own parcel ID and it would have the same assessment as a single-family home if it were someone’s; but if a condo fell into a lower bin it would half the assessment. Commissioner Voltz inquired about rental properties and the issue between rentals and condo’s for someone who owns the building; with Mr. Burton responding a rental property might be a multi-family parcel that has ten units with some common space; the total square footage is divided by the units; if the units fall into the second bin it would be approximately $177 per-unit; and multiplying the units would give the assessment for the parcel. He stated building value has the same revenue requirement; stated the allocation is based on the total value of the buildings on parcels; and the fee is $226 or $240. He stated there are very similar results on the two methodologies; and more revenue has to be taken out of the system because of the values of excluded properties. He stated for a comparison on a value basis, he compared a $212 fee for properties up to 3,000 square feet, and $276 for those over 3,000 square feet; if there is a correlation between size and value, some properties pay the lower amount based on size, and others will pay a higher amount; and sometimes they might not correlate exactly. Mr. Burton stated fundamentally, the new fee would be $69 going up to $1,330; comparably the range would change from 67% to 527%; and if comparing to the $276 fee, there would be another increase. He advised there is not a direct correlation with the bins on the chart because one is square feet and the other is value; on the value side, the trim goes to a lower value to a slightly high fee; and the percent increase is on the value basis compared to what the fees are now. He stated the results are similar in general; however, the way they differ is two, 2,000 square-foot homes are now paying $212, and if one of the building values was $200,000, and the other was $500,000, they would have very different impacts under two different ways of calculating. He stated a retail drug store’s assessment in 2007 was $256; the proposed assessment under the square-foot basis would be $1,194; and on the building value basis it would be $1,844. He advised a multi-tenant office building with two stories had an old fee of $1,056; the new fee under the square footage would be $2,222; and the new fee under the value would be $1,884. He stated a multi-unit retail store would go from a fee of $2,056 to $1,194 under the square-foot basis; and the fee would be $971.00 under the value basis. He advised a small equipment manufacturing plant’s fee would go from $1,156 to $851; and the fee would go to $244 on value, which would indicate on a square-foot basis the structure has less value than office buildings. He noted the fee for a professional office complex is $416 under the square-foot basis, and it would go to $337; the fee for the value would go to $244; and with a restaurant cafeteria there would be a very small increase. He advised before he comes back to the Board his staff plans to take the entire assessment role and calculate what the change would be for the non-residential properties; and an analysis could be run to see how many of them will have a decrease between one and 25 percent; and between 25% and 50%.
Commissioner Voltz inquired why the two-story multi-tenant office building fee increased tremendously. Mr. Burton replied the reason could be because the current fee fell on the cusp in a lower bin, and on the chart it fell into another bin because the bins are defined differently; and he and his staff will go back and look at the issue.
Chairman Scarborough inquired why the County does bins rather than actual calculations; with Mr. Burton responding on the square-foot basis if there are bins people can measure their square feet and if the property appraiser is a few feet off, they are not going to have much of a conflict as long as they are within a bin. He stated the bins need to be fairly tight so they do not get too much variation between bins as one moves from bin to bin.
Chairman Scarborough inquired what Mr. Burton will present at the next meeting that the Board does not have today. Mr. Burton replied he will have a 10-year financial plan showing what the future looks like in terms of increases; and within a year or two the Board will have to start inflationary type level increases.
PUBLIC COMMENT
Sam Zimmerman stated he represents Beachside Apartments, as the owner, and VMG Inc., which are businesses in Brevard County that together employee over 400 hundred people and provide quality rental housing to hundreds. He stated there are serious concerns about whether or not the assessment was lawfully implemented in 2006; questions have been raised about whether the method of its implementation conforms to requirements of the County’s Charter; some citizens have asked if the fire assessment’s proper implementation required referendum to voters in 2006; and inquired if a referendum is required now. Mr. Burton stated the Commissioners and taxpayers deserve honest and conclusive answers to the questions; and citizens would like to know before any further action is taken in regards to the assessment being legal. He stated in 2006 the cost to taxpayers for funding the fire services was divided into two parts, which were ad valorem taxes and fire assessment; stated ad valorem taxes differ from assessments in many important ways, but to taxpayers, perhaps no difference is more important than whereas the growth of ad valorem taxes is capped by Amendment 1 and other taxpayer protection measures, no such constraints exists for assessments; when ad valorem taxes become tax assessments, the citizens lose the reasonable budgetary growth caps they have been clamoring for; and the fire assessment is undoing the will of the people and State Legislature with devastating effects on homeowners, businesses, and the State of Florida. He stated in his own business, assessments today are 12 times more than they were in 2004; the trend of all of Brevard’s taxpayers is ominous; if there is to remain a dual tax structure for fire services, the citizens believe the Board should carefully limit the amount taxed as an assessment; and there may be legal and consultant arguments about why more of the top tax can be taxed as an assessment without growth caps, but the citizens believe good common sense and taxpayer protection should guide these decisions. He stated Florida Law specifically states, “The costs assessed must be fairly and reasonably apportioned among the properties that receive the special benefit”; that is different from ad valorem tax, which can be a progressive tax; Burton and Associates will address the issue of how the fire assessment should be allocated fairly and reasonably between the taxpayers; and surely it would be a shame if this or future meetings generated into a squabble between taxpayers; but the bigger issues are those that were discussed earlier. He stated the Board should join with taxpayers to ensure that one class of taxpayer is not penalized over another, not only because it is a requirement of the law of assessments, but because it is simply fair; stated assessments are not the way for one taxpayer to subsidize another, nor should they be; and the fire assessment should be fairly and reasonably apportioned. He stated he respectfully asks the Board to explore the legal issues surrounding the original implementation of the fire assessment, and the proper division of the cost of fire services between ad valorem tax and assessed taxes. He inquired if the taxpayers are to be denied the budget caps they have fought for. He stated assessments must be apportioned fairly; no taxpayer should pay more or less than the cost for the benefit they receive.
Chairman Scarborough he has received Attorney Allen Watts’ response; copies are being made for the public; and the Board may, at a later time, have to have Attorney Watts present for additional questions.
Lawrence Berry stated he is the regional property manager for Northland Investment Corporation, and also president of Space Coast Apartment Association; and like the others he is concerned about the apartment industry in regards to providing affordable housing. He stated in looking at what is happening within the market, the ability to provide affordable housing for the people of Brevard County is being jeopardized; the citizens are having a hard enough time making ends meet; and it is just going to get worse. He stated the assessment really needs to be looked at and how it is being apportioned; stated he has concerns about how it is being presented from a fair and equitable standpoint; there are a lot of numbers and information here; and it is very confusing. He stated in looking at it one way, his property has the potential of an increase of 382%, if he looked at it another way, based on square footage, and if Mr. Burton is correct in that each apartment is looked at individually, all of his being less than 1,300 square feet, taxes would go down; and inquired exactly where is it going to be and how will it impact him. Mr. Berry stated he agrees with the question of whether or not it is legal. He noted other municipalities, including Pensacola and Winter Springs, are questioning the legality of a fire assessment and if it is being done fairly and equitably. He commented he has real concerns as to how the fire assessment is being presented, and how it is going to have a negative impact on the ability to provide affordable housing for the residents of Brevard County.
Commissioner Voltz inquired if County Attorney Scott Knox would address the legal issue. Chairman Scarborough stated it would be best if the Board have the written opinion before any discussion; and he would like to continue public comments on the presentation, and then come back to legal questions.
Gabriele Rappeneculer stated she has not seen the figure of $342 that she paid for two years; she lives in a villa which is considered a condo with only three units side by side; and there is a fire department right around the corner. Ms. Rappeneculer stated her unit is only 1,400 square feet, she has had to pay the highest amount for the last two years, and she would like an explanation.
George Theriault stated he read the Report for Citizens on the Internet; the report stated in 2007 Fire and Rescue responded to 1,716 structural fires, 4,298 vehicle fires, and 56,000 ambulance calls; stated in 2001 the was actual count of structure fires was 526, yet the actual count in 2003 was 510, and the actual count in 2003 and 2004 was 504; the projected count for 2007 and 2008 was only 605. Mr. Theriault stated one hotel’s taxable value dropped in 2004 from $364,000 to $333,000; and manufactured trailers pay an average $26 for fire assessment per unit if it is a park with 26 to 50 lots. He stated he owns a commercial piece of property in Micco, which decreased in value; on another commercial property in Micco there was no exemption in 2000; and in 2007, the exemption is $309,180 dollars. Mr. Theriault stated he believes the taxpayers in the County are supplementing most of the businesses. He stated out of three agricultural lands, one has two homes on it with a fire assessment of $210; another piece of land has one home with no fire assessment; and the last piece of land has three homes with a $212 fire assessment.
Marlene Adams inquired who would actually be determining the building value; in today‘s volatile market building materials are sky rocketing and property values are plummeting; inquired what is the building value in such a volatile market and what is it going to be next year, or the year after; and inquired as those values go down is the assessment per-value unit going to keep going up to maintain. She stated she heard accidents were not going to be included in the fire assessment, and that the exempted properties would not be included in the assessment anymore, as they would be funded some other way; and that would make the $25 million being collected go way down; but yet the total to be collected is $27 million. She stated with the two different methodologies of building value and square footage, someone said the fee would be $69 or it would be $133; stated assessments are supposed to be based on the benefit to the property; and inquired how can a benefit be $69 or $133. She stated in her meeting with Mr. Burton, she inquired about the scope of his work and the part of the contract that was the current methodologies as well as the legal defensibility; stated Mr. Burton would not discuss it; and he did discuss it today. She stated she did some investigating into the choosing of Burton and Associates over another consulting firm; stated Mr. Burton has 177 projects, eight had something to do with fires, two were for counties; neither of the counties implemented Mr. Burton’s suggestions; and only two cities with populations under 50,000 have implemented any fire suggestions of Mr. Burton. Ms. Adams advised GSG is all over the State doing assessments; GSG have not been challenged and are not in litigation; stated GSG has had 63 fire studies, with 20 of those for counties; and 49 entities have implemented GSG methodologies. Ms. Adams stated based on the hours Mr. Burton said it would take, and the $150 per-hour lump sum of GSG, it would have been cheaper for GSG; and inquired if the choice was not based on price or experience, what was it based on. Ms. Adams handed the Board information. She noted Attorney Knox sent an email to Attorney Watts on March 13, 2008 stating he received new information unknown to his office about letters being mailed late; and the Board can see in the email that the office did know they were late. She stated on July 21, 2006 Assistant County Attorney Morris Richardson sent an email to Attorney Knox, Assistant County Attorney Christine Lepore, Deputy County Attorney Shannon Wilson, and Legal Office Administrator Marcia Day; stated Notice of Hearing was the subject, and the email stated, “As you know, today is the last day to mail notices in advance of the August 22, 2006 Board meeting”. Ms. Adams then read from the email, “I have contacted Chief Farmer and asked him whether this calculation can be made in time to include the information in the mailing notice that must go out today.” She advised the next page is the excerpt of the minutes of July 25, 2006; Mr. Richardson again said, “The Board can still give direction to staff that the notice go out today so it meets the August 22, 2006 deadline”. Ms. Adams stated that was the drop dead date, but the notices did not go out until July 31st, August 2nd, and August 3rd, and the County Attorney’s office knew it.
Mr. Burton stated the Property Appraiser’s Office determines the building value; and he had an extensive discussion with the gentleman who heads up the whole process and how the property appraiser determines the value. He advised the Property Appraiser’s Office has an exhausted process in which it considers a number of factors including the type of construction; there is a base cost per square feet; stated there are different numbers for single-family and manufactured homes; and adjustments are made off of that cost per-square feet based on a number of factors including the type of construction, age of the home, observed appreciation, and the quality of construction. Mr. Burton stated the variability throughout the County is very low from structure to structure; a structure on one side of the county would only vary as much as $6 per square feet with all other things being equal, so the market is not effecting the analysis very much; and the gentleman from the Property Appraiser’s Office agreed it would be a reasonable representation of the economic loss that would be protected by fire suppression services the County might provide. Mr. Burton stated handling changes is one of the issues needing to be considered; from year to year the Property Appraiser’s Office reassesses building values with the assumption that changes would be proportionate throughout the County because of change in underlying costs of construction; and proportionality would be very similar. He advised Burton & Associates is considering looking at a reasonable determination of likely escalation in property value over the next five years, determining the average property value over a five year period and tagging all properties at that average; changes within that period which are not extraordinary would not effect it; and it would be good for five years; but it would be good to watch it for extraordinary changes that occurred that were different than what Burton & Associates were anticipating. Mr. Burton stated if looking for positives and negatives of the two approaches, one of the negatives of the building value basis would be the potential that the building value would change and it would have to be framed in increments of time; and if the properties change from the lower value to the higher value over the five-year period then they change proportionately, but sharing of cost would not change. He stated with accidents, calls-for-service are associated with service benefit cost pool; only three percent of the costs are allocated in the cost pool; stated although those costs are excluded it is not the lions share of the cost; the lions share of the cost is in the watch-standing benefit and not in the calls for service benefit; the exemptions are excluded and are not being burdened by other properties being assessed; and that would be a policy of the County as to whether it wants to exclude those properties. Mr. Burton stated there is a fairly broad, rough justice standard in terms of the benefit issue; if the benefit is associated with value, then that is one benefit criteria, and homes of certain sizes would be allocated based upon those benefit criteria; but size is another benefit criteria; and it cannot be expected for those to come out exactly the same because they would be expected to have a similar trend. He advised Burton & Associates has been in business for over 20 years; stated the firm mostly works in financial and rate, and cost-of-portion type of work; but Burton & Associates does have a significant amount of experience in fire assessments and also in fire impact fee work, which is a similar type of apportionment issue. He stated Burton & Associates has done a number of fire assessments; three cities actually have implemented fire assessments; stated other municipalities did not implement because when it came down to them assessing what the Board is assessing now, and how it would affect what they wanted to do, they decided to leave it in the ad valorem tax and not bring it over into an assessment; and there was a different set of criteria in each case when those judgments were made. He stated he did not know a single person in Brevard County when he submitted the RFP; and Burton & Associates simply presented its qualifications and proposal. He stated the cost estimate range for GSG was in excess of $150,000; the cost for Burton & Associates is $50,000; stated the GSG methodology would be similar to the square foot methodology from Burton & Associates, except most of the ones GSG put in place are one-size fits-all on the residential side; and he believes the selection process was fair, and Burton & Associates is qualified to do the work.
Buddy Spakes stated he, too, is disgusted; and the Board knows how he feels. He inquired how can a benefit vary depending on what methodology was used; the benefit is the same to the property; but yet there is square footage by one price, valuation by another price, and the benefit to the property is changing; and it is a major blunder. Mr. Spakes stated the taxpayers have $50 million at stake; it is time for the Board to see that and cut its loses and end it now; stated he believes and is convinced that the fire assessment is illegal; and he congratulates any of the Board members seeking to run for County Commission or other office on a massive campaign they have won against themselves.
Alida Hirschfeld stated most seniors live on a fixed income; the fire tax was over and above the regular property taxes and imposed many financial hardships on seniors; seniors were pretty much destroyed with the hurricanes and a lot the homes had to be replaced, which made a triple increase in property taxes because the year of the home and the value of the home was assessed; stated Snug Harbor is a manufactured home community, and that supposedly, manufactured homes burn faster, as per a comment that had been made. She inquired if porches and sheds are being calculated, how is one to figure out square footage. Ms. Hirschfeld stated when looking at Chief Farmer’s budget she noticed a line for two new hook and ladders at a cost of $750,000 each; stated by purchasing one this year and one next year, it would decrease part of the budget; and inquired if the Board has grant writers to look for State or Federal grants to try and lower taxes, so the citizens do not have to endure taxes. She stated the presentation by Burton and Associates shows a decrease in the commercial or residential property on the taxes; that is great for property people but they are making a salary; but those who are retired are not making a salary and are living on a fixed income; and where commercial property has a chance of increasing its value to pay for taxes, retirees do not.
Commissioner Voltz inquired what is the square footage of Ms. Hirschfeld home; with Ms. Hirscheld responding it is approximately 1,700 square feet, without a porch or shed. Commissioner Voltz inquired if Ms. Hirschfeld is paying $212; with Ms. Hirscheld responding yes.
Discussion ensued.
Mr. Burton advised Burton & Associates counts any structure that is protected from loss by fire. Chairman Scarborough inquired if there was a way to exclude the shed. Mr. Burton replied it would be tough on the building value side. Chairman Scarborough stated that there is a substantial difference in having a shed burn down and a bedroom burn down. Mr. Burton stated he would have to look into the matter and report back to the Board. Commissioner Voltz stated many residents in Barefoot Bay and Snug Harbor are required to have carports and sheds. Mr. Burton stated he believes there is a building value calculation on each individual structure, but he will verify that; if there is a home it would be a different calculation than a detached garage or a shed; and the square footage is square footage. Ms. Hirschfeld noted that the sheds are attached to the homes. Mr. Burton advised that Burton & Associates would check on all the calculations.
The Board recessed at 2:15 p.m. and reconvened at 2:25 p.m.
DISCUSSION AND BOARD DIRECTION
Chairman Scarborough stated the Board had a request that the opinion by the County Attorney be reviewed; the Board toyed with various ideas from seeking court opinion, but decided on asking Attorney Allen Watts to review the opinion.
Attorney Knox stated Mr. Allen Watts is an attorney with Cobb & Cole from Deland in Volusia County; stated Attorney Watts was asked to opine on 11 or 12 different issues that have been raised by various people about the legality of the fire assessment; and he has addressed the issues in the 14-page opinion that has been distributed.
Chairman Scarborough advised Attorney Watts the Board and audience has received the 14-page handout, and asked Attorney Watts to describe the questions as well as the answers.
Attorney Allen Watts, speaking by phone, stated he received the report furnished by Attorney Knox containing the significant actions of the Board, including Ordinance 06-45, which is the Ordinance chiefly at issue, and the original Resolution adopted in February 2006, expressing the intent to use the special assessment, or the non ad valorem assessment fire services, in the year 2006, and Resolution 06-236A, adopting the rate schedule, which was adopted on September 12, 2006; and those three actions consist of everything that was ostensibly necessary to finance the fire services through use of an MSBU (Municipal Service Benefit Unit) in the 2006-2007 fiscal year. Attorney Watts stated he reviewed the two opinions Attorney Knox rendered on February 8 and February 21; he reviewed a number of email exchanges between Ms. Adams and various County officers; stated at Chairman Scarborough’s suggestion he visited with Ms. Adams in early March and received additional questions from her by email; and he has attempted to relate the questions in the report given to Attorney Knox. Attorney Watts stated the first question was whether the Charter, specifically Section 5.4.1, which states, “Requires the approval by referendum before the County Commission may impose a fire services non ad valorem assessment using an MSBU”, and he concluded the answer to be no, a referendum was not required. He stated the charter amendment that created Section 5.4.1 specifically excludes MSBU’s from the requirement that new non ad valorem assessments be submitted to the vote of the electors; it appears there is some confusion stemming from the fact the MSBU’s are used in the charter and in other ordinances in the County to mean different things and different settings; and the term he used in his analysis is the same definition that is used by the Florida Legislature in section 125.01(q) of the Florida Statues. Attorney Watts stated he went into detail in his report explaining how that section came to exist in the statues; some people have been around long enough to remember the dual taxation debates between the cities and the county that lead up to a provision being placed in the 1968 Constitution that said where a county government is providing a municipal-type service exclusively in the unincorporated area, and where the city governments are perfectly capable of providing that service to their own residents, with their own taxes, city residents could not be required to also pay to a general fund that would fund those services exclusively for the people in the unincorporated area; and the legislature created the concept of MSTU (Municipal Service Taxing Unit) and also threw in the MSBU as a way of confining the revenue base to the same people who were going to benefit from the appropriation of the revenues. He stated when doing non ad valorem assessments to be provided exclusively in the unincorporated area and in cities, or parts of cities, that may request it, taxes or assessments do not get imposed on the rest of the of the municipal properties of the County; legislature has provided for that kind of non ad valorem assessment for the MSBU’s to be adopted on a schedule that is roughly parallel with the budget process for setting millages for ad valorem levies for the General Fund, and other special millages that may be authorized in the County; and the Board will receive the preliminary tax roll from the Property Appraiser on or about the end of June. He noted there is a required statutory notice which states the first time a non ad valorem assessment is to be imposed, it must be mailed 20 days before a public hearing, and the Board then adopt the non ad valorem assessment no later than September 15th; stated usually that kind of hearing coincides with trim hearings and the fixing of the final millage rates in the budget process for the fiscal year to kick off on October 1st; and he concludes it would be difficult but not impossible to accommodate a referendum somewhere in that schedule. He stated it appeared to him it would be difficult to receive the data on June 1st from the Property Appraiser. He noted it would be difficult to receive data on June 1st from the property appraiser and to get in position to adopt a roll, which can be done before September 15th but no later, then submit it to a referendum, get the answer back from the people, and still find the revenues to provide the services; and by that time the budget has to be adopted for the fiscal year. He stated as a practical matter it did not appear it was feasible to have that kind of referendum on a statutory MSBU between the dates in June and September when the Board is adopting its budget, having the hearings of adopting the assessment roll, and then having a referendum, and dealing with the consequences of a potential disaffirmation from the people of that assessment; the case law from Ellis vs. Burke, then emanated from Brevard County, and also a case involving Charlotte County Charter; and there is a similar case in Marion County that dealt with a non-charter situation. He stated the budget process is going to be handled by the Board of County Commissioners and it can not escape that duty; that is what the court held in the Charlotte County case and the Fifth District Court of Appeals followed suit in the Ellis vs. Burke case; stated it is something elected officials would like to avoid because it is painful to set millage and to set assessments; but what the courts held in those two cases was that it was an inescapable duty of the Board to go through the budget process and the process of setting taxes, and adopting the budget. Attorney Watts stated conceding that in the case of a non ad valorem assessment, it is not a true tax in the sense of a tax on value; a lot of people say it hurts as much as a tax and should be carefully considered; but the courts have held that it must be addressed and not passed off to the people in referendum; and he heard that the same holding would apply to a non ad valorem assessment. Attorney Watts stated he concluded the drafters of section 5.4.1 did apparently understand those issues when they specifically excluded from the force of 5.4.1 the requirement that there be a referendum; and the confusion has arisen because other places in the County Code used the term Municipal Service Benefit Unit to describe special assessments which are not of the kind that are being talked about here, but the kind that are described in Chapter 125 of the general statutes. Attorney Watts stated the second question conveyed to him was if the Board of County Commissioners are required to use Code Sections 9836 through 9841 in the Code of Ordinances to establish the fire services MSBU, or could it do so with a self-contained ordinance, such as Ordinance 06-45; and he concluded that Sections 9836 through 9841 are applicable only to one-time assessments for capital projects. Attorney Watts stated a true special assessment is a way in which the government can recoup for the public benefit what is otherwise a windfall to a few people when the County goes out and builds a new public improvement that is said to confer a general benefit through the improvement of public safety and welfare and health throughout the community; the original special assessments were a way for the government to go out and recoup that extra unique benefit that went to the properties that directly faced a public improvement; It was an exception to the general rule that government cannot go around putting liens on people’s homesteads; the constitution does provide that liens for assessments may be imposed against homestead property; and the court has evolved the theory that the only kind of a lawful special assessment was one that is to recover the cost of a capital improvement to the extent that it conferred an extraordinary benefit.
Attorney Watts stated there is a case in Brevard County called Hannah vs. The City of Palm Bay; as local governments have received a number of mandates from the State but have not received a lot of additional revenue sources to pay for them, the courts have been somewhat more tolerant and the legislature has also been more tolerant of developing revenue streams that are not strictly speaking taxes; and in most cases they can be thought of as user fees or service fees that in many cases can be contracted privately, but there are economies of scales obtained by having the public body provide those services. He stated there was a time in recent history where private fire departments put together by insurance companies provided fire services within communities; stated in Charleston there are still plaques on the houses that were put there by private insurance companies to show the fire company where it could and could not stop to put out a fire; and the situation is that fire assessment has to be paid for somehow and the legislature has specifically recognized in that section of Statute that deals with MSBU, that an MSBU may be imposed for fire services. He stated going back into Sections 9836 through 9841 and looking for what it is supposed to apply to, it looks like it applies only to improvements within the public right-of-way, or within utility right-of-way, as a one-shot capital improvement; stated that is not the kind of MSBU’s the statues talk about when stating they can be set up as a recurring part of a budget for fire services, or solid waste or stormwater protection; and those are recurring charges, and not the kind of special assessment that comes from doing a one-shot capital improvement project, which confers a value on some lots more than the general benefits of community. He stated when the term MSBU is used in Chapter 9836 through 9841 it is really a misuse of the term MSBU; stated he included in his report that it would be less confusing to the public if the reference was removed in Sections 9836 through 9841 to MSBU; stated what that Code section is being used for is not what the legislature thinks of as an MSBU; and the legislature thinks of an MSBU as a recurring charge which it allows to be collected through the non ad valorem assessment methodology using the offices of Property Appraiser and Tax Collector, and it is not truly a capital improvement as referred to in Section 9836 through 9841. He stated those two questions are the heart of his report as far as why it needs to be done that way; the courts have relaxed somewhat their scrutiny of assessments and what used to be thought of as only assessable by special assessment in the case of capital improvements; and the courts now allow service fees to be collected by that methodology. Attorney Watts advised the courts understand the constraints under which local governments are operating; with respect to utility impact fees, the courts took what used to be a tax and said no, it is not a tax, it is a user fee and understanding the constraints that government is under the courts declared they can be collected by these methods even though they are involuntary; and the court held to similar effect as to storm water utility fees in Port St. Lucie. He stated there still is some rigor maintained in whether or not a particular service can be assessed with the methodology; in a case out of North Fort Lauderdale it was held that there can be linkage in value to property between fire services and property protection; and it could also go as far as a fireman providing first response medical treatment because they are doing something while they are on duty waiting for a fire. He advised the court in that case struck a line between first response medical treatment by firemen and emergency medical transport by ambulances; stated the conclusion to the question is that the fire assessment imposed by Ordinance 06-45 authorizes fire service charge, which is specifically authorized for MSBU under the general statutes and Section 9836; and if it applied it was optional and did not preclude assessments under other authority. He commented on a case called Boca Raton vs. State, which held a city or a home rule body, such as a charter county, can use any lawful method, and they do not have to stick to methods prescribed by state law or particular kinds of ordinances that are in Section 9836.
Discussion ensued
Attorney Watts read aloud question three, “What effect, if any, did the failure to Ordinance 06-09 have upon your ability to enact the fire services MSBU in August through Ordinance 06-45”; stated there is no effect and since the Code Section 9836 through 9841 do not limit the Board’s ability to adopt the fire services MSBU, then the attempt to amend those sections was unnecessary. Attorney Watts read aloud question four, “Do Code Sections 24856 through 69 or Board Policy 53, preclude the use of Ordinance 06-45 to establish the fire services MSBU”; stated the section in Chapter 248 are hanging around from a special act of the legislature which was adopted in 1959, and now shown as an Ordinance under the County code. He stated there is some overlap between Chapter 248 and Chapter 98 and some minor conflicts; for example, Code Sections in Chapter 248 say that to set off one of the special assessment districts, which Chapter 98 calls an MSBU, one has to have a petition from two-thirds; Chapter 248 states that two-thirds of the value of specially benefited property; and Chapter 98 incorporates Board Policy 53 which states two-thirds of number of benefited owners, irrespective of what proportion of the value those petitioners may represent. Attorney Watts advised Code Sections in Chapter 98 and Board Policy 53 again uses terminology MSBU for a kind of charge that is not really an MSBU-type charge; it is a special assessment in the classical sense of a special assessment and recommended that language should be cleaned up so the public does not get confused or misled about the distinction between the service charges on a recurring basis that the legislature not only allows the Board to collect with MSBU, but requires it to collect in a way to avoid double taxation. Attorney Watts stated Ms. Adams’ question was, “Can an MSBU specifically for fire services be created in Brevard County without regard to charter provisions 5.4.1, or without regard for any other local ordinances or Board policy that have other requirements, such as the Road and Bridge Department be solely in charged of the creation MSBU.” Attorney Watts advised Ms. Adams’ question is an example of why there is confusion when the term MSBU is used to describe two different things; stated in the Charter provision when it excludes MSBU’s it is talking about the MSBU’s as the legislature intended them, which is the recurring annual service charge for things like fire, garbage, and stormwater; and the Road and Bridge policy is talking about what happens when not everybody wants a particular improvement but one neighborhood wants it, and they come to the County and ask to be assessed for the pavement of the road, or the establishment of a water line. Attorney Watts stated Ms. Adams asked, “Can a non ad valorem special assessment for fire protection services be purposely named an MSBU to circumvent our charter requiring a vote of the people at an election?” Attorney Watts responded it is the only kind of assessment that should purposely be named an MSBU; assessments for Road and Bridge, which are done by petition of two-thirds of the owners are not true MSBU; and MSBU’s are what the legislature refers to for the recurring service charges. Attorney Watts read aloud the sixth question from Ms. Adams, “Was the notice of the August 22 public hearing to consider imposition and setting of the rate of non ad valorem assessments legally insufficient?” Attorney Watts responded he does not have enough facts to tell whether there is a problem or not, because a complete failure to send notices is what happened in Port St. Lucie; and the court held that it made the assessments void; stated he did not understand from Ms. Adams that that is what she was asserting; and Ms. Adams asserted to him that some of the notices, or most of the notices, where untimely received. He stated the statute in Chapter 197 requires they be sent 20 days before the hearing, and they were dated July 27; stated the received date does not matter, but it does matter if some of them were actually mailed less than the required 20 days in advance; and that it is not necessarily fatal for a number of reasons, if found to be true. He stated certainly the assessments would be valid as to all those property owners whose notices were timely mailed; and it otherwise appears that in terms of a regular ordinance, the requirements for setting up the non ad valorem assessment for fire services are met in the adoption of Ordinance 06-45. He stated Ms. Adams advised him the special requirements under Chapter 197 for a non ad valorem assessment were not met as to some persons; if that is the case, then those who can actually prove the late mailing of their notices, and who have not paid their assessments, or who have paid them under protest could argue they are entitled to a refund; however, there is a provision in Chapter 125, Section 125.66 that was added just a few years ago stating where there has been substantial compliance with the requirements of notice that the standing of any person to initiate a challenge is limited to persons who where entitled to notice and did not receive it, and that the defenses of latches, or waiver are available; and the courts have sometimes, but not always, been forgiving. He stated the City of Deltona was chartered, the notice of the election was not properly published prior to the approval of the charter, and there was a voter who challenged it; stated the court rejected the challenge ultimately on the ground that there was sufficient notice of the charter to put interested persons on inquiry and on the grounds that it was a defect that could have be waived by the legislature because the legislature created the City and did not have to require a referendum in the first place; and there are two other cases in Treasure Island and in Punta Gorda where the courts found the constitutional rights of individual property owners who were subject to special assessments could be waived by their silence and acceptance of benefits or failure to timely assert the absence of any benefits. He stated while there is no definitive answer to the question that Ms. Adams raises, the County would have some defenses if there were any challenge to the late notice; stated he does not know what a court would do, because if Ms. Adams’ statements are accurate there is not a case exactly on the point; but it would not be fatal as to all the persons who did receive notice on time. He read aloud another question from Ms. Adams, “Was the public hearing held on February 7th for Ordinance 06-09 advertised?” Attorney Watts stated that Ordinance is of no legal significance and it is a factual question that Ms. Adams needs to ask the Clerk to the Board to give her an answer. He stated the question is if that Ordinance were not advertised, is the amendment to the ordinance invalid; the minimum requirements for the adoption of ordinances, which were in effect in February 2006, requires 10 days of advance notice of intent to consider an ordinance, unless it is an emergency, in which case four-fifths of the Board may find an emergency exists and waive the requirements of advance publication; a zoning change cannot be adopted by emergency ordinance; and although there are some ordinances that require two advertised public hearings, that was not one of them. He stated he reported to Ms. Adams that an ordinance may be immune from challenge for failure to comply strictly with the notice requirements after the passage of five years from when it is adopted; stated Ms. Adams inquired if there were supposed to be two public hearings; and he advised unless a zoning change is involved, only one public hearing is required before the adoption of non emergency ordinance. He stated Ms. Adams inquired why ordinance 2006-09 in not on the Clerk’s website; and he reported that is a factual question best answered by the Clerk. He stated Ms. Adams inquired why are churches exempt; and he reported to her the decision as to which properties are to be included or excluded is a discretionary decision of the governing body, and that if an equal protection challenge were mounted, such a challenge would receive minimal scrutiny from the courts under the case law, under the equal protection clause of the fourteenth amendment to the U.S. Constitution. He stated he reported to Ms. Adams that ordinarily, unless the owner of the property that is subject to an assessment of greater than its own share, the owner does not have standing to challenge the exemption of somebody else; his recommendations to cities and counties that want to give exemptions for churches, or low income housing, is that those exemptions have to be bought from otherwise unrestricted funds, because one groups failure cannot be allowed to pay their fair share to drive up the fair share of others; and the others are only responsible for their own shares, as they do not have to pick up the shares of churches, or low income property. Attorney Watts stated he gave some of the case law that deals with the exemptions, pointing out that in the original Ordinance 06-45 there is not a direct exemption of low income household; but there is an exemption for Housing Authority properties. He stated the question of the immunity of government property for these kind of service charges is one that he fought on behalf of the Stormwater Association and the City of Gainesville against the Department of Transportation; stormwater fees were being opposed against a maintenance yard of DOT in the City of Gainesville; and DOT maintained it was immune, and the court ultimately held that it was a valid service charge, but since it was being collected as an assessment the department was immune from assessments. He stated in the case of the City of Cocoa vs. Brevard County School Board, the District Court said it was not sure the fees were just ordinary utilities fees or true special assessments from which a governmental body is immune; and it was sent back to the lower court, and eventually the school board and the city worked it out. Attorney Watts stated Ms. Adams inquired how long is the municipal service taxing unit in existence; stated he assumes Ms. Adams means the MSTU that was established after the straw vote in 1997 for the additional millage of six-tenths of a mill; there is a provision in the revenue statutes, section 200.091 that authorizes an additional millage for specific purposes for two years, but only if at the millage cap; and the millage cap is ten mills, whether a city, or levying municipal services as a county. He stated the Statute Ms. Adams inquired about only kicks in so that the people can temporarily go above ten mills, and they were not doing so in this case; the MSTU can theoretically go forever; and the referendum on increasing the millage was not a required for the purposes of section 200.09. He stated Ms. Adams inquired if the proceeds of the fire MSTU be used for other purposes; stated his response was having been collected on MSTU basis to pay for services solely benefiting properties in the unincorporated area, they must continue subject to that restriction; and if used in any way other than for benefiting properties in the unincorporated area, it would convert them from municipal service taxes to County taxes, and it would violate the provision in Article 7, Section 2, of the constitution that requires the general tax fund levy to be uniform throughout the county. He stated Ms. Adams inquired whether the difference in assessment rate and hazard code assignment between mobile home parks and mobile home lots is justifiable; and he reported it is not a question within his scope of responsibility, nor would it ordinarily be subject to a judges opinion. He stated the legal standard from the Sarasota decision of the Supreme Court states, “The legislative determination as to the existence of special benefits and as to the apportionment of the cost of those benefits, the determine nation by the Board of County Commission, should be upheld unless the determination is arbitrary”; and it is not his job to decide that, or to give an opinion. Attorney Watts stated the next question from Ms. Adams was referred to him in an email dated April 7th, “Is section 5.4.1 of the Brevard County Charter a special law within the meaning of Article 8, Section 1G of the constitution.” He stated the answer is “no”, a special law means a law passed by the legislature; it is special in the sense it does not apply to the whole State but only to a portion of the State; and a County charter or charter amendment may be proposed by a special law. He stated in Pinellas County there was a specific amendment to the charter that was proposed by the legislature; looking under Article 8 of the constitution as to how to get a County charter, a County charter may be proposed either under the authority of general law, which is the way is was done when putting together the Brevard County Charter, or by proposal in special law which was the case in Pinellas County and Volusia County; and in any case, a charter amendment, whether proposed by the legislature or by the people, must always be approved by the people in a referendum. He stated he pointed out to Ms. Adams if Section 5.4.1 had been proposed by the legislature, it would have potentially raised some questions of constitutionality because it is a proposal the legislature itself might be prevented from proposing.
Commissioner Voltz inquired if the low income exemption is found to be illegal, how can the Board do the senior exemption; with Attorney Watts responding he did not necessarily agree with the Attorney General’s opinion; the exemptions for low income housing really amount to a appropriation to low income housing to help it pay its fire assessment; the question is, would it be lawful for the County to appropriate assistance for people in low income housing. He stated the County has programs that do that everyday; and in some cases they are federally funded or revenue sharing funded. Commissioner Voltz thanked Attorney Watts for the information he provided to the Board; Attorney Watts responded that he hopes it gave some comfort to all sides of the debate that there are some good reasons why the fire assessment can be found to be necessary, the wisdom of it is up to the Board, but he wanted the people that were concerned about it to understand there is a basis for what was done that is consistent with the law and the intent of the law.
Commissioner Colon stated Ms. Adams had really good questions that she believes everyone had concerns about and wanted answers to; and she had hoped Ms. Adams would be present during Attorney Watts’ report. Commissioner Voltz inquired whether Ms. Adams got copy of the report; with Attorney Knox responding yes. Attorney Watts advised he has met with Ms. Adams before and would do so again to go over additional concerns or questions. Chairman Scarborough stated that would be beneficial as Ms. Adams has put a lot of time into the fire assessment.
Commissioner Voltz stated the Board has done its job when citizens come and ask many questions and challenge what the Board has done; the Board has done exactly what it should have done and that is to ask for a second opinion; and it is important for the entire community to know this because there have been many questions throughout the community about whether or not the fire assessment is legal.
Chairman Scarborough stated there were two questions the Board was struggling with; the Board felt there was something fundamentally wrong that was occurring, and that was that it moved to those persons who had less invested in their homes paying just as much as someone who had more; and there were people with $1 million homes having a reduction, and people who had minimal amounts in their homes not having a reduction. Chairman Scarborough stated in looking retrospectively at notice issues, the question is if the Board had the right interpretations of statutes, and to some extent, some of the legal questions are much more difficult, and it would be good for Ms. Adams to go back and meet with Attorney Watts. Chairman Scarborough inquired if Mr. Burton needs further instruction from the Board on how it would like to proceed; for instance, should the Board today make a determination on whether it wants to proceed with the square foot or the value, or is that something Burton & Associates would like to proceed with both courses and come back with further information.
Mr. Burton responded Burton & Associates is prepared to proceed with both and bring it back to the Board.
Chairman Scarborough stated the Board would like to see some bullets as to pros and cons to each of them, because there seemed to be problems particularly with the idea the square footage and sheds.
Commission Voltz stated homes are measured being under air; but carports and shed are not under air; and it needs to be looked at. She stated condos with separate garages were being billed twice; and that needs to be looked at also.
Mr. Burton stated a garage would be a separate parcel, and that parcel would get a separate bill on the size or value of the garage.
Chairman Scarborough stated that these are reasons why the Board needs to pursue both courses; and it would be acceptable to have a meeting with the people and for Mr. Burton to be present for a roundtable discussion, without the Commissioners present.
Fire Chief William Farmer informed Chairman Scarborough that a meeting has already been scheduled.
Commissioner Colon stated it is very important every time is subject comes up that there needs to be some history for people who are just tuning in, and do not understand how did this get this far; and it is important for County Manager Peggy Busacca and for County Attorney Scott Knox to gives the Board a glimpse of what has happened.
Ms. Busacca responded prior to 2005 the Fire Department was funded through an ad valorem tax, and the Emergency Medical Services was funded through a special assessment. She stated Brevard County was sued by Palm Bay about the legality of the EMS special assessment; prior to the actual decision by the court, the County staff came to the Board and said, “We are concerned, we are in court. In the event that special assessment would be found not to be legal we would not have a way to fund the Fire Department”; and the reason there was not a way to fund the Fire Department is because in 1974, Brevard County and its municipalities had a special act adopted by the legislature which limits the amount of revenue the County can generate in any given year, which was 10%. She stated there was no way to put the additional money for the EMS assessment into the ad valorem revenues and still meet the 10% cap; in order to do the funding of both Fire Service and Emergency Medical Services the County was required to remove some amount of money from the ad valorem revenues and replace it with an assessment; and that is how the fire assessment was created. She stated the fire assessment was intended to be neutral to the point where the amount of money that was generated from the fire assessment was equal to the amount of money that had been generated by the ad valorem fire millage.
Commissioner Colon stated a lot of things that are being heard in the news in regards to special assessments, and inquired if Chief Farmer had any knowledge of it.
Chief Farmer responded the City of Cocoa has gone to an assessment; a lot of other cities are looking at assessments, unlike the County, which was not looking at it because any of the property tax reform that has been going on, but because of the law suit; and some of the cities now have either adopted or are looking to adopt assessments in place of property tax. He advised Satellite Beach is softly looking at possibly doing it, along with Titusville, Melbourne and several other cities.
Commissioner Colon inquired if Attorney Knox knows of any more municipalities, similar to the Board’s situation; with Attorney Knox responding no; stated he called Casselberry and its situation is to simply adopt a fire assessment similar to what Chief Farmer was just describing, but it did not go though; there are a couple of cities in Orange County that have gone to assessments or are trying to go to assessments; and he assumes it is for the reasons the tax caps have created.
Commissioner Nelson stated the 10% can exceed by referendum, but timing became an issue related to referendum. Ms. Busacca responded yes, because the question is, for the referendum, shall the budget be adopted; that means that the Board would have to go through the process, approve a budget and then go to the voters; and in the event the votes said, “no”, she did not know how fire was going to be funded.
Chairman Scarborough stated it has been such a struggle because essentially the people that are best able to pay with the larger homes got the break and the people who were in the more limited incomes had a greater burden; and hopefully what the Board is doing here with Mr. Burton will answer some of those questions. He inquired when is the next workshop scheduled; with Ms. Busacca responding May 8, 2008 at 1:00 p.m.; and in between, Chief Farmer will have a meeting with the public. Chairman Scarborough inquired if the public is aware of the date; with Chief Farmer responding it will go out as a public advertisement. Chairman Scarborough inquired if the date was available now; with Chief Farmer responding he would check.
Ms. Busacca stated the Board reduced previous fire MSTU to the amount that was going to be offset by the assessment; and the MSTU is now equal to the millage that had been approved by referendum, plus an amount, which last year was $300,000 to offset the cost of wild land fires the year before. Commissioner Colon inquired if a citizen is looking at a tax bill, where will they be able to see the difference, and how are they able to see it; with Ms. Busacca responding to take the bill, perhaps the 2004 bill, and look at what would be the fire MSTU and see that it be two point something mills, and look at that value; one could see how that was offset if; and on a 2006 bill it was a much smaller amount, and that fire assessment was $212, and previous EMS assessment had been about $54. She stated there were a few things that moved around, but what one would see increase from assessment $54 to $212 in some cases, in other cases it would be higher and the MSTU would have gone down based on the ad valorem.
Commissioner Voltz stated the Board was told it was going to be revenue neutral, but it ended up not be revenue neutral for the citizens, only for the County. Chief Farmer stated it was actually revenue negative to the department; it would have gotten $4 million or $6 million more if it would have 2.2035 in the MSTU, taking the combination of the assessment and the $.6 million that it kept, it would have made more money 2.2035; but it is correct that it was not revenue neutral to specific persons.
Chairman Scarborough inquired to Chief Farmer as to a date for the public meeting; with Chief Farmer responding May 1, 2008 at 6:30 p.m. in the Florida Room.
Upon motion and vote, the meeting adjourned at 3:35 p.m.
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TRUMAN SCARBOROUGH, CHAIRMAN
BOARD OF COUNTY COMMISSIONERS
ATTEST: BREVARD COUNTY, FLORIDA
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SCOTT ELLIS, CLERK
(S E A L)