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Funding the Kent Fire Department RFA Compliance with RCW 52.26.240 Using Taxes and Fire Benefit Charge October 3, 2012RCW 52.26.230 Compliance Hearing1.

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Presentation on theme: "Funding the Kent Fire Department RFA Compliance with RCW 52.26.240 Using Taxes and Fire Benefit Charge October 3, 2012RCW 52.26.230 Compliance Hearing1."— Presentation transcript:

1 Funding the Kent Fire Department RFA Compliance with RCW 52.26.240 Using Taxes and Fire Benefit Charge October 3, 2012RCW 52.26.230 Compliance Hearing1

2 Kent Fire Authority FBC Funding System $1.50 Tax $1.00 Tax Levy FBC Assessment (Size, Use & Risk) Total Annual Fire Assessments October 3, 2012 RCW 52.26.230 Compliance Hearing2

3 Assessed Value Source for Levy October 3, 2012RCW 52.26.230 Compliance Hearing3

4 FBC Data source October 3, 2012 RCW 52.26.230 Compliance Hearing4 Structure Size Use & Value

5 FBC Basics Benefit charge capped: – Cannot exceed 60% of Operating budget 2012 Fire Benefit Charge was: – 39% of the Preliminary Operating Budget October 3, 2012 RCW 52.26.230 Compliance Hearing5

6 FBC Exemptions Facilities used for religious worship or education – 100% exemption Low income Seniors and Disabled – Same as tax exemptions (up to 75%) Annual household income of $35,000 or less Retired because of physical disability and have an income of $40,000 or less Must qualify through King County 206-205-5759 Agricultural uses – 75% exemption for those structures for the growing of crops/livestock Vacant Land and structures less than 400 sq ft. October 19th 2011RCW 52.26.230 Compliance Hearing6

7 Determining Annual FBC Amount Calculated by: – Determining Expenses – Subtract revenue sources other than FBC – Balance equals FBC revenue needed – Add 1% for King County October 3, 2012RCW 52.26.230 Compliance Hearing7

8 Apportionment of FBC RCW 52.26.180 Benefit charges. – (2) A benefit charge imposed must be reasonably proportioned to the measurable benefits to property resulting from the services afforded by the authority. October 3, 2012RCW 52.26.230 Compliance Hearing8

9 Apportionment of FBC Categories Used to Apportion – Size of structure As determined by King County Assessor – Category of structure One and two family residential Mobile homes Multi-family homes Commercial buildings – Response size needed Firefighters needed – Risk of structure Hazardous materials or uses – Discounts Built in protection and alerting FORMULA = – Square Root of Area X 18 X Category x Response x Risk x Discount October 19th 2011 9

10 Fire Ratings and Insurance Costs League of Minnesota Cities 2010 Ratings & Effect on InsuranceFire Service Savings Homes in Kent Fire service area – 35,355 Value of rating to homes – $1,072 – $670 = $402 – $402 x 35,355 = $14,212,710 10 Kent= Fire Class 3 Covington= Fire Class 4/3 October 3, 2012RCW 52.26.230 Compliance Hearing

11 11 Total Fire Insurance Savings Based Upon Kent Fire Department Fire Rating Homes $14,005,278 Apartments $5,865,180 Commercial $2,866,789 Total$22,740,247 October 3, 2012RCW 52.26.230 Compliance Hearing

12 Value of Benefit of Fire Department Direct Fire Insurance Benefit $22,740,247 Estimated EMS Benefit$12,000,000 Fire Prevention $Value Added Fire Investigations $Value Added Public Education $Value Added Accredited Agency Status $Value Added Cares Program $Value Added Emergency/Disaster Services $Value Added Technical Rescue Services $Value Added Property & Life loss without FD $Value Added Estimated Benefit$34,740,247 Plus October 3, 2012 RCW 52.26.230 Compliance Hearing12

13 Value of Benefit of Fire Department Total Estimated Value of Benefit exceeds: $34,000,000 Benefit exceeds cost of FBC by: $19,000,000 Benefit covers 97% total 2011 Budget October 3, 2012 RCW 52.26.230 Compliance Hearing 13

14 Establishing the FBC FBC Considerations – Levy Revenues – Other Revenues – Capital Needs from Levy Revenues – Percentage of FBC to Operating Budget – Effect on taxpayer October 3, 2012RCW 52.26.230 Compliance Hearing14

15 Levy Revenue Trend 2011 Tax from A/V $15,515,718.00 2012 Tax from A/V $14,759,990 October 3, 2012 RCW 52.26.230 Compliance Hearing 15 2013 Tax from A/V $13,943,050

16 Levy Revenue Trend 2011 Tax from A/V$15,515,718.00 2012 Tax from A/V$14,759,990.00 2013 Tax from A/V$13,943,050.00 Revenue 2011-2013 -($1,572,668.00) Overall Decrease of 11% from 2011 October 3, 2012RCW 52.26.230 Compliance Hearing16

17 Other Revenue Trend Budget Year Other Revenue District 37 Revenue Valley Med RevenueSafer Revenue Total Other Revenue 2011$6,971,551$1,847,353$575,000$206,000$4,549,198 2012$5,692,047$100,000$630,000$80,000$4,882,047 2013$5,834,075$0$550,000$400,000$4,884,075 $1,947,353.00$1,755,000$686,000 Plus 7.4% Total non-sustainable revenue$4,388,353.00 3 year Average$1,462,784.33 October 3, 2012RCW 52.26.230 Compliance Hearing17

18 Capital Trends Preliminary proposal includes $512,000. Current focus only on life cycle replacement of equipment. No dedicated capital to accommodate future growth. – Mitigation Fees cover minimal capital $150,000 collected last 3 years October 3, 2012RCW 52.26.230 Compliance Hearing18

19 FBC Revenue Trend Budget Year Taxes AssessedFBC Assessed Total Taxpayer Assessment Tax Payer Change Purchasing Power Purchase Power Loss 2011$15,515,718$12,311,981$27,827,6990.000%$27,827,699$0 2012$14,759,990$13,050,702$27,810,692-0.061%$26,778,915$1,048,784 2013$13,943,050$14,617,197$28,560,2472.632%$26,178,322$1,649,377 October 3, 2012RCW 52.26.230 Compliance Hearing19

20 Proposed FBC October 3, 2012RCW 52.26.230 Compliance Hearing20 2013 Operating Expenses $34,432,962 Proposed Capital$512,000 Total Revenue Request$34,944,962 Less 98% levy revenue-$13,464,156 Less 98% New Construction-$62,870 Less other revenue-$5,834,075 Less vacant positions-$420,000 Less 2012 carry over-$839,000 FBC Revenue Needed$14,324,861 Collection Shortfall $292,336 2013 FBC Revenue Request $14,617,197

21 FBC Basics Benefit charge capped: – Cannot exceed 60% of Operating budget 2013 Fire Benefit Charge is: – 42% of the Preliminary Operating Budget October 3, 2012 RCW 52.26.230 Compliance Hearing21

22 Ratio of FBC by Property Type Residential (>35,000 properties) = 65% – Single Family Homes= 53% – Multi-Family= 12% Commercial (1353 properties) = 35% Total Apportioned = 100% – 2011:60% Res, 40% Com – 2012:63% Res, 37% Com October 3, 2012 RCW 52.26.230 Compliance Hearing22

23 Effect of Current FBC Calculations 23October 3, 2012RCW 52.26.230 Compliance Hearing

24 Residential Comparables Tax + FBC Home Size2011 Fire Cost 2012 Fire Cost2013 Fire CostCPI Comp @8.6% 1,330$291$280$282-11.8% 2,070$376$366$376-8.6% 3,066$503$500$513-6.3% 3,988$655$664$690-3.6% 6,350$966$1003$1025-2.8% October 3, 2012RCW 52.26.230 Compliance Hearing24

25 Commercial Comparables Tax + FBC Square Feet 201120122013CPI Comp @8.6% 365,040$45,807$42,038$43,922-12.9% 135,300$18,559$19,310$20,421+1.4% 55,800$10,674$10,839$11,228-3.4% 18,220$2,330$2,377$2,602+3.1% 6,456$2,158$2,123$2,163-6.6% 2,265$658$682.19$702-2.0% October 3, 2012RCW 52.26.230 Compliance Hearing25

26 Apartment Comparables Sq. Feet201120122013CPI Comp @8.6% +/- Per Unit per month 7,984$1,417$1,441$1,515-1.7%8/$0.77 28,980$5,213$5,473$5,760+1.8%24/$1.00 90,539$20,578$21,073$22,123-1.1%96/$0.91 167,422$32,801$35,858$37,593+6%175/$0.83 257,634$55,483$58,204$66,243+10.8%300/$2.23 381,722$73,387$74,373$84,317+4.4%337/$2.70 October 3, 2012RCW 52.26.230 Compliance Hearing26

27 Questions October 3, 2012RCW 52.26.230 Compliance Hearing27


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