Martin County Taxpayer’s Association Review of Martin County’s Special Assessment for Fire Services

 

The mission of the Martin County Taxpayer’s Association (MCTA):

“To monitor and review all fiscal and tax matters affecting Martin County. To engage public officials, community leaders and private sector organizations who may influence the economy and efficiency of the County of Martin, the School District, municipalities and other taxing authorities in the matter of taxes and the financial resources of the County.”

In accordance with this mission a review was undertaken by the MCTA of the Martin County’s Special Assessment for Fire Services (Fire Fee.)

For some time now, the City of Stuart has had a Fire Fee to help pay for providing fire service. Many Florida local governments, including Broward County, have also instituted Fire Fees. The Florida Legislature, under constitutionally protected “Home Rule Authority,” has authorized local governments to charge several special assessments and fees. The specific authority is granted to county governments under Chapter 125 of the Florida Statutes.

There was a study performed by Government Services Group, Inc. (GSG) for Martin County. The study presented several scenarios as to how a Fire Fee could be implemented. It is important to know that the methodology to determine the Fire Fee needs to conform to statute and legal requirements. MCTA assumes that the methodology being used to determine the Fire Fee by Martin County meets all legal requirements.

Martin County Board of County Commissioners (BOCC) voted to institute the Fire Fee on July 24. The BOCC adopted the Fire Fee by using one of the choices that was outlined in the GSG study. The rationale in doing so, according to their literature, “is to have a dedicated, equitable and stable funding source to pay for fire protection and prevention services benefiting property in Marin County.” The BOCC contends that their present source for funding of fire services is unstable since it relies solely on ad valorem taxes.

To quote the county’s educational handout:

  • Property values fluctuate over time, resulting in an unpredictable funding stream.
  • Properties are taxed based on assessed value. This means the tax collected for one property may be different when compared to properties of a similar type.
  • Florida Constitutional Amendments are passed from time to time which increase property tax exemptions. Each property tax exemption reduces the county’s ad valorem revenue which funds fire services.
  • If the proposed Florida Constitutional Amendment 1, the Homestead Exemption increase, passes in November, staff anticipates a decrease of $2 million in ad valorem funding from the Fire Rescue MSTU (Municipal Service Taxing Unit). With an operating budget of $2.45 million, this loss in revenue would have a substantial negative impact on the Fire Rescue MSTU operating budget.

The Fire Fee will charge different amounts for several property classifications. Regardless of size or value, residential units will be billed a flat rate per dwelling of $151. Nonresidential properties have three different categories. Commercial properties will have a rate of $0.32 per square foot. Industrial/warehouse will have a rate of $0.05 per square foot and institutional properties a rate of $0.24 per square foot.

Churches and not-for-profit organizations will be exempt from the Fire Fee. The BOCC has created an economic hardship program to assist homesteaded property owners who meet the requirements yet undetermined.

Fire protection is currently funded using the Fire MSTU. That MSTU not only funds the fire portion but also the medical/transport section of the Fire/Rescue Department. By statute the ambulance transport and emergency medical services cannot be funded through the Fire Fee. Therefore the “Fire” MSTU will undergo a name change and beginning in 2019 be called the EMS MSTU.

The proposed budget for the Fire/Rescue Department in 2019 is $43,763,556. The department will be funded in the following manner: 45 percent through the EMS MSTU, 29 percent through the Fire Fee, 16 percent through insurance re-imbursement, transport fees and miscellaneous revenues.

The BOCC has chosen to fund the fire protection portion using the Fire Fee at 50 percent of the total. That means every residential home owner will pay $151.00 regardless of the value of the home after homestead exemptions are applied. The BOCC for illustrative purposes uses the average amount of a home in Martin County. The amount as stated in the literature provided by the BOCC is $246,950, minus $50,000 in Homestead Exemptions the taxable value drops to $196,950. The 2019 MSTU, as currently constituted without a Fire Fee, is 2.6319 which equates to $518.35, which would be collected on the average home. Under the proposed formula the EMS MSTU would have a rate of 2.0137 which for the average home would be $396.59 plus the Fire Fee of $151 for a total of $547.59.

Members of the Legislative Committee of the MCTA met with Chief William Schobel and Deputy County Administrator George Stokus to discuss the Fire Fee. Most of the information cited above was provided to us by Martin County government.

We would have much preferred if the BOCC in their analysis had used the residential median instead of the average home value. The median is much more illustrative of what the typical resident would pay rather than an average.

We also believe that, by every property owner paying some amount to the cost of fire protection, all homeowners will understand that a relationship exists between the amount of service requested and that which is provided.

The Legislature, using exemptions and other Save Our Homes legislation, have placed the burden to fund local government on fewer and fewer taxpayers. A disconnect has developed between voters who demand services but are exempt from paying their share of taxes to fund such services. This leaves commercial property owners and a small number of expensive residential properties to pay for government. The use of a Fire Fee over continued ad valorem tax increases makes all homeowners pay something. This causes those homeowners to be interested in the services that their dollars buy.

In this report, the MCTA did not study what expenses are paid from the General Fund that are used in the operation of the Fire/Rescue Department. Accounting, Legal, Human Resources, County Administrator, and perhaps other Martin County Departments provide direct and indirect services to the operation of the Fire/Rescue Department. It does not appear that those ancillary costs are charged to the department. Perhaps the MCTA will investigate that matter in the future.

An assessed Fire Fee removes the pressure from County government regarding the MSTU cap of 10 mils. This Fire Fee gives the BOCC the ability to fund government and not reach the cap. The Fire Fee is a valuable tool, but it does not relieve the BOCC of the responsibility to make sure that our tax dollars are well spent. It is county management and county commissioners’ obligation to ensure that all possible savings and cost reductions are considered.

The MCTA can support the imposition of the Fire Fee if the BOCC reduces the new EMS MSTU by a corresponding amount.

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