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.

RCW 52.26.230 Compliance Hearing 1

Funding the Kent Fire Department RFA

Compliance with RCW 52.26.240Using Taxes and Fire Benefit

Charge

October 3, 2012


Kent Fire AuthorityFBC Funding System

$1.50 Tax$1.00 Tax

Levy

FBC Assessment

(Size, Use & Risk)

Total Annual Fire

Assessments

October 3, 2012

SPECIFIED IN RCW 52.26.240REDUCED TAX LEVY + FIRE BENEFIT CHARGE


Assessed Value Source for Levy

October 3, 2012


FBC Data source

October 3, 2012

Structure Size

Use & Value


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


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 2011


Determining Annual FBC Amount

• Calculated by:– Determining Expenses

– Subtract revenue sources other than FBC

– Balance equals FBC revenue needed

– Add 1% for King County

Item Amount

2012 Expenses $33,313,961

Less levy revenue ($14,759,990)

Less other revenue ($5,337,390)

FBC revenue needed $13,216,581

Total 2012 FBC Revenue Request

$13,050,700

October 3, 2012


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, 2012

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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


Fire Ratings and Insurance CostsLeague of Minnesota Cities 2010

Ratings & Effect on Insurance Fire 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

Kent = Fire Class 3Covington = Fire Class 4/3

October 3, 2012


•Total Fire Insurance Savings

Based UponKent Fire Department Fire Rating

Homes $14,005,278

Apartments $5,865,180

Commercial $2,866,789

Total $22,740,247October 3, 2012


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 PlusOctober 3, 2012

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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


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, 2012

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Levy Revenue Trend2011 Tax from A/V$15,515,718.00

2012 Tax from A/V$14,759,990

October 3, 2012RCW 52.26.230 Compliance Hearing

2013 Tax from A/V$13,943,050


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, 2012


Other Revenue Trend

Budget YearOther

RevenueDistrict 37 Revenue

Valley Med Revenue Safer 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, 2012


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, 2012


FBC Revenue Trend

Budget Year

Taxes Assessed FBC Assessed

Total Taxpayer Assessment

Tax Payer Change

Purchasing Power

Purchase Power Loss

2011 $15,515,718 $12,311,981 $27,827,699 0.000% $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 $28,560,247 2.632% $26,178,322 $1,649,377

October 3, 2012


Proposed FBC

October 3, 2012

2013 Operating Expenses $34,432,962Proposed Capital $512,000

Total Revenue Request $34,944,962Less 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


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


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


Effect of Current FBC Calculations

October 3, 2012


Residential ComparablesTax + FBC

Home Size 2011 Fire Cost

2012 Fire Cost 2013 Fire Cost CPI [email protected]%

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, 2012


Commercial ComparablesTax + FBC

Square Feet

2011 2012 2013 CPI [email protected]%

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, 2012


Apartment ComparablesSq. Feet 2011 2012 2013 CPI 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, 2012


Questions

October 3, 2012

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.

Documents

compliance hearing slide

compliance hearing18

compliance hearing17

compliance hearing2

compliance hearing5

compliance hearing3

compliance hearing1

compliance hearing14