Rhea Rivera, CGFM

Director, Financial Services

Issue Statement:  A preliminary Fiscal Year (FY) 27 fire assessment rate schedule must be adopted by the Commission to be provided to the County Property Appraiser by August 4, 2026. Revenue from fire assessment is used to fund the costs of providing fire suppression services within the City.

Recommended Action: Staff recommends the City Commission approve the preliminary rate resolution adopting the preliminary proposed fire assessment rates, as reflected in the attached Exhibit A, including the $441 per residence (annual residential rate), and establishing Monday, 6:00 p.m., September 14, 2026, as the time and date of a public hearing to be held at Commission Chambers as regards to the Fiscal Year 27 fire assessment. 

The City Commission established a Fire Rescue Assessment Program in FY 02. The ordinance establishing this program requires a preliminary rate resolution and an annual rate resolution be adopted during the budget process each fiscal year. The Government Services Group, Inc. (GSG), and Nabors, Giblin & Nickerson, P.A. (NGN), have worked with the City periodically in implementing this annual Fire Rescue assessment program.

GSG was used in updating the recommended rates for FY 10, FY 17 and again for FY 22.  In all instances after each rate study, the rate structures were adjusted in order to ensure they were assessed according to current usage. Since by law a fire assessment can only be used to recover those costs associated with providing fire services to properties and not emergency medical services, part of the study involves identifying that portion of Fire Rescue expense associated with fire services. These are identified as “assessable cost”.

The most recent fire rate study was performed and completed in May 2024 by Anser Advisor Consulting, LLC, formerly known as Government Services Group, Inc. (GSG). The results and recommendations of the study were presented to the Commission on May 15, 2024, highlighting the fact that the assessable fire suppression costs for FY 2024 increased by 32% since our last assessment study in 2021.  Rates are based on the change in service demand and increased operating, personnel, and capital costs, which are projected to continue to grow over the next five years.  A copy of the study is attached in Exhibit B and Exhibit C, for reference. 

The proposed residential rate for FY 27 is $441, an increase of $59 or 15.4% from the current FY 26 rate of $382. The increase is primarily driven by anticipated personnel cost increases for fire rescue services, including projected wage and benefit adjustments, as well as the need to replace and purchase critical fire rescue equipment in the upcoming fiscal year.

The proposed rates will appear on the TRIM notice mailed to all property owners in August. There will be a hearing in regard to the final adoption of these rates on September 14, to establish the rates to appear on the property tax bill to be mailed to all property owners at the beginning of November.

At the time of the final hearing, lower rates may be adopted by the Commission if it so chooses, but higher rates can be adopted at that time only with a significant amount of effort and expense. Individual rates cannot be selectively adjusted and an adjustment in one rate (e.g., the residential rate) would require corresponding adjustments in all rates.

In FY 22, new exemptions were presented to Commission that exempted specific homesteaded residential properties from the fire assessment if they qualified through the Property Appraiser for the additional low-income senior exemption or receiving a total exemption from property tax due to qualifying disabled veteran/first responder/total disability status. The implementation of these exemptions is continuing and is included in the preliminary rate resolution. 

With early payment discounts applied, the proposed preliminary assessment rates are estimated to generate approximately $12.6 million in revenue, an increase of about $1.8 million over FY 2026. The increase is primarily due to the proposed rate adjustments across the assessment categories, including the increase in the residential rate from $382 to $441, with additional revenue also generated from new construction added to the assessment roll.

The latest fire assessment rate study completed in April 2024, reflects an increase in assessable fire suppression costs from approximately $13.4 million in FY 2026 to $15.2 million in FY 2027, or about $1.8 million. As the cost of providing fire suppression services increases due to operational needs, compensation adjustments, and planned equipment requirements, rate adjustments are necessary to provide sufficient recurring revenue to support recurring service costs. 

The City has historically attempted to recover approximately 90% of eligible fire suppression costs through the fire assessment program, with the remaining costs supported by other General Fund revenues. However, the cost of providing fire suppression services has continued to increase due to rising personnel costs, projected compensation adjustments, and significant capital equipment needs in the upcoming fiscal year. To reduce the growing reliance on other General Fund revenues, the proposed FY 2027 rates are based on the 100% funding option identified in the latest fire assessment rate study, calculated using the five-year average assessable cost. Although the proposed rates do not fully recover the estimated FY 2027 assessable cost of approximately $15.2 million, they increase the share of costs recovered through the fire assessment and reduce the amount supported by other General Fund revenues.

Staff recommends the City Commission approve the preliminary rate resolution adopting the preliminary proposed fire assessment rates, as reflected in the attached Exhibit, including the $441 per residence (annual residential rate), and establish Monday, 6:00 p.m., September 14, 2026, as the time and date of a public hearing to be held at Commission Chambers as regards to the FY 27 fire assessment.