Editor’s note: In past OCN articles, the fire district fee was referred to as a tax. From now on, it will be referred to as a fee because it is proposed as a set dollar amount based on a property class.
To lessen the blow to this year’s property tax bills from a potential new fee to fund fire protection services, the Oviedo City Council reached consensus on Monday night to implement the fee at only 60% the first year, if approved.
Monday’s meeting was a work session, meant for the Council to publicly hash out issues, not make decisions. The Council is expected to consider adopting a rate for the fee on May 23 with a final adoption hearing tentatively set for June 20.
Three of the five Council members favored a rate that would weigh costs for different classes of property based on historical demand for fire protection services.
Implementing this fee would not create a property tax rate reduction.
If adopted, the cost for owners of property with buildings on them would be, per 2,215 square feet of building area: $136 for residential properties with under 10 dwelling units, $513 for multi-family properties with 10 or more dwelling units and $429 for general service (commercial and industrial) and tax-exempt properties, with the exception of government buildings, public schools and common areas.
Here are some examples: If the fee is adopted, The Strand Apartments in Oviedo, which according to city documents has 289,625 square feet of building area, would pay $70,000 the first year and Memory Lane Cottage in the Oviedo Mall, which according to city documents has 11,216 square feet of building area, would pay $2,264 the first year.
Vacant land owners would get a bill for 15% of the base cost ($136 for residential land and $429 for general service land), per 11,300 square feet of land. The fractioned price is due to the decreased cost of providing fire service to properties without structures.
That would mean a person who owns 1.5 acres of vacant commercial land would pay about $380 the first year.
The fee is projected to collect $3.7 million in the first year. That’s $1.6 million less than the $5.3 million projected 2023 fire department budget for service within city limits. The total projected fire department budget for 2023 is $7.2 million, which includes services provided outside of city limits, which cannot be included in the fee.
The amount recovered is expected to increase by 10% each year as the fire department’s budget projections grow until it reaches 100% in 2027, with a goal of collecting that year’s full fire budget total of $6.9 million.
“I don’t know if we can bite that much of the apple off in one year,” Councilman Keith Britton said, which is why he proposed that the Council explore a phased approach to implementing the fee.
Currently, the city’s fire protection services are funded through the general fund, which is fueled by city property taxes. City officials said this fee will create funding that cannot be affected by the economy or rules the state enacts that affect the way municipalities collect taxes.
Effects on the community
Deputy Mayor Bob Pollack said he’s concerned about the impact this fee will have on religious institutions, which are typically exempt from taxes but not service-based fees, such as this.
“Right now they’re not paying anything and they’re going to take a huge hit. It’s something else to think about,” he said. “They’re going from zero to something really high.”
Britton said he favored the weighted methodology because it cost the least for homeowners.
“I have to go with what’s best for the residents,” he said. “They’re the ones who have the homes here and have been living here.”
If the fee is adopted, Mayor Megan Sladek said that getting a tax bill in November with this new fee could come as a shock to people who were expecting to be billed on the assessed value report they got in January. She said some apartment complexes would have had a $100,000 bill without the gradual implementation.
“To surprise them with $100,000 is more intense than surprising them with $60,000. That’s the idea,” she said.
“And for residents as well. If you’re on a fixed income and you have planned your entire year out so you can pay your taxes in November and they come due and all of a sudden you’re hit with more. If you have a 2,125 square foot house, it’s $135 instead of $188, so it’s about a $50 discount. That’s a little less bad.”
City Finance Director Jerry Boop said staff recommended a different methodology, one that would charge all types of properties the same rate. He said that personally, the option Council favored on Monday night – called Alternative 6 – made him “very, very concerned about the impact on businesses in the city of Oviedo.”
The other option – called Alternative 2 – would have charged the same rate to all property owners.
To help offset the costs for local businesses, the Council discussed offering a credit for businesses who take extra fire safety precautions for their properties, such as installing automatic sprinkler systems.
City staff said adjustments can be made to the fee in the future.
“Nothing is going to be perfectly fair,” Britton said. “I would like to leave the door open to make adjustments in future years.”
Here’s the video from Monday night’s meeting: