The City staff is bringing this proposal forward for the City Commission to consider. In this article, let’s take a look at what the fee is and why staff believes that this fee is a good idea to pursue.
What is the Fire Assessment Fee?Cities and counties are permitted to assess a fee for the cost of providing fire response services. When approved, this fee appears on the property tax bill and is paid along with the annual property taxes. The residents of unincorporated Polk County pay a fee for fire service, as do property owners in the City of Avon Park. The City of Sebring is considering the fee and recently voted to proceed with it.
The fee charged to each property must reflect the actual cost of that fire department to properly respond to that type of property to combat a fire. Without the fire assessment fee, the cost of fire service is paid with general fund revenues, including property taxes. The goal of assessing the fire fee is to remove the amount of money raised by the fee from the amount needed to be raised by property taxes -–thus allowing the City Commission to lower the tax rate.
Determining the actual cost to provide fire service to each type of property is a task with very exacting requirements. A company has been hired to make these calculations, which includes a review of our fire department’s response to fire calls at all the different types of property, with the number of firefighters needed and the equipment used. Costs are then calculated, and the cost per property type is determined.
There is a great deal of work required, with its attendant cost, to set up a fire assessment fee system – so why would this be of interest to the City?
Facilitating Economic DevelopmentOne reason for considering this fee is that it helps facilitate economic development. One of the most important goals for the City is to set conditions that encourage business expansion and attract new businesses to locate here. Our county includes two other towns (Auburndale and Haines City) that are about our size, and by comparison we have the lowest tax base and the highest tax rate. The City Commission has directed that major efforts be made to encourage economic development, and this goal is included in the City’s Strategic Plan. (The strategic plan can be viewed on the City’s website: http://www.cityoflakewales.com/)
When considering whether or not to move to a community, one of the criteria that is reviewed by company representatives is the city’s tax rate. Our present rate of 7.3521 mills is not the highest in the county, but it is not far from being so. Only Mulberry is higher, at 7.8358 mills. The implementation of a fire fee would permit the City to decrease the present millage rate to a rate that is below a number of other cities in the county.
The addition of the fire fee is one of many potential fees that new business reps would expect to find in a prospective new location – but the tax rate always stands out as a key indicator.
FairnessThe argument has been made that the charging of a fee that is based on the service provided is more equitable than a tax based on the value of property. Many citizens have expressed their distain of the property tax system. Some cities seek to charge user fees as much as possible to keep their property tax rates low. User fees are directed at the persons or entities benefiting from a particular service, and thus make a direct connection to a service made available.
In this era of state legislature mandates for property tax reform, Lake Wales and many other cities are exploring the use of fees (rather than taxes) to pay for city services. This is especially important for the critical services provided by our fire department.
Next week let’s continue on this topic and take a look at the fees recommended by the independent company hired to conduct the fee study.
