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HomeMy WebLinkAbout09-13-2006 Special Meeting Special Meeting Commission Chambers of City Hall 150 N. Lakeshore Dr. Ocoee, FL 34761 September 13,2006 6:00 p.m. CALL TO ORDER 1. Certify Non- Ad Valorem Assessment Roll for Stormwater for Inclusion on the Orange County Tax Roll 2. Certify Non- Ad Valorem Assessment Roll for Solid Waste for Inclusion on the Orange County Tax Roll ADJOURNMENT PLEASE NOTE: IN ACCORDANCE WITH FLORIDA STATUTES 286.0105: ANY PERSON WHO DESIRES TO APPEAL ANY DECISION AT THIS MEETING WILL NEED A RECORD OF THE PROCEEDINGS AND FOR TillS PURPOSE MAY NEED TO ENSURE THAT A VERBATIM RECORD OF THE PROCEEDINGS IS MADE WHICH INCLUDES THE TESTIMONY AND EVIDENCE UPON WHICH THE APPEAL IS BASED. ALSO, IN ACCORDANCE WITH FLORIDA STATUTE 286.26: PERSONS WITH DISABILITIES NEEDING ASSISTANCE TO PARTICIPATE IN ANY OF THESE PROCEEDINGS SHOULD CONTACT THE OFFICE OF THE CITY CLERK, 150 N. LAKE SHORE DRIVE, OCOEE, FL 34761, (407) 905 -3105 48 HOURS IN ADVANCE OF THE MEETING. AGENDA ITEM COVER SHEET Meeting Date: September 13, 2006 Item # Contact Name: Contact Number: Steve Krug 6002 Reviewed By: Department Director: City Manager: Background Summary: Over the past year City Commission directed staff to pursue the option of placing Solid Waste monthly charges on the County's Annual Tax Roll in order to ensure that charges for these services would be fairly and equitably collected from the community. The City Commission adopted Resolution 2006-003 to place Stormwater fees on February 21, 2006. All appropriate Public Hearings and Notifications were accomplished during this process. Draft data was sent to the County Tax Collector in July for inclusion on the "Notice of Proposed Property Taxes" to Orange County taxpayers. In September City Staff received final data from the Tax Collector, which was used to compute the tax roll. The FY 06-07 Tax Roll revenue for Stormwater is $2,307,038.26. Issue: The Mayor and Commission must consider certification of the Stormwater roll to the Orange County Tax Collector for placement on the Orange County Tax Roll? Recommendations Staff respectfully requests Honorable Mayor certify the Non-Ad valorem Assessment Roll for Solid Waste to the Orange County Tax Collector. Attachments: Assessment Database Financial Impact: Place Stormwater monthly charges on the County's Annual Tax Roll in order to ensure that the $2,307,037.26 in revenue for these services would be fairly and equitably collected from the community. Type of Item: o Public Hearing o Ordinance First Reading o Ordinance First Reading o Resolution o Commission Approval o Discussion & Direction For Clerk's Deot Use: o Consent Agenda o Public Hearing o Regular Agenda ~ Original Document/Contract Attached for Execution by City Clerk D Original Document/Contract Held by Department for Execution Reviewed by City Attorney Reviewed by Finance Dept. Reviewed by ( ) Number of Customers in Each Rate Cate20rv and Proiected Revenue: D N/A D N/A D N/A Residential Condominiums Non-Residential Vacant 10,178 747 320 1455 $844,017 $51,543 $1,051,535 $359,943.26 Total $2,307,038.26 Reasons For Placin!! Char!!es On The Tax Roll. . Placing the charges on the tax roll gives our customers an early payment discount. . 82% of our revenue ($1,891,771) will be available by January as opposed to having to wait the entire year to realize 100% revenues. 8.3% ($191,484) is available in November and 61 % in December ($1,407,293) . No simple mechanism for collecting delinquent funds. Delinquent accounts average $3,000 annually. . The revenue we gain from the tax roll funding coming in early, gaining interest in the bank and eliminating delinquent accounts is approximately $38,322. . Everyone is required to pay their county tax bill. We avoid hunting people down for payment or bearing the burden of not having a simple method to collect from delinquent property owners. Invoicing through the tax collector ensures that property owners are now paying for 12 months of stormwater fees, as indicated in the ordinance, making this process fair and equitable to all our property owners. AGENDA ITEM COVER SHEET Meeting Date: September 13, 2006 Item # Contact Name: Contact Number: Steve Krug 6002 Reviewed By: Department Director: City Manager: Background Summary: Over the past year City Commission directed staff to pursue the option of placing Solid Waste monthly charges on the County's Annual Tax Roll in order to ensure that charges for these services would be fairly and equitably collected from the community. The City Commission adopted Resolution 2006-002 to place Residential Solid Waste fees on February 21,2006. All appropriate Public Hearings and Notifications were accomplished during this process. Draft data was sent to the County Tax Collector in July for inclusion on the "Notice of Proposed Property Taxes" to Orange County taxpayers. In September City Staff received final data from the Tax Collector, which was used to compute the tax roll. The FY 06-07 Tax Roll revenue for Residential Solid Waste is $2,279,088. Issue: The Mayor and Commission must consider certification of the Solid Waste roll to the Orange County Tax Collector for placement on the Orange County Tax Roll? Recommendations Staff respectfully requests Honorable Mayor certify the Non-Ad valorem Assessment Roll for Solid Waste to the Orange County Tax Collector. Attachments: Assessment Database Financial Impact: Place Solid Waste monthly charges on the County's Annual Tax Roll in order to ensure that the $2,279,088 in revenue for these services would be fairly and equitably collected from the community. Type of Item: D Public Hearing D Ordinance First Reading D Ordinance First Reading D Resolution D Commission Approval D Discussion & Direction For Clerk's Deof Use: I:8J Consent Agenda D Public Hearing D Regular Agenda ['8:1 Original Document/Contract Attached for Execution by City Clerk o Original Document/Contract Held by Department for Execution Reviewed by City Attorney Reviewed by Finance Dept. Reviewed by ( ) Number of Customers in Each Rate Category and Projected Revenue: o N/A D N/A D N/A Reasons For Placin!! Char!!es On The Tax Roll. · Placing the charges on the tax roll gives our customers an early payment discount. · 82% of our revenue ($1,868,852) will be available by January as opposed to having to wait the entire year to realize 100% revenues. 8.3% ($189,164) is available in November and 61 % in December ($1,390,243) · No simple mechanism for collecting delinquent funds on Garbage Only Customers. In order to collect delinquent payments for services, the city shuts off water service to the property under ordinance. If the City is not supplying the water, we are unable to discontinue water service for non-payment. Delinquent accounts average $24,000 annually. Additional funds are lost from new residents not opening garbage only accounts with the City. · City ordinance states that the property owner will pay for the availability of sanitation services for domiciles whether occupied or vacant. City currently invoices the individual occupying a residence. Rental properties or properties being sold that are vacant for a few months, and new homeowners unaware that they must establish a solid waste account, are not contributing revenue to the City in violation of the Ordinance. · The City Attorney has informed us in the past that we are mandated to pick up residential solid waste within our jurisdiction by State Statute regardless of whether we have been paid for these services. · The revenue we gain from the tax roll funding coming in early, gaining interest in the bank and eliminating delinquent accounts is approximately $61,490. In order to achieve the same net revenue while not being on the tax roll, and after accounting for early payment discounts, we would need to add 52 cents to every customer per month. This would necessitate taking our current rate of $19 per month to $19.52 per month. · Everyone is required to pay their county tax bill. We avoid hunting people down for payment or bearing the burden of not having a simple method to collect from delinquent non-water service customers. Invoicing through the tax collector ensures that property owners are now paying for 12 months of sanitation service availability, as indicated in the ordinance, making this process fair and equitable to all our customers. · Approximately $4,000 savings in postage and mailing supplies as we have 1,100 customers we would no longer have to bill as garbage only customers. :FOLEY ATTORNEYS AT LAW 111 NORTH ORANGE AVENUE. SUITE 1800 ORLANDO, FL 32801-2386 P. O. BOX 2193 ORLANDO. FL 32802.2193 407.423.7656 407.648.1743 WWW.FOLEY.COM 407.244.3248 FOLEY & LARDNER LLP MEMORANDUM CLlENT.MATTER NUMBER 020377 .0208 TO: FROM: The Honorable Mayor and City Commissioners of the City of Ocoee Paul E. Rosenthal, Esq., City Attorney Ps (l__ September 11, 2006 DATE: RE: Non-Ad Valorem Assessments I Certification of Assessment Roll BACKGROUND: 1. On January 17, 2006, the City Commission adopted Ordinance Nos. 2006-002 and 2006-003, which ordinances authorized the City Commission to establish by resolution the use of non-ad valorem assessments (the "Uniform Collection Method") as an alternative method to the monthly billing of the stormwater utility fee and the residential solid waste (garbage) collection service fee base rate, respectively. These ordinances were adopted at advertised public hearings in accordance with the City's nonnal advertising requirements for the adoption of ordinances. 2. On February 21,2006, the City Commission adopted Resolution Nos. 2006-002 and 2006-003, which resolutions declared the intent of the City to utilize the Uniform Collection Method for the levy, collection and enforcement of non-ad valorem assessments for the base rate for residential solid waste collection service fees and charges and the stormwater utility fee, respectively. These resolutions were adopted at advertised public hearings. In accordance with the applicable statutory requirements, notice of each hearing was advertised for 4 consecutive weeks on January 19 and 26 and February 2 and 9, 2006. 3. At the May 2,2006 meeting, the following motion was considered by the City Commission and FAILED on the 2-3 vote: "Direct staff not to transmit the assessment to Orange County to place solid waste fees on the tax roll and to prepare a resolution to repeal the previous resolution approving the uniform method of collection." 4. In order to implement Resolution Nos. 2006-002 and 2006-003, the City Commission, at its meeting of May 2, 2006, approved an Agreement with the Orange County ORLA_ 421794.1 :FOLEY FOLEY & LARDNER LLP Tax Collector with respect to the use of the Uniform Collection Method for residential solid waste and stormwater (the "Tax Collector Agreement"). This Agreement imposed certain duties and obligations on the Tax Collector and the City. The provisions included the following: a. The term of the Agreement is tlrrough October 31, 2007 and is automatically renewed on an annual basis unless the City gives notice to the Tax Collector by January 10 of any calendar year in which it intends to discontinue using the Uniform Collection Method. b. Both parties agree to comply with the Florida Statutes with respect to non- ad valorem assessment. c. The City agrees that by August 31 of each calendar year, the Mayor or his designee will officially certify to the Property Appraiser the final non-ad valorem assessment roll. The City (as opposed to the Mayor) accepted responsibility to insure that the roll was free of errors and omissions. [Note: The statutory deadline is September 15.] d. Similar to the provisions on the tenn of the Agreement, the City agrees to notify the Tax Collector, Property Appraiser and Department of Revenue by January 10 of any year in which it intends to discontinue using the Unifonn Collection Method. e. The Tax Collector agrees to collect the assessments. 5. City staff has previously delivered to the Property Appraiser preliminary assessments rolls for solid waste and stonnwater. These drafts have not been approved by either the Mayor or the City Commission. 6. Section 197.3632(5), Florida Statutes, provides as follows with respect to the obligations of a local government that has adopted a resolution stating its intent to use the Uniform Collection Method: "(5) By September 15 of each year, the chair of the local governing board or his or her designee shall certify a non-ad valorem assessment roll on compatible electronic medium to the tax collector. The local government shall post the non-ad valorem assessment for each parcel on the roll. The tax collector shall not accept any such roll that is not certified on compatible electronic medium and that does not contain the posting of the non-ad valorem assessment for each parcel. It is the responsibility of the local governing board that such roll be free of errors and omissions. Alterations to such roll may be made by the chair or his or her designee up to 10 days before certification. If the tax collector discovers errors or omissions on such roll, he or she may request the local governing board to file a corrected roll or a correction of the amount of any assessment." [Underlining added for emphasis] 7. The TRIM Notices were based on the preliminary assessment rolls and information regarding the proposed non-ad valorem assessments were included in the TRIM 2 ORLA_ 421794.1 :FOLEY FOLEY & LARDNER LLP notices. Staff has subsequently identified additional properties to be added to the assessments rolls which were not included on the preliminary roll. These additional properties are in the proposed final assessment rolls to be certified by the Mayor. Staff has also identified properties which should not be included in the final assessment roll and these properties have been removed from the final assessment roll to be certified by the Mayor. DISCUSSION: I have previously advised the City Commission that, in my opinion, any action to abandon or discontinue the Uniform Collection Method would need to be taken at an advertised public hearing and reflected in a resolution adopted by the City Commission. The basis for my opinion is that the enacting Resolution were adopted at advertised public hearings and any repealing Resolution should be enacted by a similar action. Further, it is less likely that a repealing Resolution would be subject to challenge if adopted at an advertised public hearing. However, neither Florida Statutes or the Florida Administrative Code address the procedure for discontinuing use of the Uniform Collection Method. Also, there are no Florida cases and no Attorney General Opinions which address this subject. After providing the opinion referenced above, the City Commission did consider a motion to prepare a resolution to repeal the previously adopted resolution with respect to solid waste. As noted above, that motion failed and the City Commission thereafter proceeded to approve the Tax Collector Agreement. That Agreement (which was required by statute and rule) required notice to the Tax Collector, Property Appraiser, and the Florida Department of Revenue by January 10 of any calendar year in which the City Commission intends to discontinue using the Uniform Collection Method. As such, it is my opinion that any attempt to discontinue using the Uniform Collection Method for the 2006 Tax Roll would be contrary to the terms of the Tax Collector Agreement. The City could take action prior to January 10, 2007 to discontinue its use commencing with the 2007 Tax Roll. As noted above, it is my recommendation that any such action be by Resolution at an advertised public hearing. The specific issue now before the City Commission is to approve the non-ad valorem assessment rolls and authorize the Mayor to certify same to the Tax Collector. This would appear to be a ministerial function except to the extent either the City Commission or the Mayor find errors in the assessment roll since it is the Commission's responsibility to assure that the roll is free of errors and omissions. The State Statute, administrative rules and Tax Collector Agreement all use the mandatory language of "shall" in terms of the actions to be taken by the Commission and/or the Mayor. It should be noted that this obligation is placed on the Mayor and only the Mayor, or his designee, is authorized to certify the assessment roll. There is no express provision which requires that the City Commission approve the certified roll, though that is the practice of many jurisdictions, and, in my opinion, is the better and more conservative practice in order to avoid a potential challenge. The role of the Commission appears to be limited to the making of corrections to the assessment roll. ., .) ORLA_ 421794.1 : FOLEY FOLEY & LARDNER LLP I spoke with a representative of the Property Appraiser's office regarding what would happen if the Mayor failed to certify the assessment roll. Their first reaction was that they would then send the preliminary roll to the Tax Collector (which would result in a substantial loss of funds to the City since the final roll includes parcels not included on the preliminary roll). I then spoke with a representative of the Tax Collector's office who advised that they would put on the tax bills whatever information came from the Property Appraiser (i.e., the preliminary assessment roll). Subsequently, the staff from these 2 offices consulted and a representative of the Property Appraiser's office called me back to advise that they would have to consult with their legal counsel to determine what action would be required if the Mayor failed to certify the assessment roll. They would have to evaluate their obligations under the statute, the rules, the Tax Collector Agreement and the resolutions adopted by the Ocoee City Commission. It would appear that the available options would include: (1) Remove the assessments from the 2006 tax bill, (2) Place the assessments on the 2006 tax bill based on the preliminary roll, or (3) Place the assessment on the 2006 tax bill but show the charge a "zero" due to the failure to provide the required certification. Other options may be identified by the legal counsel for the Property Appraiser and Tax Collector. Should the City Commission fail to approve the assessment roll, there is still the possibility that the Mayor could or would certify the roll as the statutory authority is vested in him. It is unclear whether that action would be subject to legal challenge. It appears that unless directed otherwise by a court, the Property Appraiser and the Tax Collector would put the assessments on the 2006 Tax Bill if certified by the Mayor. A representative of the Property Appraiser's office has advised that they would not require any proofthat the assessment rolls were approved by the City Commission. Should the Mayor fail to certify and the Commission fail to approve the assessment rolls, there would be in existence conflicting actions of the City Commission since the Resolutions and Agreement with the Tax Collector would remain in effect. This could potentially result in litigation to sort out the proper method of charging solid waste and storm water fees. The effect of these conflicting actions would be difficult to predict. However, it is my opinion that the City Code would require continued monthly billing since there would not be an "adopted" assessment roll. It is possible, but unlikely, that someone might successfully assert that they are not required to pay a monthly bill due to the adoption of the Resolutions called for use of the Uniform Collection Method. CONCLUSIONS The risk free action would be for the City Commission to adopt the assessment rolls and for the Mayor to be expressly authorized to certify the rolls. This would be consistent with prior actions of the City Commission. In my opinion; it is unlikely that any such action would be subject to a successful challenge. If the City Commission does not approve the rolls and the Mayor does not certify them, the most likely outcome in the absence of litigation would be that the Property Appraiser would not certify the rolls to the Tax Collector and that they would not appear on the tax bill. However, there is uncertainty as to what would actually happen due to the lack of guidance in the statute 4 ORLA_421794.1 :FOLEY FOLEY & LARDNER LLP and rules and the apparent breach by the City of the Tax Collector Agreement. There would be even greater uncertainty if a third party were to bring litigation. If the City Commission does not approve but the Mayor certifies the rolls, it is likely that they would appear on the tax bills. If there was to be any third party litigation, the outcome would be uncertain. 5 ORLA_ 421794.1