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HomeMy WebLinkAbout08-25-92 SS '-' MINUTES OF THE OCOEE CITY COMMISSION SPECIAL SESSION PUBLIC HEARING: NON-AD VALOREM TAX ASSESSMENT - M & M UTILITIES HELD AUGUST 25, 1992 Mayor Dabbs called the Special Session public hearing: non-ad valorem tax assessment M & M Utilities to order at 7 p.m, in the Ocoee Community Center. The roll was called and a quorum declared present. Commissioner Foster offered the prayer and led the pledge of allegiance. PRESENT: Mayor Dabbs, Commissioners Combs, Foster, Woodson and Johnson. Also present were City Manager Shapiro, Director of Administrative Services Beamer, City Attorney Rosenthal, City Engineer Shira, Building Official Flippen and City Clerk Grafton. ABSENT: None. '-' City Manager Shapiro stated the sewer plant servicing the area in question was built so the trailer park could be developed by Mr. Freeman and others since the City had no sewer system in that area, When Mr. Freeman saw he was unable to run the plant, he sold it to Michael C, Minton, who named the system M & M Utilities. Mr. Shapiro spoke of the condition of the plant when he became City Manager, the leaving of Mr. Minton, and the 50 to 60 cases of hepatitis in the area that year. He gave a brief history of dealings between the City and Orange County regarding operation of the plant, including the County's going to the Circuit Court, the appointment of Southern States to run the plant and the later reluctance of Southern States to continue operating the plant because they were losing money. He advised of the requirements Southern States gave to continue operating the plant - a larger service area, which would necessitate major repairs to the plant, and a spray field, Mr. Shapiro explained that the City got a community block grant from the county for a portion of the necessary work and eventually gained title to the property and responsibility to provide the service. To overcome the problem of basic hook-up fees, the City pledged to PSC that when a final figure was reached, the land value received by the City for removing the plant, including the ponds across the street, would be deducted from the total price of the project or whatever price was required of the citizens, He said that in the future the City would construct a four-acre park for their children that would be free of drainage problems and healthy for everyone in the area. That project is in the capital improvement plan and was deducted from the fee. '-' Director of Administrative Services Beamer advised of the meeting with the affected property owners the year before and the block grant and completion of the necessary work by December 1991. She spoke of Resolution 91-24, which declared the intent of the City to utilize the non-ad valorem method for levy, collection and enforcement of non-ad valorem assessments and the original capital charge of $2,865 for customers to hook into the treatment plant that was eventually reduced to $2,535 as the result of an appraisal of the property. She elaborated on how the $2,535 was derived. She advised of the work with the Orange County Property Appraiser and the Orange County Tax Collector and the requirements of the Tax Collector's office that the information be on machine readable media and delivered to the Tax Collector before September OCOEE CITY COMMISSION SPECIAL SESSION '-" PUBLIC HEARING: NON-AD VALOREM TAX ASSESSMENT - M & M UTILITIES AUGUST 25, 1992 15, 1992. She referred the Commissioners to the three exhibits in their packages. Starting with exhibit one, she related the requirement that the City inform all the affected property owners of the amount of the assessment to them and advised that the total collection of $659,733.75 and notification that payment can be made over a ten-year period were included in the letters to the property owners. The payment arrangement is in the agreement with the Tax Collector so the information will be on each year's tax notice to the property owners, Failure to pay the assessment will result in the issuance of a tax certificate against the property. Also on the tax notice is a description of what is on the property so there is knowledge of the type of benefit received thereon. The list of affected property owners was stated in Resolution 92-14. The connection fee as set by ordinance was waived in this case, Advantages to having the assessment on the tax bill are (1) a discount for early payment, (2) prepayment by installment method and (3) payment deferral. There is a penalty for delinquent payment. '-' She next referred to Exhibit 2 which listed those properties and owners whose notices were returned as undeliverable. The statute requires the City to notice by mail. The notices were sent certified mail so there would be an indication of how many were received. Exhibit 3 was the objections received regarding the assessment. Those and one given to them by the City Clerk dated August 18 made a total of four, which were to be reviewed before objections from the audience were heard. City Attorney Rosenthal advised that the City did not purchase or acquire the M & M Utilities owned by Mr. Michael Minton, Mr. Rosenthal explained how Mr. Minton abandoned the utility, as permitted by Florida law, by sending a notice to the Public Service Commission indicating he was walking away from it. Mr. Rosenthal stated he believed the utility continued to run without anyone's operating it for a brief period of time. He related the requirement of the county and court by Florida Statute when a private utility is abandoned and the appointment of Southern States Utility. He advised how the Public Service Commission decided that the City would accept the customers served by the utility. He explained the recovery of some property formerly owned by Mr. Minton and the credit of the value of that property, He advised the Commission that they were acting as an adjustment board and what that meant, indicating that if they felt more information from the staff was needed to reach a decision regarding the appropriateness of an adjustment, it might be necessary to defer and continue the hearing to the next Commission Meeting or set a special meeting in order to take final action on the resolution. However, it was critical that all this be accomplished so that the staff would have time to have everything on the electronic medium in compliance with the statute to get it to the Property Appraiser and Tax Collectors offices prior to September 15, '-' 2 OCOEE CITY COMMISSION SPECIAL SESSION ~ PUBLIC HEARING: NON-AD VALOREM TAX ASSESSMENT - M & M UTILITIES AUGUST 25, 1992 He indicated the three written objections in the packet. He advised specific action needed to be taken during the course of the meeting to decide on each as well as similar action on any requests for adjustments that might come before them. Attorney Rosenthal read Resolution 92-14: A resolution of the City of Ocoee, Florida, relating to non-ad valorem assessments for the connection to the City of Ocoee Municipal wastewater collection and treatment system of certain residence and commercial properties formally connected to the M & M Utility sewer system providing for authority, recitals and definitions amending Resolution 91-24 to adjust the interest rate on capital charges and to extend the time to prepay the non-ad valorem assessment, providing for a unit of measurement for assessment and establishing the amount of assessment, adopting the non- ad valorem assessment role, directing the certification of the assessment role, providing for severability, providing for an effective date. ~ Public Hearing: Non-Ad Valorem Tax Assessment - M & M Utilities Mayor Dabbs opened the public hearing by addressing the written comments and/or objections to the proposed ordinance. Ms. Beamer indicated the first objection, which was from Dr. Constantino, and the response from the City Engineer. Commissioner Foster referred to the agreement between Mr. Constantino and Mr. Minton, paragraph 4, and asked if the contract was binding to the City, Attorney Rosenthal stated no and explained why, Mayor Dabbs asked City Engineer Shira about his response to Dr. Constantino. Mr. Shira stated the fee Dr. Constantino paid had no relation to what the City is doing, Mayor Dabbs asked if anyone was present representing Dr. Constantino, and there was not. Commissioner Foster. seconded bv Commissioner Combs. moved to deny the request bv Dr. Constantino. Motion carried 5-0. Mayor Dabbs next referred to the letter from Mr. H. M. Bowness. Ms. Beamer indicated the letter and the response from the City Engineer. Regarding his property, parcel 18-22-28-3544- 01090 and the service bays which were determined by the City Engineer to be non-operational, the 7.0 ERUs assessed originally were reduced to 5.0 ERUs, making the charge $12,675.00, with a yearly payment of$1,369.20 based on ten years. '--' 3 OCOEE CITY COMMISSION SPECIAL SESSION ~ PUBLIC HEARING: NON-AD VALOREM TAX ASSESSMENT - M & M UTILITIES AUGUST 25, 1992 ~ '-' Mr. H. M. Bowness stated he was assessed a total of $22,561,50, Mayor Dabbs responded he understood that the new assessment was $12,675.00; however, Ms. Beamer indicated that the reduction in assessment was for one piece of property that originally was assessed for $17,745,00. Mr. Bowness questioned the fee based on the connection. Mr. Shira explained the charge. Discussion followed. Mr. Bowness then referred to the sewer line he had installed in 1966 and opined that he should be given consideration for that line. Mayor Dabbs asked for clarification from Mr. Shira, Mr. Shira advised he saw no public benefit to the existence of that line. Mr. Rosenthal asked if the City were utilizing that line, and Mr. Shira indicated the line was in use and served perhaps five businesses. Mr. Rosenthal asked about the ramifications if the line ceased to operate, and Mr. Shira stated his opinion was that the City would advise the property owner to rectify the situation, In the case of an emergency that affected public safety, the City would probably rectify the situation and bill the property owner. Mr. Shapiro asked if anyone else hooked into that line, and the answer was that Orange Bank did. Discussion followed, Mayor Dabbs said in time the line needed to be addressed with Mr. Bowness. Mr. Bowness asked Mayor Dabbs if he recalled a conversation they had about three to four years before regarding an offer on Mr. Bowness's property at the comer of Silver Star Road and 437, Mayor Dabbs stated for the record that he was told the offer was $1 million an acre. Mr. Bowness stated he had 3,210 square feet for approximately $9.16 a square foot. He said he was ready to charge, and he felt the City owed him for a utility easement. Mr. Shira explained that the intersection improvements were done by the Florida Department of Transportation, and neither the City, phone company nor gas company was properly informed that the project was being commenced. A City water main was in conflict with their work and had the City been given proper timely notice, help could have been given to get DOT around the water main. Because of state law, the City could not delay the project so a quick design was made to get around the project, which involved going up the west side of Mr. Bowness's property on Silver Star extension. John Cockrell took a copy of an easement agreement to Mr. Bowness, who said he would take it under consideration and very generously told the City to go ahead with the project. Mr. Shira said he had not heard from Mr. Bowness what he felt was a proper value, and he said the City would pay fair market value for the easement. The easement is located in an area that would be a building setback, so there is not a development deficiency from it. Mr. Shapiro stated a rate would have to be determined, and the monies would come from a separate fund. The amount could not be deducted from the assessment during this meeting. Discussion followed. 4 OCOEE CITY COMMISSION SPECIAL SESSION ~ PUBLIC HEARING: NON-ADVALOREMTAX ASSESSMENT - M & M UTILITIES AUGUST 25, 1992 There was discussion about the tax assessment from the county and notification requirements by law, Attorney Rosenthal explained why the issue of the purchase of the easement from Mr. Bowness could not be addressed during this meeting, Discussion followed. Mr. Shapiro stated the City should try to negotiate the payment with Mr. Bowness within the time frame for payment of the non-ad valorem assessment since Mr. Bowness would receive a benefit by paying the entire amount within that time frame, He asked Mr. Bowness to make an appointment to meet him so the staff could start going over it. Commissioner Foster. seconded by Mayor Dabbs. moved to adjust the property assessment for parcel 18-22-28-3544-01090 from $17.745 to $12.675 and change the ERU value from 7.0 to 5.0. Motion carried 5-0. ~ Mayor Dabbs asked Attorney Rosenthal to explain why the running of the lines was not pertinent to this issue. Mr. Rosenthal explained that the City did not obtain from the court any rights or interests with respect to those lines, Those lines are private lines serving private property and are not part of the City-owned and -operated utility system, Therefore, the maintenance responsibilities on those lines belong to the private property owners. It might be a private matter between Orange Bank and Mr. Bowness as opposed to a matter between Mr. Bowness and the City, Mayor Dabbs. seconded by Commissioner Johnson. moved that Mr. Bowness's reauest for relief through this process on parcels 18-22-28-3544-01070 and 18-22-28-3544-02180 be denied. Motion carried 4-1. with Commissioner Woodson voting no. Ms. Beamer called for the consideration of the letter from the Chairman and CEO of Orange Bank regarding the assessment of 2.9 ERUs to the property identified as 18-22-28-0000-00079. Mr. Shira explained in an August 21, 1992, memo to Ms, Beamer how the calculation was derived. No one from the bank was present. Commissioner Woodson asked why two rest rooms rated 2,9 ERUs. Mr. Shira stated the studies done that generated the table of ERU factors are contained in Ordinance 91-13 which, with minor exceptions if any at all, is the same as the Orange County ordinance, Commissioner Combs said he had a problem with the bathroom ERUs and really had a problem with the count for the bank, Commissioner Foster stated the Commission needed to be consistent. This Commission established Ordinance 91-13, which was specific about office \...- 5 OCOEE CITY COMMISSION SPECIAL SESSION ~ PUBLIC HEARING: NON-AD VALOREM TAX ASSESSMENT - M & M UTILITIES AUGUST 25, 1992 buildings and the ERUs that would accompany them. He stated he felt they could not make an arbitrary decision on each building. Commissioner Johnson concurred. Discussion followed. Attorney Rosenthal stated if Orange Bank had presented a study in connection with this request that was analogous to the procedures set forth in the Code, that would be a proper basis consistent with the Code to make an adjustment; however, in terms of the assessment, the assessments were set. His opinion was that there was not a procedure once the assessments were set to come back and revisit the ERU calculations. Ms. Beamer stated the summer before when the fees were reviewed with the property owners, the procedure was explained. She stated the time had been available for the property owners, Commissioner Johnson. seconded bv Commissioner Foster. moved to support the staffs position and deny the Orane:e Bank request for reduction in ERUs on parcel 18-22-28- 0000-00079. Motion carried 3-2. with Commissioners Combs and Woodson voting no. ...... Ms. Beamer next addressed the objection of Mrs, Jane S. Rostiser, 90 East Circle Key Court, 18- 22-28-7122-00900, to what she felt was a tax, Mayor Dabbs read the letter for the record: City Commissioners: You are making it extremely difficult for senior citizens to "make it" in your community. We object to the levy upon our property for sewer capital charge. Why should such a small segment of the taxpayers be burdened with this? This has come about through no fault of ours, If the "city fathers" had been efficiently doing their job, this problem would never have become an issue. We retired to Ocoee in 1985, Now at 68 years old we are both still working to "keep up." How many more working years do we have? We are seriously considering moving back north. If something should happen to one of us, the survivor could not possibly survive here in Ocoee, Mayor Dabbs asked if this would be considered a request for relief, and Attorney Rosenthal stated he would consider it as such and would take action on it. '-' 6 OCOEE CITY COMMISSION SPECIAL SESSION ~ PUBLIC HEARING: NON-AD VALOREM TAX ASSESSMENT - M & M UTILITIES AUGUST 25, 1992 Commissioner Combs. seconded by Commissioner Woodson. moved to deny Mrs. Rostiser's request for relief. Motion carried 5-0. Mrs. Frances Watts, 43 Shell Key Court, parcel 18-22-28-7122-00430, stated she had lived all over Florida for over 20 years and settled in Ocoee. She could not understand why a few were paying the assessment instead of having it divided among all the City property owners. Mayor Dabbs explained that many Ocoee residents are on septic systems. Commissioner Foster spoke of his admiration for Mrs. Watts and stated that the Commission had to be consistent in the assessments. Commissioner Foster. seconded by Commissioner Johnson. moved to deny the request of Mrs. Frances Watts. 43 Shell Key Court. parcel 18-22-28-7122-00430 for an adjustment. Motion carried 5-0. Just prior to the above vote the following comments were made: ~ Commissioner Combs stated all the trailer homes in the City were in his district, and he felt the court was not fair, stating the City tried to stay out of the sewer business as long as possible. He stated if Southern States had kept the system, the charges might have been two to three times higher than the City's, There was also the possibility that they would not have had a sewer system and would have had to move, He stated it was a hard decision to tell each one to pay $183 a year or about $15.28 a month. He said, however, that the assessments had to be fair and across the board. Commissioner Woodson restated the regular capital charge for sewer, the reduction due to the credit and the ERU determination for a trailer home. Mayor Dabbs restated that normally in addition to a capital charge there is a connection fee. In these cases, there is no connection fee. He also affirmed what Commissioner Woodson said, Commissioner Johnson affirmed what Commissioner Combs' statements. Mr. James Creech, 118 Mobile Lane, stated he owned lot 8A Sundial Key, parcel 18-22-28- 7126-01080, He asked why the City did not control and see that the system was put in and run properly. Attorney Rosenthal stated the system was installed prior to the time the City was in the sewer business, Mayor Dabbs stated the reason the City did not step in was the Department of Environmental Regulation and the County were the regulatory agents over it. '-' 7 OCOEE CITY COMMISSION SPECIAL SESSION ~ PUBLIC HEARING: NON-AD VALOREM TAX ASSESSMENT - M & M UTILITIES AUGUST 25, 1992 Mr. Pat Julian, 43 Coral Key Drive, parcel 18-22-28-7126-03010, asked why there was no drainage in the community, but the residents paid $3 a month for storm drainage. Mr. Shapiro stated the problem was with the northwest ditch, and an engineering firm was looking at it. He also addressed the issue of septic tanks, stating the DER will not allow a septic tank system unless there is a massive percolation area which, in the trailer park, is not possible. He said the City determined that the least expensive option concerning the sewer was to remove the plant and install a pumping station, which is less expensive to run. Over time the sewer rates will not have to be as high because maintenance is lower. Discussion followed regarding drainage. Mr. Shapiro invited Mr. Julian to call with a street problem or any problem and said he would guarantee he would have a department head on the phone in ten minutes. Mr. Walter Moore, 100 Cypress Key Court, stated the pumping station cost $292,000, but the amount to be collected was over $600,000. He wanted to know where the rest of the money went. Ms. Beamer stated the money for the lift station or the force mains was paid out of the assessment. It was paid from the community development block grant. The dollars assessed under the sewer capital charge were for the sewer treatment plant. Explanation followed by Mr. Shapiro, ~ Mr. Jack Gibson, 75 Sand Dollar Key, parcel 18-22-28-7126-06130, stated he bought two lots 15 years before with a free sewer hook-up. A few years later, he was contacted by M & M Utilities and told he had to pay a fee. He said now he had to pay a fee to someone else. He stated the appraisal of his property included sewer ability and the City had taxed based on that appraisal. He believed the owners should be grandfathered in. Mr. Rosenthal stated that although the City levied ad valorem taxes, it had nothing to do with the operation of a sewer system. He explained the Enterprise Fund and stated tax revenue received by the City based on the assessment did not in any way impact the operation of the sewerage. He then restated how the City became involved with this sewer issue. Mr. Frank McCord, 97 Sand Dollar Key, commented on the system and asked why the interest rate assessed the property owners was eight percent. Ms. Beamer stated eight percent was the reasonable rate determined by looking at the bond anticipation note held and reviewing the other interest rates the City was being charged. Mr. Shapiro explained further. Mr. Moore asked if any of the money went for back bills, Mr. Rosenthal explained the court order required that the City underwrite out of the sewer system fund of the City any operating deficit that was incurred by Southern States for the time they were receiver for the system. '-' 8 OCOEE CITY COMMISSION SPECIAL SESSION ~ PUBLIC HEARING: NON-AD VALOREM TAX ASSESSMENT - M & M UTILITIES AUGUST 25, 1992 Ms. Beamer advised this figure was up to $1,675 a month after the year's time. The court established a price the City had to pay at the time of the stipulations. From November 1990 through November 1991, the maximum the City had to pay was $1,675 a month. There were no further questions. Mr. Rosenthal said the next order of business was to consider a motion to adopt Resolution 92- 14. Ms. Beamer clarified concerning the interest rate and explained how the amount was determined, Mr. Rosenthal stated in 1991 the Commission approved compound interest, which would have resulted in higher interest, but the City was able to structure it so the interest was reduced to simple interest. Mr. Shapiro stated a decision to delete the interest would not hurt the City financially. Discussion followed. Mr. Rosenthal stated the appropriate motion would be to adopt Resolution 92-14 as amended. Commissioner Combs. seconded by Commissioner Woodson. moved to adopt Resolution 92-14 as amended. Motion carried 5-0. ,.., Commissioner Woodson moved not to charge the eight percent interest. Motion died for lack of a second. Mr. Bowness stated his bill was $22,561 if he paid it at once, but over ten years, it would cost him $43,000, The Commission clarified and stated at eight percent simple interest, the total, including interest, was $24,3466.40. Mayor Dabbs closed the public hearing. Commissioner Foster stated he felt compassion for the citizens and knew that the $18 a month would be a financial burden for some, Of the 307 parcels involved, only 92 were owner- occupied, 215 had absentee landlords. He suggested some type of homestead exemption for those that are owner-occupied. Mayor Dabbs addressed the public and thanked them for coming. "-" 9 OCOEE CITY COMMISSION SPECIAL SESSION ~ PUBLIC HEARING: NON-AD VALOREM TAX ASSESSMENT - M & M UTILITIES AUGUST 25, 1992 Adjournment The meeting adjourned at 9:41 p.m. Attest: J ~ '- 10 APPROVED City of Ocoee