Charlotte County, Florida Municipal Service Benefit Unit (MSBU) Study

Transcription

1 Charlotte County, Florida Municipal Service Benefit Unit (MSBU) Study MARCH 2007 Presented by: Government Service Group, Inc Mahan Drive, Suite 250 Tallahassee, FL (850) (850) (fax) Contact Person: Camille P. Tharpe, Sr. Vice President

2 Table of Contents EXECUTIVE SUMMARY...1 INTRODUCTION...10 BACKGROUND...11 OBJECTIVES...12 STUDY METHODOLOGY...13 ORGANIZATION AND ADMINISTRATION...15 ANALYSIS...20 FINDINGS AND RECOMMENDATIONS...64 IMPLEMENTATION...70 Government Services Group, Inc. i

3 List of Tables Table 1 MSBU Projects by...1 Table 2 New sment Amounts and Reassigned Amounts (Maintenance and Capital) Since Table 3 Summary of Created and Reassigned MSBUs by sment Methodology Since Table 4 Minimum, Maximum and Average sment Rates by sment Since Table 5 MSBU Areas...20 Table 6 Total Sub-MSBU Codes Created or Reassigned by...22 Table 7 MSBUs Created or Reassigned by...22 Table 8 New sment Amounts and Reassigned Amounts (Maintenance and Capital) Since Table 9 MSBUs Not Recently sed...25 Table 10 Summary of MSBUs by sment Methodology Since Table 11 Type of MSBU by sment Methodology, Start Date and Number per...34 Table 12 History of sment Rates by MSBU and...38 Table 13 Minimum, Maximum and Average Total sment Revenue by sment Since Table 14 Minimum, Maximum and Average sment Rates by sment Since Table 15 MSBU Capital Revenue Compared to Total CIP...45 Table 16 Base Information for Road and Drainage MSBUs by Stormwater Region...53 Table 17 Cost Per Mile Information for Road and Drainage MSBUs by Stormwater Region...54 Table 18 Cost Per Unit Information by Road and Drainage MSBUs by Stormwater Region...57 Table 19 Base Information for Waterway MSBUs by Stormwater Region...58 Table 20 Cost Per Unit Information for Waterway MSBUs by Stormwater Region...59 Table 21 Example of Common Service Charge for Mowing...60 Table 22 Total Taxable Value by Category...61 Table 23 Total Taxable Value of Maintenance MSBUs by Stormwater Region...61 Table 24 Tax Increment Revenue for all Capital MSBUs...63 Government Services Group, Inc. ii

4 (List of Tables Cont.) Table 25 Tax Increment Revenue for all Capital MSBUs by Stormwater Region...63 Table 26 Financing Assumptions...63 Table 27 Financing Assumptions...63 List of Figures Figure 1 Charlotte County Functional Organizational Chart Figure 2 Charlotte County MSBU Related Departments...17 Figure 3 MSBU Codes Versus MSBUs by...23 Figure 4 Cumulative MSBU Codes Versus MSBUs by...23 Figure 5 Visual Representation of Maintenance MSBUs Not Recently sed...26 Figure 6 Visual Representation of Maintenance MSBUs Not Recently sed West County...27 Figure 7 Visual Representation of Capital MSBUs Not Recently sed...28 Figure 8 Visual Representation of Capital MSBUs Not Recently sed Tropical Gulf Acres...29 Figure 9 Visual Representation of Capital MSBUs Not Implemented in 2006 Farabee Road...30 Figure 10 County Stormwater MSBU Boundaries...48 Figure 11 West County Road and Drainage MSBUs...49 Figure 12 North County Road and Drainage MSBUs...50 Figure 13 South County Road and Drainage MSBUs...51 Government Services Group, Inc. iii

5 Appendices Appendix A MSBU Master List Appendix B sment Methodology Definitions Appendix C Ordinance Amending Section Government Services Group, Inc. iv

6 Executive Summary Charlotte County (County) has engaged Government Services Group, Inc. (GSG) to assist the County in reviewing and evaluating the County s current Municipal Service Benefit Unit (MSBU) System (MSBU Study). The purpose of the MSBU Study was to provide the County Commission and County staff with a complete overview and understanding of the County s current MSBU programs and their accompanying components. The goal was to examine all of the different MSBUs dating back to 1990 when the County last evaluated their programs. However, readily accessible data was only available dating back through 1993 and thus, this Memorandum provides an analysis beginning with The five areas of focus identified in the Scope of Services were: The history of the County s utilization of special assessment programs; Administration of the programs; Review of the County s application of its special assessment programs as it pertains to the size and number of MSBUs; The County s use and dependence on MSBUs/special assessments as part of the long-range Capital Improvement Plan (CIP) and financial plan. Identify strengths and weaknesses of existing system; Provision of recommendations based on guidance from County staff and Commission. The following conclusions and recommendations are a result of the analysis conducted by GSG for the MSBU Study. CONCLUSIONS Charlotte County has an increasing reliance on MSBUs for funding of services and capital projects. Countywide, there are currently 69 MSBU Programs with budgets totaling over $77 million dollars. 1 Table 1 illustrates the increasing reliance by providing an overview of the number of MSBUs created by year by discrete MSBU project area. Using 1998 as a breakpoint and crediting 1998 with no new MSBUs, the County averaged 1.7 new MSBUs a year for the period of 1993 through the end of If you take out an unusually active year in 1993, that number drops to an average of 0.6 new MSBUs per year. In comparison, the period of provides a different outcome; that eight-year period averaged 4.5 new MSBU projects per year. Excluding the year 2004 as unusual activity, this period still averaged 3.9 new MSBUs per year. Table 1 MSBU Projects by MSBUs Initiated Source: Master MSBU List using 1993 as baseline. 1 Charlotte County RFP No No projects were identified from Master MSBU List for 1994 or Government Services Group, Inc. 1

7 Table 2 reinforces the County s increasing reliance on MSBUs for funding services or projects. Beginning with the baseline year of 1993, the table illustrates the newly created or re-initiated MSBUs within the County by incremental dollars. Since 1993, an additional $27 million dollars of MSBUs has been created and funded by MSBUs or had a basis reassignment. reassignment does not affect Public Works, but does impact the administration of the MSBUs. Table 2 New sment Amounts and Reassigned Amounts (Maintenance and Capital) Since 1993 Incremental Total New Dollars of Newly Over sment Amounts Created MSBUs Percentage Increase Percentage Increase and Reassigned and Reassigned of New MSBUs or Since 1993 Amounts sment Reassigned ,336,960 1,336, % 0% ,150 1,410,110 5% 5% ,714 1,712,824 21% 28% % 0% ,924,982 15,637, % 1070% ,417 16,478,223 5% 1133% ,308 16,679,530 1% 1148% ,219,746 20,899,276 25% 1463% ,182 21,399,458 2% 1501% ,169 22,059,628 3% 1550% ,591,975 24,651,603 12% 1744% ,812 24,657,415 0% 1744% ,522,961 27,180,376 10% 1933% Source: Master MSBU List using 1993 as baseline. The County uses several different methodologies as the assessment basis to fund the various MSBUs. These different methodologies require additional administration by all affected departments and cause confusion among the property owners. Table 3 illustrates the use of different methodologies by showing the type of MSBU, assessment basis, total billing units initiated or converted and total assessment amounts initiated or converted. New MSBUs and converted units were combined to show the amount of activity in the program as a whole. A maintenance assessment program undergoing a methodology change requires the same level of administrative resources as a new assessment program. 3 No projects were identified from Master MSBU List for 1994 or Government Services Group, Inc. 2

8 Table 3 Summary of Created and Reassigned MSBUs by sment Methodology Since 1993 Type sment Total Units Total sment Amounts Capital ERC 1,551 $232,552 ERU1 15,209 $1,817,733 ERU4 9,853 $1,241,328 ERU5 9,320 $642,117 PAV 923 $148,718 Capital Total $4,082,448 Maintenance ACR 112,058 $5,680,730 CFF 48,737 $378,216 ERU 1,011 $20,347 ERU0 15,212 $506,096 ERU1 2,826 $366,690 ERU2 4,684 $594,512 ERU3 2,634 $233,762 ERU4 185,337 $14,184,640 ERU6 578 $216,079 ERUD 2,804 $288,201 ERUR 1,077 $40,472 FF 207,166 $374,897 LOT 1,060 $213,283 Maintenance Total $23,097,927 sment rates have been increasing since the beginning of the time period included in the MSBU study, A few MSBUs did experience a rate reduction; however, the decreases were short lived. In nearly every instance, rates were eventually raised and often times were considerably higher than the rates were prior to being reduced. To illustrate the rate history, Table 4 lists minimum, maximum and average assessment rates by basis. Capital MSBUs are listed for informational purposes, but since they are very specific in nature, similarities across MSBUs are difficult to identify. Maintenance MSBUs, on the other hand, have many similarities in both the types of services and also in the rates that are being assessed. Government Services Group, Inc. 3

9 Table 4 Minimum, Maximum and Average sment Rates by sment Since 1993 sment Minimum Maximum Average sment Type sment Amount sment Amount Amount Capital ERC $38 $118 $78 ERU1 $14 $448 $162 ERU4 $53 $200 $114 ERU5 $28 $67 $43 PAV $161 $161 $161 Maintenance ACR $3 $175 $83 CFF $5 $16 $10 ERU $20 $20 $20 ERU0 $25 $50 $33 ERU1 $100 $200 $150 ERU2 $45 $186 $99 ERU3 $50 $223 $106 ERU4 $30 $262 $100 ERU6 $55 $615 $335 ERUD $100 $150 $128 ERUR $16 $45 $27 FF $2 $2 $2 LOT $200 $222 $211 Source: Master MSBU List, Rounded to Nearest Whole Dollar Responsibility for special assessments and MSBUs are shared by many departments and sections throughout the County. For the MSBU Study, the four departments/sections with direct participation in the administration of special assessments and MSBUs are Public Works, Utilities, the County Attorney s Office and the MSBU section of the Budget Office. Recently, proposed assessment programs have not been implemented and proposed increases in assessment rates have been denied. Major reasons proposed increases in assessment have been denied were factors such as excessive cost burden or lack of communitywide support. These issues should be addressed before the County undertakes any new MSBU creation. Based on the interviews conducted during the MSBU Study, GSG has categorized the following major issues identified by the County staff. Issue 1: sment rates too high Last year, several capital MSBUs were not implemented due to public outcry over the assessment rates. In addition, several existing MSBUs had proposed assessment rate increases that were not approved because of the public objection. Issue 2: sment costs change dramatically year-to-year Costs for road and drainage maintenance and capital MSBUs change dramatically yearto-year because of increasing costs of labor and materials. Issue 3: Various methodologies There are several methodologies used in the County MSBUs even though the types of services to be funded by the MSBUs are similar. The different methodologies require additional administration by all affected departments and cause confusion among the property owners. Government Services Group, Inc. 4

10 Issue 4: Issue 5: Common/base costs There is an interest in developing a charge for all MSBU properties for all base or common services. This charge would be the same amount for every parcel and would include as many of the common services as could be legally included. Countywide or district-wide charge for paving MSBUs There is interest in developing a countywide charge for paving roads on a per parcel basis so that enough revenue can be generated to complete the road paving programs. RECOMMENDATIONS After reviewing the current MSBU and special assessment programs in Charlotte County, along with input from many of the County departments, discussions have generated some ideas and recommendations for the future. Recommendations are listed below and have been categorized as Short, Mid and Long Term. The main criterion for the different timeframes is the operational, legal and political hurdles each may face. These suggestions are not the only viable alternatives warranting further consideration. However, based upon GSG s extensive experience throughout the State of Florida and current environment, GSG feels the suggestions will move the County in a better direction in terms of special assessment program restructuring. SHORT TERM (1 YEAR OR LESS) RECOMMENDATIONS This section focuses on what steps can be taken by the County that will result in immediate enhancements to the MSBU system in the County. In most cases, these steps can be accomplished for a modest or no additional expense over current funding levels. GSG views these steps as necessary to ensuring that the County elected officials have adequate information to make public policy decisions regarding the MSBUs. Furthermore, these are necessary incremental steps for the County to move toward any additional enhancements that are addressed in the Mid-Term Recommendations section. Recommendation 1: Comprehensive Analysis of Maintenance Programs Most of the road and drainage and canal/waterway maintenance MSBUs have been created at the request of the property owners within the area desiring an increased level of service. However, this piece-meal approach to determining the maintenance service areas increases the costs of providing these services. The first step in combining individual road and drainage and canal/waterway maintenance MSBUs into larger areas is to conduct a comprehensive analysis of all the road and drainage maintenance and canal/waterway MSBUs to determine the required services needed to achieve base or common standards. Planning, expectations and costs should to be fully understood and communicated to the public regarding roads and conditions. The County, in creating these MSBUs, is generating expectations from the community that the problems are being addressed. If roads and waterways/canals were improved and a true maintenance program was introduced, there may be a better reception due to the cost savings achievable to all residents. Therefore, it is recommended that the County conduct a comprehensive analysis of all of the road and drainage and canal/waterway maintenance programs. Recommendation 2: Comprehensive Analysis of Capital Programs The County should conduct a comprehensive analysis of the capital programs in Public Works to determine if economies of scale could result from combining MSBU areas for purposes of the Government Services Group, Inc. 5

11 construction thus reducing overhead and administrative costs. The analysis should include the feasibility of combining the financing of several MSBUs to reduce borrowing costs and evaluating the policy of five-year increments for the terms of the loans to eliminate the expenses related to several separate transactions instead of one comprehensive transaction. Recommendation 3: Address High sment Rates One approach to resolving the issue of perceived high assessment rates is to tie the type and level of services to be provided to the expenditures and rates required to fund the services. A clear message about the level of services might provide a means for public support. Next, an examination of the central service and administrative services cost allocations to each MSBU should be examined to ensure that proper allocation has been conducted. Even if the cost allocations are deemed appropriate, the County Commission could make a policy decision to only charge a portion of these costs and allow a subsidy by the Transportation Trust Fund for the remainder. This subsidy might address the high assessment rates. Recommendation 4: Increase MSBU and Special sment Rates To Allow For Rising Costs The County has done a good job during the creation of the MSBUs and special assessments of setting maximum rates to allow increases to keep pace with rising costs. However, since some of the MSBUs have been active for a number of years, those maximum rates are at the point of forcing Public Works to reduce services. The biggest cost in most of the maintenance programs is labor. If an assessment program is at its maximum rate and the County cannot retain, or hire staff at a wage required by that rate, then service will be reduced. The maximum rates for all programs should be revisited every three years to ensure they are sufficient. A three-year review also allows for public input at public hearings that are statutorily required when assessment rates are increased. The initiation of Recommendations 5, 6 and 7 could also assist in addressing maximum assessment rates. Recommendation 5: Perform Benefit/Cost Analysis of MSBU Section The County MSBU section of the Budget Office performs all of the assessment database maintenance functions. The costs of this centralized assessment database maintenance function are prorated among all of the MSBUs. Another step in analyzing the current assessment rates is to analyze the cost of maintaining the existing MSBU database. This analysis can range from a benefit/cost analysis of the status quo to complete out-sourcing of the database maintenance services. By doing this analysis, the County will have performed a comprehensive analysis of all components of the assessment rates. Recommendation 6: Develop Three or Five Budget Projections to Calculate Average Rates The County should explore developing three or five year budget projections for each MSBU with the appropriate increases in certain line items to address inflation. Once the budget projections are developed, the County could calculate an average budget and average assessment rate to fund the average budget. The average assessment rate could be imposed for the three or five year period. In years where the average budget was greater than the annual budget, the excess assessment revenue would be carried forward. In years where the average budget was less than the annual budget, the excess assessment revenue that was carried forward would be used to fund the shortfall. Recommendation 7: Create an MSTU for Common Administrative Services Another way to address the increasing assessment rates is to charge for the common administrative costs through the creation of a municipal service taxing unit (MSTU) that encompasses all of the MSBU properties and impose a millage rate to recover the costs of these common services. This method would bifurcate the costs between the MSBUs and the MSTUs based on the apportionment methodology and the taxable value of the properties. The MSTU option was described in earlier sections of the Memorandum. The MSTU would need to be created by July 1 in order for the MSTU millage to be imposed for if it follows an existing MSTU boundary or includes all of the unincorporated portions of Charlotte County. Government Services Group, Inc. 6

12 Recommendation 8: Incorporate Legal Input in the Development of Methodologies The special assessments imposed in the MSBUs must meet the Florida case law requirements for a valid special assessment. The County Attorney is involved in the special assessment process on a year round basis. The attorney s role in the initial phase of the creation of assessments is the development and review of ordinances and resolutions. However, the County Attorney is not typically part of the initial methodology development process, but does review the methodologies that are proposed. In order to ensure compliance with the case law criteria, it is recommended that the County Attorney become an integral part of the methodology initial development in the future creation of all MSBUs. Recommendation 9: Eliminate Occupied/Vacant Distinction for Road and Drainage MSBUs Charlotte County has created different service levels for many of their road and drainage assessment programs. The most common type of distinction is between vacant and occupied properties. The logic for the distinction is that the vacant parcels need more attention by the County, since they are typically not being maintained as diligently as some of their occupied neighbors. However, it is difficult to correlate that methodology with the general notion that occupied properties need less service than vacant parcels. Mowing may make the case for occupied being charged less than vacant because a property owner will maintain the right of way for an occupied property: whereas, a vacant property needs the County to keep up the maintenance. However, a similar case can be made that occupied properties still benefit from the mowing services because mowing the vacant properties helps to maintain the aesthetic value of the area. Therefore, it is recommended that the County eliminate the occupied/vacant distinction for road and drainage MSBUs. The elimination of multiple assessment rates within each MSBU would allow the Charlotte County MSBU Section to slow the escalating burden of monitoring and accounting these two separate rates. In addition, the Public Works Department would have less accounting of the costs between the two types of properties. MID TERM (2 3 YEARS) RECOMMENDATIONS This section of the Memorandum addresses those issues that will require a longer term to implement and which may require additional funding from the County to move them forward. These options may also require the County to evaluate several alternatives in terms of policy or actions to be taken. Furthermore, these are necessary incremental steps for the County to move toward any additional enhancements that are addressed in the Long-Term Recommendations section. Recommendation 10: Equivalent Residential Unit (ERU) Standardization The utilization of several types of ERUs has been demonstrated throughout this Memorandum. These different ERU bases cause increased administration and maintenance costs for these MSBUs as well as confusion for property owners who do not understand the definitions. While the County is making progress in standardizing the definition of an ERU, this process should be completed within two years. The County is already addressing this issue by moving towards a standard methodology (ERU4), but this should occur on a more immediate basis. The County needs to continue to address this issue by moving towards a standard methodology. A corollary recommendation is provided in Recommendation 11. Recommendation 11: Methodology Review Condominiums The utilization of different methodology approaches to condominiums has been demonstrated throughout this Memorandum. These different methodology approaches cause increased administration and maintenance costs for these MSBUs as well as confusion for property owners who do not understand the approaches. While the County is making progress in standardizing the condominium approach, this process should be completed within two years. Government Services Group, Inc. 7

13 LONG TERM (3 5 YEARS) RECOMMENDATIONS This section of the Memorandum addresses those issues that will require the longest term to implement and those which will require additional funding from the County to move them forward. These options will also require the County to evaluate several alternatives in terms of policy or actions to be taken. Recommendation 12: Creation of Road and Drainage Maintenance MSBUs With Boundaries Mirroring Current Stormwater Districts Once the comprehensive analysis of the road and drainage maintenance MSBUs is completed, the creation of road and drainage maintenance MSBUs with boundaries mirroring current stormwater districts is recommended. The effects of combining the smaller road and drainage maintenance MSBUs into larger units will have the greatest impact on the Public Works Department and the MSBU Section. Not only will the number of MSBUs be reduced, sub-categories of each special assessment methodology will be eliminated. This will ease the administration in the MSBU Section. The combining of individual MSBUs may reduce the amount of time and effort by Public Works in tracking and accounting for expenditures which should reduce overall costs. It will also give more flexibility to Public Works in scheduling of work efforts and allow them to explore ways to reduce costs. In addition, if more properties are included within the MSBUs, the fluctuations in annual expenditures are easier to absorb among more properties with less effect on the assessment rates. Recommendation 13: Base Administrative Charge or MSTU for Common Services Once the combined road and drainage maintenance MSBUs are created as provided in Recommendation 12, the next step is to conduct a detailed analysis of the line items that comprise the budgets. This analysis will identify the true common administrative costs across all MSBUs. After these costs have been identified, a methodology could be developed to allocate these costs to each MSBU and then to allocate the costs within each MSBU either on a parcel or billing unit basis. The development of a base charge may provide some eventual economies of scale for these basic administrative services, which may help reduce these costs. Recommendation 14: Explore Financing Options To Identify Cost Savings and Future Certain Costs For Capital MSBUs The County should review the current financing procedures of only borrowing funds in five-year increments for capital MSBUs and the use of variable rates. Most capital MSBUs have a project life of years and the initial borrowing and debt service schedule should mirror the life of the project. Fixed rate financing options would provide exact financing costs over the life of the capital project and eliminate interest rate risk. As the financing on the current capital MSBUs nears completion of each cycle, the County should explore the option of combining the financing of several MSBUs at the same time. The magnitude of such combined revenue requirements may result in better financing options lower interest rates, longer terms for repayment, reduced borrowing costs all options that could lower the costs of capital MSBUs and result in lower capital assessment rates. Recommendation 15: Creation of Non-Tradition Tax Increment Funding (Non-CRA) for Capital MSBUs Once the comprehensive analysis of the capital MSBUs is completed and the County has investigated better financing options for capital costs, the next step would be to explore the creation of non-traditional tax increment funding for capital MSBUs. If created by County ordinance, the implementation of either tax increment option discussed in the Memorandum is not restricted to the general law requirements in Chapter 163, Florida Statutes; i.e., the proof of a blighted area is not required. One option is to provide by home rule ordinance for an annual contribution by the County from available revenue sources of an amount measured by all or a portion of the tax assessment increment that occurs within a defined area. Under this financing concept, all or a portion of a MSBU would be funded from special assessments levied against benefited property and collected on the ad valorem tax bill pursuant Government Services Group, Inc. 8

14 to the Uniform Collection Method. The level of such non-ad valorem assessments on an annual basis could be reduced, either area wide or on a per parcel basis, in an amount equal to the dedicated home rule increment by the County. As an alternative, the County could create a tax increment trust fund to fund capital MSBUs. The home rule ordinance could create either a Countywide Trust Fund or individual trust funds within each MSBU. By ordinance, an annual tax increment transfer could be required for the trust funds and applied to fund respectively the countywide road system and the road system corresponding to the specific MSBU areas. In the event bonds are issued payable from such trust funds, the ordinance commitment of the annual increment transfer would become a contractual obligation to the bondholders under the authorizing bond resolution. The amount of the annual required tax increment transfer would be calculated in a formula provided in the implementing ordinance and would be required to be deposited into each of the trust funds. IMPLEMENTATION Phase Two of the MSBU Study will be based upon County Commission policy direction regarding the recommendations provided within this Memorandum. However, Phase Two should include, at a minimum, the work effort to validate the initial findings and address the issues presented. GSG has provided a Scope of Services outlining the necessary steps required to implement the Short Term Recommendations and to provide a foundation for the Mid and Long Term Recommendations. Government Services Group, Inc. 9

15 Introduction Charlotte County (County) has engaged Government Services Group, Inc. (GSG) to assist the County in reviewing and evaluating the County s current Municipal Service Benefit Unit (MSBU) System (MSBU Study). GSG is Florida s most preeminent firm in the development, implementation, administration, and evaluation of local government special assessment programs. GSG specializes in addressing and resolving local government finance and taxation issues by working with cities, counties, special districts, and state agencies to develop uniquely tailored funding and service delivery solutions for critical infrastructure and service needs. This document is the Memorandum, which summarizes the results of the evaluation and which is the deliverable for this engagement. Government Services Group, Inc. 10

16 Background Charlotte County defines Municipal Service Benefit Units (MSBUs) as special benefit districts delineated by boundaries within the unincorporated area(s) of Charlotte County, which are established to provide construction and maintenance services for roads, rights-of-way, bridges, stormwater, waterways, bicycle paths and beach re-nourishment. In an MSBU, each property owner pays a special assessment that is fairly and reasonably apportioned among the properties receiving a special benefit for services provided. The County is granted specific powers by the Florida Constitution to carry on county government in a manner that is not inconsistent with general or special law. Specifically section (1)(q), Florida Statutes states a county may: Establish, and subsequently merge or abolish those created hereunder, municipal service taxing or benefit units for any or all of the unincorporated area of the county, within which may be provided fire protection; law enforcement; beach erosion control; recreation service and facilities; water; streets, sidewalks, street lighting; garbage and trash collection and disposal; drainage; transportation; indigent health care services; mental health care services; and other essential facilities and municipal services from funds derived from service charges, special assessments, or taxes within such unit only. Subject to consent by ordinance of the governing body of the affected municipality given either annually or for a term of years, the boundaries of a municipal service taxing or benefit unit may include all or part of the boundaries of a municipality. If ad valorem taxes are levied to provide essential facilities and municipal services within the unit, the millage levied on any parcel of property for municipal purposes by all municipal service taxing units and the municipality may not exceed 10 mills. The Florida Constitution prohibits the taxation of property inside a municipality by a county when no real and substantial benefit accrues to municipal residents and property from the county service. Section (7), Florida Statutes states: No county revenues, except those derived specifically from or on behalf of a municipal service taxing unit, special district, unincorporated area, service area, or program area, shall be used to fund any service or project provided by the county when no real and substantial benefit accrues to the property or residents within a municipality or municipalities. The special assessments imposed in the MSBUs must meet the Florida case law requirements for a valid special assessment. These requirements are: The services or facilities provided must confer a special benefit to the property being assessed and, The costs assessed must be fairly and reasonably apportioned among the properties that receive the special benefit. The County has a current population of approximately 160,000 people and is expected to exceed 200,000 residents within the next 10 to 15 years. 4 Countywide, there are currently 69 MSBU Programs with budgets totaling over $77 million dollars. 5 Charlotte County has a long history of utilizing MSBUs and other funding mechanisms to facilitate the improvements and repairs desired by the community. 4 Current population estimates taken directly from Charlotte County RFP No and projected population growth from the Charlotte County Website. 5 Charlotte County RFP No Government Services Group, Inc. 11

17 Objectives The purpose of the MSBU Study was to provide the County Commission and County staff with a complete overview and understanding of the County s current MSBU programs and their accompanying components. The goal was to examine all of the different MSBUs dating back to 1990 when the County last evaluated their programs. However, readily accessible data was only available dating back through 1993 and thus, this Memorandum provides an analysis beginning with The five areas of focus identified in the Scope of Services were: The history of the County s utilization of special assessment programs; Administration of the programs; Review of the County s application of its special assessment programs as it pertains to the size and number of the MSBUs; The County s use and dependence on MSBUs/special assessments as part of the long-range Capital Improvement Plan (CIP) and financial plan. Identify strengths and weaknesses of existing system; Provision of recommendations based on guidance from County staff and Commission. Government Services Group, Inc. 12

18 Study Methodology GSG s objective for this engagement is to review and evaluate the current MSBU Program including its history, administration, size and County dependence. The process included a due diligence review of the many components of the MSBU program. GSG has met with County staff on three separate occasions to gather information and to develop a thorough understanding of the program, the process and the issues. For the study, GSG utilized a master list of all current, completed and proposed MSBUs (Master MSBU List) which was provided by the Charlotte County MSBU Department. The List is provided as Appendix A and includes multiple listings of the MSBU areas based on items such as rates, occupied or vacant parcels or assessment basis. One of the first steps in the project was to confirm the scope of work effort. Using the Master MSBU List, GSG determined there are 13 general categories of MSBUs (based on types of services or facilities to be funded) within the County, as follows: Beach re-nourishment Canal maintenance Waterway maintenance Drainage maintenance Road maintenance Road and drainage maintenance Road and drainage capital Wastewater capital Water capital Water/wastewater capital Stormwater maintenance Fire services Solid waste services It was determined and confirmed by County staff that the following categories would not be included within the MSBU Study: Beach re-nourishment Fire services Solid waste services These categories are not included in the tables and analysis within this Memorandum. Types of information collected and reviewed for the MSBU Study include MSBU descriptions and cost data, countywide GIS information, countywide budget information, policies and procedures for County departments, procedures in notifying and dealing with citizens, meeting presentations, organizational charts, ordinances and resolutions adopted by the County and calendars. The majority of the data was provided during the meetings with the individual departments. A general meeting was subsequently followed by meetings with Public Works, the MSBU Section and Utilities. A meeting with the Budget Department never occurred; however, budget information was provided in a timely and complete manner. Government Services Group, Inc. 13

19 Following the completion of the data gathering and informational meetings, GSG reviewed the information. GSG s Technical Services Division assisted in capturing, organizing and concentrating much of the data used to understand the program. Weekly updates were used by GSG to communicate project status and additional data needs. There have been a number of assessment methodologies used historically and each has been tailored to meet the objectives of each specific MSBU. The scope of the project did not include reviewing each assessment methodology in isolation, but rather the County s general use of different assessment methodologies. Government Services Group, Inc. 14

20 Organization and Administration Responsibility for special assessments and MSBUs are shared by many departments and sections throughout the County. For the MSBU Study, the four departments/sections with direct participation in the administration of special assessments and MSBUs are Public Works, Utilities, the County Attorney s Office and the MSBU section of the Budget Office. Figure 1 provides a summarized version of the County s functional organizational chart and the placement of the departments involved in the MSBU Study. Figure 1 Charlotte County Functional Organizational Chart Charlotte County Board of County Commissioners Organization Chart FY 2006/2007 Voters Charlotte County Tax Collector Property Appraiser Board of County Commissioners Sheriff Supervisor of Elections Clerk of Circuit Court County Attorney County Administrator Assistant to County Administrator Budget Director Human Resources Director Assistant County Administrator Assistant County Administrator Tourist Development Director Economic Development Manager Redevelopment Manager Public Works Parks, Recreation & Cultural Resources Environmental and Extension Services Communications and Marketing Information Technology Human Services Purchasing Building Construction Services Community Development Fire/EMS Utilities Facilities Management Government Services Group, Inc. 15

21 ORGANIZATION Public Works employs two full-time Municipal Services District Representatives (MSDRs), who coordinate MSBU projects and budgets. The role of the MSDR is to interact with citizens and MSBU Committees to identify and implement capital and maintenance projects. The MSDRs report to the Public Works Finance Manager who also attends MSBU Committee meetings when needed to explain budget issues. The Finance Manager reports directly to the Public Works Director, who reports to the County Administrator. In addition to supervising the MSDRs, the Finance Manager is responsible for all budgeting and accounting functions within the entire Public Works Division. The Public Works Supervisor reports to the Finance Manager. The Supervisor spends approximately 80% of her time on special assessments and MSBU related functions. Reporting to the Supervisor is an Accountant II who also spends the majority of her time on MSBU related functions. The Utilities Director oversees all of the daily operations of special assessments and MSBUs directly related to utilities. Reporting to the Director are the engineering department, financial manager and community relations manager, which handle engineering and construction, finances and public relations respectively. The number of capital MSBUs managed by utilities is small compared to the number of capital and maintenance MSBUs managed by Public Works, but it takes a considerable amount of time. Recently, an employee has been hired to assist with these tasks. The MSBU section of the Budget Office has four full-time employees dedicated to the administration of MSBU programs throughout the County. Three employees in this section report to the MSBU Supervisor and the Supervisor, in turn, reports directly to the Budget Officer. The County Attorney is involved in the special assessment process on a year round basis. The Attorney s role in the initial phase of the process is the creation and review of ordinances and resolutions. The statutory requirements of advertising and noticing citizens are handled by the MSBU Department, but the County Attorney helps with managing the schedule to ensure critical deadlines are met. A representative from the Attorney s office attends every public hearing when potential assessment rate increases are on the agenda. With the number of special assessments combined with a rising cost environment, rate increase meetings are fairly frequent. Approximately 20% of the County Attorney s time is allocated to MSBU and special assessment related tasks. The County Attorney does not participate in the methodology development process nor does he typically review methodologies that are proposed. The largest pitfall of MSBUs and special assessments are methodologies that are unable to meet the two legally required tests: a methodology must be fair and reasonable and properties must receive real and substantial benefits. Government Services Group, Inc. 16

22 Figure 2 illustrates all personnel directly impacted by special assessments and MSBUs for the MSBU Study. Figure 2 Charlotte County MSBU Related Departments Government Services Group, Inc. 17

23 ADMINISTRATION The administration of special assessments and MSBUs can be divided into four sections: Identification, Creation, Implementation and Maintenance. Identification Most MSBUs are identified by citizens, or groups of citizens, such as home owners associations seeking an improvement within their community. The ideas are conveyed to the County directly through one of their departments (usually Public Works or Utilities) or through the citizens elected officials. Once a request has been made for a specific MSBU or improvement, the process moves into the creation phase. Creation This process differs slightly depending on the type of MSBU. In Utilities, engineering studies must be completed to determine feasibility and costs. The initial cost of the study is paid by the County and is added to the MSBU once underway. If the MSBU does not move forward immediately, the cost of the study either will be eventually added to the MSBU at a later date or is absorbed by the County. For road and drainage maintenance programs, one of the Municipal Services District Representatives will meet with the citizens to gain a better understanding of the services they are interested in receiving. Next, the information is forwarded to the MSBU Section where they identify the affected properties, apply a methodology and extend the rates that were calculated by Public Works. Last, the County follows the required statutory process of notification and adoption of the assessment program. Historically, different methodologies were created and tailored to meet specific financial goals of the County; however, the County is moving to a more universal measurement unit, ERU4. The County Attorney s Office assists with the creation and review of ordinances and resolutions. At the request of the citizens group petitioning the County for services, an advisory group can be created to provide additional oversight to the assessment program. Advisory groups are not required; however, they are beneficial in serving as central point of contact and information for the Municipal Services District Representatives. Implementation Depending on the program type, work on the MSBU may start immediately or may be delayed in order to complete studies and build up reserves. Usually, maintenance programs will begin soon after approval and will continue until the special assessment is dissolved. Most of the maintenance programs are found in Public Works. Administration duties are shared by Public Works, Utilities and the MSBU Department. Maintenance Public Works is responsible for the maintenance and operation of the majority of MSBUs and special assessment programs. Their duties include managing scheduling and allocating resources in conjunction with the general needs of the County. This phase is the most costly due to the ongoing requirements of time and resources needed to administer the assessment programs. Just the administration alone requires eight full time employees in Public Works, four in the MSBU Section and one in Utilities. In addition, indirect costs of these programs are likely to increase to over $1.8 million annually according to Public Works. Calls from citizens are handled by the MSBU Department as well as the Municipal Services District Representatives. All calls answered by the MSBU Department are logged. According to their records, from June 21 to July 28, 2006, 1,090 calls were handled from citizens regarding special assessments. 6 This type of call volume may not be typical of an average month; however, it demonstrates a level possible during peak volume times. Rising fuel costs and wages, combined with the inability of Public Works to pass on these increases without notification due to rates being at maximum levels, will require more frequent rate increase notices in the future. 6 According to MSBU Department from meeting on 1/10/07. It was noted this volume followed 140,000 notices sent to property owners in 22 MSBUs with rate increases. Government Services Group, Inc. 18

24 ADMINISTRATIVE S Public Works is in the process of migrating from the current maintenance management system, the Burke System, to a new system called DataStream. The move is necessary to handle the increasing complexity of managing public works MSBUs. The new central maintenance management system will be installed countywide and will assist the County in better planning and allocating resources to MSBUs countywide. The initial cost for the new DataStream system is projected at approximately $450,000 for the Public Works Department only. Ongoing costs are difficult to project, as Charlotte County will be the first user of this system. The Charlotte County Adopted Budget is over $992 million. 7 Service levels are in jeopardy of being reduced due to the lack of Public Works resources currently available and the inability to add any additional resources due to budgetary constraints. Other costs that need to be considered when evaluating an assessment program are those associated with the County Attorney s Office and the legally mandated annual requirements to update assessment rolls. 7 Source Online, 2003/04 and 2006/07 Charlotte County Budget Books. Government Services Group, Inc. 19

25 Analysis HISTORY OF ASSESSMENT PROGRAMS One of the tasks within the MSBU Study is to review and provide a history of the County s MSBU programs and the County s reliance on those programs. This review was to examine trends and program directions, not necessarily to review every assessment methodology. GSG reviewed each MSBU identified on the Master MSBU List, reviewed details and budgets of each program and categorized the programs for further analysis. A categorization that created a discrete list of MSBUs for each MSBU area was used by GSG for the historical analysis and is provided as Table 5 Table 5 MSBU Areas Name of MSBU Category Type Ackerman Waterway Waterway Maintenance Alligator Creek Waterway Unit Waterway Maintenance Boca Grande Street And Drainage Unit Road/Drainage Maintenance Buena Vista Area Waterway Unit Waterway Maintenance Burnt Store Village Street And Drainage Unit Road/Drainage Maintenance Charlotte County Maintenance Dredging Benefit Unit Waterway Maintenance Charlotte Ranchettes Street And Drainage Unit Road/Drainage Capital Charlotte Ranchettes Street And Drainage Unit Road/Drainage Maintenance Cook And Brown Street Unit Road/Drainage Maintenance Deep Creek (Non-urban) Street And Drainage Unit Road/Drainage Maintenance Edgewater North Waterway Unit Waterway Maintenance Englewood East (Non-urban) Street And Drainage Unit Road/Drainage Maintenance Farabee Road Street and Drainage Unit Road/Drainage Capital Farabee Road Street and Drainage Unit Road/Drainage Maintenance Gardens of Gulf Cove Street And Drainage Unit Road/Drainage Maintenance Greater Port Charlotte Street and Drainage Unit Road/Drainage Maintenance Grove City Street And Drainage Unit Road/Drainage Maintenance Grove City Waterway Unit Waterway Maintenance Gulf Cove Street And Drainage Unit Road/Drainage Maintenance Gulf Cove Waterway Benefit Unit Waterway Maintenance Harbour Heights Street And Drainage Unit Road/Drainage Maintenance Harbour Heights Street and Drainage Unit Solomon Drive Road/Drainage Capital Harbour Heights Waterway Maintenance District Waterway Maintenance Hayward Canal Area Waterway Unit Waterway Maintenance Lee Branch Waterway Unit Waterway Maintenance Lemon Bay Street And Drainage Unit Road/Drainage Maintenance Little Gasparilla Island Waterway Unit Waterway Maintenance Manchester Waterway Benefit Unit Waterway Maintenance Maple Leaf Estates/Victoria Estates/Kings Gate Water & Sewer Water/Sewer Capital Mid-Charlotte Stormwater Utility Unit Stormwater Maintenance Government Services Group, Inc. 20

26 Name of MSBU Category Type Northwest Port Charlotte Street And Drainage Unit Road/Drainage Maintenance Northwest Port Charlotte Waterway Waterway Maintenance Palm Shores Waterway Unit Waterway Maintenance Peace River Shores Street And Drainage Unit Road/Drainage Maintenance Peace River Shores Waterway Maintenance District Waterway Maintenance Pirate Harbour Wastewater MSBU Sewer Capital Pirate Harbour Waterway Unit Waterway Maintenance Placida Area Street And Drainage Unit Road/Drainage Maintenance Punta Gorda (Non-urban) Street & Drainage Unit Road/Drainage Maintenance Punta Gorda (Non-urban) Street & Drainage Unit Marl Paving Road/Drainage Capital Punta Gorda (Non-urban) Street and Drainage Unit Colon Road/Drainage Capital Punta Gorda (Non-urban) Street and Drainage Unit Magnolia Road/Drainage Capital Rotonda Broadmoor Street And Drainage Unit Road/Drainage Maintenance Rotonda Heights Street And Drainage Unit Road/Drainage Maintenance Rotonda Lakes Street And Drainage Unit Road/Drainage Maintenance Rotonda Long Meadow Street And Drainage Unit Road/Drainage Maintenance Rotonda Meadows Wastewater MSBU Sewer Capital Rotonda Meadows/Villas Street And Drainage Unit Road/Drainage Maintenance Rotonda Pine Valley Street And Drainage Unit Road/Drainage Maintenance Rotonda Pinehurst Street And Drainage Unit Road/Drainage Maintenance Rotonda Sands North Street And Drainage Unit Road/Drainage Maintenance Rotonda Sands Wastewater MSBU Sewer Capital Rotonda Villas and Springs Water and Wastewater MSBU Sewer Capital Rotonda West Street And Drainage Unit Road/Drainage Maintenance Rotonda White Marsh Street And Drainage Unit Road/Drainage Maintenance South Bridge Waterway Unit Waterway Maintenance South Burnt Store Street And Drainage Unit Road/Drainage Maintenance South Charlotte Stormwater Utility Unit Stormwater Maintenance South Gulf Cove (Non-urban) Street And Drainage Unit Road/Drainage Maintenance South Gulf Cove (Non-urban) Street And Drainage Unit Road/Drainage Capital South Gulf Cove Phase 1 Wastewater Collection Facilities Sewer Capital South Gulf Cove Phase 1 Water Distribution Facilities Water Capital South Gulf Cove Phase 2 Wastewater Collection Facilities Sewer Capital South Gulf Cove Phase 2 Water Distribution Facilities Water Capital South Gulf Cove Phase 3 Wastewater Collection Facilities Sewer Capital South Gulf Cove Phase 3 Water Distribution Facilities Water Capital South Gulf Cove Phase 4 Wastewater Collection Facilities Sewer Capital South Gulf Cove Phase 4 Water Distribution Facilities Water Capital South Gulf Cove Phase 5 Wastewater Collection Facilities Sewer Capital South Gulf Cove Phase 5 Water Distribution Facilities Water Capital South Gulf Cove Waterway Benefit Unit Waterway Maintenance South Punta Gorda Heights East Street And Drainage Unit Road/Drainage Maintenance South Punta Gorda Heights Street And Drainage Unit Road/Drainage Maintenance South Punta Gorda Heights West Street And Drainage Unit Road/Drainage Maintenance Suncoast Boulevard Street and Drainage Unit Road/Drainage Maintenance Government Services Group, Inc. 21

27 Name of MSBU Category Type Suncoast Waterway Unit Waterway Maintenance Town Estates Street And Drainage Unit Road/Drainage Maintenance Tropical Gulf Acres Street and Drainage Unit Road/Drainage Capital Tropical Gulf Acres Street And Drainage Unit Road/Drainage Maintenance West Charlotte Stormwater Utility Unit Stormwater Maintenance West Tarpon to Orange Dr. Wastewater MSBU Sewer Capital Source: Master MSBU List MSBUs ISSUED BY YEAR From the data provided by the County, all of the MSBU and special assessment programs were examined by start date. 8 Each MSBU subcomponent was counted in the year it was created or changes were made to methodology. Table 6 is an analysis of independent assessment MSBUs (subcomponents) by year. There were no new MSBUs or changes to existing MSBUs in 1994 or Table 6 Total Sub-MSBU Codes Created or Reassigned by Total Sub- MSBUs Created Source: Master MSBU List using 1993 as baseline. Significant change in methodologies occurred countywide in The change was primarily the assignment of different rates to assessment subcomponents based on occupied and vacant parcels. There were no new MSBUs that year, but 27 existing MSBUs were re-implemented with new ERU definitions and differentiating rates for vacant and occupied land. The trend of tailoring assessment basis definitions continues presently and is described in more detail later in the memorandum. Table 7 provides an overview of the number of MSBUs created by year by discrete MSBU project area. The analysis is similar to Table 6, except program subcomponents were combined and only the MSBU was counted. The period from 1993 through 1997 is the same as Table 6 in terms of number of MSBUs created. Using 1998 as a breakpoint and crediting 1998 with no new MSBUs, the County averaged 1.7 new MSBUs a year for the period of 1993 through the end of If 1998 is removed due to an unusually active year that number drops to an average of 0.6 new MSBUs per year. In comparison, the period of provides a different outcome with an eight-year average of 4.5 new MSBUs per year. Excluding the year 2004 as unusual activity, this period averaged 3.9 new MSBUs per year. Table 7 MSBUs Created or Reassigned by MSBUs Initiated Source: Master MSBU List using 1993 as baseline. 8 Source MSBU Master Report 9 No projects were identified from Master MSBU List for 1994 or No projects were identified from Master MSBU List for 1994 or Government Services Group, Inc. 22

28 Figure 3 graphically illustrates the data provided in Tables 6 and 7. The number of MSBUs is listed along the left side of the graph with the year the MSBUs were created listed on the bottom of the graph. Figure 3 MSBU Codes Versus MSBUs by Projects Initiated MSBU Sub Projects Created * * Figure 4 shows the cumulative effect of the additional MSBU codes and MSBUs by year. Figure 4 Cumulative MSBU Codes Versus MSBUs by Projects Initiated - Cumulative Total MSBU Sub Projects Created - Cumulative Total * * Government Services Group, Inc. 23

29 TOTAL ADDITIONAL DOLLARS YEAR Table 8 reinforces the County s increasing reliance on MSBUs for funding services. Beginning with the baseline year of 1993, Table 8 illustrates the newly created or re-initiated MSBUs within the County by incremental dollars. Since 1993, an additional $27 million dollars of capital projects and services has been created and funded by MSBUs. Table 8 New sment Amounts and Reassigned Amounts (Maintenance and Capital) Since 1993 Incremental Total New Dollars of Newly Over sment Amounts Created MSBUs Percentage Increase Percentage Increase and Reassigned and Reassigned of New MSBUs or Since 1993 Amounts sment Reassigned ,336,960 1,336, % 0% ,150 1,410,110 5% 5% ,714 1,712,824 21% 28% % 0% ,924,982 15,637, % 1070% ,417 16,478,223 5% 1133% ,308 16,679,530 1% 1148% ,219,746 20,899,276 25% 1463% ,182 21,399,458 2% 1501% ,169 22,059,628 3% 1550% ,591,975 24,651,603 12% 1744% ,812 24,657,415 0% 1744% ,522,961 27,180,376 10% 1933% Source: Master MSBU List using 1993 as baseline. OVERVIEW OF MSBUS NOT ASSESSED Based on data provided by the MSBU Department, MSBUs not assessed were suggested as a good gauge for potential future pipeline. Major reasons past MSBUs were not assessed were factors such as excessive cost burden or lack of community wide support. Although assessments did not begin, or were not supported, does not mean they are not necessary now, or will not be reevaluated in the future. 11 No projects were identified from Master MSBU List for 1994 or Government Services Group, Inc. 24

30 Table 9 is a list of MSBUs that were not recently assessed or have not yet begun, but does not include any new potential MSBUs that may be initiated in the near future. Table 9 MSBUs Not Recently sed MSBU Name Category Type Charlotte Ranchettes Street And Drainage Unit Road/Drainage Capital Charlotte County Maintenance Dredging Benefit Unit Ackerman 1 Waterway Maintenance Charlotte County Maintenance Dredging Benefit Unit - Alligator Creek 1 Waterway Maintenance Charlotte County Maintenance Dredging Benefit Unit - Buena Vista 1 Waterway Maintenance Charlotte County Maintenance Dredging Benefit Unit -Gulf Cove 1 Waterway Maintenance Charlotte County Maintenance Dredging Benefit Unit - Greater Port Charlotte 1 Waterway Maintenance Charlotte County Maintenance Dredging Benefit Unit Hayward 1 Waterway Maintenance Charlotte County Maintenance Dredging Benefit Unit - Harbour Heights 1 Waterway Maintenance Charlotte County Maintenance Dredging Benefit Unit Lemon Bay 1 Waterway Maintenance Charlotte County Maintenance Dredging Benefit Unit - Lee Branch Canal 1 Waterway Maintenance Charlotte County Maintenance Dredging Benefit Unit Manchester 1 Waterway Maintenance Charlotte County Maintenance Dredging Benefit Unit - Northwest Port Charlotte 1 Waterway Maintenance Charlotte County Maintenance Dredging Benefit Unit - Pirate Harbour 1 Waterway Maintenance Charlotte County Maintenance Dredging Benefit Unit - Peace River Shores 1 Waterway Maintenance Charlotte County Maintenance Dredging Benefit Unit - Palm Shores 1 Waterway Maintenance Charlotte County Maintenance Dredging Benefit Unit Suncoast 1 Waterway Maintenance Charlotte County Maintenance Dredging Benefit Unit - South Gulf Cove 1 Waterway Maintenance Charlotte County Maintenance Dredging Benefit Unit - South Peace River 1 Waterway Maintenance Farabee Road Street and Drainage Unit Road/Drainage Capital Grove City Waterway Unit Waterway Maintenance Little Gasparilla Island Waterway Unit Waterway Maintenance Northwest Port Charlotte Waterway 2 Waterway Maintenance Peace River Shores Waterway Maintenance District Waterway Maintenance Palm Shores Waterway Unit Waterway Maintenance Rotonda Villas and Springs Water and Wastewater MSBU 2 Sewer Capital Tropical Gulf Acres Street And Drainage Unit Road/Drainage Capital Source: Master MSBU List 1 The Charlotte County Maintenance Benefit Unit was never created. 2 MSBUs proposed to begin in 2007/08. Another way to analyze potential future MSBUs is by visually examining the geographical layout. Location in relation to neighboring MSBUs, similar MSBUs in surrounding areas and visual examination of geographic areas may reveal potential efficiencies that may be captured by better planning and coordination. MSBUs have been separated by maintenance and capital for analysis. Government Services Group, Inc. 25

31 MAINTENANCE PROGRAMS NOT RECENTLY ASSESSED Figure 5 is a visual representation of the maintenance MSBUs that were not assessed. These MSBUs were countywide. As noted in Table 9, the majority of the MSBUs that were not assessed were waterway maintenance. Figure 5 Visual Representation of Maintenance MSBUs Not Recently sed Government Services Group, Inc. 26

32 Figure 6 takes the analysis a step further and illustrates West County portion of the map. It is difficult to identify similarities among neighborhoods in close proximity to each other, or to match up communities on a countywide basis. Figure 6 Visual Representation of Maintenance MSBUs Not Recently sed West County Government Services Group, Inc. 27

33 CAPITAL PROGRAMS NOT RECENTLY ASSESSED Figure 7 is a visual illustration of some capital MSBUs that were not recently assessed within the County. Capital MSBUs, unlike maintenance, have very few, if any, common denominators. These MSBUs tend to be very specific in terms of requirements and costs for each assignment. Capital project MSBUs and special assessments are requested by communities to remedy a deficiency in their neighborhood. Figure 7 Visual Representation of Capital MSBUs Not Recently sed The areas highlighted above (Figure 7) show MSBUs with very different characteristics. For instance, water/wastewater versus street/drainage, or the varying parcel sizes. These variations make it difficult to identify combinations. Government Services Group, Inc. 28

34 Closer examination of the proposed street and drainage MSBU area in Tropical Gulf Acres, shown in Figure 8, shows a platted neighborhood with some infrastructure already in place and in varying degrees of condition. Figure 8 Visual Representation of Capital MSBUs Not Recently sed Tropical Gulf Acres Government Services Group, Inc. 29

35 Conversely, Farabee Road street and drainage MSBU is best described as having minimal current infrastructure, multiple acre lots and a rural community setting. A visual of this neighborhood is presented in Figure 9. It would be impractical to develop a methodology for these two street and drainage MSBUs that would fairly divide costs and benefit. Figure 9 Visual Representation of Capital MSBUs Not Implemented in 2006 Farabee Road APPLICATION OF SPECIAL ASSESSMENT PROGRAMS AS IT TAINS TO SIZE AND NUMBER OF PROGRAMS Since 1993, special assessment programs and MSBUs have increased in number and in total value. The total number of programs was analyzed in the previous section of this Memorandum; this section will discuss the types of ERUs and total dollars by ERU over the period covered by the MSBU Study. ASSESSMENT METHODOLOGY DEFINITIONS 12 Summary definitions of the assessment basis codes (methodology) are discussed below; more comprehensive definitions are provided in Appendix B. ACR Acre Equivalent to one acre of land CFF Canal Front Foot Per foot of canal or waterway frontage. ERC Equivalent Residential Connection ERU Equivalent Residential Unit - means the number of residential units (single-family, mobile homes, multi-family, condominiums, etc.) within the boundaries of the unit. 12 Summary definitions provided by Charlotte County Budget Office on January 11, Definitions that are more comprehensive can be found in Appendix B. Government Services Group, Inc. 30

36 ERU0 ERU1 ERU2 ERU3 ERU4 Equivalent Residential Unit per Lot for South Gulf Cove Waterway Unit. Equivalent Residential Unit 1 Defined as one residential dwelling unit and for sewer districts and waterway districts Per 80 foot lot. Equivalent Residential Unit Unique by Platted Lot a single-family or duplex residential dwelling, non-platted agricultural, single-family or duplex residential shall constitute one-tenth (1/10th) of an Equivalent Residential Unit a dwelling other than agricultural, single-family (including a single mobile home) or duplex residential use shall constitute one-fifth (1/5th) of an Equivalent Residential Unit Equivalent Residential Unit Unique by Parcel a parcel defined as agricultural, single-family or duplex residential shall constitute onetenth (1/10th) of an Equivalent Residential Unit a parcel other than agricultural, single-family or duplex residential use shall constitute one-fifth (1/5th) of an Equivalent Residential Unit Equivalent Residential Unit Standard size, unimproved, single family parcels shall be assessed on the basis of one (1) ERU or a proportion of an ERU depending on the size of the parcel. For each property zoned residential or mobile home, in which more than one dwelling unit may be placed under applicable land use and zoning requirements, shall be assessed that number of ERUs determined by all front footage divided by front footage or standard size single family parcel in the area = Number of ERUs. zoned residential or mobile home on which one or more dwelling units have been placed shall be assessed the greater of the number of ERUs determined according to the actual number of existing dwelling units on the parcel zoned residential or mobile home on which no additional residential units may be placed under applicable land use and zoning requirements shall be assessed one (1) ERU for each existing residential unit zoned other than residential or mobile home shall be assesses that number of ERUs determined by the following formula: All front footage divided by front footage of standard size single family parcel in the area = number of ERUs In 2004, the County adopted an ordinance (provided as Appendix C) amending section of the Charlotte County code. The purpose of the amendment was to standardize the definition of an Equivalent Residential Unit by deleting exemptions from street and drainage assessments of properties abutting streets normally maintained by other County, State, or Federal funds. The amendment reads as follows: 13 Equivalent residential unit (ERU) is defined, for assessment purposes, as follows for residential parcels: Unimproved Residential Parcels Standard size single-family parcels. Each parcel of property zoned residential singlefamily or mobile home (excluding mobile home park) on which only one (1) dwelling unit would normally be placed shall be assessed on the basis of one (1) ERU. Undersize single-family parcels. Each parcel of property zoned residential single-family or mobile home (excluding mobile home park), which is smaller than the size normally required for the placement of a single-family dwelling unit, shall be assessed on the basis of that proportionate share of one (1) ERU as the undersize parcel bears to the total 13 Adopted by Charlotte County Board of Commissioners April 27, 2004, Ordinance Number Government Services Group, Inc. 31

37 number of similar undersize parcels needed to constitute a standard size single-family parcel in the area in which the parcel is situated. Other residential parcels. Each parcel of property, not addressed by a or b above, which is zoned residential or mobile home on which more than one (1) dwelling unit may be placed under applicable land use and zoning requirements shall be assessed that number of ERUs is determined by taking all front footage divided by front footage of standard size single-family parcel in the area. Note: The total number of ERUs determined for the parcel shall not be less than one (1) and shall not exceed the maximum number of dwelling units allowed under applicable land use and zoning requirements for that parcel. ERU5 ERU6 ERUD ERUR FF LOT PRCL Partially Improved Residential Parcels Each parcel of property zoned residential or mobile home on which one (1) or more dwelling units have been placed shall be assessed the greater of the number of ERUs determined according to subparagraph (a)(l)c above, or the actual number of existing dwelling units on the parcel. Improved Residential Parcels Each parcel of property zoned residential or mobile home on which no additional residential units may be placed under applicable land use and zoning requirements shall be assessed one (1) ERU for each existing residential unit. Nonresidential parcels. Each parcel of property zoned other than residential or mobile home shall be assessed that number of ERUs is determined by taking all front footage divided by front footage of standard size single-family parcel in the area. The total number of ERUs so determined for the parcel shall not be less than one (1). Exceptions. The following shall be assessed zero ERUs: Any parcel of property deemed unbuildable according to land use or zoning requirements and which cannot be altered to become a buildable lot or combined with other parcels to become part of a buildable lot; Any parcel of property owned by the federal government, the State of Florida, its counties or its municipalities. Note: The county administrator, or his designee, in response to the presentation of unique, exceptional or extraordinary circumstances, where strict application of the above method of determination would create a practical difficulty or an undue hardship, as distinguished from a mere inconvenience, may determine the appropriate number of ERUs for a particular parcel on a case by case basis in the interests of fairness and administrative ease. Equivalent Residential Unit ERU for Water Distribution Facilities Equivalent Residential Unit ERU for waterfront same calculations as ERU4 but based on waterfront access Equivalent Residential Unit ERU for waterfront same calculations as ERU4 but based on waterfront access Equivalent Residential Unit per residence or where a residence could be placed. Front footage Per lot Per parcel this was per un-platted parcel in Charlotte Ranchettes. Government Services Group, Inc. 32

38 NUMBER OF PROGRAMS Table 10 shows the type of MSBU, assessment basis, total billing units initiated or converted and total assessment amounts initiated or converted. New MSBUs and converted units were combined to show the amount of activity in the program as a whole. A maintenance assessment program undergoing a methodology change requires the same level of administrative resources as a new assessment program. When analyzing Table 10, some of the total units should be discounted due to the smaller unit of measure, or to account for large tracts of land. For front feet, using 80 feet as the standard lot size, the magnitude of front feet and canal front feet would be reduced. Their magnitudes would be comparable to the corresponding total assessment amounts. A similar exercise should be done when acreage is used as the assessment basis. This shows the attempt by the County to move towards ERU4 as the standard methodology. Table 10 Summary of MSBUs by sment Methodology Since Type sment Total Units Total sment Amounts Capital ERC 1,551 $232,552 ERU1 15,209 $1,817,733 ERU4 9,853 $1,241,328 ERU5 9,320 $642,117 PAV 923 $148,718 Capital Total $4,082,448 Maintenance ACR 112,058 $5,680,730 CFF 48,737 $378,216 ERU 1,011 $20,347 ERU0 15,212 $506,096 ERU1 2,826 $366,690 ERU2 4,684 $594,512 ERU3 2,634 $233,762 ERU4 185,337 $14,184,640 ERU6 578 $216,079 ERUD 2,804 $288,201 ERUR 1,077 $40,472 FF 207,166 $374,897 LOT 1,060 $213,283 Maintenance Total $23,097,927 Table 11 provides additional information about the type of ERUs created by MSBU and year. There is a significant increase in MSBU subcomponents since Since that year, one MSBU has been initiated using front feet Harbour Heights Street and Drainage, two using acres Town Estates Occupied and Vacant, and the rest utilized some form of ERU. Alligator Creek Waterway was previously funded through millage, but will be moving to a special assessment with an assessment basis of ERUD. 14 Note: Totals may not tie due to rounding. Government Services Group, Inc. 33

39 Table 11 Type of MSBU by sment Methodology, Start Date and Number per MSBU Code Description ACW M Alligator Creek Waterway Unit MILL MILL MILL MILL MILL MILL MILL MILL MILL MILL MILL MILL MILL MILL MILL MILL MILL ERUD BGN O M Boca Grande Street And Drainage Unit ERUR ERUR ERUR ERUR ERUR ERUR ERUR ERUR BGN V M Boca Grande Street And Drainage Unit ERUR ERUR ERUR ERUR ERUR ERUR ERUR BSV M Burnt Store Village Street And Drainage Unit ERU2 ERU2 ERU2 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 BV M Buena Vista Area Waterway Unit FF LOT LOT LOT LOT LOT LOT LOT LOT LOT LOT LOT LOT LOT LOT LOT LOT LOT CB M Cook And Brown Street Unit ACR ACR ACR ACR ACR ACR ACR ACR ACR ACR ACR ACR ACR ACR ACR ACR CR C Charlotte Ranchettes Street And Drainage Unit ACR ACR ACR ACR ACR ACR ACR ACR ACR ACR ACR ACR ACR ACR ACR DC O M Deep Creek (Non-urban) Street And Drainage Unit ERU2 ERU2 ERU2 ERU2 ERU2 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 DC V M Deep Creek (Non-urban) Street And Drainage Unit ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 EE O M Englewood East (Non-urban) Street And Drainage Unit ERU2 ERU2 ERU2 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 EE V M Englewood East (Non-urban) Street And Drainage Unit ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ENW M Edgewater North Waterway Unit ERU FR M Farabee Road Street and Drainage Unit ACR ACR ACR GC O M Gulf Cove Street And Drainage Unit ERU2 ERU2 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 GC V M Gulf Cove Street And Drainage Unit ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 GCW M Gulf Cove Waterway Benefit Unit ERU1 ERU1 ERU1 ERU1 ERU1 ERU1 ERU1 ERU1 ERU1 ERU1 ERU1 ERU1 ERU1 GGC O M Gardens of Gulf Cove Street And Drainage Unit ERU2 ERU2 ERU2 ERU2 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 GGC V M Gardens of Gulf Cove Street And Drainage Unit ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 GPC O M Greater Port Charlotte Street and Drainage Unit FF ERU2 ERU2 ERU2 ERU2 ERU2 ERU2 ERU2 ERU2 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 GPC V M Greater Port Charlotte Street and Drainage Unit ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 GRC O M Grove City Street And Drainage Unit ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 GRC V M Grove City Street And Drainage Unit ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 HAW M Hayward Canal Area Waterway Unit ERU6 ERU6 ERU6 ERU6 ERU6 ERU6 ERU6 HH O M Harbour Heights Street And Drainage Unit FF FF FF FF FF FF FF FF FF FF HH V M Harbour Heights Street And Drainage Unit FF FF FF FF FF FF FF FF FF Government Services Group, Inc. 34

40 MSBU Code Description HHW M Harbour Heights Waterway Maintenance District CFF CFF CFF CFF CFF CFF CFF CFF CFF CFF CFF CFF CFF CFF CFF CFF CFF CFF LB O M Lemon Bay Street And Drainage Unit ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 LB V M Lemon Bay Street And Drainage Unit ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 LBC M Lee Branch Waterway Unit LOT LOT LOT LOT LOT LOT MW M Manchester Waterway Benefit Unit ERU1 ERU1 ERU1 ERU1 ERU1 ERU1 ERU1 ERU1 ERU1 ERU1 ERU1 ERU1 ERU1 NC O M Northwest Port Charlotte Street And Drainage Unit ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 NC V M Northwest Port Charlotte Street And Drainage Unit ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 PA O M Placida Area Street And Drainage Unit ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 PA V M Placida Area Street And Drainage Unit ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU PG O M Punta Gorda (Non-urban) Street And Drainage Unit PG V M Punta Gorda (Non-urban) Street And Drainage Unit ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 PHW M Pirate Harbour Waterway MSBU ERU6 ERU6 ERU6 ERU6 ERU6 ERU6 PRS O M Peace River Shores Street And Drainage Unit ERU2 ERU2 ERU2 ERU2 ERU2 ERU2 ERU2 PRS V M Peace River Shores Street And Drainage Unit ERU2 ERU2 ERU2 ERU2 ERU2 ERU2 ERU2 RBM O M Rotonda Broadmoor Street And Drainage Unit ERU2 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 RH O M Rotonda Heights Street And Drainage Unit ERU2 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 RL O M Rotonda Lakes Street And Drainage Unit ERU2 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 RLM O M Rotonda Long Meadow Street And Drainage Unit ERU2 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 RMV O M Rotonda Meadows/Villas Street And Drainage Unit ERU4 ERU4 ERU4 RMV V M Rotonda Meadows/Villas Street And Drainage Unit ERU4 ERU4 ERU4 RPH O M Rotonda Pinehurst Street And Drainage Unit ERU2 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 RPV O M Rotonda Pine Valley Street And Drainage Unit ERU2 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 RSN O M Rotonda Sands North Street And Drainage Unit ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 RW O M Rotonda West Street And Drainage Unit ERU2 ERU2 ERU2 ERU2 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 Government Services Group, Inc. 35

41 MSBU Code RWM O M Description Rotonda White Marsh Street And Drainage Unit ERU2 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 SB O M Suncoast Boulevard Street and Drainage Unit ACRE ACRE ACRE ACRE ACRE ERUR ERUR SB V M Suncoast Boulevard Street And Drainage Unit ACRE ACRE ACRE ACRE ERUR ERUR ERU ERU4 SBS O M South Burnt Store Street And Drainage Unit ERU2 ERU2 ERU2 ERU2 ERU2 ERU2 ERU2 ERU2 ERU2 ERU2 ERU2 SBS V M South Burnt Store Street And Drainage Unit ERU2 ERU2 ERU2 ERU2 ERU2 ERU2 ERU2 ERU2 SBW M South Bridge Waterway Unit ERUD SCW M Suncoast Waterway Unit ERUD SGC O M South Gulf Cove (Non-urban) Street And Drainage Unit ERU2 ERU2 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 SGC V M South Gulf Cove (Non-urban) Street And Drainage Unit ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 ERU4 SGCW M SGCWDRY M SGCWVHL M South Gulf Cove Waterway Benefit Unit ERU0 ERU0 ERU0 ERU0 ERU0 ERU0 ERU0 ERU0 ERU0 ERU0 ERU0 ERU0 ERU0 ERU0 South Gulf Cove Waterway Benefit Unit ERU0 South Gulf Cove Waterway Benefit Unit ERU0 SPG O M South Punta Gorda Heights Street And Drainage Unit ERU3 ERU3 ERU3 ERU3 ERU3 ERU3 ERU3 ERU3 ERU3 SPG V M South Punta Gorda Heights Street And Drainage Unit ERU3 ERU3 ERU3 ERU3 ERU3 ERU3 ERU3 ERU3 ERU3 SPGEO M SPGEV M SPGWO M SPGWV M South Punta Gorda Heights East Street And Drainage Unit ERU3 ERU3 ERU3 ERU3 ERU3 ERU3 ERU3 ERU3 South Punta Gorda Heights East Street And Drainage Unit ERU3 ERU3 ERU3 ERU3 ERU3 ERU3 ERU3 ERU3 South Punta Gorda Heights West Street And Drainage Unit ERU3 ERU3 ERU3 ERU3 ERU3 ERU3 ERU3 ERU3 ERU3 South Punta Gorda Heights West Street And Drainage Unit ERU3 ERU3 ERU3 ERU3 ERU3 ERU3 ERU3 ERU3 ERU3 TE O M Town Estates Street And Drainage Unit ACR ACR ACR ACR ACR ACR ACR ACR ACR TE V M Town Estates Street And Drainage Unit ACR ACR ACR ACR ACR ACR ACR ACR ACR TGA O M Tropical Gulf Acres Street And Drainage Unit ERU3 ERU3 ERU3 ERU3 ERU3 ERU3 ERU3 ERU3 ERU4 TGA V M Tropical Gulf Acres Street And Drainage Unit ERU3 ERU3 ERU3 ERU3 ERU3 ERU3 ERU3 ERU3 ERU4 Source: Created from Master MSBU List Provided by MSBU Department, There were no MSBUs initiated in 1994 or Government Services Group, Inc. 36

42 Table 12 has the same layout as the previous table, but instead of assessment basis, the table provides a history of assessment rates for each MSBU. Each assessment program lists individual subcomponents to show the different rates being charged for the subcomponents. For the most part, rates have been increasing since the beginning of the time period included in the MSBU study, A few MSBUs did experience a rate reduction; however the decreases were short lived. In nearly every instance, rates were eventually raised and often times were considerably higher than the rates were prior to being reduced. A trend that becomes evident is one similar to Table 11; there is a considerable increase in the number of MSBUs and subcomponents since Government Services Group, Inc. 37

43 Table 12 History of sment Rates by MSBU and MSBU Code Description ACW M Alligator Creek Waterway Unit $ BGN O M Boca Grande Street And Drainage Unit $0.00 $0.00 $0.00 $0.00 $70.00 $30.00 $30.00 $45.00 BGN V M Boca Grande Street And Drainage Unit $0.00 $0.00 $0.00 $70.00 $30.00 $30.00 $45.00 BSV M Burnt Store Village Street And Drainage Unit $10.00 $10.00 $0.00 $0.00 $0.00 $0.00 $20.00 $20.00 $25.00 $50.00 $50.00 $50.00 BV M Buena Vista Area Waterway Unit $34.93 $0.00 $ $ $ $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $ $ $ $ $ $ CB M Cook And Brown Street Unit $4.00 $7.50 $7.61 $7.61 $7.61 $10.00 $10.00 $14.50 $9.00 $9.00 $9.00 $9.00 $14.50 $14.50 $14.50 $20.00 CR M Charlotte Ranchettes Street And Drainage Unit $0.00 $35.00 $35.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $ $ $ DC O M Deep Creek (Non-urban) Street And Drainage Unit $10.00 $11.75 $17.50 $10.00 $11.00 $22.38 $22.26 $17.00 $22.00 $22.00 $63.94 $63.94 $63.94 $63.94 DC V M Deep Creek (Non-urban) Street And Drainage Unit $31.00 $31.00 $25.94 $31.05 $31.05 $73.64 $73.64 $73.64 $73.64 EE O M Englewood East (Non-urban) Street And Drainage Unit $15.00 $25.00 $16.00 $16.00 $16.00 $20.00 $51.42 $41.42 $41.42 $41.42 $ $ EE V M Englewood East (Non-urban) Street And Drainage Unit $19.28 $19.53 $23.50 $55.00 $55.00 $45.00 $45.00 $ $ ENW M Edgewater North Waterway Unit $20.12 FR M Farabee Road Street and Drainage Unit $20.00 $0.00 $3.00 GC O M Gulf Cove Street And Drainage Unit $11.00 $25.00 $22.75 $22.75 $22.75 $22.75 $22.75 $22.75 $22.75 $50.00 $75.00 GC V M Gulf Cove Street And Drainage Unit $25.00 $25.38 $25.38 $25.38 $25.38 $25.38 $25.38 $52.63 $76.07 GCW M Gulf Cove Waterway Benefit Unit $28.00 $ $ $25.00 $25.00 $25.00 $25.00 $ $25.00 $ $ $ $ GGC O M Gardens of Gulf Cove Street And Drainage Unit $0.00 $34.00 $34.00 $65.00 $24.65 $24.65 $65.00 $65.00 $65.00 $ $ $ $ GGC V M Gardens of Gulf Cove Street And Drainage Unit $35.00 $37.47 $80.47 $65.00 $65.00 $ $ $ $ GPC O M Greater Port Charlotte Street and Drainage Unit $0.69 $36.16 $25.00 $29.50 $29.50 $29.50 $41.65 $43.95 $43.95 $43.95 $54.00 $54.00 $54.00 $54.00 $54.00 $54.00 $54.00 $54.00 GPC V M Greater Port Charlotte Street and Drainage Unit $49.36 $59.73 $59.73 $59.73 $59.73 $59.73 $59.73 $59.73 $59.73 GRC O M Grove City Street And Drainage Unit $52.04 $52.04 $52.04 $52.04 $ $ $ $ GRC V M Grove City Street And Drainage Unit $60.00 $60.00 $60.00 $60.00 $ $ $ $ HAW M Hayward Canal Area Waterway Unit $ $ $ $0.00 $0.00 $0.00 $54.92 HH O M Harbour Heights Street And Drainage Unit $0.30 $0.35 $0.35 $0.37 $0.70 $1.15 $1.15 $1.70 $1.70 $1.70 HH V M Harbour Heights Street And Drainage Unit $0.43 $0.43 $0.45 $0.77 $1.29 $1.29 $1.91 $1.91 $1.91 HHW M Harbour Heights Waterway Maintenance District $1.00 $0.31 $0.05 $0.00 $0.07 $0.07 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $5.00 LB O M Lemon Bay Street And Drainage Unit $14.45 $22.50 $20.00 $20.00 $20.00 $20.00 $20.00 $30.00 $ Government Services Group, Inc. 38

44 MSBU Code Description LB V M Lemon Bay Street And Drainage Unit $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $52.00 $52.00 LBC M Lee Branch Waterway Unit $0.00 $ $ $ $ $ MW M Manchester Waterway Benefit Unit $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $ $ NC O M Northwest Port Charlotte Street And Drainage Unit $19.50 $20.07 $19.98 $19.98 $19.98 $19.98 $19.98 $20.00 $43.00 NC V M Northwest Port Charlotte Street And Drainage Unit $22.41 $23.00 $23.00 $25.00 $25.00 $25.00 $25.00 $27.00 $50.00 PA O M Placida Area Street And Drainage Unit $70.13 $70.13 $70.13 $70.13 $70.13 $70.13 $ $ $ PA V M Placida Area Street And Drainage Unit $76.50 $75.77 $75.66 $75.66 $75.66 $75.66 $ $ $ PG O M Punta Gorda (Non-urban) Street And Drainage Unit $92.78 $92.78 $92.78 $92.78 $92.78 $92.78 PG V M Punta Gorda (Non-urban) Street And Drainage Unit t $98.25 $98.25 $98.25 $98.25 $98.25 $98.25 PHW M Pirate Harbour Waterway $0.00 $0.00 $ $ $ $ PRS O M Peace River Shores Street And Drainage Unit $26.82 $26.82 $44.64 $44.64 $44.64 $44.64 $44.64 PRS V M Peace River Shores Street And Drainage Unit $29.71 $29.71 $47.92 $47.92 $47.92 $47.92 $47.92 RBM O M Rotonda Broadmoor Street And Drainage Unit $10.00 $10.00 $50.00 $50.00 $50.00 $50.00 $ $ $ $ RH O M Rotonda Heights Street And Drainage Unit $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $50.00 $50.00 $50.00 RL O M Rotonda Lakes Street And Drainage Unit $10.00 $10.00 $10.00 $10.00 $15.00 $15.00 $15.00 $50.00 $50.00 $50.00 RLM O M Rotonda Long Meadow Street And Drainage Unit $10.00 $10.00 $20.00 $30.00 $40.00 $50.00 $50.00 $ $ $ RMV O M Rotonda Meadows/Villas Street And Drainage Unit $47.00 $47.00 $47.00 RMV V M Rotonda Meadows/Villas Street And Drainage Unit $50.00 $50.00 $50.00 RPH O M Rotonda Pinehurst Street And Drainage Unit $10.00 $10.00 $50.00 $50.00 $50.00 $50.00 $ $ $ $ RPV O M Rotonda Pine Valley Street And Drainage Unit $10.00 $10.00 $20.00 $20.00 $20.00 $30.00 $50.00 $ $92.59 $92.59 RSN O M Rotonda Sands North Street And Drainage Unit $10.00 $10.00 $10.00 $15.00 $15.00 $25.00 $50.00 $50.00 $50.00 RW O M Rotonda West Street And Drainage Unit $0.00 $85.00 $85.00 $85.00 $85.00 $85.00 $85.00 $85.00 $85.00 $ $ $50.00 $ $ $50.00 RWM O M Rotonda White Marsh Street And Drainage Unit $10.00 $10.00 $20.00 $30.00 $30.00 $40.00 $50.00 $ $ $ SB O M Suncoast Boulevard Street and Drainage Unit $0.00 $4.25 $4.25 $4.25 $4.25 $16.00 $16.00 SB V M Suncoast Boulevard Street And Drainage Unit $6.45 $6.45 $6.45 $6.45 $20.00 $20.00 SBS O M South Burnt Store Street And Drainage Unit $13.47 $ $ $ $ $ $ $ SBS V M South Burnt Store Street And Drainage Unit $19.00 $ $ $ $ $ $ $ SBS WOM M South Burnt Store Street And Drainage Unit $ $ $ Government Services Group, Inc. 39

45 MSBU Code Description SBW M South Bridge Waterway Unit $ SCW M Suncoast Waterway Unit $ SGC O M South Gulf Cove (Non-urban) Street And Drainage Unit $6.00 $7.50 $10.00 $9.63 $14.60 $29.60 $29.60 $29.60 $49.60 $49.60 $49.60 SGC V M South Gulf Cove (Non-urban) Street And Drainage Unit $11.69 $11.69 $16.69 $31.70 $31.70 $31.70 $52.24 $52.24 $52.24 SGCW M South Gulf Cove Waterway Benefit Unit t $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $10.00 $10.00 $20.00 $20.00 $50.00 $50.00 $50.00 $50.00 SGCWDRY M South Gulf Cove Waterway Benefit Unit $25.00 SGCWVHL M South Gulf Cove Waterway Benefit Unit $25.00 SPG O M South Punta Gorda Heights Street And Drainage Unit $21.66 $21.66 $26.66 $26.66 $26.66 $26.66 $50.00 $50.00 $50.00 SPG V M South Punta Gorda Heights Street And Drainage Unit $25.00 $25.00 $30.00 $29.11 $29.11 $29.11 $53.41 $53.41 $53.41 SPGEO M South Punta Gorda Heights East Street And Drainage Unit $12.63 $12.63 $37.63 $92.13 $92.13 $ $ $ SPGEV M South Punta Gorda Heights East Street And Drainage Unit $25.64 $25.64 $50.64 $ $ $ $ $ SPGWO M South Punta Gorda Heights West Street And Drainage Unit $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $50.00 SPGWV M South Punta Gorda Heights West Street And Drainage Unit $3.41 $3.23 $3.23 $3.23 $3.23 $3.23 $3.23 $3.23 $53.41 TE O M Town Estates Street And Drainage Unit $25.00 $26.79 $26.43 $40.11 $40.11 $40.11 $ $ $ TE V M Town Estates Street And Drainage Unit $34.53 $34.53 $34.53 $46.53 $46.53 $46.53 $ $ $ TGA O M Tropical Gulf Acres Street And Drainage Unit $38.11 $38.04 $38.04 $38.02 $38.02 $38.02 $38.02 $38.02 $38.02 TGA V M Tropical Gulf Acres Street And Drainage Unit $41.00 $41.00 $41.00 $41.00 $41.00 $41.00 $41.38 $41.38 $ Government Services Group, Inc. 40

46 The next analysis performed was to examine the divergence in minimum and maximum total assessment revenues by assessment basis. Table 13 divides the assessments by basis type, and lists the lowest, highest and average assessment revenues for each assessment basis. The average assessment amount is a weighted average of each assessment basis. The objective is to identify inefficiencies in the assessment basis process. One example would be the assessment basis of ERU for a maintenance MSBU. The MSBU using this basis is Edgewater North Waterway and it is applied similar to an ERUD or ERU4 basis for waterways. Unless the County has intentions to utilize this assessment basis more frequently with new programs, or to migrate existing programs to this basis, it is inefficient to create an assessment basis for a single assessment program. Table 13 Minimum, Maximum and Average Total sment Revenue by sment Since 1993 Minimum Maximum Average sment Type sment sment sment Amount Amount Amount Capital ERC $232,552 $232,552 $232,552 ERU1 $25,538 $604,109 $201,970 ERU4 $1,788 $419,745 $206,888 ERU5 $78,910 $161,526 $128,423 PAV $148,718 $148,718 $148,718 Maintenance ACR $47,221 $3,760,961 $811,533 CFF $180,882 $197,334 $189,108 ERU $20,347 $20,347 $20,347 ERU0 $13,775 $492,321 $332,806 ERU1 $168,240 $198,450 $183,345 ERU2 $81,648 $512,864 $369,125 ERU3 $47,990 $126,718 $77,921 ERU4 $11,293 $3,515,597 $571,453 ERU6 $13,675 $202,404 $108,040 ERUD $13,155 $261,460 $96,067 ERUR $5,812 $34,660 $20,236 FF $374,897 $374,897 $374,897 LOT $13,323 $199,960 $106,642 Source: Master MSBU List Table 14 uses the same format as Table 13, but instead of using the total assessment revenue, it lists minimum, maximum and average assessment rates by basis. Capital MSBUs are listed for informational purposes, but they are very specific in nature and similarities across MSBUs are difficult to identify. Conversely, maintenance MSBUs have many similarities in both the types of services and the rates that are being assessed. Similar to the previous table, the objective of Table 14 is to identify inefficiencies. There are not enough examples of acres or front feet to derive much information; however, going forward these bases should only be used as a last resort to some type of equivalent unit basis. The two columns that offer the most insight are minimum and average. Minimum assessment amounts would be associated with the minimum level of services. They provide a good comparison because minimum levels of service are going to be similar across the County despite the assignment of different assessment basis. Four of the nine minimum amounts fall between $16 and Government Services Group, Inc. 41

47 $30 and three more fall between $45 and $55. The other two assessment bases have minimums of $100. Average assessment amounts are representative of average levels of service within each assessment basis. Excluding an outlier in the ERU6 basis, the averages would migrate towards two buckets : $27 - $33 and $99 - $150. The minimum and average consistencies demonstrate there is potential to achieve administrative efficiencies through the reduction of assessment basis categories. Table 14 Minimum, Maximum and Average sment Rates by sment Since 1993 Minimum Maximum Average sment Type sment sment sment Amount Amount Amount Capital ERC $38 $118 $78 ERU1 $14 $448 $162 ERU4 $53 $200 $114 ERU5 $28 $67 $43 PAV $161 $161 $161 Maintenance ACR $3 $175 $83 CFF $5 $16 $10 ERU $20 $20 $20 ERU0 $25 $50 $33 ERU1 $100 $200 $150 ERU2 $45 $186 $99 ERU3 $50 $223 $106 ERU4 $30 $262 $100 ERU6 $55 $615 $335 ERUD $100 $150 $128 ERUR $16 $45 $27 FF $2 $2 $2 LOT $200 $222 $211 Source: Master MSBU List USE AND DEPENDENCE ON MSBUS/SPECIAL ASSESSMENTS AS PART OF THE LONG- RANGE CAPITAL IMPROVEMENT PLAN (CIP) AND FINANCIAL PLAN Charlotte County produces a five year Capital Investment Plan (CIP) every year that is consistent with their County Comprehensive Plan. The CIP provides planning and budgeting information for all projects of $100,000 and greater. The CIP serves as, an implementing mechanism of the Capital Improvements Element (CIE) of the Comprehensive Plan by providing capital funding for CIE projects directly linked to maintaining adopted Levels of Service. The projects identified in this document for 2005 through 2009 are generally consistent with the five year schedule of improvements shown in the Capital Improvement Element. 15 Creating a five-year CIP requires assumptions be made in the projection of revenues and costs. On the revenue side, only existing revenue sources are included. Projects incorporated in the CIP may require 15 Introduction Section of the FY 2004/05 Capital Improvements Programs, October 26, 2004, page A-2. Government Services Group, Inc. 42

48 increases in current taxes or fees, but neither increases nor additional revenue sources are anticipated in the planning process. Cost estimates are based on the best available information at the time, but costs are refined as projects move toward completion. In most cases, reserves are established to offset the variability of project costs. The County has general definitions and guidelines used to identify and fund projects within each area of the CIP. Projects included in the CIP are permanent (long useful lives), are fixed in place and are unique in nature. The following list illustrates the CIP areas and their usual funding sources: 1. General Government impact fees, ad valorem taxes, One Cent Sales Tax/Sales Tax Extension and loans. 2. Culture/Recreation ad valorem taxes, impact fees, One Cent Sales Tax/Sales Tax Extension and grants. 3. Public Safety ad valorem taxes, special assessments, impact fees, loans and the One Cent Sales Tax/Sales Tax Extension. 4. Solid Waste landfill tipping fees, ad valorem taxes, bonds and loans. 5. Public Works MSBU assessments, impact fees, gas taxes and the One Cent Sales Tax/Sales Tax Extension. 6. Water and Sewer utility fees, bonds and loans. Charlotte County utilizes a process for prioritizing CIP projects. 16 Generally, the highest priority is given to projects that will remedy a public health or safety issue. Next, priority is given to projects mandated by law, court order or settlement, followed by those projects necessary to maintain investments in existing facilities, such as road resurfacing. Then, projects which expand capacity to serve new development in accordance with direction established by the County Comprehensive Plan. Finally, last priority is given to single facility expansion projects that serve new developments for which existing facilities and services are inadequate and lack plans for improvement. TIME LINE FOR CIP PROCESS 17 November December January February March May June County Departments assess future capital needs. The Budget Office distributes budget preparation manual including CIP Forms. The Budget Office holds instructional meetings with departments. Departments submit CIP project requests to Budget Office. The Budget Office reviews, and analyzes the departments CIP project proposals, operating budget impacts, and probable revenues. The Budget Office provides project proposals to CIP Committee. CIP Committee meets to evaluate projects. Department heads formally present project proposals to Committee. Project submissions to be rated by CIP Committee for inclusion in the tentative budget. The Capital Improvement Program is presented to the Board of County Commissioners. 16 Introduction Section of the FY 2004/05 Capital Improvements Programs, October 26, 2004, page B Introduction Section of the FY 2004/05 Capital Improvements Programs, October 26, 2004, page B-10. Government Services Group, Inc. 43

49 July September October The Board of County Commissioners will hold a Capital Improvement Program Workshop. The County Budget Officer presents the tentative Capital Improvements Program and Budget to the BCC, Clerk of the Circuit Court, County Attorney, County Administrator, Department Heads, Libraries and media. The County Budget Officer will present the revised tentative Capital Improvements Program and Budget to the BCC, County Administrator, departments, library and media. Two Public Hearings will be held to adopt the County Budget, included in it is the first year of the Capital Improvements Program. BCC adopts CIP by Resolution. Budget and CIP take effect. Table 15 analyzes the portion of the County CIP Budget funded through special assessments. Over the last two years, the CIP Budget has grown 128%. The sections of County government that have seen the largest increase are Utilities, Public Works Road Improvements and the Sheriff s Department. Utilities had an original 2007 Budget of just over $49 million, comprised of $42 million in new MSBUs and approximately $7 million carried over from the previous year. There were four new MSBUs in Utilities with new funding requests exceeding $10 million each: West Tarpon to 41, Pirate Harbor, Rotonda Meadows and Rotonda Sands. Public Works Road Improvements had an original 2007 Budget of $21.7 million. This department experienced additional requests over $57 million. The difference of approximately $75 million is the result of funds carried over from the previous year. One project drove the increase, Midway Boulevard Elkcam to Kings Highway. This project alone was a new request for over $20 million. The purpose was to widen the roadway from two to four lanes, install major drainage improvements, street lighting and bike and pedestrian facilities. The Sheriff s Department experienced a significant increase in their budget due to a new County jail facility. The County has experienced a significant increase in inmate population in recent years. The MSBU/special assessment section of the budget has experienced a decrease in their total CIP Budget over the last year. There was a noticeable trend of decreasing new requests for funding across many of the special assessment projects. There was also a noticeable trend of significant carryovers from previous budget years. Both of these factors contributed to the budget reduction in Government Services Group, Inc. 44

50 Table 15 MSBU Capital Revenue Compared to Total CIP Total CIP Budgets (000) General Government $9,484 $25,604 $25,599 Facilities Management $ - $275 $613 Natural Resources $1,374 $573 $3,415 Library CIP Projects $1,979 $1,718 $1,405 Parks, Recreation and Cultural Resources $28,776 $30,693 $42,318 Information Technology $1,120 $1,300 $525 Emergency Medical Services $308 $324 $350 Fire Rescue $13,913 $16,880 $27,572 Sheriff $650 $975 $44,871 Solid Waste $3,516 $3,800 $3,972 Public Works Countywide Road Improvements $76,886 $98,234 $153,841 Maintenance & Operations $10,669 $5,702 $4,099 Water & Sewer Utilities $18,733 $40,154 $115,263 MSBU MSTU $35,500 $48,002 $40,342 Total $202,908 $274,234 $464,185 Percentage of MSBU Special sment Funding 17% 18% 9% Source - CIP 2004/05, CIP 2005/06, CIP 2006/07 COUNTY INITIATIVES TO IMPROVE MSBU/SPECIAL ASSESSMENTS In 2004, the Public Works Department conducted studies on countywide program alternatives to current special assessment arrangement as it pertains to road maintenance paving and canal dredging. ROAD MAINTENANCE PAVING The Charlotte County Public Works Pavement Maintenance Report was produced in January of The report was the application of a preventative road maintenance plan described in an article in an industry magazine. 19 The report directed the County on the implementation of a new program that would save money and extend the useful life of their roads. The program would require resources to be allocated to new and recently repaved roadways to treat and extend their lives. The amount of resources would be minimal compared to the average cost of reconstruction. Public relations would be crucial in helping the community understand different paving work such as why new roads are being are being re-paved versus when they are only being treated. Important factors in this type of program that need to be considered are eligibility and timing. Only roads meeting County standards are eligible for inclusion. Additional costs required to improve infrastructure could not be supported by a road maintenance paving program and could face legal challenges. 18 Charlotte County Public Works Pavement Maintenance Report, January 2004, prepared by Barry Cohen, Project Coordinator for the Engineering Department of the Charlotte County Public Works Division. 19 Katie Zimmerman, P.E. and David Pehskin, P.E., The Seven Stallers, Road and Bridge Magazine pages 22-28, December Government Services Group, Inc. 45

51 According to the report issued in 2004, one-third of County roads would fall into the substandard classification. A Pavement Condition Index is a classification system that measures the current condition of roadways from 1 to 100 with 100 being a newly paved road that meets County standards. A road must meet a minimum PCI to be included in the program or be improved prior to inclusion. Timing on the maintenance schedule would be critical in maximizing the effectiveness of the program. If there is a delay in rejuvenation, the condition of the roads will continue to deteriorate and may make those roads ineligible, or at least decrease the potential savings due to higher costs. Greater Port Charlotte (GPC) is an example of a road maintenance program in the County. This arrangement is no longer in effect, but the general belief within the County is this arrangement was a disappointment in terms of improved roads and public opinion. The Charlotte Maintenance Report states 20 : There are 62,101 ERUs in the GPC MSBU that are assessed each year. Ten dollars of each assessment is designated for road maintenance, providing $620,010 annually for their road maintenance program. There are miles of roadway within the GPC MSBU, of which approximately 8.3 could be overlayed annually. At this rate, it would take approximately 79 years to complete all roads within the GPC MSBU. In addition to timing, general condition of the roads in the Greater Port Charlotte Area needs to be examined. The last inspection cited in the report was The general condition of the roads was rated 52 out of Since that time, only 8.3 of the possible miles of roads were repaved each year, intensifying poor road conditions. Based on our analysis of the Greater Port Charlotte road projects, planning, expectations and costs need to be fully understood and communicated to the public regarding roads and conditions. The general conditions of the roads in GPC are in need of infrastructure improvements that are in excess of the current $10 assessment being charged to citizens. Their roads need micro paving and/or overlaying, and in some cases, full reconstruction. The County, in assessing the $10, is generating expectations from the community that the problem is being addressed. Citizens of Charlotte County may be willing to pay for improved roads and infrastructure as demonstrated by their acceptance of the current MSBU and special assessment program. The feeling in the community that everyone should pay for their own roads is the reason Public Works has been unsuccessful in implementing a County-wide road maintenance program. If roads were improved to County standards and a true paving maintenance program was introduced, there may be a better reception due to the cost savings achievable to all residents. CANAL DREDGING A Countywide Dredging Proposal was produced in It outlined pros and cons of implementing a dredging program and to create a funding stream to dredge all existing navigable canals and provide for long term maintenance of those canals. The report gave two options in terms of creating and financing a program. Option 1 would have charged all navigable canal front properties in unincorporated Charlotte County $285 per ERU for the first two years and $150 for the next three. Additionally, all non-agricultural, unincorporated properties would have been assessed ten cents per thousand dollars of value. Option 2 had similar funding requirements except canal front properties would have been required to pay $200 the first two years and $100 each subsequent year. Canal front properties not recently dredged would have to fully fund their own projects. 20 Charlotte County Public Works Pavement Maintenance Report, January 2004, prepared by Barry Cohen, Project Coordinator for the Engineering Department of the Charlotte County Public Works Division. 21 Appendix E of the Charlotte County Public Works Maintenance Report, January, County-Wide Dredging, July 26, Prepared by Charlotte County Public Works Finance Department. Government Services Group, Inc. 46

52 The benefits of Option 1 include standardization of a countywide dredging program at an accelerated pace and elimination of the need to separately track each dredged area. The disadvantage of this option is the higher cost burden of the un-dredged areas, which would be subsidized by the other areas. The benefits of Option 2 include a better match between each area s obligations to their own costs. The disadvantages of this proposal were (1) the costs in some of the smaller areas were very expensive, (2) there would have been an increase in the number of MSBUs, (3) increased record keeping, and (4) work would have been completed at a slower pace. The primary reasons this MSBU did not move forward were lack of interest from the property owners with well-maintained waterways and the prohibitively high cost for the areas with fewer ERUs. COMMON THEMES Both of the previously discussed initiatives have some common themes in terms of direction by the County. The first is the desire to realize potential cost savings attainable by efficiencies. By combining MSBUs to gain economies of scale, savings can be achieved in most MSBUs throughout the County. Secondly, streamlining the MSBU and special assessment programs by combining MSBUs with similar levels of service to reduce administration of the County. The size of the programs is not as important as the number of programs. By reducing the number of current programs and creating larger, more encompassing MSBUs, while maintaining their legal defensibility, the County may reduce its administrative burden. ANALYSIS OF COMMON MAINTENANCE MSBU COMPONENTS The geographic layout of Charlotte County lends itself to a natural separation of areas for purposes of analyzing the common costs among the road and drainage maintenance MSBUs. As illustrated by the current stormwater MSBUs, the County breaks down into three regions. The partial list of neighborhoods included in each region is for reference. West County made up of South Gulf Cove, the Rotondas and Englewood East; North County highlighted by Greater Port Charlotte; and South County consisting of Punta Gorda, Burnt Store and Charlotte Ranchettes. Government Services Group, Inc. 47

53 The following figures illustrate the three stormwater MSBUs and within each stormwater MSBU, the specific road and drainage MSBUs. Agricultural properties located in the South Charlotte Stormwater MSBU have been exempted from stormwater MSBUs, but would be included in road and drainage MSBU programs. Figure 10 County Stormwater MSBU Boundaries Government Services Group, Inc. 48

54 Figure 11 West County Road and Drainage MSBUs Government Services Group, Inc. 49

55 Figure 12 North County Road and Drainage MSBUs Government Services Group, Inc. 50

56 Figure 13 South County Road and Drainage MSBUs In order to combine separate, specific MSBUs into larger districts, a minimum or base level of service would need to be identified and defined. Typical services that are widely provided throughout the County include road and drainage, signs and marking, and mowing. Additional costs are necessary for all special assessment programs such as administration and indirect costs. Area specific services that could not be Government Services Group, Inc. 51

57 included in a larger MSBU would include services such as beautification, landscaping, and aquatic weed control. These types of services would still be available through a MSBU or special assessment program, but could not be included in a minimum or base level of service definition. Table 16 illustrates the first step in the process. GSG first separated the road and drainage MSBUs into the three stormwater MSBU areas. Then, GSG developed base information for each MSBU using the data provided by County staff. Government Services Group, Inc. 52

58 Table 16 Base Information for Road and Drainage MSBUs by Stormwater Region Stormwater Asmt Region Description Total Units MSBU Road Miles From Burke - Rounded Total sment Revenues MSBU Budgets from FY County Budget Summary of Funds Total Work Program North Deep Creek (Non-urban) Street And Drainage Unit ERU4 8, $587, $1,576,704 $1,530,870 North Greater Port Charlotte Street and Drainage Unit ERU4 62, $3,515, $4,028,410 $3,507,306 North Northwest Port Charlotte Street And Drainage Unit ERU4 17, $862, $3,245,739 $2,839,298 North Suncoast Boulevard Street And Drainage Unit ERUR $5, $15,629 $5,153 North Harbour Heights Street And Drainage Unit FF 207, $374, $855,464 $651,752 Subtotal $5,346, $9,721,946 $8,534,379 South Cook And Brown Street Unit ACR 5, $114, $228,926 $120,186 South Charlotte Ranchettes Street And Drainage Unit ACR 2, $223, $223,999 $210,805 South Farabee Road Street and Drainage Unit ACR 15, $47, $170,746 $84,651 South Town Estates Street And Drainage Unit ACR $113, $214,385 $84,924 South Peace River Shores Street And Drainage Unit ERU2 1, $81, $281,542 $150,304 South South Burnt Store Street And Drainage Unit ERU2 2, $512, $3,348,676 $1,995,600 South South Punta Gorda Heights Street And Drainage Unit ERU $47, $161,846 $84,238 South South Punta Gorda Heights East Street And Drainage Unit ERU $126, $311,557 $163,499 South South Punta Gorda Heights West Street And Drainage Unit ERU3 1, $59, $212,333 $94,568 South Burnt Store Village Street And Drainage Unit ERU4 1, $73, $293,752 $86,293 South Punta Gorda (Non-urban) Street & Drainage Unit ERU4 7, $688, $1,251,209 $1,149,664 South Tropical Gulf Acres Street And Drainage Unit ERU4 7, $300, $887,798 $865,180 Subtotal $2,389, $7,586,769 $5,089,912 West Englewood East (Non-urban) Street And Drainage Unit ERU4 16, $3,104, $18,563,864 $12,984,540 West Gulf Cove Street And Drainage Unit ERU4 8, $629, $980,971 $911,457 West Gardens of Gulf Cove Street And Drainage Unit ERU $261, $434,176 $80,067 West Grove City Street And Drainage Unit ERU4 2, $578, $1,411,869 $456,258 West Lemon Bay Street And Drainage Unit ERU4 4, $139, $240,872 $191,487 West Placida Area Street And Drainage Unit ERU4 2, $563, $1,907,864 $1,203,169 West Rotonda Heights Street And Drainage Unit ERU4 1, $98, $323,895 $129,504 West Rotonda Lakes Street And Drainage Unit ERU4 3, $178, $918,318 $284,469 West Rotonda Meadows/Villas Street And Drainage Unit ERU4 5, $278, $1,250,589 $140,821 West Rotonda Sands North Street And Drainage Unit ERU4 2, $125, $735,423 $98,182 West Rotonda West Street And Drainage Unit* ERU4 8, $442, $3,622,159 $1,484,512 West South Gulf Cove (Non-urban) Street And Drainage Unit ERU4 14, $766, $1,963,960 $1,367,548 West Boca Grande Street And Drainage Unit ERUR $34, $138,663 $75,815 Subtotal $7,201, $32,492,623 $19,407,829 Government Services Group, Inc. 53

59 Table 17 provides the first analysis of the data, which is to determine common costs among similarly situated MSBUs, with similar methodologies based on the costs per mile. Table 17 Cost Per Mile Information for Road and Drainage MSBUs by Stormwater Region Stormwater Asmt Region Description Parcel Count Total Units MSBU Road Miles From Burke - Rounded Total sment Revenues Unified MSBU Rate MSBU Budgets from FY County Budget Summary of Funds Total Work Program Total Assmt Per Road Mile Total Budget Per Road Mile Maintenance Cost Per Road Mile Administrative Services Cost Per Road Mile North Deep Creek (Non-urban) Street And Drainage Unit ERU4 8,200 8, $587,670 $67.76 $1,576,704 $1,530,870 $8,517 $22,851 $3,176 $635 $184 North Greater Port Charlotte Street and Drainage Unit ERU4 59,903 62, $3,515,597 $56.57 $4,028,410 $3,507,306 $5,384 $6,169 $2,803 $561 $93 North Northwest Port Charlotte Street And Drainage Unit ERU4 15,788 17, $862,783 $49.36 $3,245,739 $2,839,298 $4,589 $17,265 $1,370 $274 $95 North Suncoast Boulevard Street And Drainage Unit ERUR $5,812 $18.93 $15,629 $5,153 $2,906 $7,815 $1,494 $299 $99 North Harbour Heights Street And Drainage Unit FF 1, , $374,897 $1.81 $855,464 $651,752 $14,996 $34,219 $11,364 $2,273 $238 Subtotal 86, , $5,346,759 $9,721,946 $8,534,379 $5,706 $10,376 $2,769 $554 $104 South Cook And Brown Street Unit ACR 242 5, $114,520 $20.00 $228,926 $120,186 $114,520 $228,926 $49,835 $9,967 $10,204 South Charlotte Ranchettes Street And Drainage Unit ACR 1,269 2, $223,337 $ $223,999 $210,805 $5,956 $5,973 $2,408 $482 $57 South Farabee Road Street and Drainage Unit ACR , $47,221 $3.00 $170,746 $84,651 $10,494 $37,944 $0 $844 $2,790 South Town Estates Street And Drainage Unit ACR $113,695 $ $214,385 $84,924 $20,672 $38,979 $8,726 $1,745 $1,000 South Peace River Shores Street And Drainage Unit ERU2 1,435 1, $81,648 $47.38 $281,542 $150,304 $4,413 $15,218 $5,447 $1,089 $172 South South Burnt Store Street And Drainage Unit ERU2 2,413 2, $512,864 $ $3,348,676 $1,995,600 $18,650 $121,770 $4,374 $875 $97 South South Punta Gorda Heights Street And Drainage Unit ERU $47,990 $52.48 $161,846 $84,238 $5,332 $17,983 $5,929 $1,186 $78 South South Punta Gorda Heights East Street And Drainage Unit ERU $126,718 $ $311,557 $163,499 $23,040 $56,647 $6,775 $1,355 $171 South South Punta Gorda Heights West Street And Drainage Unit ERU , $59,054 $52.90 $212,333 $94,568 $5,135 $18,464 $4,970 $994 $141 South Burnt Store Village Street And Drainage Unit ERU4 1,395 1, $73,150 $50.00 $293,752 $86,293 $5,627 $22,596 $3,839 $768 $121 South Punta Gorda (Non-urban) Street & Drainage Unit ERU4 5,204 7, $688,232 $95.00 $1,251,209 $1,149,664 $11,567 $21,029 $6,023 $1,205 $275 South Tropical Gulf Acres Street And Drainage Unit ERU4 6,738 7, $300,685 $41.08 $887,798 $865,180 $5,369 $15,854 $7,037 $1,407 $253 Subtotal 21,161 47, $2,389,115 $7,586,769 $5,089,912 $9,595 $30,469 $5,459 $1,107 $288 West Englewood East (Non-urban) Street And Drainage Unit ERU4 14,334 16, $3,104,968 $ $18,563,864 $12,984,540 $18,105 $108,244 $3,205 $641 $362 West Gulf Cove Street And Drainage Unit ERU4 7,653 8, $629,286 $75.83 $980,971 $911,457 $6,840 $10,663 $3,989 $798 $284 West Gardens of Gulf Cove Street And Drainage Unit ERU $261,191 $ $434,176 $80,067 $23,745 $39,471 $3,050 $610 $67 West Grove City Street And Drainage Unit ERU4 2,221 2, $578,222 $ $1,411,869 $456,258 $26,283 $64,176 $5,046 $1,009 $135 West Lemon Bay Street And Drainage Unit ERU4 5,237 4, $139,637 $32.19 $240,872 $191,487 $3,826 $6,599 $3,061 $612 $115 West Placida Area Street And Drainage Unit ERU4 2,841 2, $563,909 $ $1,907,864 $1,203,169 $37,594 $127,191 $8,023 $1,605 $217 Other Direct Costs Per Road Mile Government Services Group, Inc. 54

60 Stormwater Asmt Region Description Parcel Count Total Units MSBU Road Miles From Burke - Rounded Total sment Revenues Unified MSBU Rate MSBU Budgets from FY County Budget Summary of Funds Total Work Program Total Assmt Per Road Mile Total Budget Per Road Mile Maintenance Cost Per Road Mile Administrative Services Cost Per Road Mile West Rotonda Heights Street And Drainage Unit ERU4 1,837 1, $98,070 $50.00 $323,895 $129,504 $5,162 $17,047 $3,574 $715 $129 West Rotonda Lakes Street And Drainage Unit ERU4 2,877 3, $178,015 $50.00 $918,318 $284,469 $5,563 $28,697 $4,881 $976 $113 West Rotonda Meadows/Villas Street And Drainage Unit ERU4 4,029 5, $278,965 $49.99 $1,250,589 $140,821 $13,948 $62,529 $2,753 $551 $305 West Rotonda Sands North Street And Drainage Unit ERU4 2,440 2, $125,315 $50.00 $735,423 $98,182 $6,266 $36,771 $2,952 $590 $142 West Rotonda West Street And Drainage Unit* ERU4 8,076 8, $442,761 $50.00 $3,622,159 $1,484,512 $5,983 $48,948 $1,638 $328 $116 West South Gulf Cove (Non-urban) Street And Drainage Unit ERU4 13,560 14, $766,107 $52.05 $1,963,960 $1,367,548 $5,159 $13,225 $1,563 $313 $174 West Boca Grande Street And Drainage Unit ERUR $34,660 $45.00 $138,663 $75,815 $11,553 $46,221 $4,947 $989 $621 Subtotal 66,843 73, $7,201,106 $32,492,623 $19,407,829 $10,837 $48,898 $3,009 $602 $227 Other Direct Costs Per Road Mile Government Services Group, Inc. 55

61 Table 18 provides another analysis of the data, which calculates the common costs on a per unit basis for similarly situated MSBUs with similar methodologies. Unfortunately, due to the number of different methodologies, this exercise did not produce usable results. This analysis is an example of the type of process used to get to a base cost. Some of the recommendations found in this memorandum identify areas that will make this type of an analysis beneficial in the future. Government Services Group, Inc. 56

62 Table 18 Cost Per Unit Information for Road and Drainage MSBUs by Stormwater Region Stormwater Asmt Region Description Total Units MSBU Budgets from FY County Budget Summary of Funds Total Work Program Maintenance Cost Per Unit Administrative Services Cost Per Unit Other Direct Costs Per Unit North Deep Creek (Non-urban) Street And Drainage Unit ERU4 8, $1,576,704 $1,530,870 $25.27 $5.05 $1.47 North Greater Port Charlotte Street and Drainage Unit ERU4 62, $4,028,410 $3,507,306 $29.46 $5.89 $0.98 North Northwest Port Charlotte Street And Drainage Unit ERU4 17, $3,245,739 $2,839,298 $14.74 $2.95 $1.02 North Suncoast Boulevard Street And Drainage Unit ERUR $15,629 $5,153 $9.73 $1.95 $0.64 North Harbour Heights Street And Drainage Unit FF 207, $855,464 $651,752 $1.37 $0.27 $0.03 Subtotal 295, $9,721,946 $8,534,379 South Cook And Brown Street Unit ACR 5, $228,926 $120,186 $8.70 $1.74 $1.78 South Charlotte Ranchettes Street And Drainage Unit ACR 2, $223,999 $210,805 $40.43 $8.09 $0.96 South Farabee Road Street and Drainage Unit ACR 15, $170,746 $84,651 $0.00 $0.24 $0.80 South Town Estates Street And Drainage Unit ACR $214,385 $84,924 $70.87 $14.17 $8.12 South Peace River Shores Street And Drainage Unit ERU2 1, $281,542 $150,304 $58.47 $11.69 $1.84 South South Burnt Store Street And Drainage Unit ERU2 2, $3,348,676 $1,995,600 $40.64 $8.13 $0.90 South South Punta Gorda Heights Street And Drainage Unit ERU $161,846 $84,238 $58.35 $11.67 $0.76 South South Punta Gorda Heights East Street And Drainage Unit ERU $311,557 $163,499 $61.83 $12.37 $1.56 South South Punta Gorda Heights West Street And Drainage Unit ERU3 1, $212,333 $94,568 $51.20 $10.24 $1.45 South Burnt Store Village Street And Drainage Unit ERU4 1, $293,752 $86,293 $34.11 $6.82 $1.08 South Punta Gorda (Non-urban) Street & Drainage Unit ERU4 7, $1,251,209 $1,149,664 $49.47 $9.89 $2.26 South Tropical Gulf Acres Street And Drainage Unit ERU4 7, $887,798 $865,180 $53.84 $10.77 $1.94 Subtotal 47, $7,586,769 $5,089,912 West Englewood East (Non-urban) Street And Drainage Unit ERU4 16, $18,563,864 $12,984,540 $33.37 $6.67 $3.77 West Gulf Cove Street And Drainage Unit ERU4 8, $980,971 $911,457 $44.22 $8.84 $3.14 West Gardens of Gulf Cove Street And Drainage Unit ERU $434,176 $80,067 $33.60 $6.72 $0.73 West Grove City Street And Drainage Unit ERU4 2, $1,411,869 $456,258 $41.46 $8.29 $1.11 West Lemon Bay Street And Drainage Unit ERU4 4, $240,872 $191,487 $25.76 $5.15 $0.97 West Placida Area Street And Drainage Unit ERU4 2, $1,907,864 $1,203,169 $47.40 $9.48 $1.28 West Rotonda Heights Street And Drainage Unit ERU4 1, $323,895 $129,504 $34.62 $6.93 $1.25 West Rotonda Lakes Street And Drainage Unit ERU4 3, $918,318 $284,469 $43.87 $8.77 $1.01 West Rotonda Meadows/Villas Street And Drainage Unit ERU4 5, $1,250,589 $140,821 $9.87 $1.97 $1.09 West Rotonda Sands North Street And Drainage Unit ERU4 2, $735,423 $98,182 $23.56 $4.71 $1.13 West Rotonda West Street And Drainage Unit* ERU4 8, $3,622,159 $1,484,512 $13.69 $2.74 $0.97 West South Gulf Cove (Non-urban) Street And Drainage Unit ERU4 14, $1,963,960 $1,367,548 $15.77 $3.15 $1.75 West Boca Grande Street And Drainage Unit ERUR $138,663 $75,815 $19.27 $3.85 $2.42 Subtotal 73, $32,492,623 $19,407,829 Government Services Group, Inc. 57

63 Table 19 illustrates the base information for each waterway MSBU using the data provided by County staff. Table 19 Base Information for Waterway MSBUs by Stormwater Region Stormwater Asmt Region Description Parcel Count Total Units Total sment Revenues MSBU Budgets from FY County Budget Summary of Funds Total Work Program North Buena Vista Area Waterway Unit LOT $199, $940,191 $711,743 North Edgewater North Waterway Unit ERU 1,007 1,011.3 $20, $86,147 $62,604 North Hayward Canal Area Waterway Unit ERU $13, $60,498 $54,584 North Harbour Heights Waterway Maintenance District CFF ,176.0 $180, $226,062 $59,720 North Manchester Waterway Benefit Unit ERU1 1,819 1,984.5 $198, $453,765 $183,734 North Suncoast Waterway Unit ERUD $13, $62,844 $54,393 Subtotal 4,465 $626, $1,126,778 South Alligator Creek Waterway Unit ERUD 2,469 2,614.6 $261, $1,533,507 $1,174,176 South Lee Branch Waterway Unit LOT $13, $13,042 $309 South Pirate Harbor Waterway Unit ERU $202, $450,333 $124,655 South South Bridge Waterway Unit ERUD $13, $62,789 $54,436 Subtotal 2,903 $490, $1,353,576 West Gulf Cove Waterway Benefit Unit ERU $168, $559,839 $61,992 West South Gulf Cove Waterway Benefit Unit ERU0 13,583 14,661.4 $492, $903,411 $612,675 West South Gulf Cove Waterway Benefit Unit ERU $13, Subtotal 14,964 $674, $674,667 Government Services Group, Inc. 58

64 Table 20 provides another analysis of the data, which calculates the common costs on a per unit basis for similarly situated waterway MSBUs with similar methodologies. Table 20 Cost Per Unit Information for Waterway MSBUs by Stormwater Region Stormwater Asmt Region Description Total Units MSBU Budgets from FY County Budget Summary of Funds Total Work Program Maintenance Cost Per Unit Administrative Services Cost Per Unit Other Direct Costs Per Unit North Buena Vista Area Waterway Unit LOT $940,191 $711,743 $40.32 $8.06 $0.73 North Edgewater North Waterway Unit ERU 1,011.3 $86,147 $62,604 $2.85 $0.57 $1.13 North Hayward Canal Area Waterway Unit ERU $60,498 $54,584 $13.39 $2.68 $1.24 North Harbour Heights Waterway Maintenance District CFF 36,176.0 $226,062 $59,720 $0.11 $0.02 $0.03 North Manchester Waterway Benefit Unit ERU1 1,984.5 $453,765 $183,734 $6.54 $1.31 $1.16 North Suncoast Waterway Unit ERUD $62,844 $54,393 $32.64 $6.53 $1.20 Subtotal $1,126,778 South Alligator Creek Waterway Unit ERUD 2,614.6 $1,533,507 $1,174,176 $13.44 $2.69 $1.25 South Lee Branch Waterway Unit LOT 60.0 $13,042 $309 $0.00 $0.00 $0.72 South Pirate Harbor Waterway Unit ERU $450,333 $124,655 $38.92 $7.78 $0.73 South South Bridge Waterway Unit ERUD 87.7 $62,789 $54,436 $38.00 $7.61 $1.90 Subtotal $1,353,576 West Gulf Cove Waterway Benefit Unit ERU $559,839 $61,992 $6.93 $1.39 $0.73 West South Gulf Cove Waterway Benefit Unit ERU0 15,212 $903,411 $612,675 $0.72 $0.14 $0.86 Subtotal $674,667 Government Services Group, Inc. 59

65 Next, a methodology would need to be developed to address the combination of the MSBUs. For example, if the new combined MSBU consisted of three separate mowing MSBUs that were similar in lot size, had a combined 15 miles of roadways, and had 75 units in each neighborhood, the assessment charge for this service would be $10 per unit for each cycle. Table 21 illustrates this calculation. Table 21 Example of Common Service Charge For Mowing Mowing Cost Per Road Miles In Road Mile Combined MSBUs Number of Units in Combined MSBUs Mowing Cost Per Unit (150 X 15) / 225 = $10 While the results of this illustrative analysis did not provide an immediate resolution to the issue of combining MSBUs for efficiencies, this type of analysis can be applied upon the implementation of the recommendations provided within this memorandum. ANALYSIS OF OTHER FUNDING ALTERNATIVES Note: This memorandum was prepared in February 2007 and modified in March 2007 as the Florida Governor and Legislature were proposing numerous alternatives to property tax reform. The outcome of those proposals may modify the County s ability to utilize these other funding alternatives. MUNICIPAL SERVICES TAXING UNITS (MSTUs) FOR MAINTENANCE S Under the same powers that allow the County to create MSBUs, the County can also create municipal services taxing units (MSTUs). Section 125.0(1)(r), Florida Statutes, grants counties the power to (l)levy and collect taxes, both for county purposes and for the providing of municipal services within any municipal services taxing unit. This statutory authorization also provides that (t)here shall be no referendum required for the levy by a county of ad valorem taxes, both for county purposes and for the providing of municipal services within any municipal service taxing unit. The Supreme Court of Florida upheld the constitutionality of a county levy of ad valorem taxes within a municipal service taxing unit without referendum within the 10 mill constitutional limit for municipal purposes in Gallant v. Stephens, 358 So. 2d 536 (Fla. 1978). However, Article VII, Section 12 of the Florida Constitution requires referendum approval if ad valorem taxes are pledged to secure the payment of bonds. A municipal service taxing unit is not constitutionally nor functionally a special district. It is purely a mechanism by which a county can fund a particular service from a levy of ad valorem taxes, not countywide, but within all or a portion of the county. There is no benefit requirement for the implementation of an MSTU, the general rule is that questions of benefit and of unlawful burden do not arise when the tax is uniform and for a public purpose. Subject to certain specific exceptions not pertinent to this discussion, section , Florida Statutes, requires that municipal service taxing units must be created prior to January 1 of the calendar year in which the first ad valorem tax bill will be mailed. One MSTU or a series of MSTUs can be created to assist in the funding of the maintenance services provided by the County. However, because of the referendum requirement, MSTU revenues cannot be used to repay debt. Therefore, MSTUs would not be recommended to fund capital projects. Government Services Group, Inc. 60

66 Table 22 illustrates the total taxable value within all of the maintenance MSBUs based on information from the November 2006 ad valorem tax roll. Table 22 also provides an analysis of the revenue generation if millage rates of mill, mills and mills are imposed. Table 22 Total Taxable Value by Category Total Taxable Value mill mills mills All Maintenance MSBUs $47,685,481,579 $47,685,482 $23,842,741 $2,384,274 Source: November 2006 Ad Valorem Tax Roll Table 23 illustrates the total taxable value within all of the maintenance MSBUs by stormwater region. Table 23 also provides an analysis of the revenue generation if millage rates of mill, mills and mills are imposed within each region. Table 23 Total Taxable Value of Maintenance MSBUs by Stormwater Region Total Taxable Value mill mills North Area mills Maintenance MSBUs $18,935,625,538 $18,935,626 $9,467,813 $946,781 South Area Maintenance MSBUs $10,187,324,151 $10,187,324 $5,093,662 $509,366 West Area Maintenance MSBUs $18,562,531,890 $18,562,532 $9,281,266 $928,127 Source: November 2006 Ad Valorem Tax Roll TAX INCREMENT FINANCING (TIF) FOR CAPITAL PROJECTS Dedicated Home Rule Tax Increment A potential tool to generate a portion of the costs for the road capital projects is to provide by home rule ordinance for an annual contribution by the County from available revenue sources of an amount measured by all or a portion of the tax assessment increment that occurs within a defined area. The tax increment is defined as the difference in the amount of ad valorem taxes generated by the tax levied each year by the County on the taxable property contained within the specific geographic area from the amount that would have been generated by the levy of the same millage rate by the County on the taxable property within the area on the most recent assessment roll prior to the effective date of the ordinance creating the specific geographic area. If created by County ordinance, the implementation of either tax increment option discussed in this section, is not restricted to the general law requirements in Chapter 163, Florida Statutes; i.e., the proof of a blighted area is not required. Under this financing concept, a capital project would initially be funded from special assessments levied against benefited property and collected on the ad valorem tax bill pursuant to the Uniform Collection Method. The level of such non-ad valorem assessments on an annual basis could be reduced either area wide or on a per parcel basis in an amount equal to the dedicated home rule tax assessment increment by the County. Under this home rule concept, the land serves as the credit for the assessment bonds issued to finance specific infrastructure projects. The public share committed would be the agreement by the County to share all or a portion of the future tax assessment increment derived within a tax assessment increment area as an additional source of payment for the required debt. Government Services Group, Inc. 61

67 The assessment bonds would be structured so that an agreed upon home rule tax assessment increment could be applied on an annual basis to reduce the annual assessments imposed to pay scheduled debt service on the assessment bonds. Creation of Home Rule Tax Increment Trust Funds for Capital Projects As an alternative, the County could create a Tax Increment Trust Fund to fund capital projects. Again, the tax increment is defined as the difference in the amount of ad valorem taxes generated by the tax levied each year by the County on the taxable property contained within the specific geographic area from the amount that would have been generated by the levy of the same millage rate by the County on the taxable property within the area on the most recent assessment roll prior to the effective date of the ordinance creating the trust fund. Chapter 163, Part II, Florida Statutes, establishes the general law requirements for the creation by a county or a municipality of a community redevelopment district and the establishment of a community redevelopment trust fund. Under such statutory authority, the community redevelopment trust fund is financed annually by the tax increment derived from each taxing authority within the designated community redevelopment area. In State v. Miami Beach Redevelopment Agency, 392 So. 2d 857 (Fla. 1980), the Supreme Court of Florida held that funds placed in the statutory community redevelopment trust fund under the general law scheme lost its character as ad valorem taxes for purposes of constitutional elector approval requirements in Article VII, section 11, Florida Constitution. The Court's reasoning was that bonds secured by available trust fund revenues were not payable from ad valorem taxes since no bondholder had the power to compel the levy of ad valorem taxes or interfere with the budgetary discretion of a local governing board with the power to levy ad valorem taxes. Under the reasoning of the Court, the statutory duty to make an annual contribution to the community redevelopment trust fund did not make the bonds payable from ad valorem taxation in the constitutional sense of that term. Thus, voter approval is not required for the pledge of trust fund revenues generated from an annual deposit in a trust fund of a defined tax increment. The constitutional analysis provided in the State v. Miami Redevelopment Agency case is applicable to a Tax Increment Trust Fund created by ordinance. If created by County ordinance, the calculation of the amount of annual tax increment revenues required to be transferred to a trust fund is not restricted to the general law formula contained in section (2)(a), Florida Statutes. As an example, the ordinance could provide that the increment is measured only by a percentage of the prior year taxable value generated by new construction. As a further example, the ordinance could provide that the annual tax increment is calculated on the countywide taxable value or the increase in taxable value within a designated geographic area described in the ordinance (for example a specific MSBU area). Regardless of the policy decision on the calculation of the ad valorem tax increment, the ordinance could create either a Countywide Trust Fund or individual trust funds within each MSBU. By ordinance, an annual tax increment transfer could be required for either type of trust fund and applied to fund respectively, the countywide road system and the road system corresponding to the specific MSBU areas. In the event bonds are issued payable from such trust funds, the ordinance commitment of the annual increment transfer would become a contractual obligation to the bondholders under the authorizing bond resolution. The amount of the annual required tax increment transfer would be calculated in a formula provided in the implementing ordinance and would be required to be deposited into the trust funds. The annual tax increment deposited in a Countywide Trust Fund could be pledged for the payment of bonds issued by the County to fund the countywide road system. Similarly, the annual tax increment revenue deposited into the individual County trust funds could be applied to fund essential transportation improvements on the MSBU specific road system corresponding to the MSBU areas. To illustrate the tax increment concept, the following tables provide an example of the amount of revenue the tax increment could generate based on the following assumptions. Because a majority of the properties within the MSBUs are improved or vacant residential properties, it is assumed that these properties would be subject to the Save Our Homes cap on taxable value increase of three percent per Government Services Group, Inc. 62

68 year. By applying only a three percent increase per year and using the November 2006 taxable value as the base year, the tax increment would be approximately $335 million by 3, if the taxable value of all properties in the capital MSBUs were included. Table 24 provides the amount of revenue generated by 1.0, 2.0 and 3.0 mills imposed against the tax increment within all capital MSBUs. Table 24 Tax Increment Revenue for all Capital MSBUs 1 Taxable 2 Taxable Base 3% 3% Taxable Value Growth Growth All Capital MSBUs Source: November 2006 Ad Valorem Tax Roll 3 Taxable 3% Growth Increment ( 3 vs. Base ) mill mills mills $3,620,241,891 $3,728,849,148 $3,840,714,622 $3,955,936,061 $335,694,170 $335,694 $671,388 $1,007,083 Table 25 provides the amount of revenue generated by 1.0, 2.0 and 3.0 mills imposed against the tax increment within all capital MSBUs by stormwater region. Table 25 Tax Increment Revenue for all Capital MSBUs by Stormwater Region 1 Taxable 2 Taxable 3 Taxable Base 3% 3% 3% Taxable Value Growth Growth Growth North Area Increment ( 3 vs. Base ) mill mills mills Capital MSBUs $106,482,892 $109,677,379 $112,967,700 $116,356,731 $3,194,487 $3,194 $6,389 $9,583 South Area Capital MSBUs $449,389,041 $462,870,712 $476,756,834 $491,059,539 $13,481,671 $13,482 $26,963 $40,445 West Area Capital MSBUs $3,064,369,958 $3,156,301,057 $3,250,990,088 $3,348,519,791 $91,931,099 $91,931 $183,862 $275,793 Source: November 2006 Ad Valorem Tax Roll To further illustrate the application of the TIF, based on the revenue generation in Tables 24 and 25, the County could borrow as much as $12.0 million and meet the annual debt service requirements. Table 26 provides the assumptions for the annual debt service calculations: Table 26 Financing Assumptions Coupon Rate 6.50% Term (s) 10.0 Principal Amortization Installments 2 Capitalized Interest 6 months Debt Service Reserve Fund One year Contingency 5% of construction costs Cost of Issuance 1% of constructions costs Table 27 provides the annual debt service requirements for various amounts of capital costs based on the financing assumptions: Table 27 Financing Assumptions Construction Costs $500,000 $1,000,000 $5,000,000 $12,000,000 Annual Debt Service $43,509 $87,018 $435,093 $1,044,225 Government Services Group, Inc. 63

69 Findings and Recommendations SUMMARY OF FINDINGS The MSBU Study included the following MSBU categories: Canal maintenance Waterway maintenance Drainage maintenance Road maintenance Road and drainage maintenance Road and drainage capital Wastewater capital Water capital Water/wastewater capital Stormwater maintenance However, a significant portion of this Memorandum analyzes the road and drainage maintenance and capital MSBUs as well as the waterway/canal maintenance MSBUs. The concentration on these MSBUs is because of the significant number of them, as well as the failure to implement new road and drainage and waterway/canal MSBUs during There are only three stormwater maintenance MSBUs that cover regional areas of the County. In addition, all three stormwater MSBUs use the same methodology. Based on these reasons, these MSBUs do not require the same level of administration by Public Works. There are only 15 discrete utilities MSBUs that include specific geographic areas and the methodology for the utilities is the same for all the MSBUs. Based on these reasons, these MSBUs do not require the same level of administration by the Utilities Department. Thus, GSG did not concentrate on these two types of MSBUs. There is an increasing dependence on using MSBUs for a funding source in Charlotte County, particularly to resolve the road deficiencies in most neighborhoods. If the County continues to create MSBUs at the same pace as evidenced in our analysis (approximately four per year) without making changes to the County s approach, the County could implement over 15 more MSBUs by Given the fact that the MSBUs are integral part of the County s revenue strategy, steps must be taken to resolve the issues facing the County and raised during the data gathering and analysis component of the MSBU Study. To initiate the MSBU Study, a general meeting was held with all affected departments that was subsequently followed by meetings with Public Works, the MSBU Section and the Utilities Department. Based on the interviews conducted during those meetings, GSG has categorized the following major issues identified by the County staff. Issue 1: sment rates too high Last year, several capital MSBUs were not implemented due to public outcry over the assessment rates. In addition, several existing MSBUs had proposed assessment rate increases that were not approved because of the public objection. Issue 2: sment costs change dramatically year-to-year Many of the assessment costs for the road and drainage maintenance and capital MSBUs change dramatically year-to-year because of labor and materials. Government Services Group, Inc. 64

70 Issue 3: Issue 4: Issue 5: Various methodologies There are several methodologies used in the County MSBUs even though the types of services to be funded by the MSBUs are similar. The different methodologies require additional administration by all affected departments and cause confusion among the property owners. In addition, there are several methods for allocating costs among condominium properties. Again, these different methodologies require additional administration by all affected departments and cause confusion among the property owners. Finally, the County Commission made a policy decision several years ago to charge different rates for improved and vacant properties with mowing services. The rationale was that property owners of improved property mowed their own public areas near their properties and thus did not need to pay for mowing. Common/base costs There is an interest in developing a charge for all MSBU properties for all base or common services. This charge would be the same amount for every parcel and would include as many of the common services as could be legally included. Countywide or district-wide charge for paving MSBUs There is interest in developing a countywide charge for paving roads on a per parcel basis so that enough revenue can be generated to complete the road paving programs. While this idea would certainly raise a significant amount of revenue, the fair and reasonable requirement of a valid special assessment would require a thorough legal analysis of the ability of the County to lawfully impose a countywide charge. RECOMMENDATIONS After reviewing the current MSBU and special assessment programs in Charlotte County, along with input from many of the County departments, discussions have generated some ideas and recommendations for the future. Recommendations are listed below and have been categorized as Short, Mid and Long Term. The main criterion for the different timeframes are the operational, legal and political hurdles each may face. By no means are these suggestions the only viable alternatives warranting further consideration. However, based upon GSG s extensive experience throughout the State of Florida and current environment, GSG feels the suggestions will move the County in the better direction in terms of special assessment program restructuring. SHORT TERM (1 YEAR OR LESS) RECOMMENDATIONS This section focuses on what steps can be taken by the County that will result in immediate enhancements to the MSBU system in the County. In most cases, these steps can be accomplished for a modest or no additional expense over current funding levels. GSG views these steps as necessary to ensuring that the County elected officials have adequate information to make public policy decisions regarding the MSBUs. Furthermore, these are necessary incremental steps for the County to move toward any additional enhancements that are addressed in the Mid-Term Recommendations section. Recommendation 1: Comprehensive Analysis of Maintenance Programs Most of the road and drainage and canal/waterway maintenance MSBUs have been created at the request of the property owners within the area desiring an increased level of service. However, this piece-meal approach to determining the maintenance service areas increases the costs of providing Government Services Group, Inc. 65

71 these services. The first step in eventually combining individual road and drainage and canal/waterway maintenance MSBUs into larger areas is to conduct a comprehensive analysis of all of the road and drainage maintenance and canal/waterway MSBUs to determine the required services needed to achieve base or common standards. Planning, expectations and costs need to be fully understood and communicated to the public regarding roads and conditions. The County, in creating these MSBUs, is generating expectations from the community that the problems are being addressed. If roads and waterways/canals were improved and a true maintenance program was introduced, there may be a better reception due to the cost savings achievable to all residents. Therefore, it is recommended that the County conduct a comprehensive analysis of all of the road and drainage and canal/waterway maintenance programs. Recommendation 2: Comprehensive Analysis of Capital Programs The County should conduct a comprehensive analysis of the capital programs in Public Works to determine if economies of scale could result from combining MSBU areas for purposes of the construction thus reducing overhead and administrative costs. The analysis should include the feasibility of combining the financing of several MSBUs to reduce borrowing costs and evaluating the policy of five-year increments for the terms of the loans to eliminate the expenses related to several separate transactions instead of one comprehensive transaction. Recommendation 3: Address High sment Rates One approach to resolving the issue of perceived high assessment rates is to tie the type and level of services to be provided to the expenditures and rates required to fund the services. A clear message about the level of services might provide a means for public support. Next, an examination of the central service and administrative services cost allocations to each MSBU should be examined to ensure that proper allocation has been conducted. Even if the cost allocations are deemed appropriate, the County Commission could make a policy decision to only charge a portion of these costs and allow a subsidy by the Transportation Trust Fund for the remainder. This subsidy might address the high assessment rates. Recommendation 4: Increase MSBU and Special sment Rates To Allow For Rising Costs The County has done a good job during the creation of the MSBUs and special assessments of setting maximum rates to allow increases to keep pace with rising costs. However, since some of the MSBUs have been active for a number of years, those maximum rates are at the point of forcing Public Works to reduce services. The biggest cost in most of the maintenance programs is labor. If an assessment program is at its maximum rate and the County can not retain, or hire staff at a wage required by that rate, then service will be reduced. The maximum rates for all programs should be revisited every three years to ensure they are sufficient. A three year review also allows for public input at the public hearings that are statutorily required when assessment rates are increased. The initiation of Recommendations 5, 6 and 7 could also assist in addressing maximum assessment rates. Recommendation 5: Perform Benefit/Cost Analysis of MSBU Section The County MSBU section of the Budget Office performs all of the assessment database maintenance functions. The costs of this centralized assessment database maintenance function are prorated among all of the MSBUs. Another step in analyzing the current assessment rates is to analyze the cost of maintaining the existing MSBU database. This analysis can range from a benefit/cost analysis of the status quo to complete out-sourcing of the database maintenance services. By doing this analysis, the County will have performed a comprehensive analysis of all components of the assessment rates. Recommendation 6: Develop Three or Five Budget Projections to Calculate Average Rates The County should explore developing three or five year budget projections for each MSBU with the appropriate increases in certain line items to address inflation. Once the budget projections are developed, the County could calculate an average budget and average assessment rate to fund the average budget. The average assessment rate could be imposed for the three or five year period. In Government Services Group, Inc. 66

72 years where the average budget was greater than the annual budget, the excess assessment revenue would be carried forward. In years where the average budget was less than the annual budget, the excess assessment revenue that was carried forward would be used to fund the shortfall. Recommendation 7: Create an MSTU for Common Administrative Services Another way to address the increasing assessment rates is to charge for the common administrative costs through the creation of a municipal service taxing unit (MSTU) that encompasses all of the MSBU properties and impose a millage rate to recover the costs of these common services. This method would bifurcate the costs between the MSBUs and the MSTUs based on the apportionment methodology and the taxable value of the properties. The MSTU option was described in earlier sections of the Memorandum. The MSTU would need to be created by July 1 in order for the MSTU millage to be imposed for if it follows an existing MSTU boundary or includes all of the unincorporated portions of Charlotte County. Recommendation 8: Incorporate Legal Input in the Development of Methodologies The special assessments imposed in the MSBUs must meet the Florida case law requirements for a valid special assessment. The County Attorney is involved in the special assessment process on a year round basis. The attorney s role in the initial phase of the creation of assessments is the development and review of ordinances and resolutions. However, the County Attorney is not typically part of the initial methodology development process, but does review the methodologies that are proposed. In order to ensure compliance with the case law criteria, it is recommended that the County Attorney become an integral part of the methodology initial development in the future creation of all MSBUs. Recommendation 9: Eliminate Occupied/Vacant Distinction for Road and Drainage MSBUs Charlotte County has created different service levels for many of their road and drainage assessment programs. The most common type of distinction is between vacant and occupied properties. The logic for the distinction is that the vacant parcels need more attention by the County, since they are typically not being maintained as diligently as some of their occupied neighbors. However, it is difficult to correlate that methodology with the general notion that occupied properties need less service than vacant parcels. Mowing may make the case for occupied being charged less than vacant because a property owner will maintain the right of way for an occupied property: whereas, a vacant property needs the County to keep up the maintenance. However, a similar case can be made that occupied properties still benefit from the mowing services because mowing the vacant properties helps to maintain the aesthetic value of the area. Therefore, it is recommended that the County eliminate the occupied/vacant distinction for road and drainage MSBUs. The elimination of multiple assessment rates within each MSBU would allow the Charlotte County MSBU Section to slow the escalating burden of monitoring and accounting these two separate rates. In addition, the Public Works Department would have less accounting of the costs between the two types of properties. MID TERM (2 3 YEARS) RECOMMENDATIONS This section of the Memorandum addresses those issues that will require a longer term to implement and which may require additional funding from the County to move them forward. These options may also require the County to evaluate several alternatives in terms of policy or actions to be taken. Furthermore, these are necessary incremental steps for the County to move toward any additional enhancements that are addressed in the Long-Term Recommendations section. Recommendation 10: Equivalent Residential Unit (ERU) Standardization The utilization of several types of ERUs has been demonstrated throughout this Memorandum. These different ERU bases cause increased administration and maintenance costs for these MSBUs as well as confusion for property owners who do not understand the definitions. While the County is making progress in standardizing the definition of an ERU, this process should be completed within two years. Government Services Group, Inc. 67

73 The County is already addressing this issue by moving towards a standard methodology (ERU4), but this should occur on a more immediate basis. The County needs to continue to address this issue by moving towards a standard methodology. A corollary recommendation is provided in Recommendation 11. Recommendation 11: Methodology Review Condominiums The utilization of different methodology approaches to condominiums has been demonstrated throughout this Memorandum. These different methodology approaches cause increased administration and maintenance costs for these MSBUs as well as confusion for property owners who do not understand the approaches. While the County is making progress in standardizing the condominium approach, this process should be completed within two years. LONG TERM (3 5 YEARS) RECOMMENDATIONS This section of the Memorandum addresses those issues that will require the longest term to implement and those which will require additional funding from the County to move them forward. These options will also require the County to evaluate several alternatives in terms of policy or actions to be taken. Recommendation 12: Creation of Road and Drainage Maintenance MSBUs With Boundaries Mirroring Current Stormwater Districts Once the comprehensive analysis of the road and drainage maintenance MSBUs is completed, the creation of road and drainage maintenance MSBUs with boundaries mirroring current stormwater districts is recommended. The effects of combining the smaller road and drainage maintenance MSBUs into larger units will have the greatest impact on the Public Works Department and the MSBU Section. Not only will the number of MSBUs be reduced, sub-categories of each special assessment methodology will be eliminated. This will ease the administration in the MSBU Section. The combining of individual MSBUs may reduce the amount of time and effort by Public Works in tracking and accounting for expenditures which should reduce overall costs. It will also give more flexibility to Public Works in scheduling of work efforts and allow them to explore ways to reduce costs. In addition, if more properties are included within the MSBUs, the fluctuations in annual expenditures are easier to absorb among more properties with less effect on the assessment rates. Recommendation 13: Base Administrative Charge or MSTU for Common Services Once the combined road and drainage maintenance MSBUs are created as provided in Recommendation 12, the next step is to conduct a detailed analysis of the line items that comprise the budgets. This analysis will identify the true common administrative costs across all MSBUs. After these costs have been identified, a methodology could be developed to allocate these costs to each MSBU and then to allocate the costs within each MSBU either on a parcel or billing unit basis. The development of a base charge may provide some eventual economies in scale for these basic administrative services, which may help reduce these costs. Recommendation 14: Explore Financing Options To Identify Cost Savings and Future Certain Costs For Capital MSBUs The County should review the current financing procedures of only borrowing funds in five-year increments for capital MSBUs and the use of variable rates. Most capital MSBUs have a project life of years and the initial borrowing and debt service schedule should mirror the life of the project. Fixed rate financing options would provide exact financing costs over the life of the capital project and eliminate interest rate risk. As the financing on the current capital MSBUs nears completion of each cycle, the County should explore the option of combining the financing of several MSBUs at the same time. The magnitude of such combined revenue requirements may result in better financing options lower interest rates, longer terms for repayment, reduced borrowing costs all options that could lower the costs of capital MSBUs and result in lower capital assessment rates. Government Services Group, Inc. 68

74 Recommendation 15: Creation of Non-Tradition Tax Increment Funding (Non-CRA) for Capital MSBUs Once the comprehensive analysis of the capital MSBUs is completed and the County has investigated better financing options for capital costs, the next step would be to explore the creation of non-traditional tax increment funding for capital MSBUs. If created by County ordinance, the implementation of either tax increment option discussed in the Memorandum is not restricted to the general law requirements in Chapter 163, Florida Statutes; i.e., the proof of a blighted area is not required. One option is to provide by home rule ordinance for an annual contribution by the County from available revenue sources of an amount measured by all or a portion of the tax assessment increment that occurs within a defined area. Under this financing concept, all or a portion of a MSBU would be funded from special assessments levied against benefited property and collected on the ad valorem tax bill pursuant to the Uniform Collection Method. The level of such non-ad valorem assessments on an annual basis could be reduced, either area wide or on a per parcel basis, in an amount equal to the dedicated home rule increment by the County. As an alternative, the County could create a tax increment trust fund to fund capital MSBUs. The home rule ordinance could create either a Countywide Trust Fund or individual trust funds within each MSBU. By ordinance, an annual tax increment transfer could be required for the trust funds and applied to fund respectively the countywide road system and the road system corresponding to the specific MSBU areas. In the event bonds are issued payable from such trust funds, the ordinance commitment of the annual increment transfer would become a contractual obligation to the bondholders under the authorizing bond resolution. The amount of the annual required tax increment transfer would be calculated in a formula provided in the implementing ordinance and would be required to be deposited into each of the trust funds. Government Services Group, Inc. 69

75 Implementation Phase Two of the MSBU Study will be based upon County Commission policy direction regarding the recommendations provided within this Memorandum. However, Phase Two should include, at a minimum, the work effort to validate the initial findings and address the issues presented. GSG has provided a Scope of Services, below, outlining the necessary steps required to implement the Short Term Recommendations and to provide a foundation for the Mid and Long Term Recommendations. As part of the recommended Phase Two tasks, GSG will identify, cost and make recommendations regarding the best method to provide the ongoing annual maintenance of the assessment programs. Options for the annual maintenance include in-house County staff or outsourcing some or all of the maintenance services. PHASE TWO SCOPE OF SERVICES Based on the information gathered in the Phase One analysis, the following provides a scope of services for Phase Two of the project, which is to review and analyze current special assessment maintenance programs. Task 1: Conduct a Comprehensive Analysis of Maintenance Programs for Assist the County in conducting a comprehensive analysis of all of the maintenance assessment programs with specific emphasis on the road and drainage maintenance and canal/waterway MSBUs to determine the required services needed to achieve base or common standards. Determine criteria for future combinations of the smaller MSBUs to ensure that the analysis provides the requisite information to support the combinations. Analyze the type and level of services to be provided and correlate to the expenditures and rates required to fund the services. Task 2: Initiate the Comprehensive Analysis of Capital Programs for Assist the County in initiating a comprehensive analysis of the capital programs in Public Works to determine if economies of scale could result from combining MSBU areas for purposes of the construction thus reducing overhead and administrative costs. The analysis will include the feasibility of combining the financing of several MSBUs to reduce borrowing costs and evaluating the policy of five-year increments for the terms of the loans to eliminate the expenses related to several separate transactions instead of one comprehensive transaction. Task 3: Identify Full Costs (Revenue Requirements) of the Current Special sment Maintenance Programs for Evaluate the full cost of the current programs using the County s most current financial information. This full cost analysis will include (1) actual costs of services based on type and level of services to be provided, (2) the direct costs of maintaining and administering the County s special assessment programs, (3) the administrative costs associated with the MSBU Section and (4) indirect and/or other administrative costs. Examine the central service and administrative services cost allocations to each MSBU to ensure that proper allocation has been conducted. Provide recommendation regarding policy decisions to Government Services Group, Inc. 70

76 Task 4: Task 5: Task 6: Task 7: Task 8: Task 9: Task 10: charge all or a portion of these costs in case of subsidy policy. Develop Three or Five Budget Projections to Calculate Average Rates Using the base budget developed in Task 2, develop three or five year budget projections for each MSBU with the appropriate increases in certain line items to address inflation. Once the budget projections are developed, calculate an average budget and average assessment rate to fund the average budget. The average assessment rate could be imposed for the three or five year period. Calculate appropriate maximum assessment rates for each MSBU to allow for increases. Assist in the Legal Review of Current and Proposed sment Methodologies Assist the County Attorney or other legal counsel in the review of current and proposed assessment methodologies to ensure compliance with case law criteria. Recommend improvements to the current methodologies and propose procedures for future methodology development that include legal review. Begin the Process of ERU Standardization and Methodology Revisions Using the results of the legal review, the current special assessment data, and the identified benefit areas and programs, begin the process of ERU standardization and methodology revisions. The process will not only address the standardization of ERUs, but will also analyze the condominium methodology and the occupied/vacant distinction for different levels of service. Develop Pro Forma Rates To the extent possible, calculate pro forma rates for any programs with completed analysis (i.e., completion of Tasks 1 through 6). Review the pro forma rates and compare to current rates. Evaluate revenue sufficiency based on full cost and three-to-five year budget projections. Modify and adjust methodologies, full cost calculations and other variables to provide optimum assessment program. Assist With Drafting or Revising Any Ordinances or Resolutions That May Be Necessary To the extent necessary, assist the County Attorney or other legal counsel in the development and review of any ordinances or resolutions required to implement the revised assessment methodologies and pro forma assessment rates. Assist with Rate Adoption Process Advise and assist with the legal requirements for the adoption of the final assessment rate resolutions in conformance with section , Florida Statutes, including (as needed): (a) the development of the first class notices, (b) publication of the public hearing, (c) development of a public information sheet, and (d) attendance at the public hearing. Provide In-House Resource Needs Review and Cost/Benefit Analysis of Outsourcing Administration of MSBUs Review additional County department resource needs for the continued administration of MSBUs and provide a detailed cost/benefit analysis of status quo delivery versus the outsourcing of all, or some, of the assessment maintenance services. Government Services Group, Inc. 71

77 Task 11: Provide Scope of Services and Fees for Ongoing Annual Maintenance if Necessary Upon implementation of the assessment programs for , GSG will prepare a scope of services and fee for ongoing annual assessment services and additional customer service options available to the County. This will address: Ongoing and annual update of the assessment roll Data requirements Report requirements Accessibility and interface Public information program Government Services Group, Inc. 72

78 Appendix A MSBU MASTER LIST

79 MSBU Master Report MSBU Code Description MSBU Rate ACW M Alligator Creek Waterway Unit (M) ERUD AKW M Ackerman Waterway (M) ERUD BGN O M Boca Grande Street And Drainage Unit (M) - Occupied ERUR BGN V M Boca Grande Street And Drainage Unit (M)- Vacant ERUR BSV M Burnt Store Village Street And Drainage Unit (M) ERU4 BV M Buena Vista Area Waterway Unit (M) LOT CB M Cook And Brown Street Unit(M) ACR CR C Charlotte Ranchettes Street And Drainage Unit(C) ACR CR M Charlotte Ranchettes Street And Drainage Unit(M) ACR CR 99A C Charlotte Ranchettes Street and Drainage Unit (C) - Alfred Blvd PRCL CR 99C C Charlotte Ranchettes Street and Drainage Unit (C) - Clark Drive PRCL CR 99L C Charlotte Ranchettes Street and Drainage Unit (C) - Leah Road PRCL CWD ACK M Charlotte County Maintenance Dredging Benefit Unit (M) - Ackerman Sub-Unit ERUD CWD ALC M Charlotte County Maintenance Dredging Benefit Unit (M)- Alligator Creek Sub- Unit ERUD CWD BV M Charlotte County Maintenance Dredging Benefit Unit (M) - Buena Vista Sub- Unit ERUD CWD GC M Charlotte County Maintenance Dredging Benefit Unit (M) - Gulf Cove Sub-Unit ERUD CWD GPC M Charlotte County Maintenance Dredging Benefit Unit (M) - Greater Port Charlotte ERUD CWD HC M Charlotte County Maintenance Dredging Benefit Unit (M) - Hayward Canal Sub- Unit ERUD CWD HH M Charlotte County Maintenance Dredging Benefit Unit (M)-Harbour Heights Sub- Unit ERUD CWD LB M Charlotte County Maintenance Dredging Benefit Unit (M) - Lemon Bay Sub-Unit ERUD CWD LBC M Charlotte County Maintenance Dredging Benefit Unit (M)-Lee Branch Canal Sub-Unit ERUD CWD MA M Charlotte County Maintenance Dredging Benefit Unit (M) - Manchester Sub-Unit ERUD CWD NPC M Charlotte County Maintenance Dredging Benefit Unit (M) -Northwest Port Charlotte ERUD CWD PH M Charlotte County Maintenance Dredging Benefit Unit (M) - Pirate Harbor Sub- Unit ERUD CWD PRS M Charlotte County Maintenance Dredging Benefit Unit (M) - Peace River Shores ERUD CWD PS M Charlotte County Maintenance Dredging Benefit Unit (M) - Palm Shores Sub- Unit ERUD CWD SC M Charlotte County Maintenance Dredging Benefit Unit (M) - Suncoast Sub-Unit ERUD CWD SGC M Charlotte County Maintenance Dredging Benefit Unit (M) -South Gulf Cove Sub- Unit ERUD CWD SPR M Charlotte County Maintenance Dredging Benefit Unit (M) - South Peace River ERUD DC O M Deep Creek (Non-urban) Street And Drainage Unit (M) - Occupied ERU4 DC V M Deep Creek (Non-urban) Street And Drainage Unit (M) - Vacant ERU4 EE O M Englewood East (Non-urban) Street And Drainage Unit (M) - Occupied ERU4 EE V M Englewood East (Non-urban) Street And Drainage Unit (M) - Vacant ERU4 ENW M Edgewater North Waterway Unit (M) ERU FR C Farabee Road Street and Drainage Unit (C) ACR FR M Farabee Road Street and Drainage Unit (M) ACR GC O M Gulf Cove Street And Drainage Unit(M) - Occupied ERU4 GC V M Gulf Cove Street And Drainage Unit(M) - Vacant ERU4 GCW M Gulf Cove Waterway Benefit Unit(M) ERU1 GGC O M Gardens of Gulf Cove Street And Drainage Unit (M) - Occupied ERU4 GGC V M Gardens of Gulf Cove Street And Drainage Unit (M) - Vacant ERU4 Government Services Group, Inc. A-1

80 GPC HOL C Greater Port Charlotte Street and Drainage Unit (C) - Hollis Ave ERU4 GPC O M Greater Port Charlotte Street and Drainage Unit (M) - Occupied ERU4 GPC V M Greater Port Charlotte Street and Drainage Unit (M) - Vacant ERU4 GRC O M Grove City Street And Drainage Unit (M) - Occupied ERU4 GRC V M Grove City Street And Drainage Unit (M) - Vacant ERU4 GRCW M Grove City Waterway Unit (M) ERUD HAW M Hayward Canal Area Waterway Unit (M) ERU6 HH O M Harbour Heights Street And Drainage Unit (M) - Occupied FF HH SOL C Harbour Heights Street and Drainage Unit (C) Solomon Drive LOT HH V M Harbour Heights Street And Drainage Unit (M) - Vacant FF HHW M Harbour Heights Waterway Maintenance District (M) CFF LB O M Lemon Bay Street And Drainage Unit (M) - Occupied ERU4 LB V M Lemon Bay Street And Drainage Unit (M) - Vacant ERU4 LBC M Lee Branch Waterway Unit (M) LOT LGIW M Little Gasparilla Island Waterway Unit (M) ERUR MLS KV C Maple Leaf Estates/Victoria Estates/Kings Gate Water & Sewer (C) - KV ERC MLS MA C Maple Leaf Estates/Victoria Estates/Kings Gate Water & Sewer (C) - MA ERC MSU ODC M Mid-Charlotte Stormwater Utility Unit (M) - Occupied - Mid Charlotte Basin ACR MSU OGP M Mid-Charlotte Stormwater Utility Unit (M)-Occupied-Greater Port Charlotte Basin ACR MSU OHH M Mid-Charlotte Stormwater Utility Unit (M) - Occupied - Mid Charlotte Basin ACR MSU OKH M Mid-Charlotte Stormwater Utility Unit (M) - Occupied - Mid Charlotte Basin ACR MSU ONC M Mid-Charlotte Stormwater Util. Unit (M)-Occupied-Mid Charlotte Basin ACR MSU VDC M Mid-Charlotte Stormwater Utility Unit (M) - Vacant- Mid Charlotte Basin ACR MSU VGP M Mid-Charlotte Stormwater Utility Unit (M) -Vacant- Greater Port Charlotte Basin ACR MSU VHH M Mid-Charlotte Stormwater Utility Unit (M) - Vacant - Mid Charlotte Basin ACR MSU VKH M Mid-Charlotte Stormwater Utility Unit (M) - Vacant - Mid Charlotte Basin ACR MSU VNC M Mid-Charlotte Stormwater Utility Unit (M)-Vacant-Mid Charlotte Basin ACR MW M Manchester Waterway Benefit Unit(M) ERU1 NC O M Northwest Port Charlotte Street And Drainage Unit (M) - Occupied ERU4 NC V M Northwest Port Charlotte Street And Drainage Unit (M) - Vacant ERU4 NCW M Northwest Port Charlotte Waterway (M) ERUD PA O M Placida Area Street And Drainage Unit (M) - Occupied ERU4 PA OP M Placida Area Street And Drainage Unit (M) - Occupied - Paving ERU4 PA V M Placida Area Street And Drainage Unit (M) - Vacant ERU4 PA VP M Placida Area Street And Drainage Unit (M) - Vacant - Paving ERU4 PA WOM M Placida Area Street And Drainage Unit (M) - No Mowing sment ERU4 PG COL C Punta Gorda (Non-urban) Street and Drainage Unit (C) - Colony ERU4 PG MAG C Punta Gorda (Non-urban) Street and Drainage Unit (C) - Magnolia ERU4 PG O M Punta Gorda (Non-urban) Street And Drainage Unit (M) - Occupied ERU4 PG OM M Punta Gorda (Non-urban) Street & Drainage Unit (M) - Occ - Maintenance Only ERU4 PG PAV C Punta Gorda (Non-urban) Street & Drainage Unit Marl Paving (C) PAV PG V M Punta Gorda (Non-urban) Street And Drainage Unit (M) - Vacant ERU4 PG VM M Punta Gorda (Non-urban) Street & Drainage Unit (M) -Vacant -Maint Only ERU4 PHW M Pirate Harbor Waterway Unit (M) ERU6 PHWW C Pirate Harbor Wastewater MSBU (C) ERU1 PRS O M Peace River Shores Street And Drainage Unit (M) - Occupied ERU2 PRS V M Peace River Shores Street And Drainage Unit (M) - Vacant ERU2 PRSW M Peace River Shores Waterway Maintenance District (M) CFF PSW M Palm Shores Waterway Unit (M) ERUD Government Services Group, Inc. A-2

81 RBM O M Rotonda Broadmoor Street And Drainage Unit (M) - Occupied - Paving ERU4 RBM V M Rotonda Broadmoor Street And Drainage Unit (M) - Vacant - Paving ERU4 RH O M Rotonda Heights Street And Drainage Unit(M) - Occupied ERU4 RH V M Rotonda Heights Street And Drainage Unit(M) - Vacant ERU4 RL O M Rotonda Lakes Street And Drainage Unit (M) - Occupied ERU4 RL V M Rotonda Lakes Street And Drainage Unit (M) - Vacant ERU4 RLM O M Rotonda Long Meadow Street And Drainage Unit (M) - Occupied - Paving ERU4 RLM V M Rotonda Long Meadow Street And Drainage Unit (M) - Vacant - Paving ERU4 RMV O M Rotonda Meadows/Villas Street And Drainage Unit (M) - Occupied ERU4 RMV V M Rotonda Meadows/Villas Street And Drainage Unit (M) - Vacant ERU4 RMWW C Rotonda Meadows Wastewater MSBU (C) ERU1 RPH O M Rotonda Pinehurst Street And Drainage Unit (M) - Occupied - Paving ERU4 RPH V M Rotonda Pinehurst Street And Drainage Unit (M) - Vacant - Paving ERU4 RPV O M Rotonda Pine Valley Street And Drainage Unit (M) - Occupied - Paving ERU4 RPV V M Rotonda Pine Valley Street And Drainage Unit (M) - Vacant - Paving ERU4 RSN O M Rotonda Sands North Street And Drainage Unit (M) - Occupied ERU4 RSN V M Rotonda Sands North Street And Drainage Unit (M) - Vacant ERU4 RSWW C Rotonda Sands Wastewater MSBU (C) ERU1 RVWW C Rotonda Villas and Springs Water and Wastewater MSBU (C) ERU1 RW O M Rotonda West Street And Drainage Unit (M) - Occupied ERU4 RW OP M Rotonda West Street And Drainage Unit (M) - Occupied - Paving ERU4 RW OPH M Rotonda West Street And Drainage Unit (M) - Paving - Heights Transfer ERU4 RW V M Rotonda West Street And Drainage Unit (M) - Vacant ERU4 RW VP M Rotonda West Street And Drainage Unit (M) - Vacant - Paving ERU4 RW VPH M Rotonda West Street And Drainage Unit (M) - Paving - Heights Transfer ERU4 RWM O M Rotonda White Marsh Street And Drainage Unit (M) - Occupied - Paving ERU4 RWM V M Rotonda White Marsh Street And Drainage Unit (M) - Vacant - Paving ERU4 SB O M Suncoast Boulevard Street and Drainage Unit(M) - Occupied ERUR SB V M Suncoast Boulevard Street And Drainage Unit (M) - Vacant ERUR SBS O M South Burnt Store Street And Drainage Unit (M) - Occupied ERU2 SBS V M South Burnt Store Street And Drainage Unit (M) - Vacant ERU2 SBS WOM M South Burnt Store Street And Drainage Unit (M) - No Mowing sment ERU2 SBW M South Bridge Waterway Unit (M) ERUD SCW M Suncoast Waterway Unit (M) ERUD SGC O M South Gulf Cove (Non-urban) Street And Drainage Unit (M) - Occupied ERU4 SGC P2 M South Gulf Cove (Non-urban) Street And Drainage Unit (M) - Ph2 Paving ERU4 SGC P3 M South Gulf Cove (Non-urban) Street And Drainage Unit (M) - Ph3 Paving ERU4 SGC P4 M South Gulf Cove (Non-urban) Street And Drainage Unit (M) - Ph4 Paving ERU4 SGC P5 M South Gulf Cove (Non-urban) Street And Drainage Unit (M) - Ph5 Paving ERU4 SGC V M South Gulf Cove (Non-urban) Street And Drainage Unit (M) - Vacant ERU4 SGCW M South Gulf Cove Waterway Benefit Unit (M) - Waterfront ERU0 SGCWDRY M South Gulf Cove Waterway Benefit Unit (M) - Dry Lots ERU0 SGCWVHL M South Gulf Cove Waterway Benefit Unit (M) - Village of Holiday Lakes ERU0 SGW 1 C South Gulf Cove Phase 1 Water Distribution Facilities (C) ERU5 SGW 2 C South Gulf Cove Phase 2 Water Distribution Facilities (C) ERU5 SGW 3 C South Gulf Cove Phase 3 Water Distribution Facilities (C) ERU5 SGW 4 C South Gulf Cove Phase 4 Water Distribution Facilities (C) ERU5 SGW 5 C South Gulf Cove Phase 5 Water Distribution Facilities (C) ERU5 SGWW1 C South Gulf Cove Phase 1 Wastewater Collection Facilities (C) ERU1 Government Services Group, Inc. A-3

82 SGWW2 C South Gulf Cove Phase 2 Wastewater Collection Facilities (C) ERU1 SGWW3 C South Gulf Cove Phase 3 Wastewater Collection Facilities (C) ERU1 SGWW4 C South Gulf Cove Phase 4 Wastewater Collection Facilities (C) ERU1 SGWW5 C South Gulf Cove Phase 5 Wastewater Collection Facilities (C) ERU1 SPB M Stump Pass/Beach Renourishment Benefit Unit (M) CFF SPG O M South Punta Gorda Heights Street And Drainage Unit (M) - Occupied ERU3 SPG V M South Punta Gorda Heights Street And Drainage Unit (M) - Vacant ERU3 SPGEO M South Punta Gorda Heights East Street And Drainage Unit (M) - Occupied ERU3 SPGEV M South Punta Gorda Heights East Street And Drainage Unit (M) - Vacant ERU3 SPGWO M South Punta Gorda Heights West Street And Drainage Unit (M) - Occupied ERU3 SPGWV M South Punta Gorda Heights West Street And Drainage Unit (M) - Vacant ERU3 SSU OAG M South Charlotte Stormwater Utility Unit (M) - Occupied - Agricultural ACR SSU OEX M South Charlotte Stormwater Utility Unit (M) - Occupied - Exempt ACR SSU ONAGM South Charlotte Stormwater Utility Unit (M) - Occupied - Non Agricultural ACR SSU VAG M South Charlotte Stormwater Utility Unit (M) - Vacant - Agricultural ACR SSU VEX M South Charlotte Stormwater Utility Unit (M) - Vacant - Exempt ACR SSU VNAGM South Charlotte Stormwater Utility Unit (M) - Vacant - Non Agricultural ACR TE O M Town Estates Street And Drainage Unit(M) - Occupied ACR TE V M Town Estates Street And Drainage Unit(M) - Vacant ACR TGA C Tropical Gulf Acres Street and Drainage Unit (C) ERU4 TGA O M Tropical Gulf Acres Street And Drainage Unit (M) - Occupied ERU4 TGA V M Tropical Gulf Acres Street And Drainage Unit (M) - Vacant ERU4 WSU O M West Charlotte Stormwater Utility Unit (M) - Occupied ACR WSU V M West Charlotte Stormwater Utility Unit (M) - Vacant ACR WTWW C West Tarpon to Orange Dr. Wastewater MSBU (C) ERU1 Government Services Group, Inc. A-4

83 Appendix B ASSESSMENT METHODOLOGY DEFINITIONS

84 sment Methodology Definitions ACR Acre Equivalent to one acre of land CFF Canal Front Foot Per foot of canal or waterway frontage ERC Equivalent Residential Connection ERU Equivalent Residential Unit - means the number of residential units (single-family, mobile homes, multi-family, condominiums, etc.) within the boundaries of the unit. ERU0 Equivalent Residential Unit per Lot for South Gulf Cove Waterway Unit ERU1 Equivalent Residential Unit 1 Defined as one residential dwelling unit (includes single family, mobile home and each unit of a multifamily or condominium) ERU2 Equivalent Residential Unit 1. Each platted lot, to which a State of Florida Department of Revenue land use code designating agricultural, single-family (including a single mobile home) or duplex residential use has been assigned; 2. Each parcel of property other than a platted lot, to which a State of Florida Department of Revenue land use code designating agricultural, single-family (including a single mobile home) or duplex residential use has been assigned, shall constitute one-tenth (1/10th) of an Equivalent Residential Unit for each full 8 feet of Frontage lying contiguous to the abutting street; provided however, that the front footage for any parcel with frontage on more than one street shall be deemed to be the frontage of the longest side of such parcel abutting any street; 3. Each parcel of property, to which a State of Florida Department of Revenue land use code designating other than agricultural, single-family (including a single mobile home) or duplex residential use has been assigned, shall constitute one-fifth (1/5th) of an Equivalent Residential Unit for each full 8 feet of Frontage lying contiguous to the abutting street; provided however, that the front footage for any parcel with frontage on more than one street shall be deemed to be the frontage of the longest side of such parcel abutting any street. ERU3 Equivalent Residential Unit 1. Each parcel of property, to which a State of Florida Department of Revenue land use code designating agricultural, single-family (including a single mobile home) or duplex residential use has been assigned, shall constitute one-tenth (1/10th) of an Equivalent Residential Unit for each full 8 feet of Frontage lying contiguous to the abutting street; provided however, that the front footage for any parcel with frontage on more than one street shall be deemed to be the frontage of the longest side of such parcel abutting any street; 2. Each parcel of property, to which a State of Florida Department of Revenue land use code designating other than agricultural, single-family (including a single mobile home) or duplex residential use has been assigned, shall constitute one-fifth (1/5th) of an Equivalent Residential Unit for each full 8 feet of Frontage lying contiguous to the abutting street; provided however, that the front footage for any parcel with frontage on more than one street shall be deemed to be the frontage of the longest side of such parcel abutting any street. ERU4 Equivalent Residential Unit A. RESIDENTIAL PARCELS (1) Unimproved Residential Parcels. a. Standard Size Single Family Parcels. Each parcel of property zoned residential single family or mobile home (excluding mobile home park) on which one (1) Government Services Group, Inc. B-1

85 dwelling unit would normally be placed shall be assessed on the basis of one (1) ERU. b. Undersized Single Family Parcel. Each parcel of property zoned residential single family or mobile home (excluding mobile home park), which is smaller than the size normally required for placement of a single family dwelling unit, shall be assessed on the basis of that proportionate share of the ERU as the undersized parcel bears to the total number of similar undersize parcels needed to constitute a standard size single family parcel in the area in which the parcel is situated. (MSBU NOTE: Boat Lots) c. Other Residential Parcels. Each Parcel of property, not addressed by (A) or (B) above, which is zoned residential or mobile home n which more than one dwelling unit may be placed under applicable land use and zoning requirements shall be assessed that number of ERUs determined by the following formula. All Front Footage divided by Front Footage or Standard Size Single Family Parcel in the Area = Number of ERUs. The total number of ERUs so determined for the parcel shall not be less than one (1) and shall not exceed the maximum number of dwelling units allowed under applicable land use and zoning requirements for that parcel. (2) Partially Improved Residential Parcels. Each parcel of property zoned residential or mobile home on which one or more dwelling units have been placed shall be assessed the greater of the number of ERUs determined according to subparagraph (a)(1)(c) above, or the actual number of existing dwelling units on the parcel. (3) Improved Residential Parcels. Each parcel of property zoned residential or mobile home on which no additional residential units may be placed under applicable land use and zoning requirements shall be assessed one (1) ERU for each existing residential unit. (MSBU NOTE: 12/30/96-Per Dave Gruen, Budget Ofc. RPH Lt 73 & RBM Lt 73 zoned MF with SF home on whole lot give 1 ERU) B NON-RESIDENTIAL PARCELS Each parcel of property zoned other than residential or mobile home shall be assesses that number of ERUs determined by the following formula: All front Footage divided by Front Footage of Standard Size Single Family Parcel in the Area = Number of ERUs. In 2004, the County adopted an ordinance (provided as Appendix C) amending section of the Charlotte County code. The purpose of the amendment was to standardize the definition of an Equivalent Residential Unit by deleting exemptions from street and drainage assessments of properties abutting streets normally maintained by other County, State, or Federal funds. The amendment reads as follows: 23 Equivalent residential unit (ERU) is defined, for assessment purposes, as follows for residential parcels: Unimproved Residential Parcels Standard size single-family parcels. Each parcel of property zoned residential single-family or mobile home (excluding mobile home park) on which only one (1) dwelling unit would normally be placed shall be assessed on the basis of one (1) ERU. Undersize single-family parcels. Each parcel of property zoned residential single-family or mobile home (excluding mobile home park), which is smaller than the size normally required for the placement of a single-family dwelling unit, shall be assessed on the basis of that proportionate share of one (1) ERU as the undersize parcel bears to the total number of similar undersize 23 Adopted by Charlotte County Board of Commissioners April 27, 2004, Ordinance Number Government Services Group, Inc. B-2

86 parcels needed to constitute a standard size single-family parcel in the area in which the parcel is situated. Other residential parcels. Each parcel of property, not addressed by a or b above, which is zoned residential or mobile home on which more than one (1) dwelling unit may be placed under applicable land use and zoning requirements shall be assessed that number of ERUs is determined by the following formula: All Front Footage divided by Front Footage of Standard Size Single Family Parcel in the Area = Number of ERU s. The total number of ERUs so determined for the parcel shall not be less than one (1) and shall not exceed the maximum number of dwelling units allowed under applicable land use and zoning requirements for that parcel. Partially improved residential parcels. Each parcel of property zoned residential or mobile home on which one or more dwelling units have been placed shall be assessed the greater amount of the number of ERUs determined according to subparagraph (a)(1)c. above, or the actual number of existing dwelling units on the parcel. Improved residential parcels. Each parcel of property zoned residential or mobile home on which no additional residential units may be placed under applicable land use and zoning requirements shall be assessed one (1) ERU for each existing residential unit. Nonresidential parcels: Each parcel of property zoned other than residential or mobile home shall be assessed that number of ERU s determined by the following formula: All Front Footage divided by Front Footage of Standard Size Single Family Parcel in the Area = Number of ERU s. The total number of ERU s so determined for the parcel shall not be less than one (1). Exceptions: (1) The following shall be assessed zero ERU s: A. Any parcel of property deemed unbuildable according to land use or zoning requirements and which cannot be altered to become a buildable lot or combined with other parcels to become part of a buildable lot; B. any parcel of property owned by the federal government, the state of Florida, its counties or its municipalities. (2) The county administrator, or his designee, in response to the presentation of unique, exceptional or extraordinary circumstances, where strict application of the above method of determination would create a practical difficulty or an undue hardship, as distinguished from a mere inconvenience, may determine the appropriate number of ERU s for a particular parcel on a case by case basis in the interests of fairness and administrative ease. ERU5 Equivalent Residential Unit ERU for Water Distribution Facilities ERU6 - Equivalent Residential Unit - ERU for waterfront ERUD - Equivalent Residential Unit - ERU for waterfront - based on waterfront access ERUR Equivalent Residential Unit per residence or where a residence could be placed. FF Front Footage LOT-- Lot PAV Paving PRCL per parcel Government Services Group, Inc. B-3

87 Appendix C ORDINANCE AMENDING SECTION 4-6-1

88 Government Services Group, Inc. C-1

89 Government Services Group, Inc. C-2

90 Government Services Group, Inc. C-3

91 Government Services Group, Inc. C-4