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HomeMy WebLinkAboutAgenda - 11-13-2012 - 3ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: November 13, 2012 Action Agenda Item No. 3 SUBJECT: Review the Concept of Establishing Three (3) New Fire Service Districts to Improve Property Insurance Ratings and Lower Homeowners' Insurance Costs DEPARTMENT: Emergency Services PUBLIC HEARING: (Y /N) No ATTACHMENT(S): A. Old South Orange Fire Insurance District Map B. Chapel Hill/ Southern Triangle District Map C. New South Orange Fire Insurance District Map D. Property Tax Revenue Projections — New South Orange Fire Service District E. Letter from North Chatham Volunteer Fire Department F. Old North Chatham Fire Insurance District Map G. Comparison of Insurance Premiums H. Old Greater Chapel Hill Fire Insurance District Map I. New Greater Chapel Hill Fire Insurance District Map J. Greater Chapel Hill Fire Insurance District Map with Hydrants K. Property Tax Revenue Projections — North Chatham Fire Insurance District L. New North Chatham Fire Insurance District Map M. Property Tax Revenue Projections — New Greater Chapel Hill Fire Service District N. Memorandum from Staff Attorney INFORMATION CONTACT: F. R. Montes de Oca, 245 -6100 Annette Moore, 245 -2317 Michael Talbert, 245 -2308 PURPOSE: To consider the concept of establishing three (3) New Fire Service Districts to improve insurance rating, improve fire coverage, and lower insurance costs for property owners outside of six (6) road miles from the nearest station in the existing Southern Triangle Fire District. FA BACKGROUND: On September 13, 2011 the Board was presented options for changing fire districts to improve insurance ratings for the 1,156 properties located outside of six (6) road miles from the closest fire station located in their fire insurance district. A County Attorney's memorandum dated September 1, 2011 provided a legal opinion for fire protection tax districts, with the available options listed below: 1. Realign Fire Insurance District boundaries without changing Fire Tax Districts 2. Change existing Fire Protection Districts, which would also change the Fire Tax District. 3. Establish one or more Fire Service Districts to replace or overlay existing Fire Protection Districts which could also change Fire Tax Districts. On March 13, 2012 the Board approved a request from the Orange Grove Fire Department to construct a new fire station #2 that is strategically located in the southeastern part of the Cane Creek Fire District. This newly constructed fire station is providing insurance district coverage for an estimated 400 property owners that were more than six (6) road miles from the Orange Grove Station. The Orange Grove Fire Department is in the planning stages for a new fire station #3 to be strategically located in the western part of the Cane Creek fire district. That new fire station #3 will provide insurance district coverage for an estimated 250 property owners currently more than six (6) road miles from the Orange Grove Station. The Emergency Services Workgroup has discussed all available options for the 1,156 properties located outside of (6) six road miles from the closest fire station located in their fire insurance district. With the new fire stations in the Cane Creek Fire District, over 600 property owners will be provided insurance district coverage and will be located less than six (6) road miles from the nearest Orange Grove Station. The Emergency Services Workgroup is recommending the creation of (3) three New Fire Service Districts to overlay and replace (3) existing Fire Protection Districts. With input from the State Fire Marshal's office, the proposal is to modify existing fire insurance districts and create Fire Service Districts that are exactly the same as the fire insurance districts. The three (3) Fire Services Districts are proposed to be the South Orange Fire Service District, North Chatham Fire Service District and Greater Chapel Hill Fire Service District. South Orange Fire Service District Attachment A is a map of the existing South Orange Fire Insurance District. Due to the Town of Chapel Hill annexations, the South Orange Fire Insurance District has been split. The Town of Carrboro provides fire protection in the South Orange Fire Insurance District and now has to travel through the Town of Chapel Hill to respond to a fire call off Mt. Carmel Church Road. Attachment B shows a detail map of the area and Chapel Hill Fire Station # 5 that is less than one (1) mile from the area outlined in gray. The Town of Chapel Hill is better positioned and willing to provide fire protections for this area in gray. The Town staff is prepared to make that recommendation to the Chapel Hill Town Council. This issue has also been discussed with the Town Manager for the Town of Carrboro. The Town Manager is prepared to recommend to the Carrboro Board of Aldermen that the Town provide fire protection to the proposed new Fire Insurance District (see Attachment C) if the tax rate is adjusted to be revenue neutral for the Town. The area in gray on Attachment B 3 represents 100 parcels and $36,003,769 of real property value. When vehicles and personal property values are added to the real property total, an estimated $37,673,414 of taxable value would be removed from the existing South Orange Fire Insurance District. Attachment D shows the existing property valuation of $556,977,528 for the South Orange Fire Insurance District, the reduction of $37,673,414 of taxable value, and the remaining property valuation of $519,304,114. The estimated tax valuation reduction from the existing South Orange Fire Insurance District equals 6.8% of the total. A fire district tax increase of .6 cents, from 7.85 cents to 8.45 cents, would be required to insure that this change is revenue neutral for the Town of Carrboro. North Chatham Fire Service District Orange County has received a letter from North Chatham Volunteer Fire Department (Attachment E) indicating that the Department will charge a tax rate of 8.8 cents beginning July 1, 2013. This is the same rate currently charged in Chatham County and a 76% increase over the existing 5 cents. Attachment F is a map of the existing North Chatham Fire Insurance District. Included on Attachment B, in yellow, are 112 homeowners located more than six (6) road miles from the nearest North Chatham Station, but less than three (3) road miles from Chapel Hill Fire Station #5. These homeowners have an insurance rating of 10 (see Attachment G for an example of insurance premiums related to fire insurance ratings). Several homeowners in this area have indicated that they cannot get fire insurance or that the rate has doubled. The only logical Fire Department that could provide fire protection for this area is the Town of Chapel Hill. The Town of Chapel Hill is a municipal fire department which relies on hydrants as its water source to fight fires. The Town of Chapel Hill is better positioned and willing to provide fire protections for this area. Discussions have occurred involving the Town of Chapel Hill Fire Chief and North Chatham Fire Department Chief concerning possible fire and insurance solutions for this area. Attachment H is a map of the existing Greater Chapel Hill Fire Insurance District. Attachment I is a map of the proposed new Greater Chapel Hill Fire Insurance District that includes not only the area proposed to be deleted from South Orange, but also the 112 homeowners from Attachment B and additional property included in the Southern Triangle Fire District that have hydrants. The Town of Chapel Hill staff is prepared to make this recommendation to the Chapel Hill Town Council, and the North Chatham Fire Chief has indicated a plan to make this recommendation to the North Chatham Board of Directors. Attachment J shows a potential new Chapel Hill Fire Service District which includes hydrants. Attachment K is a projection of property values and revenues for the New North Chatham Fire Insurance District. Attachment L is a map of the proposed New North Chatham Fire Insurance District. With a property tax increase from 5 cents to 8.8 cents and a reduction of property covered by the district, the net impact for the new district is a revenue increase of $31,441 from $213,325 to $244,766. Greater Chapel Hill Fire Service District Attachment M is a projection of property values and revenues for the New Greater Chapel Hill Fire Insurance District. n Outcomes • Improved Fire Insurance Ratings for 112 homeowners. • Improved response times for all residents of the New Greater Chapel Hill Fire Service Districts. • Higher Fire District tax rates for everyone. Actions needed to create three (3) new Fire Service Districts • Approval by the Orange County Board of Commissioners following the procedure outlined in Attachment N, including scheduling a Public Hearing. • Approval by the Carrboro Board of Aldermen. • Approval by the Chapel Hill Town Council. • Approval by the North Chatham Fire Department Board of Directors. • Approval by the State Fire Marshal's Office. FINANCIAL IMPACT: There is no financial impact to the County, but there is a financial impact on all property owners with higher Fire District Taxes. RECOMMENDATION(S): The Manager recommends that the Board consider the establishment of three (3) New Fire Service Districts and provide direction to staff regarding action to establish the three (3) New Fire Service Districts. 1 .rt.0 1 '1i►=`ter+� :"':a 1 Stations Old South Orange Fire Insurance District LEGEND Attachment A W IN Fire r +' ..South Orange IN Parcel boundary Streets 1 inch= 4,150 feet MAW .° s j, 9 ��' �,,. �• j,j, _ }v'� �nub 1��0�`-�.•` a,'J' "��/E�«X17+►�� � t,' i �� _ .. /•,�� M''' ' Vic. L ''l�I���=�i 110. �+� MAR i 1 • [. '•T.. 37ti Ivry MAi ���' k iU �..,■�.� Y •I • Hy ] .�• rj >:�t w,v'�"ra!i «$aN.�,•'� �f'�'� _* t ■"' ..t .��E r�.'J.�Zi i � f� QIy a; i ! .. S Y -A :'I,: tea'.. ♦ i 1w, a� ^ ?z_. i a-�_••' ry S r '�• "�'i3 fj w j,� +►` ! • WIN n�"i c�. ! 3�,N �,�i'�°n� '� � �� -"- ,.iq�7 „$'�' !d�'�'v'��un�,,. � .•.F��tS:1�-`a1i ��,��,,;Li+ cy�¢SI� -� 199M x? •�`�.��a _ �j � �u D� X61.1'�,s ��tiefaKC���,r4J ��■� +�� � (' ��,� ��� NNW � �®�� .� �� ¢�, �?�'�,,� 1-;i ;� '�fir;�•��� � '�' � °• ► •. • mar totF•"d ., ' ' i.�• old t4 '� ° ' f• s `��' • + womma ^ ■ � •°� -f � :�� ,� -a�.... +. JAI i= 1 L • (` ♦����• � � � I - � tea' MOW MA WE!i«����� �'� •:"fit�► �j ��j��` ! '� ";�kRI�� 1•*�*. "" ►���r;� �'�,.' •'�� �. .�� �--� ^.�� r •ate-� is fail � , •�1 C N T O m 7 L L.LI N m 0P _ tr O N W W E rr to lL C (f°j 0 E c0 V W G) 7 Nip 3aS'LL- L JQy� W LL «° m t ayi 0 'U° L xZ z a Eo25 W J 0 _ a ILA ', h ••• • •• bDOOE -o� I �!._. • bas._ ��� '-. _.�_ `\, .F Y ':�'O ,•� • ��W ;p�gEr tT%--r;. t- ►�r !^ °pp ! i/�>� /., T .i a`....:Y ` •• Z P_',..t t l-r,� Z. '� IE'R r.\\ ��03', \`r' �., —� f ---- � 1 1 �, �, o t / U AbNOOVaO. �:' j � -mot�_-(.\' ",,,,►�� :v�';'� J i. Q, (i /+► { . . . vii r 1.t�rlI ` tl. ll.n.w a ,;��� � w��°y =z � �� t9ii■1��� New South Orange Fire Insurance District ,Gov Ivi LEGEND Attachment C Lw Fire Stations a New South Orange Fire Insurance District Parcel boundary Its, Streets 1 inch 4,150 feet Map made by Orange Count ITIG IS Division . . '� i, r� Iii}'?�"�,r`•� i1V� aI ■ • • rte♦ s B U s r; ' ° +",[zy♦,• �0�►<�44 amm MR �Yl1', C■.-.".'�..1,�[IF' lu—s inur.ZG�i �4 Y' o+����• +r�C't��j p �y,� cp, r.. 1. . 7 Ilsm.��4�� ' �. •+►llo '�",,,�C r�•��:rn�i.�vK`�f;'��� e• / } F N�wyf;gcel • . •tG3 '.-1 1./1911 1 �'�101 ic �;■� 1y• i a{ /1 NAP dpol FA Ab SWUM Am WA - i �1, -•■. �. � .3� sub,.,I:Ti . {'/i �� • T' r � ��'o• N .r ,. f Kill idWF Mill, AM— 0 Attachment D Property Tax Revenue Projections - South Orange Fire District 2- Nov -12 District: Tax Code Valuation as of =outnern Orange Revised Tax Rate FC Southern Orange Needed to Increase 2/29/2012 2/29/2012 Break Even Total Valuation 556,977,528 37,673,414 519,304,114 Levy (Total Valuation Divided by $100) 5,569,775 376,734 5,193,041 Approved Tax Rate 0.0785 0.0785 0.0845 0.0060 100% Collection Rate 437,426 29,574 438,812 Projected Property Tax Collections (97 %) 424,303 28,686 425,648 1 Cent Equalsi 54,027 3,654 50,672 100.0% 6.8% 6.8% ATTACHMENT E I\ H NORTH CHATHAM VOLUNTEER FIRE DEPARTMENT 45 MORRIS ROAD PITTSBORO, NORTH CAROLINA 27312 PHONE: (919) 542 -3380 FAX: (919) 542 -6613 CHATHAM E -Mail: pyro @nc.rr.com June 25, 2012 Bernadette Pelissier, Chair Orange County Board of Commissioners Post Office Box 8181 200 South Cameron Street Hillsborough, North Carolina 27278 Ms. Pelissier, The purpose of this letter is to acknowledge the receipt of the 1 year notification by Orange County for Fire Protection of the Southern Triangle and Damascus Fire District and to inform Orange County Commissioners that any future contract with North Chatham Volunteer Fire Department will be at the current fire tax rate those residents in North Chatham Fire District are charged for fire protection in Chatham County. Currently the fire tax rate is 8.8 cents on the $100 evaluation of the property. North Chatham has been providing fire protection, rescue service and medical response to the Southern Triangle and Damascus Fire District for over 20 years. At the time Orange County contracted this service with North Chatham; there were no other departments in the area willing to meet the needs of the two districts. North Chatham has provided a quality service to the residents of Orange County and lowered the insurance premiums on three different ISO inspections. However, we understand many counties in North Carolina are addressing the challenges of providing fire protection needs for homeowners insurance. Over the years residents of the North Chatham Fire District have been charged a higher fire tax rate than residents of the Southern Triangle and Damascus Fire Districts. The same level of service has been provided to all three fire districts. Any future fire district contracts with Orange County will be at the current 8.8 cents fire tax or the same fire tax rate being charged to Chatham County residents in the North Chatham Fire District, thereafter. During the next few months Orange County will be making a decision on fire protection for the Southern Triangle and Damascus area or by June 30, 2013. Once district lines are established and if North Chatham is contracted to provide fire protection to the Southern Triangle and Damascus Fire District, then the contract will be evaluated by North Chatham Board of Directors to provide the service. Sincerely, hn Strowd, Chief North Chatham Volunteer Fire Department mac: Michael Talbert, Asst. County Manager ..'t.., M M .bd ca L) (V cV N Cn In `F" c t L M a V 4 = � Ol E Z Z V N,E _ Q r m o o m r ;� o N V U2 z y c U y w o�mo U-1 _ c0 p Z in f0 y L a o t E L p0 . I ^ O o n i4 d a no Z LL (z LLJ ©� I I g E rr � � O � s J �.► tLf FAORETUM y ++ IL ¢ o'. t1 - JNOEvao J_W OZE O LL cz co x V� c .-ym - P ,� '•, O O a �" PF Comparison of Insurance Premiums Relative to ISO Public Protection Classifications This chart compares annual insurance premiums for a new wood frame home valued at $100,000.00 with smoke detectors. This report was provided by an actual agent in Wake County. ISO CLASS AGENT 1 AGENT 2AGENT 3 10 $470.00 $514.00 $585.00 9S $376.00 $411.00 $469.00 8 $353.00 $384.00 $438.00 7 $318.00 $347.00 $394.00 6 $259.00 $283.00 $320.00 5 $259.00 $283.00 $320.00 4 $259.00 $283.00 $320.00 3 $259.00 $283.00 $320.00 2 $259.00 $283.00 $320.00 1 $259.00 $283.00 $320.00 XIFtW:6 -13t $CtI" D 3 .-r LO m O n M II oyx = m r Q — •� "W E � l o Q r m m ;sEE! U O 0. / 9 E E U) to m ¢ ro m ast Qj O O N N N 9m�t L IL O O U' 05 d z EQz Jo Q _ / U L cc (1) •.- z I. w . Q O � sa31 n - gR\ OI S3f I�IT �Y 7v cooM3 JQ b -- � / 2 W tr L<L nee I H17 - �v O G'N IC b o b. O S� f V C7� 41 p,1,24 O W U .0 0 L) Cl) m O Q O O, 2 c U Q L r c /\ 0 a U m , V i of t o II oox Nwm cc � E E C n� o o m m e 3 N Na �3E" o m m o U u�r- r_ p m E E "` C7 Z 1,� W LL O to N d C7 v°V t LL 2 I I I 00 3 n�z _ W J l�• ����G ADI'•S f7W .Ff0DO EAR O00 M30p3 x -- - IER r� ......'._. _ O �RBORF- M - � - ' W lo LU GP � Nj0 J G �a L t1" EK f� 3J I H•3 2 / o czi �\�O I 1 _ O �l .�-�•� o �a ti. o I u O I o• � ` 00 = w_ S 5 7 9. cos 91 sn L Fr — o v 0 0 • L c O� L E M o _ L E E 2 n r � p 2 c N (6 iE • p c y N a t SEE' _ _� J O c E E ¢ m�Oc Z (n Ln <o Q @ m o o z W W{o� O LU Ln 3 EO,t Z LL� . a is CL a 4 F GST N Q+ Q U HI IV OIS I Y _ p01�1SE A j1 i pOOM3pp3 ��b�v CO a = Lu ,r i i d Sn s 15' �b 1 _ tog s� _..r�� 15 Attachment K Property Tax Revenue Projections - North Chatham Fire Insurance District 5- Nov -12 District: Tax Code Valuation as of =outnern Triangle Southern Triangle Revised Damascus New North FJ (Deleted) Southern Triangle FK Chatham 2/29/2012 11/2/2012 11/2/2012 2/29/2012 Total Valuation 345,311,224 153,206,894 192,104,330 94,641,073 286,745,403 Levy (Total Valuation Divided by $100) 3,453,112 1,532,069 1,921,043 946,411 2,867,454 Approved Tax Rate 0.0500 0.0500 0.0500 0.0880 100% Collection Rate 172,614 96,052 47,321 252,336 Projected Property Tax Collections (97 %) 167,435 93,171 45,890 244,766 1 Cent Equals 33,495 18,634 9,180 27,814 U �I+ Lo Lo ' L i A 35 co J y N N C) LO LL _ ._�7---- _ Q E `O O` 'co m E o Ul Y4i C N N r UEm N N 7 m Z E E m -0 U) �1y (O N N o m L Z V 7 Z „ o W ai o o @ zH v P s d4 o f- U LL z o o iA n s E a z LL r--Yr y W I I I LJ RE o Z b + J f O b t s_ ? ( P 5 Q o L � t n 8 4 o =INOE)VH(I 3 cu ry kF •,' ;} 1 � � LL — 4 d yH� COS G�VRON Q � O �\NPFOR�s r C0 O > 0 17 Attachment M Property Tax Revenue Projections - New Greater Chapel Hill Fire District 8- Nov -12 District: Tax Code Valuation as of Chapel Hill From From New District FG South Orange Southern Triangle 2/29/2012 Total Valuation 2,345,976 37,673,414 153,206,894 193,226,284 Levy (Total Valuation Divided by $100) 23,460 376,734 1,532,069 1,908,803 Approved Tax Rate 0.0750 0.1000 100% Collection Rate 1,759 190,880 Projected Property Tax Collections (97 %) 1,706 185,154 1 Cent Equalsi 227 1 18,515 18 ATTACHMENT N TO: Michael Talbert, Assistant County Manager Cc: Frank Montes de Oca, Emergency Services Director John Roberts, County Attorney FROM: Annette M. Moore, Staff Attorney RE: Fire Service Districts DATE: October 9, 2012 The County Attorney's Office was asked to provide a legal opinion on the how to implement fire service districts in the County. Below is an excerpt from the Memorandum I drafted for the County Manager on September 1, 2011. County Service Districts The County is authorized to define one or more areas within the county to establish a service district to fund fire protection services! A service district within a county is not a municipal corporation nor does it have any independent authority. The service district is established and maintained by the county. Creation of a Fire Service District To create a service district the board of commissioners must first consider all of the following: 1. The resident population and population density of the proposed district; 2. The appraised value of the property subject to taxation in the proposed district; 3. The present tax rates of the county and any city or special district tax in which the district or any portion is located; 4. The ability of the proposed district to sustain additional taxes; and 5. Any other matters the board believes to have a bearing on whether the district should be established . 2 The Board may then establish a service district if, upon information and evidence it receives, it finds that all of the following apply: 1. There is a demonstrable need for providing the service in the district; 2. It is impossible or impracticable to provide those services on a countywide basis; 3. It is economically feasible to provide the proposed services in the district without unreasonable or burdensome annual tax levies; and 4. There is a demonstrable demand for the proposed services by persons residing in the district.3 1 N.C.G.S. § 153A -301 2 N.C.G.S. § 153A- 302(a) 1 19 The Board of Commissioners must then hold a public hearing on the proposed creation of the service district.4 Prior to holding the public hearing the Board of Commissioners shall have prepared a map of the proposed district, a statement showing that the proposed district meets the standards provided above, and a plan for providing the service to the district.5 Please let me know if you need further information. 'N.C.G.S. § 153A- 302(al) 4 N.C.G.S. § 153A- 302(c) 5 N.C.G.S. § 153A- 302(b) 2