Loading...
HomeMy WebLinkAboutAgenda - 01-24-2013-13 (5)1 INFORMATION ITEM MEMORANDUM To: Orange County Board of Commissioners From: Michael S. Talbert, Assistant County Manager Date: January 17, 2013 Re: Proposed New Greater Chapel Hill Fire Service District Attachments: Agenda Item 9 from the Town of Chapel Hill Business Meeting 1/14/13 On January 14, 2013 the Chapel Hill Town Council considered the County's request to provide fire protections in a proposed New Greater Chapel Hill Fire Service District. Attached are the Executive Summary, Town Managers Recommendation, Staff Report from Chief Dan Jones and Resolution A. There was a long discussion by the Manager and Town Council around the three options the Manager presented for the Council's consideration. 1. Refuse to provide the protection outside Town limits except for mutual aid. 2. Require that the affected residents petition for annexation in order to receive primary fire protection. 3. As requested, enter into a service agreement with Orange County to extend our current fire district area to provide protection to the affected neighborhoods. The Town Manager did not recommend any of the options. The Town Council unanimously approved a Resolution A, requesting Orange County Government's assistance in encouraging the residents of the proposed New Greater Chapel Hill Fire Service District to seek annexation onto the Town of Chapel Hill. The Town is not interested in expanding the existing Chapel Hill Fire District. There is no need to move forward with further discussion of 3 New Fires Service Districts that were presented to the Board on December 11, 2012. All of the existing Fire Protection Districts will remain in place for Fiscal 2013/2014 and staff will continue to look for other solutions. There are no easy solutions to this problem. Coversheet TOWN OF CHAPEL HILL NORTH CAROLINA EXECUTIVE SUMMARY Meeting Date: 1/14/2013 AGENDA #9 Title of Agenda Item: Consider Orange County Request to Enlarge Greater Chapel Hill Fire District. (R- 5)(R -6) Background: In order to provide relief from exceedingly high homeowner insurance rates to the property owners in the area, Orange County is seeking to shift a portion of the Southern Triangle Fire District to the Greater Chapel Hill Fire District (currently a small unincorporated area of Winter Road & Meadow Lane). The area to be realigned encompasses Azalea, Bayberry Road and Chimeneas neighborhoods and would be covered by Chapel Hill Fire Station #5 which currently provides mutual aid to North Chatham for these residences. Information provided to the County Commissioners by their staff and previously to the Town Council can be found at the following link:http://www.co.orange.nc.us/occlerks/121113.]2d Within the last 24 months, homeowners insurance companies have significantly improved the accountability for the location of their insured properties through the use of G.I.S. and other technologies. As a result, identifying which fire department protects properties they insure is more precise, affecting Insurance Services Organization (ISO) ratings and insurance premium rates. The previous method for determining coverage was largely based on mailing addresses and proximity to any fire station. The unincorporated neighborhood south of Chapel Hill, north of Mt. Carmel Church Road (known as the Southern Triangle Fire District) is being impacted by these improvements in determining fire protection coverage. Insurance companies over the years gave them credit for being protected by Chapel Hill even though they were actually protected by the North Chatham VFD. Since the discrepancy has been identified, their insurance rates have doubled, tripled or been canceled. Residents have petitioned Orange County to change their protection district to Chapel Hill from North Chatham to return to lower insurance rates. In response to this petition, options for the Town include: 1. Refuse to provide the protection outside Town limits except for mutual aid responses. (No revenue for the Town for service provided; no financial relief for the property owners) 2. Require that the affected residents petition for annexation in order to receive primary fire protection. This would be consistent with the stated plans for the area to become part of the Town as reflected in its incorporation in the Urban Services District and the Extra - territorial jurisdiction of the Town. 3. As requested, enter into a service agreement with Orange County to extend our current fire district area to provide primary protection to the affected neighborhoods. Fiscal Note: If the area is annexed (option 2), property tax revenues from the area would generate approximately $954,537.84 per year. The Town would also benefit from increased sales tax revenue, Powell Bill funds and other population based revenues. Accepting this Fire District and imposing a tax rate of $.15 (15 cents) (option 3) would generate about $289,839.43 for the Town of Chapel Hill. Because we are already responding to this area under mutual aid agreements, there would be no immediate impact on the Fire Department's budget. In consideration of equity for Chapel Hill http: / /chapelhillpublic.novusagenda. comB luesheet. aspx ?itemid =2083 &mee... 1/17/2013 Coversheet taxpayers inside the Town, the recommended tax rate would distribute the proportional cost of fire service and future capital expenses to the residents of this area. Recommendations: That the Council consider these options to determine appropriate direction. ATTACHMENTS: Viewing attachments may require Adobe Acrobat. Manager's Cover Memorandum Staff Memorandum Resolution A Re -,nhrtinn R Area Map CogDjy Property Tax Revenue Projections County Letter and ToCH Manager's Response ISO Grading Comparison K http:// chapelhillpublic .novusagenda.comBluesheet.aspx ?itemid= 2083 &mee... 1/17/2013 M MEMORANDUM TO: Mayor and Town Council FROM: Roger L. Stancil, Town Manager SUBJECT: Triangle Fire District request from Orange County DATE: January 14, 2013 PURPOSE The staff memorandum from Fire Chief Dan Jones provides an analysis and describes options relative to Orange County's request to realign fire districts in the southern part of the County. The County proposes to a contract with Chapel Hill to provide fire protection in a service district within the urban services boundary, but outside of and adjacent to Town limits, to serve a particular neighborhood. We have no obligation to provide primary fire protection outside of the Town limits. We do have mutual aid agreements in place to provide response assistance to our neighboring emergency services agencies. This neighborhood currently benefits from such an agreement. Orange County has identified, from their perspective, that a service agreement with Chapel Hill for fire protection is their first choice to resolve the issue. ISSUES and CONCERNS Orange County and the Towns of Chapel Hill and Carrboro have a long standing plan for orderly growth of urban areas while preserving rural areas of the County. This plan has been successful in minimizing sprawl within Orange County, allowing municipalities to provide urban level services and preserving the benefits of nearby rural areas and farms. The neighborhood in question is included in the urban services boundary and the Town's extra - territorial jurisdiction and, under past policies of the state, clearly intended to be part of the Town eventually. I am not sure why this area has not been annexed under previous annexation authorities. Recent actions by the NC General Assembly have severely limited the ability of Towns to initiate annexation. A referendum is now required and a simple majority of all registered voters from only the proposed annexed area who actually vote in the referendum voting against the annexation would prevent the annexation from going into effect. For annexation of this neighborhood to occur through voluntary petition, it must be initiated by a 100% petition from the property owners. In all meetings with Orange County and citizens on this issue we have reiterated our position that annexation would be the most effective means to resolve this issue and the solution we recommend first and foremost. Because the petition process requires 100% of the affected properties to be party to the request, it is practically impossible to achieve that outcome and in this case there are residents who have already stated opposition to that option. Annexation would avail those residents the full benefit of all Town services and also include them as participants in Town direction and cost of service. There is a business argument to accept the County's request to provide the fire protection service and receive the associated revenue since the Fire Chief s analysis indicates that the service demand can be absorbed within existing resource levels. Since we already respond to this area (via mutual aid agreement) we could consider the service district arrangement to recoup revenue and offset our costs rather than the revenue otherwise go elsewhere. From an urban policy perspective, however, the intent of an urban services boundary area is to provide those services as part of the normal progression to annexation into the municipal jurisdiction. Parsing out services on a menu selection or pay as you go basis dilutes the benefits of full annexation and places the burden of supporting necessary infrastructure and organizational function systems on the Town residents alone while others receive the services, particularly when the service fees or district taxes pay only for the specific and direct service rendered. RECOMMENDATION I recommend that the Council consider these perspectives and provide direction. Resolution A asks Orange County to facilitate a discussion with the residents of these affected neighborhoods that explores and educates the benefits of annexation for their properties not only from a fire protection standpoint but from a standpoint of full Town services. Resolution B authorizes the Town Manager to work with the County to implement the fire district changes. This situation points to how our ability to plan for orderly and sustainable growth is affected by changes in the state and federal levels of government. I recommend that Council begin to consider the recent changes by the General Assembly in annexation and other laws that affect the Town's ability to manage its growth and remain a sustainable community and how these changes affect our current system of joint planning, urban services districts and extraterritorial jurisdiction. MEMORANDUM TO: Roger L. Stancil, Town Manager FROM: Daniel Jones, Fire Chief SUBJECT: Orange County Request to Enlarge Greater Chapel Hill Fire District DATE: January 14, 2013 INTRODUCTION Tonight, the Council is being asked to consider a request from Orange County to encompass a portion of the Southern Triangle Fire Protection District into the existing Greater Chapel Hill Fire Protection District (outside of Chapel Hill corporate limits) in order to mitigate the costs of homeowners insurance imposed on residents in the area currently being served by the North Chatham VFD. These residents have recently experienced sharp increases in homeowner's insurance premiums due to insurance companies becoming more accurate in determining legal fire protection coverage areas. Previously these residents were considered by their respective insurers to be within Chapel Hill's fire protection due to the proximity to Chapel Hill fire station 45. As a result they received lower insurance premiums than they would receive if covered by North Chatham VFD. Chapel Hill currently responds into this area on an "automatic mutual aid" agreement with North Chatham VFD for fires and other incidents, however, Chapel Hill is not the legally responsible jurisdiction for the area which is how insurance is determined. BACKGROUND The State of North Carolina anticipates that areas developed to urban standards will be provided fire protection by cities. When that development occurs outside of a Town, the State uses a system of fire districts to provide fire protection to unincorporated areas. This is done either by the establishment of a tax district or a service district. These districts are administered by the Counties through franchises or contracts with volunteer fire departments or adjoining municipal fire departments. By its inclusion within the urban services boundary and the extraterritorial jurisdiction of the Town of Chapel Hill, the Town and County's joint planning anticipated that this area would eventually be within the Town limits. Because of recent changes to the State's annexation laws, the Town's ability to initiate this annexation have been severely limited. Chapel Hill has not traditionally provided fire protection outside of the municipal limits with the exception of a very small "donut hole" unincorporated area known as the Greater Chapel Hill 7 Fire District which includes about 6 residences on Winter Road and Meadow Lane adjacent to Merritt's Pasture on NC 54 By -pass. Orange County has contracted with North Chatham VFD to cover the southeastern portion of the County for decades. Part of the area was also historically covered by Carrboro Fire Department. When Chapel Hill annexed Southern Village in 2000 it divided the fire districts and created pockets of coverage including the areas of Bayberry, Azalea and Chimeneas. North Chatham provides an Insurance Services Organization (ISO) rated coverage of 6 (on a scale of 1 -10) but this only applies within six miles of the jurisdictions nearest fire station. In the case of the Azalea, Bayberry and Chimeneas neighborhood, they are beyond the six mile limit from North Chatham station #2 and thusly are rated an ISO -10 which is equivalent to no coverage. Chapel Hill fire protection is rated at an ISO -3 and the approximate distance for the farthest part of the neighborhood is less than 3 miles. Chapel Hill and North Chatham VFD both participate in a County -wide mutual aid agreement whereby neighboring fire departments assist each other in major incidents or on fringe jurisdiction incidents where the neighboring department is as close as or closer than the department having jurisdiction. This neighborhood in discussion is such an area and Chapel Hill has provided automatic mutual aid to North Chatham in this area for over 10 years. Being residential, this is not a high service demand area. In FY 2011 -12, the Chapel Hill Fire Department has only responded into this neighborhood twice; and for a period of the last 5 years has only recorded sixteen incidents requiring fire response. The Chapel Hill Police also have a mutual aid agreement with the Orange County Sheriff for this area and for a period of the last 24 months have recorded nineteen responses to incidents in this area. On May 10, 2012, Orange County hosted an information meeting for the public to discuss rising concerns about insurance rates in the neighborhoods of Azalea, Bayberry and Chimeneas. The meeting was facilitated by Assistant County Manager Michael Talbert. A couple of County Commissioners were present as were North Chatham Fire Chief John Strowd and Chapel Hill Fire Chief Dan Jones. Approximately 30 residents of the neighborhood in question attended and took turns telling about their insurance rate increases or in some cases, cancellations. Mr. Talbert explained the potential options including change of fire districts, voluntary annexation into the Town of Chapel Hill, building a closer North Chatham VFD station or no action at all. Most of the residents present were opposed to annexation and in favor of a change of fire districts. Chief Strowd explained that building another fire station was not financially feasible and everyone agreed that doing nothing was not an option. Residents also expressed a desire to change the ISO distance rules but it was explained that those were controlled by the State Legislature and could not be done locally. After a series of back and forth discussions this past summer between Mr. Talbert and the Fire Chiefs, Mr. Talbert appeared before the Chapel Hill Town Council on December 3, 2012 to request consideration for the Town of Chapel Hill to enter an agreement with Orange County to provide fire protection to the neighborhood identified as including Azalea, Beechridge, Grey Bluff, Chestnut, Bayberry, Morgan Cliff, Flagstone, Silers Fen, Rhododendron, Arbutus, Bolinas, Serrano, Majestic, Umbrio, Madera and Chimeneas streets. This area has a total tax valuation of $193,226,284 and one cent equals $18,515. The neighborhood in question is in the extraterritorial planning jurisdiction of Chapel Hill and within the urban services boundary. DISCUSSION This issue is not a question of emergency services delivery or life safety. It is an issue of planned urban growth and how State regulatory control and insurance ratings impacts homeowners financially. Through the mutual aid agreements, the Town of Chapel Hill Fire Department historically and currently responds to reports of fires or other life threatening incidents in this neighborhood and takes necessary actions to save life and property until North Chatham VFD units arrive. The Town of Chapel Hill has three distinct options relative to this request: Option 1 - Refuse to provide the protection outside Town limits except for mutual aid. This option does not resolve the financial and insurance issue for the homeowners in the neighborhood but does not withhold any potential lifesaving or property saving services they currently receive through the standing mutual aid agreements. This also creates the question of what to do about the small Greater Chapel Hill Fire District of Winter Road and Meadow Lane. Since through mutual aid we continue to respond into this area without financial remuneration for our services the Town would not benefit from the additional revenue created by the fire service district. Since we in Chapel Hill benefit significantly from neighboring fire departments mutual aid assistance as well it would be an extreme risk for us to terminate our mutual aid agreements. Option 2 - Require that the affected residents petition for annexation in order to receive primary fire protection. This is a viable option and would provide the residents the full range of public services of the Town of Chapel Hill including fire protection. This would appear to be the quickest and easiest way to resolve this issue but would require the residents to petition the Town to initiate annexation. However, these residents already enjoy the benefits of Chapel Hill residency because they receive mutual aid from the Town's fire and police departments, have access to other Town amenities such as parks and library, and receive OWASA water and sewer since they are within the Urban Services boundary. There is little motivation for them to petition for annexation other than to mitigate the increase in their homeowner's insurance premiums, if other options are not available. The difference between the cost of paying Town taxes (49.4 cents) in the case of voluntary annexation and the increase in their insurance premiums is unknown. Option 3 — As requested, enter into a service agreement with Orange County to extend our current fire district area to provide primary protection to the affected neighborhoods. This option is requested by Orange County and also requires approval by the State Fire Marshal's office. We would enter a service agreement with Orange County and become the primary fire jurisdiction for the affected area. Residents would realize the ISO rating of the Chapel Hill Fire 9 Department and enjoy a reduction in insurance premium rates. The Town would advise Orange County of the tax rate necessary to cover our costs equivalent to the costs our residents currently pay. The County would collect the fire tax on the Town's behalf. The Chapel Hill Fire Department can reasonably provide this protection without any immediate budgetary impact. Depending upon other future growth or density in the vicinity of Fire Station 45 this neighborhood could contribute to overall response needs in the area that cumulatively has the potential for additional resource needs. The primary response for this neighborhood would come from station #5 (US 15 -501 and Bennett Road) with backup from station #2 (Hamilton Road) and station #1 (MLK Jr. Blvd and Columbia). Mutual aid would be received from North Chatham VFD. Although this area is already covered with OWASA fire hydrants there is a need to install three additional hydrants to improve distribution and access. In order for this issue to be resolved by the beginning of FY 2013 -14 it is necessary to make a determination as soon as possible. Any solution will require Town of North Chatham VFD, Town of Chapel Hill, Orange County and the NC State Fire Marshal's Office approval. There would also need to be time to change dispatching data in the Orange 911 Communications Center for this area. FISCAL IMPACT Currently the Chapel Hill Fire Department responds to the neighborhood in question as a first response agency on mutual aid. Therefore, the addition of the service area does not initially create any additional workload or service demand. The additional workload would be represented in the form of fire cause investigations, hazard investigations and public education opportunities. The demand for these services in unknown at this time, but we believe they can be absorbed in our current task assignments in the near -term. Annexation of this area would increase the tax base of the Town approximately $193,226,284, and generate recurring property tax revenue in the amount of $954,537.84. Additionally, the Town would benefit from increased sales tax revenue, Powell Bill funds and other population based revenues. If we were to accept the County's request for a service agreement we would recommend the setting of a Fire District Tax rate of 15 cent. This rate is estimated to be equivalent to the rate incurred by Town residents for municipal fire protection, which is incorporated into the property taxes paid to the Town. Approximately 12 cents would be needed to cover the operating expense of the fire department, and the remaining 3 cents applied to long -term capital expenses (facilities, equipment, etc.) This would generate approximately $289,839.43 per year in additional fire tax revenue for the Town of Chapel Hill. 10 Fire District Tax Calculation District Valuation TOCH Valuation Total Valuation Cost of Fire services: Operating Costs OH Cost Capital Total 193,226,284 7.353.675.000 7,546,901,284 $ 7,883,812 890,049 296.000 $ 9,069,861 Overhead Calculation: Personnel Cost $ 6,592,955 Overhead Rate 13.5% OH Cost $ 890,049 FY13 Budget (see below) RECOMMENDATION per County We recommend that the Council consider the options for a response to Orange County. The Fire Department staff is prepared to implement and carry out your direction. 11 RESOLUTION A A RESOLUTION REQUESTING ORANGE COUNTY GOVERNMENT'S ASSISTANCE IN ENCOURAGING THE RESIDENTS OF A NEIGHBORHOOD THAT INCLUDES AZALEA, BEECHRIDGE, GREY BLUFF, CHESTNUT, BAYBERRY, MORGAN CLIFF, FLAGSTONE, SILERS FEN, RHODODENDRON, ARBUTUS, BOLINAS, SERRANO, MAJESTIC, UMBRIO, MADERA and CHIMENEAS STREETS TO SEEK ANNEXATION INTO THE TOWN OF CHAPEL HILL IN ORDER TO RECEIVE BENEFITS OF MUNICIPAL FIRE PROTECTION AND REDUCE THEIR HIGH COST OF HOMEOWNER'S INSURANCE PREMIUMS (2013- 01- 14/R -5) WHEREAS, the Town of Chapel Hill has received a petition from Orange County government, asking for Town Council to consider providing fire protection service to a neighborhood south of an adjoining Town limit; and WHEREAS, the reason for this request is to provide financial relief to the residents of that neighborhood who have received significant increases in insurance premium rates due to their travel distance from the current service provider; and WHEREAS, Chapel Hill Fire Station #5 is in the immediate vicinity and already provides mutual aid automatic response for the purpose of life and property saving; and WHEREAS, there is little benefit to the Town of Chapel Hill to provide said service other than additional revenue to offset costs of providing said protections however the Council wishes to be a good partner to Orange County and assist them in resolving this issue and believes the best and quickest way to resolve the issue is annexation into the Town limits of Chapel Hill. NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Town Manager is directed to formally request that Orange County suggest and encourage and the residents and property owners of the neighborhood that includes Azalea, Beechridge, Grey Bluff, Chestnut, Bayberry, Morgan Cliff, Flagstone, Silers Fen, Rhododendron, Arbutus, Bolinas, Serrano, Majestic, Umbrio, Madera and Chimeneas streets to petition the Town of Chapel Hill for annexation as soon as possible either by presenting a formal petition for annexation with the signatures of 100% of the property owners or by a petition of residents demonstrating to the Town's satisfaction that there is sufficient support to merit the Town initiating the steps for annexation under part 7, Article 4a, Chapter 160A of the General Statutes. This the 14th day of January, 2013.