HomeMy WebLinkAboutDocumentation_Miscellaneous_Tab 5_11/5/1997 f
Memorandum
To: Finance & Administration Committee Members
From: Thomas G. Bradford, Village Manager
Date: October 31, -1997
Subject: Interim Service Fee; Agenda Item
Interim service fees are fees used to pay for operating expenses
due to new growth. In Florida, as well as many other states, the
assessment value of a property is set as of January 1st of each
year and any real estate not "substantially complete" by then
will not be entered on the tax rolls. Therefore, the local
government may not receive any property taxes for up to a year,
although it has to provide services . The purchaser of such real
estate may be paying real estate taxes as a part of his/her
monthly principal, interest, taxes, and insurance (PITI ) payments
to the jurisdiction for estimated property taxes, but the
jurisdiction is not receiving these revenues . Instead, the home
purchaser will receive a rebate from the mortgagor since the
escrow amount will be too high.
Interim service fees can generate substantial revenues .
Deerfield Beach, Florida, expects to collect about $100, 000
annually, assuming only 150 new units per year. In Collier
County, Florida, the interim service fees are likely to generate
about $1 . 3 million per year. All of these figures exclude any
fees allocable to schools .
The Palm Beach County Commission has decided to pursue the
establishment of an interim service fee for County services under
such circumstances explained above. When Palm Beach County
finally adopts their interim service fee, Village staff will
recommend to the Village Council the adoption of an interlocal
agreement with Palm Beach County whereby Tequesta will agree to
collect the interim service fees for those properties in
Tequesta, which will also have to pay the Palm Beach County
interim service fees, as a convenience to our Tequesta property
owners . The Tequesta Department of Community Development will
receive a 2% or 3% administrative service fee for handling such
payments .
Therefore, the operative question becomes "should Tequesta now
pursue the adoption of an interim service fee for itself?"
Tequesta averages approximately 12 new homes per year. If
Tequesta' s costs are similar to the City of Deerfield Beach,
located in Northern Broward County, the establishment of a
Tequesta interim service fee could generate up to $8, 000 per
fiscal year. This is a sum worth pursuing.
•
If the Council wishes Tequesta staff to pursue a Tequesta interim
service fee, staff will have to do a required cost and/or
feasibility analysis in order to calculate the costs of service
that would be recaptured through the interim service fee. This
analysis would be similar to the work typically done in the
establishment of impact fees . If Tequesta staff is incapable of
properly handling such a study, the Village Council can
anticipate such work to cost between $3,000 - $5, 000 to be done
by outside consultants .
•
This matter is being brought forward to the Finance &
Administration Committee for your direction in this regard.
TGB/krb
council\103197.sam
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