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PBSD BC Agenda 01/22/2021 PELICAN BAY SERVICES DIVISION Municipal Services Taxing and Benefit Unit NOTICE OF PUBLIC MEETING FRIDAY, JANUARY 22, 2021 THE BUDGET COMMITTEE OF THE PELICAN BAY SERVICES DIVISION WILL MEET ON FRIDAY, JANUARY 22 AT 9:00 AM AT THE COMMUNITY CENTER AT PELICAN BAY, 8960 HAMMOCK OAK DRIVE, NAPLES, FLORIDA. AGENDA 1. Pledge of Allegiance 2. Roll call 3. Agenda approval 4. Approval of 10/12/2020 meeting minutes 5. Audience Comments 6. 1st quarter 2021 financial statements review 7. Full year forecast — under and overs 8. Early look at FY2021/2022 budget a. Operations i. Carryforward ii. Reductions and increases from FY2021 b. Capital i. Major projects, amount and timing ii. Impact of financing 9. Discussion of Assessment Strategy a. Long-term b. FY 2022 10. Assessment Methodology a. Ad valorem vs. ERU b. ERU distribution 11. Other Committee Comments 12. Adjourn ANY PERSON WISHING TO SPEAK ON AN AGENDA ITEM WILL RECEIVE UP TO THREE(3) MINUTES PER ITEM TO ADDRESS THE BOARD. THE BOARD WILL SOLICIT PUBLIC COMMENTS ON SUBJECTS NOT ON THIS AGENDA AND ANY PERSON WISHING TO SPEAK WILL RECEIVE UP TO THREE (3) MINUTES. THE BOARD ENCOURAGES YOU TO SUBMIT YOUR COMMENTS IN WRITING IN ADVANCE OF THE MEETING. ANY PERSON WHO DECIDES TO APPEAL A DECISION OF THIS BOARD WILL NEED A RECORD OF THE PROCEEDING PERTAINING THERETO, AND THEREFORE MAY NEED TO ENSURE THAT A VERBATIM RECORD IS MADE, WHICH INCLUDES THE TESTIMONY AND EVIDENCE UPON WHICH THE APPEAL IS TO BE BASED. IF YOU ARE A PERSON WITH A DISABILITY WHO NEEDS AN ACCOMMODATION IN ORDER TO PARTICIPATE IN THIS MEETING YOU ARE ENTITLED TO THE PROVISION OF CERTAIN ASSISTANCE. PLEASE CONTACT THE PELICAN BAY SERVICES DIVISION AT(239) 597-1749. BUDGET COMMITTEE PELICAN BAY SERVICES DIVISION OCTOBER 12, 2020 The Budget Committee of the Pelican Bay Services Division met on Monday, October 12 at 1:00 p.m. at the Board of County Commissioners Chambers, third floor, Collier County Government Center, 3299 Tamiami Trail East,Naples, Florida 34112. In attendance were: Budget Committee Nick Fabregas Michael Fogg, Chairman Denise McLaughlin Joe Chicurel Scott Streckenbein (by telephone) Pelican Bay Services Division Staff Karin Hellmann, Operations Analyst Neil Dorrill, Administrator Lisa Jacob, Project Manager Chad Coleman, Operations Manager Barbara Shea, Administrative Assistant Darren Duprey, Assoc. Project Mgr. Also Present Susan O'Brien, PBSD Board Mark Isackson, County OMB Division Rick Swider, PBSD Board APPROVED AGENDA (AS PRESENTED) 1. Pledge of Allegiance 2. Roll call 3. Agenda approval 4. Approval of 02/25/2020 meeting minutes 5. Audience Comments 6. Role of the Budget Committee 7. Review of September 30th financial statements 8. Carryover projects and expenditures, and impacts on FY2021 budget 9. FY2022 budget issues 10. Review of major projects and funding options 11. Assessment Methodology—need for change? 12. Other Committee Comments 13. Adjourn ROLL CALL All members were present and a quorum was established. The committee recognized Mr. Streckenbein to participate by telephone. 1 Pelican Bay Services Division Budget Committee Meeting October 12, 2020 AGENDA APPROVAL IBy consensus, the committee approved the agenda as presented. I APPROVAL OF 02/25/2020 MEETING MINUTES Dr. Chicurel motioned, Ms. McLaughlin seconded to approve the 02/25/2020 meeting minutes as presented. The motion carried unanimously. AUDIENCE COMMENTS None ROLE OF THE BUDGET COMMITTEE Mr. Fogg provided a list and brief discussion of the responsibilities of this committee as he understands it. Mr. Fabregas suggested that the committee consider performing a periodic review of large project expenditures. After committee discussion,it was agreed that the committee's roles would continue as is. FINANCING OPTIONS FOR MAJOR PROJECTS Mr.Fogg commented that the PBSD is looking to obtain approximately$10 million to fund our sidewalk ($5 million) and lake bank remediation ($5 million) projects, to be available sometime in the first quarter of 2021, and be paid back over 15 years. Mr. Mark Isackson, County Director of Corp. Finance & Management Services, commented that the PBSD needs to solidify the amount of funding required and the timing of the funding requirements. He provided the following three recommended financing options. 1. A commercial paper instrument obtained through the local Finance Commission. Characteristics include, (1)variable rate (currently at 1.33%), (2)typically a 5-year rolling program to draw down funds, (3) similar to a line of credit, (4) low fees, and (5) funds would be available within 45 days. 2. A taxable fixed rate note. (A tax-exempt note is not advised, as the IRS requires the funds to be spent within three years to avoid IRS penalties.) Characteristics include, (1) locking in a fixed rate (currently below 2%), (2) the entire $10 million loan would be taken down immediately, and(3) this instrument would most likely be a competitive bank loan. 3. An increase in the PBSD assessment over several years, possibly supplemented with existing excess PBSD reserves. REVIEW OF SEPT. 30 FINANCIAL STATEMENTS Year-end financial statements for our four PBSD funds were provided in the agenda packet. Mr. Fogg provided an analysis of our budgeted carryforward vs. actual carryforward amounts for each of our funds. CARRYOVER PROJECTS AND EXPENDITURES AND IMPACTS ON FY2021 AND FY2022 BUDGETS Mr. Fogg and the committee discussed large projects and expenditures impacting the FY2021 and FY2022 budgets. The following issues were discussed. 2 Pelican Bay Services Division Budget Committee Meeting October 12,2020 • Ms. Jacob reported that she estimates $500,000 is required to complete the replacement of those PB signs which were not replaced as a result of Hurricane Irma. • Mr. Fogg commented that we have approximately $1 million in reserves for beach renourishment projects. Ms. O'Brien commented, (1) there will be a County truck haul beach renourishment program in FY2022, (2) a possible beach resiliency project is estimated to cost $1 - $2 million, and (3) the PBF is not responsible to contribute any funding for PB beach renourishment (confirmed by Mr. Dorrill). The committee agreed that annual additions to beach renourishment reserves must continue each year. Ms. McLaughlin commented that unpredictable weather events will determine when and if beach renourishment is needed. • Mr. Fogg commented that we have $354,000 for IRMA expenses available in our FY2021 budget. Mr. Coleman commented that this entire amount will not be needed, but that he cannot estimate the amount left over at this time. • Mr. Fogg commented that the FY2021 budget includes a carryforward from the prior year of approximately$1 million,which was utilized to partially fund our operating budget. He estimated that the FY2022 may only have the benefit of a carryforward of less than half that amount. In FY2022, the amount of funding required for capital projects may be reduced as a result of long-term financing in place, and therefore additional budget funds may be available to fund our operating budget. • Mr. Fogg commented that after we determine the expected remaining life of our streetlight poles, we will make a determination of at what point we need to start replenishing Fund 778 with reserves for streetlight pole replacement. REVIEW OF MAJOR PROJECTS AND FUNDING OPTIONS Mr. Fogg provided a list of our major projects with respective expected funding sources, time frames, and comments. He also provided a summary of financing options with varying loan amounts,payback timeframes, and resulting effects on the future level of the assessment per ERU. Ms. McLaughlin expressed concern over our low rate of project implementation, and therefore suggested that choosing a financing option which would allow us to draw down funds over time would be beneficial. Ms. Jacob commented that the permitting phase of a lake bank project takes 6-9 months,which is followed by the procurement process. She provided a summary of the estimated project budget of$117,500 for surveying, engineering, design, and permitting of Lake 4-1,which was added to the record. By committee consensus, it was agreed that staff should move forward with this phase of the Lake 4-1 project. Mr. Fogg reported that Lake 4-1 may have some drainage issues,which may need to be addressed and funded as part of the Lake 4-1 project. Ms. McLaughlin provided and discussed an informational document on Geoweb, a material which may be used for lake bank remediation, which was added to the record. ASSESSMENT METHODOLOGY—NEED FOR CHANGE? Mr. Fogg commented that prior PBSD boards have considered proposals to change PBSD assessment methodology. He noted that the two issues to be considered are (1) possible benefits (if any) to changing to ad valorem taxation, and (2) possible benefits to changing the ERU calculation methodology. Mr. Fogg provided his thoughts on these issues in a document, which was added to the record. He noted that the existing assessment methodology has been in effect for over 25 years. Mr. Fabregas commented that his recent research showed that PBSD boards in 3 Pelican Bay Services Division Budget Committee Meeting October 12,2020 1999, 2003, and 2010 looked at this issue, and chose not to make any changes. Mr. Streckenbein commented that he believes an approval by referendum is required to change over to ad valorem taxation. By consensus, the committee was not in favor of changing to ad valorem taxation. Mr. Fogg reviewed the existing methodology of ERU allocations for commercial entities, residences, and unimproved land. He commented that he has had no success in obtaining any documentation on the origination of the methodology. Mr. Fogg commented that the PB Golf Course is an integral part of the Pelican Bay plan; it offsets the high density of the residential units and functions as part of the water management system of Pelican Bay. Mr. Dorrill commented that he would like to review the documentation of the ERU allocation methodology originating during the time that the PB Improvement District existed. Mr. Fabregas commented that at a past Budget Committee meeting, Mr. Dorrill had presented information on the ERU allocation methodology of communities similar to Pelican Bay, which showed these communities using similar methods of taxation. By consensus, the committee agreed not to pursue making any changes to the ERU allocation methodology at this time. The issue may be discussed again in the future. OTHER COMMITTEE COMMENTS Ms.McLaughlin suggested that an article be written to be included in the PB Post regarding the replacement of the PBSD maintenance facility. Mr. Fogg responded that he would prepare an article for the PB Post. Mr. Dorrill commented that Clam Pass is being closely monitored as sand from a previous County beach renourishment truck haul project south of Clam Pass appears to be travelling northward as a result of recent tropical events. Additional information and discussion will be provided at the Oct. 14 PBSD Board meeting. ADJOURNMENT The meeting was adjourned at 2:57 p.m. I Michael Fogg, Chairman Minutes approved [ ] as presented OR 1 ] as amended ON [ ] date 4 PELICAN BAY BALANCE SHEET December 31, 2020 (UNAUDITED) Pelican Bay Landscape, fil Street Safety,Lake& Clam Bay Capital , Operating Fund Lighting Beach Projects Projects IL 109 778 a 322 320mg TOTAL ASSETS Cash and investments 5,536,142.08 2,075,869.93 5,562,893.91 321,857.41 13,496,763.33 Interest receivable 3,570.27 2,082.57 4,030.71 237.81 9,921.36 Trade receivable,net - - - - Due from other governments - - 136,252.77 - 136,252.77 Total assets 5,539,712.35 2,077,952.50 5,703,177.39 322,095.22 13,642,937.46 LIABILITIES AND FUND BALANCE Liabilities: Accounts payable 180,348.89 4,105.28 82,263.94 69,696.68 336,414.79 Wages payable - - - - - Retainage payable - - 1,418.83 - 1,418.83 Total liabilities 180,348.89 4,105.28 83,682.77 69,696.68 337,833.62 Fund balances: Fund balance 5,359,363.46 2,073,847.22 5,619,494.62 252,398.54 13,305,103.84 Total liabilities and fund balances 5,539,712.35 2,077,952.50 5,703,177.39 322,095.22 13,642,937.46 Fund Balance at the end of the period 5,359,363.46 2,073,847.22 5,619,494.62 252,398.54 13,305,103.84 Unspent balance of projects: Small projects under$200K - - 210,805.05 - 210,805.05 50066-PBSD Landscape Improvement - - 527,677.21 - 527,677.21 50126-Beach Renourishment - - 1,078,883.89 - 1,078,883.89 50143-PBSD Field Operation Center Improvements - - 298,194.56 - 298,194.56 50154-Hurricane Irma - - 606,672.14 - 606,672.14 50178-Sidewalk Maintenance/Enhancement - - 205,072.35 - 205,072.35 50211-PBSD OPS BLD - - 2,046,570.05 - 2,046,570.05 50212-PBSD PH1-SW - - 630,000.00 - 630,000.00 51026-PBSD Lake Bank Restoration - - 1,116,271.85 - 1,116,271.85 51100-Clam Bay Restoration - - - 253,228.42 253,228.42 Total unspent balance of major projects - - 6,720,147.10 253,228.42 6,973,375.52 Budgeted reserves: 991000-Reserve for contingencies 124,100.00 - - - 124,100.00 991700-Reserve for disaster relief 680,900.00 - - - 680,900.00 992090-Reserve for sinking fund - - 370,000.00 - 370,000.00 993000-Reserve for capital outlay 300,000.00 90,000.00 - - 390,000.00 994500-Reserve for future construction and improvement - - - - - 998000-Reserve for cash 483,600.00 39,700.00 - - 523,300.00 Total budgeted reserves 1,588,600.00 129,700.00 370,000.00 - 2,088,300.00 Budgeted commitments at the end of the period 1,588,600.00 129,700.00 7,090,147.10 253,228.42 9,061,675.52 Projected excess(deficit)fund balance 3,770,763.46 1,944,147.22 (1,470,652.48) (829.88) 4,243,428.32 0 N 0 M O ✓ -a NI al V aD E e \ N \ O e e e . o e e o o e a O O mco Ln a O CD N O an > r1 > t0 a N O CO Ln N COM a a N pp lD tD tD N O a .-i M C W 0 ci O O VI N o COO CD O W LD Cl a Ln 4- e O 2t u . ci it R m N u ,-i 0 0 Ol to o o M o N M co to M N N 0 0 0 0 0 0 0 'S• m n1 t0 0 0 CO CO W N a Ln 0 N M M 0000001 al N ' tO O O M O W N ' N ' N .-i O N of O O O O O Cl tp u 01 01 0 0 01 CO 0 N VI CO a CO 0 01 0 0 0 0 0 C1 (..., C C rl co Lo a 01 N Ln h tD 01 tO In 1.01 a 01 O1 0 LO tO 0 (O 00 O N N 00 Ot M Vl N M .4N O1 C1 a O O M 0o W v Oy N D1 N to VI `� N '-I N tO N CO N N CO 0 CO W 1-1N W N V 01 N N m V1 0O N N c1 tO co No W L m > N V rl rl N ,-I M 6 10 C d W r1 tD O N O N N a N CO M W . 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N F- Q w a° > > '—Eo a s. w E s Fs w w ¢ Z W Q .0 ,� '^ v 0 F- " o .on x -0 0 0 8 )O u 0 m E 7 0 m y w r w z z uu 0 o ' n w o 2 o H O W 0U Q Z > a .v. v a H X o`ii ~ m H g m m ~ X Cl. Z u 0 C F- Z m W a Ft CO W Agenda item#8ai Page 1 of 5 19/20 Year-End Financials, Carry-Over Amounts: Fct* Act. Diff 109 2.439 2.863 424 778. 1,989 2,111 122 320 15 212 197 322 2,431 3.392 961 109 Expenses $600k (12%)under budget, Revenues $150k over budget Carry forward $424k more than expected 778 Underspent more than Fct, which was already less than 19/20 budget 320 Fct, was unrealistic. 322 Project underspend from Fct. - see analysis. * Used for 20/21 budget preparation. Agenda item#8ai Page 2 of 5 322 Analysis Fct C/O Actual. 20/21. Total Landscape Improvement 300 378 150 528 a. Signage 96 96 96 Lake Aeration 105 55 55 Beach renourishment. 564 564 515 1 .079 Field Ops. Center. 281 298 298 b. Hurricane Irma 0 621 621 c. PBSD Asset Management. 30 44 44 Roadway safety 21 21 21 Sidewalks 200 222 20 242 d. Lake Bank Restoration 0 183 950 1.133 Transfers 71 71 1.597 2.482 1 .706 4.188 Free Balance 334 334 (334)* 1.372 Financing reserve 500 500 500 1 .000 Ops Building 2.062 2.062 834 834 2.431 3.316 4.934 7.250 { 20/21 budgeted project costs exceeded revenue by $334K. Shortfall funded from c/o. Cannot identify which projects were adjusted. (1.706 - 334 = 1.372 - 20 from County for sidewalk maintenance = 1.352 = net assessment revenue +interest). a.) Too high by $300K b.) Could be rolled into financing c.) Too high by $300K d.) Could be rolled into financing Agenda item#8ai Page 3 of 5 A/c 109 1. Impact of 19/20 C/O on 20/21 Operating Budget 19/20 C/O. $2,439,400 Less: budgeted reserves: Cash Flow. $473,100 Disaster Relief 680,900 Contingencies 124,100 Capital Outlay 300,000 1 ,578,100 Amount of 19/20 C/O use to fund 20/21 operating budget $ 861,300* *Similar to $800,000 increase in 20/21 capital budget 2. Impact of19/20 C/O on 21/22 Operating Budget Potential shortfall in 21/22 Operating Budget if spending remains at 20/21 level $ 861,300 Offset by: Actual 20/21 C/O from 19/20 2,863,717 Budgeted C/O from 19/20 2,439.400 Excess C/O that can't be used in 20/21 but will be c/o to 21/22 424,317 Potential Shortfall $ 436,883 Agenda item#8ai Page 4 of 5 Possible ways fo fund 21/22 operations shortfall of approx. $400K: 1. Budget 21/22 spending more accurately (i.e. eliminate some of budget cushion) to reduce ongoing impact of C/O 2. Reduce Cash Flow Reserve $483K - Oct/Nov 20/21 revenue over $1 .9m and we we have other reserves! Reduction of $150K plus a reduction in annual beach renourishment reserve of $250K (see below) would cover deficit. 3. Transfers from ongoing capital projects/funds budget: One Time Ongoing FEMA Reimbursement. 516,000 (1) Hurricane Irma 300,000* (1) Landscape Imp. 350,000 (2) Sidewalks 242,000 (3) Field Op's Center. 298,000 (3) Beach renourishment $250,000. (4) * Net of outstanding commitments of $321 K * i * (1) Other uses = Phase 2 sign replacement, lakes, etc. * (2) Some duplication with operating budget. $150K include in 20/21 * budget * (3) Roll into financing? ( * (4) $500K included in 20/21 budget, $250 000 probably adequate in * 21/22 Assumes we retain approx. $1 .0 million in ongoing capital budget for Lake bank renovation, 4. Reduce Clam Bay budget by $150K - one time only. i3 Agenda item#8ai Page 5 of 5 We need to re-establish Operations Budget on self financing/assessment basis. Excess C/O in future years will be less if operations budget is more accurate reflection actual spending. May need to increase operations portion of overall assessment. li F3 fl - o 4 _ a, m g - 0] -0 a C a) O) Q a) c V O co i7 Cti7 07 C c) •E m E c a)aa)) a) 8 B- rn 8 al (0 CO 0 a) E O ~ (D a) a) U n co) v > c 0 rH is m o � rn c E E 13 C C) co E a � W 00 N CO c O CO r... 41 a) — d m C N Q) N ils m U U � � 6 N N N E C �M+ C Q C C a) a Q d: c c c m O — m o > oo c .o � fl W = c c o >tr. Cl) .- W m Y C H- E W W (nO Q Ea J JJ 0 to 00 0 IR 0 0 IC C 0 { CI. cOcs, in 000 _O 69. 3 - ry � 64 6 a so- 0 N la 6g S.. 0 o iL a. 0 r 4 _.-•a.�Y - CO tt O c) 'd' r- L1) O )) O O M . al 0) N CO ab C) CD N 00 NY ' 1)) CD CD U (.72.,LO CO 0 0 00 v- 0) C) 0) 0 0� CO N p Z CD 0) In h 0 N t1 CO N N- 07 M (f) M N r 04040 tH EA 00(H(H(R0 0 O a) �' (fl (» 0 0. k in (& 0 U t r 8 a) c c Li } (0 al c " c c a a) ro d +2 c W c c o E c M W > ci `° `° l 0 z Q p N 0 N H ).:. N Q. c C E y 1-5 C c c ) 0 O z •Q M - Etc m`° co) on p E Q ` ro 0 �+ n a) aoi c co aoi n Y n) o G o al En rn r0 N 0 o) 0 a O mac'' E .� .3o o'�(n m o .d c m tY W Z m co c ,_ a) a) Y a) N o Y a = m m "' c c O� 'p .� cnQ u- as � QLX � On. .J m _J a N (a (`) mm } Q. � a) 1 8co a) E a)u) O7(n E t--' = N p Y O W a) ¢ 13 on CO p Nma 7mm .d (0 CDm O (a R) (y 0 ai n n � ma (5 = aa (nQ Q Q U �l �(� � ..E -J H i Q (O CO CO (D CO CO CO n co co r N (o O •41 OO N ` V (() (q N. 0o . N (V O 0 m O O OO OOOOOOOOv) to Q., Agenda item#8bii Page 1 of 3 Impact on assessment of proposed financing Option 1 . Borrow money for sidewalks and as needed for lake bank remediation. Each additional $1 m borrowed at 3% over 10 years requires annual funding of approx. $115,000 or $15 per ERU. $15 is 2% of current assessment of $760 per ERU. Preliminary financing schedule ( $5m for sidewalks and $1.0m for lake banks in each of first three years only ) suggests impact or borrowing $8.0 in first three years is between $6 and $30 per ERU. $30 per ERU represents approx. 4% of the current assessment. Beyond year 6 annual financing cost rises to approx. $90 per ERU or 12% or current assessment. An additional 2 years of borrowing $1 .0m would raise annual cost to $120 per ERU or 16% of current assessment. Option 2. Increase capital budget by $1 m to cover spending of $2m per year on lake banks after year 3 (3 years covered in proposed financing). Increase the capital budget $1 m over two years = $65 per ERU or 8.5% of the current assessment. Increase $1 m over three years = $43 per ERU or 5.6% of the current assessment. Could utilize current surplus capital project monies (see earlier discussion) to fund lake banks in short term and to buy time to increase assessment at say 5% per annum for five years 760 798 = 38 - financing 23 = available for capital projects 15 $115,000 838 = 78 - 30 = 48 = 370,000 880 = 120 - 50 = 70 = 536,000 924 = 164 - 50 = 114 = 873,000 970 = 210 - 50 = 160 = 1 ,225.000 Agenda item#8bii Page 2 of 3 Under either option we need to start increasing capital assessment in 21/22 yk I k Agenda item#8bii Page 3 of 3 • a? 1 1;; 1 qI / q 1 .4iirci '' 4111P.Hq ° H1 ° i IRJ , • • ,. . .• i .• . : i. : ! .••• :: D I • •W ; E •• • 1... . . • a. • ii • • . ? . ; — •t : : CC . . • 7-0 .1 • . . c ; c) i • ,8 i ; • -0 ! .ct i i i .• .... ; . ..!. •••• i- • - , ••• . 2 1 § §. 8 f) I? 8 § E 0 - oc, 1 -7 -- ' - ! 0 , . . • . •, - , • • cn: i • • i •4.: ! .• .'..t •. . • . . i . i- t. • . 11 g 1 'i ‘g I 1 81 . <7 S— I ....0. . . x , i1; 8 i i 9',' ?. ii . . . . • ' • w , i . 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IlJ01 I 1 ,..-.1 ..,1:V,.1 •••:1 :.:..1 •:-.:1 :-..•••• , :.1 .:;..11 s'..' :',...:1-',:''' .....:q....:-..1 .::'.'•:,..',!::.-::.':•.',•,:::1'.±.•••,.1 ''•':''':;•1•;',','• 7s--1 !......1 -......:1:•.:11 :::. .....•••1 •••.'...1 ....:•....1 '.. :,:.1.•-•:.i:-:.....ft:A.....-...1 .......1 .:::1,,':•,•. .-:.:1.,:.,....1.........:•;,•I :..•.,•••,.....:',..:1'.:',•,.1 Agenda item#10a Page 1 of 1 Ad Valorem vs ERU increasing the portion of PBSD assessment based on Ad Valorem taxes vs acreage basis was evaluated in 1993 when current assessment scheme adopted. Reviewed again in 2002 when no change recommended. Reviewed again in 2019 when minor changes recommended by budget committee that were not approved by the PBSD Board. Now that Pelican Bay is substantially built out and all properties are valued by reference to estimated market value ( i.e. virtually no developable undeveloped land left ) argument in favor of Ad Valorem taxes is stronger. Currently raise 90% of revenue from ERU assessment. Residential pays 93% of Ad Valorem vs 80% of ERU so change would increase residential burden. Non-Profit organizations would gain most - no Ad Valorem taxes but would benefit from reduced ERU. Pro's Fairness - lower value properties may benefit. Consistent with way County assesses taxes. Con's Ad Valorem assessed on property values that can fluctuate. fi Non-profits would gain benefit . increase in residential assessment likely to be unpopular with voters, would need extensive community engagement, might provoke unhealthy community discourse. Existing system in place for 27 years, no apparent concern expressed from residential or commercial property owners. 1 Agenda item#10b Page 1 of 6 PBSD ERU Assessments ERU'S. Acres Residential per schedule 6,452.00 979.52 Waterpark Place per schedule 60.91 4.92 TOTAL RESIDENTIAL ( 6.61 ERU's per acre). 6,512.91 984.44 TOTAL ERU'S/ACRES 7,658.90 1 ,379.23 Less: Residential 6,512.91 984.44 Golf Course ($1 .00/acre) 220.65. 220 65 County Park ($1.00/acre) 14.88 14.88 Water plant ($1 .00acre) 12.00 12.00 6,745.56 1,231 .97 TOTAL COMMERCIAL ( 6.20 ERU's per acre). 913.34 147,26 Golf Course 220.65 County Park 14.88 Water Plant 12.00 UNIMPROVED LAND (1 .00 ERU per acre). 247.38 247.38 TOTAL LESS UNIMPROVED LAND 7,411.52 1,131 .85 Observations: 1 . Residential vs Commercial Prior to 1993 assessments were made on the basis of property acreage. It appears one of the objectives of the 1993 change was to maintain the total residential assessment percentage the same as it was prior to the change. This appears to have been accomplished by allocating 5.75 units per acre to commercial properties. Agenda item#10b Page 2 of 6 Today residential properties represent approx. 80% of the acreage and are assessed approx. 80% of the ERU assessment. 2. Undeveloped Land. Today there is virtually no "developeable" undeveloped land - mainly the second tower at "Mystique".That leaves the golf club as the main undeveloped land in Pelican Bay. In the 1993 assessment change the golf club was allocated 1 ERU per acre. There were likely several motivating factors warranting this lower assessment - for example, the golf club lakes, fairways and associated green space was designed to act as the storm water management system for Pelican Bay thereby benefiting all property owners, the PUD design and covenants make development of this property virtually impossible, the transfer of the golf course from a developer subsidized venture to a member owned club, etc. These actors appear to be still valid today. The allocation pf 1 ERU per acre has been questioned by some but it appears that any other allocation would be arbitrary and could be challenged as unjustified. We are unaware of a better generally accepted methodology for assessing golf course property. Some home-associations appear to assess golf course land at zero, including The Pelican Bay Foundation. 3. Conclusion on assessment methodology Current allocation methodology has been in place for over 27 years and appears acceptable to the community at this time. Any move to change the allocation methodology would require significant effort (probably involving the use of an outside consultant) and likely be controversial. 4. Assessment Anomalies Naples Grand is currently assessed 9.07 per ERU vs 5.75 and Waterside Shops general parcel 5.43 vs 5.75. Consideration could be given to making changes to these assessments to make all commercial assessments consistent. 1 Agenda item#10b Page 3 of 6 Which non-residential entities pay most ERU taxes to PBSD? More than $50,000 (2021) Registry Hotel $ 122,761 Ritz Carlton 114,605 Waterside Shops 114,125 Market Place 59,700 The Club 224,000 { $E i Agenda item#10b Page 4 of 6 ERU Anomalies 1 . Waterside Shops parcel 66270160002 ERU factor 5.43 vs 5.75 Adjustment would increase assessment by 23.15 acres x 0.32 x $760 per ERU = $5,630 p.a. 2. Registry Hotel ERU factor 9.07 vs 5.75 Adjustment would decrease assessment by 17.81 acres x 3.32 x $760 per ERU = $44,938 p.a. 3. Gulf Bay towers Paying on 4.92 acres on undeveloped land at 12.38 per acre And 60 (?) residences in new tower. fff Agenda item#10b Page 5 of 6 1 I tZ O et O 4n 40 M N N a- e- N (O 41 CT) Cl 4) M 00 CO e- et N CO O O e- CO CO. ti 43 CO 40 O 43 O 00 et M M h 00 O 4) N so CO N l F- O O tO 7 O e- d e- O 00 er c') e- O (Ni e- e- 00 e- to O) N • 0) co (0 O 00 M 0) CO N e- 00 40 e- ti (n e- M N. (0 et N U) O) 0) 00 N- 00 n C) vs:M e- M M oo sf (0 4() CO.CO V) e-• 1.-. e- N 0) 1`,.. i e- of N O c- h Cn e- h 4o W co::ti M 0 to W Tr tD [t r- N00 ate-- CN- e- N N e- e- N Co c. 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Agenda item#10b Page 6 of 6 PELICAN BAY SERVICES DISTRICT FY 2021 ASSESSMENT Total $ 4,224,600.00 $ 1,597,200.00 $ 5,821,800.00 Per Unit $ 551.5936 $ 208.5417 $ 760.14 Commercial Folio# Acres Units Factor O&M Capital Total Ritz Carlton 00168360006 26.22 150.77 5.75 $ 83,163.77 $ 31,441.83 $ 114,605.60 Public Library 00169000006 1.69 9.72 5.75 $ 5,361.49 $ 2,027.03 $ 7,388.52 Fire Station 00176682006 3.63 20.87 5,75 $ 11,511.76 $ 4,352.27 $ 15,864.02 Fifth Third Bank 32435500101 0.84 4.83 5.75 $ 2,664.20 $ 1,007.26 $ 3,671.45 Market Place Parcel 1 64030000252 4.1 23.58 5.75 $ 13,006.58 $ 4,917.41 $ 17,923.99 Market Place Parcel 2(Albertson's) 64030000508 5.23 30.07 5.75 $ 16,586.42 $ 6,270.85 $ 22,857.27 Market Place Parcel 3 64030001002 6.38 36.69 5.75 $ 20,237.97 $ 7,651.40 $ 27,889.36 Market Place Parcel 4(World Savings) 64030001109 1.03 5.92 5.75 $ 3,265.43 $ 1,234.57 $ 4,500.00 Market Place Parcel 5(Ruby Tuesdays) 64030001206 1.11 6.38 5.75 $ 3,519.17 $ 1,330.50 $ 4,849.66 Market Place vacant parcel 64380000355 2.19 12.59 5.75 $ 6,944.56 $ 2,625.54 $ 9,570,10 Pelican Bay Financial Center 64380000601 4.03 23.17 5.75 $ 12,780.42 $ 4,831.91 $ 17,612,34 IIMA,Wachovia 66270040009 9.98 57.4 5.75 $ 31,661.47 $ 11,970.29 $ 43,631.77 SunTrust 66270120000 4.66 26.8 5.75 $ 14,782.71 $ 5,588.92 $ 20,371,63 Waterside Shops 66270160002 23.15 125.70 5.43 $ 69,335.32 $ 26,213.69 $ 95,549.01 Morgan Stanley 66270200001 3.07 17.65 5.75 $ 9,735.63 $ 3,680.76 $ 13,416.39 Morgan Stanley(additional land) 66270200108 0.63 3.62 5.75 $ 1,996.77 $ 754.92 $ 2,751.69 Philhamonic Clrfor the Arts 66270240003 6.5 37.38 5.75 $ 20,618.57 $ 7,795.29 $ 28,413.86 Comerica Bldg 66270240100 2 11.5 5.75 $ 6,343.33 $ 2,398.23 $ 8,741.56 Waterside Shops(Saks parcel) 66270240207 0.71 4.08 5.75 $ 2,250.50 $ 850.85 $ 3,101.35 Waterside Shops(Jacobson's parcel) 66270240304 0 0 0.00 $ - $ - $ - Waterside Shops(US Trust parcel) 66270240401 1 5.75 5.75 $ 3,171.66 $ 1,199.11 $ 4,370.78 Waterside Shops(Barnes Noble parcel) 66270240508 1.25 7.19 5.75 $ 3,965.96 $ 1,499.41 $ 5,465.37 Waterside Shops(Nordstrom's parcel) 66270240605 1.29 7.42 5.75 $ 4,092.82 $ 1,547.38 $ 5,640.20 St.Williams 66272360004 6.26 36 5.75 $ 19,857.37 $ 7,507.50 $ 27,364.87 Registry Hotel 475 units 17.8125 161.5 9.07 $ 89,082.37 $ 33,679.49 $ 122,761.85 Inn at Pelican Bay 51680000107 2.5 14.38 5.75 $ 7,931.92 $ 2,998.83 $ 10,930.75 Other PBSD(water plant) 66330200022 12 12 1.00 $ 6,619.12 $ 2,502.50 $ 9,121.62 County Park 66679080505 14.88 14.88 1.00 $ 8,207.71 $ 3,103.10 $ 11,310.81 The Club at Pelican Bay 66330042002 2.13 2.13 1.00 $ 1,174.89 $ 444.19 $ 1,619.09 66330043001 6.64 6.64 1.00 $ 3,662.58 $ 1,384.72 $ 5,047.30 66330043056 0.71 0.71 1.00 $ 391.63 $ 148.06 $ 539.70 66330080006 69.33 69.33 1.00 $ 38,241.98 $ 14,458.20 $ 52,700.18 10 acres club and maintenance facility 10 57.5 5.75 $ 31,716.63 $ 11,991.15 $ 43,707.78 66330200006 3 3 1.00 $ 1,654.78 $ 625.63 $ 2,280.41 66330200051 1.43 1.43 1.00 $ 788.78 $ 298.21 $ 1,086.99 66530120009 0 0 1.00 $ - $ - $ - 66674441453 135.22 135.22 1.00 $ 74,586.49 $ 28,199.01 $ 102,785.50 66330041003 1.01 1.01 1.00 $ 557.11 $ 210.63 $ 767.74 66330280000 0.57 0.57 1.00 $ 314.41 $ 118.87 $ 433.28 66330321008 0.04 0.04 1.00 $ 22.08 $ 8.34 $ 30.41 66432560204 0.57 0.57 1.00 $ 314.41 $ 118.87 $ 433.28 66674440357 0 0 1.00 $ - $ - $ - 66674440454 0 0 1.00 $ - $ - $ - Residential Gulf Bay residential acres(Walerpark Place C) 81210001753 4.65 57.57 12.38 $ 31,753.59 $ 12,005.12 $ 43,758.71 Gulf Bay residential acres(Waterpark Place D) 81210002257 0,27 3.34 12.38 $ 1,843.76 $ 697.07 $ 2,540.83 $ - $ - $ - Total per acre calculated parcels 399.7125 1,206.90 $ 665,718.09 $ 251,688.90 $ 917,407.00 Total Residential 979.5284 6,452.00 $ 3,558,881.91 $ 1,346,511.10 $ 4,904,393.00 Total ERU's 7,658.90 $ 4,224,600.00 $ 1,597,200.00 $ 5,821,800.00