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FY 2023 Non-Ad Valorem Assessment Rate Increase for Hernando Beach South Street Lighting Municipal Service Benefit Unit and Establishment of Future Maximum Rate
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BRIEF OVERVIEW
Due to the impact of rising gas prices, Withlacoochee River Electric Cooperative (WREC) has raised their fuel surcharges in June 2022 and anticipates a second increase before the end of the calendar year. In addition, WREC has been changing lighting from a Sodium Vapor fixture at a monthly cost of $7.74 per light to a LED style Cobra fixture at a monthly cost of $10.15 per light for both replacement and additions within the district. The change in fixtures have further impacted the overall operational cost to the district.
The Hernando Beach South Street Lighting MSBU currently has 120 Cobra-105 (Sodium Vapor) lights and 29 Cobra-205 (LED) lights. The older Cobra-105 lights are being replaced with the Cobra-205 lights at a rate of five per year, creating an increase of $2.41 monthly per light, which in turn creates a yearly increase of $28.92 per light.
As a result, the Hernando Beach South Street Lighting Municipal Service Benefit Unit (MSBU) district's assessment revenue can no longer support the increasing annual operating expenses and maintain the required 18% reserves at the current assessment rate of $32.00. Therefore, staff recommends increasing the FY 2023 non-ad valorem assessment rate to $42.00 per unit to operate 149 street lights; and increasing the maximum assessment rate from $37.00 to $50.00. The MSBU contains 424 units and the estimated annual assessment revenue to be collected is $16,900 based on 95% collection rate.
MSBU Name Fund ORD Current FY22 Proposed FY23 Proposed Max Rate
Hernando Beach South 7111 90-07 $32.00 $42.00 $50.00
In accordance with Section 197.3632, Florida Statutes, a non-ad valorem assessment roll shall be adopted at a public hearing held before September 15th if the non-ad valorem assessment is increased beyond the maximum rate authorized by law or judicial decree, at the time of initial imposition. Property owners were notified of the public hearing and assessment increase by first-class mail and newspaper advertisement at least 20 days prior to the public hearing date per Florida Statue.
FINANCIAL IMPACT
The recommended assessment rate of $42.00 to each of the 424 units is anticipated to generate $16,900 at 95% collection rate and is included in the proposed FY 2023 revenue budget account 7111-09111-3252001 for Hernando Beach South Lighting MSBU and appropriated to various operating accounts to provide street lighting within the district boundaries.
LEGAL NOTE
The Board has legal authority to establish MSBU's and set assessment rates pursuant to Sections 125.01 and 197.3632, Florida Statutes.
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RECOMMENDATION
It is recommended that the Board approve and authorize the Chairman’s signature on the attached resolution increasing the annual non-ad valorem assessment rate from $32.00 to $42.00 and increasing the maximum rate to $50.00 for the Hernando Beach South Street Lighting MSBU for FY 2023.