ANNUAL LOCAL GOVERNMENT REVENUE ANALYSIS OF THE 13th FLOOR INVESTMENTS RESIDENTIAL DEVELOPMENT IN TAMARAC, FLORIDA

Wednesday, January 9, 2019

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Report Commission

13th Floor Investments commissioned this report in support of the company’s proposed residential

development in the City of Tamarac, Broward County, Florida. The development contemplates the

construction of 423 residential units which will be 3-, 4- and 5-bedroom homes that will be constructed

on a former golf course.

The proposed development is situated off of Commercial Boulevard on the north, Rock Island Road to

the east, and NW 44th Street on the south. The property currently has a City zoning of RC -Recreation.

The developer will be requesting Residential Estate-RE and Two-Family District-R-2, though only

single-family units are being contemplated.

General Project Location

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General Location of Project In The City of Tamarac, Florida. Source: Broward County Property Appraiser 2017 Aerials.

This study is designed to forecast the annual revenues that will accrue to the City of Tamarac and other

taxing authorities under the proposed use. One-time revenues have also been estimated for the City,

Broward County, and the School Board. The study used the rates and fees that were in effect as of the

date of the report.

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Study Conclusions The study concludes that the proposed residential development would provide an estimated $2,016,166 in annual revenue to the City of Tamarac once the project is fully. The City could also expect to receive $5,332,653 in one-time revenues from the proposed development. Broward County would receive $903,476 annually and $770,862 in one-time revenues. The School Board of Broward County would receive $1,042,193 annual and $3,552,302 in one-time school impact fees. All local governments levying taxes and fees against this proposed development would be expected to receive $4,293,088 annually. Total one-time fees to all governments are estimated to be $9,655,817. The project would add an estimated 1,508 additional people to the City’s population.

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SOURCES OF REVENUES

The City of Tamarac levies taxes, fees, assessments, and charges on several sources. The City also

receives more intergovernmental revenue as its population increases. The proposed residential

development will generate $1,975,279 to the City annually from all revenue sources. Table A

summarizes the annual revenue sources that would accrue to the City:

Table A

The City levies various impact, permit, and other fees against new development. These fees are used for

capital improvements within the City or to pay for development-related improvements made by the City.

Other fees are collected to pay for the services provided new construction. Table B summarized the one-

time revenues that the City of Tamarac would receive from this proposed development:

Table B

Proposed ProjectProperty Taxes 1,136,141$ Fire Assessments 148,050 Franchise and Utility Taxes 254,986 Intergovernmental 229,194 Stormwater Fees 54,055 Utility System Net Operating Income 152,852 Total Annual Revenue 1,975,279$

Recurring Annual Revenue

Proposed ProjectWater and Sewer Connection Fees 1,649,700$ Parks and Recreation Impact Fees 139,590 Traffic Impact Fee 89,253 Building Permit Fees at 2.50% 3,418,582

Total One-Time Revenues 5,297,125$

One-Time Revenues

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Broward County also levies various impact, permit, and other fees against new development. Table C

summarizes the one-time revenues for Broward County, plus the school impact fees paid to the School

Board of Broward County:

Table C

Other units of local government also levy taxes on the property. Table D details the revenues to all

jurisdictions if the property were to be developed as proposed:

Table D

Proposed Project518,828$ 237,726 756,554$

3,486,366$

Broward County and School Board One-Time Revenues

Transportation Concurrency FeesPark Impact FeesTotal One-Time Revenues

School Impact Fees

City of TamaracBroward County

School Board of Broward

County

Children's Services Council

N. Broward Hospital District FIND SFWMD Totals

Property Taxes $1,136,141 $883,522 $997,901 $76,087 $169,177 $4,987 $45,758 $3,313,573

Fire Assessments $148,050 - - - - - - $148,050

Franchise and Utility Taxes $254,986 - - - - - - $254,986

Intergovernmental $229,194 - - - - - - $229,194

Stormwater Fees $54,055 - - - - - - $54,055

Utility System Net Operating Income $152,852 - - - - - - $152,852

Total Annual Revenue, All Jurisdictions $1,975,279 $883,522 $997,901 $76,087 $169,177 $4,987 $45,758 $4,152,711

Recurring Annual Revenue To All Jurisdictions

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EXPLANATION OF REVENUE SOURCES, CALCULATIONS, AND ASSUMPTIONS

Property taxes, franchise fees, utility service taxes, and fire assessments can be calculated with a

substantial degree of certainty. Intergovernmental revenue increases as population increases, but the City

does not directly control this revenue source.

The various revenue sources, their impacts, and the major assumptions used in determining the

projection are detailed in the following sections.

PROPERTY TAXES

The proposed residential project will generate $1,136,141 annually in City property tax revenues.

Property taxes are a function of the property’s taxable value and the property tax rate levied by the City.

The property tax rate used in this report is $7.2899 per $1,000 of taxable value and it is the rate the City

levied for fiscal year 2019. This rate has been levied against the taxable value of the properties. The

taxable value is calculated from the assessed values less exemptions on each parcel. Both the assessed

values and the exemptions are set or determined by the Broward County Property Appraiser’s office. The

assessed and taxable values of the proposed development were based upon an average sale value of

$375,000, $475,000, $612,500 and $796,250 for the single-family units. The assessed value used in this

study was 85% of the sale value of the single-family units and it was assumed that 51% of the homes

would have a $50,000 homestead exemption, based upon data from the 2018 tax roll for the City. The

estimated taxable value for the proposed development was $155,851,451.

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FIRE ASSESSMENT FEES

The proposed project produces $148,050 annually in fire services assessment revenue.

The City levies an annual special assessment for fire protection services. The rate used in this study was

the one adopted for the City’s fiscal year 2019. Each dwelling unit is assessed $350.00 annually, gross of

any discounts allowed.

FRANCHISE AND UTILITY TAXES

The proposed project will generate $254,986 annually from franchise fees and utility service taxes.

The City of Tamarac levies a 5.9% franchise fee on electrical consumption. The City also levies a utility

service tax of 10% on electrical, water service, propane, and natural gas consumption. We based our

estimates upon energy consumption and expenditure surveys conducted by the U.S. Department of

Energy, Energy Information Administration and the project’s estimated square footage. We have

assumed for the proposed development an average size of between 1,800sf to 3,000sf for the single-

family homes. The City levies a 20% franchise fee on solid waste services.

INTERGOVERNMENTAL REVENUE

The proposed project will provide an additional $229,194 in revenues from other governmental units

to the City.

The City receives money from other units of government. Most of this recurring intergovernmental

revenue is a function of population and, as population increases, so does the amount of this revenue

source. We have excluded non-recurring intergovernmental revenue, as little of that is a function of

population. Examples of some of the excluded sources might be federal stimulus grants and state grants

for capital improvements. Examples of intergovernmental revenue that has been included would be State

of Florida annual appropriations for revenue sharing, sales tax, communications services taxes, and gas

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taxes. We have used an estimate of 3.3 persons per household in calculating an estimated increase in

City population of 1,396 persons.

Based upon the per capita recurring intergovernmental revenue estimated by the State of Florida for the

City for fiscal year 2019, we forecasted that the City would receive $229,194 more annually because of

this development.

UTILITY SYSTEM NET OPERATING REVENUE

The proposed residential use will generate $152,852 more in additional net operating revenue for the

City’s water and sewer system.

The City’s water and sewer system charges monthly water and sewer usage to each of its customers. On

both of these services, the City makes a profit. Based upon the City’s 2017 fiscal year audited

Comprehensive Annual Financial Report, we determined that the operating margin, after deducting

depreciation expense, was 33.6% for water and sewer. Using rates in effect at the report date, and

assuming 8,000 gallons per month consumption on single-family dwelling units, we estimated that the

additional contribution after expenses was $152,852 annually.

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ONE-TIME IMPACT FEES AND PERMIT REVENUE AND OTHER FEES

The proposed use would provide the City $5,297,125 in one-time revenues.

The City levies various impact fees and permit fees. Impact fees for water and sewer connections, and

traffic mitigation are based upon the number of dwelling units. Permit and Inspection fees have been

estimated as a percent of construction costs. Parks and Recreation impact fees are based upon the

development density, the assumed occupancy per unit, and a market-based acreage fee, assumed to be

$100,000/acre.

Building permit fees have been calculated at 2.50% of construction value, which we have estimated at

slightly over $133 million.

Water system impact fees are $1,700 per home and sewer system impact fees are $2,200 per home.

Additionally, the proposed use would provide the County $756,554 in one-time revenues and the

School Board would receive $3,486,366 in impact fees.

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Total Economic Benefit

The proposed development will also have a positive effect on the regional economy. Using the RIMS II

data from the Bureau of Economic Analysis of the U.S. Department of Commerce, the multiplier effect

of the jobs and goods and services provided by the new project during the construction phase will

provide the regional economy the economic benefit summarized in Table D:

Table D Initial Impact, Total Jobs Created, and Jobs Created Directly From Project

During the construction phase, the project will pump $133.4 million into the regional economy in the form of wages and purchases of goods and services. It will directly create 278 jobs at the project site and will create a total of 2,829 jobs across all industries and locales as the spending occurs. Using estimates of the final purchase price of the homes, and further assuming down payments of 20%, we deduce that the project will provide approximately $52.3 million in additional household income in the City. The average household income of the project is expected to be $123,597. The 2017 median household income of the City was $45,474.

Final Demand (Initial Impact)

Construction Phase

RIMS II Industry Jobs

Multiplier

RIMS II Direct Effect Jobs Multiplier

Total Jobs Created (Total

Impact)

Jobs Created Directly From Project (Direct

Effect)

$133,457,353 21.1988 2.0807 2,829 278