TO: Mayor and Commission AGENDA DATE: 11/16/2026
FROM: City Manager AGENDA ITEM: 4 - A
SUBJECT:
Title
Request for approval to advertise Notice of Intent to use the Uniform Method of Collecting Non-Ad Valorem Assessments for various services for FY 2027 - 2028.
Body
LOCATION:
City Hall
COST:
Dependent on Commission Action
SOURCE OF FUNDS:
Citywide
ORIGINATING DEPARTMENT:
City Manager
POTENTIAL MOTION:
Recommendation
“Staff requests City Commission consensus to authorize the City Manager and staff to initiate the statutory advertising process and schedule the required public hearing for consideration of a resolution expressing the City's intent to utilize the uniform method of collecting non-ad valorem assessments, pursuant to Section 197.3632, Florida Statutes, for eligible municipal services and improvements beginning with Fiscal Year 2027-2028 for the following potential assessments:
1. Fire Administration & Operations
2. Fire Capital
3. Park Administration & Operations
4. Right of Way Improvements (Median maintenance, sidewalks, etc)
5. Improvement Assessment (Street Paving)
6. City Wide Streetlighting
7. Building Construction for Parks, Fire Stations, Sheriff Substation & Support Buildings)
No non-ad valorem assessment is being levied, no assessment rate is being established, and no assessment program is being approved through the requested action.
END
BACKGROUND:
Background
On November 3, 2026, Florida voters approved Constitutional Amendment 3, "Increased Homestead Exemption; Lower Cap on Increases in Non-Homestead Property Assessments." The amendment becomes effective January 1, 2027. Among Its provisions, Amendment 3 increases the homestead exemption applicable to non-school ad valorem property taxes to $150,000 beginning with the 2027 tax year and $250,000 beginning with the 2028 tax year. Beginning January 1, 2029, the exemption will be adjusted annually based on inflation, as measured by the applicable Consumer Price Index (CPI). The amendment also reduces the annual assessment increase limitation for non-homestead property from 10% to 5%.
These constitutional changes will have a significant and continuing financial impact on the City of Deltona's General Fund, particularly its ability to maintain existing municipal services and fund future operating and capital requirements.
Based on information provided by the Volusia County Property Appraiser, utilizing current taxable property values and the City's adopted millage rate of 6.4948 mills, the property appraiser office estimated the following reductions in annual ad valorem tax revenue:
|
Fiscal Year |
Homestead Exemption |
Estimated Annual Revenue Reduction |
|
FY 2027-2028 |
$150,000 |
$11,630,438 |
|
FY 2028-2029 |
$250,000 |
$17,088,634 |
The projected reductions are measured against the City's FY 2026-2027 ad valorem tax revenue baseline. The FY 2028-2029 reduction represents the estimated total annual loss compared with that baseline, rather than an additional loss on top of the FY 2027-2028 estimate. These estimates are preliminary and subject to changes in taxable property values, future millage rates, property classifications, eligibility requirements, and implementing legislation.
Furthermore, the inflationary adjustment to the homestead exemption beginning in 2029 is expected to create additional long-term pressure on the City's ad valorem tax base. As exemption amounts increase, a greater portion of qualifying residential property value may become exempt from municipal property taxation.
The Volusia County Property Appraiser has published information regarding the estimated financial impact of Amendment 3, which serves as the primary source of data for these projections. Source: <https://vcpa.vcgov.org/tools/impact-estimator>
Statutory Authority for Non-Ad Valorem Special Assessments
In response to the anticipated reduction in property tax revenues, City staff is evaluating alternative funding mechanisms that may help preserve essential municipal services and maintain the City's financial sustainability.
Chapter 166, Florida Statutes, commonly referred to as the Municipal Home Rule Powers Act, provides municipalities with broad authority to conduct municipal government, perform municipal functions, and provide municipal services, except where expressly prohibited by law.
Specifically, Section 166.021, Florida Statutes, recognizes the City's authority to exercise municipal powers for legitimate municipal purposes, subject to applicable constitutional and statutory limitations. Under Florida law, municipalities may establish non-ad valorem special assessments to fund eligible services, facilities, and improvements that provide a special benefit to assessed real property, provided that the cost of those services or improvements is fairly and reasonably apportioned among the properties receiving the benefit.
Unlike ad valorem property taxes, which are based on taxable property value and an adopted millage rate, non-ad valorem assessments are based on an assessment methodology related to the benefit provided to the affected property.
Section 197.3632, Florida Statutes, establishes the uniform method for the levy, collection, and enforcement of non-ad valorem assessments through the annual property tax collection process.
Pursuant to this statute, a municipality electing to utilize the uniform collection method for the first time must adopt a resolution of intent at a properly advertised public hearing. The resolution must identify the need for the assessment and include a legal description of the boundaries of the real property potentially subject to the assessment.
The statute generally requires:
1. Publication of the City's intent to utilize the uniform method of collection once each week for four consecutive weeks preceding the required public hearing.
2. Adoption of a resolution of intent before January 1 of the applicable year, or before March 1 if the City, Property Appraiser, and Tax Collector mutually agree to the extended deadline.
3. Submission of the adopted resolution to the Property Appraiser, Tax Collector, and Florida Department of Revenue within the applicable statutory timeframe.
4. Preparation of the necessary assessment methodologies, identification of benefited properties, and determination of proposed assessment rates.
5. Compliance with applicable mailed and published notice requirements, public hearings, and adoption of the assessment roll before implementation.
Any implementing ordinances or resolutions must also comply with applicable requirements of Section 166.041, Florida Statutes.
NOTE - Approval of a resolution of intent does not establish an assessment, approve an assessment rate, or obligate the City Commission to implement any assessment. Rather, it preserves the City's ability to consider using the uniform method of collection for eligible assessments during the subsequent budget process.
Purpose of the Requested Commission Direction
At this time, City staff is requesting City Commission consensus to proceed with the required statutory advertising and public hearing process for consideration of a resolution of intent to utilize the uniform method of collecting non-ad valorem assessments, pursuant to Section 197.3632, Florida Statutes.
The proposed assessments would apply only to properties within the jurisdictional boundaries of the City of Deltona that are determined to receive a legally sufficient special benefit from the applicable services or improvements.
The intent is to evaluate whether certain eligible municipal operating and capital expenditures, currently supported in whole or in part by ad valorem property taxes, may instead be funded through non-ad valorem special assessments.
This approach would provide the City Commission with additional funding options to address the anticipated reduction in General Fund revenues resulting from Amendment 3.
The request before the City Commission is limited to authorization to proceed with statutory advertising and consideration of the required resolution of intent. No assessment rates, assessment methodologies, or assessment programs are being presented for approval at this time.
Potential Services and Capital Improvements for Assessment Consideration
Staff have identified the following municipal services and capital expenditures for preliminary evaluation as potential non-ad valorem assessment programs.
The amounts below represent the City's FY 2026-2027 budgeted expenditures for the respective functions and are provided for informational and planning purposes only.
|
Potential Assessment Category |
FY 2026-2027 Budget |
|
Fire Administration and Operations |
$13,250,000 |
|
Fire Capital Needs |
$5,000,000 |
|
Parks Administration and Operations |
$4,100,000 |
|
Right-of-Way Improvements, including median maintenance, sidewalks, and related improvements |
$2,500,000 |
|
Street Paving and Roadway Improvements |
$2,000,000 |
|
Citywide Streetlighting |
$200,000 |
|
Municipal Facility Construction, including parks facilities, fire stations, sheriff substations, and support buildings |
$3,500,000 |
|
Total Potential Expenditures for Evaluation |
$30,550,000 |
|
|
|
These categories are preliminary and are not intended to represent a determination that all listed services or expenditures are legally eligible for funding through non-ad valorem assessments.
Each proposed assessment category would require additional analysis to determine:
• Whether the service, facility, or improvement provides a legally sufficient special benefit to real property.
• Whether the proposed costs are eligible for recovery through a special assessment.
• The appropriate geographic boundaries and classes of properties receiving the benefit.
• A fair and reasonable methodology for apportioning the assessment among benefited properties.
• The estimated annual assessment amounts and financial impacts on affected property owners.
• Compliance with applicable Florida statutes, constitutional requirements, and controlling judicial decisions.
Certain categories, particularly general administrative services, parks operations, public safety facilities, and municipal support buildings, may require additional legal analysis to determine whether the proposed expenditures satisfy the special-benefit requirements. The inclusion of a service or expenditure in this preliminary list does not authorize its assessment or establish that the full budgeted amount may be recovered.
Financial and Budgetary Considerations
Non-ad valorem special assessments may provide an alternative revenue mechanism to support certain municipal services and capital improvements that would otherwise compete for limited General Fund resources. To the extent legally permissible, these assessments could reduce the reliance on ad valorem property taxes for eligible services, thereby allowing the City to better manage the financial consequences of Amendment 3. However, non-ad valorem assessments are not an unrestricted replacement for property taxes. Assessment revenues must be used for the specific purposes for which the assessments are lawfully imposed and must satisfy the applicable special-benefit and fair-apportionment requirements.
The City Commission would retain authority to determine whether any proposed assessment should be implemented, the level of eligible costs to be recovered, and the appropriate funding structure, subject to applicable law.
Staff anticipates that any proposed assessment program would be developed and evaluated in conjunction with the FY 2027-2028 budget process, including financial analysis, public participation, and Commission consideration.
Public Participation and Implementation Process
Should the City Commission provide the requested consensus, staff would initiate the statutory process necessary to preserve the option of using the uniform collection method beginning with FY 2027-2028. This process would include the required advertising, consideration of a resolution of intent, coordination with the Volusia County Property Appraiser and Tax Collector, and subsequent evaluation of individual assessment programs. Prior to implementation of any assessment, staff would return to the City Commission with the necessary supporting information, including assessment methodologies, proposed rates, estimated revenue, eligible expenditures, and the anticipated financial impact on affected property owners.
The City would also conduct the required public hearings and provide applicable statutory notices, ensuring that property owners have an opportunity to review and comment on any proposed assessments.
End