Form revised December 9, 2004

FISCAL NOTE FOR NON-CAPITAL PROJECTS

Department:	Contact Person/Phone:	DOF Analyst/Phone:
Executive Administration	Mel McDonald / 3-0071	Karl Stickel / 4-8085

Legislation Title: 

AN ORDINANCE relating to alarm systems and fire alarm systems; adding new definitions and revising existing definitions; establishing primary billing responsibility guidelines for licensing fee components; modifying penalty provisions; establishing false alarm parameters; adding criminal penalties; establishing a revised fee structure; adding an exemption from licensing fees for federal and state governmental entities that respond to their own alarms; extending the due date for false alarm fees and penalty provisions; amending false alarm waiver provisions; amending fire alarm monitoring licensing fee component; adding sections 6.10.025, 6.10.035, 6.10.120, 6.10.130 and 6.10.235 relating to billing procedures for change of subscriber location and change of monitoring company; and amending Sections 6.10.005, 6.10.010, 6.10.015, 6.10.020, 6.10.030, 6.10.040, 6.10.050, 6.10.080, 6.10.100, 6.10.110, 6.10.205, 6.10.210, 6.10.215, 6.10.220, 6.10.230, 6.68.010, 10.08.140, 10.08.165, and 10.08.168, respectively, of the Seattle Municipal Code.

· Summary of the Legislation:

The proposed ordinance revises the burglar and fire alarm fees provided for in Seattle Municipal Code Chapter 6.10, so that projected fee revenues are aligned with the City’s costs for response to false or intentional alarms by both the Seattle Police Department (SPD) and Seattle Fire Department (SFD), and for the costs of regulatory activities of the Department of Executive Administration (DEA).  The legislation also clarifies and amends certain sections to reflect new procedures concerning SPD false burglar alarms. 

· Background:

In November 2003, the City adopted Ordinance 121332 pertaining to burglar and fire alarm license fees and false alarm fees.  The City imposed regulatory fees on alarm system monitoring companies to defray the SPD and SFD costs in responding to false alarm responses.  Prior to Ordinance 121332, the cost for SPD and SFD response to false and unintentional alarms was borne by the public through the General Subfund.  The number of alarm systems in the City continues to grow, resulting in a growing number of false and unintentional alarms and an escalating cost burden to the City. 

Under the current ordinance, codified as SMC Chapter 6.10, the City levies a license fee for both burglar alarms and fire alarms.  The City also levies a false alarm fee on alarms responded to by the SPD.  These fees are administered by DEA in its regulatory and revenue licensing authority.  The annual license fees and false alarm fees which are assessed upon alarm monitoring companies, rather than individual alarm system subscribers.

The intent of imposing alarm license fees and false alarm fees is to recover the City’s costs of responding to false alarms, to hold alarm monitoring companies accountable for false alarms, and to provide an incentive for the alarm monitoring companies and their subscribers to reduce false alarms.  

The proposed legislation establishes a new alarm fee structure.  Since adoption of Ordinance 121332, the City has worked to restructure the annual permit fee to make it more responsive to industry concerns, while ensuring that the City fully recovers all costs associated with false alarms.  Additionally, the proposed legislation establishes criteria that create a more equitable distribution of the fees and allows for improved review, reconciliation, and audit. 

• Please check one of the following:

____ This legislation does not have any financial implications. (Stop here and delete the remainder of this document prior to saving and printing.)

_X_ This legislation has financial implications. (Please complete all relevant sections that follow.)

Costs.  The City estimates that responding to false alarms costs the City approximately $2,233,000 each year.  This includes SPD costs of $1,116,000, SFD costs of $967,000, and DEA costs of $150,000.  These costs are based upon the number of false alarms and the direct and indirect costs in responding to and administering those alarms.  DEA administers the alarm license fee and false alarm fee programs.  Approximately 85% of DEA’s workload is on behalf of SPD, and the remaining 15% on behalf of SFD. 

Revenues.  The fee structure proposed in this legislation realigns anticipated revenues from collected fees with the City’s associated costs.  The fee structure proposed in this ordinance, will result in revenues of $1,836,000, directly corresponding with the total costs of the service.

Burglar alarm fee changes.  The City determined that the fees covering SPD costs and SFD costs should be kept separate.  To achieve approximate full cost recovery and continue the incentive to reduce false alarm dispatches, a following new annual fee schedule is proposed:

• False alarm fee:   $90 (current fee: $125).
• "Victor calls" fee (dispatched but cancelled prior to arrival):  $30 (current fee: $125).
• Burglar alarm license fee:  $10 (current fee:  $40). 

These fee levels will generate estimated revenues of $1,254,000, to offset SPD costs and associated DEA enforcement costs.

Fire alarm fee changes.  Currently, the fire alarm license fees are $320 for monitored alarms required by the Fire Code and $80 for monitored alarms not required by the Fire Code.  The proposed fee structure revises the current arrangement, creating three categories of annual fees:

• Large Structures (5 stories or 200,000 sq. ft. or greater):  $693.
• Medium Structures (3 to 4 stories and less than 200,000 sq.ft.):  $223.
• Other Structures (Less than 3 stories and less than 200,000 sq.ft.):  $76.

These fee levels will generate estimated revenues of $582,000 to offset SFD costs and associated DEA enforcement costs.  As an incentive to subscribers and licensees to work on reducing the number of false fire alarms, the SFD will absorb the cost of the first false alarm fee per license.  Accordingly, as the number of false alarms declines, the City will be in a position to reduce the fire alarm license fee. 

Appropriations:  This table should reflect appropriations that are a direct result of this legislation.  In the event that the project/ programs associated with this ordinance have appropriations that were, or will be, received because of previous or future legislation or budget actions, please provide details in the Notes section below.

Fund Name and Number	Department	Budget Control Level*	2005 Appropriation	2006 Anticipated Appropriation
TOTAL

Notes:  SPD anticipates adding an administrative position to support its False Alarm Unit.  The DEA anticipates adding a license and standards inspector position to reduce the backlog and maintain administration of the numerous licensees in the alarm license fee program.

Anticipated Revenue/Reimbursement: Resulting From This Legislation: This table should reflect revenues/reimbursements that are a direct result of this legislation.  In the event that the issues/projects associated with this ordinance/resolution have revenues or reimbursements that were, or will be, received because of previous or future legislation or budget actions, please provide details in the Notes section below the table.

Fund Name and Number	Department	Revenue Source	2005 Revenue *	2006 Revenue
General Subfund (00100)	DEA	Alarm License Fees	$1,906,000	$1,836,000
TOTAL			$1,906,000	$1,836,000

Notes:  *The City also expects 2004 back fee payments from a large monitoring company equaling approximately $1.2 million.

Total Regular Positions Created Or Abrogated Through This Legislation, Including FTE Impact:  This table should only reflect the actual number of positions created by this legislation  In the event that positions have been, or will be, created as a result of previous or future legislation or budget actions, please provide details in the Notes section below the table.

Position Title and Department*		Fund Name	Fund Number	Part-Time/ Full Time	2005 Positions	2005 FTE	2006 Positions**	2006 FTE**
	TOTAL

*   List each position separately

** 2006 positions and FTE are total 2006 position changes resulting from this legislation, not incremental changes. Therefore, under 2006, please be sure to include any continuing positions from 2005

Notes:  This ordinance does not create or abrogate positions.  SPD anticipates adding an administrative position to support its False Alarm Unit, and DEA anticipates adding one licenses and standards inspector position to reduce the backlog and maintain administration of the numerous licensees in the alarm license fee program.  These positions will be authorized through a separate ordinance. 

· Do positions sunset in the future?  (If yes, identify sunset date):

Not applicable.

Spending/Cash Flow: This table should be completed only in those cases where part or all of the funds authorized by this legislation will be spent in a different year than when they were appropriated (e.g., as in the case of certain grants and capital projects).  Details surrounding spending that will occur in future years should be provided in the Notes section below the table.

Fund Name and Number	Department	Budget Control Level*	2005 Expenditures	2006 Anticipated Expenditures
TOTAL

Notes:  Not applicable.

· What is the financial cost of not implementing the legislation?

Because the City is experiencing higher collections than forecasted, the revenue generated from under the current alarm fee structure will outpace the City’s costs to respond to false alarms and to enforce the alarm system regulatory provisions. 

· What are the possible alternatives to the legislation that could achieve the same or similar objectives?

None.

· Is the legislation subject to public hearing requirements:  No.

· Other Issues (including long-term implications of the legislation):

With the implementation of the revised legislation, there may be opposition from the alarm monitoring companies, and related market segments, with respect to the current processes involved in paying the license fee and tracking false alarms through their customer base.

Please list attachments to the fiscal note below:

Not applicable.