Item D
(
BOARD OF COUNTY COMMISSIONERS
AGENDA ITEM SUMMARY
Meeting Date: December 10. 2003
Division:
County Administrator
Bulk Item: Yes
No-L
Department: County Administrator
AGENDA ITEM WORDING:
Discussion of the response from Monroe County to the proposal by the Secretary of the Florida
Department of Community Affairs in reference to the Monroe County Comprehensive Plan and Work
Program.
ITEM BACKGROUND:
The County's progress in meeting the Comprehensive Plan and Work Program requirements is to be
evaluated by the Governor and Cabinet. The Secretary to the Department of Community Affairs has
identified that the County has made significant effort in meeting its obligations but has not made
substantial progress. The Secretary has made a presentation to the Board of County Commissioners
including a proposal to be recommended to the Governor and Cabinet as a way of meeting obligations
in the future. The Administrator will be providing to the Board of County Commissioners some
additional financial information prior to the December 10 meeting.
PREVIOUS RELEVANT BOCC ACTION:
Presentation by the Secretary of DCA at the November 19,2003 meeting and discussion by the Board
of County Commissioners and the scheduling of a special meeting on December 10. (This meeting was
previously discussed as being held on December 8.)
CONTRACT/AGREEMENT CHANGES:
N/A
STAFF RECOMMENDATIONS:
Discussion and preparation of a response to the Secretary of the Department of Community Affairs as
deemed appropriate by the Board of County Commissioners.
TOTAL COST:
N/A
BUDGETED: Yes
No
COST TO COUNTY:
N/A
SOURCE OF FUNDS:
REVENUE PRODUCING: Yes _ No _ AMOUNT PER MONTH_ Year
APPROVED BY: County Atty _ OMB/Purchasing _ Risk Management _
DIVISION DIRECTOR APPROVAL:
. ~r.
-1_ !a ~
James L. Roberts
DOCUMENTATION:
Included
x
To Follow
Not Required_
AGENDA ITEM #~
DISPOSITION:
MEMORANDUM
TO: Board of County Commissioners
FROM James L. Roberts
County Administrator
DATE: November 17,2003
SUBJECT: Recommendation for Wastewater Funding
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
On November 10, 2003, the Secretary of the Department of Community Affairs sent
the County Commission a recommendation for dealing with issues pertaining to the
implementation of the Comprehensive Plan and Work Program. On November 14, I sent to
you a review by Mr. McGarry concerning certain aspects of that proposal.
I also indicated to the County Commission that we would look at issues pertaining to
the proposal for a $200 million bond issue for wastewater facilities. One of the County's
major goals, and certainly of great importance to the Department of Community Affairs, is
implementation of a successful wastewater program. The County has been wrestling with the
question of how to implement the program and fund it.
If we look at the monies that have been connnitted, spent, and progrannned for a
variety of projects around the Keys (excluding Key West), it appears as though approximately
$200 million falls into one of those categories. That, of course, does not mean that all those
projects are implemented but rather that they are either implemented, planned or have specific
funding reserved. The list includes the public participation with the privately owned Stock
Island system, the north Key Largo utility, Conch Key, Bay Point, Big Coppitt ($6 million
progrannned in the infrastructure sales tax fund), the Key Largo Wastewater District, Layton,
Key Colony Beach and the two very large projects in Islamorada and Marathon. The State
and federal governments have provided significant contributions to those numbers through
State appropriations, FEMA grants and a $4.3 million grant for the Little Venice project.
What is it that remains to be done in unincorporated Monroe County? A staff review
of the Monroe County Wastewater Master Plan, with some inflation factor added, suggests
that there is slightly under $300 million left to program and implement in unincorporated
Monroe County. When the two categories are added together, the numbers are
approximately the $500,000,000 that was originally discussed when Congress passed the
authorization of $1 00 million.
Through a referendum, the voters of Monroe County approved the extension of the
one cent infrastructure sales tax. Some of those funds were to be utilized for wastewater
facilities. In fact, there is a category called "Physical Environment" which has a total from FY
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2005 through FY 2019 of $64 million. In addition, funding in FY 2003 and FY 2004 shows .
another $6 million which is identified for the proposed Big Coppitt system. Therefore, the .:
County has already made a COnlllntment of approximately $70 million over the next 16 years.
If the State follows through on its proposal to purchase environmentally sensitive lands, then
this sum of money could be totally dedicated to wastewater facilities in unincorporated
Monroe County.
Presently, the County anticipates approximately $10,500,000 per year of revenue.
There are some special categories for which revenue should be set aside with the great
majority of the money going for specific projects. In FY 2003, the Board of County
Connnissioners adopted a $21 million bond which is to be utilized primarily for public safety
facilities (fire stations, EMS facilities, courthouses, medical examiner facility, Upper Keys
government center). Payment on those bonds ranges from $1.8 million per year to up to $2
million per year by the end of 2019. The balance of the infrastructure sales tax fund has been
identified for projects.
How then can the County anticipate the funding of wastewater projects in
unincorporated Monroe County? First, it must be recognized that the wastewater authority
for unincorporated Monroe County is the Florida Keys Aqueduct Authority, with the
exception of Stock Island and the Key Largo Wastewater District. The FKAA has significant
borrowing capacity based on the revenue flows paid by the users of wastewater systems.
Already, the FKAA has proceeded through a court validation process pertaining to the
Marathon project and should have the ability to do so for other projects as required. At this
time, their borrowing limits are not known and would have to be detennined
However, there is an Interlocal Agreement in place between Monroe County and the
FKAA in reference to cooperating on development of wastewater systems. That Agreement
is that the County will provide or work with the FKAA in locating and purchasing property
for wastewater plants and in assisting with some of the up front costs leading to the FKAA's
implementation of systems. If the Board of County Connnissioners wishes to pursue a
commitment to funding a specific amount by the County, there should be research and an
agreement with the Florida Keys Aqueduct Authority concerning nmtual responsibilities and
financial obligations. One question for the County would be whether the currently allocated
amount of infrastructure sales tax funds for wastewater projects is sufficient and available
according to a reasonable timetable, even though it will not all be available prior to 2010. If
the answer is that funding must be accelerated, then the County Connnission can move toward
a debt obligation using the infrastructure sales tax funds as support.
In August of 2003, Public Financial Management presented to the County a debt
capacity report which was geared toward providing funding for the purchase of
environmentally sensitive lands. If the State proposal is to take on most of that responsibility,
the debt capacity report can be viewed as a potential resource for the development of
wastewater treatment facilities. Once again, the County should consider the nmtual and
relative participation of the FKAA. -
2
PFM analyzed a wide variety of potential funding sources. After review and .
consideration of the use of those sources and the difficulties associated especially with -:
utilization of ad valorem millage, it seemed that the best source of funding remains the
infrastructure sales tax. PFM concluded that for any meaningful amount to be bonded from
this source there would have to be a readjustment of other projects within the program
Depending upon interest rates and further analytical work to be done, it is possible that there
could be a total of $50 to $60 million of debt, at lease two-thirds of which would be available
for wastewater facilities.
Therefore, after consultation and analysis with the FKAA, the County would be in a
position to live up to its obligation as a partner with the FKAA in implementing a wide
ranging wastewater program. One of the questions is how rapidly an overall program can be
implemented in conjunction with the State's mandate of201O requirements.
Therefore, on a continuing basis over the next 15 years, the County has approximately
$70 million worth of infrastructure sales tax funds. If there is a need to accelerate the
availability of those funds, the County can use that revenue flow to support a bond issue. In
addition, the County has additional capacity within the local infrastructure sales tax fund over
the next 15 years to make additional funds available should it be necessary to do so.
It is the Administrator's feeling that the $200 million bond issue discussed in the
Secretary's letter of November 10, 2003, is an attempt to have a cormnitment for most, ifnot
all, of the actual cost for wastewater facilities. It basically suggests that Monroe County
should be the primary funding agent for all such facilities in unincorporated Monroe County.
The County has made substantial policy decisions in reference to the utilization of its funding
and has supported a wide variety of projects. It is reasonable to assume that the County will
continue such a level of support in conjunction with its partners in the state and federal
governments and in the Florida Keys. In an effort to assure that there not be an onerous
burden placed upon the users of new wastewater facilities, the County's policy is to continue
to strive to reduce those impacts wherever possible.
Therefore, the Administration's recommendation m reference to this Issue IS as
follows:
1. Work with the Florida Keys Aqueduct Authority to determine relative financing
abilities and a cooperative way to accelerate and implement the overall
wastewater program for the County;
2. Continue to use the infrastructure sales tax revenue stream to support
wastewater treatment efforts throughout unincorporated Monroe County;
3. Utilize that revenue stream as support for bonding obligations should it be
necessary or prudent to accelerate the availability of funding;
3
4. If requested by the State, pass a resolution that incorporates these steps and any .
others detemrined appropriate by the Board of County Commissioners to .:
accent the County's continuing connnitment to completing its wastewater
treatment program.
JLR: dlf
Ene.
Cc: Richard Collins
Tim McGarry
Jim Reynolds, FKAA
Jim Quinn, DCA
Hal Canary, PFM
:J~~
James L. Roberts
County Administrator
4
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Nov IU ZUUJ 1~:4U
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STATE OF FLORIDA
DEPARTMENT OF COMMUNITY AFFAIRS
The Honorable Dixie Spehar, Mayor
Key West
Suite 102, 500 Whitehead Street
Key West Florida
"Dedicated to making Florida a better place ~o call home"
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Dear Mayor Spehar I
Last week J visited with you and other memh= ofthe Montoe cJunty Board of Commissioners
and discussed a partnership proposal to begin implementation of$e work program associated
with the Florida Keys Protection Act. The purpose of this letter ii' to formally submit to you the
specific elements of the proposal.
J discussed with you that the .IUUW report that will he submitted 10 the Govemor and Cabinet
sitting as the Administration Commission later this month will show that Monroe County has not
made the required progress in implementing the work program. I then proposed to you a
partnership- With certain commitments on behalf of the county d municipal governments, the
partnership I outlined to you would commit state funding from s era! revenue sources to
implement the goals of the work program. Additionally, the p ership could result in an
increase in the :;tnnual Rate of Growth Allocation. Our partners p would entail the following
actions from Monroe County.
COLLEEN CASTILLE
Sec18ta'Y
.lea BUSH
Gollernor
November 10.2003
On November 19, 2003. the MOIU'oe County Board of County C1mmissioners would adopt a
resolution committing to the items listed below: I
1) ADOPT FUNDING MECH.Al\l'lSM FOR W ASTEWi<<\TER
Monroe County would prepare and adopt a $200 million ~ond issue for wastewater
facilities outlined in the Monroe County Sanitary WasteJ.ater Master Plan adopted in
June of 2000. I have suggested that a portion of the I.ejt infrastructure sales tax, which
was approved by the people of Monroe County be used' part for wastewater projects.
Other sources would be acceptable, however, I believe at current revenue sources exist
without increasing taxes. I
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2) PROTECT UPLAND HABITAT I
Monroe County would protect its upland habitat on an i*erim basis by A) specifying that
the adopted Conservation And Natural Areas Map be designated as protected species
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2555 SHUMARD OAK BOULEVARD . TALLAHASSEE, FLORIDA 32399-2100
Phone; 650.488.6466/Suncom 278.8466 FAX: 850.9121.0781/Suncom 291.0761
Internet address: htto:l/www dca.st*le.flus
I
CRITICAl.. STATIi CONCERN FIELD OFFICE COMMUNITY PlNINING EMEftGENCV MAHA(jE~NT
27!l& 0...-_ HoQI\WaY. Sui.. 212 26SS Slo""",'G O...Iloul_'O z556 SIlu".rd Oak e.,....vaftl
~"'on. fl. 33050.2227 :.=~~;~i 3Z3g~2'OO T::~~; 323~21OO
I
HOUSlNO & COMMUNITY DEVELOPIlIENT
:25~5 SI1u_'c Oak BcWell8'O
T..Iaha..... n 323!19.,2100
(a50)4ll&-7lIS6
NOY IU lUUJ IU:41
,.. u"
The Honorable Dixie Spehar
November 1 0, 2003
Page Two
habitat thereby automatically applying negative points to posed development in these
areas and B) prohibiting the award of positive points for de elopment in the Conservation
and Natural Areas through lot donation aT aggregation.
3) PARTICIPATE AND COMMIT TOAHURRlCANE VACUATIONEXERCISE
AND AGREE TO A JOINT CITY/COUNTY PLAN
Monroe County would join with the Department and other elevant agencies in a
comprehensive hurricane exercise scheduled for May, 200 thereby developing, testing
and agreeing to a joint evacuation plan for the Florida Key -
The state's commitment would entail the following items from th Department ofCooununity
Affairs and our other state agencies involved in activities in the F1 rida Keys:
1) CONSERV ATlON L~'ID ACQUISITION
The Department will work with two state land acquisition pro in an effort to secure
funds for the Florida Keys for land acquisition for habitat prot ction. The Florida Forever
Program within the Department of Environmental Protection auld provide up to $93
million over three years. Additionally, I will work with Gov or Bush to secure a budget
recommendation for the appropriation of $20 million in unsp t Preservation 2000 monies
CWTetltly in the Department of Community Affairs budget.
2) STORMW ATER MANAGEMENT
Per the recommendation of the Monroe County Stonnwater anagement Master Plan
(adopted August, 2001), the Florida Department of Trans po lion has coIIl1Ilirted to
incorporate the Storrnwater retrofit into their schedule afro maintenance of U.S. Highway
1. Additionally, the South Florida Water Management Distri has committed to funding
stonnwater management projects which I would suggest be u cd in other projects not
associated with U.S. 1.
3) AFFORDABLE HOUSING LAND ACQUISITION DEVELOPMENT
CWTently there are programs I.Ulder the Florida Housing F' ce Corporation (a housing
partner of DCA) that provides bonds and tax credits for the elopmcnt of workforce
housing. There is a special set-aside for developments in th Florida Keys. However, there
are two reasons why few Keys developments get proposed: ) the land costs are excessively
high and 2) there are not enough affordable housing ROGO 'ts available to make more
than one financially feasible development a year if at all. erefore, I would propose seeking
available monies from the Florida Housing Finance Corpora ion for the acquisition ofland
for development of workforce housing that would remain w rkforce housing in perpetuity.
The Department will request that Governor Jeb Bush and m bers of the Cabinet give
Monroe County additional units for Affordable Housing for the workforce as long as Monroe
County assures us that these additional units will remain affi rdable in perpetuity. We suggest
that the County use a land trust to acquire the land to keep e units affordable.-
NOV IU lUUJ 10;41
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The Honorable Dixie Spehar
November 1 O~ 2003
Page Three
As a beginning discussion item, I would recommend that the C unty receive 117 units that
were not allocated over the last three years, and that the COWl'S annual allocation be
increased from 158 units (126 market rate and 32 affordable) t 197 units (126 market rate
and 71 affordable).
The people at the Department of Community Affairs share the con ems of the citizens of the
Florida Keys about the future of your economy and enviromnent d I hope that you see this
proposed partnership as the means to work together to solve many of the most pressing issues
facing this unique archipelago.
I would respectfully request your indulgence in my making this PI} posal to you at your meeting
oftbe Monroe COWlty Commission on the 19th of November. PIe e call me at 850-488-8466 if
you bave any questions related to this proposal
Yours truly,
Colleen M Castille
Secretary
Cc: Governor Bush
Members of the Administration Commission
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County of Monroe
Growth Management Division
2798 Overseas Highway
Suite 410
Marathon, Florida 33050
Voice: 305.289. 2500
FAX: 305.289.2536
Board of County Commissioners
Mayor Dixie Spehar, District 1
Mayor Pro Tern Murray Nelson,
District 5
Corom. Charles "Sonny" McCoy,
District 3
Corom. George Neugent, District 2
Corom. David Rice, District 4
MEMORANDUM
TO: James L. Roberts
County Administrator
FROM: Timothy 1. McGarry, AICP
Director of Growth Management
DATE: November 12,2003
SUBJECT: Staff Evaluation of DCA Proposal for
Protection ofUpIand Habitat on an Interim Basis
DCA Proposal
On an interim basis, Secretary Castille is asking the BOCC to:
A) Specify that the adopted Conservation and Natural Areas Maps be designated as
protected species habitat thereby automatically applying negative points to proposed
development in these areas; and
B) Prohibit the award of positive points for development in these Conservation and
Natural Areas through lot donation or aggregation.
Staff Evaluation
This proposal reflects DCA's concerns that further fragmentation and elimination of significant
upland habitat will continue to take place while the County is preparing and adopting necessary
amendments to its Comprehensive Plan and Land Development Regulations to implement the
recormnendations of the Florida Keys Carrying Capacity and Goal 105 of the Comprehensive Plan.
It should be noted that. the Board can not implement this proposal through a simple resolution, it
will take at a minimum an ordinance.
Although some clarification is required on how many negative points such properties would be
scored under ROGO, this proposal is similar to the alternative interim development ordinance
RESULTS OF AN AGREEMENT WITH DCA
THIS AGREEMENT WILL:
1. Provide $130 million for wastewater, environmentally sensitive lands,
and workforce housing from DCA
2. Provide $130 million for wastewater, environmentally sensitive lands
and workforce housing from Monroe County
3. Provide the means for the State of Florida and Monroe County to move
forward and still allow either party not to participate should the mutual
agreement not be fulfilled
4. Provide $20 million for land purchases of workforce housing over the
next two years
5. Provide a pledge of $80 million for wastewater over the next 6 years
6. Return 180 market rate permits each year for Monroe County
7. Provide 300 out-of-ROGO permits for year 2004 for workforce housing
8. Provide up front cesspit credits
9. Rescind the notice of violation issued by the State
Murray E. Nelson, Mayor
December 10, 2003
DCA WILL PROVIDE:
1. 300 RaGa allocations for workforce housing
2. Provide $10 million for purchase of workforce building sites in 2004
3. Provide $10 million for wastewater as a match for County bonding $20
million in June 2004
4. Provide $20 million in State/Fed funds as a match for County's $20
million bond in June 2005
5. Provide 180 market rate permits per year
6. Provide $93 million for purchase of environmentally sensitive lands
7. Any changes to RaGa that could be construed as a taking would be
initiated by DCA
8. Provide up front cesspit credits for the building of new homes
9. DCA will report substantial progress on 28-20 work plan
10. Rescind the Notice of Violation issued to Monroe County
MONROE COUNTY WILL:
1. Bond $20 million of infrastructure funds for wastewater as a match for
a $10 million grant from the State
2. Provide a pledge to expend $80 million collected from connection fees
to expand wastewater projects using the connection fee funds
3. Provide a second $20 million bond on infrastructure funds to match a
Federal/State match of $20 million in June of 2005
4. Bond $10 million of Land Authority revenue (~ penny of the tourist
impact tax) to buy workforce housing land in 2004
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proposed by the staff in July as an alternative to a moratorium. This alternative interim
development ordinance, which would have assigned an automatic ten negative points to any lots or
parcels within the Conservation and Natural Areas, was considered and rejected by the Board.
A significant difference is that under the DCA proposal, property owners within the Conservation
and Natural Areas would not be able to receive any points for lot donation under ROGO. [As
directed by the Board in September, the staff is already preparing and processing amendments to the
Land Development Regulations, that would eliminate these properties from receiving points for lot
aggregation.] In effect, the eIimination of any points for lot donation and the automatic assignment
of negative points would place a moratorium on any lands within the Conservation and Natural
Areas, as these properties would be unable to compete under ROGO.
If the Board wants to support this proposal for a "temporary" moratorium, it may want to consider
making its support contingent upon commitments from DCA for the following:
o Taking the lead or, at least becoming an equal partner with the County in the legal
defense of any taking claims resulting from such a moratorium and other taking
claims filed based on mandates placed upon Monroe County;
o Assisting the County to secure State financial resources and legislation to defend
against and cover such claims; and,
o Withdrawing or at least placing on hold, its Notice of Violation (Case No. DCA03-
NOV-004) filed against the County concerning the administration of its habitat
protection regulations.
Unfortunately, the "quid pro quo" aspects of the DCA proposal requires the County to move
forward with specific actions with no guarantees that the DCA Secretary can deliver on her
promises, especially as they are dependent upon favorable action from the Governor and Cabinet
and/or Florida Legislature. Therefore, a possible alternative approach would be for the County to
enter into a carefully crafted Section 380.032, F.S., agreement with DCA to implement the
moratorium which would make that agency a party to any legal challenges and taking claims.
An alternative approach to a moratorium that could also be considered through a Section 380.032
agreement would be changing the ROGO scoring to assign a "significant" amount of positive points
to any application outside of the Conservation and Natural Areas, rather than assigning "negative"
points to applications within those areas.
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BOARD OF COUNTY COMMISSIONERS
AGENDA ITEM SUMMARY
Meeting Date: August 20. 2003
Divisiory.
County Adririnistratot:
Bulk Item: Yes No X Department: County Administrator
AGENDA ITEM WORDING:
Presentation of a Debt Capacity Report from Public Financial Management, the County's financial
advisor and action by the Board of County Cormnissioners, as appropriate.
ITEM BACKGROUND:
At the meeting of the Board of County Cormnissioners in July of 2003, in conjunction with the
discussion of the acquisition of environmental sensitive lands, the BOCC asked for a report concerning
the availability of funds for either direct purchase or bonding of the cost of the acquisition of such
environmentally sensitive lands. The Administrator and staff have worked with Public Financial
Management to review the options available. In addition, there is the possibility of utilizing, on a one
time basis, existing funds from the Land Authority. The reports will be completed and submitted to the
Cormnission prior to the August meeting.
PREVIOUS RELEVANT BOCC ACTION:
As above.
CONTRACT/AGREEMENT CHANGES:
N/A
STAFF RECOMMENDATIONS:
Discussion by the Board of County Connrussioners and approval to proceed, as appropriate.
TOTAL COST:
Unknown
BUDGETED: Yes
No
COST TO COUNTY:
Unknown
SOURCE OF FUNDS:
REVENUE PRODUCING: Yes
No
AMOUNT PER MONTH_ Year
APPROVED BY: County Atty _ OMB/Purchasing -X- Risk Management _
DIVISION DIRECTOR APPROVAL:
-~~~
James L. Roberts
DOCUMENTATION:
Included ----A-
To Follow
Not Required_
DISPOSITION:
AGENDA ITEM #
-rJ
DEBT CAPACITY REPORT
In conjunction with consideration of the potential acquisition of
environmentally sensitive lands (ESl), the Board of County Commissioners
instructed the Administration to have a Debt Capacity Report prepared for the
August, 2003 BOCC Meeting. The purpose was to evaluate the potential funding
available, either for direct acquisitions or for debt financing for the purpose of
purchasing ESL.
Attached to this memorandum are two documents. The first is a
memorandum from the Executive Director of the Land Authority in reference to
the availability of Land Authority ROGO reserves. The second is the report as
prepared by Public Financial Management. In summary the condusions reached
are as follows:
LAND AUTHORITY
The Executive Director has identified approximately $3.4 million in ROGO
reserves. This amount, or part of it, could be available to assist the County in its
ESl purchases. The funds are not suitable for debt financing. If the Board of
County Commissioners/Land Authority chooses to utilize these funds, it may be
necessary to have an amendment to the Comprehensive Plan. The Board should
also be aware that there are other potential uses for these funds whi~h may be
necessary due to requirements for administrative relief for ROGO applicants and
the resolution of litigation.
LOCAL GOVERNMENT INFRASTRUCTURE SALES SURTAX (FUND 304)
This one percent sales surtax is utilized to support the capital program for
the County. It is presently programmed through 2019. Use of these funds is
appropriate for the intended purpose; however, use of these funds for the
support of long range debt would require the elimination of anticipated and
programmed capital projects. PFM suggests that by utilizing approximately $5
million per year for fifteen years and wrapping the existing debt ($21,455,000)
into the total package, there could be approximately $56 million of new debt
available for ESl.
GUARANTEED ENTInEMENT
These funds are sent to the County under the Florida Revenue Sharing Act
of 1972 through a formula. These funds support other general government
services. The County would see an addition of only about $360,000 per year
available for debt support; however, using these funds for that Durpose would
require the raising of ad valorem taxes to replace them in the budget.
HALF CENT SALES TAX
Once again this is revenue-shared from the State by formula. The
approximate $5.3 million projected to be received would produce about $30
million in bond capacity; however, once again these funds are utilized to support
the County budget and dedicating them to debt support would require the raising
of ad valorem taxes.
TOURIST IMPACf TAXES
An approximate $1 million per year would not produce a significant level
of debt capadty even if it could be utilized. These funds are presently included
in the Land Authority budget.
FOUR CENT GAS TAX (NEW PROPOSAL)
One idea that has recently surfaced is the possibility of a legislative
change to allow the County to impose a four cent additional tax on each gallon
of gasoline sold. There would need to be a County-wide referendum in order for
this to occur or an Ordinance adopted by the Board of County Commissioners.
The theory is that the legislative change would allow this to occur only for areas
of Critical State Concern. Four cents would produce approximately $2.4 million
per year and support a $17 million/15 year debt capacity.
STATE PARK SURCHARGES
The surcharges charged by the Department of Environmental Protection
and parks in the County produces for the land Authority approximately $350,000
per year. This would produce only a $2.2 million debt capacity. Funds can be
used to acquire ESL or affordable housing property. These revenues are also
utilized to support the General Fund general government operations.
COVENANT TO BUDGET AND APPROPRIATE (CBA)
CBA basically means the utilization of the County's non ad valorem
revenues (where allowable) to support debt. An analysis indicates that there
may be approximately $40 million of those funds available after reduction of
certain government budgeted expenditures; however. that money is dedicated to
support various aspects of the County budget and would have to be reolaced
(probably by ad valorem taxes) if utilized for ESL.
AD VALOREM REVENUES
The County is able to use ad valorem revenues to support debt. In
essence, general obligation bonds are issued and, if directly secured by ad
valorem millage, would require a voter-approved referendum. PFM has done an
analysis of one mill of increased ad valorem revenue and one quarter mill of
increased ad valorem revenue. Their numbers are conservative and suggest one
mill would produce $11 million per year based on Fiscal Year 2002 and one
quarter mill would produce nearly $3 million per year (the actual amounts would
be slightly higher based upon new property values). These would produce
substantial debt financing opportunities In the range of $60 million (one mill) or
approximately $47 million (one quarter mill). The issue here is the raising of
additional millage and the possible need to take the question to referendum.
,.
Please review the EXECUTIVE SUMMARY In the PFM Report. That page
summarizes PFM's findings and feelings overall in reference to the potential for
debt financing. The last bullet in the Summary suggests that, if the County Is to
proceed with the issuance of debt for ESL, that utilizing a millage approach
would seem to be the most prudent at this time.
MONROE COUNTY LAND AUTHORITY
12()() THUr-MN AV~:NlJl'. Sun"!' 2117 · KFY Wrc;r, fl.IIIWM 33040
PHON" (.l05) 29!i ,f) I XII . FAX (:\O~;) 2t)5-S Ull
MEMORANDUM
TO:
FROM:
James L. Roberts, County Administrator
Mark J. Rosch, Executive Director M ~
Monroe County Land Authority ~
DATE: August 8, 2003
SUBJECT: land Authority ROGO Reserve
Pursuant to Policy 101.6.2 of the Monroe County Year 2010 Comprehensive Plan, the Monroe
County Land Authority has established a budgetary reserve tor the purchase at property to
provide administrative relief to ROGO applicants. Since FY 93, the land Authority has set aside
35% of its recurring land acquisition revenue into this reserve. To date there have been no
expenditures from this reserve and thus the balance has grown over the years to its current
level of $3.4 million. The ROGO reserve in the proposed FY 04 budget is $3.8 million.
The County's ROGO ordinance has been in effect for 11 years. To date the Land Authority has
purchased property from six ROGO administrative relief applicants at a total cost of
approximately $800,000. All but $12,000 of this total was paid for with State funds that are no
longer available (Preservation 2000 funds appropriated to the Land Authority by the FlorIda
Legislature) .
The ROGO ordinance creates a contingent liability that is difficult to forecast. The variables
include: 1) how many property owners will choose to enter the ROGO competition; 2) how many
ROGO allocations will be available for the County to issue; 3) which applicants will compete
unsuccessfully for four years and become eligible for administrative relief; 4) which of the
eligible applicants will choose to apply for administrative relief; 5) what form of administrative
relief the Board will choose to offer; 6} how many eligible applicants will be willing sellers; and 7)
the purchase price for a given property.
As of the most recent ROGO ranking approved by the County Planning Commission (April 14,
2003), there were 305 applications denied a ROGO allocation Of these 305. 48 have already
been in ROGO for 4 years and have either declined the Land Authority's purchase offer or have
not applied for administrative relief. Depending on the outcome of future rankings, a maximum
of 23 additional applications may have been in ROGO for 4 years by this time next yearo
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What bUdgetary impact will this situation have? It is impossible to know for sure. After 11
years, the impact has only been $800,000. Assuming an average assessed value of $45,000
per parcel, the assessed value of the 48 "4-year aids" is approximately $2.1 million. By this time
next year if the 23 "3-year aIds" are still in ROGO, the estimated assessed value of potential
administrative relief properties will be $3.2 million. The estimated assessed value of all 305
applications i8 $13.7 million. These figures are only rough estimates, but they illustrate the
potential order of magnitude involved and the high degree of uncertainty.
The Land Authority's ROGO reserve was established pursuant to Policy 101.6.2 of the
Comprehensive Plan. Should the Board wish to use a portion of the reserve for acquisitions
outside of the ROGO administrative relief process, the Board should proceed by directing staff
to initiate a plan amendment.
2
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7.
Potential Development Credits (PDCs) . An applicant may have the option of
receiving positive points, called Potential Development Credits (PUCs), for
transferring dcvelop,"cnt righlll awa)' frol11 " ~cllder site tor development
proposed on an eligible receiver site, as specitied in Objec:tivc 101.13 and related
policies.
(:
PoUey 10105.8
The Residential Permit Allocation Ordinance shall be amended to award a graduated
scale of positive points to dwelling units which are proposed for lots within legally
planed, recorded subdivisions, which are served by existing illfrastruclure, including at a
minimum potable water, electricity and paved roadways. Maximum points shall be
awarded for those projects proposed within planed subdivisions which IU'C 67% to 100%
built out; fewer points will be awarded for proj~ts proposed for subdivisions 33% - 61%
built out; and minimum points shall be awarded for projects proposed for subdivisions 0-
)3% built out. The percentage of build out shall be based upon updated, accurate data
from the County's Geographic Information Sys":m (GIS). Thc Ordinance shall be
amended when the pertinent information is readily avuilable on the County's GIS.
Polic:y 101.5.9
Monroe County shall allow for thc= development of multiple-family units within the
Permit Allocation System. If a project ranks high enough ill the Point Systeln for a
portion of the development to recc.:ive an allocation award, but the project incJudes more
units than are available during an allocation period, the entire project may receive
allocation awards if the excess allocation is reduced trom the next allo<:lltion period(s).
Multi-family affordable hou:>>i"8 or elderly housing projects lIhall be given priority.
(j
Polie,101.5.10
Monroe Counly may develop a program, called Transfer of ROGO Exemption (TRE),
chat would allow tor the transfer ofT-site of dwelling unit:l, hotel rooms, I'C(;reacional
vchicle spaces and mobile homes to another site in thc same ROGO sub-area, provided
that they arc lawfully existing and can be accounted for in the County's hurricane
evacuation model In addition, the new site would not be eligible for any negative
environn,entAl points under ROGO with the execl)tion of those properties designated
Residential High. When a multiple-family housing development utilizes a TRE, any other
units in that saine project that are pennined through the ROGO process may be eligible
for minor positive points on a one for one basis.
Obieetin 101.6
Monroe County shall expand the Monroe County Land Authority acquisition program co provide
for the purchase of land from property owners who have not been awarded building pennit
allocations in the Permit Allocation System.
Policy 101.6.&
MOllroc Coullty shilll. upon D prol,erty owncr's requc!\t, purchnse property for fair market
value ur pemlit the minimum reilsonable economic woe of the property, if the property
owner meets th~ following conditions; .
I.
they hilv~ been d~l\ied an allocation award for t'lllr slIccclisivc years in t1~e Penn it
Allocation System; :
.heir propus~d oc:vdoplllcnt othcrwl!\c meets i111 applicable county, s~te, Dnd
federal regulations; ;
I
Policy 00C41l"."1 . MonrM County Vear 20tO Comprehe"el"e PI.n
I
(
2.
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Iheir allllcallUn .ppli~aliun I1a5 nul been withdrawn;
4. Ihey have: complied wilh all Ihe rC'llIlrcment!'i or the Permit Allocatitln Syslem;
and
S. they folluw the procedures for admllustr.tive relief contained in the Dwelling
Unit Allocittion Ordinance,
A~ u!\ed in this Policy, "minimum re;,sonable economic use" shall me.,n, a!'l applied to
any residentially zoned lot of record which was buildable immediately prior III the
effeclive elate of the Plan, no less than a singl~.r.mily residence. "fair market value"
shall be an amount which is no less than ad valorem valuation in the Monroe Cuunty
Real Property Tax Roll for the year 1992.
Policy 101.6.2
By fiscal year 1998, the Monroe County l.afld Authority shall dedicate a minimum of 3S
percent of its annual budget each year for 1I.,e I)urpose of acquiring land from qualified
property uwners as defined by Policy 101.6.1. Funds accumulated from this suurce shall
be reserved for the acquisition of land from (IUalified property owners.
Policy 101.6.3
Dy January 4, 1998, Monroe County !:hall identify potential funding sources and seek
funding from state, federal, andlor private sources to be used for acquisition of land from
qualified property owners as defined by Policy 101.6.1.
Poli~y 101.6.4
The Cuunty will coordinate with DCA to ensure that DCA continues to support enhanced
land acquisition cfforts in the Keys biSSCd on needs identified in this comprehensive plan.
This courdination shall ensure continued support of state ac:q"iliition efforts under CARL,
Preservation 2000 ;lnd the Florida Communities Tnlst programs. The County and the
Department will also support appropriate legislative changes which will have the effect
of enhancing the I.and Authority efforts throughout the Count)', and the South Florida
Water Management District's acquisitions on Big Pine Key. Similarly, cooperation will
continue with private acquisition efforts, such as The Nature Conservancy and the
Florida Land and Sea Trust.
Policy 101.6.5
Monroe County shall anflually compile a list prioritizing the lands requested for County
acquisition due to the Permit Allocation System. n,e lands of the property owners who
meet the criteria ill Policy 101.6.1 shall be ranked ace()rding to:
I. the en"irclulIlcntal sensitivity of the vegetative habitat, marine resources, and impacts
to the quality of near shore waters as specified by the ranking in the Environment~"
DeSign Criteria section of the l.and Development Regulations;
2. whelher the property is in known, probable, and/or potent;;,1 habit:u for one or more
threatened and/or endangered speCies, as indiclltcll on the most recent I'rntected
Arumal M;,ps; ilnd
OOlls. Obllc:bvlI .nd Polociu . Futll'e La",", Use
3.1.31
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MONROE COUNTY, FLORIDA
Debt Capacity Report
August 20, 2003
Public Financial Management, Inc.
10100 Deer Run Farms Road
Suite 201
Fort Myers, FL 33912
.'--'~\":f~. ,~"':',:~-;.;\"'3!'T~:,',~!," -, -..,;-
Monroe County Debt Capacity Report
August 20, 2003
EXECUTIVE SUMMARY
. Public Financial Management, Inc. ("PFM") has examined Monroe County's existing
revenue sources and determined the estimated debt capacity of each to aid in the funding of
environmentally sensitive land ("ESL") purchases.
. The County has the option of pledging either non-ad valorem or ad valorem revenues.
. The County's Guaranteed Entitlement, Half-Cent Sales Tax, Infrastructure Sales Surtax
(Fund 304) and Covenant to Budget and Appropriate revenues have the capacity to secure
bonded debt on a stand-alone basis. However, these revenues are currently tied to long-term
capital projects and operational expenses. Over reliance on these revenues for bonded debt
service will result in an increase of ad valorem millage in order to balance the County's
budget. Use of Fund 304 to pay debt service will result in the elimination of anticipated
capital projects.
. Florida statutory limit for ad valorem millage is 10 mills. The County has proposed an ad
valorem millage of 4.4756 mills. A slight millage increase for operational expenses would
not require voter approval. However, the issuance of bonded debt secured by ad valorem tax
revenues would require a voter-approved referendum.
. The County's total assessed value has grown by an average of approximately 7.8 percent
over the past five fiscal years.
· ~ mill ad valorem tax revenues will generate an average of $5.4 million in revenues over the
next 15 years at an assumed 7.8 growth percentage. This is sufficient to support a $47
million ESL financing.
. PFM recommends that the County proceed with an issuance of Limited General Obligation
(~mill ad valorem tax) Bonds, Series 2003, to support the acquisition ofESL.
Public Financial Management
Page J
Monroe County Debt Capacity Report
August 20, 2003
I. INTRODUCTION
Public Financial Management, Inc. ("PFM"), as Financial Advisor to Monroe County ("County"),
has examined the County's existing revenue sources and determined the estimated debt capacity of
each to aid in the funding of environmentally sensitive land ("ESL") purchases.
The premise underlying debt financing of ESL purchases is that the rate of price inflation on land in
the Florida Keys greatly exceeds the interest rate on municipal bonds under almost any imaginable
scenario. In addition, such unique lands may be spoiled beyond reasonable restoration by the time
pay-as-you-go ("P A YGO") financing becomes available to save a particular site. Thus, both cost
savings and urgency justify issuance of municipal bonds for ESL purchases.
This Debt Capacity Report summarizes the County's existing debt and available revenue streams
that could support debt service payments, identifies existing commitments of those revenues and
calculates the par amount of bonds that could be issued within the constraint of the annual average
debt service computed. A key element in that calculation is "coverage," the extent to which pledged
revenues must exceed related debt service. More volatile, less reliable revenue streams suggest
higher coverage ratios are needed to attain investment grade ratings and qualify for bond insurance.
PFM recognizes the County maintains a balanced budget; that is, every dollar of revenue is
committed to an appropriation for operations, capital expenditures or debt service. A new program,
such as ESL purchases, requires reallocation of existing revenues, increases in rates or appropriation
of revenue growth.
II. EXISTING BONDED DEBT: GENERAL FUND
The County may use its General Fund revenues to secure an ESL financing. As of August 2003, the
County has limited General Fund bonded debt outstanding. The following page includes a
breakdown of the County's General Fund bonded debt service, including securities, existing
covenants and other details.
Public Financial Management
Page 2
Monroe County Debt Capacity Report
1 ''-lit'
\ Ill' ltlll I
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Maturity
2003
2004
2005
2006
2007
2008
l~:--ut..'
.\nllII1tl1
Datcel
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Maturity
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
_ ."-, "'~~~~:...""!':::;'-::i~~-"'l-": ",,:,:._';to. .....}~~
August 20, 2003
Guaranteed Entitlement Revenue Refunding Note, Series 2002
3,495,144
12/19/2002
12/19/2003
N/A
Guaranteed Entitlment
SunTmst
No Prepayment Penalty
1.05X Pledged Revenues
N/A
Principal
541,359
556,045
571,254
590,663
609,146
626,677
Coupon
2.96%
2.96%
2.96%
2.96%
2.96%
2.96%
Interest
103,456
87,432
70,973
54,064
36,580
18,550
Debt Service
644,815
643,477
642,227
644,727
645,727
645,227
Infrastmctme Sales Surtax Revenue Bonds, Series 2003
21,455,000
3/4/2003
3/26/2003
MBIA
A3/A
One Cent Infrastmcture Sales Surtax
William R. Hough & Company
10 years @ par
1.30X Pledged Revenues
N/A
Principal
1,105,000
1,145,000
1,170,000
1,205,000
1,240,000
1,285,000
1,335,000
1,385,000
1,445,000
1,505,000
1,575,000
1,645,000
1,720,000
1,805,000
1,890,000
Coupon
2.00%
2.00%
2.00%
2.00%
2.40%
2.75%
3.00%
3.25%
3.40%
3.50%
3.60%
3.70%
3.75%
4.00%
4.00%
III. EXISTING REVENUES SOURCES
Interest
683,696
652,230
629,330
605,930
581,830
552,070
516,733
476,683
431,670
382,540
329,865
273,165
212,300
147,800
75,600
Debt Service
1,788,696
1,797,230
1,799,330
1,810,930
1,821,830
1,837,070
1,851,733
1,861,683
1,876,670
1,887,540
1,904,865
1,918,165
1,932,300
1,952,800
1,965,600
PFM has included the following section summarizing the existing County revenue sources that may
be used to secure a financing of ESL. The revenue amounts are based upon the County's FY2004
Proposed Budget and FY2002 CAFR. While the County's low level of indebtedness may indicate
Public Financial Management
Page 3
Monroe County Debt Capacity Report
August 20, 2003
that there is capacity to issue future debt on a senior lien basis (i.e. bondholders that have achieved
"senior-lien" status on a particular County revenue stream will have a prior claim to that revenue),
only a fraction of the County's annual revenues are actually available to support debt serviCe as
these funds will be used for operational expenses, P A YGO capital expenditures and the possible
issuance of additional bonded debt down the road.
Local Government Infrastructure Sales Surtax (Fund 304)- The Local Government
Infrastructure Surtax is levied at one cent pursuant to an ordinance enacted by a majority vote of the
County's governing body and approved by vote in a countywide referendum. Generally, the
proceeds of this revenue must be expended to finance, plan, and construct infrastructure; to acquire
land for public recreation or conservation or protection of natural resources.
In 1998, the infrastructure surtax was voted in to secure the Infrastructure Sales Surtax Bonds,
Series 1998. In 2000, the County's share of this tax declined due to the incorporation of Marathon.
Currently, the County has voted in the infrastructure surtax to secure the Infrastructure Sales Surtax
Bonds, Series 2003 ($21,455,000). This tax expires in 2018.
Summary of Revenue
. FY2004 Proposed Revenues: $10,500,000
. Bonded Debt Pledged to Revenue: Infrastructure Sales Surtax Bonds, Series 2003
. Average Annual Debt Pledged to Revenue: $1.8 million/year
. Use of Additional (Unused) Revenues: Funding of the Monroe County Board Capital
Plan, including dedicated amounts for wastewater, solid waste and land acquisition
· Use of these funds for support of debt would require the elimination of anticipated
capital projects
Guaranteed Entitlement-The Florida Revenue Sharing Act of 1972 was a major attempt by the
Legislature to ensure a minimum (guaranteed) level of revenue parity across units of local
government. Provisions in the enacting legislation created the Revenue Sharing Trust Fund for
Municipalities. Currently, the trust fund receives 2.9 percent of the net cigarette tax collections and
2.25 percent of sales and use tax collections. An allocation formula serves as the basis for the
distribution of these "guaranteed entitlement" revenues to each County that meets the strict
eligibility. There are no use restrictions on these revenues; however, there are some statutory
limitations regarding funds that can be used as a pledge of indebtedness. Currently, the only bonded
debt secured by the County's Guaranteed Entitlement is the Revenue Refunding Note, Series 2003
($3,495,144).
Summary of Revenue
. FY2004 Proposed Revenues: $1,000,000
· Bonded Debt Pledged to Revenue: Revenue Refunding Note, Series 2003
. Average Annual Debt Pledged to Revenue: $640,000/year
· Use of Additional (Unused) Revenues: Funneled into General Fund to support general
government operations
· Use of these funds for support of debt would require raising ad valorem taxes
Public Financial Management
Page 4
"'-~'''"'~'~~~~1M~~1"iI'~~~;'~~';o_" '...
Monroe County Debt Capacity Report
August 20, 2003
Half-Cent Sales Tax-Created in 1982, the Half-Cent Sales Tax Program generates the largest
amount of revenue for local governments among the state-shared revenue sources currently
authorized by the Legislature. It distributes net sales tax revenue to'counties and municipalities that
meet strict eligibility requirements. Allocation formulas serve as the basis for this distribution to
each County and its respective municipalities. The program's primary purpose is to provide relief
from ad valorem and utility taxes in addition to providing counties and municipalities with revenues
for local programs. Currently, the County allocates Half-Cent sales tax revenues between its General
Fund (45 percent) and its Planning, Building and Zoning Fund (55 percent). Currently, the County
has no bonded debt secured by this revenue stream.
Summary of Revenue
. FY2004 Proposed Revenues: $5,300,000
. Bonded Debt Pledged to Revenue: None
. Average Annual Debt Pledged to Revenue: None
· Use of Additional (Unused) Revenues: Funneled into the General Fund to support
general government operations and the Planning, Building and Zoning Fund to
support the operations of the Growth Management Division.
· Use of these funds for support of debt would require raising ad valorem taxes
Tourist Impact Taxes-The tourist impact tax is levied at the rate of 1 cent on most rents, leases or
lets, living accommodations in hotels, motels, apartment houses, rooming houses, mobile home
parks, and the like. The taxes are collected and administered by the Florida Department of Revenue.
Counties may use this revenue source to acquire ESL. Currently, the County receives approximately
$1 million in tourist impact tax revenues each year.
Summary of Revenue
. Estimated Annual Revenues: $1,000,000
. Bonded Debt Pledged to Revenue: None
. Average Annual Debt Pledged to Revenue: None
· Use of Additional (Unused) Revenues: Funneled into the General Fund to support
general government operations.
4 Cent Gas Tax-Local governments are authorized to levy a tax up to 6 cents on every net gallon
of motor fuel sold in the County. The tax may be authorized by an ordinance adopted by a majority
vote of the Board of County Commissioners or voter approval in a countywide referendum.
Generally counties are authorized to utilize the tax only for transportation such as street lighting,
bridge maintenance public transportation operations and maintenance and roadway drainage to
name a few. In addition, small counties that have a total population of 50,000 or less on April 1,
1992 are authorized to use the proceeds to fund infrastructure projects. Depending on the use of the
land to be purchased, the County may not be able to use this revenue as a funding without a special
exemption from the State. Legal Counsel should be consulted prior to finalizing the financing plan.
Public Financial Management
Page 5
Monroe County Debt Capacity Report
August 20, 2003
Summary of Revenue
· Estimated Annual Revenues: $2,400,000
· Bonded Debt Pledged to Revenue: None
· Average Annual Debt Pledged to Revenue: None
State Park Surchal1!:es-Currently, the Department of Environmental Protection ("DEP") imposes
and collects a surcharge of 50 cents per person per day on admission to all state parks in areas of
critical state concern located in a county, and a surcharge of $2.50 per night per campsite, cabin, or
other overnight recreational occupancy unit in state parks. The proceeds from these surcharges, less
a collection fee that is to be kept by DEP for the actual cost of collection, is transmitted to the
Monroe County Land Authority. Such funds shall be used to purchase ESL or affordable housing.
The state park surcharges will remain imposed as long as the Monroe County Land Authority is in
existence.
Summary of Revenue
· Estimated Annual Revenues: $350,000
· Bonded Debt Pledged to Revenue: None
· Average Annual Debt Pledged to Revenue: None
Covenant to Bude:et and Appropriate-The County's Covenant to Budget and Appropriate
("CBA") revenues represent all legally available non-ad valorem revenues (i.e., the surplus of Total
Governmental Funds Revenues over Public Safety, General Government and Debt Service
expenses). The County uses its CBA revenues to fund necessary County projects and services on a
P A YGO basis. The following is the calculation of the County's CBA revenues, based on numbers
found in the County's FY2002 CAFR:
Revenues
Total Governmental Fundsl
Less: Ad Valorem Revenues2
Total Revenues
$160,412,640
(54.584.047)
$105,828,593
Expenditures
Essential and Mandated Expenditures:
Public Safety!
General Government!
Debt Service!
Total Essential & Mandated Expenditures
Ad Valorem Support of Expenditures2
Net Expenditures
Legally Available Non..Ad Valorem Revenues
82,854,954
31,214,821
6.049.706
120,119,481
(54.584.047)
65.535.434
$40,293,159
I Monroe County FY2002 CAFR, pg. E-5
2 Monroe County FY2002 CAFR, pg. H-I
Public Financial Management
Page 6
, ':.~)l:t~.,.\_~.""...,"",,'ii_~~:'
Monroe County Debt Capacity Report
August 20, 2003
Summary of Revenue
. FY2004 Proposed Revenues: $40,293,159
. Bonded Debt Pledged to Revenue: None
. Average Annual Bonded Debt Pledged to Revenue: None
· Use of Additional (Unused) Revenues: Funneled into the General Fund to support
general government operations and Special Revenue Fund to support various
earmarked services.
· Use of these funds for support of debt would require raising ad valorem taxes
Ad Valorem Revenues- Ad valorem taxes may be used for any general government purpose up to
the Florida 10-mill statutory limit. A levy of millage above this 10-mill limit would entail voter
approval of a referendum seeking the additional taxing authority. Currently, the County has
proposed an ad valorem tax millage of 4.4756, and would not require a referendum to raise this
millage up to 10 mills to cover operational expenses. However, an issuance of General Obligation
bonds secured by the County's ad valorem millage would require a voter-approved referendum.
Local governments may levy ad valorem taxes subject to the following limitations:
1) Ten mills for county purposes
2) Ten mills for municipal purposes
3) Ten mills for school purposes
4) A millage fixed by law by a county furnishing municipal services
5) A millage authorized by law and approved by voters for special districts.
The State Constitution provides two exceptions to the 10-mill cap. The exceptions include a voted
millage not to exceed a period of two years. Additionally, no property may be subject to more than
20 mills of ad valorem tax for municipal and county purposes without elector approval, regardless
of the property's location, under the State Constitution. For example, Duval County/City of
Jacksonville is a consolidated government; therefore, it has a 20-mill cap since it operates as both a
county and municipal government. Currently, the County has no debt secured by its ad valorem
revenues.
Summary of Revenue
· County's FY2002 Total Ad Valorem Assessed Value: $11.3 billion (1 mill of this
amount equals $11.3 million; y.. mill of this amount equals $2.8 million); County's
proposed FY2005 Total Ad Valorem Assessed Value $14.8 billion ($14.8 million)
. Bonded Debt Pledged to Revenue: None
· Average Annual Bonded Debt Pledged to Revenue: None
· Use of Additional (Unused) Revenues: Used to balance budget in light of capital
expenditures and services funded by non-ad valorem revenues
· Use of these ad valorem tax revenues for support of debt would require raising
millage
Public Financial Management
Page 7
Monroe County Debt Capacity Report
August 20, 2003
IV. PROPOSED REVENUE COVERAGE FACTORS
Typically with the issuance of debt, there are limitations related to certain coverage requirements
and additional bonds tests. Each revenue pledge is evaluated by financial institutions and bond
insurers based upon certain credit criteria to determine the necessary coverage requirements (i.e. the
ratio of total revenues to total debt service). For stronger credits such as ad valorem taxes, the ratio
of revenues to debt service required by credit rating agencies is closer to 1 to 1, or 1.00 times
coverage. For weaker credits such as sales tax, the ratio is much greater than 1 to 1 (i.e., a much
higher coverage requirement). Higher coverage requirements will result in greater restriction of a
County revenue stream for anticipated capital projects or services. The tables below include the
actual coverage requirements for the County's General Fund revenues currently pledged to bonded
debt and estimated coverage requirements for the County's General Fund revenues not pledged to
bonded debt.
Pledged Re\ ('HUeS ('0\ enlge
One-Cent Infrastructure Surtax
Guaranteed Entitlement
1.30
1.05
Rt.,\ t.'I1111'S 110t Pledged Estimated
( 'onTage
Half-Cent Sales Tax 1.30
Covenant to Budget & Appropriate 1.00
State Park Surcharge 1.30
Tourist Impact Tax 1.30
Ad Valorem Tax Revenue 1.00
Limited (y.. mill) Ad Valorem Tax 1.10
Revenue 3
4 Cent Gas Tax 1.50
v. CURRENT INTEREST RATE MARKET
Interest rates have a significant impact on the debt capacity of any given revenue. As interest rates
rise debt capacity will decrease and vice versa. Therefore, any estimated debt capacity may change
on a daily basis as the market fluctuates. Today's interest rates are at five-year low levels and
therefore increase the County's debt capacity. The chart on the following page illustrates the 10-
Year Treasury, 20- Year General Obligation Bond and 25-Revenue Bond rates over the past five
years:
4 Limited ad valorem debt could result in a higher required coverage level than ad valorem debt because the issuer
cannot raise the millage above '14 to pay debt service. In an ad valorem issue, the issuer receives voter approval to
adjust the millage as necessary to pay debt service.
Public Financial Management
Page 8
~ ......,~~.-~~~:,';
Monroe County Debt Capacity Report
August 20, 2003
Interest Rates
Last Five Years
7.0
6.5
6.0
5.5
5
u 5.0
...
...
l:l.
4.5
4.0
3.5
3.0
12/04/97 12/03/98 12/03/99
12/01/00
11/30/01
11/29/02
I-I0-Year TSY - 20 GO Bond - 2S Rev Bond I
VI. AD VALOREM DEBT CAPACITY SCENARIOS
PFM has provided scenarios to analyze the available debt capacity for the County's ad valorem and
limited ad valorem (Y-4 mill) tax revenues. The County has expressed an interest in using ad valorem
tax revenues to fund the acquisition of ESL. PFM has recently advised Sarasota and Alachua
Counties on issuing limited ad valorem tax bonds to fund the acquisition of ESL. Along with the Y-4
mill ad valorem tax, we have also explored the viability of using ad valorem tax revenues (1 mill) as
a source of ESL funding.
The FY2002 tax base to which our assumed millage applies is currently $11.3 billion, yielding
$11.3 million in I-mill ad valorem tax revenues and $2.8 million in Y-4 mill ad valorem tax revenues.
Additionally due to the timing, the County would not be able to levy additional millage until FY
2005. If this took place the County could receive $14.8 million in 1 mill ad Valorem tax revenues.
Since the County's ad valorem assessed value grew by an average of approximately 7.8 percent over
the past five fiscal years, we have assumed this growth percentage in our scenario. The following
are other major assumptions in each scenario:
· Bonds are amortized for a term of 15 years
· Debt service in each scenario is calculated using current market rates for a Florida ad
valorem credit
· Cost of Issuance is estimated at $200,000; Underwriter's Discount is estimated at $6.00 per
bond; and Bond Insurance is estimated at 35 basis points of total debt serv~ce
· Par Amount of Y-4 mill ad valorem ($47.1 million) and I-mill ad valorem ($60 million)
scenarios are conservative to account for any shortfalls in the assumed ad valorem tax
Public Financial Management
Page 9
Monroe County Debt Capacity Report
August 20, 2003
growth rate of 7.8 percent and the County's ongoing need to fund operational expenses with
ad valorem tax revenues
Scenario 1: Level Debt Service Scenario: Ad Valorem Revenues Increasinf! at 7.8 PercentlYr.
5
Level Debt Service Scenario
One Mill Ad Valorem Revenues Increasing at 7.8% Per Year
50
.45
<<l
35
~
!
o
=25
5ii
...
20
15
10
o
2005 2lD) 1!JJl 200l 2lIl9 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2lJ2O
1_ Oebt SeMce -+-Revenues I
In Fiscal Year 2005, the County could receive approximately $15 million in I-mill ad valorem tax
revenues available to secure General Obligation bonded debt. General Obligation debt, backed by
the full faith and credit of the County, is subject to only I.OOx coverage restriction. The above chart
demonstrates that the County has significant capacity for General Obligation debt at I-mill
assuming that the FY2002 ad valorem assessed value continues to grow by 7.8 percent each year in
line with five-year historical trends. Given the low coverage levels required by General Obligation
debt and the County"s low General Obligation debt burden, it has the capacity to issue nearly $305
million in I-mill ad valorem debt over the next 15 years at the 7.8 percent growth rate. However,
given the County's reliance on ad valorem taxes for operational expenses, PFM suggests that the
County issue $60 million in bonds for 15 years secured by this revenue stream. This results in
approximately $5.5 million in debt service each year and approximately $136 million in additional
revenues over this period to fund operational expenses or additional bonded debt.
Public Financial Management
Page 10
" ,;...,-;'4,~,'.:."~~"~""",,,,,_,~,__ _~..'''';!"\,,~.,, _,,_,.~
Monroe County Debt Capacity Report
August 20, 2003
Scenario 2: Level Debt Service Scenario: Limited Ad Valorem Revenues Increasin2 at 7.8
PercentIYr.
10
9
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2018 2017 2018
8
7
8
.
c
o
== 5
i
...
4
3
2
o
1- Debt Service ...... Revenues I
In 2003, the County will receive approximately $2.8 million in ~ mill ad valorem tax revenues
available to secure Limited General Obligation bonded debt. Limited General Obligation debt,
backed by the County's ~ mill ad valorem tax revenues, is usually subject to only 1.00x coverage
restriction. The above chart demonstrates that the County has significant capacity for Limited
General Obligation debt assuming that the FY2002 ad valorem assessed value grows by 7.8 percent
in line with historical trends. Given the low coverage levels required by Limited General Obligation
debt and the County's low Limited General Obligation debt burden, it has the capacity to issue
approximately $81.6 million in ~ mill ad valorem tax debt over the next IS years assuming a 7.8
percent assumed growth rate. However, given the County's reliance on ad valorem taxes for
operational expenses, we have provided the County with a IS-year, $47.1 million bond issuance
scenario that guarantees the County at least I. lOx coverage from 2004 through 2007 and 1.30x in
the out years. This results in approximately $4.4 million in debt service each year and approximately
$16.9 million in unused quarter mill revenues to fund operational expenses or additional bonded
debt.
VII. NON-AD VALOREM FINANCING SCENARIOS
While ad valorem tax revenues are likely the best source to secure an ESL financing, PFM has also
calculated scenarios for the County's General Fund non-ad valorem revenues. Currently, General
Fund revenues are tied to long-term capital projects and services. Over reliance on these revenues
for bonded debt service will result in an increase of ad valorem millasze to fund oDerational
eXDenditures. To ensure that the County still has considerable funding capacity following a 2003
Public Financial Management
Page I J
Monroe County Debt Capacity Report
August 20, 2003
bond issue for ESL, we have assumed that the County issues bonds secured by each revenue stream
at a par amount well below maximum debt capacity.
PFM has summarized the results of the debt capacities completed for each of the County's General
Fund non-ad valorem credits. For revenue streams that are likely to generate at least $15 million
over the next I5-years, PFM assumed that the County issues bonds with those revenues. However,
for those revenue streams that are likely to generate less than $15 million over a I5-year period;
PFM assumed that the County issues a IO-year private placement note with those revenues. The
estimated interest rates are based upon market rates for August 2003.
Public Financial Management
Page /2
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