Item C1
Feb 18 00 04:55p
Commissioner Williams
(305) 289-6306
p. 1
BOARD OF COUNTY COMMISSIONERS
AGENDA ITEM SUMMARY
Meeting Date: _2128/00
Division:_BOCC
Bulk Item: Yes_x_ No
Department:_Commissioner Williams
AGENDA ITEM WORDING: Discussion and direction for use of proposed infrastructure sales tax
extension, scheduled for referendum vote Marcht4, 2000.
ITEM BACKGROUND: While this tax extension would seem a no brainer, since it offers obvious and
enonnous benefits for both the county and the various municipalities, and it is estimated at least 50% oftbe
lax is paid by visitors, there is fear among the citizenry that those tax funds would be spent for building up
county government rather than for prujects to more directly benefit the citizens of the county. Staffhas
prepared documentation on proposed uses of those funds in hopes that those fears can be addressed and we
can have community wide consensus and support for the extension of the tax.
PREVIOUS RELEVANT DOCC ACTION: The BOCC recently approved the placing of a referendum
on the March ballot for the extension of the infrastructure sales tax. This tax has provided 76 million for
county spending since fiscal year 1990.
STAFF RECOMMENDATION:
TOTAL COST:
BUDGETED: Yes:_ No:
COST TO COUNTY:
REVENUE PRODUCING: Yes:
No:_ AMOUNT PER MONTH
YEAR
APPROVED BY: Couoty Attomey_ OMBlPurchasing Risk Management
DMSIONDIRECTORAPPROVAL, tj-4-ul~~
Nora A. Williams
DOCUMENTATION: Included:_ To Follow:_x_ Not Required:
Agenda Item #:
~L
DISPOSITION:
ONE CENT INFRASTRUCTURE SALES TAX
Since Fiscal Year 1990, the County has received funds from a One Cent
Infrastructure Sales Tax for the primary purpose of proceeding with much needed capital
projects. This tax, which is estimated to be paid approximately 50% by visitors to the
Keys, has provided $76 million of County spending through the end of Fiscal Year 1998.
Additional funds that are distributed to the existing municipalities provided for financial
assistance for their projects. Eighty-three million, six hundred thousand dollars more are
projected for the completion of projects through the end of the existing life of the tax in
Fiscal Year 2004.
The original tax was the result of a referendum of the voters in Monroe County.
They saw the need and an opportunity to fill that need through a one cent sales tax.
Many of the County's needs have already been met. However, it has become
increasingly apparent that a wide variety of needs have not been addressed. Prominent
among these are wastewater and stormwater facility development and improvement
throughout the Keys. In March of 2000, the voters will be asked once again to pass a
referendum extending the One Cent Infrastructure Sales Tax for an additional fifteen
years.
The major use of these funds will shift as identified by the estimated distribution
of funds on the attached sheet. There will, of comse, be need for improvements to public
facilities; but these will have a much smaller place in the overall funding formula. It is
suggested that the following breakdown will be appropriate:
. General government projects including offices and other facilities - 5%
c/
. Public safety improvements including fire/emergency medical service
facilities and the emergency operations center improvements - 10%
. Physical environment improvements including wastewater and
stormwater facilities throughout the Keys. These funds can be utilized
as match for major federal and state grants, as preliminary funding
leading to bonding and as an indication to the federal and state
government that the County is serious about its water quality issues -
65%
. Human Service projects including the obligation the County has to
assist the Department of Health in maintaining adequate facilities - 5%
. Culture and recreation projects including parks, library improvements
and expansion of recreation facilities - 10%
. Other uses including additional matches for grants of various types-
5%
The estimated revenues are conservative and based upon the possibility
that there may be incorporations in the future. It should be noted again that the
existing municipalities will also receive an estimated $8 million per year from the
infrastructure sales tax, which can be used as appropriate within their
jurisdictions.
The history of infrastructure sales tax spending is quite significant for
Monroe County. A review of the spending history up to 1998 and the Capital
Projects Plan through Fiscal Year 2004 clearly shows the large number and types
of projects addressed with ~astructure sales tax funds at the County level.
These do not include those funds utilized at the municipal level. It is clearly
recognized that Monroe County is a small County with very little taxable
property. It would have been next to impossible for these projects to be
completed without an outside source of revenue. As the needs of the County
shift, especially to wastewater and stormwater projects, this source of revenue
2
needs to be continued. The ultimate goal is to improve facilities and services for
the citizens of the County.
A look back at some of the higWights of the uses of these funds might be
significant and help to demonstrate how this program can add to the quality of life
for our citizens, even during emergencies.
The purpose of the tax is to provide revenue for certain capital projects
with a life expectancy of fifteen years or more and also to be used for other public
purposes.
A good example of when this money may be used for any public purpose
is for hurricane recovery. After Hurricane Georges hit the Keys, millions of
dollars of damage and cleanup costs were incurred. Although the Federal
Emergency Management Administration (FEMA) paid a large percentage of this
cost, there was a required local match. The Solid Waste Reserve Fund was
depleted and an additional $3.4 million was required. It looked like Solid Waste
Rates would have to be substantially increased to pay this shortfall or a substantial
one-time property tax increase instituted. However, this was avoided as funds
from the One Cent Infrastructure Sales Tax Fund were used instead.
Additionally, Hurricane Georges provided significant damage to our waterways,
causing pollution, degrading water quality, and making navigation difficult or
impossible in many instances. The cost of the required canal cleanup was
enormous, exceeding $11.0 million. A grant from the U.S. Department of
Agriculture was available but a 12.5% local match was required. Funds from the
3
One Cent Infrastructure Sales Tax were used as the match and the canal cleaning
project became a reality.
More traditional projects that were completed with the One Cent
Infrastructure Sales Tax include recreational projects such as Key Largo
Community Park, Bernstein Park, Watson Field, Harry Harris Park,
Hibiscus/Friendship Park, Anne's Beach, BayPoint Park, Jesse Hobb's Park as
well as several recreational projects at various schools. Land for some of these
sites and other park sites were funded by this revenue source as well as other
sources. Infrastructure tax funds were frequently used as a match for other
funding sources.
Governmental offices were constructed or renovated utilizing these funds.
Such buildings were in dire need of attention because they were neglected for so
long due to inadequate funding. Without the One Cent Infrastructure Sales Tax
the only viable alternative would have been ad valorem taxes. The same can be
said of our public safety facilities. These facilities were woefully inadequate prior
to the tax. Now, fire facilities, emergency medical service facilities, and police
facilities are being expanded and upgraded to meet the needs of the public.
Conventional projects like those just mentioned are still needed. Work at
the Marathon Community Park has just begun. A new Health Department facility
is required in the Upper Keys. New municipalities will require offices to serve
the public better. And continuing efforts to implement projects that will improve
quality of life will be pursued. A growing desire for highway beautification and
scenic highways has been expressed. Planning is currently underway on the
4
Overseas Heritage Trail which will provide a recreational trail from Key Largo to
Key West making use of the Old Keys Bridges. And significant advancements
are in the works for projects involving wastewater and stonnwater. If
Infrastructure Sales Tax revenues are available, then user fees and hookup fees for
the homeowner will be more reasonable. Also, Congress will be more willing to
provide the County with grant funding that will offset the cost to our small
community.
Many projects still need to be accomplished in this County, whether it is
by the County, by an existing City, or by a future City. Funding for these projects
will be required. If this tax does not pass, then alternative funding will be
necessary. Ad valorem taxes could be this alternate funding, and it would have to
be significantly increased to provide the revenue that the One Cent Infrastructure
Sales Tax would otherwise bring in. While it is difficult to know an exact
amount, it has been estimated that our visiting tourists pay about 50% of the sales
tax in this County. Therefore, passing this One Cent Infrastructure Sales Tax
extension will allow the tourists visiting this County to share in paying for the
infrastructure needs of the municipalities and unincorporated areas of Monroe
County .
The Infrastructure Sales Tax has become the major source of funding
capital programs in the Florida Keys. In a small County with only a small portion
of its land area available for taxation, this outside source of funding becomes even
more significant. The challenges facing the Keys in the future are substantial.
5
This source will provide a fairly predictable revenue stream to support the needs
of the County and its various municipalities.
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