Okaloosa County BOCC — October 15, 2013 — Action Item Printout — reading text

BOARD OF COUNTY COMMISSIONERS AGENDA REQUEST DATE: September 17, 2013 TO: Honorable Chairman and Members of the Board FROM: John Hofstad SUBJECT: Gas Tax Interlocal Agreement DEPARTMENT: Public Works BCC DISTRICT: All STATEMENT OF ISSUE: Staff requests Board approval of a revised Interlocal Agreement between Okaloosa County and the County’s nine incorporated municipalities related to the distribution of Local Option Gas Tax (LOGT) revenues for both the first and second LOGT. BACKGROUND: During the May 21, 2013 BCC meeting, the Board elected not to extend an existing interlocal agreement for the distribution of gas tax revenues between the County and the County’s nine incorporated municipalities. At issue was the distribution of revenue from the first LOGT (6 cents) which is imposed on every gallon of motor fuel (gasoline and diesel) sold in Okaloosa County. The agreement, which had been in place since 2003, recognized a 60/40 funding distribution with the County retaining 60% of the revenue and the balance of 40% being split among the municipalities. By taking no action to extend the previous interlocal agreement, the Board effectively set in motion the process to redefine how gas tax revenues would be distributed among all participating agencies. Absent a formal interlocal agreement for gas tax distribution, Chapter 336 of the Florida Statutes dictates how revenues collected within a County through a local option gas tax will be shared among the incorporated municipalities and County. The distribution rate of these funds shall be based on each entity’s transportation related expenditures for the preceding 5-year period. In short, those entities that spend more dollars on transportation infrastructure and upkeep will receive more revenue annually than those who spend a lesser amount. For the past several months, staff coordinated closely with the municipalities to gather transportation related expenditure data. An initial evaluation of the data indicated a funding split in the 70/30 range; however, much of the data received differed vastly from the information contained in each entity’s Annual Financial Report (AFR) which is filed annually with the Florida Department of Revenue (DOR). For this reason and the time constraints involved with certifying a new funding split with the DOR, staff elected to utilize AFR expenditure information in the final calculation for consistency. In addition, staff backed out the County’s enterprise fund contributions to the expense total which resulted in a final split with the cities of 64/36. Staff presented the 64/36 split to the municipalities along with the Board’s proposal to implement 3 cents of the second LOGT and the resulting revenue that would be generated from both sources (1st LOGT and 3 cents of the 2nd LOGT). After considerable discussion on the subject and several iterations of a proposed interlocal agreement, the majority of the municipalities offered their support for a 64/36 funding split which utilizes relative percentages from the previous agreement applied to each of the municipalities. This proposed distribution (attached) results in each City gaining a 22% increase in revenue for next year (9 months of revenue in year 1) and a 32 % increase in revenue for each subsequent year. The revised Interlocal Agreement is attached to this report and details the percentage and dollar allocation to each entity. Contingent upon Board approval and execution by the municipalities, the agreement will be forwarded to the DOR prior to October 1st in order to implement the funding distribution on January 1, 2014. It should be noted that only a majority of the incorporated area has to approve the agreement for it to become effective. One or two dissenting municipalities cannot nullify the agreement if they do not represent a majority of the incorporated area. To date, three municipalities representing a majority of the incorporated population have approved the agreement. The agreement shall be in place for a period of ten years from the date of execution unless otherwise modified to reflect different distribution percentages based on transportation related expenditures. The proposed Interlocal Agreement has been reviewed and approved by legal counsel. OPTIONS: Approve/Disapprove the proposed Interlocal Agreement between Okaloosa County and the County’s nine municipalities for distribution of Local Option Gas Tax revenues at a rate of 64% to Okaloosa County and 36% to be split among the municipalities as defined in the agreement. RECOMMENDATIONS: Staff requests Board approval of the proposed Interlocal Agreement between Okaloosa County and the County’s nine municipalities for distribution of Local Option Gas Tax revenues at a rate of 64% to Okaloosa County and 36% to be split among the municipalities as defined in the agreement. RECOMMENDED BY: APPROVED BY: Ernie Padgett, County Administrator