Okaloosa County BOCC — January 18, 2013 — AG P&T Amendment — reading text

From: KEN DANLEY [KENDANLEY@AUD.STATE.FL.US] Sent: Friday, December 28, 2012 3:24 PM To: Jim Curry Cc: Don Amunds; MARILYN ROSETTI; JIM KIEDINGER Subject: Preliminary and Tentative Finding Revision Mr. Curry, As requested, I am forwarding the revised Preliminary and Tentative Finding No. 17. Please don’t hesitate to call if you have any questions. Thank you. Ken Danley, CPA, CGFM Audit Coordinator State of Florida Auditor General (850) 484-5138 Fax: (850) 484-5112 In the event your response contains information that may be considered sensitive or confidential, please do not send that information via fax or email. Please contact me to make alternative arrangements to provide the information. Finding No. 17: Tourist Development Taxes – Statutory Compliance As discussed in the Background section of this report, Section 125.0104, Florida Statutes, governs the use of tourist development taxes and indicates the various purposes for which they may be used. This Section further provides that any use of tourist development taxes not expressly authorized is prohibited. During the period May 2010 through May 2012, the County paid $1,912,095.68 from tourist development taxes to fund a portion of lifeguarding and beach patrol services provided by the City of Destin Fire Department and the Okaloosa County Beach Safety Department. Section 125.0104, Florida Statutes, does not expressly authorize such expenditures as allowable uses of tourist development taxes. In response to our inquiries, County personnel provided three opinions from legal counsel indicating that tourist development taxes may be used to fund lifeguard and beach patrol services, provided that the BCC makes a legislative determination that the primary purpose of these services is related to either promoting tourism within the County or the improvement or enhancement of beach facilities. However, in Attorney General Opinion No. 90-55, dated July 23, 1990, the Attorney General concluded that tourist development taxes may not be used to fund lifeguarding services or general governmental functions owed to the public at large. During the period May 2010 through May 2012, the County also used $564,000 in tourist development taxes to fund a portion of the County’s beach shuttle service. Section 125.0104, Florida Statutes, does not expressly authorize such expenditures as allowable uses of tourist development taxes. As part of its tourist development plan in effect during the period May 2010 through May 2012, the BCC concluded that providing beach shuttle services was a proactive step to reduce seasonal tourism traffic congestion and encourage efficient and environmentally friendly transportation choices, established a permanent and dependable connection between the beaches and adjacent tourist destinations, and was necessary to promote the convention center and provide an alternate mode of access thereto. However, transportation services are a general government function owed to the public at large and, as such, do not appear to be an allowable use of tourist development taxes. Beginning with the 2012-13 fiscal year, the BCC funded the beach shuttle services from other revenue sources. Recommendation: The County should seek an opinion from the Attorney General as to the allowability of the $2,476,095.68 of questioned expenditures and, if appropriate based on the Attorney General’s opinion, should restore this amount to the tourist development taxes accounts.