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2014 03 10 Regular 600 3rd Generation Sales Tax Interlocal Agreement COMMISSION AGENDA     Informational Consent ITEM600 Public Hearings Regular X       March 10, 2014KSKL Regular MeetingCity ManagerDepartment         REQUEST: The Public Works Department requesting City Commission approval of an Interlocal Agreement with Seminole County, the School Board of Seminole County, and all municipalities in Seminole County pertaining to the shared distribution and use of a proposed one-cent local government infrastructure sales tax.   SYNOPSIS: A countywide referendum is scheduled for May 20, 2014 for a proposed one percent local government infrastructure sales surtax (aka: 3rd generation sales tax).  The proposed Interlocal Agreement identifies the terms and procedures for the distribution of revenues between Seminole County, the School Board, and the seven municipalities in Seminole County, if the proposed sales surtax is approved by the voters. CONSIDERATIONS:   In January 2014 the Seminole County Commission voted to conduct a countywide  referendum on May 20, 2014 for a proposed one percent local government infrastructure sales surtax.  This sales tax, which is also referred to as the "3rd Generation Penny Sales Tax," would resume a one percent sales tax in Seminole County previously approved in 1991 and 2001.  The 2001 sales tax (2nd generation) expired in 2011.   The 3rd generation one cent sales tax would generate an estimated total of $631  million over a 10-year period.    Regular 600 PAGE 1 OF 4 - March 10, 2014 Exhibit 1 is the proposed Interlocal Agreement for the distribution and use of  revenues between Seminole County, the School Board, and the seven municipalities in Seminole County.  The terms of the agreement are summarized as follows:   Net revenues from the sales tax will be distributed directly to the parties on a  monthly basis, a change from the previous sales tax interlocal agreement which distributed funds through Seminole County on a reimbursement basis.   The School Board receives 25% of the net revenues, which is the same as the  2nd generation sales tax.   Seminole County receives 24.2% of the net revenues to complete  major/regional infrastructure projects listed in Exhibit B of the enclosed agreement.  In the 2nd generation sales tax, the County share for major/regional projects was approximately 37.5%.   Seminole County and the seven cities split the remaining 50.8% of the net  revenues using a statutory formula (Section 218.62, Florida Statutes).  The shared percentage is up from 37.5% in the 2nd generation sales tax.   To summarize the funding split, Seminole County receives a total share of  55.6% (consisting of 24.2% for major projects plus 31.4% based on the statutory split of the remainder) , the School Board receives 25%, and the seven cities split the remaining 19.4% share.  In the 2001 (2nd generation) sales tax, the cities received a 14.3% share.   The City of Winter Springs would receive 2.99% of the net revenues, up from  2.43% in the 2nd generation sales tax.  Exhibit D provides a complete breakdown of the distribution to the County and all cities.   The types of projects eligible for funding by the 3rd generation sales tax  includes public transportation infrastructure such as roadways, traffic signals, pedestrian/bicycle facilities, and trails.  With the 3rd generation sales tax, the list of eligible infrastructure has been expanded to include stormwater management facilities.   The County regional project list (Exhibit B) includes the proposed widening of SR  434 from SR 417 east to Mitchell Hammock Road in Oviedo.  This segment of SR 434 is currently two lanes and would be widened to four lanes.  The widening of SR 434 in the vicinity of SR 417 is important for the long-term economic development potential of the Greenway Interchange District, plus it would improve access and capacity between Winter Springs and Oviedo.   At 2.99% of the net revenues, the 3rd generation sales tax would generate  approximately $19 million in revenue to the City of Winter Springs over the 10-year period.  Exhibit 2 is the draft list of City projects proposed for funding by the 3rd generation sales tax.  Some of the priority projects on this list include:   Replacement and/or major repairs for four City bridges that have been  determined by FDOT to be functionally obsolete or scour critical.   Regular 600 PAGE 2 OF 4 - March 10, 2014 Roadway improvements at the Greenway Interchange District (GID), including  improvements along SR 434 and the extension of City collector streets within the GID.   The Orange Avenue Extension through Central Winds Park including  intersection improvements at SR 434.   Resurfacing and reconstruction of the City's collector street network.  The  City's current asphalt resurfacing program has kept up with demand and the current pavement condition of City streets is good overall.  However, the City's asphalt resurfacing program has been supplemented in the past by one-cent sales tax revenues, such as the resurfacing of Winter Springs Boulevard in 2007-08 at a cost of $2.1 million.  With asphalt price increases and a number of collector streets expected to need resurfacing in the next 10 years, the local option gas tax (current funding source for resurfacing) is insufficient to meet the long-term demand.     If the 3rd generation sales tax passes, Staff will review and likely recommend the  elimination or significant reduction of transportation impact fees charged to new development.  The 3rd generation sales tax would likely provide sufficient funding to construct the necessary transportation capacity improvements that would otherwise be funded by transportation impact fees.  Staff would also recommend that Seminole County reduce or eliminate transportation impact fees, which are also charged by the County to new developments in the city.   The addition of stormwater management facilities as eligible infrastructure in the 3rd  generation sales tax would likely defer the possible need to consider increasing the City's stormwater utility fee for the duration of the 10-year tax period.    FISCAL IMPACT: If the proposed infrastructure sales tax is approved by Seminole County voters in May 2014, the net revenue to the City over the 10-year implementation period is estimated to be $19 million. COMMUNICATION EFFORTS: This Agenda Item has been electronically forwarded to the Mayor and City Commission, City Manager, City Attorney/Staff, and is available on the City’s Website, LaserFiche, and the City’s Server. Additionally, portions of this Agenda Item are typed verbatim on the respective Meeting Agenda which has also been electronically forwarded to the individuals noted above, and which is also available on the City’s Website, LaserFiche, and the City’s Server; has been sent to applicable City Staff, Media/Press Representatives who have requested Agendas/Agenda Item information, Homeowner’s Associations/Representatives on file with the City, and all individuals who have requested such information. This information has also been posted outside City Hall, posted inside City Hall with additional copies available for the General Public, and posted at five (5) different locations around the City. Furthermore, this information is also available to any individual requestors. City Staff is always willing to discuss this Agenda Item or any Agenda Item with any interested individuals.   Regular 600 PAGE 3 OF 4 - March 10, 2014 RECOMMENDATION: Staff recommends the City Commission approve the Interlocal Agreement and authorize the City Manager and City Attorney to prepare and execute any and all applicable documents. ATTACHMENTS: 1.Exhibit 1 - Interlocal Agreement (43 pages) 2.Exhibit 2 - City of Winter Springs Project List (2 pages) Regular 600 PAGE 4 OF 4 - March 10, 2014