Title
Interlocal Agreement with Alachua County for the Additional Five (5) Cents Local Option Fuel Tax (B)
Section 336.025, Florida Statutes allow counties to impose an additional local option gas tax of one to five cents on motor fuel sold in a county, with the revenue generated by such tax to be used by county and municipal governments only for transportation expenditures authorized by law. Alachua County is considering adopting an ordinance for the implementation of this additional five cents to be effective January 1, 2008.
Explanation
On Tuesday, April 17, 2007, the Alachua County Commission approved authorization for the County Manager and County Attorney to prepare an Interlocal Agreement between Alachua County and the City of Gainesville that would provide a distribution formula for an additional five cent local option fuel tax of 52.150% to the unincorporated Alachua County and 38.635% to the City of Gainesville.
There are currently two separate interlocal agreements between Alachua County and the City of Gainesville for distribution of local option fuel tax. The first three cents are distributed based on 43.940% to Alachua County and 43.940% to City of Gainesville; the second three cents are distributed based on 60.360% to Alachua County and 33.330% to City of Gainesville; the average of these two distribution formulas is 52.1% to Alachua County and 38.6% to City of Gainesville.
Based on an average of mileage of roadway and population distribution Alachua County would receive 51.884% and the City of Gainesville 37.468%. If the formula was based on percentage of road mileage the distribution would be 62.023% to Alachua County and 25.141% to the City of Gainesville. Using just population the distribution is 41.745% Alachua County and 49.795% City of Gainesville. Using the default formula of transportation expenditures the City of Gainesville distribution is approximately 50 to 70%. Based on figures calculated in 2003 the percentage was in the range of 50%; however, for the transportation expenditures from 2001 through 2005 the estimated distribution is 70% to the City and 25% to the County. Staff believes that the increase is largely due to major increases in transit funding related to the University of Florida partnership as well as capital during the same time frame from the Campus Development Agreements and federal grants associated with the Airport and other federal transportation earmarks received by the City.
Even though the some of the formulas provide greater percentages for the City, it was quite clear in the negotiations that the County was not interested in moving forward with implementation of the tax if they did not receive a greater share. This is largely due to the responsibility that the County Commission has in being the sole entity able to implement the additional tax. Of the remaining mechanisms for revenue distribution, the formula that averages the existing distributions is a methodology that staff felt was supportable since it was slightly higher than the formula that averaged the population and road mileage formula.
In regards to allowable expenditures of this particular fuel tax, Florida Statutes state that it must be used "for transportation expenditures needed to meet the requirements of the capital improvements element of an adopted comprehensive plan or for expenditures needed to meet immediate local transportation problems and for other transportation-related expenditures that are critical for building comprehensive roadway networks by local governments. For purposes of this paragraph, expenditures for the construction of new roads, the reconstruction or resurfacing of existing paved roads, or the paving of existing graded roads shall be deemed to increase capacity and such projects shall be included in the capital improvements element of an adopted comprehensive plan. Expenditures for purposes of this paragraph shall not include routine maintenance of roads."
Several commissioners have expressed concern about the use of the funds for transportation projects that would provide additional capacity in the unincorporated portion of the Gainesville urban area that would encourage development further out from the urban core but yet continue to bring additional traffic congestion into the urban core. If the City Commission would like to offer specific language to the County Commission on the types of projects they would to see funded, an option to consider would be the following language: "Alachua County agrees to limit their expenditure of the revenue from the additional five (5) cents to major maintenance such as unpaved road alternative surface treatments, resurfacing/reconstruction projects, bicycle/pedestrian projects, and roadway safety improvements."
On May 8, the Alachua County Commission approved the motion for "the County Attorney to prepare for the Board's consideration an Interlocal Agreement and Ordinance with the following modified conditions:
1) Adopting the distribution method as presented by staff the average of all the totals.
2) (10%) - Bicycle/Pedestrian projects
(15%) (14%) - Unpaved road alternative surface treatments
(75%) - Roadway safety improvements and Unfunded resurfacing/reconstructions projects as follows:
1. NW 16th Avenue/23rd Avenue $6,500,000 City limits
2. SW 63rd Blvd/62nd Avenue $4,000,000 Urban Cluster
3. NW CR 235 $10,000,000
4. NW 43rd Street $4,200,000 City limits
5. NW CR 231 $5,600,000
3) And that language be included specifying no new roads or travel lanes."
The alternative surface treatment projects are noted in a report prepared for the County Commission in October 2006 as "There are several alternative surface treatments that can be applied on most of the existing unpaved roads in Alachua County. These surface treatments include sand seal, chip seal, open-graded cold pave asphalt and hot-mix asphalt. All of these solutions would provide greater relief from the problems addressed in the last section at similar life-cycle costs. It is important to note that these treatments do not meet the regulatory requirements for a paved road as required by the Alachua County Development Land Code; therefore, further improvements would be required for any future development to take place."
Fiscal Note
Based on information provided by the State of Florida, an additional 5-cents local option fuel tax will generate approximately $5,500,000 annually in Alachua County. The City's portion of the revenue under the 38.625% distribution will be approximately $2,134,275 annually. The default distribution formula will be in the range of 50 to 70% with projected revenue of $2,750,000 to $3,850,000.
Recommendation
The City Commission: 1) approve the Interlocal Agreement with the additional language to address Alachua County 's agreement to limit their expenditure of the revenue from the additional five (5) cents to major maintenance such as unpaved road alternative surface treatments, resurfacing/reconstruction projects, bicycle/pedestrian projects, and roadway safety improvements; and 2) authorize the City Manager to execute the Interlocal Agreement.
Alternative Recommendation A:
The City Commission: 1) select a higher distribution percentage rate; and 2) direct staff to go back to the County Commission for further negotiations.