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2aDATE: May 4, 2010 CITY OF SOUTH MIAMI TO: Honorable Mayor and Members of City Commissi VIA: Roger M. Carlton, Acting City Manager FROM: Carol M. Aubrun, Grants /Writer Administrator RE: Municipal Charter County Sales Surtax Update Histo South Miami hAd All-America Mir 1 2001 On April 26, 2010, staff attended the Municipal Charter County Sales Surtax Working Group's meeting. The purpose of the working group was to find creative solutions for providing funding for the three (3) new municipalities while minimizing the financial impact on the existing cities and Miami -Dade County. The proportional share for the new cities (Cutler Bay, Doral and Miami Gardens) is approximately $5,000,000 annually. Within the next two (2) weeks, there will be a conference call with all municipalities to discuss the possibility of a Hold Harmless Revenue Growth Model (attached). The model would hold surtax revenues at the current fiscal year's level with the inclusion of the new cities. Staff will participate in the conference call and will provide updates to the Mayor and City Commission. END OF MEMORANDUM New Municipality Charter County Sales Surtax Working Group Concept Paper — Hold Harmless Revenue Growth Model April 8, 2010 Sales surtax proceeds, while preliminary, appear to be on the rebound. This reflects the general trend in the economy with consumer spending that in turn drives sales tax revenues. Revenues have been positive for 3 successive months and state revenue forecasts anticipate the trend to continue. In this model all existing surtax recipients, Miami -Dade County and the 31 pre- existing municipalities, would agree to hold surtax revenues at the current FY 2009 -10 level. The new cities would be funded out of the growth in surtax collections. Once the new cities were funded at the appropriate level of $5,000,000 additional growth in surtax collections would be distributed to all parties. Presuming an FY 2009 -10 surtax level of $175,000,000 and $5,000,000 required for Cutler Bay, Doral and Miami Gardens, it would require less than a 3% growth in surtax revenues to fund the new cities.