Friday, September 26, 2014

Pinellas County PSTA Interlocal Agreement Review - Section 9



Pinellas County Voters are being asked to approve a law (The GreenLight Plan) that would provide
for an open ended 1% increase in the County sales tax.

You can read a review of the actual law you will approve if you vote yes at Sales Tax (GreenLight) Ordinance Review

Due to pressure from opponents of the Greenlight plan and the Sales tax ordinance, the Suncoast Transit Authority and the Pinellas County Commission found it necessary to develop the Interlocal Agreement before the election to add some direction to how the revenue from the 1% sales tax will be spent and to attempt to add some clarity regarding the suspension of the current PSTA Ad valorem property tax. 

DISCLAIMER:
The following document is a reproduction of the Pinellas County Interlocal Agreement with the Suncoast Transit Authority approved by the Pinellas County Commission.

The text of the Agreement appears in italics     My Comments appear in Bold regular text.

SECTION 9. REDUCTION AND TERMINATION OF SURTAX.

This is critical section.

It lays out the conditions for reduction or termination of the sales tax.

Upon the earlier of:
(A) completion of all steps to finance (including without limitation debt incurrence, and/or execution of public-private partnerships or leases), acquire, and/or construct all projects and capital improvements contemplated in PSTA's Greenlight Plan, as mutually determined by PSTA and the County (if the parties cannot mutually determine whether PSTA's Greenlight Plan has been completed, the parties shall engage a nationally recognized transit consultant acceptable to both Parties to make such determination);

Note that (A) provides for payment of debt. Once committed to bonds, the tax cannot be eliminated until the bonds are satisfied. Later we find this Agreement allows those bonds to stay in place for 90 years.

 (B) PSTA's decision to discontinue such steps to finance, acquire and/or construct substantially all of the projects and capital improvements contemplated in PSTA's Greenlight Plan;

(C) the occurrence of a Force Majeure;

(D) the fiftieth 50th anniversary of the date the Surtax is first levied and each 20th anniversary thereafter;

 In (D) a review after 50 years and each 20 year anniversary thereafter. Obviously both PSTA and the current County Commission are expecting this tax to go on for a significant period of time.

Note in (D) the commitment to not with hold funds needed to meet its then outstanding "financial obligations". This is an assurance the that those issuing, maintaining and owning the obligation bonds issued to finance the train will always get their money.

(E) a payment default under the Trust Agreement; or

(F) PSTA applying Surtax Net Proceeds for a purpose other than PSTA's Greenlight Plan,
the County and PSTA shall meet to discuss the particular event described in clauses (A) through (F) that has occurred and shall consider, depending upon the event, revising this Agreement, revising or adding to PSTA's Greenlight Plan, seeking further authorization for additional uses by PSTA of the
Surtax Net Proceeds or reducing or increasing, if there has been a previous reduction and subject to the limitations of the Surtax Referendum, temporarily or permanently, the Surtax Net Proceeds. If the Parties are unable to agree on what action, if any, to take, after making a good faith effort, the County may take any legally required action to reduce the Surtax Net Proceeds distributed to PSTA. In determining what action to take, if any, pursuant to this Section 9, the Parties shall comply with the provisions of Section 29(B) hereof.

Any reduction of Surtax Net Proceeds distributed to PSTA as a result of an action or event described in clauses (C), (E) or (F) above shall be temporary and the County shall promptly begin distributing the full amount of the Surtax Net Proceeds to PSTA, including all amounts that were held back and actual interest earnings, if any, actually derived by the County, when the County determines, in its sole discretion, that such event or action has been cured or no longer exists. The foregoing shall not impose a duty on the County to invest any of such withheld amounts. The County shall determine, in its sole discretion, whether any reduction of Surtax Net Proceeds distributed to PSTA as a result of an action or event described in clauses 6 (A), (B) or (D) will be temporary or permanent. If the County determines to permanently reduce the distribution of the Surtax Net Proceeds, to the extent and as permitted by law, it may take such action as it deems necessary and is legally required to reduce the amount of the Surtax levy in accordance with this Section. Notwithstanding anything in this Section 9 to the contrary, any temporary reduction shall be limited to an amount that will not impair PSTA's ability to meet all of its then outstanding financial obligations under the Trust Agreement.

(F) is particular interesting as it says the tax would be terminated if the funds are used for anything other than the "Greenlight Plan" Since the Greenlight Plan can be modified by the PSTA and the County at any time with no public input this Section provides absolutely no control over the spending of sales tax or bond revenues what so ever.

Note also that the County "in its sole discretion" will pay all amounts held back:  "Any reduction of Surtax Net Proceeds distributed to PSTA as a result of an action or event described in clauses (C), (E) or (F) above shall be temporary and the County shall promptly begin distributing the full amount of the Surtax Net Proceeds to PSTA, including all amounts that were held back and actual interest earnings, if any, actually derived by the County, when the County determines, in its sole discretion, that such event or action has been cured or no longer exists."

Given that the PSTA Board is one third populated by County Commissioners there is little here to protect the tax payers.

Watch My Video Green Light - It's a Bad Law before you vote.

E-mail Doc at: dr.webb@verizon.net. Or send me a Facebook (Gene Webb) Friend request. Please comment below, and be sure to share on Facebook and Twitter.
Disclosures: Contributor to
No Tax for Tracks.
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