Tuesday, September 30, 2014

Pinellas County PSTA Interlocal Agreement Review - Section 11

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. 

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.

(A) PSTA shall reimburse the County for the fees, costs and expenses incurred by the County with respect to all actions relating to the enactment of the Ordinance, the negotiation, execution and delivery of this Agreement and all other matters related thereto through and including the validation of the initial issuance of bonds for PSTA's Greenlight Plan, including, without limitation, the fees and expenses of bond counsel or other outside counsel, its financial advisor, and all similar fees, costs and expenses. The total sum to be paid by PSTA pursuant to this Section 11 shall not exceed the sum of One Hundred Thousand Dollars ($100,000.00). The amount due under this Section 11 shall be made in a one-time payment and is due only upon passage of the Surtax Referendum and after PSTA begins to receive Surtax Net Proceeds in accordance with the Ordinance and this Agreement.

(A) County will get reimbursed for expenses. Note the special emphasis on Bond issuance. Bonds are the key in this effort to get money (sales tax revenue) permanently committed to the rail project.

Note that even though the train effort is not scheduled to begin until the late part of this decade, these bonds will be issued as quickly as possible to eliminate any chance at stopping or controlling train construction as time moves on and the actual costs and facts become clear.

Once pledged to the Bonds, the Sales Tax revenue cannot be used for any purpose other than bond debt service and the use of the bond proceeds are determined in the bond covenants.

If buses are not stipulated in the Bond covenants then those dollars cannot be used for buses.

(B) While any of the Surtax Net Proceeds are being withheld by the County pursuant to Section 9 hereof, all costs and expenses incurred by the County and the Clerk in exercising their obligations hereunder, and the fees and expenses of outside professionals that the County reasonably determines
are necessary for the County and/or the Clerk to exercise their obligations hereunder shall be withdrawn by the County from the withheld funds.

(B) Here the County sets up a way to cover its expenses should it be necessary to with hold funds from PSTA as a punitive effort to get control.

(C) PSTA shall be solely responsible for all costs, expenses and/or obligations relating to or arising from transit or transportation service and systems provided by PSTA, including PSTA's Greenlight Plan, including but not limited to: (i) acquisition, development, construction, improvement, operation, maintenance, repair or replacement of Transportation Infrastructure, as well as the acquisition of any necessary real property; (ii) PSTA's operating, personnel, and supportive services, costs and expenditures; and (iii) payment of principal and interest on bonds or other debt obligations issued or incurred for PSTA's Greenlight Plan as provided in Section 7.

(C) Here the County makes it clear that PSTA is totally responsible for all of its public transportation commitments under the GreenLight Plan. The County also makes it clear that PSTA is responsible for its obligation under any bond financing. The problem is when PSTA runs out of money to build the train, run the train, subsidize the train and run the buses what happens?

The real question is will the Bond Houses allow this to stand or will they require that the County be a cosigner on the revenue bonds?

If the Bond Houses refuse to issue bonds without the County as an obligated participant, then ether the train is dead, or the County agrees.

Should the County agree and PSTA fail financially, which is a real likelihood, then the County would be on the hook for the bond service and the operation of the public transportation system.

Your transportation property tax will come screaming back.

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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