Wednesday, October 8, 2014

Pinellas County PSTA Interlocal Agreement Review - Sections 26, 27 28 and 29

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.

AGAINST PREPARER OF AGREEMENT. This Agreement has been prepared by the County and reviewed by PSTA and its professional advisors. PSTA, the County and the County's professional advisors believe that this Agreement expresses their understanding and that it should not be interpreted in favor of either PSTA or the County or against PSTA or the County merely because of their efforts in preparing it.

This is a feel good Section to assure both parties they have done everything possible to make this Agreement as flexible as possible. Note that the County establishes itself as the author of the Agreement, while the actual GreenLight Ordinance was authored by the PSTA.

This Agreement constitutes the entire Agreement between the Parties and no change will be valid unless made by supplemental written agreement duly authorized and executed by the Parties.

No indication here who must approve any written agreement that changes the original Agreement.

Should any paragraph or portion of any paragraph of this Agreement be rendered void, invalid or unenforceable by any court of law for any reason, such determination shall not render void, invalid or unenforceable any other paragraph or portion of this Agreement, unless it is determined that the County may not impose the Surtax or that the Surtax Net Proceeds may not be legally distributed to PSTA, in which case this Agreement shall terminate.

Standard contract language protecting the Agreement from any one Section being held invalid by any court.

Note also that this Section provides for termination of the Agreement should the County not be able to impose the sales tax or that the proceeds of the sales tax cannot legally be distributed to the PSTA.

(A) Except and to the extent expressly permitted herein, as long as bonds, notes, loans, lines of credit, other evidences of indebtedness, lease agreements, concession agreements or other similar agreements are secured by Surtax Net Proceeds, the pledging of the Surtax Net Proceeds in the manner contemplated hereunder shall not be subject to repeal, modification or impairment by any
subsequent ordinance, resolution or other proceedings of the Board of 12 Commissioners of the County, and the County shall not take any action which will adversely impact its obligation and ability to levy the Surtax and to pay Net Surtax Proceeds to the PSTA to be used as contemplated in this Agreement and in the Ordinance.

This Section protects any bond issuers and holders where the Surtax revenue is pledged to the bonds and that will be required for all bonds related to the GreenLight Plan. This Section prevents the County through its Board of Commissioners and the County directly from taking any action that affect collecting and payment of the sales tax to PSTA for servicing of the Bonds.

In other words, once sales tax revenues are pledged to , "notes, loans, lines of credit, other evidences of indebtedness, lease agreements, concession agreements" the County cannot stop the sales tax or refuse to pass the sales tax proceeds to the PSTA.

This Agreement allows for these bonds to be in place for 50 years with two twenty year renewals. That is a total of 90 years.

If GreenLight passes, you can bet that the very first thing PSTA will do is establish the Bonding  and lines of credit to tie up as much of the sales tax revenue as they can to prevent any legal action from preventing encumbering the sales tax proceeds.

(B) Except as otherwise provided below, notwithstanding anything herein to the contrary, the County shall not under any circumstances reduce or cause the reduction of Surtax Net Proceeds to be distributed to PSTA (i) unless written confirmation is received from each rating agency then maintaining a rating on PSTA debt obligations to the effect that such reduction will not in and of itself cause such rating agency to reduce or withdraw the then current rating, and (ii) below a level which, in the reasonable opinion of a qualified independent consultant(s) selected by PSTA and approved by the County (a) jeopardize, at such time or in the future, PSTA's ability to cost-effectively incur debt as contemplated in PSTA's Greenlight Plan, (b) jeopardize, at such time or in the future, PSTA's ability to obtain federal and state funding at the times and in the amounts contemplated in PSTA's Greenlight Plan, (c) jeopardize, at such time or in the future, PSTA's ability to execute public-private partnerships (if deemed by PSTA and its financial advisor to be the most appropriate way to deliver all or a portion of PSTA's Greenlight Plan), (d) cause PSTA to be in breach of this Agreement or any then-existing funding, grant or loan agreement or the Trust Agreement, (e) jeopardize, at such time or in the future, PSTA's ability to renew, replace, and properly maintain PSTA's physical assets at the times and in the amounts contemplated in PSTA's Greenlight Plan, or (f) otherwise frustrate, at such time or in the future, PSTA's ability to plan, develop, acquire, improve, construct, equip, operate, maintain, or finance PSTA's Greenlight Plan. This Section 29(B) shall not apply in any manner with respect to the County's ability to reduce Surtax Net Proceeds distributions to PSTA pursuant to Section 6 hereof.

This is the Section that ties up your tax dollars and assures that the tax stays in place.

GreenLight is a 90 year mortgage on the future of Pinellas County, and you sign it when you vote yes.

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

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Disclosures: Contributor to
No Tax for Tracks.

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