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HomeMy WebLinkAboutCC 2001-04-30 Discussion ItemCITY OF MIAMI CITY ATTORNEY'S OFFICE MEMORANDUM TO: Commissioner Tomas FROM: Alejandro Vilarello, C DATE: April 27, 2001 RE: What are the proper Funds MIA -01-00012 n C= n > E! o � T Am S �J r Z w Z w of Miami Sports and Exhibition Authority You have requested a legal opinion on substantially the following question: WHAT ARE THE PROPER USES OF MIAMI SPORTS AND EXHIBITION AUTHORITY FUNDS. The funds of the Miami Sports and Exhibition Authority must be used for purposes consistent with MSEA's purpose and mission. The portion of the funds that represents convention development tax proceeds, and interest accrued thereon, may be used solely for the purposes delineated in Section 212.0305, Florida Statutes and Section 29-63(a) of the Miami - Dade County Code, which consist, essentially, of capital improvement and maintenance of certain specifically approved facilities. The Miami Sports and Exhibition Authority (MSEA) was created by the City of Miami ("City") as an independent and autonomous agency of the City pursuant to Section 212.057, Florida Statutes (1985) [now repealed; See §212.0305, Fla. Stat. (1997)]. Its purpose, as set forth in Section 2-1012 of the Code of the City (the "Code"), is to promote sports, conventions and exhibitions to the greatest extent feasible, and to generate and further community support to achieve this purpose. The powers and duties of MSEA include the power to acquire, construct, equip, maintain and operate exhibition halls, arenas, convention centers, coliseums, auditoriums, recreation centers, clubhouses, gymnasiums, golf courses, parking facilities and related buildings, and the usual facilities related thereto. MSEA is further authorized to do all things necessary or convenient to carry out the powers enumerated in Section 2-1014 of the Code. MSEA was created to administer and disburse the convention development tax funds that the county is authorized to levy under Section 212.0305, Florida Statutes. Section 212.0305(4)(b)4.a., Florida Statutes, requires the governing body of the municipality in which the projects to be funded with the tax are to be developed, to designate an authority to administer and disburse the tax funds. Thus, MSEA was created by the City as a condition precedent to the City receiving the tax proceeds levied by Miami -Dade County under Section 212.0305, Florida Statutes. The sources of MSEA's funds are the convention development tax proceeds that it receives from Miami -Dade County and interest accrued thereon ("CDT") and other revenues derived from the operation of the Miami Arena and related facilities, such as rental or use fees Re: Proper uses for Miami Sports & Exhibit Authority April 27, 2001 MIA -01-00012 Page 2 ("Related Revenues"). The distinction between CDT and Related Revenues is important because the use of CDT funds is subject to the restrictions set forth in Section 212.0305, Florida Statutes. See, Fla. AGO 98-34 (1998). A. USE OF CONVENTION DEVELOPMENT TAX (CDT) REVENUES: The Convention Development Tax Act (the "Act"), codified in Section 212.0305, Florida Statutes, authorizes certain counties in the State of Florida to levy a three percent (3%) convention development tax on transient rentals. The provisions of the Act, which are specifically applicable to Miami -Dade County and the City, are found at Section 212.0305(4)(b), Florida Statutes. Section 212.0305 (4)(b)2, Florida Statutes, establishes the authorized uses of CDT funds. It provides that the funds shall be used as follows: (i) two-thirds (2/3) of the proceeds shall be used to extend, enlarge, and improve the largest existing publicly -owned convention center in the county; and (ii) one-third (1/3) of the proceeds shall be used to construct new multipurpose convention/coliseum/exhibition center/stadium or the maximum components thereof, as funds permit, in the most populous municipality in the county. After the completion of any of the projects referenced above, the tax proceeds may be used to acquire, construct, extend, enlarge, remodel, repair, improve, plan for, operate, manage, or maintain one or more convention centers, stadiums, exhibition halls, arenas, coliseums, or auditoriums, and may be used to acquire and construct an intercity light rail transportation system. Thereafter, the tax may be used, as determined by the county, to operate the authority created pursuant to Section 212.0305 (4)(b)4.a, or to acquire, construct, extend, enlarge, remodel, repair, improve, operate, or maintain one or more convention centers, stadiums, exhibition halls, arenas, coliseums, auditoriums, golf courses, or related buildings and parking facilities in the most populous municipality in the county. Article VI of the Miami -Dade County Code (the "County Code"), codifies the ordinance pursuant to which Miami -Dade County levied and imposed the CDT. Section 29-63(a) of the County Code designates the uses of the tax revenues and interest accrued thereon. It provides that: (2) The portion received by the authority designated by the City of Miami shall be used to construct a new multipurpose convention/coliseum/exhibition center or the maximum components thereof as funds permit within the City of Miami; (3) After the completion of any project under subparagraph (1) or (2), tax revenues and interest accrued may be used to acquire, construct, extend enlarge, remodel, repair, improve or maintain one (1) or more convention centers, stadiums, exhibition hall, arenas coliseums, or auditoriums; and... . Re: Proper uses for Miami Sports & Exhibit Authority April 27, 2001 MIA -01-00012 Page 3 Therefore, based on the applicable provisions of the Act and of the County Code, the CDT portion of MSEA funds may be used solely for the purposes delineated in the Act and in the County Code, which consist, essentially, of capital improvement and maintenance of certain specifically approved facilities. It should be noted that the County Code provision appears to be more restrictive than the corresponding statutory provision in that it does not include the authorization to use CDT funds in connection with a golf course facility. The statute, however, provides for the alternative that the funds be used as determined by the county or as provided in Section 212.0305(4)(b)2.d., Florida Statutes. B. RELATED REVENUES: Section 212.0305(4)(b)2, Florida Statutes, deals solely with "convention development moneys, including any interest accrued thereon, " and restricts the use thereof to the purposes set forth therein. This section is silent about the uses of any other sources of revenues, such as the Related Revenues. On February 3, 1998, this Office issued legal opinion MIA 98-05 that concluded that Related Revenues were not subject to the restrictions contained in Section 212.0305(4)(b), Florida Statutes. Our opinion was confirmed by Attorney General Opinion 98-34, copy of which is enclosed. Related Revenues, however, may be used only for purposes consistent with MSEA's purpose and mission. CONCLUSION MSEA's funds must be used for purposes consistent with MSEA's purpose and mission. The portion of the funds that represents CDT funds and interest accrued thereon are further restricted by the provisions of Section 212.0305(4)(b), Florida Statutes (2000), which offers the alternative that CDT funds be used as designated by the county or, essentially, to fund capital improvements and maintenance of certain specifically approved facilities as set forth above. 19:107:1:� i REVIEWED AND APPROVED BY: Olga amirez-Seijas 0 Rafael O. Diaz Assistant City Attorney Assistant City Attorney cc: Mayor and Members of the City Commission Carlos A. Gimenez, City Manager Walter J. Foeman, City Clerk Office of the Attorney General State of Florida *1 AGO 98-34 May 12, 1998 RE: CONVENTION DEVELOPMENT TAX--TAXATION--MUNICIPALITIES-- rent revenues received from rental of sports arena funded by city convention development tax not subject to limitations applicable to convention development tax revenues. s. 212.0305. Fla. Stat. Mr. Joel Edward Maxwell Interim Miami City Attorney 444 Southwest Second Avenue, Suite 945 Miami, Florida 33130-1910 Dear Mr. Maxwell: On behalf of the Miami Sports and Exhibition Authority, you ask substantially the following question: Are rent revenues received by the Miami Sports and Exhibition Authority from leasing the land on which the Miami Arena is situated considered to be convention development tax moneys subject to the restrictions placed on such moneys by section 212.0305(4)(b)2., Florida Statutes, or are such proceeds 'other related sources of income" not subject to the same restrictions? In sum: Rent revenues received by the Miami Sports and Exhibition Authority from leasing the land on which the Miami Arena is situated are not convention development tax moneys subject to the restrictions placed on such moneys by section 212.0305(4)(b)2., Florida Statutes. Such revenues, however, must be used to carry out the duties and functions of the Authority. You state that the Miami Sports and Exhibition Authority (MSEA) was created by the City of Miami as an independent and autonomous agency of the city pursuant to section 212.057, Florida Statutes 1985, which authorized the levy of a convention development tax. Section 212.057 was repealed in 1986, WN11 and provisions for the levy of convention development taxes are now contained in section 212.0305, Florida Statutes. The purpose of the MSEA is to promote sports, conventions, and exhibitions to the greatest extent possible, to generate and further community support to achieve this purpose, and to endeavor to attract professional sports franchises to utilize facilities within the city. IFN2] You state that the MSEA has the authority to acquire, construct, equip, maintain, and operate exhibition halls, arenas, convention centers, coliseums, auditoriums, recreation centers, gymnasiums, and related buildings and may acquire in its own name real and personal property necessary to achieve its purposes. According to your letter, the MSEA is funded by convention development tax proceeds and other revenue derived from the operation of the Miami Arena and related facilities. You state that the designation of the MSEA for this purpose was a condition precedent to the city receiving such tax proceeds under section 212.0305, Florida Statutes. FN3 Proceeds from the convention development tax levy were used by MSEA to acquire the land on which the Miami Arena was built in 1986, and the authority derives approximately $300,000 annually in rent from the leasing of the land to the arena. The Convention Development Tax Act, section 212.0305, Florida Statutes, authorizes certain counties to levy a three percent convention development tax on transient rentals. Section 212.0305(4)(b)l., Florida Statutes, provides that "the proceeds of this levy shall be known as the charter county convention development tax." Pursuant to section 212.0305(4)(b)2., *2 "All charter county convention development moneys, including any interest accrued thereon, received by a county imposing the levy shall be used as follows: a. Two-thirds of the proceeds shall be used to extend, enlarge, and improve the largest existing publicly owned convention center in the county. b. One-third of the proceeds shall be used to construct a new multipurpose convention/coliseum/ exhibition center/stadium or the maximum components thereof as funds permit in the most populous municipality in the county. c. After the completion of any project under sub-subparagraph a., the tax revenues and interest accrued under sub-subparagraph a. may be used to acquire, construct, extend, enlarge, remodel, repair, improve, plan for, operate, manage, or maintain one or more convention centers, stadiums, exhibition halls, arenas, coliseums, or auditoriums, and may be used to acquire and construct an intercity light rail transportation system as described in the Light Rail Transit System Status Report to the Legislature dated April 1988, which shall provide a means to transport persons to and from the largest existing publicly owned convention center in the county and the hotels north of the convention center and to and from the downtown area of the most populous municipality in the county as determined by the county. d. After completion of any project under sub-subparagraph b., the tax revenues and interest accrued under sub-subparagraph b. may be used, as determined by the county, to operate an authority created pursuant to subparagraph 4. or to acquire, construct, extend, enlarge, remodel, repair, improve, operate, or maintain one or more convention centers, stadiums, exhibition halls, arenas, coliseums, auditoriums, golf courses, or related buildings and parking facilities in the most populous municipality in the county. e. For the purposes of completion of any project pursuant to this paragraph, tax revenues and interest accrued may be used: (I) As collateral, pledged, or hypothecated for projects authorized by this paragraph, including bonds issued in connection therewith; or (II) As a pledge or capital contribution in conjunction with a partnership, joint venture, or other business arrangement between a municipality and one or more business entities for projects authorized by this paragraph." Section 212.0305(42., Florida Statutes, initially refers to all charter county convention development moneys, including interest accrued thereon. An examination of the statute, however, indicates that the term refers to the proceeds of the tax levy and interest accrued on such proceeds. In setting forth the permissible uses for charter county convention development moneys, the statute uses the terms proceeds and tax revenues interchangeably. FN4 Thus, the provisions of section 212.0305(4)(b)2., Florida Statutes, setting forth the authorized uses for charter county development moneys, including accrued interest, appear to relate to convention development tax proceeds or revenues and accrued interest on such funds. Where the Legislature has prescribed the manner in which a thing should be done, that is, in effect, a prohibition against its being done in any other way. The specific provisions in section 212.0305, Florida Statutes, limit the use of such revenues generated from the convention development tax to the purposes specified therein. FNS *3 Revenues derived from rent of the facilities are not tax revenues or proceeds from the tax levy and thus would not appear to be subject to the limitations contained in section 212.0M05(4)(b)2., Florida Statutes. The statute recognizes that the MSEA may receive other revenues. Section 212.0305(4)(b)4.a.(I), Florida Statutes, in providing for the creation of an authority such as MSEA, states that such entity has the sole power to "administer and disburse such proceeds and any other related source of revenue." Additionally, it may invest and reinvest "the proceeds from the convention development tax and any other revenues generated by the authority in the same manner that the municipality in which the authority is located may invest surplus funds." IFN61 (e.s.) Such revenues, however, are subject to the limitations and conditions imposed upon MSEA and must be used to carry out MSEA's duties and functions. Accordingly, I am of the opinion that rent revenues received by the Miami' Sports and Exhibition Authority from leasing the land on which the Miami Arena is situated are not convention development tax moneys subject to the restrictions placed on such moneys by section 212.0305(4)(b)2., Florida Statutes. Such revenues, however, must be used to carry out the duties and functions of the Authority. Sincerely, Robert A. Butterworth Attorney General [FN11. See, s. 71, Ch. 86-152, Laws of Florida. IFN21. Section 2-1012, Miami City Code. JFM. See, s. 212.0305(4)(b)4.a., Fla. Stat., providing that before a charter county enacts an ordinance imposing the levy, the county shall notify the governing body of each municipality in which certain projects are to be developed and as a condition precedent to receiving funding, the governing bodies of such municipalities shall designate or appoint an authority that has sole power to approve the concept, location, program, and design of the facilities and to disburse "such proceeds and any other related source of revenue." FN4. See, e.g., s. 212.0305(4)(b)2.b., Fla. Stat., stating one-third of the proceeds shall be used to construct a new multipurpose convention/coliseum/exhibition center/stadium in the most populous municipality in the county while s. 212.0305(4)(b)2.d., Fla. Stat., states that after completion of any project under sub - subparagraph b., the tax revenues and interest may be used to operate the authority created pursuant to subparagraph 4., or to construct, improve, or operate convention centers, stadiums, exhibition halls, arenas, coliseums, auditoriums, golf courses or related buildings and parking facilities in the county's most populous city. FNS . See, e.g., Alsop v. Pierce, 19 So. 2d 799, 805 (Fla. 1944) (when the Legislature has prescribed the mode, that mode must be followed); Thayer v. State, 335 So. 2d 815, 817 (Fla. 1976). FN6 . Section 212.0305(4)(b)4.c., Fla. Stat. Fla. AGO 98-34,1998 WL 655676 (F1a.A.G.) END OF DOCUMENT Copr. (C) West 2001 No Claim to Orig. U.S. Govt. Works