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CITY OF MIAMI
OFFICE OF THE CITY ATTORNEY
MEMORANDUM
TO: Tlie Honorable Mayor and Members of the City Commission
FROM: Julie O. Bru, City Attorney
DATE: September 3, 2010
RE: Proposed Resolution for City Commission Meeting- September 16, 2010
initiating conflict resolution procedures provided by Chapter 164 Florida
Statutes, in connection with Miami -Dade County's threatened reduction of
transit system surtax proceeds to the City of Miami.
(File No. 10-01073)
The attached proposed Resolution seeks authorization to initiate conflict resolution
procedures provided by Chapter 164 Florida Statutes, in connection with Miami -Dade County's
threatened reduction of transit system surtax proceeds to the City of Miami.
Background
In June 2002, Miami -Dade County ("MDC") commissioners voted to place the "People's
Transportation Plan," which called for a half -penny sales tax increase, on the November ballot.
MDC obtained the support of the then -existing municipalities by promising that 20% of the
surtax proceeds would be distributed pro rata among them.
On July 9, 2002, the MDC Commissioners ("BCC") passed and adopted Ordinance No.
02-116, amending Chapter 29 of the Code of Miami -Dade County by adding Article XVI — One
Half Percent Charter County Transit System Sales Surtax Authorized by Section 212.055(1),
Florida Statutes (2001). The ordinance would go into effect upon approval of the MDC
electorate. Ordinance No. 02-116 provides, in relevant part,
Sec. 29-124 . . . (f) Twenty percent of surtax proceeds shall be distributed
annually to those cities existing as of November S, 2002 that meet the following
conditions ... (ii) That apply 20% of any surtax proceeds received to transit uses .
.. (iii) Surtax proceeds distributed amongst the existing cities shall be distributed
on a pro rata basis . .. (g) Newly incorporated cities shall have the right to
negotiate with the County for a pro rata share of the sales surtax . .. . The
preceding sentence shall not affect the twenty (20%) percent share provided
herein for municipalities existing on Novernber S, 2002.
(emphasis added) Ordinance No. 02-116 can be amended or repealed only by a two-thirds vote
of the BCC; it does not contain a sunset provision. That same day, the BCC passed and approved
Ordinance No. 02-117, creating the Citizen's Independent Transportation Trust ("CITT"), which
would monitor the projects funded by the surtax.
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Notably, the issue of future municipalities was discussed at the July meeting of the BCC.
Commissioner Ferguson expressed concern about "the exclusion of future municipalities from
the surtax proceeds." At that time, MDC Attorney Robert Ginsburg proffered the following
language: "newly incorporated cities shall have the right to negotiate with the County for a pro
rata share of the sales surtax .... The preceding sentence shall not affect the twenty (20%)
percent share provided herein for municipalities existing on November 5, 2002."
In November 2002, the voters approved the half -penny tax.
Since 2002, three municipalities have been incorporated — Miami Gardens (May 13,
2003), Doral (June 24, 2003) and Cutler Bay (November 8, 2005). To date, these new
municipalities have not obtained a share of the surtax revenue. MDC did not honor its legal
mandate to pay these municipalities their share out of MDC's 80% share.
The proceeds collected by the existing municipalities for the six years ending in
September 2008 were $200,772,646. Of that amount, Coral Gables received $7,725,324 and
Hialeah received $40,837,004. The City of Miami received $66,688,145. In 2009, the cities
received: Coral Gables - $1.4 million; Hialeah - $7.2 million; Miami - $12.5 million.
Miami entered into an interlocal agreement with MDC. The agreement adopted
Ordinance No. 02-116 and expressly requires that "twenty (20) percent of surtax proceeds ... be
distributed annually to those Cities existing as of November 5, 2002 ("eligible cities") ...." The
contract defines "Eligible Cities" as "cities in existence as of November 5, 2002." The term of
the agreement is 5 years. It is in effect through July 10, 2012.
On July 19, 2010, the MDC Manager formally recommended a "hold harmless plan" to
the CITT and the BCC. Under the hold -harmless plan, the new cities would be funded with the
growth in surtax revenue that is expected in the coming years as the economy recovers. Thus,
the amount that existing cities receive would be frozen at the present amount and they would
have to forego any surtax growth. If there is little or no growth, the new cities will be funded by
MDC's share. Once the funding to the new cities reaches $5.3 million (which is the money
needed to fund these new cities for one year), the new cities will then be incorporated into the
existing cities' 20% share. This will create a loss to the City of Miami.
cc: Carlos A. Migoya, City Manager
Elvi Gallastegui, Agenda Coordinator
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