OFFICE OF THE CITY COUNCIL

 

CHERYL L. BROWN                                                                                                         117 WEST DUVAL STREET, SUITE 425

            DIRECTOR                                                                                                                                                                                 4TH FLOOR, CITY HALL

   OFFICE (904) 630-1452                                                                                                                                                          JACKSONVILLE, FLORIDA  32202

     FAX (904) 630-2906                                                                                                                                                                                                              

  E-MAIL: CLBROWN@coj.net

 

JOINT RULES/FINANCE/TEU COMMITTEE MEETING MINUTES - AMENDED

Ordinance 2013-820

May 7, 2014

1:00 p.m.

 

City Council Conference Room A

Suite 425, City Hall

117 West Duval Street

 

Attendance:  Council Members Bill Gulliford (President), Greg Anderson (F, TEU), Stephen Joost (F, TEU), Reginald Brown (F, TEU), John Crescimbeni (F), Johnny Gaffney (F), Robin Lumb (F), Matt Schellenberg (F, TEU), Warren Jones (R), Doyle Carter (R), Bill Bishop (R), Lori Boyer (R), Denise Lee (R), Don Redman (R), Jim Love (TEU)

 

Also: Peggy Sidman and Paige Johnston, Office of General Counsel; Theresa Eichner and Margo Klosterman – Mayor’s Office; Jeff Clements – City Council Research; Janice Billy and Kyle Billy – Council Auditor’s Office; John Pappas – Public Works Department; Nathaniel Ford and Brad Thoburn – JTA; Juliette Williams – Legislative Services Division

 

The Chairman called the meeting to order at 1:08 p.m. and all council members introduced themselves for the record.

 

President Gulliford gave a brief introduction and expressed disappointment that allegations had been made that his support for this bill is self-serving and will benefit his business; he invited the media to scrutinize his business sales and realize that the vast majority of his heavy equipment sales are to overseas clients.

 

Copies were distributed of 2 proposed project lists and Brad Thoburn of the JTA gave an overview of the current uses of the local option gas tax and the proposed division of the proceeds of the extended gas tax under the propose interlocal agreement between the City and JTA developed through the course of 3 meetings of numerous interested parties.

 

Council Member Schellenberg noted that many of the projects on the distributed lists were promised previously under other funding programs and were not completed when funds ran out; the citizens have the right to be leery of another promised project list. In response to a question from Council Member Lumb, Mr. Thoburn indicated that tens of millions of dollars have already been expended on design and engineering on many of these projects. Council Member Brown urged a more equal division of the revenues between the City and JTA. Council Member Jones noted that a new alternative fuels tax mechanism will take effect in 2018 and could affect the revenues the extended tax may generate. Nathaniel Ford, CEO of the JTA, stated that a third party financial advisor generated the estimate of the potential revenue taking many market factors into account and the bond underwriters will take another look at the reliability of the revenue stream if and when the revenue is pledged to bond payment, so experts will opine several times on the sufficiency of the revenue to meet the projected needs. The current estimate is that the tax will produce $27 million per year and be relatively flat over the 20 year period. Council Member Boyer urged that the bill and interlocal agreement be amended to reflect the priority of use of the funds for debt service over mass transit if that is in fact the Council’s intent.

 

Brad Thoburn reviewed the project lists which are based on several priority criteria: degree of readiness for construction, unfinished BJP projects, additional available funding sources (i.e. mobility fees and fair share), potential effect on mobility and traffic congestion, and relative geographic fairness of distribution. Council Member Brown questioned the fairness of the list and how some roads in very congested condition were not included. Council Member Bishop said that a number of state roads were included on the Better Jacksonville Plan project list with the understanding that the FDOT would advance the time frame for the replacement of the Mathews Bridge, which has not yet come to pass. Council Member Redman suggested that the gas tax revenue be used on a “pay as you go” basis rather than issuing bonds to finance the projects. Mr. Pappas answered questions from Council Member Anderson about the timing of projects and the effect of readiness on the ranking of projects. In response to a question from Council Member Joost, Mr. Thoburn said that the project cost estimates were recently updated in the process of compiling the list and costs are beginning to rise again recently after several years of flat or declining costs during the recession.

 

Council Member Brown requested a legal opinion about the City’s legal responsibility to complete all of the original BJP projects and whether the extension of the gas tax would contain an obligation to complete those projects. In response to a question from Council Member Brown, Ms. Sidman stated that General Counsel Cindy Laquidara and State Attorney General Pam Bondi have both opined that the City is within its authority to extend the local option gas tax. Mr. Brown also requested a listing of all City funds expended on improvements to state roads in the last 5 years and expressed the opinion that the JTA would be more effective than the City in hiring higher percentages of minority-owned businesses in the contracting for those projects. Council Member Brown urged the Council to hold a town hall meeting to involve the general public in commenting on and prioritizing the project list.

 

Ed Burr, Chair of the JTA board, said that the JTA is primarily interested in the extension of the local option gas tax as a mass transit funding vehicle because $27 million in gas tax is used annually to finance the bus system and the system will be crippled without it. The current low interest rate environment and relatively low (although increasing) cost of construction makes this a good time to issue bonds and build the maximum amount of roads possible after taking care of mass transit needs. The 5 cents of the gas tax allocated to JTA will generate $8 to 9 million per year for debt service on $100 million of road building and the remainder will be allocated to mass transit operations. Council Member Brown requested that the OGC provide information about the process required to levy the additional 6 cents of local option gas tax.( in addition to the existing 6 cents being considered for extension). Mr. Burr stated that the JTA board has not taken a corporate position in favor of or opposed to the gas tax extension and has only discussed the terms of the proposed interlocal agreement. Council Member Lee urged the JTA board to take a public stand on the issue of the extension.

 

In response to a question from Council Member Boyer, Mr. Thoburn stated that none of the projects on the proposed list are currently on the FDOT’s 5-year project list. Ms. Boyer suggested that every possible source of state funding be explored and that if additional funds are obtained, that the project list be completed and additional projects added if possible. She said that using these gas tax funds for state road projects on the list may free up local funding for local transportation projects on the City’s CIP list. Council Member Crescimbeni suggested that the JTA confer with the FDOT on their cost estimation methodology and confirm that the City’s and JTA’s estimate are reasonable. President Gulliford requested information from the JTA on how much funding for listed projects has been allocated but is sitting idle because the project can’t be moved forward. Council Member Lee said that the fundamental decision to be made is whether mass transit funding should be done via the local option gas tax or through the City General Fund, which is already overburdened with many other challenges. Council Member Joost made a PowerPoint presentation showing that the gas tax is a steadily declining revenue source because of fuel efficiency increases and changing fuel sources (electricity, compressed natural gas, etc.). He urged the Council not to make a 20 year commitment to a fixed project list and a declining funding source which will inevitably lead to more project cancellations and citizen disappointment. Council Member Bishop asked the General Counsel’s Office to provide definitive information on what state law provides about what happens in 2018 when the state begins imposing the state fuel tax on compressed natural gas and other alternative fuels and whether local governments will be allowed to impose their local option taxes on those fuels.

 

President Gulliford cited the importance of extending the gas tax as a source of funding for job creation and doing it sooner rather than later because construction costs will inevitably rise as economic activity increases. Council Member Joost felt that this is such a substantial and costly issue that the Council should take the matter to the citizens in town hall meetings and gauge the feelings of the general public.

 

At the next meeting the joint committee will consider the Council Auditor’s report and recommendations for amendments to the bill.

 

There being no further business, the agenda meeting was adjourned at 3:36 p.m.

 

Jeff Clements, Council Research Division (904) 630-1404

 

Posted 5.8.14  9:00 a.m.