Issue Statement : The City participates in the Additional Local Option Gas Tax on Motor Fuel Interlocal Agreement (ILA) with the County to receive its share of this County-levied gasoline tax. This agreement must be updated each year to reflect the current population of all participating cities since the allocation of gasoline taxes is based on the most current population figures.

Recommended Action: The City Commission to adopt a resolution authorizing the proper City officials to execute the 2021 Amendment to the ILA  between the County and the City providing for the division and distribution of the proceeds from the County Additional Local Option Gas Tax on Motor Fuel ordinance for Fiscal Year 2022.

As authorized by Florida Statute, Section 336.025(1), the Broward County Commission has levied a total of 11 cents of local option gas tax for every gallon of motor fuel and special fuel sold. The eligible cities of Broward County, through interlocal agreements, share these taxes. There are three agreements affecting the City with the City's share based on its population in relationship to the total population of all cities included in the agreement. These population numbers are updated annually through an amendment to the original agreements.  

The first Local Option Gas Tax (LOGT) for six cents was originally levied in 1983, then revised in 1988 to extend for thirty years, expired on August 31, 2018.  The successor agreement approved by Commission on February 7, 2018 does not require annual amendments and will run from September 1, 2018 to  December 31, 2047.   The second levy, the Additional LOGT, was approved in 1993 for three cents, expiring on December 31, 2024. The third levy, the Fifth Cent Additional Transit LOGT was approved in 2000 for one cent and will expire on December 31, 2031. 

The second of these three taxes is the subject of this agenda item report. In total, the above taxes account for ten of the eleven cents per gallon noted above. There is a fourth, one-cent County tax, but the City does not receive any proceeds from this tax.

The City is required to spend the funds received from this gas tax on certain qualified road-related items. The funds have historically been used for transportation expenditures, including road resurfacing and other qualified expenditures of the Public Works Street Maint. Division. A report is filed annually with the State Department of Transportation, reflecting all revenues and expenditures during the year.

As noted above, the ILA provides for an annual adjustment of the local option gas tax distribution formula based on each city’s current population. The County retains 48.73% of all the tax proceeds for County-wide road purposes. The participating cities receive the remaining 51.27%, which is distributed based on population.

For the coming year, as indicated in Exhibit A, the City's population has increased to 45,709 residents from 45,576 last year but the City's share of population among the participating communities has slightly decreased.  Thus, the City's share of the allocated gasoline tax has decreased slightly from 1.227030 percent for FY 20 to  1.222587 percent for FY 22.  These population figures are based on the Florida Estimates of Population published annually by the Bureau of Economic and Business Research (BEBR) at the University of Florida.  

The City receive proceeds from the Additional Local Option Gas Tax and the Fifth Cent Additional Transit Local Optional Gas Tax as a single, co-mingled distribution. Revenues from these taxes are based on the number of gallons of fuel sold. Revenue performance can be highly variable. The City received $338,162 in revenue from these taxes in FY 2019. In FY 2020, the City budgeted $350,000, but only received $299,214 due the effects of the COVID-19 pandemic on fuel sales. The FY 2021 budget contemplates $228,727 in revenue.

The City Commission to adopt a resolution authorizing the proper City officials to execute the 2021 Amendment to the ILA between the County and the City providing for the division and distribution of the proceeds from the County Additional Local Option Gas Tax on Motor Fuel ordinance for FY 22.