Voters could see a funding option on a ballot by the end of the year to support the city's road improvement plan, according to a city administrator.
City Manager Michael Spurgeon said Friday that members of the city staff are working now to set up educational hearings throughout the next three months to “fully inform residents of the options they have in funding a projected $15 million, long-term project to rebuild and maintain city streets.
Options include increasing property tax, boosting city sales tax, assessing a fee to city utility customers or redistributing funds that already exist in the city's general fund - or a combination thereof.
Each of the options have their benefits and drawbacks, according to Spurgeon. However, he said that residents should rest assured that he has no intention of locking residents into an eternal obligation.
“It is my recommendation that we never do anything without a sunset clause, Spurgeon said.
The clause would place a formal ending date on the funding mechanism. In order to continue, city officials would have to go back to the voters for approval.
“It is essentially a grade card, Spurgeon said. “It tells us if we are doing our job.
Spurgeon said voters have a lot to consider as they search for a revenue source that they are comfortable with.
A property tax increase is a viable option, but complicated, according to Spurgeon.
Currently, the city charter allows the city to only borrow 5 percent of its assessed value of $45 million, meaning that the most it can borrow at any given time is $2.2 million.
The city already has borrowed a half-million dollars through the last bond issue for city improvements, leaving the city with the ability to borrow about $1.7 million.
“In order to increase our line of credit, voters would have to approve a change in the city charter, Spurgeon said.
For every $1 million dollars levied through property tax, property owners with an assessed home value of $50,000 would pay about $15.89 per year in additional property tax, according to Spurgeon.
The city charter also calls for a 60-percent voter approval rate any time that a tax increase relates to road improvements.
Some people think a sales tax is the best option for road improvements because it allows everyone who shops in Miami to carry a portion of the burden of paying for city improvements.
The problem with additional sales tax, according to Spurgeon, is that an increase could push Miami's sales tax over 9 percent.
A utility assessment - which does not require a vote of the people - is another option, but is argued heavily by people who say it is taxation without representation. It is estimated that a $1 assessment of utility customers would bring about $90,000 in revenue annually.
Spurgeon said the city could look to redistribute money in the existing budget, but the result would mean a loss in personnel.
Of the city's budget, 85 percent is obligated to personnel costs.
Lastly, Spurgeon said that increasing utility rates is an option for generating revenue.
“I don't think that is a viable option, Spurgeon said. “It is my opinion that utility rate increases should be strictly tied to the cost of providing utility services - not to fix the roads.