Despite an economic downturn and fluctuating oil prices, city leaders are pushing forward with plans to roll out a comprehensive road improvement plan.
Allan Brooks of Public Finance Law Group PLLC and Jon Wolff, vice president of Municipal Finance Services, told council members last week that they have two options for generating revenue - general obligation bonds or a sales tax.
Only one option , sales tax, is expected to come close to generating the level of revenue needed to finance a $200 million plan to build, repair and maintain the city's 112 miles of streets.
General obligation bonds available to the city are restricted to a level within the city's bonding capacity and will generate about $2.1 million. They are also less flexible than sales tax, according to Wolff.
Monday's discussion included questions of current economic conditions, rising construction costs and matters regarding financial structuring and its impact on the existing budget.
Council members are focusing on sales tax options and looking for public feedback on a proposal that could raise the the city's sales tax portion by one percentage point - with voter support.
“We want the community to decide its destiny,” said Mayor Brent Brassfield. “It is time. We have put this off long enough. We cannot continue to turn our heads, we have to do it - right now.”
Brassfield said the city needs to be prudent and give the people of Miami a voice in deciding how the city should move forward.
The mayor said he will not support a plan that does not address future maintenance. He also indicated that the plan should not put tax payers “on the hook” for perpetuity.
“The city has never really had a road plan like what we are going to propose … (a plan that implements) maintenance once it is finished,” Brassfield said. “I would not be in favor in this in any manner .. If we are not going to put some sort of regular maintenance commitment on this program.”
Brassfield has stated many times that, as a man who once spent a summer patching city streets, he knows that the time for temporary fixes must end.
His sentiments were echoed by city manager Huey P. Long.
“What I want our citizens to understand is that you have to affect the base of the streets in this community - that is the key to sustainable streets,” Long said.
Long said street improvement is the “single greatest thing you can do for a property owner in this town.”
Street improvement will boost property value, build community pride and entice business, according to Long.
“I want to encourage you to not strap another bandage on our streets,” Long said.”I know a penny is significant … But, if you are going to do it, do it right.”
A one percent increase in sales tax would boost the city's tax rate to 4 percent - a level that is average, according to Brooks.
Overall, purchases in Miami would be taxed at 9.85 percent.
The questions that are currently before the council include:
€ Whether to seek a general obligation bond or a sales tax increase.
€ If a sales tax is decided - should it be a quarter-cent, half-cent or a full penny?