Capital Improvements
I.
PURPOSE
In
1985, the Florida Legislature mandated that local governments plan for the
availability of public facilities and services to support development
concurrent with the impacts of such development. Consequently, the Capital
Improvements Element (CIE)of local comprehensive plans has become the
"cornerstone" for achieving this mandate. Specifically, the
purpose of the CIE is to: (1) evaluate the need for public facilities in
support of the Future Land Use Element; (2) estimate the costs of improvements
for which the Town has fiscal responsibility; (3) analyze the fiscal capability
of the Town to finance and construct improvements; and (4) adopt financial
policies to guide the funding and construction of improvements.
The
Capital Improvements Element differs from a capital improvements program
in that the scope is limited to only those capital improvements derived from
the other elements of the comprehensive plan. In short, the CIE can be
used to demonstrate the economic feasibility of the comprehensive plan.
It focuses on the capital outlay required to meet existing deficiencies and to
maintain adopted level of service standards planned for public facilities in
the plan.
II. NEEDS
DERIVED FROM OTHER ELEMENTS
The
previous plan elements have not identified any facility improvements as defined
by Chapter 9J5 needed to meet the demands of both existing and future
development for which the Town has the responsibility for providing. This
is primarily because the Town is almost built out and, for the most part,
contracts for infrastructure needs. The impacts of new or improved public
educational and public health care systems and facilities on the provision of
infrastructure were examined.
The
present geographic service area and location of public schools and public
health care systems indicate that no new public facilities will be needed to
serve the residents of the Town. The Town is served by Indialantic
Elementary School, Hoover Junior High School, and Melbourne High School.
The first two are located just north of the Town Limits, and the third, across
the Indian River in the City of Melbourne. The public health facilities
are, also, located in Melbourne. There is no suitable vacant acreage
remaining within the Town Limits which could be used for either of these uses.
This
element does present an inventory of suggested improvements which are generally
nonrecurring in nature. Although, to some, the improvements may seem
small, they are important to the Town and to its residents.
The
following inventory of suggested improvements provides a brief description of
each project, an estimate of the project cost, and a target year.
It
should be pointed out that the list is not all inclusive of potential needs, but
it does present an accurate picture of what the Town could choose to accomplish
and for which it can provide the necessary
funding.
Suggested Improvements Needs
Town of Indialantic, Florida
Element
Project Description Estimated
Cost Year Needed
Traffic
Circulation Landscape 5th Ave.
Medians $
42,000 1999
Drainage
Oakland Avenue Drainage $
30,000 1998
Purchase
of Street Sweeper $
45,000 1998
*Other
Fire
Truck
$200,000 1999
Recreation
New Basketball Court
at
Orlando
Park
$ 10,000 1999
*Fire truck purchase
would be through a Town referendum.
III.FINANCIAL
RESOURCES
In
order to plan for needed capital improvements and to systematically arrange for
their financing, it is necessary to inventory the major sources of funding
available to the Town.
The
following list contains the various revenue sources as well as a discussion of
their current status:
Local
Resources
Property
taxes are based on a millage rate (one mill is the equivalent of $1 per $1000
of assessed value or .1%),which is applied to the total taxable value of all
real property and other tangible personal property. State constitutional
provisions exist for raising the millage rate above the 10mill cap by local
referendum for debt service or provision of municipal type services within the
County.
As
one of the major sources of revenue for the Town, this tax accounts for
approximately 37% of the annual budget. The 1997 millage rate was
4.9623 mills, and the adjusted tax base was approximately $149,509.240.
Public
Utility or User Charges
This
revenue is derived from the tax placed upon franchises for public utilities
such as Florida Power and Light,telephone, cable television, and gas.
This
source of revenue currently makes up for 31% of the annual budget.
Licenses,
Permits, Fines and Forfeitures
This
source includes such revenues as occupational licenses, building permits,
inspection fees, zoning application fees, and court fines.
Currently,
this category amounts to approximately 9% of the annual budget.
Intergovernmental
This
category includes State revenue sharing, cigarette tax, liquor tax, sales tax
(discretionary), and local option gas tax.
This
source accounted for approximately 15% of the annual budget.
Miscellaneous
This
category included the interest on investment and tax collection as well as
miscellaneous revenue.
Approximately
7% of the annual budget was derived from this category.
Other
Sources of Revenue
Because
the Town has limited financial resources, it may be necessary for it to seek
additional sources. The following revenue sources represent options
available to finance capital improvements.
Impact
Fees
These
fees are charged in advance of new development and are designed to pay for
infrastructure needs, but not operating costs, which directly result from new
development. The Town currently participates in the Brevard County
Impact Fee Program which collects impact fees for correctional facilities and
transportation facilities.
The
pedways on S.R. A1A were constructed from funds generated by this program.
Special
Assessments
Like
impact fees, special assessments are levied against residents, agencies, or
districts who directly benefit from the new service or facility. For
example, the resurfacing of a residential street could be financed through such
a program since only the neighborhood or residents living on the street would
benefit from the improvement.
The
Town has recently levied special assessments for improvements on Fourth
Avenue in the amount of $35,000.
Borrowing
The
extremely high cost of many capital improvements requires local governments to
occasionally resort to borrowing, either through shortterm or longterm
financing. Short term financing, perhaps through local banks, is one
option available to raise required revenue for periods of, perhaps, one to five
years. The more customary method, however, is to authorize long term bond
issues, normally for five to forty years. The following are examples of
types of bond issues which the Town may use.
General
Obligation Bonds
These
bonds are backed by the full faith and credit of the Town, and are required to
be approved by voter referendum. General obligation bonds offer lower
interest rates than other bonds, as they are, in effect, secured by the taxing
power of the Town. Revenues collected from the ad valorem taxes on real
estate and other sources of general revenue are used to serve the debt.
Capital improvements financed through general obligation bonds should benefit
the Town as a whole rather than particular areas or groups.
No
general obligation bonds have been issued by the Town.
Revenue
Bonds
Unlike
general obligation bonds, revenue bonds are financed by those directly
benefiting from the capital improvement. Revenues can be pledged to
pay for the improvement.
The Town issued a
bond in 1991, to be paid off in 2011, for the construction of the new Town
Hall, Fire Station, and Public Works Building. The bond was in the amount
of $650,000 and the principle and interest is payable from and secured by a
lien on the franchise fees from the electric power services. The interest
is a variable rate of 6.9% of the financial institution=s prime rate not to exceed 9%. The
yearly principal payment is $36,500.
Industrial
Revenue Bonds
This
type of bond can be issued by the Town, but is actually assumed by companies or
industries who use the revenue for construction of plants or facilities.
The attractiveness of these bonds to industry is that they carry comparatively
low interest rates due to their tax exempt status. The advantage to the Town is
that the private sector is responsible for retirement of the debt and that new
employment opportunities are created in the community.
Because
of the small amount of vacant land remaining in the Town, it is unlikely that
this type of bond will be used.
State
Resources
The
Town of Indialantic depends on annual disbursements from the State to
supplement its operating and capital budget revenues. The sources of
revenue listed in the above section represented funds which the Town may levy,
collect, and disburse at the local level. This section addresses those
funds which are: generated locally, but collected and later returned by
State agencies to the Town; adopted as a local option tax or license fee;
collected and returned by the State; or shared by the State in the form of
grants to the local government, but originate from State general
revenues. Amounts available from these sources may vary widely from year
to year, depending upon legislative actions.
Revenue
Sharing Trust Fund
There
are two components to this fund, the cigarette tax and the intangibles
tax. Cigarettes are currently taxed at 33.9 cents per pack, of
which a portion is returned to the Town. The intangibles tax is
currently levied annually on stocks and bonds and new mortgages and other lien
secured obligations.
The
Town receives approximately $62,000 per year from this source.
Sales
Tax
The
current sales tax rate in Florida is 6%, and is levied upon retail sales, and
such things as commercial rentals, admission fees to entertainment facilities,
and motor vehicle sales. While there are many exemptions from the sales
tax authorized by the Legislature, over $5 billion is collected annually by the
State. Of the total collected, a percentage is returned to
counties and cities in accordance with specific formulae. The formulae's
variables, in the case of counties,include unincorporated county population,
incorporated population, and total county population.
The
Town receives approximately $113,000 per year from this source of
revenue.
Local
Option Gas Tax
This
tax may be levied over and above the normal gas tax. The Town collects approximately
$70,000 per year from this source from the County.
Motor
Fuel Tax
The
Town receives no direct funds from this source but does receive benefits from
this program on County streets and resurfacing of local streets.
Federal
and State Grants and Loans
The
U.S. State and Local Fiscal Assistance Act of 1972,which formerly provided for
a system of federal general revenue sharing, has not been substantially
modified. Federal funds are currently either: a) allocated to State
agencies which administer block grants in accordance with the programs which
they monitor; or b) reserved at the federal agency level and are disbursed as
block grants directly to state and local agencies or other eligible
organizations and individuals. The purpose of the block grant program is
to enable greater latitude by recipients in actual use of the funds, although
recipients are still required to use the funds for specific categories of
projects. These funds are not distributed by allocation, but rather, require
competitive applications. Consequently, these grant monies are generally
a nonrecurring source of funds, and as such cannot be accurately projected for
budgeting purposes.
A
partial list of available federal grant sources is included on the following
table. Other grants are administered at the state level, with state
executive departments acting as "passthrough agencies" for
federallyfunded project grants.
An example of a
federally funded project grant program is the Community Development Block Grant
(CDBG). The U.S. Department of Housing and Urban Development, which
administers the program, allocates 70% of its CDBG funds for "entitlement
communities,"or the larger urban areas. These entitlement
communities may apply for and receive grants for financing specific projects
from a list of eligible activities outlined in Title I statutes, such as
infrastructure improvements, housing projects, and commercial
revitalization. The remaining 30% of the funds are disbursed to state
passthrough agencies in Florida's case, the Department of Community
Affairs (DCA). DCA administers these grants for the same types of
projects, but restricts their availability to "small cities" and
counties.
In
addition to block grants, several federal agencies offer direct loan programs,
but their applicability to capital improvement projects is extremely
limited. State loans, on the other hand, are usually available to finance
such capital projects as land acquisition for low income housing. The
Department of Community Affairs' Bureau of Housing administers loans and grants
for these purposes through eligible local governments.
The
Town has received State funding for its oceanfront and riverfront parks.
IV. LOCAL
POLICIES AND PRACTICES
Local
policies and practices may be used to guide growth in support of the goals,
objectives, and policies established in the Future Land Use Plan. Many of
these policies and practices are influenced by a higher level of government
such as the State or the County which have jurisdiction over public facilities
within the Town.
In
this section, many of the local policies and practices which are employed or
may be employed in the future by the Town are described in terms of their
general concept as well as the circumstances which may warrant their use.
Level
of Service Standards
These
standards are an indicator of the extent or degree of service provided by, or
proposed to be provided by a facility based upon and related to the operational
characteristics of the facility. Level of service indicates the capacity
per unit of demand of each public facility. They are, in short, a summary
of existing or desired public facility conditions.
FEDERAL GRANTS
Sample List of Administering Federal Agencies
and Program Titles
Department
of Commerce
Public
Works and Development Facilities
Support
for Planning Organizations
Public
Works Impact Projects
Public
Telecommunications Facilities Construction and Planning
Department
of Health and Human Services
Community
Health Centers
Department
of Housing and Urban Development
Housing
Development Grants
Community
Development Block Grant/Entitlement
Community
Development Block Grant/Small Cities Program
Urban
Development Action Grant
Department
of Interior
Outdoor
Recreation Acquisition, Development, and Planning
Urban
Park and Recreation Recovery Program
Department
of Transportation
Urban
Mass Transportation Capital Improvement Grants
Urban
Mass Transportation Technical Studies Grants
Environmental
Protection Agency
Construction
Grants for Wastewater Treatment Works
Comprehensive
Estuarine Management
Source:
"Catalog of Federal Domestic Assistance", 1986, Government Printing
Office, Washington, D.C.
At present the Town has not adopted such standards but the following are proposed:
Sanitary Sewer |
200
gal./residential unit/day 200
gal./equivalent res.unit/day |
|
|
Solid Waste |
8.32
pounds/person/day |
|
|
Drainage |
Retention of the
first 1" of rainfall on site and designed for the 25 year 24 hour
storm |
|
Potable Water |
288
gal/residential unit/day |
|
Transportation |
Collector and
Local Streets |
LOS
C LOS
E LOS
D LOS E |
|
Recreational Standards |
4 acres per 1000 persons |
|
Capital
Improvements Program
This
program is developed to set forth each capital project or other such
expenditure which the local government plans to undertake over a fiveyear
period. It is more detailed than the Capital Improvements Element
required by the comprehensive plan.
At
present, the Town has approximately $80,000 in its Capital Improvements Fund.
Impact
Fees
These
fees are imposed by many jurisdictions on new development to offset the costs
of new capital facilities necessitated by that development.
The
Town participates in the County Impact Fee Program.
User
Fees
These
charges are designed to recoup the costs of public facilities or services by
charging those who benefit from them.
The Town currently
collects user fees through the use of parking meters along Wave Crest Street.
Other
Policies
Since
the Town does not provide water or sewer service; does not have any unplatted
land; and would not need a moratorium for public facilities needs, it is
doubtful that any policies directed toward them would be necessary.
V.
FINANCIAL ANALYSIS
Fiscal
Assessment
This
assessment is directed toward those projects mentioned in other elements of the
Comprehensive Plan. Its purpose is to determine if sufficient funds will
be available to finance projects within the existing budgetary system.
Accounting
System
The
accounting policies of the Town of Indialantic conform to generally accepted
accounting principles as applicable to governments. The following is a
summary of the more significant policies:
Fund
Accounting
The
accounts of the Town are organized on the basis of funds and account groups,
each of which is considered a separate accounting entity. The operations
of each fund are accounted for with a separate set of selfbalancing accounts
that comprise its assets, liabilities, fund equity, revenues, and expenditures,
or expenses, as appropriate. Government resources are allocated to and
accounted for in individual funds based upon the purposes for which they are to
be spent and the means by which spending activities are controlled. The
various funds are grouped, in the financial statements in this report, into
five generic fund types and three broad fund categories as follows:
Government
Funds
General
Fund The general fund is the general operating fund of the Town. It
is used to account for all financial resources except those required to be
accounted for in another fund.
Special
Revenue Funds Special revenue funds are used to account for the proceeds
of specific revenue sources (other than special assessments, expendable trusts,
or major capital projects) that are legally restricted to expenditures for
specified purposes.
Debt
Services Funds Debt service funds are used to account for the
accumulation of resources for, and the payment of, general longterm debt
principal, interest, and related costs.
Proprietary
Funds
Enterprise
Funds Enterprise funds are used to account for operations (a) that are
financed and operated in a manner similar to private business enterprises
where the intent of the governing body is that the costs (expense, including
depreciation) of providing goods or services to the general public on a
continuing basis be financed or recovered primarily through user charges; or
(b) when the governing body has decided that
periodic
determination of net income is appropriate for capital maintenance, public
policy, management control, accountability or other purposes.
Fiduciary
Funds
Trust
and Agency Funds Trust and Agency funds are used to account for assets
held by the Town in a trustee capacity or as an agent for individuals, private
organizations, other governments, and/or other funds. These include
Expendable Trust, Nonexpendable Trust and Pension Trust Funds are accounted for
in essentially the same manner as governmental funds. Agency Funds are
custodial in nature (assets equal liabilities) and do
not involve
measurement of results of operations.
Projected
Revenues
The
tax base of the Town was projected to increase at a rate of 2 percent per year
based upon the previous four years. The assessment rate of Brevard
County is expected to remain at 100 percent. The proposed millage
rate which was 4.8451 mills for 1998-1999 was assumed to increase
to 5 mills and remain constant. This increase includes the rollback.
The following
table indicates the
projected adjusted tax base, the projected
millage rate, and
the projected ad valorem yield.
Projected
Taxable Value, Millage, and Revenue
1987 2010
Town of Indialantic, Florida
Year
Taxable Value Millage
Revenue
1987
$114,308,850
3.3160 $379,048.14
1988
123,243,249
3.4440 424,449.74
1989
132,860,897
3.2410 430,602.16
1990
146,730,768
3.3489 491,386.66
1991
146,928,839
3.7096 545,047.22
1992
144,997,671
3.9925 578,903.20
1993
145,108,314
4.3323 628,652.74
1994
144,299,455
4.8019 692,911.55
1995
145,671,613
4.7708 694,970.13
1996
145,569,257
5.1751 753,335.46
1997
149,509,240
4.9623 741,909.70
1998
155,314,791
*4.8451 752,515.69
2000
161,527,383
5.0000 807,637.00
2005
169,603,752
5.0000 848,019.00
2010
178,083,940
5.0000 890,420.00
*Proposed
Source:
Town and County Property Appraisers Office
As stated before, the Town is almost
completely built out and is primarily a low density residential
community. The projected revenue from the ad valorem tax as well as the
other revenues previously discussed such as the utility and franchise taxes, State
revenue sharing, and gasoline tax all will go to the general fund needs, and a
tax increase or decrease will be determined. The Town currently has
$80,000 set aside for capital
improvements however
no deficiencies were identified in any of the Comprehensive Plan elements.
It
has more or less been the accepted policy of the Town to provide for a
referendum to decide upon an additional tax for large capital
improvements. The Town plans to have a referendum for the purchase of
a new fire truck which will cost in excess of $200,000.
It
should be pointed out that in July, 1991, the storm drainage revenue
certificates were paid off and this made available an average of
$16,000 per year which could be used for capital improvements.
VI.
CONCLUSION
It
is easy to see from the previous sections of this document that the
Town, by virtue of its being almost built out and by contracting for
most of its infrastructure services, has not identified any capital
improvements expenditures related to Plan deficiencies.
The
Town will continue to evaluate the need for capital improvements on a yearly
basis during the budget preparation and will amend this element accordingly if
necessary.
For
the time being, the suggested list of improvements contained in Section II of
this element will be pursued by the Town.
VII.IMPLEMENTATION
The
Town, because of its size and because most public facilities are provided by
other governmental entities, does not have a list of capital
improvements. It will, however, evaluate the list of suggested
improvements to ascertain if these can be completed.
VIII.
MONITORING AND EVALUATION
As
part of its yearly budgeting process, the Town will examine the suggested list
of improvements to determine if any can be inserted into the budgetary
process. This review will be coordinated by the Town Manager and will
provide priority status and a statement of the ability of the Town to finance
projects.
Finally,
the Town will carefully monitor those public facilities provided to the Town by
other governmental agencies to ensure that adopted levels of service can
continue to be met.
IX. GOALS,
OBJECTIVES, AND POLICIES
Goal
1:
Develop a multiyear capital improvements program which establishes a plan for prioritizing and financing public improvements and which supports the goals, objectives, and policies of the Comprehensive Plan of the Town.
Objective 1:
Capital improvements will be provided to correct existing deficiencies, accommodate future growth, and to replace obsolete facilities as indicated in the element.
Policy
1.1:
The
Town will continue to include all projects identified in the other Plan
elements, determined to have a cost of $25,000 or more and for which the Town
has the responsibility to provide.
Policy
1.2:
Proposed capital improvement projects will be evaluated and prioritized according to the following criteria:
Elimination
of existing capacity deficits
Impact
on the budget of the Town and financial feasibility
Location
needs based on projected growth pattern
The
accommodation of new development and redevelopment facility demands
Plans
of State agencies and the St. Johns River Water Management District, Brevard
County, and the City of Melbourne
Objective 2:
Public
expenditures that subsidize development in high hazard coastal areas will continue
to be limited to those improvements included in the Coastal Management and
Conservation Element.
Policy
2.1:
The Town will expend funds in the high hazard area for the replacement and renewal of existing public facilities.
Policy
2.2:
The Town will continue to preserve and enhance its existing recreation areas located in the high hazard area.
Objective 3:
The
Town will continue to coordinate its land use decisions and fiscal
resources with any scheduled capital improvements in order to maintain adopted
level of service standards contained in all plan elements.
Policy
3.1:
Level of service standards shall be those identified in other Plan elements.
Policy
3.2:
Prior
to the issuance of a building permit or any other development order, the Town
will ascertain that all public facilities and services needed to serve
developments, for which previous development orders were issued, are in place.
Policy
3.3:
The Town will determine whether adequate public facilities and services are or will be available to meet the demand of any proposed development when needed by that development. The foregoing determination will be made at or immediately prior to the time of issuance of a development order.
Policy
3.4:
The
Town will continue to implement develop policies for the renewal
and replacement of public facilities and will coordinate with outside service
providers for the same.
Objective 4:
Future
development will continue to bear a proportionate cost of facility
improvements necessitated by the development in order to maintain adopted LOS
standards.
Policy
4.1:
The
Town will continue to participate in the County Impact Fee Program evaluate
the need to adopt an impact fee which will address transportation and
recreation improvements and which will assess new development a prorata
share of the costs necessary to maintain the adopted level of service.
Objective 5:
The
Town will continue to manage its fiscal resources to ensure the
provision of necessary capital improvements for previously issued development
orders and for future development and redevelopment proposals.
Policy
5.1:
In
providing capital improvements, the Town will continue to limit the
maximum ratio of outstanding indebtedness to no greater than 5% of the property
tax base.
Policy
5.2:
All
efforts will continue to be made by the Town to secure Federal and State
grants as well as private funds to finance capital improvements.
Policy
5.3:
The
Town will continue to develop fiscal policies to direct expenditures for
capital improvements which recognize the policies of the other Plan elements.
Policy
5.4:
The Town will request the County to spend impact fees for sidewalks/bikepaths, recreational improvements, and road improvements in those areas of the Town impacted by County growth.
Policy
5.5:
The
Town will continue to set aside monies for capital improvements evaluate
the need to develop a 5 year capital improvements program during 1989. and
will evaluate yearly the need to amend this element.
Objective 6:
The following level of service standards are set for the following public facilities and services:
Affected Public
Facility and Service Level of Service
on S.R.
A1A
LOS E
on U.S.
192
LOS D
Riverside Drive (North of U.S. 192) LOS E
Local
streets
LOS C
Sanitary Sewer |
200
gal./residential unit/day 200
gal./equivalent res. unit/day |
|
Solid Waste |
8.32
pounds/person/day |
Potable Water |
288
gal/residential unit/day |
Drainage |
Retention of 1st 1
inch of rainfall on site storm Retention of 1st 1 inch of rainfall on
site |
Recreation |
4 acres of
park/open space for each 1,000 residents |
Objective 7:
Each year as part of the Town's annual budget review, the Town shall consider the needs of the Town and goals, objectives, and policies in this Plan to ascertain whether to amend this element by adding a capital improvements schedule pursuant to Rule 9J5.016(4), Florida Administrative Code.