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September 2, 2010 |
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| November 25, 2009 |
By: Terry Sheridan |
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ommunity redevelopment agencies, often criticized for the amount of tax revenues they hoard, are becoming piggy banks for some cash-strapped local governments.
Miami-Dade County commissioners last week voted to ask the 15 agencies within its jurisdiction to return surplus funds to the county for the current and upcoming fiscal years — a move that could generate tens of millions of dollars for the county.
The city of Lauderlake Lakes asked its agency to pay for a special police patrol at a Wal-Mart store.
The city of North Miami took $3 million from its community redevelopment agency during budget talks last summer, and now wants to renegotiate how much money Miami-Dade County gets from the agency.
While some CRAs are being tapped for money, others are reassessing how they do business. The city of Hollywood has consolidated its beach-area and downtown CRAs into one agency that will focus less on marketing and incentives, and more on infrastructure. More than $1 million has been trimmed from the CRA budget.
These aren’t isolated moves. Across South Florida, governments are coping with shrinking tax dollars by cutting expenses and, increasingly, local governments are looking to funds held by their redevelopment agencies as possible revenue sources.
CRAs, created to eliminate slums and blight, raise money for redevelopment projects through bonds and property taxes. Taxes collected in a CRA district are frozen in the year the district is created. After that, the agency can keep up to 95 percent of new taxes generated by development and property value increases. The funds, called tax-increment financing, are intended to be re-invested in the district.
State law requires that CRAs return uncommitted funds to taxing authorities. Few do that because they have allocated the funds to proposed projects, even though those projects may be languishing.
In Miami-Dade, a resolution sponsored by Commissioner Carlos Gimenez would allow the county to enter directly into agreements with county-run CRAs, or with cities that have CRAs to reclaim money.
The total surplus of all of Miami-Dade’s CRAs this and next fiscal year is estimated at $22 million. County Manager George M. Burgess doesn’t expect cities or CRAs to go along with the proposal, according to Gimenez.
“We’ve got a budget gap of about $400 million this year and we expect another big drop in property values next year,” he said. “This would make a dent. It could mean jobs saved, or no tax increases.”
In North Miami, the county’s plan likely won’t be welcome. In fact, North Miami officials want the county to approve allowing the city to claim a bigger cut of the tax increment from the western portion of its CRA.
The situation is unique, said CRA executive director Tony Crapp, a former assistant county manager.
The 4-year-old CRA encompasses 60 percent of the city and is broken into two sectors with different funding systems.
The eastern portion was created primarily as the redevelopment engine for the Biscayne Landing project at the former Munisport landfill on Biscayne Bay. In exchange for the CRA covering such a big chunk of the city, the county requires the CRA to refund a portion of the tax-increment financing that originates yearly from the western portion of the CRA.
Since fiscal year 2005-2006, Miami-Dade has received refunds totaling $9.9 million for the western portion instead of leaving the tax proceeds in the CRA trust fund, as is customary.
The CRA has kept about $2 million in tax proceeds from the western section during that time, Crapp said.
The city now wants the county to allow it to retain a larger portion from the sector for the next three years to close a $5 million budget shortfall, Crapp said. If that’s allowed, the city could receive $2.8 million this fiscal year.
FUNDING STUDY
While some of South Florida’s biggest redevelopment efforts lie in CRA districts, no one claims to know how much the agencies have accumulated in tax revenues. That’s why the Florida Redevelopment Association has commissioned a study by Ned Murray, associate director of Florida International University’s Metropolitan Center in Miami.
“Throughout the state, there’s a pretty big swing between cities being ultra-conservative and protecting [redevelopment revenues] and staying focused, and others trying to see if there are certain expenses allowable under the CRA plan that would allow the agencies to assume projects the cities may have had as priorities instead,” said Kim Briesemeister. She is former president of the Florida Redevelopment Association and current executive director of the West Palm Beach community redevelopment agency.
But shifting city projects to the CRAs could violate state growth management law, which requires cities to pay for capital improvement projects unless those projects also are in the redevelopment plan.
It’s a “funny anomaly,” said Gary Rogers, redevelopment director of Lauderdale Lakes. “The law says cities pay for capital improvement projects. And the law also says I, as a CRA, can do capital improvement projects if my redevelopment plan includes that.”
Cities also are looking to CRA money to cover other types of expenses.
Earlier this year, Lauderdale Lakes officials asked the CRA to pay $300,000 for extra police patrols around a Wal-Mart store at State Road 7 and Oakland Park Boulevard.
“We could have signed an interlocal agreement, and it would have been permissible to do,” said Rogers, former president of the Florida Redevelopment Association.
“But I have a strong philosophy that CRA dollars should build things that are there at the end of the year … Hiring police for a year — there’s nothing to see, feel and touch.”
Rogers rejected the request and when city officials asked him to justify his decision, Rogers pointed to the CRA’s other contributions to the city.
The agency is putting up recreational equipment, building parks and trails and “branding” the city with marketing and promotions to developers and other investors — something that will pay off when the economy rebounds, he said.
“We recommend that if a redevelopment plan is 3 to 5 years old, it’s time to re-do it and re-consider the money and tax factors and cities needing money,” Rogers said. “CRAs need to find something else to do in that time. We’ll build infrastructure and be ready for when developers re-enter the market.”
Hollywood assistant city manager Cathy Swanson-Rivenbark agrees with Rogers’ strategy.
City officials are revising their redevelopment plan to focus more on what she describes as the “main mission of bricks and mortar, and the elimination of slum and blight.”
“They’ve gotten distracted more with consumer marketing and special events,” she said. “It was well-intended but at the end of the day, those events can go away and you still have a layer of slum and blight. So we have to re-focus.”
Like Rogers in Lauderdale Lakes, Hollywood intends to focus its CRA more on infrastructure improvements, said Swanson-Rivenbark.
Last year’s beach CRA budget included $3.2 million for marketing events, such as “Brazil on the Beach” and a clambake festival. That has been reduced to $1.8 million.
As cities statewide face a third year of lower property values and budget deficits, redevelopment officials know eventually there may be talk of dissolving some agencies.
“I was thinking the other day that we resolved another year without that being discussed,” said Carol Westmoreland, executive director of the Florida Redevelopment Association in Tallahassee.
CRAs will cease to exist when they stop getting revenues, she said, and so far they continue to receive revenues.
“CRAs are such a valuable tool that governments are saying, ‘Why dissolve this option?’ It’s like keeping a line of credit open in case you might need it.”
Terry Sheridan can be reached at (954) 468-2614.
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