Summary
To: Mayor and Commissioners
From: Town Staff
Date: 3/8/2022
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Subject:
Title
Second Reading Ordinance 543 - Municipal Public Service Tax
Summary:
This ordinance amends Chapter 54, Article IV of the code to include the levy of a public tax on the purchase of water service. The Town is presently considering the sale or transfer of its water system, and approval of this ordinance would allow for the tax should a system sale or transfer occur in the future. This ordinance would become effective only in the event of a sale or transfer, and notification to the Department of Revenue would be required 120 days prior to the effective levy date. The levy can't be effective until any January 1, April 1, July 1, or October 1 which follows the Town's notification to DOR..End
Body
Previous Commission Action: First reading approved on February 15, 2022. The Commission previously declined to impose a MPST on the Gas utility, but discussed wanting to evaluate a potential levy on water if the utility were transferred or sold.
Background/Problem Discussion: Section 166.231, Fla. Stat., permit municipalities to levy a public service tax on the purchase of water service. This would be an additional revenue source in the event of a sale or transfer of the water system. A Municipal Public Services Tax (MPST) is a levy on gas utility, electricity or water utility sales that cities and towns in Florida may adopt for their jurisdictions. The maximum allowed levy is 10% and may not be applied to any "fuel adjustment charge", meaning any rate increase passed along to customers resulting from fuel cost increases affecting the utility provider (F.S. 166.231)
The Town currently has a MPST levy of 10% for sales of electricity by Duke Energy. This is one of the revenue sources dedicated to service the bonded debt in the Infrastructure Fund. Additionally, the Town has the option to set an MPST of up to 10% on eli...
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