Summary
To: Finance Board
From: Stefan Massol
Date: 7/16/2020
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Subject:
Title
Discussion of Municipal Public Services Tax
Summary:
Staff will provide an overview of the Municipal Public Services Tax (MPST) and impacts to customers and the Town of extending the levy to gas and water utility sales.
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Body
Background/Problem Discussion:
The 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). Enacting a new MPST would require an ordinance change for the Town, including two readings with approval by Town Commission.
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 eligible non-fuel charges for water and gas services. Other communities in Pinellas County have MPST levies on gas and water. Of the 20 communities with Clearwater Gas customers in their limits, 13 have levied a MPST on eligible charges, and all but two of these communities set the maximum rate of 10%. With respect to water sales, 14 out of the 24 municipalities in Pinellas County have levied a MPST and again, all but two of these communities have the maximum 10% levy. Charts are provided for reference purposes.
Staff is providing information on the MPST as a potential alternative revenue source for the Infrastructure Fund. COVID-19 is expected to significantly reduce Sales Tax-driven revenues such as the Penny for Pinellas surtax in the Infrastructure Fund. Those revenues are needed to sufficient rev...
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