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r � BOOK D9 PAGE 02 7 Indian River County *$9,053,766 Vero Beach $1,752,663 Sebastian - $1,425,818 Indian River Shores $264,964 Fellsmere $243,187 Town of Orchid $4,434 TOTAL $12,744,832 *We budget 95% of the estimated amount Proceeds of the surtax may be expended on infrastructure as defined in the bill as "any fixed capital expenditure or fixed capital costs associated with the construction, reconstruction or improvement of public facilities which have a life expectancy of 5 or more years and any land acquisition, land improvement, design and engineering costs related thereto." Analysis In the late 198Ws Indian River County found itself in an infrastructure dilemma when developing its Comprehensive Land Use Plan. Based on the capital improvement element at that time, the County had over $400 million of infrastructure improvements over the next twenty years and was seeking adequate revenue sources to meet the levels of service set forth. A review was begun of additional revenue alternatives available to fund future infrastructure needs. Analysis - continued After studying the alternatives, Indian River County found the Optional Sales Tax appealing for the following reasons: 1. FAIR ALTERNATIVE - ALL USERS CONTRIBUTE - Everyone pays, including tourists and non-residents; not just the property owners of Indian River County. The roads and other infrastructure within the County are built for peak demand. Tourists and non-residents use the County's roads, parks, and facilities. Optional Sales Tax does not hit just one specific group of people, unlike user or impact fees. 2. DOLLARS GENERATED - There were no other revenue sources, besides ad valorem taxes, that could generate approximately $7 million a year in revenues. 3. INCLUDED EXEMPTIONS - Sales tax is exempted on purchases of medicine and food. 4. CITIES AND COUNTY SHARE - The sales tax is not just received by the County. The Cities get a proportionate share to help them in their infrastructure needs. 5. PAY AS YOU GO - It gave Indian River County the ability to pay for capital improvements with existing available funds, possibly augmented by short-term borrowings. This would eliminate the need for ten or forty year debt for these type projects and would substantially reduce overall cost of capital improvements by not having to pay huge financing costs (interest) over a long period of time. 6. USED FOR NEEDED CAPITAL PROJECTS - Money could be used for jails, roads, parks and health facilities which would have to be built regardless if an optional sales tax was in place or not. This would place a burden on other resources (i.e., ad valorem taxes). JUNE 229 1999