House and Senate bills dealing with Community Redevelopment Agencies (CRAs) are currently working their way through committees in the Florida Legislature. CRAs are used by government entities to provide public monies as an incentive to encourage private investment in areas. In Brooksville these monies are provided to local business to encourage them to undertake renovations the the exterior of their buildings. Hernando County recently instituted a CRA for the Kass Circle area in Spring Hill (2016) and the City of Brooksville formed a CRA for their downtown district in 1999 which covers 104 acres. If some form of these bills survive and get the governor’s seal of approval, our local governments may need to make adjustments to how the CRAs are operated.
An area must meet certain requirements for a local government to institute a CRA. The area is surveyed and the required conditions are documented in a “Finding of Necessity.” After a CRA is designated, local governments can utilize Tax Incremental Funding to repay bonds taken out to improve an area. Basically, tax revenues due to an increase in property values are utilized to repay the bonds. The City of Brooksville relies on other funding options as well. The downside of TIF is that it is dependent on property values increasing and could pose a risk if the economy takes a downturn.
According to a Florida League of Cities Legislative issues briefing dated Nov. 7, 2017, “HB 17 (Raburn) and SB 432 (Lee) increase audit, ethics, reporting and accountability measures for community redevelopment agencies (CRAs). The bills require CRAs to annually submit additional reporting information to the state, including performance data for each CRA plan, number of projects started, total number of projects completed, commercial property vacancy rates, amount expended on affordable housing, etc. The bills require CRA procurement to comport with city and county procurement procedures. Of specific concern to cities, HB 17 outlines a process by which CRAs can be phased out, unless reauthorized by a supermajority vote of the body that created the CRA. Additionally, HB 17 prohibits the creation of a new CRA unless authorized by a special act of the Legislature.”
There are also revisions to requirements for the use of the redevelopment trust fund proceeds. (Governments establish trust funds for the revenues derived from tax incremental financing)
The Florida League of Cities, statement continues,
“SB 432 differs from HB 17, in that it does not contain any provisions which phase out existing CRA or require legislative approval of new CRAs. SB 432 does contain additional provisions which would cap administrative spending at 18%.”
While administrative and overhead expenses related to the implementation of a community redevelopment plan is added into the allowable expenses of the CRA annual budget in HB 17.
Florida League of Cities brief goes on, “In addition, SB 432 prohibits Tax Increment expenditures on: festivals, street parties, grants to promote tourism, and grants to socially beneficial programs. Lastly, SB 432 would change CRA board composition by requiring the appointment of two non-elected members…”
In letters to Representative Ingoglia, Representative Massullo and Senator Simpson, the city of Brooksville contends that reporting requirements for CRA Board composition, annual reporting, auditing and finance are already in place statutorily.
The letter signed by Mayor Battista states, “The City Council of the City of Brooksville is opposed to any legislation that may eliminate, phase out or require redundant or unnecessary regulatory oversight which mandates additional expenditures from funds that continue to be desperately needed for redevelopment improvements in our community.”
The city cites the following impacts the CRA has had, “To date, private investment has been more than 5 times the value of CRA incentives provided. The work of the Brooksville CRA has directly contributed to the value of the community redevelopment area increasing by over $5,000,000 from when the CRA was created in 1999.”
SB 432 passed the Senate Community Affairs Committee (5-1) on November 7, 2017. SB 432 is currently in the Appropriations Subcommittee on Transportation, Tourism, and Economic Development; and must also go through Appropriations Committee; and Rules Committee.
A review of a Committee Substitute (CS) is pending review for HB 17. (A Committee Substitute is a bill that has gone through several amendments and is no longer a product of a single legislator.)