New law provides for additional uses of tourist development tax revenues [PREMIUM CONTENT]

PARKING SPACES completed in Blue Mountain Beach as part of the Walton County Tourist Development Council’s (TDC) ongoing 30A Parking Project. Many more public facilities projects of various types appear to be in the future for the TDC in view of a measure approved in the 2018 legislative session. TDC members were updated on the new law at their April 3 regular bimonthly meeting.

Could bed taxes be put to work for roads, water/sewer, other new uses?

New law provides for additional uses of tourist development tax revenues

Walton County’s tourism council members recently received an update on a new law that will expand allowable uses of bed tax revenues, The law provides for funding to develop or operate “public facilities” under certain circumstances within the area within which the tax is collected.
Four “cents” on every dollar spent on short-term accommodations south of the bay in Walton County is collected as Tourist Development Tax (TDT) or “bed tax.” Uses of the tax currently include Walton County Tourist Development Council (TDC) administration, marketing, beach maintenance, beach nourishment, maintenance and improvement, acquisition of property for beach parks and accesses, product development, shoulder season promotion, event grants sponsorship, beach safety, code enforcement, and similar purposes.
Almost $23.8 million was collected in Walton County through the TDT in 2017, according to this year’s report on the economic impact of tourism.
As part of the April 3 regular monthly Walton County Tourist Council (TDC) meeting at the South Walton Annex, TDC Executive Director and Clay Adkinson, TDC attorney, provided an update on the new law that will impact use of the bed tax.
The measure, HB 7087, entitled “Taxation,” was signed by Florida Governor Rick Scott on March 23. Set to take effect on July 1, the legislation encompasses a variety of provisions, among those tax rate reduction on property rentals, property tax relief on storm-damages property, and additional corporate income tax credit for brownfield clean-up.
Adkinson explained in reference to the portion of the new law applying to the TDT that the definition of “public facilities” encompasses capital improvements related to transportation, sewer, solid waste, potable water, drainage, and pedestrian facilities. Other uses may also qualify. Included in the “public facilities definition, for purposes of the measure, is that these facilities must be “major capital improvements that have a life expectancy of 5 or more years…”
Requirements for the expanded use of the TDT, Adkinson told the council members, will include that more than $10 million in TDT was collected in the previous fiscal year in the taxing district (a condition more than met in Walton County), along with a vote of recommendation by the tourism council for the specific use, and at least a two-thirds vote of approval by the county commission, which would translate to at least four out of five aye votes by the Walton County Board of County Commissioners (BCC).
Additionally, Adkinson noted, no more than 70 percent of the cost of a new facility may be paid through TDT revenues—and at least 40 percent of overall TDT revenues collected by the county will have to be used to promote and advertise tourism.
He added that, when approving the use of this 70 percent for a project, the BCC would also have to identify a source of the additional 30 percent of the project cost.
(In reference to aforementioned requirement for 40 percent of total TDT funds to be used for promotion and advertising of tourism, Tusa clarified that the TDC currently spends 45 percent for these purposes.)
The final requirement of the new law outlined by Adkinson was that, in order for TDT funds to be used for public facilities, an independent analysis of the project envisioned for funding would have to be undertaken at the TDC expense and would have to demonstrate a positive impact of the project on tourist-related business in the county.
Adkinson highlighted that the latter impact would not have to be determined only by “heads in beds,” or lodging. There is to be additional flexibility for this determination, opening up the ability of impacts on restaurants, retail, bike, paddleboard, and kayak rental businesses and other service vendors to be factored in as demonstrating the aforementioned positive impact on tourism, he indicated.
He discussed that the independent analysis requirement could present a challenge for the TDC, as it would not be likely that it would be allowed to be done “in-house,” or, in order to avoid a conflict of interest situation, by any agency tied to tourist-related businesses in the county. Adkinson suggested looking at engaging an independent professional agency through a continuing contract to provide the required analysis as needed, since the need for these studies would likely come up often, even in connection with many of the types of projects and purchases previously undertaken by the TDC, upon the legislation becoming effective.
“The door is now open for a lot more broad use of our TDT moneys to make infrastructure-related improvements,” Adkinson summarized.
He added that overall staff analysis of the new law was that it was a “positive development” in terms of where TDT funds could be spent, “while protecting the general basis,” of the TDT tax.

Current TDC projects and property acquisitions

Also discussed at the April 3 meeting were current and planned infrastructure projects and property acquisitions funded by the TDC.
Brian Kellenberger, TDC beach operations director, furnished a report that included a substantial list of TDC capital improvement projects.
Among these were ongoing repairs to regional and neighborhood beach access, consisting of removal and replacement of deck boards and handrails.
Kellenberger reported design development as 70 percent complete on the two-acre beachfront parcel on CR-30A in Dune Allen acquired by the TDC to be used as a new regional beach access. The property is near Stinky’s Fish Camp restaurant.
There were minor changes to the project design due to the TDC/county not receiving a setback variance from the property right-of-way, according to the report. Kellenberger envisioned the project design and permitting phase being completed by July and construction starting in September.
Other beachfront property recently acquired in Miramar Beach by the TDC, as well, is to serve as a new regional beach access with 26 parking spaces, four golf cart parking spaces, a loading/unloading zone, and an ADA-accessible boardwalk. The property is located south of Scenic Gulf Drive and east of the Alamo Street/Scenic Gulf Drive intersection. Kellenberger reported that the conceptual design phase for the project started in December 2017, with a public workshop held on the access in February.
Property acquired by the TDC on the south side of CR-30A near Cafe Thirty-A in Seagrove Beach is also planned for use as a new regional beach access. Kellenberger reported that Atkins Engineers, Inc., has been contracted for architectural and engineering services on the project and that surveying an site assessment are underway. Challenges identified with the project are a drainage basin on the property for a large area north of CR-30A and a large drainage ditch traversing the site. He said an initial meeting between TDC staff and the state Department of Environmental Protection (DEP) was held on March 28.
Kellenberger noted that construction on the TDC’s 30A Parking Project is 95-percent complete in five areas. Six locations are planned for the project, with a total of 150 parking spaces to be added in the CR-30A area in the vicinity TDC regional beach accesses.
In remarks later in the meeting, Tusa discussed the 1.25-acre property located on Driftwood Road, about 350 feet north of the TDC’s existing Miramar Beach Access, for which a purchase contract was recently approved. The site is to serve as beachgoer parking space and also contain drainage improvements.
He also brought up three parcels located north of South Walton High School on the west side of U.S. 331 that could serve as a site for a new TDC visitor center and offices. The properties are viewed as a convenient location for tourists to visit for information when entering south Walton County, in contrast with the current location, which has been more difficult to access for a number years since the four-laning of U.S. 98 south of the bay.
Tusa said that appraisals had been obtained on the three properties.
Council members discussed that prices were increasing quickly for properties along U.S. 331 and voiced concern that the current TDC visitor center and office location would be lost before long in view of state plans to widen U.S. 98 in the area to six lanes and possibly construct other improvements at the U.S. 98/U.S. 331 intersection.
A special TDC meeting was scheduled to consider proceeding with purchase of one or more of the three properties. The meeting is scheduled for 9 a.m. on April 13 at the South Walton Annex.

The April 3 TDC meeting may be viewed in its entirety on the Walton County website at the link: