Exh 9AGENDA ITEM #9
SEPTEMBER 24, 2001
September 18, 2001
MEMORANDUM
TO The Honorable Mayor
and Members of the City Commission
FROM. Jun H n
rty anager
SUBJECT. Crty Ma er's Report
Emergenc~Repairs from Water Line Bre~__17`° Street and Sea Oats Drive, A
subcontractor working for the JEA to install new underground electric lines bored into a Crty
water main at the intersection of 17`n Street and Sea Oats Drive That main was properly mazked
by Atlantic Beach and it will be the responsibility of the contractor to reimburse Atlantic Beach
for all expenses related to the repair
The City's point repair contractor (Gruhn May) was called into repair the water line that evening
as well as repair the pavement Because of the extensive damage to the intersection and the
newly resurfaced street, the City insisted that the entire intersection be repaved The total cost
for the water line repair and pavement reconstructron now totals $23,356 47 Repairs were
authorized under the City's emergency purchasing procedures
AT&T Broadband Billings/Florida Communications Service Tax 5imolification Law, The
Crty received the attached notice dated September 4, 2001 from Ann Murphy describing a notice
to be placed in customer billings for AT&T Broadband next month about the change in taxes
because of recent Florida legislation Also attached is a memorandum dated 9/12/01 from
Nelson Van Liere with some comments about the new law and its effect on various
communication providers This should beself-explanatory If you have any questions, Nelson
plans to attend the Commission meeting and should be able to answer them
Hurricane Gabrielle, Damage resulting from Hurricane Gabrielle which passed by Atlantic
Beach on September 14-15 was much fighter than expected The City's Streets Division cut up
and removed four trees that had fallen and partially blocked city streets Minor flooding was
evident in several azeas, although rt was much less severe than what occurred in the rainstorm
approximately two weeks earlier The Utility Department reports that there was a considerable
amount of infiltration and inflow into the sewer system during the heavy ram and most ofthe
City's lift stations were pumping at full capacity for several hours at a time However, only three
manholes began to surchazge and contractors were called out to pump down the levels and carry
the wastewater to the plants Donna ICaluzniak has estiniated that only about 500 gallons was
spilled into City's creeks and the DEP has been appropriately notified Public Utility crews did a
great Job in anticipating when and where these problem azeas would occur and getting
contractors in gmckly
Last, our waste hauler, BFI, has put on an extra truck to haul the debris beginning on Monday,
September 17ei They wfll continue with the extra truck as well as working extra hours (until
8 00 pm) each night until the debris is collected BFI has agreed not to charge for the additional
collections resulting from Hurricane Gabrielle even though our contract gives them authorization
to do so
AGENDA ITEM #9
SEPTEMBER 24, 2001
..~
AT&T
Southeast Drvisron
September 4, 2001
Mr Jim Hanson
City Manager
Atlantic Beach City Hall
800 Seminole Road
Atlantic Beach, FL 32233
Dear Mr Hanson,
AT&T Broadband
5934 Pochartl Street
Jacksonville FL 32216
As you probably know, the Florida Legislature recently passed a new law regarding the
collection of communications taxes I would like to take this opportunity to bnefly describe the
impact of this new tax law on our cable customers' bills
Effectroe with bills produced on or after October 1, 2001, cable customers will see two different
line items on their monthly statements - a state communications service tax and a local
communications service tax These two taxes will replace all other taxes and the franchise fee
that currently appear on the bills except the sales tax The sales tax will now apply only to the
sale or rental of egwpment
For most of our customers, the net effect of the new tax structure will be an increase in their
overall monthly cable bill To help illustrate this change, attached is an example of the impact of
the new tax structure on a typical $40 cable bail
lhre are notifying customers of the new tax structure via the follo4ving methods
1) A bill insert explaining the new tax will appear with our customers' September
statements
2) We have produced informational video spots which will be running on our cable system
pnor to and during the implementation of the new tax structure
3) A message will be placed on our automated phone system with information regarding
the new tax
t~~
7a (~ Recycled Paper
AGENDA ITEM #9
SEPTEMBER 24, 2001
Furthermore, per the directive of the State of Flonda, we will be refemng any follow-up
questions received from customers regarding the tax to the Department of Revenue at 1-800-
352-3671 and to their website at myflonda com/dor We will also inform customers they can
wnte to the State at Tax Information Services, Flonda DOR, 1379 Blountstown Highway,
Tallahassee, FL 323042716
Despite all of these precautions and efforts to educate our customers, we do expect call volume
to increase in October due to this tax change Thank you in advance for your understanding of
this expected contain
Finally, please note that all local franchise fees owing under the current fee structure for the
penod pnor to the implementation of the new tax structure will be remitted to your community on
or before December 31, 2001, pursuant to the requirements of the new tax law
We look forward to working with you and the State to limit confusion dunng this transitional time
As always, please call me at 619-3778 if you have any questions regarding this inforrnation
r/Sincerely,
`-/
Ann Carter Murphy
Director of Public Policy
Attachment
AGENDA ITEM #9
SEPTEMBER 24, 2001
Samale Cable (Videol Monthly Statement
October 1, 2001
$40 00
Atlantic Beach
Current Franchise Fee 3 00%
Future Conversion Rate 7 12%
Tier
July 1
October 1
Itemized Services (hers)* $37 80 Itermzed Services (Uers)*
Remote ControUConverter** 2 20 Remote ControUConverter**
Subtotal
$40 00 Subtotal
$37 80
2 20
$40 00
Sales Tax Standard Converter and
Sales Tax (all bill) 2 48 6 19% Remote Control 0 14 6 19%
Franchise Fee Gty 1 20 3 00"/° Local Communications Servrce Tax 2 69 7,12%
FCC Regulatory Fee 0 04 0 12% FCC Regulatory Fee 0 04 0 12%
State Communications Service Tax 3 47 9 17"/°
TOTAL
$43 72
$46 33
Local Communrcatrons Servrce Tax rs calculated as follows
Itemized Services x Local Conversion Rate (vanes by Junsdict~on)
State Communications Servrce TaC rs calculated as follows
Itemized Servrces x Frxed State Rate of 9 17%
Sales Tax rs app(red to Egmpment Rental (Converter and Remote Only)
*Based on a $37 80 monthly fee for vrdeo services, as an example
**Based on a standard converter and remote control together wrth a monthly fee of $2 20, as an exa~le
Advanced/Digital converter rs about $4 00 per month
AGENDA ITEM #9
SEPTEMBER 24, 2001
MEMORANDUM
Date. September 12, 2001
To Jim Hanson, City Manager
From Nelson Van Liere, Finance Duector
Subject: Implementation of the Florida Communications Services Tax Simplification Law
I have reviewed the September 4`s, 2001 letter received from AT&T Broadband with respect to
comments and sample bill presented and the effects on customers that the new tax structure will have
To clanfv the presentation. you must note an error in the calculation
The error is m the existing rate indicated by the July 1 presentation. That presentation does not include
the 1% Local Option Sales Tax that Duval County has imposed This 1% tax consists of the Better
Jacksonville Half Cent Tax and the previously existing half-cent sales tax that is currently chazged and
will continue to be charged The October 1 presentation does include tins rate as part of the Local
Communications Sernce Tax of 7.12% The presentation should therefore show an additiona141 cent<.
for a total of $44 13 for the July 1 sample bill This reduces the increase of the total sample bill to
$2 20
This letter does indicate that the average customer of cable services will expenence an increase in their
bill as a result of the new tax structure This appeazs to be true
It is unportant to distinguish that although the unplementation of the new tax structure may cause an
increase in the overall cable bill, it may also cause a decrease in taxes paid for other services The
reason for this is that the whole philosophy of the new structure is to create a level playing field for all
communications services so that one form of communication does not receive an unfair tax advantage
over another
The rate unposed on communications was calculated by the State in an effort to replace a vanety of
existing taxes and fees on those same services with one uniform rate. All revenues related to
communications, (franchise fees, municipal public sernce taxes, sales taxes and permit fees for
communications services), that the City receives aze being replaced The revenues from existing
sources were reported to the State by the City and also by the vendors providing the sernces to our
citizens The revenues were then compazed and confirmed to be an accurate accounting of what the
City of Atlantic Beach receives from all communications sernces From this, a rate of 6 52% was
then derived that would net the City the same revenues or as they say "keep the C~ revenue neutral"
Ahhough the City and the citizens in total aze held revenue neutral, no one citizen will be neutral. The
affects of the new tax structure on a particular citizen depend on their personal usage of the ever-
growing wide variety ofcommunication services It would be impossible to make a statement ofthe
effects of the new tax structure on individual bills that would be accurate for all citizens Each
individual will be affected m a different way