TO: Honorable Mayor & Members of the North Port Commission
FROM: A. Jerome Fletcher II, ICMA-CM, MPA, City Manager
TITLE: An Ordinance of the City of North Port, Florida, Providing for the Levy and Collection of a Public Service Tax on the Purchase of Electricity Within the City; Providing for Findings; Providing for Exemptions; Providing for Record Keeping; Providing for Violations and Penalties; Providing for Enforcement; Providing for Conflicts; Providing for Severability; and Providing an Effective Date.
Recommended Action First Reading
Option 1: Approve Ordinance No. 2026-31 as presented and move to second reading on November 17, 2026.
City Commission Options First Reading
Option 1: Approve Ordinance No. 2026-31 as presented and move to second reading on November 17, 2026.
• Pros: Reduces taxes. A tax reduction would directly lower electricity bills, helping households manage increasing living costs and making local businesses more competitive. Would also show signs of fiscal responsiveness, especially in times of inflation and rising energy prices.
• Cons: Reduces unrestricted revenue available to the General Fund for administration and programs such as Police, Fire Rescue, Parks, and several others.
Option 2: Deny Ordinance No. 2026-31 as presented.
• Pros: Aligns to proactive financial planning by preserving stable revenue for essential services and programs. It also avoids shifting the financial burden to other taxes or fees while ensuring equitable outcomes across residents and businesses.
• Cons: Would not lower electricity bills and help households and businesses manage increasing energy costs.
Background Information
Florida Statutes Section 166.231 authorizes a municipality to levy a tax on the purchase of electricity within the municipality, at a rate not to exceed 10% of the payments received by the seller of electricity from the purchaser of the service. Ordinance No. 2026-31 reduces the existing Electric Public Service Tax from 10% to 9.4%.
The following provides a chronological order of events regarding the Public Service Tax:
Ø February 4, 1991: During the City Commission Regular Meeting, the Commission adopted Ordinance No. 91-3, providing in part for the levy of a Public Service Tax of two percent (2%) on each and every purchase of electricity service within the municipal boundaries of the City.
Ø July 13, 1998: During the City Commission Regular Meeting, the Commission adopted Ordinance No. 98-27, repealing Ordinance No. 91-3 in its entirety, and providing in part for a levy of a Public Service Tax of two percent (2%) on each and every purchase of electricity service within the municipal boundaries of the City.
Ø October 26, 2021: During the City Commission Regular Meeting, the Commission adopted Ordinance No. 2021-40, re-pealing Ordinance No. 98-27 in its entirety, and providing in part for a levy of a Public Service Tax of six percent (6%) on each and every purchase of electricity service within the municipal boundaries of the City.
Ø October 24, 2023: During the City Commission Regular Meeting, the Commission adopted Ordinance No. 2023-28, repealing Ordinance No. 2021-40 in its entirety, and providing in part for a levy of a Public Service Tax of ten percent (10%) on each and every purchase of electricity service within the municipal boundaries of the City.
Ø January 13, 2026: During the City Commission Regular Meeting, the Commission discussed agenda item 26-0234 regarding the Electric Public Service Tax on Florida Power & Light (FPL) electric service bills and options to reduce the impact of FPL rate increases on North Port residents.
Ø March 13, 2026: During the City Commission Budget Workshop, the City Manager provided two scenarios to the City Commission to reduce the Electric Public Service Tax, a revenue neutral approach or a reduction to 6%.
Ø June 10 and 11, 2026: During the City Commission Budget Workshops, the City Manager presented the Fiscal Year 2026-2027 recommended budget to the Commission. The recommended budget included Budget Proposal 3570 recommending the revenue neutral approach to reduce the Electric Public Service Tax from 10% to 9.4%.
Ø July 29, 2026: During the City Commission Budget Workshop, the Commission reached unanimous consensus to move forward with Option 1 from agenda item 26-0967, keeping Budget Proposal 3570 approved and including it in the Fiscal Year 2027 Tentative Budget.
Ø September 24, 2026: During the City Commission Special Meeting, the Commission adopted the Fiscal Year 2026-2027 non-district budget, which included the reduced revenue estimate reflecting the electricity tax rate decrease from 10% to 9.4%.
Per Florida Statutes Section 166.233, a tax levy or any changes must be adopted by Ordinance which requires two readings. The Ordinance may become effective only on January 1, April 1, July 1, or October 1. In addition, the City shall notify the Florida Department of Revenue at least 120 days before the effective date of the Ordinance. Based on these statutory requirements, the scheduled effective date for the tax reduction is April 1, 2027.
Ordinance No. 2026-31 has been reviewed by the City Attorney and is legally correct as to form.
Ordinance No. 2026-31 is exempted from the business impact estimate requirement per Florida Statute Section 166.041(4)(c) as it relates to the adoption of budgets or budget amendments, including revenue sources necessary to fund the budget.
Ordinance No. 2026-31 was submitted to the City Clerk’s Office on October 26, 2026, for signature, subject to City Commission approval.
Strategic Plan Pillar
Good Governance
Financial Impact
Loss of revenue to the General Fund associated with the proposed tax reduction is approximately $501,155 annually (001-0000-314.10-00). The amount reflected as a loss of revenue to the City represents a corresponding savings to electricity purchasers within the City. The estimate is based on point-in-time data provided by FPL and may vary with changes in electricity consumption levels, future FPL electricity rates, and the continued growth and development of the City.
Procurement
Not applicable.
Attachments:
1. Ordinance No. 2026-31
Prepared by: Jake Gaub, Budget Manager
Department Director: Irina Kukharenko, CPA, Finance Director