Wastewater Funding – Why does Key Largo pay so much more?

cut-balance-imbalance-scissor-cuting-desk-52780665The most stunning thing about the Keys wastewater projects is the expense.  These things cost big money.  Altogether, the Keys are going to spend nearly $700 million on sewer projects.  About $407 million of that will be spent in the unincorporated area, which includes Key Largo.

You would think that since all citizens in the unincorporated area pay all the same taxes and vote for all the same county commissioners, we’d all be paying the same amount for our sewer systems.  Nope.  That is not the case.  Each household in Key Largo will contribute well over $1,800 more for its system than households in the other unincorporated areas.

When people first hear this number, they think surely there must be some logical explanation.  Maybe the Key Largo project costs more?  Nope.  On a per household basis, the Key Largo project costs about $5,000 less.

Perhaps Key Largo is more financially well-off?  Nope.  Key Largo’s median household income is around the average for Monroe County.  The truth is that some of the areas blessed with lower financial contributions actually have median incomes that are much higher than average.  Those lower contributions are possible only because of the huge amount of the infrastructure sales tax they receive from Monroe County.  The Key Largo project, which serves about 14,000 households, has received about $23 million.  The other unincorporated areas, which also serve about 14,000 households, will receive over $124 million.

So how and why did this happen?  I don’t know.  I first raised this issue with Monroe County back in July 2011, right after I became the General Manager of the Key Largo Wastewater Treatment District.  I was very naive I guess.  I expected the county would be horrified and would want to remedy this problem immediately.  Nope.  Far from it.

Fortunately, there is state money available to the Keys for sewer projects – the Mayfield Grant.  The Mayfield Grant was meant to finance and refinance the state-mandated sewer projects in the Florida Keys.  Somewhere along the line, the state decided that the money could NOT be used for refinancing as originally intended.  So those communities that had completed or nearly completed their projects as required by the state were out of luck.

As a matter of policy, you would think the state would avoid penalizing those who completed their state-mandated projects on time.  Bottom line is the state is very committed to this “no refinance” position and they will not change their minds.  So we’ve got to accept this as a given.  Very recently, the county and the District came to an agreement which could fix this discrepancy.  This agreement is a possible solution to the unfair wastewater funding disparity, but Key Largo taxpayers definitely need to keep a close eye on things to make sure they actually benefit from it.

I’ll be tossing out a lot of numbers in these posts.  So I want to provide back-up documentation whenever possible so that you can verify all this for yourselves.  Here are some links:

The District asked their accounting firm to perform a wastewater funding analysis.  The Board heard me talk about this issue for many years and wanted to have outside confirmation.  Here is a summary table from that report, and yes, it confirms that the unfair funding disparity is definitely a reality.

Wastewater Funding Analysis

Here is information about median household incomes from the Census Bureau.  I found all this information using the American Fact Finder Tool.  I did an advanced search for median household income by place.  As you can see, Key Largo and Tavernier consistently have the lowest median household incomes.  Cudjoe Key and the Lower Keys consistently have the highest.  And yet, those areas will receive $100 million more from the sales tax and pay less for their more expensive sewer system.  I think this is outrageous.  It really shows where Key Largo stands in the eyes of Monroe County.

MedianHouseholdIncome_2009_to_2013

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3 Responses to Wastewater Funding – Why does Key Largo pay so much more?

  1. Pingback: Monroe County – Allergic to Math | The Real Poop

  2. Pingback: Emergency Services – Who, Where and How Much? | The Real Poop

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