The first two posts were meant to inform Key Largo taxpayers about the grim reality of the wastewater funding situation. In this post, I’ll talk about an interlocal between the District and Monroe County that could allow the funding disparity to be repaired using state money to offset infrastructure sales tax money. It was approved by the District board on April 21. Here’s a link.
While there is certainly reason to be optimistic, its important to keep a few things in mind.
- According to my reading of this agreement, the $26 million inequity will only be repaired if and when state money becomes available. The District will trade restricted state funds in exchange for unrestricted county money. In simpler terms, the District can use county money to pay down debt and provide relief to the ratepayers/taxpayers (one in the same). But it cannot use state money for that purpose. State money must only be used for “new projects”. So if I’m reading this thing correctly, no state money, no equity. See paragraph 16, in particular. Not sure I like that. I believe Monroe County has an obligation to its taxpayers in Key Largo whether state money comes through or not.
- The District has received $17 million from the state so far, and has about $9 million in projects that it still needs to pay for. That leaves $8 million that can be used for financial relief. The District has not provided any financial plan regarding how this money will be deployed. However, my understanding is that the intent is to give up the entire $17 immediately available from the state in exchange for interest-free payments from the county over a period of ten years. Not sure I like that either. The projects will be complete in the next couple of years, but county money will come in over a period of ten years. How will the District cash flow this? More information is needed. I’ve asked the District for a financial plan. They, apparently, have not yet prepared one.
The agreement definitely has the potential to fix the disparity but a lot of things have to go right. Number one, the state has to come through. I believe that they will. Governor Scott and the legislature have fulfilled promises made by the state long ago. I think they will continue to do so.
Number two, the county commission actually has to approve this agreement and then abide by it. Its supposed to be on their May 20th agenda for approval. If approved, will they abide by the terms? Based on past behavior, that is certainly a legitimate concern. However, the agreement is structured in a way that I think makes it hard for them to wriggle out of their obligation. But they need to know that the public is watching. Number three, will the District actually be willing and able to pass savings on to the ratepayers? Not enough information yet to know one way or the other.
So to wrap up, this agreement is a possible solution but there’s still lots of uncertainty.