De-tangling the Rhetoric – Assessments and Rates

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Dishonest quagmire talk leaves fairness stuck in the mud.

The county administrator has described the wastewater funding situation as a “quagmire“.  The truth is it’s really not that difficult.  Calculating the disparity is a matter of simple arithmetic.  If you can add, subtract, multiply and divide you can figure it out.

Since these projects are all fully funded, start with the estimated project cost.  From that you deduct state, federal, county and other outside funding.  That gives you the contribution needed from the local area.  If you want to estimate the per EDU contribution, you divide by the number of EDU’s.  That gives a you a logical basis of comparison.  Easy.  Even if the projects being compared have differing assessment strategies and rate structures they are still comparable if you look at the aggregate numbers.  Here’s a table from the Key Largo Wastewater Treatment District’s wastewater funding analysis.

What gets difficult is how to disburse funds in order to provide the financial relief needed by Key Largo citizens.  But that is the Key Largo Wastewater Treatment District’s problem not Monroe County’s.  Monroe County’s role is to find constructive ways to correct the unfair and excessive financial burden they have imposed on their taxpayers in Key Largo.  There are a few ways they can do this.

  • Their lobbying team can persuade the state to allow wastewater funding to be used for much-needed financial relief.  Key Largo taxpayers pay for the cost of that lobbying team just like Cudjoe Regional taxpayers do.  It’s about time these resources were used to help rather than hurt Key Largo taxpayers.
  • Monroe County could use part of the infrastructure sales tax to provide direct financial relief.  They talked about doing this in 2012 when they were drumming up support for the extension of the infrastructure sales tax.  After the referendum passed, they never said another word about it.
  • The county could abide by the swap agreement, and see to it that the $17 million the District got from the state is deployed in a way that maximizes the financial benefit to Key Largo taxpayers.

If the county could act in good faith to correct the situation they created, it would be a wonderful thing for all taxpayers.  It would optimize the efficient use of state and federal funding.  It would open the door to true cooperation and team work among the entities of the Keys.  The county pays lip service to “team work” but what they really want is for the entities like Key Largo, who are disadvantaged funding-wise, to keep quiet about their issues so that the county can roll over them in Tallahassee and Washington D.C.

The county occasionally brings up the subject of equalizing rates throughout the Keys.  While it’s not a terrible idea, it’s something that should have been planned from the start.  At this point, that discussion really needs to wait until the extreme funding inequities on the construction side are addressed.

We need to be very clear on the differences between construction costs and operating costs.  I provided the graphic below to clarify things.

Construction Vs Operating

Funding for construction of the projects is supplied by a number of sources.  In Key Largo’s case, funding for construction will also come out of rates.  This is exactly why I think the discussion about equalizing rates is extremely premature.  Ratepayers in the other unincorporated areas pay zero construction costs out of rates.  Once the District can relieve their customers of that burden, they can re-analyze their rate structure.

When the county tries to conflate construction costs and operating costs, they are in fact needlessly creating a “quagmire” that would not exist otherwise.  The FKAA has sole responsibility for operating costs within its service area.  The District has sole responsibility for operating costs within its service area.  The county has no business meddling in that.  Monroe County is responsible for distributing the infrastructure sales tax.  So far, they have failed to do so in an equitable manner.  That alone should disqualify them from any discussion of rates until that failure is corrected.

If customers within FKAA’s service area have issues with operating costs, they need to take that up with the FKAA board.  If customers within the District’s service area have issues with operating costs, they need to take that up with the District board.  If the solution to high operating costs involves capital improvements then the county may play a role, by using the infrastructure sales tax to pay for some of those projects.  But keep in mind, the FKAA has already received an massive benefit from that funding source just to build the projects.

Here’s what I think might really behind the talk of equalizing rates.  Because of the way they planned and designed their wastewater system, the FKAA is looking at some very high operating costs.  Low pressure systems are not cheap to maintain.  The customers in Cudjoe Regional are already very unhappy over the use of low pressure systems within their service areas.  Now the FKAA is looking at the possibility of angering them even further with high operating costs and rates.  Not only that, there are clearly issues in Big Coppitt.  That “gold standard” gravity system might not be as cost-effective as they counted on.

I suspect that the FKAA is looking for a savior.  On the construction side that savior was Monroe County.  The county over-subsidized the FKAA projects to the detriment of taxpayers countywide.  When it comes to operating costs, the county can’t do that.  What they can do is encourage the absorption of the District by the FKAA.  That way, Key Largo ratepayers may subsidize operating costs as well.

The county administrator was talking about dissolving the District even before I left.  And I think we might see that come up in the Tallahassee lobbying effort under the guise of consolidating and being more “efficient”.  But what it’s really all about is soaking Key Largo ratepayers for operating costs, just like they did with construction costs.  The good news is, the county cannot unilaterally dissolve the District.  That has to be done by the District itself.  But the District board has been off its game lately so ratepayers need to be awake and aware.

I asked the county for any and all material they plan to distribute in Tallahassee in support of the Stewardship Bill.  I’m told there is only one document being prepared for distribution and that is being done by Rep. Raschein’s office.  That is certainly a comforting thought, but I’d still like to see it.  The county’s track record is so sleazy, I really can’t afford to take anything for granted.

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