Monroe Park Reality Check

stress-explosion-concept-exhausted-businessman-45371680The Key Largo Wastewater Treatment District (District) is still hemming and hawing over Monroe Park.  Here’s the story from the Free Press.  (And another letter on KeysNet.com.)  The District board tends to get stuck in vacillation-mode sometimes.  The only thing that can possibly pull them out of it is context.  And context is exactly what’s missing here.

Let’s start with some basic priniciples.

The District as a “business”

The District board and staff (including me once upon a time) like to say they run the place like a business.  That’s certainly a useful concept, but it can be taken to ridiculous extremes.  In reality, the District is not a business.  It is a ratepayer-supported government entity whose mission is to provide wastewater service within a geographical area that stretches from the Monroe County line to the Tavernier Creek bridge (excluding Ocean Reef).

If you look at it from a basic business school text book sense, the Key Largo wastewater project should never have been built.  None of the wastewater projects in the Keys should ever have been built.  There’s no definable “return on investment”.  In fact, it’s a struggle just to get the thing paid for without bankrupting the customers.  Hence all the trips to Tallahassee and Washington D.C.

So why do it at all?  We all know the answer.  It’s a long-term investment to preserve water quality, which in turn preserves the economy and way of life in the Keys.  The Keys can’t afford not to do it.  Besides the systems were state-mandated.  They were a legal requirement.

Impact on Ratepayers

According to this analysis found on the District’s December 15, 2015 meeting agenda, the project will cost about $1.3 million to build and about $72,000 per year to operate – net of Monroe Park’s contribution.  Compare that to the District’s overall costs.  The overall project cost to date is around $155 million.  Budgeted operating costs are about $3.7 million.

There is state money available to pick up the $1.3 million.  Therefore, the construction cost has zero impact on other District ratepayers.  I’m sure it will be argued that the $1.3 million could be used to “pay down debt”.  But how much of an impact would that really have on the ratepayers?  The District has been tight-lipped, even hostile to inquiries about financial relief.  Without an analysis, it’s hard to say what exactly the impact might be, but I doubt it would amount to very much.

The District is billing about 12,000 EDU’s so it would cost current customers an additional $6.00/EDU/year ($0.50/EDU/month) to pick up Monroe Park.  Right now all Key Largo customers are paying an additional $8/EDU/month because of the county-imposed funding shortage.  District 5 commissioner, Sylvia Murphy thinks that’s just fine.  So why should another $6.00/EDU/year ($0.50/EDU/month) be such a big deal?

Impact on Monroe Park Citizens

Now let’s look at the impact on the folks in Monroe Park.  Assuming they would pay the same construction and operating costs as the District, things would shake out as follows:

  • Monroe Park customers would pay for the entire cost of the construction project.  That is $2.0 million for 137 EDU’s or nearly $15,000 per EDU.
  • They would also pay for all operating costs to the tune of $160,000 per year, which works out to $97 per month per EDU.  For wastewater alone.  A typical single family residential wastewater bill in Key Largo is around $60 per month.

I’ll go ahead and state the obvious:  I don’t see how these people can afford this.  I don’t understand the District’s reasoning here.  This is not a well-to-do area like Big Coppitt or Key Haven or parts of Cudjoe Regional that have received enormous subsidies from the taxpayers.  Why place this excessive financial burden on these people?  Especially when there’s state money available?  And especially when the impact on the rest of the service area is negligible?

Other Factors?

The financial arguments for not providing service for Monroe Park are demonstrably weak.  The policy arguments are even weaker.  After all, it’s the District’s mission to provide wastewater service within it’s service area.  So what’s really going on here?

First, a little history.  Monroe Park residents wanting the District to provide service is somewhat recent.  A few years ago, the District held a hearing about providing service to the area and the citizens overwhelmingly decided that they would prefer to do it themselves.  So the District removed itself from the equation.

Of course, reality always sets in sooner or later and the citizens realized how much this was actually going to cost.  At the same time, there were tremendous compliance issues in the area and the Florida Department of Environmental Protection (FDEP) and the Health Department were strongly urging the District to get involved.  With state money available, it was a no-brainer for the District to handle the issue.

Second, political considerations.  Certain sewer board members have always been hostile to the idea of using state money for projects.  In fact, when the state first awarded the District the much-needed $17 million two board members supported the idea of simply giving it away to the county because it could not be used to “pay down debt”.

At the time, the county was still steadfastly refusing to enter into a swap agreement.  It seems obvious to me that this was a maneuver designed to pressure the District into giving up the money.  Unfortunately, two sewer commissioners were all too eager to cave in.  Thankfully staff and the other commissioners held firm.  If they hadn’t, there wouldn’t have been any money to trade!

The end result is that the District finally did get their swap agreement.  But I think the reluctance to use state money for any project, no matter how necessary or beneficial, has its roots in the county’s political maneuvering when the state money was first awarded.  I suspect that some at the District are haunted by the idea that the county will be “offended” or “inconvenienced” if any of the money is used for projects, and that would cause the county to renege on the agreement.  The sad truth is the county is already threatening to renege.  So the District may as well do what they can for the citizens in their service area, and have a Plan B at the ready.

What’s missing from the District’s calculus, of course, is the fact that the county has an obligation to its taxpayers in Key Largo.  The county is solely responsible for creating the funding inequity that necessitated the swap agreement in the first place.  And they have an obligation to correct that inequity, whether state money is available or not.  In addition, the county stands to benefit greatly from the swap agreement.  So I think worrying about how $2.0 million will affect the county is a bit silly.  The District’s mission is to provide effective, affordable wastewater service within its service area, not to tiptoe around the county.

The District needs to put the citizens of Key Largo first, and that includes the citizens in Monroe Park.

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