I saw this story in the Free Press this morning: Sewer Commissioner Seeks 2nd Term. Comm. Steve Gibbs is running for re-election to the Key Largo Wastewater Treatment District board. Unfortunately, he was quoted as saying something that isn’t quite accurate.
He said the crown jewel of the board’s achievements since 2012 – when he was elected – has been the reduction of the massive debt the district incurred when installing the state-mandated advanced wastewater treatment system for the island. Three and a half years ago that debt was at roughly $80 million, Gibbs pointed out, but now it is under $50 million thanks in part to an interlocal agreement with Monroe County for the swapping of use-specific funds.
The District has only received $1 million from the county as a result of the swap agreement. So actually, the swap had little to do with the debt reduction. There are three main factors at work.
- The District’s regular debt service payments are huge. The District pays about $5 million in debt service payments each year. That’s about the same as what it costs to run the District. In three years, those payments amount to about $15 million.
- The District entered into an interlocal agreement with the Village of Islamorada whereby the District would treat the Village’s wastewater. As part of that agreement, Islamorada agreed to pay a capital contribution of $10 million.
- The District refinanced a $30 million bank loan. The District did not use all the funds from that loan and so when they refinanced, about $5 million went back to the bank.
The swap agreement has the potential to make a big difference. But if Comm. Gibbs were being completely honest, he would have to admit that it hasn’t yet. The District needs to be watchful and cautious. The swap agreement is a great idea, but it is also very risky.
The county is an unreliable negotiating partner and county officials have made statements to indicate that they do not intend to honor the agreement. The District is giving up $17 million that would have been available on a reimbursement basis. They’re going to have to hope the county honors its legal obligation. Based on my experience with the county, there’s a very good chance they are looking for a way to avoid paying their $17 million debt back to the District. Or at least trying to make it more difficult for the District to collect. True to form, the county has continued to be negligently irresponsible with taxpayer money and it would not surprise me at all if they were looking for another bail-out.
While what Mr. Gibbs said is technically true, it is very misleading. Key Largo citizens get enough of that tap dancing from the county. They don’t need it from the wastewater board, too.
I’ve got another issue with what was said. Debt reduction is good and necessary, but that should not be the end goal. The end goal should be rate and assessment relief for Key Largo ratepayers. County Commissioner, George Neugent once asked me, “The District’s doing fine financially, right?” I replied, “It’s not the District’s books I’m worried about. I’m worried about our customers’ books.” I hope that Comm. Gibbs agrees. He hinted at rate relief in the newspaper story, but there are still no specifics.
There’s been a vague statement that rates might be reduced sometime in 2018. That’s a long way off, and the ratepayers have already been waiting a very long time. I would like to hear the candidates talk about financial relief. I would like to see a solid plan emerge. The last time I asked for details, I got a very evasive response.
Is financial relief in the plan or not?