Staff recommends approval of the resolution opposing the statutory changes.
Miami-Dade County’s Board of County Commissioners adopted two resolutions in April 2008 (R-404-08 & R-444-08) urging Florida legislators to prohibit municipal water and wastewater utilities from levying a surcharge on consumers living outside of the City Limits. The preambles to these resolutions allege that the surcharge amounts are “taxation without representation.” Both resolutions state that the surcharge results in unfairness to consumers living outside the City’s boundaries when they have no representation, voice or input in the City’s decisions.
Section 180.191, F.S. allows municipalities to implement up to a 25% surcharge to those customers living outside the city limits without performing a cost study and up to a 50% surcharge if deemed appropriate by a cost study. §180.191, F.S. has withstood numerous legal challenges, with the courts recognizing the appropriateness of the outside city limits surcharge because of the inherent cost of service differential and the ownership nature of the in-city customers.
All customers of the utility, living both inside and outside the city limits, have equal opportunity to appear at rate hearings which are advertised in compliance with §180.136, F.S. , giving them a voice in rate setting matters. The surcharge to those customers living outside of the city limits is not a tax; it is a fee for services associated with the increased costs of providing these services.
There are potentially devastating effects to repealing the outside city limits surcharge that include:
· Jeopardizing our credit rating for debt, as surcharge income is generally considered acceptable revenue for debt coverage tests;
· Jeopardizing existing outstanding debt service instruments which include surcharges in the debt service coverage ratios;
· Environmental impacts resulting from developer installed water & wastewater systems not as efficient or effective as municipal owned systems;
· Eliminate a means for obtaining a fair return on investments owned by the City of Leesburg
· Eliminate a means for equal cost sharing for services provided by non-tax paying recipients of benefits from community sponsored activities;
· Eliminate a means of equalizing the in-city public service tax;
· Elimination of a means for providing funding for utility capital projects necessary to meet environmental and legislative mandates;
· Chilling effect on outside city limit development in that there would be less incentive to provide services.
1. Adopt the resolution as presented; or
2. Such alternative action as the Commission may deem appropriate
There is no fiscal impact to adopting this resolution.
Prepared by: EF Smyth, DCM
Attachments: Yes____ No ______
Advertised: ____Not Required ______
Attorney Review : Yes___ No ____
Reviewed by: Dept. Head ________
Finance Dept. __________________
Deputy C.M. ________EFS________
City Manager ___________________
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WF No. ______________________
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA, OPPOSING AND PROTESTING THE EFFORTS OF MIAMI-DADE COUNTY TO DENY THE MUNICIPAL WATER AND WASTEWATER UTILITIES RATE SETTING AUTHORITY FOR UTILITIES PROVIDED OUTSIDE OF THE MUNICIPAL BOUNDARIES; AND PROVIDING AN EFFECTIVE DATE.
BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA:
THAT Section 180.191, F.S. grants every municipality in Florida that operates water and wastewater systems outside their own boundaries the right to establish water and wastewater rates for outside city customers that include a surcharge up to 25% without a special public hearing and up to 50% with a special public hearing; and
THAT the surcharge permitted by the state recognizes and justifiably offsets the capital costs and burden carried by a municipality’s tax paying citizens to enable the acquisition, maintenance and operation of its water and wastewater utility and, therefore, provide quality water and wastewater services for non-residential and non-municipal ratepayers; and
THAT the City of Leesburg has been appropriately collecting the statutory surcharge pursuant to §180.191, F.S. since 1984 and
THAT the City of Leesburg’s water and wastewater utility continues to provide high quality water and wastewater services to customers both inside and outside the city limits, which enable economic growth and development in its service areas and enhances the quality of life of those customers; and
THAT this resolution shall become effective immediately.
NOW, THEREFORE BE IT RESOLVED by the City Commission of the City of Leesburg, Florida;
Section 1 The foregoing recitals are true and correct.
Section 2 The City of Leesburg opposes any change to the City’s water and wastewater utilities rate making authority as established by the Florida Legislature in §180.191, F.S.
Section 3 The City of Leesburg opposes any discriminatory action that would treat municipal water and wastewater utilities rate making authority differently from those granted under §180.191, F.S. to operate outside of the corporate boundaries.
Section 4 The City Clerk is hereby directed to send a copy of this Resolution to the Lake County Board of County Commissioners, and the members of the Lake County Legislative Delegation, the President of the Florida Senate, Speaker of the Florida House of Representatives, Florida Governor Charlie Crist and the legislative leadership of the Florida League of Cities, Inc.
PASSED AND ADOPTED by the City Commission of the City of Leesburg, Florida, at a regular meeting held the _24th_ day of __November, 2008