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Highlands Today

AP Opposes Effort To Stop Utility Surcharges

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By MARC VALERO

Highlands Today

Published: December 29, 2008

AVON PARK - The Avon Park City Council is sending a message to the governor - that it opposes Miami-Dade County's effort to eliminate municipalities from lawfully setting higher utility rates for customers outside the city limits.
Avon Park has joined numerous Florida cities, including Sebring, by approving a resolution in opposition of the south Florida county's efforts to prohibit the utility surcharge.

Miami-Dade County is trying to do away with this 25 percent surcharge that the city automatically charges, in accordance with Florida statutes, to people outside the city limits, said Avon Park City Attorney Gerald Buhr. That would be very bad for the cities, so the cities are all opposing it.

A lot of counties are in favor of it because if the cities cannot charge higher rates outside the city they may not want to compete with counties in providing utility services, he said.

Miami-Dade County's Board of County Commissioners adopted two resolutions in April 2008, urging Florida legislators to prohibit municipal water and wastewater utilities from levying a surcharge on consumers living outside of the city limits.

The 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.
Florida statutes allows municipalities to implement up to a 25 percent surcharge to those customers living outside the city limits without performing a cost study and up to a 50 percent surcharge if deemed appropriate by a cost study.

Municipalities have noted a number of negative effects to repealing the outside city limits surcharge including:

• Jeopardizing credit rating for debt, as surcharge income is generally considered acceptable revenue for debt coverage tests;

• Environmental impacts resulting from developer installed water and wastewater systems not as efficient or effective as municipal owned systems.

•Eliminate a means for obtaining a fair return on investments.

• Eliminate a means for equal cost sharing for services provided by non-tax paying recipients of benefits from community sponsored activities.

• Possibly slow outside city limit development in that there would be less incentive for cities to provide services.

Highlands Today reporter Marc Valero can be reached at 386-5826 or mvalero@highlandstoday.com

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