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Res 58-08RESOLUTION N0.58-08 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF DELRAY BEACH, FLORIDA, OPPOSING AND PROTESTING THE EFFORTS OF MIAMI-DADS COUNTY TO ELIMINATE THE CITY'S ABILITY TO RECOVER COSTS OF PROVIDING WATER AND SEWER SERVICE OUTSIDE ITS MUNICIPAL BOUNDARIES; PROVIDING AN EFFECTIVE DATE. WHEREAS, Section 180.191, Florida Statutes, grants every municipality in Florida that operates water & sewer systems outside their own boundaries the right to establish water & sewer 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 WHEREAS, 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 & sewer utility and, therefore, provide quality water & sewer services for non-residents and non-municipal taxpayers; and WHEREAS, the City of Delray Beach has been appropriately collecting the statutory surcharge pursuant to ~ 180.191 since 1980; and WHEREAS, the City of Dekay Beach's water & sewer utility continues to provide high quality water & sewer service to outside city customers, which enables economic development in its service area and enhances the quality of life of its customers. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF DELRAY BEACH, FLORIDA, AS FOLLOWS: Section 1. The foregoing recitals are true and correct. Section 2. The City of Delray Beach opposes any change in the City's water & sewer utility rate making authority as established by the Florida Legislature in ~ 180.191, Florida Statutes. Section 3. The Ciry Clerk is hereby directed to send a copy of this Resolution to the President of the Florida Senate, Speaker of the Florida House of Representatives, Florida Governor Charlie Crist, the legislative leadership at the The Florida League of Cities, Inc. and the Palm Beach County legislative delegation. Section 4. This resolution shall take effect immediately upon its adoption. PASSED AND ADOPTED by the Ciry of Delray Beach Ciry Commission at the regular meeting assembled this 18``' day of November, 2008. ~~ ~~ ATTEST: V ` City Clerk MAYOR 2 RES. NO. 58-08 MEMORANDUM TO: Mayor and City Commissioners FROM: Terrill Pyburn, Assistant City Attorney THROUGH: Susan Ruby, City Attorney DATE: November 7, 2008 SUBJECT: AGENDA ITEM 8.E. -REGULAR COMMISSION MEETING OF NOVEMBER 18 2008 RESOLUTION NO. 58-08 ITEM BEFORE COMMISSION Resolution No. 58-08 BACKGROUND The attached Resolution No. 58-08 is objecting to efforts by Miami-Dade County to modify Section 180.191, Florida Statutes, to eliminate the rights of a municipal utility to assess surcharges to customers outside its municipal boundaries. RECOMMENDATION The City Attorney's Office recommends City Commission discretion. Talking Points Regarding the Outside City Surcharge Presented by the City of North Miami Beach • Miami-Dade County's Board of County Commissioners passed Resolutions R-404-08 and R-444-08 in April 2008 urging Florida legislators to prohibit municipal water and wastewater utilities from levying a surcharge on consumers living outside the city limits. - Section 180.191, Florida Statutes (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. • Preambles to the Resolutions state that the surcharge amounts to "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 into City decisions. - All customers of the utility, living both inside and outside city limits, have equal opportunity to appear at rate hearings, which are publicized pursuant to Section 180.136, F.S., giving them a voice in rate setting matters. - The outside city limits surcharge IS NOT a tax, IT IS a fee associated with the increased costs of providing service outside the city limits. • Section 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. - The Florida Supreme Court upheld Section 180.191, F.S. in Mohme v. City of Cocoa, 328S. 2D422. Selected statements made by the Court include: "A .different rate may be charged... It is justified because of the difference in cost to furnish services to those without the municipal limits, as compared to the cost to furnish it to those within the municipality."; and "...we believe that the legislature reasonably concluded that there are additional costs attributable to the providing of these services by municipal utility systems and that these costs cannot be pinpointed even under sophisticated cost accounting techniques. Because of the interconnection of the components of a utility system... the exact additional cost of delivery of utility services to those outside." A060022.00 Page 1 of 3 110308 - The Fourth District Court of Appeals in City of Pompano Beach v. L.M. Oltman, Gerald F. Glass and Floyd F. Toomey, 389 So.2d 283; 1980 Fla. App. Lexis 175359 upheld Section 180.191, F.S. Selected statements include: "The City has the clear right to charge higher rates to users of its utility system outside the City than to users inside the City. Clay Utility Co. v. City of Jacksonville, 227 So.2d 516 (Fla. 1st DCA 1969); Mohme v. City of Cocoa, supra." • The legislature recognized that providing utility service outside the city limits was inherently more costly than providing service within the city limits and provided for that inherent cost differential with the surcharge provision of Section 180.191, F.S. Several factors can account for this cost differential and include: - In-city owners are due a return on their investment in the utility system. The AWWA (American Water Works Association) is the recognized authority on utility rate making. AWWA Manual M-1 acknowledges it is necessary for municipal utility systems to charge a rate differential to outside city limits customers in order that the in-city utility owners are compensated for their investment. - The municipality is seeking to equalize outside city rates when a water franchise fee or utility tax is charged to inside City customers and not outside City customers. - The municipality is seeking to normalize its inside City customer costs. - The municipality can facilitate development by providing utility service outside City boundaries while minimizing potential subsidization by City customers. - In-city density can provide economies of scale not obtainable in less dense outside City customer groups. - Permitting costs outside City can be more than in-city costs. • There are potentially devastating effects to repealing the outside city limits surcharge. These effects include: - Jeopardizing municipalities' 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. - 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. A060022.00 Page 2 of 3 110308 - Eliminate a means for providing funding for utility capital projects necessary to meet environmental and legislative mandates (ocean outfalls recently enacted by the legislature). Other sources of funds, such as grants and SRF loans, are becoming more limited. - Chilling effect on outside city limit development. Less incentive to provide service. • What can your City do to protect Section 180.191, F.S.? - Pass a resolution similar to Resolution R2008-14 passed by the City of North Miami Beach. - Lobby your legislators with your support of Section 180.191, F.S. as it currently reads and be on the lookout for, and take no action on, Resolutions such as R-404-08 and R-444-08 passed by the Miami-Dade BOCC asking for changes eliminating the outside of city surcharge as provided for in Section 180.191, F.S. - Make other cities aware of the Miami-Dade resolutions and solicit their support and involvement. - Stay aware and informed as resolutions such as those promulgated by Miami- Dade (R-404-08, R-444-08) can have negative impacts on countless cities throughout Florida. A060022.00 Page 3 of 3 110308 RESOLUTION N0.58-08 A RESOLUTION OF THE QTY COMMISSION OF THE QTY OF DELRAY BEACH, FLORIDA, OPPOSING AND PROTESTING THE EFFORTS OF MIAMI-DARE COUNTY TO ELIMINATE THE ABILITY OF QTIES TO RECOVER COSTS OF PROVIDING WATER AND SEWER SERVICE OUTSIDE ITS MUNIQPAL BOUNDARIES; PROVIDING AN EFFECTIVE DATE. WHEREAS, Section 180.191, Florida Statutes, grants every municipality in Florida that operates water & sewer systems outside their own boundaries the right to establish water & sewer 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 WHEREAS, the surcharge permitted by the state recognizes and justifiably offsets the capital costs and burden carved by a municipality's tax paying citizens to enable the acquisition, maintenance and operation of its water & sewer utility and, therefore, provide quality water & sewer services for non residents and non municipal taxpayers; and WHEREAS, the City of Delray Beach has been appropriately collecting the statukory surcharge pursuant to ~ 180.191 since 1980; and WI~REAS, the City of Delray Beach's water & sewer utility continues to provide high quality water & sewer service to outside city customers, which enables economic development in its service area and enhances the quality of life of its customers. NOW, THEREFORE, BE IT RESOLVED BY THE QTY COMNIISSION OF THE QTY OF DELRAY BEACH, FLORIDA, AS FOLLOWS: Section 1. The foregoing recitals are true and correct. Section 2. The City of Delray Beach opposes any change in the City's water & sewer utility rate malting authority as established by the Florida Legislature in ~ 180.191, Florida Statutes. Section 3. The City Qerk is hereby directed to send a copy of this Resolution to the President of the Florida Senate, Speaker of the Florida House of Representatives, Florida Governor Charlie Crist, the legislative leadership at the The Florida League of Cities, Inc. and the Palm Beach County legislative delegation Section 4. This resolution shall take effect irnrrbediately upon its adoption PASSED AND ADOPTED by the City of Delray Beach City Commission at the regular meeting assembled this day of , 2008. ATTEST: MAYOR City Qerk [IT4 Of DELRi14 BEFI[H February 3, 2009 The Honorable Shelley Vana County Commissioner 301 N. Olive Ave., 12"' Floor West Palm Beach, 33401 Dear Commissioner Vana: Please find attached Resolution No. 58-08 objecting to efforts by Miami-Dade County to modify Section 180.191, Florida Statues, to eliminate the rights of a municipal utility to assess surcharges to customers outside its municipal boundaries. The City Commission passed and adopted Resolution No. 58-08 at the Regular Commission Meeting of November 18; 2008. If we can be of any assistance to you, please call the office 8:00 a.m. - 5:00 p.m. Monday through Friday at (561) 243-7050. Sincerely, Chevelle D. Nubin, CMC City Clerk CDN/kw Attachment ~ERVICE ERFOR~~iANGE INTEGRITY RESPONSIBLE ~NNOVF~TIVE ~E:~MWORK k DELRAY BEACH - .- ,,: .. , ' .' 100 N.\N. 1st AVENUE • DELRAY BEACM, FLORIDA 33444 • 561!243-7000 All-America City 1993 2001 February 3, 2009 The Honorable Burt Aaronson County Commissioner 301 N. Olive Ave., 12th Floor West Palm Beach, 33401 Dear Commissioner Aaronson: Please find attached Resolution No. 58-08 objecting to efforts by Miami-Dade County to modify Section 180.191, Florida Statues, to eluninate the rights of a municipal utility to assess surcharges to customers outside its municipal boundaries. The City Commission passed and adopted Resolution No. 58-08 at the Regular Commission Meeting of November 18, 2008. If we can be of any assistance to you, please call the office 8:00 a.m. - 5:00 p.m. Monday through Friday at (561) 243-7050. Sincerely, _'J . Chevelle D. Nubin, CMC City Clerk CDN/kw Attachment ~ERVIC~ PERFORMANCE TNTECRIT`/ ~SPONSIBLE ~NNOVATIVi_ ~EAMbV®RK DELRAY BEACH ' 100 N.W. 1st AVENUE • DELRAY BEACH,.FLORiDA 33444 • 5611243-7000 All-America City 1993 2001 February 3, 2009 The Honorable Jess Santamaria County Commissioner 301 N. Olive Ave., 12t" Floor West Palm Beach, 33401 Dear Commissioner Santamaria: Please find attached Resolution No. 58-08 objecting to efforts by Miami-Dade County to modify Section 180.191, Florida Statues, to eliminate the rights of a municipal utility to assess surcharges to customers outside. its municipal boundaries. The City Commission passed and adopted Resolution No. 58-08 at the Regular Commission Meeting of November 18, 2008. If we can be of any assistance to you, please call the office 8:00 a.m. - 5:00 p.m. Monday through Friday at (561) 243-7050. Sincerely, ~. \ v "+~ Chevelle D. Nubin, CMC City Clerk CDN/kw Attachment ERVZCE ~FRFOR~R~ICE INTEGRITY i5PON5IBLE Nt~JOVATZVE ° ~AiVtV~l4RlC ~ t ~"~~ i ~ 4 ni ~ r !I ~ I 14 s :wx, `q~ tl II - 6'w ~ ~I i~~ y It ~'- ri. fiua I C; ~ rvl n( r(r q. 7ir '~' !Ihr February 3, 2009 The Honorable Jeff Koons County Commissioner 301 N. Olive Ave., 12~h Floor West Palm Beach, 33401 Dear Commissioner Koons: Please find attached Resolution No. 58-08 objecting to efforts by Miami-Dade County to modify Section 180.191, Florida Statues, to eliminate the rights of a municipal utility to assess surcharges to customers outside its municipal boundaries. The City Commission passed and adopted Resolution No. 58-08 at the Regular Commission Meeting of November 18, 2008. If we can be of any assistance to you, please call the office 8:00 a.m. - 5:00 p.m. Monday through Friday at (561) 243-7050. Sincerely, Cam- ~ N,~.~ Chevelle D. Nubin, CMC City Clerk CDN/kw Attachment ERVICE 9-~ERFC?RMANCE ' NTE~RTTY ESPC~NSISLE ' INNOVATIVE ' ~EAMWORK [li4 OF ~ELRR4 BEEI[N DELRAY BEACH 0 All-America City ~11~® 1993 2001 February 3, 2009 The Honorable Karen Marcus County Commissioner 301 N. Olive Ave., 12t" Floor West Palm Beach, 33401 Dear Commissioner Marcus: 100 N.VJ. isi AVENUE s DELRAY BEACH, FLORIDA 33444 • 561!243-7000 Please find attached Resolution No. 58-08 objecting to efforts by Miami-Dade County to modify Section 180.191, Florida Statues, to eliminate the rights of a municipal utility to assess surcharges to customers outside its municipal boundaries. The City Commission passed and adopted Resolution No. 58-08 at the Regular Commission Meeting of November 18, 2008. If we can be of any assistance to you, please call the office 8:00 a.m. - 5:00 p.m. Monday through Friday at (561) 243-7050. Sincerely, ~. `~~ Chevelle D. Nubin, CMC City Clerk CDN/kw Attachment ERVICE ~ERFOR/U~ANCE N T FGRITY E5PGNSIBL.E " ~NN®VATIVE ~EAtV1V1/QRK DELRAY BEACH ` ` ° ° '^ 100 N.W. 1Si AVENUE • DF_LRAY BEACH, FLORIDA 33444 • 561/243-7000 All-America City 1993 2001 February 3, 2009 The Honorable Christopher Smith Florida Senator 220 Senate Office Building 404 South Monroe Street Tallahassee, Florida 32399-1100 Dear Senator Smith: Please find attached Resolution No. 58-08 objecting to efforts by Miami-Dade County to modify Section 180.191, Florida Statues, to eliminate the rights of a municipal utility to assess surcharges to customers outside its municipal boundaries. The City Commission passed and adopted Resolution No. 58-08 at the Regular Commission Meeting of November 18, 2008. If we can be of any assistance to you, please call the office 8:00 a.m. - 5:00 p.m. Monday through Friday at (561) 243-7050. Sincerely, ~.~ Chevelle D. Nubin, CMC City Clerk CDN/kw Attachment SERVICE " ~ERFOR~~4~NCE ` NTEGRITY ° RESPONSIBLE ° ,CNNOVRTIVE ° TEAMWORK [IT4 OF DEIe'~p4 ~E~!~H February 3, 2009 The Honorable Jeff Atwater President Senator 312 Senate Office Building 404 South Monroe Street Tallahassee, Florida 32399-1100 Dear Senator Atwater: Please find attached Resolution No. 58-08 objecting to efforts by Miami-Dade County to modify Section 180.191, Florida Statues, to eliminate the rights of a municipal utility to assess surcharges to customers outside its municipal boundaries. The Ciry Commission passed and adopted Resolution No. 58-08 at the Regular Commission Meeting of November 18, 2008. If we can be of any assistance to you, please call the office 8:00 a.m. - 5:00 p.m. Monday through Friday at (561) 243-7050. Sincerely, • ~\ ~'~.~.~uv Chevelle D. Nubin, CMC Ciry Clerk CDN/kw Attachment ERVTCC ~ERFCIRMANCE ° N~"EGRITY ESPONSIBI_E ° NNCVA~-zV~ C EAM`,~/ORK [li4 OF QELR114 6Ep[H February 3, 2009 Ed Chase, Executive Director Palm Beach County Legislative Delegation 301 North Olive Avenue Suite #1101 West Palm Beach, Florida 33401 Dear Mr. Chase: Please find attached Resolution No. 58-08 objecting to efforts by Miami-Dade County to modify Section 180.191, Florida Statues, to eliminate the rights of a municipal utility to assess surcharges to customers outside its municipal boundaries. The City Commission passed and adopted Resolution No. 58-08 at the Regular Commission Meeting of November 18, 2008. If we can be of any assistance to you, please call the office 8:00 a.m. - 5:00 p.m. Monday through Friday at (561) 243-7050. Sincerely, ~ • ~\V~ Chevelle D. Nubin, CMC City Clerk CDN/kw Attachment ~ERVTCE ~ERFORM~a~CF PJTEGRITY ' b°~ESPQNST~LE ° NNQV~TIVE ' ~EANlWQRK ~,, . 1 DELRAY BEACH .. . _ ° ` ~ -- . '~ ... :: _ . 100 N.W. is! AVENUE • DELRAY BEACH, FLORIDA 33444 . 561/243-7000 All-America City 1993 2001 February 3, 2009 Lynn Tipton, Director of Membership Development Florida League of Cities 301 S. Bronough Street, Suite #300 P.O. Box 1757 Tallahassee, Florida 32301 Dear Ms. Tipton: Please find attached Resolution No. 58-08 objecting to efforts by Miami-Dade County to modify Section 180.191, Florida Statues, to eliminate the rights of a municipal utility to assess surcharges to customers outside its municipal boundaries. The City Commission passed and adopted Resolution No. 58-08 at the Regular Commission Meeting of November 18, 2008. If we can be of any assistance to you, please call the office 8:00 a.m. - 5:00 p.m. Monday through Friday at (561) 243-7050. Sincerely, Chevelle D. Nubin, CMC City Clerk CDN/kw Attachment ,ERVZCE F~E(2rORMANCE NTEC7RITY ESr ON5TBl.E NNO1iATIVE ~EAMWO~~C February 3, 2009 Office of Governor Charlie Crist State of Florida The Capitol 400 S. Monroe Street Tallahassee, Florida 32399-0001 Dear Governor Crist: .. ~ «. DELRAY BEACH, FLORIDA 33444 0 561/243-7000 Please find attached Resolution No. 58-08 which objects to the efforts by Miami- Dade County to modify Section 180.191, Florida Statutes, to eliminate the rights of a municipal utility to access surcharges to customers outside of its municipal boundaries. The City Commission passed and adopted Resolution No. 58-08 at the Regular Commssion Meeting of November 18, 2008. If we can be of any assistance to you, please call the office 8:00 a.m. - 5:00 p.m. Monday through Friday at (561) 243-7050. Sincerely, ~,\ • ~ \ v~ Chevelle D. Nubin, CMC City Clerk CDN/kw Attachment ~ERVICE ~ERFORMANC~ I1~TEGRIT`{ ESPON5T8LE fI.NNOVATTVE ~EAMWOR{C ' DELRAY BEACH ° ,~~ ~ , -~-p ~ M ~ _. # ~.W..;; a ~ , ~~. ~~YF ... > 100 N.W. 1st AVENUE • DELRAY BEACH, FLORIDA 33444 . 561/243-7000 ~ ~ - All-America City 1 1993 2001 February 3, 2009 The Honorable Addie Greene County Commissioner 301 N. Olive Ave., 12`h Floor West Palm Beach, 33401 Dear Commissioner Greene: Please find attached Resolution No. 58-08 objecting to efforts by Miami-Dade County to modify Section 180.191, Florida Statues, to eliminate the rights of a municipal utility to assess surcharges to customers outside its municipal boundaries. The City Commission passed and adopted Resolution No. 58-08 at the Regular Commission Meeting of November 18, 2008. If we can be of any assistance to you, please call the office 8:00 a.m. - 5:00 p.m. Monday through Friday at (561) 243-7050. Sincerely, ~~ Chevelle D. Nubin, CMC City Clerk CDN/kw Attachment SERVICE ~ERFORt~~ANCE TNTE6RITY ESPONSII3LE INNOVATIVE ~EAMUI/ORK '; _', _,~-.` I~ALIV~ ~~A~~[ ~®~.JNT'x I,E~I~I,A'1~VE ~E~,~GA'I~®I~T 301 NORTI-I OLIVIi AVENUE WEST PALM BEACH, FL 33401 561/355-2406 FAX: 561/242-7171 REP. PRISCILLA TAYLOR CI-Inlx REP. MARIA SACHS VICE-CI-~nlx SENATORS IEEE nTwATER DISTRICT' 25 DAVE ARONBERG nISIRICT' 27 KLN I'RUITT DTSTRTCI' 28 CI-IRIS SMITH DISTRICr 29 TED DEIITCH UIS"IRICT 30 LARCENIA BULLARD DIS1RICr 39 REPRESENTATIVES KEVIN RARER nls`IRlcr ~s WILLIAM SNYDER nlslRlcr s2 CARL DOMINO DISIRIC.I' 83 PRISCILLA TAYLOR nls`IRlcr s4 JOSEP}-1 ABRUZZO DISTRICT' AS MARIA SACI-IS DIS'TRICT' R6 ADAM HASNER DIS1Rlcr s~ MARK ]'AFFORD DISTRICT' 88 MARY BRANDENBURG DIS'I'ItICT 89 KELLY SKIDMORE DISTRICT' 90 EI_LYN BOGDANOPF DISTRICT 91 March 20, 2009 Ms. Chevelle D. Nubin City of Delray Beach 100 NW 1St Avenue Delray Beach, FL 33444 Dear Ms. Nubin: ~ECEt VED MAR 2 51009 CITY CLERK ~tiACH c ~+ oG2 '`~ ~LORI~~ Thank you for forwarding Resolution No. 58-08 to the Palm Beach County Legislative Delegation office. It was distributed to each member of the delegation via fax this afternoon. If I can be of any further assistance, please let me know. Sincerely, Ed Chase Palm Beach County Legislative Delegation ED CI-EASE 17<I:CUTIVIi DIRGCI'OR