COMMENTARY

“It is difficult to imagine what more Mayfield could have done to alienate municipal power providers across the state.”  

MARK SCHUMANN

Neither of the local utility-related bills for which State Representative Debbie Mayfield recently placed required legal notices are supported by the Vero Beach City Council.  Yet, the wording Mayfield chose for the notices could easily lead one to assume her proposed legislation has the full support of the City of Vero Beach.

The opposite seems to be true.  In fact, the City Council will almost surely join the Florida League of Cities in opposing Mayfield’s effort to assist the Indian River County Commission and local utility activists Glenn Heran and Stephen Faherty in their attempt to force the City of Vero Beach out of both of its utility businesses.

Mayor Richard Winger has placed an item on the agenda for next week’s City Council meeting addressing Mayfield’s legislation.  “These various bills seem to be politically motivated, and either attack municipalities in general, or the COVB in particular, in favor of county governments,” Winger wrote in explaining the public need to be addressed by the Council.  “For the private (local) bills, no public hearing has been held as required on page 3 of the state guidelines for a private (local) bill, and the excerpt (legal notice) erroneously says the City is a party to the action, which is untrue,” Winger wrote.

In concluding his explanation of why the Council should take action to protect Vero Beach’s interests Winger added, “Lastly, this requested legislation is likely to delay the successful sale of the City Electric Utility, as it might be seen by some as an attack on either Municipalities or Power Providers.  Hopefully this proposed bill will not cause an added electric sale delay until the Legislative Session concludes May 2, 2014.  But HB 861 may be yet another stumbling block…”

In addition to the two local bills to be filed by the end of February, Mayfield has also filed three general utility related bills — HB 812, HB 813 and HB 861. HB 861 is nothing less than a direct assault on the Florida Municipal Power Agency and its member cities, all of which will have to sign off on changes in FMPA contracts needed to clear the way for the proposed sale of Vero Electric to Florida Power & Light.  It is difficult to imagine what more Mayfield could have done to alienate municipal power providers across the state.

Mayfield’s HB 812 would place the city’s electric utility under the jurisdiction of the Florida Public Service Commission.  City leaders haven’t exactly been clamoring to be regulated by the PSC.  Another general bill Mayfield has filed is HB 813.  In what would constitute a sweeping expansion of state powers of eminent domain, HB 813 would essentially hand the Indian River County Commission a means of seizing the city’s water and sewer utility.

The two local bills for which Mayfield published legal noticed in late January have yet to be filed.  Though Mayfield has satisfied the Florida House rule requiring the legal notice, she may not be honoring the letter or the spirit of two other House rules.  House guidelines for filing local bills suggest that, “County or municipal attorneys, or other appropriate local officials, are expected to draft local bills.”  Though Mayfield’s bills affect the City of Vero Beach, they certainly were not drafted by City Attorney, Wayne Coment.  According to Coment, the City has not even been consulted on the language of the bills.

Further, House rules require the local legislative delegation to hold a noticed public meeting to discuss the proposed legislation and to hear public input.  Mayfield may contend that the meeting of the Treasure Coast Legislative Delegation held last fall in City Hall satisfied that requirement.  At the time of the meeting, however, the legislation had not been drafted.

For Mayfield to have written the legal notices in a way that suggest her local bills are being filed at the request and with the support of the City of Vero Beach may have been crafty, but it was also disingenuous.

In a email alert to its membership, the Florida League of Cities called attention to Mayfield’s bills, enumerating the likely negative impact the legislation would have on cities across the state.  The full text of the Florida League of Cities email is presented below, along with the following screen shot of the legal notices Mayfield’s office placed with Scripps Treasure Coast Newspaper.

The following email was sent Feb. 7 from Megan Sirjane-Samples, Administrative Assistant/Legal Affairs for the Florida League of Cities to the organizations’ membership.

IMPORTANT The Florida League of Cities needs your help in determining the affect that the following legislation could have on municipalities.

On February 5, 2014 Representative Debbie Mayfield filed HB 813, also known as the “Ratepayer Representation Act.” HB 813 has not yet been referred to committee, and as of 2/6/14, there is not a Senate Companion.

HB 813 allows for counties to take over a municipal franchise of a water and wastewater utility once the municipal franchise agreement, resolution, or ordinance has expired. The county must compensate the municipality for the fair market value of the facilities transferred to serve the unincorporated areas of the county. If the franchise agreement, resolution, or ordinance contains no expiration date, the county may provide services subject to meeting the following requirements:

·         A majority of the ratepayers in the unincorporated area of the county served by the municipality, either by vote in a referendum or written response to a mail survey, have agreed to be served by the county; and

·         The county compensates the municipality for the fair market value of such facilities owned by the municipality that are transferred to the county to serve the unincorporated area of the county.

In addition, the bill prevents municipalities from extending service to the unincorporated areas of a county, without express consent from the County Board of Commissioners. HB 813 limits the rate that a municipal water or wastewater utility may charge its customers outside of its municipal boundaries to a rate not more than 25 percent of the rate that it charges its consumers within the municipality for corresponding services.

This new ceiling cuts the current legal rate that a municipality may charge to its customers outside of municipal boundaries in half. The surcharge is necessary to extend and provide services for customers who are not located within municipal boundaries and also covers the cost of extending infrastructure to those areas. The proposed rate charged to customers outside of municipal boundaries will not be authorized without the review of the Public Service Commission (PSC). Included in the bill is the provision that the PSC must find the rates, fees, and charges for those customers are just and equitable.

Effective July 1, 2014, a municipality may not establish a new surcharge or increase an existing surcharge on ratepayers in unincorporated areas of a county unless the PSC finds that the proceeds of any new surcharge, or the existing surcharge and any new increase, are dedicated exclusively to repayment of that portion of bonds issued by the municipality to finance the facilities that serve the unincorporated areas. The commission must also determine the appropriate rate and duration of the surcharge necessary to accomplish this purpose.

Effective July 1, 2018, a surcharge imposed by a municipality on or before July 1, 2014, on ratepayers in unincorporated areas of a county, which surcharge exceeds 15 percent of the rates, fees, and charges applied to ratepayers inside the municipal boundaries, must be approved by the PSC. The commission must find that the proceeds from the entire surcharge are dedicated exclusively to repayment of that portion of bonds issued by the municipality to finance the facilities that serve the unincorporated areas. The commission shall determine the rate and duration of the surcharge necessary to accomplish this purpose. However, the total surcharge may not exceed 25 percent of the rates, fees, and charges applied to ratepayers inside the municipal boundaries.

All surcharges on water and wastewater utilities imposed by a municipality on or before July 1, 2014, on ratepayers in unincorporated areas of a county shall expire effective July 1, 2024, and may not be imposed after this date unless the PSC approves. The bill allows customers receiving services in the unincorporated county area to petition the PSC for a review of the rates, fees, and charges of the municipal utility.

Finally, and most troubling, the bill requires that municipalities who own and operate water and wastewater utilities that provide services either directly or indirectly to unincorporated areas of the county are no longer exempted from oversight of the PSC.