There are other UEP payment options
To the editor:
I am not here to argue for or against the city’s going ahead with its UEP project at this time. What I do want to put to rest is the bogus argument that unless the city goes ahead with its UEP project, we will be required o greatly increase our utility rates if we are to avoid increased property taxation. While the city administration has not said it is one or the other, it has only put before you this North vs South issue if we are to avoid spending general city monies to pay for the bonding. But you should know that you are not limited to those choices.
An alternative would be to eliminate impact fees for water or sewer or both and specially assess the capital facilities cost to the property to the property benefited. That special assessment could be less than the impact fee. While impact fees are designated to pay for utility capital facilities they are not capable of being the revenue source of bond amortization. Their receipt as revenue is not timely and any revenue bond could not be sold based on impact fee revenue at any realistic rate of interest. Why then does the administration seek to not remove utility impact fees? I believe, at least in part, that they help make utility rates a “cash cow.” They become such because when they are subsequently received they “repay” the sewer and water fund creating additional monies. Are you aware of the sewer and water monies that go toward payment of maintenance and operation of the city hall? That is for electric, insurance, telephone, etc. as well as part of the salary of the city manager and department heads.
What now is the apparent obstacle to a special assessment? It seems to be the letter of Christopher Treber to the city attorney dated April 15, 2009. In that letter on page 3, paragraph 1, line 11 he states:
“If the city does not have a plan to provide utility service to the North Expansion Area within six years or such other reasonable time frame, then the preliminary expenditures (new capital facility) that were incurred cannot be assessed against the north Expansion area xxx.”
For that statement he cites and relies on the 4th District Court of Appeals case in Home Builders & Contractors Assn. of Palm Beach County vs. Board of County Commissioners of Palm Beach County, 446 So.2d 140.
That case was a road impact fee case and had nothing to do with any special assessment. He also in error, in his letter states that the Home Builders & Contractors Assn. supra, states that the case has established six years for the monies to be spent to provide a benefit to properties. Impact fees provide no benefit to property but are based on the impact that development has on the area or community. Moreover his statement on the six year limitation as case law is a stretch. The Appeal Court sets forth the provisions of the Palm Beach ordinance which provided that the impact monies were to be spent in six years. This time limitation was not an issue in that case. Had the ordinance said two years or 10 years that would not be a time limitation because it was not discussed or ruled on.
A special assessment for bonding can be under Florida law be pre-approved before any bond issues. It will place the cost where the benefit is. It will also avoid the huge increase in utility rates to finance the bonding and should be considered by the council.
Arnold E. Kempe
Cape Coral