Legislative Matter

Miami-Dade Legislative Item
File Number: 071598

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Clerk's Official Copy

File Number: 071598

File Type: Resolution

Status: Adopted

Version: 0

Reference: R-976-07

Control: County Commission

File Name: INTERLOCAL AGREEMENT BETWEEN MDC & VILLAGE OF KEY BISCAYNE

Introduced: 5/23/2007

Requester: Office of Strategic Business Management

Cost:

Final Action: 9/4/2007

Agenda Date: 9/4/2007

Agenda Item Number: 8L1A

Notes:

JAM

Title:

RESOLUTION RELATING TO THE DISTRIBUTION OF ELECTRICAL FRANCHISE FEES; AUTHORIZING THE COUNTY MAYOR OR HIS DESIGNEE TO EXECUTE ADDENDUMS TO THE SECOND INTERLOCAL AGREEMENTS BETWEEN THE COUNTY AND THE CITY OF AVENTURA, THE CITY OF SUNNY ISLES BEACH AND THE VILLAGE OF PINECREST; AUTHORIZING THE COUNTY MAYOR OR HIS DESIGNEE TO EXECUTE INTERLOCAL AGREEMENTS WITH THE VILLAGE OF KEY BISCAYNE THE TOWN OF MIAMI LAKES, VILLAGE OF PALMETTO BAY, CITY OF DORAL, CITY OF MIAMI GARDENS, AND TOWN OF CUTLER BAY

Indexes:	INTERLOCAL AGREEMENT
	MIAMI-DADE COUNTY

Sponsors:

NONE

Sunset Provision: No

Effective Date:

Expiration Date:

Registered Lobbyist:

None Listed

Legislative History
Acting Body	Date	Agenda Item	Action	Sent To	Due Date	Returned	Pass/Fail

Board of County Commissioners	9/4/2007	8L1A	Adopted				P
REPORT:	Commissioner Seijas noted this resolution involved a major change to the franchise fee. She expressed concern that certain cities who renegotiated the franchise fee would receive more money, while the County continued receiving the same amount listed in the 30-year agreement entered into with Florida Power & Light (FPL) in 1990. She noted the new formulas had created a compensation rate per cities, which happen to have power generated facilities within their boundaries, and had changed the way the pie was divided. She felt this needed further review and that she wanted to review all supporting materials and consequences for those cities not included. Ms. Jennifer Glazer-Moon, Director, Office of Strategic Business Management, clarified that FPL paid the County more each year because the fee was based on the gross receipts adjusted by countywide taxes paid. She noted this item was negotiated with the cities and a compromise to repay over a period of years, a portion of the payments that the cities felt they lost because they were not properly notified of the new distribution method. Prior to this, Ms. Glazer-Moon noted that UMSA absorbed all of the adjustments deducted before FPL made their payment to the County, and cities were not taking any reductions. She noted the County went back and reviewed the way the franchise fees were being distributed and realized that if full incorporation ever occurred, UMSA would be contributing to the cities, so the County changed the formula. Ms. Glazer-Moon explained this item would place a distribution methodology in the agreement regarding franchise fee payments. She noted the County had received agreements executed by the Cities of Aventura, Pine Crest, and Sunny Isles Beach; and this resolution requested the authority to execute the same agreement with the Cities of Key Biscayne, Miami Lakes, Palmetto Bay, Doral, Miami Gardens, and Cutler Bay. Ms. Glazer-Moon responded to Commissioner Seijas’ question regarding the location of a power generating facility within the boundaries of Miami Lakes. She noted this item dealt with real or personal property such as power lines and FPL easements within these cities. Ms. Glazer-Moon also noted that based on the calculation in the original formula, UMSA would bear more of the reduction because it contained the Turkey Point Power Plant, and the deductions for countywide taxes that FPL paid on their property was only taken to the unincorporated area. She noted the new calculation prorated the deductions for power plants and countywide taxes across the board to all cities, which would benefit UMSA. County Manager Burgess added that as incorporations occurred, those cities would be entitled to a share of the franchise fee paid to the County for UMCA. He explained the way the 30-year franchise agreement with FPL was structured. He noted taxes paid by FPL were prorated across UMSA and newly incorporated cities, but the disparity occurred regarding how the County handled the power plants, particularly the Cutler Plant at Palmetto Bay. He noted the County attempted to negotiate a compromise with the cities that provided more to UMSA, and were now prorating the taxes on the power plants across all jurisdictions. The amount of franchise fees did not change but the distribution among the cities did. In response to Commissioner Seijas’ comment that nine cities were missing from the attached memorandum, Ms. Glazer-Moon noted the intention was to execute an agreement with the cities that the Board had already approved. She noted that subsequent to the last Committee meeting, the County received executed agreements matching the amounts and methodology negotiated from all remaining cities except the City of Doral. Responding to Commissioner Barreiro’s question when the 30-year franchise agreement would expire, Ms. Glazer-Moon noted the franchise agreement was adopted in 1989 by referendum and would expire in 2019. Chairman Barreiro asked the County Attorney to provide him with a report on the process for Franchise Agreements, whether or not they are put out to bid. Following further discussion, it was moved by Commissioner Seijas that this resolution be deferred. This motion failed due to lack of a second, and the Board proceeded to vote on a motion to adopt the foregoing proposed resolution as presented.

Budget and Finance Committee	7/11/2007	3K	Forwarded to BCC with a favorable recommendation				P

Budget and Finance Committee	6/12/2007	3G	Carried over due to lack of a quorum		7/11/2007

County Attorney	5/24/2007		Assigned	Craig H. Coller		5/30/2007

County Manager	5/23/2007		Assigned	Jennifer Glazer-Moon	5/23/2007

County Manager	5/23/2007		Assigned	County Attorney	7/10/2007
REPORT:	OSMB (B&F COMTE 6/12/2007)

County Manager	5/23/2007		Referred	Budget and Finance Committee	6/12/2007

Legislative Text

TITLE
RESOLUTION RELATING TO THE DISTRIBUTION OF ELECTRICAL FRANCHISE FEES; AUTHORIZING THE COUNTY MAYOR OR HIS DESIGNEE TO EXECUTE ADDENDUMS TO THE SECOND INTERLOCAL AGREEMENTS BETWEEN THE COUNTY AND THE CITY OF AVENTURA, THE CITY OF SUNNY ISLES BEACH AND THE VILLAGE OF PINECREST; AUTHORIZING THE COUNTY MAYOR OR HIS DESIGNEE TO EXECUTE INTERLOCAL AGREEMENTS WITH THE VILLAGE OF KEY BISCAYNE THE TOWN OF MIAMI LAKES, VILLAGE OF PALMETTO BAY, CITY OF DORAL, CITY OF MIAMI GARDENS, AND TOWN OF CUTLER BAY

BODY
WHEREAS, this Board desires to accomplish the purposes outlined in the accompanying memorandum, a copy of which is incorporated herein by reference,
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF MIAMI-DADE COUNTY, FLORIDA, that this Board approves the addendum to the second interlocal agreement between the County and the City of Aventura, City of Sunny Isles Beach and Village of Pinecrest and the interlocal agreement between the County and the Village of Key Biscayne, Town of Miami Lakes, Village of Palmetto Bay, City of Doral, City of Miami Gardens, and the Town of Cutler Bay for the distribution of Florida Power and Light Company franchise fees, substantially in accordance with the forms attached hereto and made part hereof; and authorizes the County Mayor or his designee to execute same for and on behalf of Miami-Dade County.

HEADER
Date:

To: Honorable Chairman Bruno A. Barreiro
and Members, Board of County Commissioners

From: George M. Burgess
County Manager

Subject: Interlocal Agreement between Miami-Dade County and the Village of Key Biscayne, City of Aventura, Village of Pinecrest, City of Sunny Isles Beach, Town of Miami Lakes, Village of Palmetto Bay, City of Doral, City of Miami Gardens and Town of Cutler Bay for the distribution of franchise fees

STAFF RECOMMENDATION
It is recommended that the Board of County Commissioners (BCC) approve and adopt the attached resolution authorizing execution of an addendum to the interlocal agreements with the City of Aventura, the City of Sunny Isles Beach and the Village of Pinecrest; and the interlocal agreements with the Village of Key Biscayne, Town of Miami Lakes, Village of Palmetto Bay, City of Doral, City of Miami Gardens and the Town of Cutler Bay in substantially the form attached for the distribution of electrical franchise fees.

MANAGER'S BACKGROUND
On July 25, 1989, the BCC approved Ordinance No. 89-81 relating to the Franchise Agreement (Agreement) with the Florida Power & Light Company (FPL). This agreement allows FPL the right to operate in public places/rights of way in unincorporated Miami-Dade County. The Agreement became effective May 25, 1990 and has a thirty year term. The Agreement requires FPL to pay the County six percent of the gross revenues billed to residential and commercial customers within the Unincorporated Municipal Service Area (UMSA) based on the previous calendar year�s billing minus a credit for real and tangible personal property taxes paid by FPL.

Since the approval of this Agreement, nine areas of UMSA have incorporated; Village of Key Biscayne, City of Aventura, Village of Pinecrest, City of Sunny Isles Beach, Town of Miami Lakes, Village of Palmetto Bay, City of Doral, City of Miami Gardens, and Town of Cutler Bay. FPL currently has separate franchise fee agreements with municipalities incorporated prior to 1990. As the new municipalities were formed, the County entered into agreements with the municipalities for the FPL franchise fee distribution.

The methodology used by the County to calculate the corresponding payments to the municipalities prior to FY 2001-02 was based on the six (6) percent of gross revenues generated in the particular municipality, minus the FPL property taxes paid to the particular municipality, and minus Countywide, Fire, Library, Florida Inland Navigation District (FIND), South Florida Water Management District (SFWMD), and Everglades property taxes paid by FPL for property within that particular municipality.

FPL, in addition to the credit for the Countywide taxes it pays in UMSA, also receives a credit for the Countywide taxes it pays in municipalities in existence prior to 1990. Realizing that the franchise fee distribution methodology used prior to FY 2001-02 produced an undue burden to UMSA, County staff re-evaluated the distribution methodology to include a pro-ration of the countywide payments made in municipalities existing prior to 1990 that have their own agreements. The methodology used since FY 2001-02 was based on six (6) percent of gross revenues generated in the municipality minus municipal taxes paid to the municipality, minus countywide taxes paid to the municipality, then the pro-rated countywide taxes paid in the municipalities with their own agreements.

In late 2005, the Village of Pinecrest, City of Aventura, City of Sunny Isles Beach, Town of Miami Lakes and Village of Key Biscayne retained Public Resources Management Group, Inc. to review the franchise fee payments made by the County. In early 2006, the municipalities met with the County to discuss the revised franchise fee distribution methodology. After several meetings with the municipalities, the methodology was adjusted to prorate the impact of the taxes paid associated with the power plants located in some municipalities among all of the new municipalities and UMSA.

The new methodology pro-rates all of the countywide payments made in municipalities between UMSA and the municipalities listed above. Additionally, it prorates the power plants in the new municipalities so that no one municipality is negatively affected by having a power plant within its boundaries (Turkey Point and Cutler Power Generating Facilities). Under this methodology the impact of all the Countywide taxes are applied proportionately between the new cities and UMSA.

Because the methodology used from FY 2001-02 through FY 2004-05 negatively affected the franchise fee payments for the Village of Pinecrest, City of Sunny Isles Beach, and the City of Aventura, the County agreed to retroactively apply the new methodology for those fiscal years. By applying the new methodology to these municipalities, the Village of Pinecrest realized an additional $879,954, the City of Sunny Isles Beach realized an additional $782,886, and the City of Aventura realized an additional $1,651,278. The payments to the municipalities will occur in three equal installments.

The attached addendums to the interlocal agreements between the City of Sunny Isles Beach, City of Aventura, and the Village of Pinecrest outline the new methodology for the calculation of the FPL franchise fee payments. The Office of Strategic Business Management is currently in the process of obtaining the remaining franchise fee agreements from the Village of Key Biscayne, Town of Miami Lakes, Village of Palmetto Bay, City of Doral, City of Miami Gardens, and the Town of Cutler Bay.

___________________________
Jennifer Glazer-Moon, Director
Office of Strategic Business Management

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