Mayor Dailey: Bill limiting utility transfer to general fund a '$10M hit' to city budget

Tallahassee Mayor John Dailey spoke on legislation that would limit the amount of money city utilities transfer each year to their general funds — a measure he said could amount to a $10 million hit to the budget.

The House Energy, Communications & Cybersecurity took up the bill (PCS for HB 1331) on Tuesday, advancing it in a 17-1 vote. Rep. Demi Busatta Cabrera, R-Coral Gables, the bill’s sponsor, said many municipal utilities serve customers who don’t have a voice in the process because they live outside city limits.

“Because these customers cannot vote for the persons who govern the municipal utility, they have no say in the rates that they pay or the amounts the city transfers,” Busatta Cabrera said. “These customers often do not benefit from these transfers.”

Dailey, who attended the meeting with City Commissioner Curtis Richardson and City Manager Reese Goad, told subcommittee members that the city’s annual $50 million general fund transfer helps pay for services utilized by customers who live outside city limits.

“The general fund transfer allows for essential government services such as public safety — which is one of my top priorities — and quality of life to better meet the specific needs or our community with essential services like roads, parks and affordable housing,” Dailey said.

He noted that the city has been recognized as a top public utility in the country and that its rates are among the lowest, public or private, of like-size communities. He emphasized that the city’s “conservative fiscal approach” to providing services is “one of our top priorities.”

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But he added that the legislation would “have about a $10 million hit to our community,” which he said equates to about a third of the cost of sworn police officers.

“So in order to maintain quality of life and be able to pay one-third of our officers ... we would significantly have to raise the millage rate in the city of Tallahassee,” Dailey said. “So we look forward to continuing to work on this bill, helping the chairwoman meet the needs of what she is trying to address, but also being able to tell our story and how it would impact us.”

Busatta Cabrera, later in the meeting, said she wanted to “make something abundantly clear” — that the bill would not remove funding from police or firefighters.

“I would never put forward a bill that would do that,” she said. “And for that to be said or that to be implied quite honestly is ludicrous because that would not happen. The funds get transferred into (general revenue) and then it’s up to the municipalities ... to decide how they are going to be good stewards of our hard-working Floridians’ taxpaying dollars."

The bill would limit the amount of revenue that could be transferred from municipal electric, natural gas, water and sewer utilities to the general fund to pay for non-utility government functions. However, municipal utilities that are governed by an authority with elected representation from outside city limits would not be subject to general fund transfer limits, according to a staff analysis.

Similar legislation in the Senate (SB 1380) also was up for a hearing Tuesday before the Committee on Regulated Industries. But the bill was temporarily postponed.

Rep. Mike Giallombardo, R-Cape Coral, noted that some cities are transferring “tons and tons of money” into the general fund using proceeds from people who live outside city limits but don’t often use city services. He mentioned North Miami Beach, Miami Gardens and Gainesville as examples.

Tallahassee's Electric Utility serves roughly 127,000 customers, with about 22,000 located in the unincorporated area. Talquin Electric serves another 26,000 or so customers outside city limits.

Rep. Mike Caruso, R-West Palm Beach, asked Dailey to address the concept of getting tax dollars from people outside city limits who don’t have the right to vote for commissioners “even though you’re doing a great job.”

“No. 1 with this and the utility — I commend you,” Caruso said. “But please address the concept that we’re trying to work on here, which is taxation without representation.”

Dailey said the city has a citizens advisory committee with seats set aside for residents in the unincorporated area. He said the city commission approves rates during meetings shown on TV “where we invite everyone to participate.”

“There’s ways that we can continue to work on this to make sure that proper representation is at the table during the formal negotiations, making sure that we’re all completely available,” the mayor said. “But again, I’m here to tell you, in the many years that I have served both on the county and the city, I’ve not heard from one citizen truly upset with the fact that they were paying ... for services inside Tallahassee.”

Contact Jeff Burlew at jburlew@tallahassee.com and follow @JeffBurlew on Twitter.

This article originally appeared on Tallahassee Democrat: Mayor Dailey: Bill limiting utility transfer a '$10M hit' to city budget