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The following is the response to an opinion editorial written by North Miami Beach Mayor Michael Jackson Joseph. This response will address factual misstatements and/or characterizations. All documentation supporting the below corrections are available. If you’d like to see the paperwork, the receipts, please e-mail rhysdao.shanahan@miamidade.gov.
- First, the City of North Miami Beach claimed that the 25% surcharge “ensure[s] the cost of maintaining this [water] infrastructure is shared equitably.” According to the 2020 Revenue Bonds disclosures, the City of North Miami Beach voted for and uses to determine how funds collected from their water service are used, operating revenues used to maintain the water infrastructure “Excludes Outside City Surcharge Revenue as these revenues are passed through directly to the General Fund.” This quote is taken directly from the City of North Miami Beach’s own legal documents, outlining the first of many glaring misstatements about how this 25% tax on non-North Miami Beach Residents is used.
- The City of North Miami Beach claims in their response that “the loss of roughly $5 million a year… will have to be covered by every other water customer.” The actual amount collected from the City of Miami Gardens ratepayers by North Miami Beach water is unclear. Previously, they’ve said it was $3 million, then $4 million, and now they are asserting it is roughly $5 million. Notwithstanding, the real question is where does the surcharge revenue from Miami Gardens rate payers go? Does revenue from the surcharge go into a North Miami Beach water fund or does it go into the North Miami Beach general fund? As noted above, what we have learned from the North Miami Beach Revenue Bonds secured by the North Miami Beach Water and Sewer system in 2020 is that the surcharge revenue goes directly into the general fund of the City of North Miami Beach. Because the water surcharge revenue goes directly into the general fund it is not used to maintain the water delivery system or supporting operations. As such, removal of the surcharge paid by Miami Gardens ratepayers does not affect the water delivery system, operations, or the rate that is paid by customers of North Miami Beach Water and Sewer. This is without regard to whether the ratepayer lives in the City of North Miami Beach, Miami Gardens, Sunny Isles Beach, Aventura, Golden Beach, or Unincorporated Miami-Dade County. This is not to say that North Miami Beach will not raise water rates, it is within their discretion to raise water rates. However, removal of the surcharge from the ratepayers of Miami Gardens, or any other city, does not necessitate a change in the water rate. It is clear from NMB Water revenue bonds that the surcharge is not counted in the gross revenue of North Miami Beach’s water system. The water rate that has been established by North Miami Beach is sufficient to operate and maintain the system. This is according to North Miami Beach’s bond documents.
- NMB claims “they have made every attempt to work this out neighbor-to-neighbor”. In 2018, North Miami Beach privatized the water system. They were informed that if they privatized their water system, they would not be able to charge the surcharge. They charged the surcharge anyway. The City of Miami Gardens filed a class action lawsuit asserting that the surcharge was illegally assessed. The City of North Miami Beach was forced to pay a settlement of $9 million. That settlement is currently being paid out of the general fund because the surcharge revenue did not go back into the water system. While they say they tried to work it out neighbor to neighbor, this simply is not true.
Another question is, if the surcharge was being illegally assessed against Miami Gardens ratepayers, wasn’t it being illegally assessed against all customers that don’t reside in the City of North Miami Beach? Will North Miami Beach refund the money collected illegally during the period of privatization from its customers in Aventura, Sunny Isles Beach, Golden Beach, or Unincorporated Miami Dade County? Returning their money would be the neighborly thing to do.
- Finally, NMB claims to have offered options which would resolve this dispute. Options such as Miami Gardens fully transitioning to the Miami-Dade County Water and Sewer service or building an entirely new water service utility in Miami Gardens. The offers were not serious and in some instances they weren’t legal. North Miami Beach’s offer that allowed Miami Gardens customers to transition to Miami-Dade County is something that would be attractive to Miami Gardens customers, however, it would immediately violate North Miami Beach’s bond covenant with their bond issuers, as such it would never be allowed, and they know that. North Miami Beach has secured nearly $90 million in loans based on the revenue received from rates charged to all their customers. The money securing these bonds does not include the surcharge. Removal of the surcharge does not violate the bonds, but removal of the customers would. And again, North Miami Beach knows this, or their bond engineers and attorneys would inform them immediately.
Next, North Miami Beach says that Miami Gardens can build and operate their own water utility. This proposal is illusory and violates Florida law. According to Florida statute 180.06, no city can build a new utility system where a system already exists if it is owned by another city. And again, NMB could never agree to that because it would violate their bond covenant.
North Miami Beach now suggests that Miami Gardens could buy their interest out of North Miami Beach Water. This is not an unattractive offer. It is, however, unserious. First, the offer was made in the final hour as legislation made its way through the Florida Senate and the Florida House. Second, the amount of due diligence that it would take for Miami Gardens to buy North Miami Beach Water is extensive and will take time. Third, a hypothetical purchase of North Miami Beach Water by Miami Gardens is not a reason to continue the imposition of this unjust surcharge. It literally has nothing to do with the surcharge. If the City of North Miami Beach wants to sell their water utility system to Miami Gardens, they should send formal correspondence expressing that. I have every confidence that the City of Miami Gardens will be receptive.
I’ve been told that this issue is too complicated for people to understand. I disagree. This story is a story that is as old as time. People take advantage of other people. North Miami Beach has been taking advantage of residents of Miami Gardens, Golden Beach, Sunny Isles Beach, Aventura, and Unincorporated Miami-Dade County. Miami Gardens just had the courage, wherewithal, resources, and tenacity to fight back.
