Pinecrest Water Referendum: follow the money and vote a SMART YES!

I know, it is an initial bold statement on a seemingly controversial matter regarding the upcoming Pinecrest Village fire protection and water referendum. As a fiscally conservative businessman, engineer and data scientist, I like to eliminate political noise and agendas by following the data and facts on the ground in order to understand the root causes of issues.

Based on my solely data-driven financial analysis, our options are the following:
1. Pinecrest completes the waterline and fire hydrant infrastructure for $158/year via a Yes Vote on the referendum, the cheapest and most effective way.
2. Delay and Pinecrest, or any other agency completes it later, it will cost us more.
3. Miami Dade-County completes it, regardless of their motivation, it will cost more, easily more than $500/year!
4. MD Water and Sewer completes the project, not only would it cost us more but only residents with water will pay the bill.

Let’s Follow the Money!

Let’s establish some facts: Money doesn’t grow on trees and Government can only spend the money it collects as taxes. In the end, taxpayers end up footing the bill for any government project.

Unfortunately, the political reality is that, no government agency wants to use its current operating budget to finance large capital improvement, and government agencies always raise taxes in order to finance capital improvement projects. Miami-Dade County is no exception from this fact. Accepting this reality, as a fiscally responsible person, I only care how my tax dollars are spent in the most efficient manner.

In any county-wide capital improvement project, Pinecrest residents pay significantly more than the benefit they receive in return. As a result, Pinecrest is always a donor community for any county-wide project.

We have a “recent” experience with this disparity. The 2005 Miami-Dade Building Better Communities capital improvement project benefited Pinecrest with a partial fire protection and water project allocation in 2007-2009.

Some try to argue that we received “free money” for our partially completed water project. This statement cannot be further from the truth. Every taxpayer in Pinecrest is paying for it today as the BBC County bond obligation is included in our tax bill. In Pinecrest, this amounts to approximately $314/year per property through 2038.

Pinecrest received $3.3M in funding for a project which benefited only 570 homes, though every taxpayer in Pinecrest (whether or not a resident of those 570 homes) is paying for an incomplete water infrastructure project at an average cost of $314/year per property.

The $15M project proposed in the Village’s fire protection and water referendum will cost an average of $158 in Village taxes per year per property. For 70% of homeowners, the cost will be an average of $97 and for 40 percent of homeowners will the cost will be an average of $55 per year.

This means Pinecrest would spend our tax dollars 9 times more efficiently than Miami Dade!

In fact, were Pinecrest to have completed the waterline project in 2007, the cost to 70 percent of Pinecrest registered voters would have been an average of $23/year in property taxes.

The longer we delay this project, the greater the cost will be. My understanding is that the waterline project would have cost 20 percent less two years ago than today.

Were Miami-Dade County to complete this project, we would certainly be taxed at a higher rate and we would have no ability to influence how much our taxes would be raised. The precedent is set and in plain sight; we are ALL paying the price of the 2005 BBC GOB bond and we will continue to pay $314/year for 19 more years! We can “outsource” the problem, Miami-Dade might solve it, but it will cost us more.

Miami-Dade Water & Sewer Department (MDWASD) could be another option but it adheres to the same policies as the county.

MDWASD is effectively a non-profit organization owned by Miami-Dade County residents and its current water rates are not set based on cost basis but determined as part of a policy decision. It costs MDWASD more to deliver water to us due to the low density of our population and size of our property lots.

If the rates were consistently market-based, Pinecrest residents would pay significantly more. The range for such a price increase would be between 80-300 percent. In the unlikely event that MDWASD were to complete this project for us, it would require MWASD to issue a bond financed by a water rate increase. In this event, MDWASD may be inclined to set rates based on cost, meaning higher water prices.

In fact, I understand from Pinecrest Village that MDWASD has indicated it would cost upwards of $30M+ to undertake this project. Again, it will cost us more!

If MDWASD were to pay itself for the project only residents currently with water service will pay the pricier water bill. In other words, residents not connected to water would pay nothing as they do not have a water bill.

Another alternative is for policy makers to decide to add an additional water project surcharge to our water bill as we have seen similar structures with the FPL storm surcharge. For sure, it will cost us more!

For those who advocate a no vote, I respect your individual choice.

However, please keep in mind that, the problem will not go away!

When we make decisions sometimes our emotions get in the way of making the correct ones. We can feel very strongly about things being done “right”. Generally in life and specifically in business, I learned a long time ago, that being “right” and being proud is just simply not practical and most of the time just costs more.

Our current situation is best described in a business term as an off-balance sheet debt. We know we must pay it, but we are not accounting for it and we don’t report it. However, the debt is still there. Unfortunately, this debt increases at a quicker pace than any offsetting investment we can make. I want to remind all of you that Einstein once said: “the compounding interest is the greatest force in the universe”.

Some may be swayed by the mirage of “free money” or advocate waiting for “winning the lottery”. We are already paying for that “free money”, dearly. Betting on winning the lottery is just simply not a strategy. It is financially irresponsible.

Our community is financially savvy, and I encourage all of you to use reason and logic when we make this important decision.

I am ok with not feeling “right” and getting the best deal. The best deal for Pinecrest is a smart and pragmatic Yes Vote.

I encourage all of you to Vote a SMART and pragmatic YES.

Side note: We can also generate additional revenue as a community. If we enable our developer community by removing one of the biggest hurdles in deciding to invest in projects, Pinecrest can easily add 20 more $4M+ houses, and the tax base increase alone would cover 45% of this project. We are losing $68/property every year. Let’s be savvy with our finances. Let’s make a good investment.

Daniel Enekes

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  1. I may be wrong, but I believe the author of this article lives in a home without county water access and will benefit from a Yes vote. Costs should be distributed over time amongst only the 740 property owners needing to connect.

  2. I’d rather give my money to those who need it, instead of people who buy houses knowing fully well that they did not have city water, yet then expect others to pay for it for them. All while Pinecrest is busy spending the tax money we already paid on allowing artists to graffiti down 112th street and then pave over it. How about real issues like traffic from Palmetto and Cutler Bay cutting through Pinecrest making Ludlam a disaster in the morning? How about repaving our streets? Let’s start focusing on real problems.

  3. How many of the affected homes are palatial estates and how many are the older homes built in the 1940’s,50’s and 60’s? Has anyone kept track of the statistics? In another article there was a claim that developers went to great expense to hook up with County infrastructure when building mansions. That makes sense to me. What billionaire would buy a mansion in Pinecrest without the hookup to County infrastructure?
    When my parents bought a house in old pinecrest in 1962 the well water was hard,and not the best tasting water due to heavy lime deposit, but it was safe to drink. When people bought decades ago, they never dreamed that the water would eventually become polluted.

  4. “Based on my solely data-driven financial analysis, our options are the following:” 1, 2, 3, and 4. It looks line Mr. Enekes neglected to mention a 5th option which has been discussed at some of the information sessions the Village of Pinecrest has provided. Pinecrest can create a special taxing district which covers only those homes currently without access. As they are the ones that will benefit from the $15,000,000 project, they should be the ones who pay for it. Divided by the 748 homes without access, that comes out to a hair over $20,000 per home. Owners of these homes knew or should have known when they bought that the homes were without access to county water, but bought anyway. While I recognize that socialism is a growing trend in America, but I prefer to give my charitable donations to those who truly need the assistance and not to someone who could afford to buy a house in Pinecrest but wants his neighbors to pay for his home improvements.


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