FPL franchise fee to stay flat for Miami Lakes customers

Florida Power & Light customers in Miami Lakes will not see the franchise fee portion of their utility bills increase, the town council decided.
The utility collects a franchise fee from customers and pays that money to the town, which uses it to fund general services like law enforcement, public works and parks.
Over the previous three decades, FPL paid franchise fees to Miami-Dade County, which passed monies through to municipalities.
But the utility’s agreement with the county expires in May 2020, which allows Miami Lakes and other municipal governments to negotiate their own contracts with FPL.
The town’s agreement goes into effect June 1.
Left undecided was whether the town should keep the franchise fee at 3 percent or raise it to 6 percent, a rate Town Manager Edward Pidermann suggested during an Aug. 27 budget workshop.
If the rate stays at 3 percent, Pidermann said, he may have to cut over $500,000 from the 2019-2020 proposed $16.6 million budget.
His suggested rate of 6 percent would have increased the average Miami Laker’s FPL bill by approximately $3.19 per month, Pidermann said.
According to the FPL agreement with Miami Lakes, the town is expected to receive about $1.2 million each year. But in the coming fiscal year that begins in October, those payments won’t begin until June 2020 and will only total about $390,000.
“Because of the time between the county agreement ending and the town agreement beginning, we have an $800,000 gap and and are only going to be getting paid for four months,” Pidermann said.
“That would mean a shortfall in those franchise fee revenues for most of the fiscal year.”
Council member Jeffrey Rodriguez said a 6 percent fee would give Miami Lakes the best chance to keep property taxes low.
“We will not have a balanced budget at [a] 3 percent [franchise fee],” Rodriguez said. “At six percent, we can have a balanced budget. “
Armando Fernandez, external affairs manager at FPL, attended the workshop and said the town can change its franchise fee after the agreement takes effect.
“You can change it in July,” Fernandez said. “You can change it once a year.”
But most council members rejected the 6 percent rate because they believe it would amount to a tax increase for residents.
“We keep it at 3 percent and raise it at a later date if we need to,” said Councilman Luis Collazo. “I understand we need the money for services but I’d rather take a conservative approach to this.”
Councilwoman Marilyn Ruano said the council should approve the lower rate.
“I’m not in favor of 6 percent and we may lose certain level of services at 3 [percent],” she said. “But we have to tighten up our belts just like we do at home. I think we can still do a little better with 3 percent. But we are not here to raise taxes.”
Vice Mayor Nelson Rodriguez, who’s running for state representative in 2020, offered 5 percent.
“I’m not a 6 percent guy, but I’m willing to change it to five,” he said.
But he rescinded his recommendation after council members decided to stay with 3 percent.
Councilman Josh Dieguez wanted restrictions on how any excess franchise money that does not go toward general operating costs is spent. He said it should go toward projects that are priorities for residents but were not addressed in previous years.
“The sidewalks and streets in certain areas need repairs, and we need to focus on tree trimming, removal and replacement and stormwater repairs,” Dieguez said.
His suggestion may be approved in a future ordinance that was passed on first reading that night and will be voted on again on Sept. 10.
But Councilman Carlos Alvarez said the money should instead should be held in reserve.
“The fee allows us some flexibility to address emergencies,” he said. “We can’t control a natural disaster.”
Pidermann said in coming days, he and town staff will explore options to cover the possible budget shortfall, solutions that may include cuts in spending or finding other sources of income.
The town’s budget hearings are scheduled for Sept. 10 and Sept. 24, both at 7:30 p.m. at town hall.