Fort Lauderdale plans to use water-sewer money to balance budget — again

Fort Lauderdale is poised to remove millions of dollars from its water-sewer system fund, a controversial practice that a majority of city elected officials pledged to stop.

A proposed $20.4 million transfer from the water-sewer fund would be used to balance the city budget, under a draft spending plan unveiled in recent days by the city manager. The withdrawal would bring to at least $126.6 million the total amount removed from the water-sewer fund since 2012, to spend on unrelated city expenses.

The city’s aging infrastructure — and pending wave of development — have been a top issue in the past year. A recent citizen survey found infrastructure heavy on residents’ minds. A majority of the City Commission elected in March — Mayor Dean Trantalis and commissioners Steve Glassman and Ben Sorensen — campaigned on the issue of strengthening the water-sewer system and ending the financial transfers.

“Three of you campaigned on the promise to eliminate this practice,” city resident Joseph Maus emailed commissioners Saturday, “and I hope you live up to your promise.”

Glassman emailed back that the reliance on water-sewer funds could be phased out over time, so as not to “blow a $20 million hole in the budget.”

“I am extremely disappointed that the propose[d] budget ignores the consensus of the Commission,” Glassman wrote in the email, “and I will be expressing that on Tuesday.”

Sorensen said in a text message Monday that the transfers “need to begin to be phased out immediately and ultimately eliminated.”

Fort Lauderdale’s utility rates automatically increase 5 percent each year, and customers outside the city limits pay a 25 percent rate surcharge, but the city doesn’t use all of the money to rebuild the system. The South Florida Sun Sentinel reported last year that while the city’s water-sewer system has been deteriorating, the city has systemically removed millions.

A consultant last year determined that the system needs $1.4 billion in repairs and upgrades in the coming 20 years, and recommended the transfers cease.

The aging city pipes suffered a series of failures in the past four years that crippled the ability to transport sewage from toilets to the wastewater plant. Sewage flooded a neighborhood in 2016 and overflowed from manholes last year. The large sewage spills into local waterways prompted the state Department of Environmental Protection to take enforcement action, negotiating a consent order with the city to force repairs to be made.

City Auditor John Herbst said the “return on investment” transfers, though rarely used in Florida, are legal and proper.

City Commissioner Heather Moraitis said she supports it, particularly in order to prevent an increase in the property tax rate. She said she doesn’t agree with the terminology some critics use to describe it. Trantalis has referred to it as “stealing” from the fund.

“We’re allowed to do it,” Moraitis said at a recent budget workshop. “We’re allowed to take profit. We’re allowed to use it, obviously, for stuff in our city, like we are doing. I am definitely not at the point where I think we need to raise taxes.”

Commissioner Robert McKinzie said he favored continuing the withdrawals until there’s a “solid solution” to relying on it.

City Manager Lee Feldman’s proposed $790.3 million total budget also rests on maintaining the same property tax rate the city has used for the past 11 years — about $412 for every $100,000 of taxable property value. The rate hasn’t been lower since 1986, city officials confirmed.

That still would result in $10.4 million more taxes for the city, because property values rose 6.34 percent, not counting new buildings that also will generate more taxes. That almost covers the $10.7 million Feldman said the city needs for employee raises. He also proposes hiring an additional 33.5 employees, adding to the team of 2,776.

Nearly 61 percent of the city’s general fund budget of $362.2 million goes to police and fire-rescue services, the proposed budget says.

The budget also proposes an increase in stormwater rates, used for drainage, of $2 a month for single-family homeowners. The city’s water-sewer rates will increase 5 percent, and the impact for a household using 5,000 gallons a month would be $3.16 a month. The $256 annual fire fee will not change. Sanitation rates will go up 3 percent, or about .95 a month for residential customers.

City commissioners will approve a tentative tax rate Tuesday. Final budget hearings are Sept. 6 and Sept 12.

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