Wastewater Project Funding in the Unincorporated Area

Wastewater Project Funding in the Unincorporated Area

It is a well-documented and undisputed fact that Key Largo citizens are paying more for their wastewater system than citizens of the other unincorporated areas, and that this inequity has had a detrimental effect on our economy. Charts 1 and 2 compare the relative size and cost of the Key Largo project to the projects in the other unincorporated areas. Charts 3 and 4 compare the local contributions and the infrastructure sales tax funding received from Monroe County.

Chart 1: Number of Developed EDU’s in Unincorporated Area

Chart 1 compares the number of developed EDU’s in Key Largo with the number of developed EDU’s in the other unincorporated areas. About half the developed EDU’s are located within Key Largo. The other half are dispersed throughout the other unincorporated areas.

Chart 2: Sewer Project Costs in the Unincorporated Area

Chart 2 compares the project costs in the unincorporated areas. The total cost is $391.1 million. The Key Largo project cost approximately $154.5 million or about 40% of the total. The projects in the other unincorporated areas combined are estimated to cost about $236.6 million or 60% of the total.

Chart 3: Local Contribution from Unincorporated Areas

Chart 3 compares the local contribution from each of the unincorporated areas. That is, how much money did each local area pay for its project? The other unincorporated areas combined will contribute $59.4 million or $4,240 per developed EDU.

Key Largo will contribute $94.6 million or $6,732 per developed EDU. That is a difference of $2,492 per developed EDU.

Keep in mind that Key Largo taxpayers are required to pay all of the taxes that other citizens are required to pay. The Key Largo area is unincorporated so none of that tax money comes to Key Largo directly. It must come through Monroe County. That is, Key Largo citizens must rely on Monroe County to distribute tax money in a fair and responsible manner.

Chart 4: Distribution of Monroe County Sales Tax

Chart 4 identifies the primary source of this difference in the local contributions. Each of the areas has received approximately the same percentage of state and federal funding – about 21%. The major difference in funding, and the primary cause of the disparity, is the amount of sales tax that has been received from the county. Key Largo has received $24.4 million or $1,736 per developed EDU. The taxpayers in the other unincorporated areas are projected to receive $128.3 million or $9,158 per developed EDU - a difference of $7,422.

The county has not offered any solid proposals for fixing the problem. At this time, it falls to the taxpayers of Key Largo to do what they can to improve their own situation.


It is also useful to look at this issue by Monroe County District. The Duck Key and Conch Key wastewater projects are located within District 4. The two projects cost about $19.2 million, or $13,205 per EDU. Customers within the local service area will contribute about $6.2 million or $4,264 per EDU. The projects have received $11.3 million from the county or $7,772 per EDU. The numbers for projects located in District 2 show a similar trend. These projects, which include Cudjoe Regional, Big Coppitt and Bay Point, cost a total of $212.9 million or $19,222 per EDU. Customers in the local service area will contribute $47.7 million or $4,307 per EDU.

The situation in District 5 is quite different. The Key Largo project cost quite a bit less per EDU than the others - $154.5 million or $10,995 per EDU. Customers will contribute a staggering $94.6 million or $6,731 per EDU. That is, they will pay approximately $2,500 more per EDU. The primary reason is the lack of county funding. Key Largo taxpayers received $24.4 million from the county for their sewer project, or $1,736 per EDU – about $6,000 less than the other two Districts.

1 EDU is equivalent to the flow from a single family home.

The economic damage caused by this funding inequity is demonstrated by economic data from the Census Bureau. It stands to reason that an area like Key Largo, where the local community is saddled with an excessively high share of sewer costs, would struggle economically. Unsurprisingly, Key Largo’s rate of economic recovery is lagging behind areas that have not been similarly burdened. The number of business establishments in Key Largo is 12% below what it was in 2004. Contrast that with the Lower Keys, who have received the lion’s share of sales tax funding for their sewer projects. The number of business establishments in the Lower Keys is only 3.5% less than what it was in 2004. The number of employees shows a similar trend.

CHART 1: BUSINESS SURVEY PATTERNS FROM THE US CENSUS BUREAU
	Number of Establishments			Number of Employees
Area	2004	2011*	% +/-	2004	2011*	% +/-
Monroe County	3,792	3,487	-8.0%	32,471	27,579	-15.1%
Key West	1,617	1,493	-7.7%	15,317	14,085	-8.0%
Lower Keys	371	358	-3.5%	1,959	1,812	-7.5%
Key Largo	712	626	-12.1%	5,917	4,909	-17.0%

*Note that 2011 is the latest year for which this data is available. Data for 2012 is expected to be available in June.

There is some good news. The state legislature has included $50 million in this year’s budget for the Florida Keys. If all continues to go well, the Key Largo Wastewater Treatment will receive $17 million of that. The $50 million must be used for new projects, which means that it cannot be used to ease the existing financial burden on our customers, like we had hoped. However, we can use it to pay for projects which we already had planned and for new projects that will enhance the reliability of our system.

Key Largo Wastewater Treatment District ratepayers are also Monroe County taxpayers. If you are concerned about the inequitable distribution of county funding, please do not hesitate to let us know. We are working hard to correct the problem. We have also provided a link to the Board of County Commissioners. Remember that the commissioners are elected county-wide. They all work for you. We encourage you to reach out to them as well.

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